Washington Healthcare Update - June 2021 #2

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This week in Washington: Discussions on infrastructure and prescription drug changes continue.

Upcoming Hearings/Markups

Congress

House

  • House Energy and Commerce Committee to Discuss Vaccine Legislation
  • Bipartisan Essential Drugs Stockpile Bill Reintroduced

Administration

  • HHS Commits $60 Million to Developing Advanced Generics
  • CMS Increases Pay for At-Home COVID-19 Vaccination of Medicare Beneficiaries
  • CMS Increases Funding for Navigators
  • FDA Authorizes Injection Version of Regeneron Antibody Cocktail
  • FDA Approves Biogen’s Alzheimer Drug
  • FDA Publishes Four Guidances on Drug Supply Chain Security Act Compliance
  • White House Announces Worldwide Vaccine Distribution Plan
  • White House Report Says FDA Needs Authority to Collect Drug Supply Chain Information
  • Biden Administration Commits Funds to Merck for COVID-19 Treatment
  • NIH Trial to Study Mixed COVID-19 Vaccine Boosters
  • President Biden’s Budget Proposal

Proposed Rules

  • CMS Issues Proposed Rule to Delay Medicaid Multiple Best Price Policy
  • CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals
  • CMS Interim Final Rule Requires LTC Providers to Report Vaccination Rates and Educate Staff and Residents

Courts

  • U.S. District Court of D.C. Rules in Milton S. Hershey Medical Center, et al. v. Becerra

Reports

  • GAO Report on Use of Digital Vaccine Credentials
  • GAO Report on the National Health Service Corps

Upcoming Hearings/Markups

June 15

House Energy and Commerce Committee, Subcommittee on Health Hearing: “Booster Shots and Enhancing Public Health Through Vaccine Legislation”
10:30 a.m.
For more information, click here.

June 16

House Education and Labor Committee Hearing: “Examining the Policies and Priorities of the U.S. Department of Health and Human Services”
9:00 a.m.
For more information, click here.

Congress

House

House Energy and Commerce Committee to Discuss Vaccine Legislation

On June 15, the House Energy and Commerce Subcommittee on Health will hold a hearing titled “Booster Shot: Enhancing Public Health Through Vaccine Legislation.” Bills to be discussed at the hearing are listed and linked below.

  • H.R. 550, the “Immunization Infrastructure Modernization Act”
  • H.R. 951, the “Maternal Vaccinations Act”
  • H.R. 979, the “Vaccine Fairness Act”
  • H.R. 1452, to direct the Secretary of Health and Human Services to publish the formula the Secretary uses to determine the allocation of COVID-19 vaccines, and for other purposes
  • H.R. 1550, the “Promoting Resources to Expand Vaccination, Education and New Treatments for HPV Cancers Act of 2021” or the “PREVENT HPV Cancers Act of 2021”
  • H.R. 1978, the “Protecting Seniors Through Immunization Act of 2021”
  • H.R. 2170, the “Helping Adults Protect Immunity Act” or the “HAPI Act”
  • H.R. 2347, the “Strengthening the Vaccines for Children Program Act of 2021”
  • H.R. 3013, the “COVID Vaccine Transportation Access Act”
  • H.R. 3655, the “Vaccine Injury Compensation Modernization Act”
  • H.R. 3742, the “Vaccine Information for Nursing Facility Operators Act” or the “Vaccine INFO Act”
  • H.R. 3743, the “Supporting the Foundation for the National Institutes of Health and the Reagan-Udall Foundation for the Food and Drug Administration Act”

Bipartisan Essential Drugs Stockpile Bill Reintroduced

On June 3, Reps. Buddy Carter (R-GA) and Lisa Blunt Rochester (D-DE) reintroduced the Essential Medicines Strategic Stockpile Act. The bill would pilot a program that allows states to partner with pharmaceutical companies to maintain a six-month supply of drugs.

Administration

HHS Commits $60 Million to Developing Advanced Generics

On June 8, the Department of Health and Human Services (HHS) committed $60 million to develop technology that improves the manufacturing of complex generic drugs. The investment aims to reduce U.S. dependence on foreign production of critical drug ingredients. HHS will use its authority under the Defense Production Act (DPA) to establish a group that will select 50-100 essential drugs to focus on.

CMS Increases Pay for At-Home COVID-19 Vaccination of Medicare Beneficiaries

On June 9, the Centers for Medicare and Medicaid Services (CMS) announced it would increase pay for at-home COVID-19 vaccination of Medicare beneficiaries from $40 to $75 per dose. This means that providers will receive around $70 more for the two vaccine doses. The agency noted that this change would facilitate the vaccinations of older Medicare beneficiaries.

CMS Increases Funding for Navigators

On June 4, the Centers for Medicare and Medicaid Services (CMS) announced it would make $80 million in grant funding available for navigators in states with a federal facilitated marketplace in the 2022 plan year. Applications will be accepted until July 6, and 120 grants will be distributed. The funding represents an eightfold increase from the previous year.

FDA Authorizes Injection Version of Regeneron Antibody Cocktail

On June 3, the Food and Drug Administration (FDA) announced an updated emergency use authorization that would allow a reduced dose of the Regeneron antibody cocktail REGEN-COV to be used as investigational treatment for patients older than 12 with mild-to-moderate COVID-19 symptoms. The newly authorized dosage is composed of 600 milligrams of casirivimab and 600 milligrams of imdevimab and can be administered by injection if IV infusion is not possible. Regeneron had an antibody treatment for 1,200 milligrams of casirivimab and 1,200 milligrams of imdevimab via IV infusion treatment authorized in November 2020.

FDA Approves Biogen’s Alzheimer Drug

On June 7, the Food and Drug Administration (FDA) approved Biogen’s Alzheimer drug Aduhelm (aducanumab). The agency noted that although the data is not straightforward, the drug’s benefits outweigh its risks. The FDA will use the accelerated approval pathway, which requires post-approval studies to verify the clinical benefit. Following approval, three members of the advisory committee resigned.

FDA Publishes Four Guidances on Drug Supply Chain Security Act Compliance

On June 3, the Food and Drug Administration (FDA) published four guidances that clarify how pharmaceutical companies can comply with the Drug Supply Chain Security Act (DSCSA). The guidance is intended to help manufacturers and distributors identify suspect drug products and provides information on how the FDA should be notified in such cases.

The final guidance, “Product Identifiers Under the Drug Supply Chain Security Act, Questions and Answers,” can be found here. The final guidance, “Drug Supply Chain Security Act Implementation: Identification of Suspect Product and Notification Guidance for Industry,” can be found here. The revised draft guidance, “Definitions of Suspect Product and Illegitimate Product for Verification Obligations Under the DSCSA,” can be found here. The new draft guidance, “Enhanced Drug Distribution Security at the Package Level Under the DSCSA,” can be found here.

White House Announces Worldwide Vaccine Distribution Plan

On June 10, the White House announced that the U.S. will purchase and donate 500 million doses of Pfizer’s COVID-19 vaccines to 92 low- and middle-income countries. This will add to the 80 million COVID-19 vaccine doses the U.S. has already committed to allocating across the world, with 25 million COVID-19 vaccines dedicated to the COVAX initiative.

White House Report Says FDA Needs Authority to Collect Drug Supply Chain Information

In a June 8 supply chain report, the Biden administration, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) called on Congress to give the FDA power to collect information about drugs and drug ingredients in the U.S. supply chain. The report and its recommendations were issued in response to a Feb. 24 executive order that directed the administration to launch a 100-day review and strategy development to address supply chain vulnerabilities.

The full report can be found here.

Biden Administration Commits Funds to Merck for COVID-19 Treatment

On June 9, the Biden administration committed to pay Merck $1.2 billion for 1.7 million courses of molnupiravir (MK-4482), an investigational COVID-19 treatment, if the Food and Drug Administration (FDA) grants the antiviral emergency use authorization.

NIH Trial to Study Mixed COVID-19 Vaccine Boosters

On June 1, the National Institutes of Health (NIH) began a clinical trial to test the safety and effectiveness of a Moderna COVID-19 vaccine booster shot for adults who have already been immunized with one of the other three COVID-19 vaccines authorized by the Food and Drug Administration (FDA). Dr. Anthony Fauci stated that this trial will inform policy decisions on the potential use of mixed vaccine schedules should booster doses be indicated.

President Biden’s Budget Proposal

On Friday, May 28, 2021, the White House released the Fiscal Year (FY) 2022 Budget. The complete budget can be found here. The FY 2022 Budget in Brief can be found here, and the Fact Sheet: The President’s Budget for Fiscal Year 2022 can be found here.

The FY 2022 Budget includes two plans that President Biden has already put forward: the American Families Plan and the American Jobs Plan. President Biden’s budget request represents the White House priorities, but it is Congress’s responsibility to draft and set the budgets. The budget sent to Congress represents the president’s vision and priorities. It is still up to Congress to create and pass a budget resolution.

In the budget, the president calls on Congress to take action to address a public option, lower prescription drug costs and lower Medicare eligibility, but there are no formal financial plans to support these proposals. The budget also does not include a renewal of the Hyde Amendment, which bars federal funding for abortions.

CMS

FY 2022 budget estimates $1.4 trillion in mandatory and discretionary outlays for the Centers for Medicare and Medicaid Services (CMS), a net increase of $96 billion from last year.

  • $995.7 billion to provide Medicare benefits
  • $53 billion to raise wages and benefits for home health care workers
  • $2.4 billion for program integrity, including the Health Care Fraud and Abuse Control Program and the Medicaid Integrity Program
  • $4.3 billion for CMS program management
  • $1.1 billion for the CMS Center for Medicare and Medicaid Innovation
  • $864 million for CMS federal administrative costs
  • $472 million for survey and certification
  • $1.7 billion to operate the federally facilitated marketplace

FDA

The FY 2022 budget requests $6.5 billion for the FDA, an increase of $477 million above the FY 2021 enacted amount. This includes $3.6 billion in budget authority and $2.9 billion in user fees.

  • $1.6 billion for food safety, which includes:
    • $45 million to support the New Era of Smarter Food Safety
    • $23 million for the Data Modernization and Enhanced Technologies Initiative
    • $20 million for emerging chemical and toxicology issues
    • $19 million for maternal and infant health and nutrition
    • $54 million to support capacity-building and infrastructure investments
  • $500 million for vaccines, therapeutics and medical supplies
  • $478 million to support rent, utilities, maintenance and infrastructure improvements to advance public health
  • $100 million to combat youth tobacco use
  • $83 million to support data modernization efforts

HRSA

The FY 2022 budget requests $12.6 billion for the Health Resources and Services Administration (HRSA), which is $497 million above the FY 2021 enacted amount. This includes $7.8 billion in discretionary budget authority and $4.7 billion in mandatory funding.

  • $5.6 billion for health centers
  • $152 million to increase access to HIV prevention services, outreach efforts and care coordination
  • $2.6 billion for the Ryan White HIV/AIDS Program
  • $190 million for Ending the HIV Epidemic in the U.S. Program
  • $340 million to the Title X Family Planning Program
  • $138 million to improve maternal health and reduce maternal mortality and morbidity
  • $377 million in mandatory funding for the Home Visiting Program
  • $969 million for other maternal and child health programs
  • $165 million for the Rural Communities Opioid Response Program
  • $37 million for telehealth
  • $1.8 billion for HRSA workforce programs, including:
    • $477 million for the National Health Service Corps
    • $225 million for the Behavioral Health Workforce Development and Technical Assistance and Evaluation Programs
  • $17 million to improve operations and oversight of the 340B program
  • $21 million for the Vaccine Injury Compensation Program and Countermeasures Injury Compensation Program
  • $78 million for the Organ Transplantation and the Blood Stem Cell Transplantation Programs
  • $168 million to support investments in information technology and cybersecurity

CDC

The FY 2022 budget proposal requests $15.4 billion for the Centers for Disease Control and Prevention (CDC) and the Agency for Toxic Substances and Disease Registry (ATSDR). This includes $8.7 billion in discretionary funding, which represents the largest budget authority increase in nearly two decades.

  • $1 billion to strengthen vaccine confidence
  • $500 million to modernize public health surveillance and data collection
  • $709 million in program support funding
  • $400 million in flexible funding to support public health infrastructure
  • $35 million for the Infectious Disease Rapid Response Reserve Fund
  • $5.1 billion in mandatory funding for the Vaccines for Children Program
  • $946 million for the National Center for Immunization and Respiratory Diseases
  • $1.4 billion to support local response to infectious disease outbreaks
  • $1.1 billion for CDC’s HIV/AIDS surveillance
  • $678 million for the National Center for Emerging Zoonotic Infectious Diseases
  • $30 million to modernize infectious disease public health programs
  • $742 million for Public Health Scientific Services (PHSS)
  • $106 million for public health workforce and career development programs
  • $1.1 billion for the National Center for Injury Prevention and Control
  • $713 million for opioid overdose prevention and surveillance
  • $1.5 billion for chronic disease prevention and health promotion activities
  • $43 million for the Maternal Mortality Review Committees
  • $333 million to support CDC’s environmental health activities
  • $345 million for occupational safety
  • $641 million to monitor and treat survivors of 9/11
  • $698 million for global health activities
  • $82 million for ATSDR

NIH

The budget proposal would raise the National Institutes of Health’s (NIH) budget by $9 billion, to a total of $52 billion in FY 2022. This represents an increase of 22 percent.

  • $6.5 billion investment to launch ARPA-H, which would focus on research and development in health with an initial focus on cancer, diabetes and Alzheimer’s
  • $2.5 billion to continue ongoing research, which includes:
    • $2.2 billion for opioids, stimulant and pain research
    • $330 million to enhance health disparities and inequalities research
    • $100 million to continue research on climate change
    • $26 million to support HIV/AIDS research
    • $30 million for the Implementing the Maternal Health and Pregnancy Outcomes Vision for Everyone (IMPROVE) Initiative
    • $25 million for firearm violence prevention research
    • $250 million for NIH infrastructure, buildings and facilities

Proposed Rules

CMS Issues Proposed Rule to Delay Medicaid Multiple Best Price Policy

On May 26, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that would delay the Medicaid Multiple Best Price Policy implementation for six months. The Medicaid Multiple Best Price Policy would require manufacturers to report multiple best prices for a drug under Medicaid if the drug manufacturer is participating in a value-based purchasing arrangement.

The original rule, which was finalized on Dec. 31, 2020, would have implemented the requirements on Jan. 21, 2022, but the Biden administration’s proposed rule would delay the implementation until July 1, 2022.

The most recent proposed rule, titled “Medicaid Program; Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements: Delay of Effective Date for Provision Relating to Manufacturer Reporting of Multiple Best Prices Connected to a Value Based Purchasing Arrangement; Delay of Inclusion of Territories in Definition of States and United States,” can be found here.

CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals

On April 27, the Centers for Medicare and Medicaid Service (CMS) issued a proposed rule titled “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program.”

The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for fiscal year (FY) 2022. CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for IPPS hospitals and LTCHs on an annual basis. A fact sheet that discusses major provisions of the proposed rule can be downloaded from the Federal Register here.

The public comment period closes on June 28.

The rule can be found here.

CMS Interim Final Rule Requires LTC Providers to Report Vaccination Rates and Educate Staff and Residents

On May 11, the Centers for Medicare and Medicaid Services released an interim final rule titled “COVID-19 Vaccine Requirements for Long-Term Care Facilities and Intermediate Care Facilities for Individuals with Intellectual Disabilities Residents, Clients, and Staff.”

The rule requires long-term care (LTC) facilities and intermediate care facilities treating individuals with intellectual disabilities to submit weekly reports on the COVID-19 vaccination status of residents and staff. In addition, the interim final rule requires LTC and intermediate care facilities to educate residents and staff about the vaccine and offer shots when supplies are available.

There is a 60-day comment period.

The rule can be found here.

Courts

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

U.S. District Court of D.C. Rules in Milton S. Hershey Medical Center, et al. v. Becerra

On May 17, 2021, the U.S. District Court for D.C. ruled in the case of Milton S. Hershey Medical Center, et al. v. Becerra that the Department of Health and Human Services (HHS) unlawfully changed the assigned weighting factors used to calculate reimbursements to hospitals for stipends, salaries and administrative costs related to training residents and fellows. The reimbursements, called direct graduate medical education (DGME) payments, are determined by the weighted average of full-time equivalent (FTE) residents employed by the hospital.

The hospitals challenged a 1997 Centers for Medicare and Medicaid Services (CMS) final regulation that reduces the weighted number of FTEs a hospital can claim for reimbursement when the hospital’s unweighted FTE count exceeds the number of FTE residents for the most recent cost reporting period ending on or before Dec. 31, 1996. Therefore when a hospital exceeds the cap, its weighted FTE count is reduced proportionally to the amount by which it exceeded the cap.

The District Court of D.C. stated that the text of the statute does not give the HHS secretary the authority to change the weights that Congress assigned to residents and fellows when calculating the number of FTE residents per hospital. Teaching hospitals should find that their Medicare reimbursement for training physicians will increase as a result.

Reports

GAO Report on Use of Digital Vaccine Credentials

On June 3, the Government Accountability Office (GAO) released a report titled “Digital Vaccine Credentials” that explains how digital vaccine credentials function, and notes some limitations. The report notes that although digital vaccine credentials could help mitigate outbreaks and allow for a safe reopening, there are challenges related to data protection, interoperability and equity.

The full report can be found here.

GAO Report on the National Health Service Corps

On June 1, the Government Accountability Office (GAO) released a report titled “National Health Service Corps: Program Directs Funding to Areas with Greatest Provider Shortages.” The report states that the National Health Service Corps (NHSC) Program offers scholarships and loan repayments to health care providers in exchange for working in areas where there are provider shortages. The GAO found that 14,000 providers participated in NHSC programs in fiscal year 2020, but noted that 43 percent of providers who newly applied to NHSC programs did not receive funding.

The full report can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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