Washington Healthcare Update - November 2021 #4

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This week in Washington: House passes reconciliation package.

Congress

The House and Senate are in recess.

House

  • House Passes Reconciliation Package
    • Medicaid Gap
    • PBM Oversight/Transparency
    • Medicaid/CHIP Provisions
    • Drug Pricing
  • Energy and Commerce Committee Passes Healthcare Bills Out of Committee
  • Reps. DeGette and Upton Introduce the Cures 2.0 Act
  • Rep. DeLauro and Sen. Markey Introduce Bill to Fund Research for a Universal Flu Vaccine

Senate

  • Senators Introduce Bill to Strengthen the Infectious Disease and Public Health Workforce
  • House and Senate Members Request Investigation into Nurse Staffing Agencies Pricing

Administration

  • HHS Withdraws Trump-Era Policy on Laboratory-Developed Tests
  • CMS Announces Special Enrollment Period Week Two Numbers
  • FDA Authorizes and CDC Endorses Moderna and Pfizer COVID-19 Boosters for All Adults
  • SAHMSA Extends Methadone Flexibility

Proposed Rules

  • FDA Issues Draft Guidance on Premarket Submissions for Device Software Functions
  • HHS Issues Proposed Rule to Withdraw the SUNSET Rule
  • FDA Issues Draft Industry Guidance on Real-World Data Standards
  • FDA Issues Proposed Rule on Over-the-Counter Hearing Aids
  • FDA Issues Guidance on Continuous Manufacturing of Drug Substances and Products
  • FDA Issues Guidance Updating Unique Device Identification Policy

Final Rules

  • CMS Issues Final Rule to Delay VBP Reporting and the Inclusion of U.S. Territories
  • CMS Issues Final Rule Rescinding Medicare Coverage of Innovative Technology and “Reasonable and Necessary” Final Rule
  • CMS Issues Final Rule for End-Stage Renal Disease Prospective Payment System
  • CMS Issues CY 2022 Medicare Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems Final Rule
  • CMS Issues CY 2022 Medicare Physician Fee Schedule Final Rule
  • CMS Issues 2022 Home Health Prospective Payment System Rate Final Rule

Reports

  • GAO Report on Drug Development Pathway for Antibacterial and Antifungal Drugs
  • GAO Report on VA Acquisition Management
  • GAO Report on Transition to Alternative Payment Models in Rural and Underserved Areas
  • GAO Report on Suicide Prevention Efforts at the DOD and VA
  • GAO Report on Vaccine Development Capabilities and Challenges

Congress

House

House Passes Reconciliation Package

On Nov. 19, the House passed the $1.7 trillion reconciliation package with a vote of 220-213. Votes came the morning after the Congressional Budget Office (CBO) published a complete cost estimate of the reconciliation package, also called the Build Back Better (BBB) Act. Healthcare provisions in the reconciliation package include an extension of the Affordable Care Act (ACA) tax credits, a short-term policy to address the Medicaid coverage gap, the addition of hearing benefits to Medicare, a cap for seniors’ out-of-pocket drug costs and authority for Medicare to negotiate some drug prices. The reconciliation package now goes to the Senate, where it is expected to be modified to meet reconciliation restrictions. The bill will then return to the House for another vote.

The Congressional Budget Office (CBO) estimates extending the American Rescue Plan’s higher ACA tax credits and allowing people in states that did not expand Medicaid to access the subsidies from 2022 to 2025, as well as the BBB’s other coverage provisions, would decrease the number of uninsured Americans by an average of 3.4 million over that period. The provisions together would cost about $130 billion.

The predicted drop in the number of uninsured includes 4.9 million people with individual market coverage and 100,000 additional Medicaid enrollees, net 1.6 million people with employer-sponsored coverage. CBO attributes a third of losses in employer coverage to firms no longer offering insurance and two-thirds from workers who choose not to enroll.

The American Rescue Plan (ARP) lowered the premium contribution requirements for people earning up to 400% of the poverty level and limited the contribution to 8.5% of income for others, and the BBB would extend both policies through 2025. The BBB also would lower the contribution threshold for an employer-sponsored plan to be considered affordable from 9.5% of income to 8.5%, in alignment with the individual market. CBO assumes those policies would increase spending by $43.5 billion and would reduce revenue by $30 billion over 10 years.

Extending the subsidies would result in 1.2 million fewer uninsured people during the years they are in effect, CBO and the Joint Committee on Taxation predict.

Medicaid Gap

The BBB would fix the Medicaid gap by extending the ACA tax credits to people earning 100% of the poverty level in states that did not expand Medicaid. This measure would increase spending by about $43.8 billion and reduce revenue by $13 billion over 10 years, CBO predicts. CBO and JCT say the gap fix policy would result in 1.7 million fewer uninsured.

After 2025, the extended credits and gap fix policy would have much smaller effects on sources of coverage and no net effect on the number of people without health insurance.

The ARP also offered maximum ACA tax credits to anyone on unemployment in 2021, and the Build Back Better Act would extend that policy by one year. CBO says that provision would increase expenditures by $804 and lower revenue by about $1 billion over 10 years.

The coverage provisions are part of the House Ways & Means section of the BBB that also includes a provision capping cost-sharing for insulin products at $35 (or 25% of the negotiated price, whichever is cheaper). The policy would cost a total $5.1 billion including $529 million in expenditures and $4.6 billion in lower revenues.

PBM Oversight/Transparency

A provision requiring oversight of PBMs would raise revenue by $1.7 billion (CBO and Joint Tax estimate).

Medicaid/CHIP Provisions

Requiring one-year continuous enrollment for kids in Medicaid or CHIP will save nearly $3.7 billion over 10 years while making CHIP permanent will save about $1 billion. Meanwhile, it will cost $2.21 billion to extend coverage for postpartum women from 60 days after giving birth to one year.

And CBO estimates it will cost $954 million to provide a maternal health home for pregnant and postpartum women.

Drug Pricing

Overall, the drug pricing measures, including savings and new revenues, would reduce the deficit by $297 billion and would result in 10 fewer drug inventions out of the 1,300 drugs expected to be introduced in the next 30 years.

Medicare price negotiation would contribute to $79 billion in savings, which is far less than the other drug pricing measures. The current version eventually applies to 20 of the most expensive drugs, including insulin, does not use international reference pricing and delays the risk of negotiation until biologics have been on the market for 13 years and until drugs have been on the market for nine years

The drug cost controls would save $262 billion, and the rebates that drug companies would pay when they raise prices faster than inflation would generate $34 billion in new revenue.

Repealing the Trump-era drug rebate rule saves $143 billion. The rule would have been a bigger offset had the separate bipartisan infrastructure bill not eaten into about $50 billion of those savings by delaying the rule.

Inflation rebates would save the government $49 billion by discouraging drug companies from raising prices. That’s separate from the $34 billion that inflation rebates would generate when companies raise prices faster than inflation.

The Part D redesign would save the government $1.6 billion. The bill would cap beneficiaries’ annual out-of-pocket costs, which would cost $130 million, but it would also shift a greater share of liability onto insurers. The bill would make plans pay 65% of beneficiary’s brand drug costs, including for biosimilars, and 75% of generic drug costs during the initial stage of Part D. Once beneficiaries hit the catastrophic phase, plans would pay 60% of all drug costs. Brand and biosimilar drug makers would have 10% liability during the initial phase and 20% liability during the catastrophic phase. Medicare would cover 20% of the cost of brands and biosimilars during catastrophic and 40% of the cost of generics. Generics would pay nothing throughout the phases

The CBO cost estimate can be found here.

Energy and Commerce Committee Passes Healthcare Bills Out of Committee

On Nov. 17, the House Energy and Commerce Committee passed 12 bills out of committee, 9 of them pertaining to healthcare and the healthcare workforce. The bills, which can be found listed below, now go to the House floor.

  • R. 5561, the Early Hearing Detection and Intervention Act
  • R. 5487, the Stillbirth Health Improvement and Education (SHINE) for Autumn Act of 2021
  • R. 1193, the Cardiovascular Advances in Research and Opportunities Legacy Act
  • R. 1667, the Dr. Lorna Breen Health Care Provider Protection Act
  • R. 3320, the Allied Health Workforce Diversity Act of 2021
  • R. 4555, the Oral Health Literacy and Awareness Act of 2021
  • R. 5551, the Improving the Health of Children Act
  • R. 3537, the Accelerating Access to Critical Therapies for ALS Act
  • R. 1218, the Data Mapping to Save Moms’ Lives Act

Reps. DeGette and Upton Introduce the Cures 2.0 Act

On Nov. 16, Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) introduced the Cures 2.0 Act, which is intended to be a follow-up bill to the 21st Century Cures Act. The bill would establish the Advanced Research Projects Agency for Health (ARPA-H), fund Food and Drug Administration (FDA) programs and create a Medicare coverage pathway for innovative device coverage. The bill would also direct the FDA commissioner to establish incentives to increase the use of decentralized trials.

A press release on the bill can be found here. A summary of the bill can be found here. The bill text can be found here.

Rep. DeLauro and Sen. Markey Introduce Bill to Fund Research for a Universal Flu Vaccine

On Nov. 19, Rep. Rosa DeLauro (D-CT) and Sen. Ed Markey (D-MA) reintroduced the Flu Vaccine Act, which would allocate $1 billion to the National Institutes of Health to research and develop a universal influenza vaccine or prevention that protects against multiple strains of the virus.

The bill text can be found here.

Senate

Senators Introduce Bill to Strengthen the Infectious Disease and Public Health Workforce

On Nov. 18, Sens. Tammy Baldwin (D-WI), Susan Collins (R-ME), Jacky Rosen (D-NV) and Lisa Murkowski (R-AK) introduced the Bolstering Infectious Outbreak (BIO) Preparedness Workforce Act. The bill aims to address retention and recruitment issues by establishing a student loan repayment program for professionals who focus on infectious diseases (ID) and public health preparedness and response.

The bill text can be found here.

House and Senate Members Request Investigation into Nurse Staffing Agencies Pricing

On Nov. 15, Sens. Bill Cassidy (R-LA) and Mark Kelly (D-AZ) along with Reps. David McKinley (R-WV) and Doris Matsui (D-CA) wrote to White House COVID-19 Response Team Coordinator Jeffrey Zients requesting an investigation into reports of nurse staffing agencies inflating prices during the COVID-19 pandemic.

The letter can be found here.

Administration

HHS Withdraws Trump-Era Policy on Laboratory-Developed Tests

On Nov. 15, the Department of Health and Human Services (HHS) withdrew a Trump-era policy that blocked the Food and Drug Administration (FDA) from requiring premarket review of some laboratory-developed tests (LDT). The Trump administration announced the policy in August 2020, with the objective of expediting the availability of COVID-19 tests. The FDA stated that the policy resulted in poorly performing COVID-19 tests being approved. With the withdrawal of the policy, the FDA will expect LDTs to have either emergency use authorization or marketing authorization.

CMS Announces Special Enrollment Period Week Two Numbers

On Nov. 18, the Centers for Medicare and Medicaid Services (CMS) announced that 851,000 people selected individual market plans in the states that use the healthcare.gov platform during week two of the 2022 Open Enrollment Period.

FDA Authorizes and CDC Endorses Moderna and Pfizer COVID-19 Boosters for All Adults

On Nov. 17, the Food and Drug Administration (FDA) authorized Moderna and Pfizer’s COVID-19 vaccine booster doses for all U.S. adults. On Nov. 19, the Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices voted to recommend the booster doses. The recommendation makes all adults 18 and over eligible, but strongly endorses the boosters for individuals over 50.

SAHMSA Extends Methadone Flexibility

On Nov. 18, the Substance Abuse and Mental Health Services Administration (SAHMSA) announced it would be extending the methadone take-home flexibilities for an additional year after the COVID-19 Public Health Emergency (PHE) designation expires. SAHMSA initially granted the take-home flexibility in March 2020 as part of the Health and Human Services (HHS) Department’s Overdose Prevention Strategy. SAHMSA is considering ways to make the take-home flexibility permanent.

Proposed Rules

FDA Issues Draft Guidance on Premarket Submissions for Device Software Functions

On Nov. 3, the Food and Drug Administration (FDA) published new draft guidance titled “Content of Premarket Submissions for Device Software Functions.” The guidance provides information on documentation sponsors need to submit for FDA’s evaluation of the safety and effectiveness of device software functions. When final, the guidance will replace prior guidance issued in 2005.

Public comments will be accepted until Feb. 2, 2022.

The draft guidance can be found here.

HHS Issues Proposed Rule to Withdraw the SUNSET Rule

On Oct. 29, the Department of Health and Human Services (HHS) issued a proposed rule that would withdraw the January 2021 final rule titled “Securing Updated and Necessary Statutory Evaluations Timely (SUNSET).” The SUNSET final rule required HHS regulations with a significant economic impact to be reviewed every 10 years, with regulations automatically expiring if they were not reviewed. This would have impacted more than 17,000 HHS regulations and required a review process considerably faster than HHS ever conducted.

The rule would have gone into effect in March 2021, but HHS issued a delay following a lawsuit.

Comments will be accepted until Dec. 28, 2021.

The proposed rule can be found here.

FDA Issues Draft Industry Guidance on Real-World Data Standards

On Oct. 22, the Food and Drug Administration (FDA) announced industry draft guidance titled “Data Standards for Drug and Biological Product Submissions Containing Real-World Data.” The guidance includes recommendations to help sponsors comply with the Federal Food, Drug and Cosmetic Act when submitting study data from real-world data sources.

Public comments will be accepted until Dec. 21, 2021.

The draft guidance can be found here.

FDA Issues Proposed Rule on Over-the-Counter Hearing Aids

On Oct. 20, the Food and Drug Administration (FDA) issued a proposed rule titled “Medical Devices: Ear, Nose, and Throat Devices; Establishing Over-the-Counter Hearing Aids.” The proposed rule would establish a new category of over-the-counter (OTC) hearing aids that could be sold to consumers directly without a medical exam or audiologic hearing. The proposed rule comes after President Biden’s July Executive Order aimed at promoting competition in the economy directed the FDA to increase access to OTC hearing aids.

Public comments will be accepted until Jan. 18, 2022.

The proposed rule can be found here.

FDA Issues Guidance on Continuous Manufacturing of Drug Substances and Products

On Oct. 12, the Food and Drug Administration issued a draft guidance document titled “Q13 Continuous Manufacturing of Drug Substances and Drug Products,” which was prepared with the support of the International Council for Harmonisation (ICH). The draft guidance provides clarification on the development and operation of continuous manufacturing and builds on prior guidelines Q7-Q10.

Comments will be accepted until Dec. 13, 2021.

The guidance can be found here.

FDA Issues Guidance Updating Unique Device Identification Policy

On Oct. 14, the Food and Drug Administration (FDA) issued a draft guidance titled “Select Updates for Unique Device Identification: Policy Regarding Global Unique Device Identification Database Requirements for Certain Devices.” The guidance revises the 2020 Unique Device Identification Guidance. The updated guidance explains there are certain class I devices for which the FDA will not enforce the Global Unique Device Identification Database (GUDID) submission requirements, and also states how a class I device labeler can determine if the device is in the scope of compliance policy.

Comments will be accepted until Dec. 13, 2021.

The guidance can be found here.

Final Rules

CMS Issues Final Rule to Delay VBP Reporting and the Inclusion of U.S. Territories

On Nov. 17, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “Medicaid Program; Delay of Effective Date for Provision Relating to Manufacturer Reporting of Multiple Best Prices Connected to a Value Based Purchasing (VBP) Arrangement; Delay of Inclusion of Territories in Definition of States and United States.” The final rule delays the best price provisions and reporting related to VBP arrangements as part of the Medicaid Drug Rebate Program (MDRP) from Jan. 1, 2022, to July 1, 2022. In addition, the rule also delays the inclusion of five U.S. territories in the MDRP’s regulatory definition of “states” from April 1, 2022, to Jan. 1, 2023.

The regulations will be effective on Dec. 20, 2021.

The final rule can be found here.

CMS Issues Final Rule Rescinding Medicare Coverage of Innovative Technology and “Reasonable and Necessary” Final Rule

On Nov. 12, the Centers for Medicare and Medicaid Services (CMS) released a final rule to rescind the Trump administration’s “Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary’” (MCIT/R&N) Final Rule. The final rule was published on Jan. 14, 2021, and would have gone into effect on Dec. 15, 2021. The rule would have granted up to four years of expedited Medicare coverage for certain designated “breakthrough” devices that receive market authorization. CMS states that the rule did consider the differences in devices and the potential safety impact on Medicare patients.

The final rule can be found here. A CMS press release on the final rule can be found here.

CMS Issues Final Rule for End-Stage Renal Disease Prospective Payment System

On Oct. 29, the Centers for Medicare and Medicaid Services (CMS) published a final rule titled “End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model.” The final rule updates payment rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services starting Jan. 1, 2022. The rule also updates the acute kidney injury (AKI) dialysis payment rate for renal dialysis services and the ESRD Treatment Choices (ETC) Model.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

CMS Issues CY 2022 Medicare Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems Final Rule

On Nov. 2, the Centers for Medicare and Medicaid Services (CMS) released a Final Rule titled “Calendar Year (CY) Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center (ASC) Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model.” CMS is required by the January 2021 Hospital Price Transparency Final Rule to update Medicare payment policies for Outpatient Prospective Payment System (OPPS) hospitals and ASCs on an annual basis. The changes in the final rule aim to strengthen enforcement of hospital price transparency requirements and will stop the phased elimination of the Inpatient Only (IPO) list for surgical procedures. CMS will increase the penalty for hospitals that do not comply with the Hospital Price Transparency Rule starting on Jan. 1, 2022. The final rule also halts the elimination of the IPO list. In addition, the rule updates the OPPS payment rates for hospitals that meet quality reporting requirements by 2.0 percent. The final rule also details the Radiation Oncology Model, which is set to begin on Jan. 1, 2022, and last for five years.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

CMS Issues CY 2022 Medicare Physician Fee Schedule Final Rule

On Nov. 2, the Centers for Medicare and Medicaid Services (CMS) issued a final rule titled “Calendar Year (CY) 2022 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Provider Enrollment Regulation Updates; and Provider and Supplier Prepayment and Post-payment Medical Review Requirements.” The rule includes policy changes for Medicare payments under the Physician Fee Schedule (PFS) and would continue the coverage of Medicare telehealth services and finalize changes to the Medicare Diabetes Prevention Program (MDPP) expanded model, among other things. The CY 2022 PFS conversion factor is $33.59, a decrease from the CY 2021 factor of $34.89.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

CMS Issues 2022 Home Health Prospective Payment System Rate Final Rule

On Nov. 2, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule titled “Calendar Year (CY) 2022 Home Health Prospective Payment System Rate Final Rule.” The rule will expand the Home Health Value-Based Purchasing (HHVBP) Model. In addition, the rule updates the Medicare Home Health Prospective Payment System (HH PPS) and the home infusion therapy services payment rates for CY 2022. In addition, the proposed rule makes permanent changes to the home health Conditions of Participation (CoP) implemented during the COVID-19 public health emergency.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

Reports

GAO Report on Drug Development Pathway for Antibacterial and Antifungal Drugs

On Nov. 19, the Government Accountability Office (GAO) published a report titled “Drug Development: Pathway for Approving Antibacterial and Antifungal Drugs for Patients with Limited Treatment Options is Infrequently Used.” The report states that the Food and Drug Administration’s (FDA) limited population pathway for antibacterial and antifungal drugs (LPAD) has only been used to assess four drugs since it was established in 2016. The report notes that the Department of Health and Human Services (HHS) did not concur with a 2020 GAO recommendation to incentivize the development of treatments for antibiotic-resistant infections.

The full report can be found here.

GAO Report on VA Acquisition Management

On Nov. 18, the Government Accountability Office (GAO) published a report titled “VA Acquisition Management: Fundamental Challenges Could Hinder Supply Chain Modernization Efforts if Not Addressed.” The report details prior GAO recommendations regarding the Department of Veterans Affairs’ (VA) acquisition management. The GAO states that although the VA is taking action on supply chain issues, preliminary observations highlight the fundamental acquisition management challenges that could undermine supply chain efforts. The GAO stated that a VA acquisition framework would be beneficial.

The full report can be found here.

GAO Report on Transition to Alternative Payment Models in Rural and Underserved Areas

On Nov. 17, the Government Accountability Office (GAO) published a report titled “Medicare: Information on the Transition to Alternative Payment Models by Providers in Rural, Health Professional Shortage, or Underserved Areas.” The report notes from 2017-2019, a smaller percentage of eligible providers in rural or health professional shortage areas participated in the Centers for Medicare and Medicaid Services’ (CMS) Advanced Alternative Payment Model (APM) than providers not located in those areas. The GAO notes that providers in rural, health professional shortage or underserved areas face financial and technological challenges in transitioning to APMs.

The full report can be found here.

GAO Report on Suicide Prevention Efforts at the DOD and VA

On Nov. 17, the Government Accountability Office (GAO) released a report titled “DOD and VA Health Care: Suicide Prevention Efforts and Recommendations for Improvements.” The report states the Department of Defense (DOD) and the Department of Veterans Affairs (VA) have multiple efforts underway aimed at preventing suicide among servicemembers and veterans. These efforts include depression and suicide-specific screening, tracking and education. The report states that the GAO has recommended that the DOD include non-clinical suicide prevention efforts in its assessments. In addition, the GAO recommends that the VA incorporate key practices for staffing model design and improve its process to accurately identify all on-campus veteran suicides.

The full report can be found here.

GAO Report on Vaccine Development Capabilities and Challenges

On Nov. 16, the Government Accountability Office (GAO) released a report titled “Vaccine Development: Capabilities and Challenges for Addressing Infectious Diseases.” The CARES Act required the GAO to examine the government’s response to the COVID-19 pandemic. The GAO identified 16 innovative technologies and approaches to enhance the U.S. response to infectious diseases. Policy options to address challenges in vaccine development include prioritizing infectious disease pathogens, improving preparedness, further developing data standards and evaluating inhibiting factors to vaccine investment.

The report, with further detail, 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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