The following LPG Weekly Health Care Watch provides a summary update of legislative and regulatory health care activities from April 12 – April 19. 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
The Senate stands in recess until at least May 4.
House
The House stands in recess until at least May 4.
REGULATORY UPDATE
On April 16, CMS released its FY2021 proposed payment rule for Inpatient Rehabilitation Facilities (IRFs). In recognition of the COVID-19 pandemic, CMS limited the scope of the rule to “essential policies” including Medicare payment to IRFs, as well as proposals that reduce provider burden and may help providers in the COVID-19 response. CMS proposes to increase Medicare payments to IRFs by 2.9% (or $270 million), relative to FY2020 rates. A fact sheet is available here. Comments are due by June 15.
CORONAVIRUS UPDATE
On April 13, it was reported that commercial testing volume is declining, despite efforts to expand testing. Commercial labs ran 108,000 tests on April 5 but only 75,000 on April 12. On April 16, the White House coronavirus task force attributed the decrease to an increase in providers running point-of-care tests.
On April 13, the governors of Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island announced plans to form a working group comprised of public health and economic officials that will determine when to begin easing social and economic restrictions in the Northeast. Simultaneously, the governors of California, Oregon, and Washington launched a similar group for the West Coast. Earlier that day, President Donald Trump said on Twitter that he alone has the power to decide when to stay-at-home orders could be lifted, which he later walked back. On April 16, midwestern states created their own alliance, including Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, and Wisconsin.
On April 13, Sanford Health said it is partnering with South Dakota to launch the first statewide clinical trial of the antimalarial drug hydroxychloroquine as a potential treatment for COVID-19. The trial will begin with 2,000 infected patients and, if successful, could be expanded to include up to 100,000 residents.
On April 13, it was reported the Cardinal Health asked the Trump administration to invoke emergency powers to remove all tariffs on select medical supplies. In an April 8 letter, Cardinal asked U.S. Trade Representative Robert Lighthizer to remove the 7.5% to 25% tariff recently levied on Chinese medical supplies, as well as the 2.8% to 17.5% tariff on certain types of medical apparel.
On April 13, Minority Leader Chuck Schumer (D-NY), HELP Ranking Member Patty Murray (D-WA), and Finance Ranking Member Ron Wyden (D-OR) sent the U.S. Department of Health & Human Services (HHS) Secretary Alex Azar a letter requesting for the second wave of payments under the $100 billion Public Health & Social Services Emergency Fund (PHSSEF) included in the Coronavirus Assistance, Relief & Economic Security (CARES) Act to be directed to providers in areas particularly hard-hit by the pandemic. The first $30 billion from the fund has been distributed to Medicare Fee-For-Service (FFS) providers. In addition, the Senators challenged the Administration’s decision to use a portion of the PHSSEF to offset the cost of uncompensated care, rather than leveraging “obvious solutions” to expand coverage, such as opening a special enrollment (SEP) period on Healthcare.gov.
On April 13, America’s Essential Hospitals (AEH) sent Congressional leaders a letter outlining its asks for the next emergency relief bill, including 1) directing funds toward hospitals with the greatest need for support; 2) increasing Medicaid payments; 3) loosening eligibility rules for the 340B program; 4) softening repayment protocol under the Medicare Accelerated and Advance Payment Program; 5) disregarding a temporary increase in beds from teaching hospitals’ indirect medical education payments; and 6) expanding telehealth flexibility under Medicare.
On April 13, 181 House members requested that the Trump administration permit seniors to receive “complex, lifesaving” drug infusions in the home setting during the pandemic. Currently, according to the letter, only simple intravenously administered drugs can be administered in the home.
On April 13, CMS postponed the 2019 benefit year HHS Risk Adjustment Data Validation process. The decision seeks to allow individual and small group health insurance issuers and providers to focus on more immediate threats posed by COVID-19.
On April 13, CMS released to states an updated FAQ document on the enhanced federal Medicaid funding.
On April 13, the Food & Drug Administration (FDA) granted an emergency use authorization (EUA) to a saliva test developed by Rutgers University. The test is novel in that it can be administered without requiring health professionals to be near symptomatic patients.
On April 13, the Federal Emergency Management Agency (FEMA) held a call with CMS and FDA to consider issuing an EUA to import more dialysis fluids. Reports indicate that about 20% of COVID-19 patients in intensive care units require dialysis and hospitals in New York City are approaching a shortage of fluids.
On April 13, CMS released supplemental guidance for transferring or discharging residents between long-term care facilities based on COVID-19 status.
On April 14, the Office of Management & Budget (OMB) received an interim final rule issued by the Centers for Medicare & Medicaid Services (CMS) entitled Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency.
On April 14, CMS announced it is doubling Medicare’s payment rate for lab tests that use high-throughput technologies. Such tests have a higher testing capacity and deliver faster results but require specially trained technicians. Medicare will pay $100, up from $51, for these labs for the duration of the national emergency. CMS indicated that COVID-19 antibody tests do not qualify for the increased payment rate.
On April 14, President Trump said he will pause U.S. funding to the World Health Organization (WHO) while his Administration reviews the organization’s initial response to the pandemic in China. The move follows a series of complaints from the White House and GOP lawmakers that WHO has demonstrated a favorable bias toward China, even though the U.S. is its greatest donor. Later that day, Centers for Disease Control & Prevention (CDC) Director Robert Redfield said that his Agency will continue to work with the WHO to combat the virus. House Democrats plan to challenge the decision, accusing the President of violating the same federal law as the Ukraine aid freeze that contributed to his impeachment.
On April 14, National Institute of Allergy & Infectious Diseases (NIAID) Director Anthony Fauci predicted the U.S. will not be ready to reopen the country by May 1 because of a lack of testing and tracing resources, which he claimed are necessary to contain further spread.
On April 14, former Center for Medicare & Medicaid Innovation Director Adam Boehler announced the “Dynamic Ventilator Reserve,” a program developed alongside the American Hospital Association to send unused ventilators to hospitals located in “hotspots.” More than 20 health systems have signed onto the program so far, amounting to 4,000 ventilators. Participating providers will input data into a new shared database to determine when new supplies become available.
On April 14, GlaxoSmithKline and Sanofi unveiled a partnership to speed up the development of a potential COVID-19 vaccine.
On April 14, consumer advocacy groups asked Congressional leaders to protect a “maintenance-of-effort” provision included in the Families First Coronavirus Response Act that incentivizes states to maintain Medicaid coverage for beneficiaries already enrolled. They note that in past recessions, states have used eligibility cuts as a way to balance state budgets and argue that a similar move during the pandemic would have dire consequences.
On April 14, Gov. Gavin Newson (D) released California’s guidelines for relaxing stay-at-home policies.
On April 14, the Assistant Secretary for Preparedness & Response (ASPR) posted a hospital resource package detailing how hospital administrators, hospital emergency planners, and infection control practitioners should address a hospital surge, crisis standards of care, staffing surge and resilience, workforce protection, regulatory relief, equipment supply surge, and telemedicine.
On April 14, Morning Consult released a poll showing a partisan divide on the public’s perception of hydroxychloroquine, the antimalarial drug being promoted by President Trump. The poll concludes that 30% of Democrats support using the drug for COVID-19 before clinical trials are completed, compared to 71% of Republicans.
On April 15, CMS issued guidance for Inpatient Prospective Payment System hospitals and Long-Term Care Hospitals on how to code claims to receive higher Medicare payment for COVID-19 care. The payment increase is required by the CARES Act.
On April 15, FDA released an FAQ on at-home diagnostic tests. The Agency has not authorized any at home-test so far but is working with developers toward issuing EUAs.
On April 15, the Health Resources & Services Administration (HRSA) awarded $90 million for Ryan White HIV/AIDS Program recipients to address COVID-19. The funds, appropriated in the CARES Act, will be distributed among 581 recipients across the country.
On April 15, the White House tapped Michael Caputo, a campaign official, to be the lead COVID-19 spokesperson for HHS.
On April 15, HELP Ranking Member Murray outlined Democrats’ “Roadmap to Reopening by Ensuring a Speedy & Ubiquitous Lab Testing System (RESULTS).” Notably, the plan includes $30 billion in the next emergency funding bill to expand testing.
On April 15, researchers in China paused two clinical trials examining’s Gilead’s antiviral, Remdesivir, as a COVID-19 treatment because of insufficient enrollment. The NIAID is conducting its own trial of the drug, which has yet to be approved by the FDA for any indication.
On April 15, the Kaiser Family Foundation (KFF) released an analysis examining factors that could influence overall health spending for private insurers, Medicare, and Medicaid. KFF notes that delayed or foregone care many offset payers’ short-term costs but cause spending to increase over the long-term because of pent-up demand. KFF predicts hospitalizations for infected patients will cost around $20,000.
On April 15, UnitedHealth Group CEO Dave Wichmann told Wall Street analysts that deferred elective visits at hospitals and clinics are offsetting COVID-19 costs. Wichmann claims this phenomena contributed to $3.4 billion first-quarter profit and, at least temporarily, allows the insurer maintain its 2020 profit projections. UnitedHealth Group has also said it plans to re-enter the Affordable Care Act (ACA) marketplaces.
On April 15, Gov. Andrew Cuomo (D) outlined his plan for allowing New Yorkers to return to work and public spaces. His plan includes introducing an antibody test to identify essential workers who have contracted the virus and show immunity. He also issued and Executive Order requiring residents to wear masks in areas where social distancing cannot be exercised.
On April 16, the President released guidelines for governors to follow to gradually reopen their states. The plan is divided into three phases; once the criteria in a phase is complete, then the state can advance to the next phase. Under phase one, outpatient elective surgeries can resume and restaurants, movie theaters, sporting events, gyms, and places of worship can reopen under strict social distancing rules. Under phase two, gatherings are capped at 50 people, but schools, parks, and organized events can reopen. Nonessential travel can resume. Under phase three, suspectable individuals can resume limited public interactions, workplaces can reopen, and visits to long-term care facilities and hospitals can occur.
On April 16, Facebook and Instagram began notifying users that they may be able to enroll in the ACA marketplaces if they lost their job and, by extension, their health coverage because of the pandemic. Facebook will also notify users if posts containing misinformation about the pandemic appeared on their feed, such as advertisements for unproven treatments. However, a nationwide SEP for enrollees displaced from coverage due to the pandemic has not yet been authorized.
On April 16, Energy & Commerce Chairman Frank Pallone (D-NJ), Oversight Chair Carolyn Maloney (D-NY), and HELP Ranking Member Patty Murray (D-WA) sent a letter to Secretary Azar urging him to waive restrictions on fetal tissue research for purposes of developing COVID-19 treatments and vaccines.
On April 16, the Biomedical Advanced Research & Development Authority awarded Moderna $483 million to speed up the development of its potential vaccine (mRNA-1273), which is currently being tested in phase one trial by the National Institutes of Health (NIH).
On April 16, Gov. Kevin Stitt (R) announced elective surgeries may resume in Oklahoma on April 24. COVID-19 cases are expected to peak in the state on April 30. On April 17, Texas Gov. Greg Abbott (R) announced he will also allow providers to resume certain elective surgeries starting next week.
On April 17, 34 Senate Democrats sent a letter to Congressional leaders requesting that they respond to the surge in unemployment by expanding options for health insurance coverage. Specifically, the lawmakers are asking for enhancing federal funds to Medicaid programs based on states’ unemployment rates and offering incentives for states to expand their Medicaid programs to ACA-levels. In addition, they suggest boosting subsides for coverage on the ACA marketplaces and reimbursing COBRA premiums for the recently unemployed.
On April 16, HHS announced it has signed a $336 contract with General Electric and Ford under the Defense Production Act to produce 50,000 ventilators by July 13. Secretary Azar said his Department has now secured the production of 100,000 ventilators by mid-July.
On April 16, President Trump appointed the following members of Congress to serve on a task force to advise on reopening the economy. A list of those serving on the Opening Up America Again Congressional Group can be found here.
On April 17, NIH and its foundation launched a public-private partnership to speed-up the development of vaccine and treatment options. The partnership, “Accelerating COVID-19 Therapeutic Interventions and Vaccines,” will develop a framework for prioritizing vaccine and drug candidates, streamlining clinical trials, and coordinating regulatory processes to rapidly respond to COVID-19, as well as future pandemics. So far, 16 biopharmaceutical companies have signed onto the program, as well as the FDA, CDC, ASPR, and the European Medicines Agency.
On April 17, CDC released data that stratifies COVID-19 cases based on racial and ethnic status. The data shows that the virus is disproportionately impacting minority populations. African Americans have accounted for 30% of cases and Latino have accounted for 18%.
On April 17, CMS outlined new and expanded flexibilities for Rural Health Clinics and Federally Qualified Health Centers during the pandemic.
Lawmakers are continuing to negotiate an interim emergency relief package targeted at supporting small business and 22 million Americans have lost their job in the last month. For most of the week, GOP lawmakers have been pushing for a clean bill that boosts funding for the small business Paycheck Protection Program (PPP) by $250 billion, whereas Democrats have supported attaching an additional $250 billion for hospitals, states and local governments, and SNAP benefits. On April 17, House Minority Leader Kevin McCarthy (R-CA) said he would support additional funding to hospitals. Current reports suggest hospitals would receive an additional $75 billion, though the negotiations are fluid. PPP funds were officially depleted on April 16. On April 19, Speaker Pelosi announced negotiators were close to reaching an agreement on the next COVID-19 funding bill that would replenish the PPP fund.
Congressional leaders have selected four out of five members to serve on the Congressional Oversight Commission, which was created by the CARES Act to oversee the U.S. Treasury Department’s implementation of a $500 billion fund for distressed industries. Senate Majority Leader Mitch McConnell (R-KY) named Sen. Pat Toomey (R-PA), Majority Leader Schumer tapped Bharat Ramamurti (former top economic adviser to Sen. Elizabeth Warren (D-MA)), Speaker Nancy Pelosi (D-CA) chose Rep. Donna Shalala (D-FL), and Minority Leader McCarthy selected Rep. French Hill (R-AK). Leader McConnell and Speaker Pelosi still have to appoint a chair.
RULES AT THE WHITE HOUSE 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
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
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
Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plans (CMS-9916); Final Rule; Received 4/9/20
Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency; Interim Final Rule; 4/14/20
HHS-FDA
Annual Summary Reporting Requirements Under the Right to Try Act; Proposed Rule; Received 3/31/20
HHS-SAMHSA
Coordinating Care and Information Sharing in the Treatment of Substance Use Disorders; Final Rule; 3/16/20
REPORTS
Congressional Budget Office (CBO)
On April 16, CBO issued a preliminary estimate of the CARES Act. CBO predicts the $2.2 trillion law will increase the federal deficit by $1.8 trillion over the 2020-2030 window.
Government Accountability Office (GAO)
On April 14, GAO issued a report entitled, Preventing Drug Diversion: Disposal of Controlled Substances in Home Hospice Settings. The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) of 2018 allows certain hospice employees to dispose of unused controlled substances after a patient dies in the home. The law also tasked GAO with monitoring the impact of this provision. After speaking with seven hospices, GAO reported several implementation challenges, including the cost of certain disposal methods, a lack of a witness to the disposal process, and inconsistencies between state and federal laws concerning which hospice employees are permitted to dispose of controlled substances.
HHS Office of Inspector General (OIG)
On April 13, OIG posted a report entitled An Estimated 87% of Inpatient Psychiatric Facility (IPF) Claims with Outlier Payments Did Not Meet Medicare’s Medical Necessity or Documentation Requirements. Out of the 160 claims CMS paid to IPFs that OIG audited between FY 2014-2015, 25 did not comply with Medicare’s medical necessity requirement. Based on this sample, OIG estimates that Medicare overpaid IPFs $93 million during this period. In addition, OIG found 142 claims that had missing or inadequate medical record elements. Therefore, OIG claims that 87% of IPF claims with outlier payments did not meet Medicare’s necessity or medical record requirements. OIG made several recommendations to help CMS improve its oversight of IPF errors.
On April 13, OIG released a report entitled Most Indian Health Service (IHS) Purchased/Referred Care Program Claims Were Not Reviewed, Approved, and Paid in Accordance with Federal Requirements. OIG audited a sample of 100 claims paid between October 2013 and June 2016 and found that 82 claims were not paid in accordance with federal requirements. Based on these results, OIG estimates IHS was paid for 658,025 claims during their audit period that did not meet federal requirements.
On April 14, OIG posted a report entitled Medicare Home Health Agency Provider Compliance Audit: Residential Home Health. OIG reports that Residential Home Health did not comply with Medicare billing requirements for 11 of the 100 home health claims it reviewed. Therefore, OIG estimates Residential Home Health received at least $2 million in overpayments for services furnished during CYs 2014 and 2015.
On April 15, OIG released a report entitled 96% of South Carolina’s Medicaid FFS Telemedicine Payments Were Insufficiently Documented or Otherwise Unallowable. OIG attributes such noncompliance to the state’s failure to formally train providers on proper telemedicine documentation or adequately monitor compliance. OIG estimates that unallowable payments totaled at least $2.1 million ($1.5 million federal share) between July 1, 2014 through June 30, 2017.
UPCOMING HEARINGS
Senate
None of note
House
None of note
OTHER HEALTH POLICY NEWS
On April 13, the Supreme Court announced it will hear oral arguments by telephone on a select number of previously postponed cases between May 4-13. Notably, the Supreme Court will hear Little Sisters of the Poor v. Pennsylvania, the case on the ACA’s contraceptive mandate, on May 6. Notably, Rutledge v. Pharmaceutical Care Management Association, originally scheduled for an April 27 hearing, was left off the list, meaning the case will likely be postponed until the next term. The case could establish state authority in regulating pharmacy benefit managers.
On April 13, New York requested that the Supreme Court stay the Administration’s “public charge” rule, which permits immigration officials to deny green cards to those using social supports, like Medicaid. New York, the plaintiff, argues that the COVID-19 pandemic “has dramatically altered the nature and magnitude of the irreparable harms faced by plaintiffs, their residents, and the nation.” The rule has been in effect since January, after the Supreme Court declared it as constitutional.
On April 14, the American Action Forum (AAF) released a study comparing the three leading congressional proposals to reform Medicare Part D, including the Senate Finance Committee’s proposal (S. 2543), the House-passed bill (H.R. 3), and the GOP’s package of bipartisan measures (H.R. 19/S. 3129). AAF predicts that out of the three proposals, H.R. 19/S. 3129 would provide the greatest reduction in Part D enrollee’s out-of-pocket costs. AAF also expects H.R. 19/S. 3129 would provide nearly the same level of reinsurance savings to the federal government as S. 2543 and more than H.R. 3.
On April 14, the U.S. 8th Circuit Court of Appeals ruled that Iowa’s certificate of need laws can remain in place after an eye surgeon filed a lawsuit claiming that such laws unfairly restricted him from opening a practice in the state. However, the court sided with the state health department and ruled that it is in Iowa’s interest to demonstrate a “rational bias” towards full-service hospitals.
On April 14, the U.S. 6th Circuit Court of Appeals sided with pharmacies in mass opioid legislation, ruling that they do not need to present opioid prescription records dispensed over the past decade. The decision reverses a lower court’s ruling that directed pharmacies to provide dispensing data as part of their lawsuit against opioid drug manufacturers.
On April 15, President Trump indicated he is considering leveraging his “constitutional authority to adjourn both chambers of Congress” for purposes of making recess appointments. President Trump blames Senate Democrats of blocking his executive branch nominees. The House and Senate have been holding pro-forma sessions, which prevent recess appointments from being made. Nevertheless, the executive power Trump cites has never been exercised in the past, would be unlikely to work given that Democrats control the House, and would set off a legal battle.
On April 15, Altarum reported that 42,500 health-sector jobs were lost in the month of March, the largest one-month decline in 30 years. Most of the job losses were in the ambulatory setting, including physician offices, home health, and dental offices; hospital jobs remained stable.
On April 16, the Economic Policy Institute (EPI) predicted as many as 9.2 million Americans were at high risk of losing their employer-sponsored health insurance over the past four weeks. Two weeks ago, EPI estimated that same figure was 3.5 million.
On April 16, 371 organizations, including health advocacy groups, sent Congressional appropriators a letter calling for a greater share of non-defense spending to be directed to the Labor-HHS-Education FY2021 spending bill.