This week in Washington: Budget reconciliation goes back to the House with changes for vote on Tuesday.

Upcoming Hearings/Markups

Congress

Hearings/Markups

• House Energy and Commerce Committee Hearing on “The Future of Telehealth: How COVID-19 is Changing the Delivery of Virtual Care”

House

• 340B: 266 House Legislators Want Fines for Drug Companies

Senate

• Senate Passes American Rescue Plan
• Becerra Gets a Tied Vote at Finance Committee
• Public Option Legislation Introduced
• Bipartisan Legislation Introduced on Rx Drug Prices

Administration

• Department of Labor Extends Election of COBRA Coverage Timeframe
• Geographic Direct Contracting Model Put on Hold
• CMS Strengthens Requirements That Plans and Issuers Cover COVID-19 Diagnostic Testing Without Cost Sharing

Reports

• U.S. GAO - Medicare Part B: Payments and Use for Selected New, High-Cost Drugs

Upcoming Hearings/Markups

March 9, 2021

House Committee on Appropriations, Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies - FDA’s Foreign Drug Inspections Program

Senate Health, Education, Pensions and Labor Committee - Examining our COVID-19 Response: An Update from the Frontlines

• Witnesses:

  • Jerry P. Abraham, M.D., M.P.H., C.M.Q.
    Director, Kedren Health Vaccines
  • Umair A. Shah, M.D., M.P.H.
    Secretary of Health, state of Washington
  • Ashish K. Jha, M.D., M.P.H.
    Dean, Brown University School of Public Health
  • Mary Ann Fuchs, D.N.P., R.N., N.E.A., B.C., FAAN
    Vice President of Patient Care and System Chief Nurse Executive
    Duke University Health System

March 11, 2021

House Committee on Appropriations, Subcommittee on Legislative Branch - COVID-19 and the Mental Health and Substance Use Crises

House Committee on Appropriations, Subcommittee on the Departments of Labor, Health and Human Services, Education, and Related Agencies - Controlled Substances: Federal Policies and Enforcement

Congress

Hearings/Markups

House Energy and Commerce Committee Hearing on “The Future of Telehealth: How COVID-19 is Changing the Delivery of Virtual Care”

Tuesday, March 2 - The purpose of the hearing was to begin the conversation about what the future of telehealth can be in the United States, post-pandemic.

Witnesses:

• Megan R. Mahoney, M.D.
  Chief of Staff
  Stanford Health Care
• Ateev Mehrotra, M.D., M.P.H.
  Associate Professor of Health Care Policy
  Harvard Medical School
• Elizabeth Mitchell
  President and CEO
  Purchaser Business Group on Health
• Jack Resneck, Jr., M.D.
  Board of Trustees
  AMA
• Frederic Riccardi
  President, Medicare Rights Center

House

340B: 266 House Legislators Want Fines for Drug Companies

Two hundred sixty-six members of the House of Representatives have told the Department of Health and Human Services that HHS should fine drug companies that deny 340B discounts to hospitals for drugs dispensed by contract pharmacies and to make drug companies pay hospitals back for discounts that were withheld. The letter says it’s the long-held position of the Health Resources and Services Administration that drug companies must provide 340B discounts to hospitals and clinics that qualify, regardless of whether hospitals dispense the drugs themselves. The letter states there are no provisions in the statute that allow manufacturers to set conditions or impede access to 340B discounts.

The letter urges the Health Resources and Services Administration to immediately create and appoint a dispute resolution panel and write guidance or regulation to stop drugmakers from effectively converting up-front discounts into rebates.

Beginning this past summer, some drug companies stopped shipping discounted drugs to pharmacies that 340B hospitals contract to dispense drugs; other drug companies restrict shipments to one contract pharmacy for each hospital.

Senate

Senate Passes American Rescue Plan

On March 6, 2021, the Senate passed the American Rescue Plan Act on a 50-49 vote. Sen. Sullivan (R-AK) had to leave for a family emergency. The legislation is a $1.9 trillion pandemic relief package after making changes to provisions related to minimum wage, health insurance, pensions, broadband, student loans and entertainment venues.

The House is expected to vote Tuesday on the Senate version.

In order to keep the support of all 50 Democrats needed to advance the package, Senate Majority Leader Charles E. Schumer brokered deals to reduce federal unemployment insurance payments from the $400 included in the House-passed package to $300 per week through Sep. 6. He also agreed to reduce the number of people who would receive direct payments by lowering the phase out for individuals from $100,000 to $80,000 and for joint filers from $200,000 to $160,000.

Find more information in McGuireWoods LLP and McGuireWoods Consulting's latest alert, Senate Passes American Rescue Plan.

Becerra Gets a Tied Vote at Finance Committee

The Senate Finance Committee voted 14-14 along party lines to advance HHS Secretary-nominee Xavier Becerra’s nomination, previewing a likely close vote on the floor as Republicans coalesce in their opposition to the California attorney general and former Democratic member of the House of Representatives.

Chairman Ron Wyden (D-OR) has submitted the notice of a tie vote to the Senate. Next, the majority leader will file a motion to discharge the nomination, with a maximum four hours of debate, equally divided between the parties. If the motion is approved, the nomination can then be placed on the Senate calendar.

While Democrats say Becerra’s experience and unbending support for the Affordable Care Act make him the perfect choice to lead HHS, Republicans oppose the nomination due to Becerra’s pro-choice position on abortion and argue he lacks qualifications for the job.

Public Option Legislation Introduced

On March 2, Sens. Tim Kaine (D-VA) and Michael Bennet (D- CO) introduced updated legislation that would phase in a public option based on the Medicare framework and would be available in the individual and small group exchanges. “The Medicare X Choice Act” would limit enrollment to consumers eligible for Affordable Care Act subsidies, meaning people who have an offer of affordable coverage would not be able to enroll. The bill also fixes the “family glitch” that currently blocks potentially millions of Americans from subsidies.

The updated bill has 11 Democratic cosponsors: Sens. Dick Durbin (IL), Tammy Duckworth (IL), Ben Cardin (MD), Debbie Stabenow (MI), Patrick Leahy (VT), Raphael Warnock (GA), John Hickenlooper (CO), Amy Klobuchar (MN), Tina Smith (MN), Jeanne Shaheen (NH) and Gary Peters (MI).

Under this legislation, a new Medicare-like option would be created and would be required to cover the Affordable Care Act’s essential health benefits. It would first be sold in the individual market states that have only one insurer and later would also be sold in high-cost areas. By 2025, the plan would be available in the small business and individual insurance marketplaces nationwide.

The new bill would expand and enhance the ACA tax credits, eliminate cost sharing for primary care services, and allow plans to reimburse hospitals at 150 percent of Medicare, up from 125 percent in the initial bill. The bill also would require Medicare to negotiate drug prices for the Medicare X option and Part D program.

Bipartisan Legislation Introduced on Rx Drug Prices

On March 3, Sens. Jeanne Shaheen (D-NH), Bill Cassidy (R-LA), Michael Bennet (D-CO) and Marco Rubio (R-FL) reintroduced “The Ensuring Timely Access to Generics Act of 2021,” which would lower drug prices through increasing competition from generic drugs through better oversight of the Food and Drug Administration’s (FDA) citizen petition process.

The citizen petition process allows interested stakeholders, including drug companies, to bring concerns to the FDA’s attention regarding pending applications. The members believe some have discovered how to exploit this process by filing citizen petitions in order to delay the approval of generic competitors and extend their patent protections. This legislation ensures the FDA’s ability to reject citizen petitions if they believe that the primary purpose of the petition is to delay the approval of an application, thereby increasing competition in the marketplace and lowering costs for patients. The bill would also set a time limit to ensure that citizen petitions are submitted in a timely manner after the petitioning party becomes aware of the information upon which their petition is based. This time limit helps avoid instances where brand-name drug manufacturers slow down the FDA review process by filing citizen petitions shortly before a generic drug is set to be reviewed by FDA. The legislation takes the additional step of requiring the Secretary of Health and Human Services (HHS) to establish procedures for referring a petitioner to the Federal Trade Commission (FTC) if they have reason to believe a petition was submitted with the primary purpose of delaying the approval of another application.

Administration

Department of Labor Extends Election of COBRA Coverage Timeframe

On Feb. 26, the Department of Labor extended the one-year timeframe for workers to elect COBRA coverage for another year. The American Benefits Council, which represents large employers, says the new guidance will create more burdens and confusion for plan sponsors and enrollees.

Under the new guidance, someone eligible for COBRA as of March 1 would have until March 1, 2022, to sign up. The Trump administration initially provided workers the additional time to elect COBRA in guidance released May 4, 2020, but that ability would have ended 60 days after the end of the Trump administration’s declaration of a national emergency due to COVID-19. On Feb. 24, the Biden administration announced a continuation of the national emergency.

Geographic Direct Contracting Model Put on Hold

CMS decided to revisit the Trump administration’s controversial Geographic Direct Contracting Model on March 1, the same day applications could be submitted. The full-risk Geographic Direct Contracting Model, or Geo, would require participants to take on risk for beneficiaries in an entire geographic region. “The Geographic Direct Contracting Model is currently under review and CMS looks forward to sharing additional information when available,” the website says.

The Trump administration touted the demo the day before Trump left office, posting a blog laying out how the demo could act as a value-added proposition for beneficiaries that would wrap around accountable care organizations.

CMS Strengthens Requirements That Plans and Issuers Cover COVID-19 Diagnostic Testing Without Cost Sharing

CMS and the Department of Labor issued new guidance making clear that private group health plans and issuers generally cannot use medical screening criteria to deny coverage for COVID-19 diagnostic tests for individuals with health coverage who are asymptomatic. Such testing must be covered without cost sharing, prior authorization or other medical management requirements imposed by the plan or issuer. This guidance also reinforces existing policy regarding coverage for the administration of the COVID-19 vaccine and highlights avenues for providers to seek federal reimbursement for costs incurred when administering COVID-19 diagnostic testing or a COVID-19 vaccine to those who are uninsured.

View the guidance.

Courts

Find a comprehensive look at “The Courts and Healthcare Policy” here.

Reports

U.S. GAO - Medicare Part B: Payments and Use for Selected New, High-Cost Drugs

Hospital outpatient departments use certain drugs for surgical or diagnostic procedures. An example is a drug to more clearly view organs during an ultrasound.

If those drugs are new and cost more, Medicare pays hospitals for the procedure and makes an additional “pass-through” payment for the drug, for the first two to three years. After pass-through payments expire, Medicare pays for the drug as part of a single payment for the procedure.

The GAO found hospitals used some drugs more when the drugs were eligible for pass-through payments, and for six of the seven drugs reviewed, Medicare paid less for the drug and procedure after pass-through payments expired.

Read the report.