Washington Healthcare Update - May 2021 #4

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This week in Washington: Talks continue on infrastructure, Senate committees moving forward on health legislation, President’s budget due the end of the week.

Upcoming Hearings/Markups

Congress

House

  • Following Hearing, Democratic Committee Chairs Ask for FTC Investigation into AbbVie’s Pricing Practices
  • House Passes Orphan Drug Exclusivity Loophole Bill

Senate

  • Executive Session to Discuss Legislation
  • Procedural Vote for Brooks-LaSure Nomination Set
  • Bipartisan Health Savings Bill Reintroduced

Administration

  • HHS to Invest American Rescue Plan Funds into the Pediatric Mental Health Care Access Program
  • FDA Issues Final Guidance on Use of Master Protocols for COVID-19 Drugs and Biologics
  • HRSA Threatens to Fine Pharmaceutical Companies for Restricting 340B Discounts
  • HHS-OIG and DOJ Warn Providers That Charging for the COVID-19 Vaccine May Violate the False Claims Act
  • FDA Updates Its Inspection Guidance
  • FDA Issues Revised Draft Guidance on Use of Covariates in Clinical Trials
  • FDA Delays Unique Device Identifier Labeling Deadline
  • IRS Guidance on COBRA Assistance Released

Proposed Rules

  • CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals
  • CMS Issues Proposed Rule on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities
  • CMS Issues Proposed Rule Updating Hospice Payment and Cap Increase
  • CMS Issues Proposed Rule on Inpatient Rehabilitation Facility Prospective Payment System
  • CMS Interim Final Rule Requires LTC Providers to Report Vaccination Rates and Educate Staff and Residents

Courts

  • Supreme Court to Hear Mississippi Abortion Case
  • Supreme Court Dismisses Title X Lawsuit
  • Texas Sues Regarding 1115 Waiver Extension
  • State of Missouri Sued for Not Implementing Medicaid Expansion
  • Eli Lilly Sues HHS over 340B Policy

Reports

  • GAO Report on the Department of Veterans Affairs’ Response to COVID-19
  • GAO Report on the U.S. President’s Emergency Plan for AIDS Relief
  • GAO Report on COVID-19 in Nursing Homes
  • GAO Report on COVID-19 Program Flexibilities in Medicare and Medicaid

Upcoming Hearings/Markups

May 25

House Appropriations Committee Hearing: “FY 2022 Budget Request for the National Institutes of Health”
10:00 a.m.
For more information, click here.

Senate Health, Education, Labor and Pensions Committee Executive Session: “S. __, Maternal Health Quality Improvement Act; S. 1491; S.__, Supporting the Foundation for the National Institutes of Health and the Reagan-Udall Foundation for the Food and Drug Administration Act; S. 1301; S. 610; and S. 1658”
10:00 a.m. (This session may not be webcast)
For more information, click here.

House Appropriations Committee Hearing: “FY 2022 Defense Health and Medical Readiness
11:00 a.m.
For more information, click here.

May 26

House Appropriations Committee Hearing: “FY 2022 Budget Request for the Centers for Disease Control and Prevention”
10:00 a.m.
For more information, click here.

May 27

House Veterans’ Affairs Committee Hearing: “Investing in a Better VA: Examining the Role of Infrastructure in Veterans’ Access to Care and Benefits”
2:30 p.m.
For more information, click here.

House

Following Hearing, Democratic Committee Chairs Ask for FTC Investigation into AbbVie’s Pricing Practices

On May 18, Rep. Carolyn Maloney, chair of the Committee on Oversight and Reform, and Rep. Jerrold Nadler, chair of the Judiciary Committee, wrote to ask Federal Trade Commission (FTC) Acting Chair Kelly Slaughter to investigate if AbbVie broke antitrust laws with its patent strategy. The letter, which can be found here, stated that the committee’s review of nonpublic documents indicates that AbbVie has delayed biosimilar competition for far longer than warranted by its own evaluations of its patent portfolio strength, which anticipated biosimilar entry no later than 2017.

The representatives’ request for a formal inquiry was made on the same day that the AbbVie CEO testified before Congress about the company’s pricing practices for drugs Humira and Imbruvica. Testimony from the May 18 hearing can be found here.

In addition, the House Oversight Committee released a Drug Pricing Investigation report into AbbVie’s pricing practices for Humira and Imbruvica on May 18. The report can be found here.

House Passes Orphan Drug Exclusivity Loophole Bill

On May 19, the House passed the Fairness in Orphan Drug Exclusivity Act (H.R. 1629) by an overwhelming vote of 402-23. The bill would amend the cost recovery pathway under the Orphan Drug Act to require pharmaceutical companies seeking orphan drug designations to demonstrate they do not expect to recoup development costs.

Senate

Executive Session to Discuss Legislation

On May 25, the Senate Health, Education, Labor and Pensions Committee will hold an executive session titled “S. __, Maternal Health Quality Improvement Act; S. 1491; S.__, Supporting the Foundation for the National Institutes of Health and the Reagan-Udall Foundation for the Food and Drug Administration Act; S. 1301; S. 610; and S. 1658.” The bills to be discussed at this meeting are listed below.

  • S. __, Maternal Health Quality Improvement Act
  • S. 1491, Rural Maternal and Obstetric Modernization of Services Act
  • S. 1662, Supporting the Foundation for the National Institutes of Health and the Reagan-Udall Foundation for the Food and Drug Administration Act
  • S. 1301, Promoting Physical Activity for Americans Act
  • S. 610, Dr. Lorna Breen Health Care Provider Protection Act
  • S. 1658, Providing Urgent Maternal Protections for Nursing Mothers Act

Procedural Vote for Brooks-LaSure Nomination Set

On May 24, the Senate will vote on whether to invoke cloture on Chiquita Brooks-LaSure’s confirmation to be the next administrator for the Centers for Medicare and Medicaid Services (CMS). Senate Majority Leader Chuck Schumer (D-NY) filed cloture on May 20.

A successful cloture vote would limit floor debate on the confirmation, and both the cloture and final vote require simple majorities.

Bipartisan Health Savings Bill Reintroduced

On May 20, Sens. Mike Crapo (R-ID), Ben Cardin (D-MD), Angus King (I-ME) and Kevin Cramer (R-ND) reintroduced the Preventive Health Savings Act (S. 1685), which would direct the congressional budget to include the cost savings of preventive health care. The bill would also allow certain committee chairs to request an analysis of preventive measures extending beyond the 10-year window.

The bill text can be found here.

Administration

HHS to Invest American Rescue Plan Funds into the Pediatric Mental Health Care Access Program

On May 20, the Department of Health and Human Services (HHS) announced it would invest $14.2 million in funds made available to the Pediatric Mental Health Care Access Program. The investment will allow the program to expand into new states and create regional networks of psychiatrists who use telehealth to consult with pediatricians.

FDA Issues Final Guidance on Use of Master Protocols for COVID-19 Drugs and Biologics

On May 17, the Food and Drug Administration (FDA) issued a final guidance that details how product sponsors can use master protocols to test drugs and biologics intended to treat or prevent COVID-19. The guidance was published and finalized without public input, and primarily focuses on umbrella trials and platform trials.

The final guidance can be found here.

HRSA Threatens to Fine Pharmaceutical Companies for Restricting 340B Discounts

On May 17, the Health Resources and Services Administration (HRSA) sent a letter to six drug companies stating that their policies restricting discounts for 340B providers that dispense medications through contract pharmacies have resulted in overcharges and violate the 340B statute. In the letter, HRSA Acting Administrator Diana Espinosa threatened to fine drug companies that continue to restrict discounts.

The letters, which can be found here, were sent to AstraZeneca, Lilly USA, Novartis Pharmaceuticals, Novo Nordisk, Sanofi and United Therapeutics.

HHS-OIG and DOJ Warn Providers That Charging for the COVID-19 Vaccine May Violate the False Claims Act

On May 17, the Department of Justice (DOJ) and the Health and Human Services Office of Inspector General (HHS-OIG) wrote a letter advising the public that they should not be asked to pay for the COVID-19 vaccine. The letter also warned providers not to seek payment from individual vaccine recipients, and stated that doing so might violate the False Claims Act and could lead to criminal and civil penalties.

The letter can be found here.

FDA Updates Its Inspection Guidance

On May 17, the Food and Drug Administration (FDA) updated its inspection question-and-answer guidance with additional information on how it will handle drug applications. The guidance includes information on how the agency will approve applications for issue response letters when a physical facility inspection cannot take place due to COVID-19-related travel restrictions.

The original guidance was published in August 2020, and the updated version from May 2021 can be found here.

FDA Issues Revised Draft Guidance on Use of Covariates in Clinical Trials

On May 20, the Food and Drug Administration (FDA) issued a revised version of its 2019 draft guidance that explains how drugs and biologics sponsors can use covariates in their clinical trials to more accurately estimate potential treatment effects on trial participants. The guidance provides information on using linear and nonlinear models from covariate adjustment.

The guidance can be found here.

FDA Delays Unique Device Identifier Labeling Deadline

On May 20, the Food and Drug Administration (FDA) announced it would be pushing the deadline back by two years by which medical device manufacturers must switch to using unique device identifiers (UDI) by two years. Medical device manufacturers now have until Sept. 23, 2023, to comply with the UDI requirements, which would require all manufacturers to use a standardized identification system for medical devices in the U.S and eliminate the use of legacy NHRICs and NDCs. The FDA stated that the deadline would be delayed due to the COVID-19 pandemic.

This is the second time the agency has delayed enforcement of its UDI rule. The original compliance guideline was 2018, but the FDA pushed it back to 2021.

The guidance document on the deadline change can be found here.

IRS Guidance on COBRA Assistance Released

On May 18, the Internal Revenue Service (IRS) issued guidance on the 100 percent federal coverage of COBRA premiums authorized by the American Rescue Plan for Apr. 1 through Sept. 30. The guidance explains that COBRA premium assistance will be available for workers who are not otherwise eligible for an employer plan or Medicare, although people enrolled in Affordable Care Act coverage can switch with COBRA. The 40-page guidance document answers dozens of other technical and policy questions, including how employers can calculate and claim the tax credits.

For more information, click here.

Proposed Rules

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 Issues Proposed Rule on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities

On April 8, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year (FY) 2022.” In the rule, CMS proposes increasing skilled nursing facilities’ (SNF) pay a net 1.3 percent, or $444 million, in FY 2022 and adding two new quality reporting measures in FY 2021: vaccination rates among health care workers and health care–acquired infections.

The proposed rule also asks for public comments on potential ways to readjust the Patient Driven Payment Model (PDPM), a patient payment classification system created in 2019 to be budget-neutral but that data shows caused an unintended $1.7 billion increase in payments in fiscal year 2020. It is possible that the data was affected by the COVID-19 pandemic.

CMS proposes to add a new claims-based measure, health care–associated infections (HAI), to the quality reporting, which would use Medicare fee-for-service claims data to estimate the rate of health care–associated infections acquired during nursing home care that result in hospitalization. The goal is to assess which nursing homes have higher rates of infections acquired during care. The proposed rule also suggests several changes to the SNF Quality Reporting Program and seeks feedback on plans to define digital quality measures for the program. The proposed rule would also alter the SNF Value-Based Purchasing Program, which offers incentive payments to nursing homes based on the quality of care.

Public comments on the proposed rule will be accepted until June 7.

The rule can be found here.

CMS Issues Proposed Rule Updating Hospice Payment and Cap Increase

On April 8, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Medicare Program: FY 2022 Hospice Wage Index and Payment Rate Update, Hospice Conditions of Participation Updates, Hospice and Home Health Quality Reporting Program Requirements.” The proposed rule would increase payments in FY 2022 by 2.3 percent, or $530 million. Providers that do not meet the quality reporting requirements will receive a 2 percentage point reduction to their annual market basket update. The proposed rule also would increase the aggregate payment cap from $30,683.93 in 2021 to $31,389.66 for fiscal year 2022, a 2.3 percent increase.

The proposed rule would also revise the labor shares based on the compensation cost weights for each level of care, with labor share at 74.6 percent for continuous home care, 64.7 percent for routine home care, 60.1 percent for inpatient respite care and 62.8 percent for general inpatient care. In addition, the proposed rule would make the pseudo-patient waiver for hospice aide competency testing permanent and let pseudo-patients be used for hospice aide competency training. It would also have hospices conduct a competency evaluation related to whatever deficiencies and related skills a hospice aide supervisor noted. Also, the rule would allow CMS to modify the Hospice Quality Reporting Program by adding measures meant to promote health equity measures.

Comments are accepted until June 7.

The proposed rule can be found here.

CMS Issues Proposed Rule on Inpatient Rehabilitation Facility Prospective Payment System

On April 7, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2022 and Updates to the IRF Quality Reporting Program.” The proposed rule would update Medicare payment policies and rates for facilities under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for fiscal year (FY) 2022. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for IRFs on an annual basis.

For FY 2022, CMS proposes to update the IRF PPS payment rates by 2.2 percent based on the proposed IRF market basket update of 2.4 percent, less a 0.2 percentage point multi-factor productivity (MFP) adjustment. IRFs that do not meet reporting requirements are subject to a 2 percentage point (2.0 percent) reduction in their annual increase factor. With the objective of advancing racial equity, CMS plans to utilize several social determinants of health measures and is seeking feedback. In addition, the rule proposes using COVID-19 vaccination coverage measures and updating transfer of health (TOH) information to determine quality of care.

Comments are accepted until June 7.

The proposed 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.

Supreme Court to Hear Mississippi Abortion Case

On May 17, the Supreme Court agreed to take up a case over Mississippi’s law that bans abortions after 15 weeks. This is seen as the first direct challenge to Roe v. Wade in decades.

Supreme Court Dismisses Title X Lawsuit

On May 17, the Supreme Court dismissed a case over the “gag rule” that keeps Title X grantees from referring patients for abortions. However, the Supreme Court left the possibility open to further lawsuits if the Department of Health and Human Services (HHS) does not enforce the rule until it is replaced.

In 2019, the Trump administration finalized a rule that prevented Title X grantees from talking about or referring patients for abortion services. Stakeholders asked the Supreme Court to dismiss the case once President Biden took office since his administration planned to revoke the rule. In April 2021, HHS issued a notice of proposed rulemaking to roll back the 2019 rule to a 2000 version which would allow Title X grantees to refer patients for abortion services. The 2000 rule would also eliminate the requirement that Title X projects and abortion-related services be physically and financially separated.

Texas Sues Regarding 1115 Waiver Extension

On May 14, the Texas attorney general filed a lawsuit asking a federal district court in Texas to reinstate a 10-year extension of an 1115 waiver that had been approved in the last days of the Trump administration. The waiver was revoked by the Biden administration on April 16, and the Centers for Medicare and Medicaid Services (CMS) justified this decision by saying that Texas failed to go through the proper notice and comment period.

In the lawsuit, Texas argues that Acting CMS Administrator Elizabeth Richter did not have the authority to revoke the waiver extension. The lawsuit also alleges that the waiver was rescinded with the ulterior motive of forcing Texas to expand Medicaid under the Affordable Care Act.

Texas still has 16 months before the waiver expires, and CMS says that the state has enough time to reapply for an extension.

The rescinding of Texas’s waiver extension led Sen. John Cornyn (R-TX) to stall Chiquita Brooks-LaSure’s nomination for CMS administrator.

State of Missouri Sued for Not Implementing Medicaid Expansion

On May 20, three Missouri residents sued the Missouri Health Department for not implementing a Medicaid expansion as was called for in a state ballot initiative passed last year. In August 2020, Missouri voters approved a constitutional amendment to expand Medicaid under the Affordable Care Act. The expansion was to be effective July 1, but the Republican-led state government refused to appropriate funds for the expansion in the state’s budget in April. As a result, Missouri Governor Mike Parson pulled the state plan amendments outlining the expansion that had already been submitted to the Centers for Medicare and Medicaid Services (CMS). Parson stated that Missouri would not move forward with the expansion due to a lack of appropriated funds.

The three Missouri residents suing state that they would be eligible for Medicaid if the state moved forward on expansion.

Eli Lilly Sues HHS over 340B Policy

On May 20, Eli Lilly asked a federal judge to stop the Department of Health and Human Services (HHS) from penalizing companies, starting June 1, that restrict discounts to hospitals that dispense 340B drugs through multiple contract pharmacies. Earlier, the Human Resources and Services Administration (HRSA) told Lilly and five other drug companies to comply with HRSA’s interpretation of the 340B statute concerning the use of multiple contract pharmacies by June 1, or face civil monetary penalties.

In its motion, Lilly says complying with the 340B law and HRSA’s new threat of penalties is an attempt to circumvent the legal process and that HRSA has no legal justification for the June 1 deadline. Lilly also questions the government’s authority to require drug makers provide 340B discounts to hospitals that dispense drugs through multiple contract pharmacies.

Reports

GAO Report on the Department of Veterans Affairs’ Response to COVID-19

On May 20, the Government Accountability Office (GAO) issued a report titled “COVID-19 Pandemic: VA Provides Health Care Assistance as Part of the Federal Response.” The report details how the Department of Veterans Affairs (VA) coordinates with the Federal Emergency Management Agency (FEMA) in a multiagency council to review requests for emergency resources. The report found that from March 2020 to February 2021, the VA conducted 117 mission assignments across 38 states, one territory and four tribes in response to COVID-19.

The report can be found here.

GAO Report on the U.S. President’s Emergency Plan for AIDS Relief

On May 20, the Government Accountability Office (GAO) issued a report titled “President’s Emergency Plan for AIDS Relief: State Should Improve Data Quality and Assess Long-term Resource Needs.” The report states that the Emergency Plan for AIDS Relief provided about $6 billion annually for efforts to combat HIV from 2015-2020. Despite this investment, about 1.7 million people were newly infected with HIV in 2019. The report states that while HIV infection rates have declined in Sub-Saharan Africa since 2010, the doubling of the youth population, an age group vulnerable to acquiring new HIV infections, partially offsets this rate of decline.

GAO recommended that the President’s Emergency Plan for AIDS Relief ensure its budget data is complete and accurate, establish procedures to improve data quality and assess long-term resource needs.

The report can be found here.

GAO Report on COVID-19 in Nursing Homes

On May 19, the Government Accountability Office (GAO) released a report titled “COVID-19 in Nursing Homes: Most Homes Had Multiple Outbreaks and Weeks of Sustained Transmission from May 2020 through January 2021.” The report summarized a study of COVID-19 outbreaks in nursing homes from May 2020 to January 2021. The study found that during that eight-month period, the nursing homes under review had an average of three outbreaks. 94 percent of nursing homes under review experienced more than one outbreak, and 85 percent of the nursing homes had an outbreak lasting five or more weeks.

The report can be found here.

GAO Report on COVID-19 Program Flexibilities in Medicare and Medicaid

On May 19, the Government Accountability Office (GAO) released a report titled “Medicare and Medicaid: COVID-19 Program Flexibilities and Considerations for Their Continuation.” The report found that in response to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services (CMS) utilized program waivers and other flexibilities to expand beneficiary access to care. CMS issued over 200 Medicare waivers, which allowed for expansion of hospital capacity, workforce expansion and telehealth waivers. CMS approved over 600 waivers or flexibilities for Medicaid, which allowed 43 states to suspend fee-for-service authorizations and 50 states to waive certain provider screening and enrollment requirements.

The report notes that these changes include certain risks and concerns, such as increased spending, program integrity, beneficiary health and safety.

The 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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