The following LPG Weekly Health Care Watch provides a summary update of legislative and regulatory health care activities from April 19 – April 26. 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.
NON-CORONAVIRUS LEGISLATIVE UPDATE
Senate
On April 21, the Senate confirmed, by voice vote, Michael Weahkee to serve as the director of the Indian Health Agency (IHS) for four years. Weahkee previously served as the principal deputy director and has been the Administration’s nominee for the past six months.
The Senate stands in recess until at least May 4.
House
Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) have agreed to appoint a bipartisan group of lawmakers to consider ways for the chamber to work and vote remotely.
The House stands in recess until at least May 4.
NON-CORONAVIRUS REGULATORY UPDATE
On April 21, the U.S. Department of Health & Human Services (HHS) relaxed enforcement of two interoperability rules in an effort to reduce providers’ administrative burden during the COVID-19 pandemic. Specifically, the Centers for Medicare & Medicaid Services (CMS) delayed implementation of its interoperability and patient access final rule and the Office of National Coordinator for Health Information Technology (ONC) extended providers’ deadline to comply with its interoperability and information blocking final rule by six months. In addition, the HHS Office of Inspector General (OIG) released a proposed rule regarding civil money penalties for information blocking, in which OIG asks for stakeholders to submit comments on how information blocking enforcement time frames should be adjusted due to the public health emergency.
On April 21, the Office of Management & Budget (OMB) received the CY2021 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System proposed rule.
On April 22, the Food & Drug Administration (FDA) extended the comment period for draft guidance, “Interpreting Sameness of Gene Therapy Products Under the Orphan Drug Regulations,” until July 28, 2020.
On April 22, the Medicare Board of Trustees released its 2020 annual report. The Trustees predict Medicare’s Hospital Insurance (HI) Trust Fund will most likely be depleted in 2026 – the same year it has predicted since 2018. However, under a worst-case scenario, the Trustees estimate the HI Trust Fund could become insolvent by 2023; this outcome becomes more likely if the economy sustains a period high unemployment. While the report references COVID-19, the pandemic’s implications were not explicitly accounted for the Trustee’s modeling.
On April 23, CMS extended the comment period for its proposed rule, "Medicare Program: Comprehensive Care for Joint Replacement Model Three-Year Extension and Changes to Episode Definition and Pricing," until June 23, 2020. Comments were originally due by April 24.
On April 23, CMS approved the Accreditation Commission for Health Care as a national accrediting organization for home infusion therapy suppliers interested in participating in the Medicare program.
CORONAVIRUS UPDATE
White House Update
On April 20, President Donald Trump invoked the Defense Production Act (DPA) to require Puritan Medical Products to produce 20 million testing swabs every month for the duration of the national emergency.
On April 22, President Trump signed an Executive Order (EO) suspending the issuance of green cards for 60 days; individuals will continue to be able to enter the U.S. on a temporary basis. The President indicated the EO was intended to ensure unemployed Americans are not competing with foreigners for jobs.
Legislative Update
On April 19, Sens. Bob Menendez (D-NJ) and Bill Cassidy (R-LA) revealed a legislative proposal that would create a $500 billion fund for states, U.S. territories, local governments, and the District of Columbia. The fund would be divided into three phases and allocated based on population size, infection rates, and state revenue losses. However, no state would receive less than $2.5 billion. The money would be in addition to the $150 billion granted to states and local governments in the Coronavirus Aid, Relief & Economic Security (CARES) Act. The Senators are aiming to attach their proposal to the next major COVID-19 package.
On April 20, Energy & Commerce Chairman Frank Pallone (D-NJ) sent a letter to the Coronavirus Task Force Coordinator Deborah Birx advocating for her team to develop a national testing plan.
On April 20, the World Health Organization (WHO) validated five diagnostics tests and placed orders to produce and distribute 30 million of them over the next four months. In addition, Director General Tedros Adhanom Ghebreyesus maintained that while antibody tests have utility in identifying who has been infected, “tests that find the virus are the core tool for active case finding, diagnosis, isolation and treatment.”
On April 20, a group of House members sent a letter to Chinese Ambassador Cui Tiankai noting that a quality assurance export requirement created in China on March 31 has caused U.S. importation of crucial medical supplies to be delayed. The members ask for a more targeted requirement that ensures quality while allowing for a timelier export of supplies to the United States.
On April 21, 13 Senate Democrats sent letters to pharmaceutical manufacturers requesting that they enroll a diverse group of participants in their clinical trials for vaccines and treatments.
On April 22, Majority Leader Mitch McConnell (R-KY) suggested states should consider declaring bankruptcy instead of accepting additional aid from the federal government. He also maintained that additional COVID-19 funding will not be voted on until at least May 4.
On April 22, Democrat leaders on the Energy & Commerce Committee sent a letter to OMB Director Russell Vought asking a series of questions related to the Administration’s decision to suspend WHO funding.
On April 23, Sens. Mitt Romney (R-UT) and Krysten Sinema (D-AZ) sent a letter to the Centers for Disease Control & Prevention (CDC) Director Redfield claiming that the Administration is “behind the curve” in monitoring the virus’ spread and that the CDC should develop near real-time reporting of the outbreak.
On April 23, the House passed a resolution, by a 212-182 vote, to establish an additional oversight committee to monitor the Administration’s implementation of COVID-19 funds appropriated by Congress. The “Select Subcommittee on the Coronavirus Crisis” will be a 12-member branch of the Oversight Committee chaired by Majority Whip Jim Clyburn (D-SC). The Speaker will name seven members and the Minority Leader will appoint five.
On April 24, the President signed an $484 billion “interim” emergency aid package. At the core of the deal is $321 billion for the Paycheck Protection Program, a loan program targeted a small business. However, the measure also includes $75 billion for hospitals under the Public Health & Social Services Emergency Fund (Provider Relief Fund), $60 billion for emergency and economic disaster loans, and $25 billion for coronavirus testing. The measure also requires the development of a national testing strategy. The Senate passed the measure by unanimous consent on April 21; the House voted 388-5 to approve it on April 23. The HHS provisions are summarized here.
On April 23, the House Judiciary Antitrust Subcommittee Chair Rep. David Cicilline (D-RI) said he is advocating for the next COVID-19 package to include a moratorium on mergers until the pandemic concludes, unless a company is already in or clearly approaching a bankruptcy. Chair Cicilline argues such a ban would prevent large, well-situated companies from buying out smaller competitors.
On April 24, Majority Leader Steny Moyer (D-MD) said House Democrats are aiming to complete the next COVID-19 package, “CARES 2.0,” by May 4 and hold a vote shortly thereafter. Some of their priorities include free health care coverage for COVID-19 patients, additional aid for state and local governments, monthly cash assistance, protections for renters, and an investment in mail-in voting.
Regulatory Update
On April 19, CMS announced nursing homes are now required to report COVID-19 cases to the CDC and to inform residents, their families and representatives of COVID-19 cases in their facilities. Nursing home infection data will be made publicly available.
On April 19, CMS issued guidance on providing essential non-COVID-19 care to patients without symptoms of COVID-19 in regions where spread is contained. The guidance corresponds with “Phase 1” of the President’s Guidelines for Opening Up America Again.
On April 20, CMS announced clinicians participating in the Quality Payment Program (QPP) can now earn Merit-based Incentive Payment System (MIPS) credit for submitting COVID-19 clinical trial data.
On April 20, it was reported that the CDC initially experienced delays in distributing its signature COVID-19 testing kit to public health labs across the country because its Atlanta-based lab did not follow standard manufacturing practices. This caused one of the test components to be contaminated and delayed national testing by over a month.
On April 20, the Department of Justice (DOJ) announced it will not challenge AmerisourceBergen for distributing medicines and supplies to areas with the greatest demand during the pandemic, which, under normal circumstances, could be considered illegal market allocation.
On April 21, CDC Director Robert Redfield warned that the public health system could be further strained in the fall, when both the seasonal flu and the coronavirus are circulating. Coronavirus Response Coordinator Deborah Birx also maintained that “it is very important to have a completely refreshed and comprehensive stockpile going into the fall.”
On April 21, CMS published guidance to allow licensed, independent freestanding emergency departments in Colorado, Rhode Island, and Texas to temporarily care for Medicare and Medicaid patients.
On April 21, 2020, CMS issued explanatory guidance related to the scope and application of the “blanket waivers” to certain financial relationships.
On April 21, CMS released a FAQ to issuers of individual, small group, Medicare Advantage (MA), and Part D plans, detailing flexibilities available related to utilization management and prior authorization during the pandemic.
On April 21, a National Institutes of Health (NIH) panel issued guidelines for health care providers on potential treatments. The guidance divides drugs into two broad categories: antivirals and immune-based therapies. NIH has composed a “living document” that will be updated as new clinical data is released.
On April 21, HHS announced that Rick Bright will no longer serve as the Director of the Biomedical Advanced Research & Development Authority (BARDA), a position he held for three years. Instead, Bright will lead a new NIH initiative aimed at speeding up point-of-care testing. Gary Disbrow, Bright’s former deputy, will step in as BARDA’s Acting Director. On April 22, Bright released a statement claiming he was released from his post in part because he “resisted efforts to fund potentially dangerous drugs promoted by those with political connections,” including chloroquine and hydroxychloroquine. He plans to file a whistleblower complaint with the HHS OIG and the Office of Special Counsel. On April 23, E&C Chairman Pallone requestedthat the HHS OIG to investigate Bright’s reassignment.
On April 21, the FDA provided the first emergency use authorization (EAU) to a home diagnostic test. The test, developed by LabCorp, could help providers conserve personal protective equipment. LabCorp said the test will be made available to consumers in the coming weeks and will have an out-of-pocket cost of $119.
On April 22, HHS unveiled its plans to allocate the next wave of Provider Relief Fund aid to health care providers, building on the $30 billion that was distributed on April 10 based on 2019 Medicare fee-for-service revenue. Additional information can be found here and here. CMS will distribute $20 billion based on 2018 net patient revenue starting April 24. HHS also announced that $10 billion will be sent to providers in “hotspots,” $10 billion will be issued to rural health clinics and providers, and $400 million will be given to the Indian Health Service. As a condition for receiving Provider Relief Fund aid, which does not need to be repaid if certain conditions are met, providers are barred from issuing surprise bills to “presumptive or actual COVID-19 patients.” In addition, HHS announced that providers can register to be reimbursed, at Medicare rates, for treating the uninsured starting April 27 and can begin submitting claims in early May. HHS has indicated future support to providers for uninsured care, skilled nursing facilities, dentists, and Medicaid-only providers.
On April 23, CMS released a new telehealth toolkit for states to help accelerate adoption of broader telehealth coverage policies in the Medicaid and Children’s Health Insurance Programs (CHIP) during the COVID-19 pandemic. According to the toolkit, states should consider policy changes such as expanding eligible beneficiary groups for telehealth coverage, revising scope-of-practice rules determining which providers can deliver care using telehealth, and increasing reimbursement rates for telehealth services. The toolkit also includes a compilation of FAQs and other resources available to states.
On April 23, CDC awarded $631 million to state and local health departments to support contact tracing and testing efforts.
On April 23, the it was reported that within the Veterans Affairs Department, about 1,900 health care workers have been infected, 20 have died, and 3,600 are quarantined because of potential exposure to the virus and being unable to work. The Department of Labor (DOL) is investigating the situation and Democrats have asked the President to leverage the DPA to secure more supplies for the VA.
On April 23, the DOL claimed an additional 4.4 million Americans filed for unemployment insurance between April 11-18, raising the five-week total to 26 million and the unemployment rate to around 11%.
On April 24, the FDA advised against using hydroxychloroquine and chloroquine for COVID-19 treatment outside of the hospital setting or a clinical trial, citing a heightened risk of cardiac complications.
Other
On April 20, Gov. Larry Hogan (R) announced that South Korea will send Maryland 5,000 coronavirus kits, which translates to 500,000 tests.
On April 21, a non-peer reviewed study tracking the spread of the virus in Los Angeles County concluded that 4.1% of residents have developed antibodies, meaning that between 221,000 and 442,000 people recovered from an infection. To compare, 8,000 cases were confirmed in the region at the time of the study. A similar, observational survey conducted in New York state found that 14% of residents had developed antibodies.
On April 22, the National Governors Association and the Association of State & Territorial Health Officials released a “Roadmap to Recovery” to help states determine when and how to ease stay-at-home orders. The guidance consists of ten incremental steps to reopening various parts of the economy and advises governors to act conservatively when in doubt, noting that opening too soon would “further deepen a recession and protract economic recovery.” The first step is to expand testing capacity and make testing broadly available.
On April 22, New York, New Jersey, and Connecticut launched a program to institute contact-tracing within the tri-state region. The $10 million program will be funded by Mike Bloomberg and developed by the Johns Hopkins School of Public Health.
On April 23, results from a clinical trial assessing Remdesivir as a COVID-19 treatment were mistakenly posted on WHO’s website. The leaked results, which were quickly removed, suggest the drug did not help participants enrolled in a randomized trial in China recover from COVID-19 and even triggered significant side effects that caused some patients to end treatment. Gilead maintains that the results are inconclusive because the study ended early due to insufficient enrollment.
On April 23, Lower Drug Prices Now, a drug pricing coalition, launched a new advertisement campaign challenging the prices of potential COVID-19 treatments and vaccines.
As of April 26, the U.S. had 954,182 confirmed COVID-19 cases resulting in 54,573 deaths, according to Johns Hopkins University & Medicine Coronavirus Resource Center.
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
CY2021 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Rates (CMS-1736); Proposed Rule; Received 4/21/20
HHS-FDA
Annual Summary Reporting Requirements Under the Right to Try Act; Proposed Rule; Received 3/31/20
HHS-OCR
Nondiscrimination in Health and Health Education Programs or Activities; Final Rule; 4/23/2020
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 24, CBO released preliminary estimates of key economic variables, taking into account COVID-19 legislation passed so far. CBO expects the federal deficit will increase to $3.7 billion and the unemployment rate will climb to 16% by the end of the calendar year. CBO expects the economy will begin improving in the third quarter but continue to decline throughout the second.
HHS Office of Inspector General (OIG)
On April 21, OIG posted a report entitled Companion Data Services, LLC (CDS), Overstated Its Medicare Segment Pension Assets as of January 1, 2017. The report aims to answer whether CDS complied with federal requirements regarding its cost accounting practice when (1) implementing OIG’s prior audit recommendation to decrease the Medicare segment pension assets as of January 1, 2013, and (2) updating the Medicare segment pension assets from January 1, 2013, to January 1, 2017. OIG could not address the first question but concluded that CDS did not comply with the second. OIG recommends that CDS decrease the Medicare segment pension assets by $777,081 and recognize $17.3 million as the Medicare segment pension assets as of January 1, 2017.
On April 21, OIG released a report entitled HHS Operating Division Needs to Improve Information Technology Continuity Planning. However, OIG only posted the title of the audit, citing increased cyberactivity prompted by the pandemic.
On April 21, OIG published a report entitled Palmetto Government Benefits Administrator, LLC, Claimed Some Unallowable Medicare Postretirement Benefit (PRB) Costs. OIG found that Palmetto claimed $11,699 in unallowable Medicare PRB costs on its Final Administrative Cost Proposal (FACP) for FY 2012.
On April 21, OIG issued a report entitled Palmetto Government Benefits Administrator, LLC, Claimed Some Unallowable Medicare Pension Costs. OIG concludes Palmetto claimed $42,054 of unallowable Medicare pension costs on its FACP for FY2012.
On April 22, OIG issued a report entitled Grand Desert Psychiatric Services: Audit of Medicare Payments for Psychotherapy Services. Of the 100 psychotherapy services in its audit, OIG reports that only one service complied with the requirements. Further, OIG claims that the total number of deficiencies is greater than 99 because 29 services had more than one deficiency.
UPCOMING HEARINGS
Senate
None of note
House
None of note
OTHER HEALTH POLICY NEWS
On April 20, Oklahoma Gov. Kevin Stitt (R) announced Medicaid expansion will officially be on the state ballot on June 30. In addition, Gov. Stitt officially requested for CMS to issue federal funds for the state’s expansion population in the form of a block grant under the Healthy Adult Opportunity demonstration. His plan would also adopt work requirements and permit some beneficiaries to be charged premiums. However, it has yet to be determined if Medicaid would be expanded through a constitutional amendment, which would require a traditional ACA-expansion and preclude his demonstration request.