Washington Healthcare Update - March 2021 #5

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This week in Washington: The House and Senate are in recess.

Congress

House

  • Representatives Propose a Permanent Extension of CHIP Funding
  • Representatives Introduce Bill to Allow Medicare Advantage Plans to Reimburse Audio-Only Telehealth Visits
  • Pelosi States That Drug Pricing Bill May Help Pay for Infrastructure Package

Senate

  • 32 Democratic Senators Support Medicare Drug Price Negotiation Bill
  • Senators Reintroduce Bill to Increase Drug Pricing Transparency
  • Senator Sanders Chaired Senate HELP Hearing on Drug Pricing
  • Senate Confirms Shalanda Young as OMB Deputy Director
  • Senate Confirms Rachel Levine as Assistant Health Secretary
  • Senate Confirms Vivek Murthy as Surgeon General
  • Senate Passes Legislation to Avert Sequester Cut

Administration

  • President Biden Doubles Vaccine Distribution Goal
  • Department of Health and Human Services (HHS) Halts Distribution of Eli Lilly’s Bamlanivimab
  • Centers for Medicare and Medicaid Services (CMS) to Host Webinar on Commercial Repayment Center Portal
  • Center for Medicare and Medicaid Services (CMS) ACA Special Enrollment Period Extended to August 15

Proposed Rules

  • Food and Drug Administration (FDA) Guidance on Bulk Drug Substances

Courts

  • Update on Cost-Sharing Reduction Payments Court Cases

Reports

  • Government Accountability Office’s (GAO) Annual Fiscal Health Report

Congress

House

Representatives Propose a Permanent Extension of CHIP Funding

The House Energy and Commerce Committee is looking at ways to strengthen the Affordable Care Act (ACA) and expand Medicaid coverage. A proposal by Reps. Vern Buchanan (R-FL) and Lucy McBath (D-GA) to permanently extend the Children’s Health Insurance Program (CHIP) funding is under discussion as part of the committee’s agenda. CHIP is set to expire in 2027. In addition, Rep. Nanette Diaz Barragán’s (D-CA) has introduced a bill that would provide the extension in addition to letting states increase Medicaid and CHIP eligibility levels for children living in families with incomes up to 300 percent of the federal poverty level without a waiver.

Representatives Introduce Bill to Allow Medicare Advantage Plans to Reimburse Audio-Only Telehealth Visits

On March 24, Reps. Terri Sewell (D-AL) and Gus Bilirakis (R-FL) introduced “The Ensuring Parity in MA and PACE for Audio-Only Telehealth Act,” which would allow Medicare Advantage plans to count diagnoses from audio-only telehealth services towards the risk adjustment for plan years 2020 and 2021. The bill would also allow providers to be reimbursed at the same rate for audio-only telehealth and in-person visits during the pandemic. The bill is slightly different from one introduced last month in the Senate, as the Senate bill does not apply its provisions to PACE.

Pelosi States That Drug Pricing Bill May Help Pay for Infrastructure Package

On March 23, House Speaker Nancy Pelosi (D-CA) stated that the upcoming infrastructure package will likely be paid for by including Democrats’ drug pricing bill, the Lower Drug Costs Now Act of 2019 (H.R. 3). Leader Pelosi also said that the infrastructure package will include several health care provisions, including a permanent increase to the ACA tax credits. Pelosi stated that including H.R. 3 would pay for $500 billion of the cost of the infrastructure bill and could be utilized to boost ACA tax credits and make ACA coverage more affordable.

Senate

32 Democratic Senators Support Medicare Drug Price Negotiation Bill

On March 22, Sen. Amy Klobuchar (D-MN) reintroduced the Empowering Medicare Seniors to Negotiate Drug Prices Act, which would allow Medicare to negotiate drug prices. The bill has 32 Democratic cosponsors, including Sen. Joe Manchin (D-WV). Rep. Peter Welch (D-VT) introduced identical legislation in the House.

Senators Reintroduce Bill to Increase Drug Pricing Transparency

On March 23, Sens. Tammy Baldwin (D-WI), Mike Braun (R-IN), Tina Smith (D-MN) and Lisa Murkowski (R-AK) reintroduced the FAIR Drug Pricing Act.

The legislation would require drug manufacturers to notify the U.S. Department of Health and Human Services (HHS) of certain price increases and submit a transparency and justification report 30 days prior to increasing the price of certain drugs by more than 10 percent in one year or 25 percent over three years. The report will require manufacturers to provide information to justify the price increase.

Senator Sanders Chaired Senate HELP Hearing on Drug Pricing

On March 23, the Senate Health, Education, Labor and Pensions (HELP) Committee Subcommittee on Primary Health and Retirement Security held a hearing titled “Why Does the US Pay the Highest Prices in the World for Prescription Drugs?” Subcommittee Chair Bernie Sanders (I-VT) and other subcommittee Democrats expressed support for allowing drug pricing negotiations and benchmarking drugs costs with other nations. Sen. Susan Collins (R-ME), the ranking Republican on the subcommittee, highlighted manufacturers’ gaming of the patent system and Sen. Lisa Murkowski (R-AK) spoke in support of her bill to make drug companies justify their price hikes. Sen. Mike Braun (R-IN) expressed support for allowing employers and the government to negotiate drug prices.

Senate Confirms Shalanda Young as OMB Deputy Director

On March 24, the Senate confirmed Shalanda Young to be the deputy director of the Office of Management and Budget in a 63-37 vote. Young won support from 13 Republicans.

Senate Confirms Rachel Levine as Assistant Health Secretary

On March 24, the Senate confirmed Dr. Rachel Levine as Assistant Secretary for Health by a vote of 52-48, marking the first Senate confirmation of an openly transgender official. Two Republicans joined in supporting Levine, who previously served as Pennsylvania’s Secretary of Health.

Senate Confirms Vivek Murthy as Surgeon General

On March 23, Dr. Vivek Murthy was confirmed as Surgeon General, a position he held in the Obama administration. He was confirmed by a vote of 57 to 13. His confirmation was less antagonistic this time than it was in 2014. In the Obama administration, his confirmation fight dragged on for over a year because Republicans were concerned he would use his position to push for stricter gun control.

Senate Passes Legislation to Avert Sequester Cut

On March 25, the Senate passed an extension of the Medicare sequester moratorium through the end of the year. Without an extension, the delay in the 2 percent sequester reductions would have expired March 31. The House of Representatives will vote on the measure April 13 when it returns from its recess. The American Hospital Association is pushing the Centers for Medicare and Medicaid Services (CMS) to hold claims until the House returns to session and has a chance to vote on the Senate version. In the past, CMS has held claims when they knew Congress was about to act to avert Medicare payment reductions.

However, the Senate legislation does not include a House provision that would have also delayed 4 percent reductions that will be triggered by spending in the American Rescue Plan. Providers continue to push to have those reductions, which would start in the fall, delayed.

Administration

President Biden Doubles Vaccine Distribution Goal

In a March 25 press conference, President Joe Biden said his administration is aiming to distribute 200 million doses of COVID-19 vaccines in its first 100 days, doubling the original goal after passing it last week.

Department of Health and Human Services (HHS) Halts Distribution of Eli Lilly’s Bamlanivimab

On March 24, HHS announced it would stop distributing Eli Lilly’s COVID-19 monoclonal antibody bamlanivimab as a single therapy for COVID-19 due to increased spread of variants resistant to bamlanivimab when it is administered alone.

HHS will continue to distribute Lilly’s bamlanivimab in conjunction with etesevimab to be used as part of an antibody cocktail. The announcement was prompted by data demonstrating that bamlanivimab administered alone is not effective against emerging strains of COVID-19.

Centers for Medicare and Medicaid Services (CMS) to Host Webinar on Commercial Repayment Center Portal

CMS will host a webinar to highlight the benefits and features of the Commercial Repayment Center Portal (CRCP) on April 21, 2021. Webinar details can be found in the official announcement here.

Center for Medicare and Medicaid Services (CMS) ACA Special Enrollment Period Extended to August 15

On March 23, CMS announced that Americans will now have until Aug. 15 to buy Affordable Care Act coverage through healthcare.gov. The special enrollment period had previously been slated to end on May 15. This change gives consumers more time to access the increased tax credits made available by the American Rescue Plan.

The American Rescue Plan increased credits for people who were already eligible for subsidies and provided help for people earning more than 400 percent of poverty level who were previously ineligible for tax credits. It also provides maximum ACA credits to anyone receiving unemployment in 2021.

Proposed Rules

Food and Drug Administration (FDA) Guidance on Bulk Drug Substances

On March 23, the FDA provided a preliminary assessment on five bulk drug substances for use by outsourcing facilities. The notice posted to the Federal Register states that the FDA has considered and proposed to include quinacrine hydrochloride (“quinacrine”) on the 503B Bulk Drug List. The notice also states that the FDA considered but proposes not to include bromfenac sodium, mitomycin-C, nepafenac and hydroxychloroquine sulfate on the list. Comments on the notice close on May 24.

The notice can be found here.

Courts

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

Update on Cost-Sharing Reduction Payments Court Cases

The U.S. Department of Justice (DOJ) has until April 26 to decide whether it wants to weigh in on a U.S. Supreme Court case in which insurers are challenging the Trump administration decision to not pay the full amount of cost-sharing reduction payments owed insurers since 2017.

At issue are the cost-sharing reductions (CSRs) that certain silver-level Affordable Care Act (ACA) plans must provide to low-income individuals. The Obama administration had directly paid the CSRs out of the pot of money used for tax credits, but the Trump administration determined that since Congress never appropriated the funds, paying them was illegal. The payments were ended in October 2017, but insurers figured out a work-around, dubbed silver-loading, that allowed the plans to mitigate the CSR losses through increased tax credits.

Insurers sued the Trump administration for payment. The results of the cases varied, but several Court of Federal Claims judges ruled in favor of the insurers and in at least one case, the judge said the Trump administration had to reimburse plans not only for money lost in 2017, but also the full amount owed in 2018, regardless of the silver-loading work-around.

In August, a three-judge appeals court panel ruled in favor of the insurers on the merits, citing SCOTUS’s April 2020 ruling in a similar case that found the government was obligated to pay insurers money owed under the ACA’s risk corridor program.

In its petition, the Common Ground Healthcare Cooperative argues the Federal Circuit ruling gives the government “strong incentive not to pay in the hope of receiving a reduction through mitigation.”

The insurers further say that allowing the government to ignore obligations can create greater problems. The government itself admitted that the decision to end CSRs will cost taxpayers $194 billion more over 10 years, Common Ground says, referring to a Congressional Budget Office score on silver-loading that the Department of Justice wrote in a February brief in another case at the Federal Circuit.

Common Ground Healthcare Cooperative, which is representing 101 insurers in a class action, asked the high court to review their case in a Feb. 24 petition. Five days earlier, Maine Community Health Center (MHCO) and Community Health Choice, Inc. also asked the high court to take up the issue after the full U.S. Court of Appeals for the Federal Circuit refused their request to review the decision from a three-judge panel.

“These holdings reflect a principle as old as the Nation itself: The Government should honor its obligations,” Justice Sonia Sotomayor had said in the risk corridors ruling.

“The Federal Circuit’s ruling undermines that fundamental principle and thus warrants this Court’s review,” Common Ground said.

The Biden administration was initially asked to respond to the MCHO, Community Health Choices petition by March 25, but that has been delayed until April 26.

Reports

Government Accountability Office’s (GAO) Annual Fiscal Health Report

On March 23, the GAO published its fifth annual report on the nation’s fiscal outlook. The report states that in fiscal year 2020, debt held by the public reached about 100 percent of gross domestic product, up from 79 percent a year earlier. The GAO estimates that if left unchecked, debt will grow to 200 percent of GDP in 2048.

The report recommends that Congress and the White House pivot to putting the government on a sustainable long-term fiscal path once the pandemic subsides and the economy recovers. The GAO recommends that Congress consider a new approach to the debt limit other than suspending it or raising it. The limit on the nation’s borrowing authority is currently suspended through the end of July.

GAO recommended that the following steps be taken to improve the fiscal outlook:

  • Narrow the tax gap between taxes owed and those paid
  • Reduce improper payments
  • Implement program reforms recommended by the GAO

The complete report can be found here.


If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Alexandra Gale, Research Associate

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in Washington, D.C.

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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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