The following LPG Weekly Health Care Watch provides a summary update of legislative and regulatory health care activities from March 23–29. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
Senate
Senators returned to their home states on March 25, following the passage of a third COVID-19 package. The chamber does not plan to return to the Capitol until April 20, unless otherwise required.
House
House Democrats were expected to release an Affordable Care Act (ACA) expansion bill to coincide with the 10-year anniversary of the law on March 23. The bill was expected to provide moderate Democrats with an alternative to Medicare for All. The plan was rumored to expand subsidies beyond 400% of the federal poverty level while also increasing the value of the existing subsidies. However, Speaker Pelosi (D-CA) elected not to introduce the bill to dedicate energy to the COVID-19 response.
The House is in recess, and has not set a return date.
REGULATORY UPDATE
On March 24, the Centers for Medicare & Medicaid Services (CMS) withdrew its proposed rule on tightening state Medicaid eligibility determinations from the Office of Management & Budget (OMB) review process. The rule was expected to reduce improper payments, though make it more difficult for beneficiaries to enroll in Medicaid and maintain coverage.
Om March 24, OMB received a notice entitled “Announcement of Calendar Year (CY) 2021 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies.” CMS previously stated that the final rate announcement will be released by April 6.
CORONAVIRUS UPDATE
On March 23, Senator Chris Murphy (D-CT) and U.S. Senator Brian Schatz (D-HI) introduced the Medical Supply Chain Emergency Act, legislation to require implementation of the Defense Production Act (DPA) of 1950 and federalize the manufacturing and distribution of needed medical supplies. The American Hospital Association, American Medical Association, and American Nurses Association called on the Administration to invoke the DPA to produce supplies critical to health care workers.
On March 23, the CMS released two “toolkits” on telehealth for general practitioners and providers treating patients with End-Stage Renal Disease (ESRD).
On March 23, President Donald Trump signed an Executive Order (EO) to prevent hoarding and price gouging of medical supplies needed to treat patients with COVID-19. In response, the U.S. Department of Health & Human Services (HHS) issued a notice subjecting certain protective equipment, ventilators, and drugs with the active ingredient chloroquine phosphate or hydroxychloroquine to the hoarding prevention measures authorized under the EO.
On March 23, House Democrats unveiled a $2.5 trillion stimulus package as an alternative to the Senate’s “stage three” deal, which at the time totaled roughly $1.8 billion. The House bill would require insurers to fully cover treatments; however, the government would reimburse them for patients’ cost-sharing amounts. Insurers would also be banned from using prior authorization for COVID-19 drugs. A new risk corridor program would be established in Medicare Advantage and in the Exchanges to shield plans from higher than expected spending due to COVID-19 patients. States and local governments, labs, and health care providers would be required to report testing data in real-time. Additionally, it would release a “sense of Congress” that providers should not balance bill patients for COVID-19 care. Many expect the House bill to form the basis of “state four” legislation, if necessary.
On March 23, a CMS spokesperson said the Trump administration is considering opening a special enrollment period for the federal ACA exchange. Eleven states and the District of Columbia have already re-opened their exchanges.
On March 23, CMS sent an interim final rule to OMB entitled Revisions in Response to the COVID-19 Public Health Emergency.
On March 24, Moderna announced that their vaccine might be made available to health care workers as soon as this fall, if the FDA grants an emergency use authorization.
On March 24, the Federal Emergency Management Agency (FEMA) Administrator Peter Gaynor said the Trump administration will formally implement the DPA to acquire 60,000 test kits. However, FEMA reversed their position later that day, claiming the they were able were able to procure test kits from the private market without using the DPA.
On March 24, Ford announced partnerships with General Electric and 3M to mass-produce respirators, ventilators, and face masks.
On March 24, HHS Office of Inspector General (OIG) issued a FAQ on waiving telehealth cost-sharing for COVID-19 cases.
On March 24, 20 House Democrats sent a letter to the President calling for a two-week national shelter-in-place order.
On March 24, HHS released an emergency use authorization (EUA) declaration, allowing the Food & Drug Administration (FDA) to authorize unapproved drugs, devices, and biologics, as well as new uses for such products.
On March 25, Aetna become the first major national insurer to waive cost-sharing and deductibles for COVID-19 in-network hospitalizations. Some regional plans, including CareFirst and Blue Cross Blue Shield of Massachusetts, have also issued similar policies.
On March 25, after mounting pressure, Gilead requested to rescind orphan drug status for its experimental antiviral Remdesivir, which FDA granted just two days prior. Forgoing orphan drug status for the potential COIVD-19 treatment would shorten market exclusivity, eliminate a 25% tax credit for the drug’s development, and increase opportunity for market competition. Gilead expects that even without the designation, it can expedite the development of the drug. It was later reported that HHS Secretary Alex Azar, FDA Commissioner Stephen Hahn, and FDA Center for Drug Evaluation & Research Director Janet Woodcock were unaware that Remdesivir was receiving orphan status. On March 23, Gilead announced it is temporarily halting access to the Remdesivir because of overwhelming demand, with the exception of pregnant women and infected minors.
On March 25, Mylan announced it is waiving exclusive distribution rights to Kaletra, an HIV drug that may double as a COVID-19 treatment. Mylan maintains that by enabling other generic applicants to be eligible for FDA approval of their medicines, U.S. patients will have expanding access to the drug in the event that additional clinical studies conclude that the product is an effective COVID-19 treatment.
On March 26, Director of the National Institute of Allergy & Infectious Diseases (NIAID) Anthony Fauci warned the global community should prepare for another cycle of COVID-19 surfacing next winter, particularly if COVID-19 is not contained in the Southern Hemisphere.
On March 27, the President signed H.R. 748, the third emergency relief package. The $2.2 trillion deal aims to avoid further economic decline by sending capital to industries particularly vulnerable to the pandemic, as well as state and local governments and individuals Americans. It also enhances safety net programs, such as unemployment. Importantly, the bill funds health extenders through November 30, delaying a May 22 deadline that was previously seen as an opportunity to move surprise billing and drug pricing legislation. It also includes S. 2740, which creates user fees for over-the-counter drugs and increases FDA oversight of the industry. Additionally, it directs HHS and the National Academies of Sciences, Engineering & Medicine to conduct a report within two months examining the U.S. dependence on critical drugs and medical equipment sourced from abroad, as well as requiring manufacturers of certain medical devices to notify HHS when they anticipate a meaningful supply disruption in U.S. markets. Further, the measure gives HHS discretion to distribute $100 billion to hospitals and increases Medicare reimbursement to hospitals by 20% for COVID-19 cases. Notably, it delays Medicare’s 2% sequestration through the end of the year. Lastly, the bill requires private insurers to pay providers’ charge rate for tests, as long as a contract between the provider and insurer is not already in place. A section-by-section summary is available here.
On March 27, British Prime Minister Boris Johnson tested positive for COVID-19, making him the first major world leader to contract the virus.
On March 27, FDA granted EUA for point-of-care testing technology developed by Abbott, “ID NOW,” that can produce results in as little as five minutes. The company is ramping up production to deliver 50,000 tests per day.
On March 27, CMS released guidance on exceptions and extensions for quality reporting and value-based purchasing programs.
On March 27, President Trump invoked the DPA, ordering General Motors to produce ventilators. In a briefing, the President stated, “We will not hesitate to use the full authority of the federal government to combat this crisis. We thought we had a deal with, as an example General Motors, and I guess they thought otherwise. They didn’t agree, and now they do.” Previously, the White House wanted to lean on voluntary efforts to produce medical supplies.
As of March 28, CMS approved 1135 Medicaid Waivers for 34 states. The waivers loosen rules around prior authorization, provider enrollment requirements, nursing home pre-admission reviews, and permittable sites of care.
The Trump administration’s 15-day EO to practice social distancing expires on March 30. On March 24, the President signaled he wants to relax the guidelines and “open” the nation by Easter. On March 26, he sent a letter to governors notifying them that the Administration is drafting guidelines for state and local governments to increase or loosen social distancing measures in individual counties based on an assessment of their risk level. Specifically, the White House plans to designate counties as high, medium, or low risk using data to determine the next phase of the U.S. response. The new plan is expected to be unveiled on March 31.
According to data from Johns Hopkins, the U.S. now leads the world in confirmed COVID-19 cases, surpassing China and Italy.
House Democrats are expected begin working on a fourth emergency funding package, which Speaker Pelosi has claimed will be targeted at economic recovery.
On March 29, President Trump announced that despite earlier consideration of relaxing the social distancing guidelines, they will be extended through April 30.
All COVID-19 information and guidances released by CMS are available here.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
HHS-CMS
Conditions for Coverage for End-Stage Renal Disease Facilities—Third Party Payments (CMS-3337-P); Proposed Rule; Received 6/6/2019
International Pricing Index Model for Medicare Part B Drugs (CMS-5528-P); Proposed Rule; Received 6/20/2019
Medicare Coverage of Innovative Technologies (CMS-3372-P); Received 7/30/2019
Medicaid & CHIP Managed Care (CMS-2408-F); Final Rule; Received 9/26/2019
Strengthening the Program Integrity of the Medicaid Eligibility Determination Process (CMS-2421-P); Proposed Rule; Received 12/20/2019
Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value Based Payments (VBP) for Drugs Covered in Medicaid (CMS-2482-P); Proposed Rule; Received 12/27/19
Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2021 Rates (CMS-1735); Proposed Rule; Received 1/30/20
Strengthening Oversight of Accrediting Organizations (AO) and Preventing AO Conflict of Interest, and Related Provisions (CMS-3367); Proposed Rule; Received 2/18/20
FY 2021 Skilled Nursing Facility (SNFs) Prospective Payment System Rate Update and Quality Reporting Requirements (CMS-1737); Proposed Rule; Received 2/24/20
FY 2021 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Requirements (CMS-1729); Proposed Rule; 2/24/20
FY2021 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements (CMS-1733); Proposed Rule; Received 3/3/20
FY 2021 Inpatient Psychiatric Facilities Prospective Payment System Rate and Quality Reporting Updates (CMS-1731); Proposed Rule: Received 3/4/20
Specialty Care Models to Improve Quality of Care and Reduce Expenditures (CMS-5527); Proposed Rule; Received 3/10/20
Amendments to the HHS-operated Risk Adjustment Data Validation under the Patient Protection and Affordable Care Act's (ACA) HHS-operated Risk Adjustment Program (CMS-9913); Proposed Rule; Received 3/11/20
Treatment of Medicare Part C Days in the Calculation of a Hospital's Medicare Disproportionate Patient Percentage (CMS-1739); Proposed Rule; Received 3/12/20
Revisions in Response to the COVID-19 Public Health Emergency (CMS-1744-IFC); Interim Final Rule; Received 3/23/20
Announcement of Calendar Year (CY) 2021 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies; Notice; Received 3/24/20
HHS-CDC
Control of Communicable Diseases; Foreign Quarantine: Suspension of Introduction of Persons into United States from Designated Foreign Countries or Places for Public Health Purposes; Interim Final Rules; Received 3/18/20
HHS-IHS
CY 2020 Reimbursement Rates; Notice; Received 3/2/20
HHS-OIG
Civil Monetary Penalties Law Notice of Proposed Rulemaking; Proposed Rule; Received 1/23/20
HHS-HRSA
Coordinating Care and Information Sharing in the Treatment of Substance Use Disorders; Final Rule; 3/16/20
REPORTS
Government Accountability Office (GAO)
On March 26, GAO released a report entitled Drug Misuse: Sustained National Efforts Are Necessary for Prevention, Response, and Recovery. GAO is adding drug misuse to their “High Risk List,” which includes topics in need of transformation, or at high risk from fraud, waste, abuse, and mismanagement. They predict federal agencies may struggle to focus on drug misuse during COVID-19 but warn that the pandemic could fuel contributing factors of misuse, such as unemployment, stressing the long-term need to maintain and build upon ongoing efforts.
HHS Office of Inspector General (OIG)
On March 26, OIG posted a report entitled Most of the Non-Newly Eligible Beneficiaries for Whom Colorado Made Medicaid Payments Met Federal and State Requirements, but Documentation Supporting That All Eligibility Requirements Were Verified Properly Was Not Always in Place. OIG conducted an audit to determine whether Colorado made Medicaid payments on behalf of non-newly (i.e., non-ACA expansion) beneficiaries who did not meet federal and state eligibility requirements. OIG estimates estimated Colorado made Medicaid payments of at least $46.7 million ($23.8 million federal share) on behalf of at least 3,603 potentially ineligible beneficiaries.
On March 27, OIG posted a report entitled Medicaid Fraud Control Units (MFCU) FY 2019 Annual Report. OIG concludes that MFCUs play a vital role in combating Medicaid fraud and in protecting facility residents from patient abuse or neglect. In FY 2019, they found that MFCUs’ efforts contributed to total recoveries of $1.9 billion, with a return of investment of $6.41 for every $1 spent.
On March 27, OIG posted a report entitled Risk Assessment of HHS Grant Closeout Procedures. OIG determined that an audit of the HHS’ grant closeout process is not warranted at this time, given that the risk that HHS will not meet federal requirements for grant closeouts is low.
On March 27, OIG issued a report entitled Medicare Dialysis Services Provider Compliance Review: Bio-Medical Applications of Arecibo (BMA). The report suggests that BMA claimed reimbursement for dialysis services that did not comply with Medicare requirements, amounting to at least $96,185 in unallowable payments. OIG recommends for BMA to return $96,185 to the Medicare program and strengthen their internal controls to ensure that dialysis services comply with Medicare requirements in the future.
UPCOMING HEARINGS
Senate
None of note
House
None of note
OTHER HEALTH POLICY NEWS
On March 25, FDA approved Bristol-Myers Squibb’s multiple sclerosis treatment Zeposia. However, the timeline for launch will be delayed because of COVID-19.
On March 26, the U.S. Attorney for the Southern District of New York sued Anthem, alleging that the insurer violated the False Claims Act by knowingly submitting inaccurate medical codes to the federal government from 2014 through 2018 for its MA plans. The case marks one of the largest MA fraud cases to date.
On March 27, the Medicare Payment Advisory Commission (MedPAC) indicated that in lieu of their regular public meeting scheduled for April 2, they will meet in private through a video conference call. A transcript of the discussion and staff presentations will be available shortly after the meeting. In contrast, the Medicaid and CHIP Payment and Access Commission (MACPAC) indicated that they will hold a live public webcast of their April 2 meeting during which they will approve chapters in their June report to Congress.