THIS WEEK’S DOSE

• House Speaker Vote: The House Republican Conference nominated Rep. Scalise (R-LA) as the next speaker of the House, but he withdrew before the nomination was brought to the full House for a vote.
• Sen. Sanders (I-VT) Report on Nonprofit Hospitals: Sen. Sanders released a report critical of nonprofit hospitals for failing to provide sufficient charity care.
• New Physician Medicare Payment Proposal: The House GOP Doctors Caucus released draft legislation that would reform how Medicare pays doctors.
• FDA Digital Health Advisory Committee: The US Food and Drug Administration (FDA) announced the creation of a new committee to address issues related to digital health technologies.

CONGRESS

House Republicans Working to Elect New Speaker. On October 11, House Majority Leader Scalise won the Republican Conference’s nomination to become Speaker of the House after last week’s motion to vacate Speaker McCarthy. He defeated Judiciary Committee Chairman Jordan (R-OH) by a vote of 113–99. On October 12, however, Rep. Scalise withdrew from the race after it became clear that he could not secure the 217 Republican votes necessary to win an election on the House floor in the face of uniform opposition from House Democrats. Behind-the-scenes meetings were unproductive in securing support from what appeared to be a significant number of holdouts.

As of publication of this newsletter, the House floor remains essentially frozen in the absence of a resolution to this leadership upheaval.  And, it is happening at a time with pressing legislative needs, including work on FY 2024 appropriations bills, the pending November 17, 2023 expiration of the continuing resolution keeping the government open, and potential need for legislative action to address the Israel-Hamas war. Should the speakership stalemate continue, lawmakers may need to consider steps that would allow the current speaker pro tempore, Rep. Patrick McHenry (R-NC), to call up legislative business on the House floor.

Sen. Sanders Releases Report Attacking Major Nonprofit Hospitals. The report questions nonprofit hospital systems’ efforts to provide low-income Americans with the affordable medical care required by their nonprofit status, and emphasizing the tax benefits that come with nonprofit status. The report examines 16 of the largest nonprofit hospital systems in the United States, highlighting their annual revenue compared to their percentages of annual revenue dedicated to charity care. The report calls on Congress and the Internal Revenue Service (IRS) to take action to hold nonprofit hospitals accountable for providing quality, affordable care to low-income patients across the country. Read Sen. Sanders’ press release here. It is important to note that Senator Sanders is Chair of the HELP Committee, which does not have jurisdiction over the IRS.

The American Hospital Association quickly responded with its own report noting that tax-exempt hospitals provided more than $130 billion in benefits to their communities in 2020 alone. The association also published a statement that Sanders’ report failed to account for the wide range of community benefits nonprofit hospitals provide.

House GOP Doctors Caucus Releases Draft Legislation. The draft legislation would reform payment under the Medicare physician fee schedule (PFS). The legislation comes in advance of the final 2024 PFS rule, which could be released at the end of this month or early in November. Under existing statutory requirements, the Centers for Medicare & Medicaid Services (CMS) had proposed a -3.36% cut to the 2024 Medicare conversion factor and a -3.26% cut to the anesthesia conversion factor. Unlike past legislative fixes to the fee schedule that simply increased the conversion factor by a percentage, the approach taken in this bill is more nuanced.

The draft legislation would update the current $20 million budget neutrality threshold under the PFS to $53 million in 2025. The $53 million threshold would then be updated by an inflationary factor—the Medicare Economic Index—every fifth year starting in 2030. The legislation also would require CMS, starting in 2025, to implement budget neutrality corrections by comparing estimated utilization to actual utilization for each relative value unit adjustment that it made in the previous year and adjust estimated PFS expenditures for services the following year to reconcile any miscalculations in utilization. The legislation would require CMS to update the prices and rates for each of the direct cost inputs every five years and, beginning in 2025, limit any increase or decrease to the conversion factor to 2.5%. The bill has not yet been scored and may not address the most immediate need for relief in 2024.

ADMINISTRATION

FDA Creates Digital Health Advisory Committee. FDA announced that the committee’s goal is to work with the agency on issues related to digital health technologies, such as artificial intelligence/machine learning, augmented reality, virtual reality, digital therapeutics, wearables, remote patient monitoring and software. The committee will consist of nine core voting members including the chair. The number of temporary members selected for a particular meeting will depend on the meeting topic. Those interested in serving or nominating a representative to serve as a voting or non-voting member can submit nominations through FDA Advisory Committee Membership Nomination Portal.

The solicitation for individuals and consumer organizations can be found here. The solicitation for individuals and industry organizations can be found here. FDA is accepting nominations through December 11, 2023.

QUICK HITS

• 2024 Medicare Premiums and Deductibles: CMS announced the 2024 standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, an increase of $14 from the annual deductible of $226 in 2023.  Please see the CMS fact sheet linked above for additional details for those with higher incomes, those with high incomes who have only immunosuppressive drug coverage, Part A cost sharing changes, and Part D Income-Related Monthly Adjustment Amounts.
• HHS Announces $16.7 M in New Grants to Create Sustainable Jobs for Individuals with Low Incomes. The US Department of Health and Human Services (HHS), through the Administration of Children and Families, announced $16.7 million in new grant awards to support 39 Community Economic Development projects. According to HHS, the grants, which align with October’s Community Economic Development Month, will stimulate the creation of more than 575 new full-time jobs with sustainable wages for individuals living in low-income communities in 26 states.
• ARPA-H Awards $26 M to Address Transplant Shortages. HHS, through the Advanced Research Projects Agency for Health (ARPA-H), announced up to $26 million for a newly funded project, part of its Open Broad Agency Announcement, that aims to lay the groundwork for the development of 3D printed, fully-functional human organs.
• GAO Releases Report on COVID-19 Relief Spending. The report found that state and local government recipients of the Coronavirus State and Local Fiscal Recovery Funds program obligated more than half and spent less than half of their awards, per their reporting as of March 31, 2023.

NEXT WEEK’S DIAGNOSIS

Healthcare activity is expected at the committee level next week, including a House Ways and Means field hearing on rural health, a House Energy and Commerce Health Subcommittee legislative hearing on provider issues, and a Senate Finance Committee hearing on Medicare Advantage marketing and enrollment.

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