The following LPG Weekly Health Care Watch provides a summary update of legislative and regulatory health care activities from April 26 – May 2. 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
The Senate will reconvene on May 4.
House
On April 27, Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) released a concept paper on “CURES 2.0.” Based on feedback from nearly 500 stakeholders, they propose focusing on six areas: 1) public health and pandemic preparedness; 2) caregiver integration; 3) patient engagement in decision-making; 4) diversity in clinical trials; 5) Food & Drug Administration (FDA) modernization; and 6) Centers for Medicare & Medicaid Services (CMS) modernization. Notably, the lawmakers are seeking additional stakeholder input on how CMS should be modernized so that the U.S. can keep pace with technological and scientific advances. The authors are aiming to introduce legislation by the end of the year and pass it as a stand-alone measure before FDA user fees are due in 2022. However, they are hoping many of the proposals, including the clinical trial reforms and the pandemic-related provisions, are included in a future COVID-19 legislative package.
The House has tentative plans to return to Washington the week of May 11.
NON-CORONAVIRUS REGULATORY UPDATE
On April 28, the Office of Management & Budget (OMB) received a CMS proposed rule, “Payment Policies for Durable Medical Equipment, Prosthetics, Orthotics and Supplies.”
On April 29, OMB received a CMS final rule, “Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid, Medicare Cost Plans, and PACE Programs.”
On May 1, President Donald Trump said he intends to replace Christi Grimm as the U.S. Department of Health & Human Services (HHS) Inspector General, citing frustrations with a recent report. President Trump plans to nominate Jason Weida, a U.S. attorney in Boston, to resume Ms. Grimm’s role.
CORONAVIRUS UPDATE
White House Update
On April 27, President Trump unveiled two new COVID-19 testing related documents, including a testing overview and a testing blueprint explaining how his Administration plans to coordinate with the private sector and states to expand testing. Notably, the testing overview documents specifies that the federal government will function as a “supplier of last resort,” placing greating responsibility on the states. Furthermore, a White House official said the Administration plans to provide enough tests to all 50 states to screen at least 2% of their residents.
On April 28, the President signed an Executive Order (EO) to require meat production plants to stay open, supporting continued food supply during the pandemic. Specifically, the EO will invoke the Defense Production Act (DPA) to classify meat plants as essential. So far, 20 meat processing plants have closed and at least 17 plant workers have died because of COVID-19.
On April 29, it was reported that Joe Grogan will resign from his post as the Director of the Domestic Policy Council in late May. He held the post for over one year and was heavily involved in the Administration’s drug pricing reform and surprise medical billing initiatives.
On April 30, the Administration’s national lockdown guidance expired; Governors now have discretion to determine when and how to reopen their states. As of May 2, 14 states have taken steps to easy their lockdown orders.
On May 1, the Administration said $12 billion in funding from the Public Health & Social Services Emergency Fund (Provider Relief Fund), authorized by the Coronavirus Aid, Relief & Economic Security (CARES) Act, will be sent to providers in “hotspots;” $10 billion will go to hospitals that have treated 100 or more COVID-19 patients, and $2 billion will be sent to 395 hospitals that have provided care to low-income and uninsured patients.
On May 4, President Trump is expected to hold a coronavirus town hall at the Lincoln Memorial, proposing tax and regulatory policies that would boost the economy.
Legislative Update
On April 27, Senate Majority Leader Mitch McConnell (R-KY) indicated he is open to providing additional aid to state and local governments, as long as business owners, health care workers, and employees are granted increased liability protections as companies starts to reopen. So far, Democrats have resisted loosening such protections. On April 30, Speaker Nancy Pelosi (D-CA) estimated that state and local governments may need as much as $1 trillion in Congress’ next legislative package.
On April 27, the Republican Study Committee released a “Conservative Framework for Recovery, Accountability, and Prosperity,” a 37-point blueprint for guiding the nation through the pandemic. Notable provisions include permitting FDA to fast-track approval for drugs and supplies that have been approved for COVID-19 abroad; creating a pharmaceutical chief negotiator at the U.S. Trade Representative (USTR); and suspending the ban on new physician-owned hospitals.
On April 27, House Foreign Affairs Chairman Eliot Engel (D-NY) launched an inquiry into the Administration’s decision to pause U.S. funding to the World Health Organization (WHO).
On April 27, a group of public health leaders urged Congress to include $46.5 billion in their next package to hire 180,000 contract tracers, book blocks of vacant hotel rooms so individuals sick with COVID-19 can self-isolate, and pay them to stay away from work until they recover.
On April 28, nearly 30 organizations sent a letter to Congressional leaders requesting that the next COVID-19 package support private health insurance coverage. Specifically, they recommend that Congress subsidize employers’ costs to maintain health benefits; pay for COBRA coverage; expand the use of health savings accounts; open a Special Enrollment Period for the Affordable Care Act (ACA) marketplaces; and expand eligibility for federal subsidies in the ACA marketplaces. The group suggests these actions would be more effective than the Administration’s plan to draw from the Provider Relief Fund to pay for uncompensated care.
On April 28, Sen. Bernie Sanders (I-VT) penned an op-ed touting his proposal to cover uninsured and underinsured Americans during the pandemic. The Health Care Emergency Guarantee Act would require Medicare to pay all health care costs for the uninsured, as well as all out-of-pocket expenses (OOP) for those with existing public or private insurance, until an FDA-approved vaccine is widely available. He argues his proposal is more comprehensive than the Administration’s plan to reimburse providers for uncompensated care and less expensive the Democrats’ push to expand COBRA subsides. A summary of the bill is availablehere.
On April 28, National Institute for Allergy & Infectious Diseases (NIAID) Director Anthony Fauci predicted that every American who needs a test should be able to attain one by the end of May or beginning of June.
On April 29, Sens. Tammy Baldwin (R-WI) and Chris Murphy (D-CT) introduced legislation to establish an executive officer to oversee the production and distribution of equipment and supplies needed to address COVID-19. Forty-six Senate Democrats support the bill; companion legislation is expected to be introduced in the House.
On April 29, a bipartisan group of over 160 House members requested that leadership incorporate funding for scientific and medical researchers in the next package. Specifically, they propose directing $26 billion to supplement research grants and contracts, offer emergency relief to researchers, and fund more graduate student and postdoc opportunities for up to two years.
On April 30, Sen. Elizabeth Warren (D-MA) and Rep. Jan Schakowsky (D-IL) introduced the COVID-19 Emergency Manufacturing Act, which would authorize the federal government to manufacture Personal Protective Equipment (PPE), prescription drugs, and other medical supplies needed to address COVID-19. The bill would create an “Emergency Office of Manufacturing for Public Health” to steer the supply chain of COVID-19 medical products.
On May 1, Reps. Joe Kennedy (D-MA) and Pramila Jayapal (D-WA) introduced the Medicare Crisis Program Act, which aims to guarantee access to health covering during the pandemic by expanding Medicare and Medicaid eligibility. The bill would enroll the recently unemployed and their household into Medicare, increase Medicaid eligibility to 300% of the federal poverty level, boost the Medicaid federal match rate, and limit OOP costs for COVID-19 for all insured individuals. The legislation would remain in effect until enrollees are employed and have access to sufficient health insurance, or the federal and state unemployment rate returns to within 2% of the unemployment rate in the last quarter of 2019, whichever comes first. The authors frame their proposal as an alternative to relying on private insurance to expand coverage. Thirty-two House Democrats have endorsed the bill.
On May 1, HHS Secretary Azar tweeted that the Trump administration will send “3 Abbott point of care testing machines and 1,000 tests” to the Senate, which is set to return on May 4. On May 2, President Trump also tweeted noting that there is “tremendous” COVID-19 testing capacity in Washington for Senators and their staff returning to Capital Hill. Later that day, Leader McConnell and Speaker Pelosi issued a joint statement turning down these tests.
Regulatory Update
On April 26, CMS announced it is reevaluating the amount it will pay providers under its Accelerated Payment Program and immediately suspending Medicare Part B suppliers from participating. CMS will no longer accept new applications for the program. Unlike the Provider Relief Fund, these Accelerated Payment Program funds must be repaid and, after a short interest free repayment period, the program establishes a 10.25% interest rate on any repayments that have not been made. CMS sited the $175 billion Congress appropriated to the Provider Relief Fund as rationale to suspend this program. An updated fact sheet on the Accelerated Payment Program is available here.
On April 27, the CDC updated guidance for state and local health departments detailing new priorities for testing patients that are suspected to be infected.
On April 27, the National Association of Medicaid Directors (NAMD) sent a letter to HHS Secretary Azar requesting “expeditious distribution of Congressionally appropriated funds to critical Medicaid providers” within the next two weeks. In addition, to better inform state decisions on additional fiscal relief, NAMD requests more transparency from HHS on specific funding amounts issued to providers. Last week, Secretary Azar said a portion of the Provider Relief Fund will be sent to Medicaid-only providers, but HHS has not shared any further details. In addition, an HHS spokesperson said the Department is "in the process of establishing a database to disclose the entities that have attested to the receipt of their distributions and the amounts they receive.”
On April 27, the American Medical Association (AMA) sent a letter to “testing czar” Admiral Brett Giroir, raising concerns with the current state of diagnostic testing, as well as the performance of antibody tests on the market. The AMA recommends that the Administration adopt a national testing strategy; communicate regularly with laboratory community; ensure laboratories have the resources to meet the growing demand; and issue guidance and increase education around antibody testing.
On April 27, the Advanced Medical Technology Association (AdvaMed) sent a letter to USTR requesting that the Administration ease tariffs for a medical technology products crucial to caring for infected patients. AdvaMed claims that Section 301 tariffs on such products should be removed without a specified termination date or at least one year after WHO declares the pandemic has concluded.
On April 28, CMS notified providers that they may now earn credit in the Merit-Based Incentive Payment System for the 2020 performance period if they participate in a clinical trial and report their findings to a clinical data registry.
On April 28, the Oversight & Reform Economic & Consumer Policy Subcommittee on sent a letter to the FDA asking a series of questions related to its governance of antibody tests. The Subcommittee also sent letters to four manufacturers (BioMedomics, Epitope Diagnostics, Premier Biotech, and UCP Biosciences) requesting information on their communication with the FDA, data supporting product accuracy, and facilities that purchased their tests. The FDA has indicated it is reevaluating its policy that has allowed more than 100 antibody tests to reach consumers prior to its approval.
On April 29, the U.S. Departments of Labor (DOL) and Treasury issued a final rule to extend key deadlines for employee benefit plans, plan participants, and plan beneficiaries impacted by the pandemic. Specifically, the rule allows individuals that lost their employer sponsored health plan because of the coronavirus pandemic to sign up for Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage up to 60 days after the national emergency declaration ends. Traditionally, individuals have up to 60 after leaving their job to apply for COBRA. An FAQ on COBRA implementation changes is available here. On April 30, the DOL reported that for the week ending on April 25, 3.8 million Americans filed new jobless claims. Since stay-at-home orders were issued six weeks ago, a total of 30.3 million have filed for unemployment.
On April 29, the National Institutes of Health (NIH) launched the “Rapid Acceleration of Diagnostic (RADx)” initiative, aimed at speeding innovation, commercialization, and development of at-home or point-of-care testing technologies. Under the program, scientists and inventors with a new testing technology can compete for a share of up to $500 million to bring their product to market.
On April 30, CMS issued a second iteration of sweeping waivers and rule changes to allow the health care system to adapt to the COVID-19 pandemic, including a second COVID-19 Interim Final Rule. The updates seek to expand diagnostic and antibody testing for Medicare and Medicaid beneficiaries, increase hospital capacity, augment the health care workforce, decrease administrative burden, and further expand telehealth in Medicare. The new rule changes are available here.
On April 30, the Federal Emergency Management Agency announced it will coordinate a 14-day supply of PPE to 15,400 nursing homes that participate in the Medicare and Medicaid programs. Shipments will begin in July and be customized to each facility based on staffing levels.
On April 30, the Medicaid & CHIP Payment & Access Commission (MACPAC) sent a letter to Secretary Azar reiterating its concern that Provider Relief Funds are not being sufficiently directed to providers that solely or predominately treat Medicaid beneficiaries.
On April 30, CMS established an independent commission to address nursing home quality and safety.
On April 30, the FDA issued final guidance for industry that outlines new flexibilities under the Drug Supply Chain Security Act to help ensure adequate distribution of prescription drugs throughout the supply chain.
On April 30, it was reported that Walmart returned $12.6 million received from HHS as part of the Provider Relief Fund and sent a letter to HHS Secretary Azar and CMS Administrator Seema Verma requesting that Walmart be excluded from future disbursements.
Other
On April 26, former FDA Commissioner Scott Gottlieb penned an op-ed in the Wall Street Journal claiming that “America Must Win the Coronavirus Vaccine Race,” since the first nation to develop a vaccine will not be in an immediate position to share. Gottlieb predicts that the “first country to the finish line will be first to restore its economy and global influence;” therefore, he recommends investing in a development and regulatory process that is “unprecedented in scope and urgency.”
On April 27, Regeneron and Sanofi SA announced their rheumatoid arthritis drug Kevzara may have only been an appropriate treatment for critically ill COVID-19 patients, according to preliminary results from Phase 2 of an ongoing trial.
On April 28, Pfizer announced it is preparing to manufacture vaccines in the U.S. and Europe and is aiming to supply millions of doses of vaccines this year and hundreds of millions in 2021. Pfizer also announced the vaccine it is developing with BioNtech could be ready for emergency use as soon as this fall.
On April 27, the Pandemic Response Accountability Committee, a panel of 24 inspectors general investigating proper implementation of Congressionally authorized relief funds, named Robert Westbrooks to be its executive director.
On April 28, Chinese researchers released a study suggesting that cancer patients, especially those with blood and lung malignancies, are nearly three times more likely to die from COVID-19. The research also found that the cancer patients with COVID-19 were more likely to have "severe events," such as being admitted to intensive care units and being placed on a ventilator. The study was conducted at 14 hospitals in the Hubei province.
On April 29, Gilead said its antiviral Remdesivir may be an effective COVID-19 treatment. Director Fauci validated this claim: “The data shows that Remdesivir has a clear-cut, significant positive effect in diminishing the time to recover.” According to results from an NIAID trial, patients that receive the drug recover 31% faster than those receiving a placebo. Fauci also compared the drug to the first medication identified to treat HIV. For severely ill patients, Gilead said that Remdesivir may be effective in just a five-day regimen. On May 1, FDA granted Remdesivir an Emergency Use Authorization.
On April 29, Maryland Gov. Larry Hogan (R) issued an EO requiring universal testing for all nursing home residents across the state.
On April 29, Los Angeles Mayor Eric Garcetti said the city is providing free testing to all residents regardless of symptoms, becoming the first major U.S. city to do so. Nearly half of California’s cases have been reported in Los Angeles.
On April 30, AstraZeneca and Oxford University announced a partnership to develop and produce the University’s potential vaccine, which is currently being testing in humans. The researchers anticipate their vaccine could be developed as soon as September.
On April 30, the Association for Accessible Medicines released a “Blueprint for Enhancing the Security of the U.S. Pharmaceutical Supply Chain.”
As of May 2, the U.S. had 1,132,315 confirmed COVID-19 cases resulting in 66,6364 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
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
Payment Policies for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) (CMS-1738); Proposed Rule; Received 4/28/20
Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid, Medicare Cost Plans, and PACE Programs (CMS-4190); Final Rule; Received 4/29/20
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
Government Accountability Office (GAO)
On April 29, GAO released a report entitled Antibiotic Resistance: Additional Federal Actions Needed to Better Determine Magnitude and Reduce Impact. GAO maintains that of antibiotic resistance is one of the leading public health challenges of the time, though the precise magnitude of the problem is unknown. GAO recommends that HHS take a leading role in promoting a robust pipeline of antibiotics, support judicious use of existing antibiotics, and increase resistance testing to assess the scope of the issue. Notably, HHS did not concur with GAO’s recommendation to use postmarket financial incentives to encourage the development of new treatments for antibiotic-resistant infections.
On April 30, GAO published a letter sent to Secretary Azar on April 23 outlining 55 open recommendations that HHS could prioritize to save the most money, address “high risk” issues, or otherwise significantly improve HHS operations.
HHS Office of Inspector General (OIG)
On May 1, OIG issued a report entitled North Carolina Received $30 Million in Excess Federal Funds Related to Improperly Claimed Health Home Expenditures. OIG conducted an audit to determine whether North Carolina claimed federal Medicaid reimbursement for health home expenditures in accordance with federal and state requirements. Results from the audit suggest North Carolina received $30.7 million in excess federal funds between October 1, 2011, through September 30, 2013. OIG recommends that this sum be return to the federal government.
UPCOMING HEARINGS
Senate
HELP Committee
May 7, 10:00 a.m., 106 Dirksen Senate Office Building
Shark Tank: New Tests for COVID-19
Witnesses include: Francis Collins, Director, NIH and Gary Disbrow, Acting Director, Biomedical Advanced Research & Development Authority, Office of the Assistant Secretary For Preparedness & Response
House
Appropriations Labor-HHS-Education Subcommittee
May 5, 2020; 10:00 a.m.; 2359 Rayburn House Office Building
Witnesses include: Tom Frieden, President & CEO, Resolve to Save Lives, former CDC Director and Caitlin Rivers, Senior Scholar at the Johns Hopkins Center for Health Security, Assistant Professor in the Department of Environmental Health and Engineering, Johns Hopkins Bloomberg School of Public Health
OTHER HEALTH POLICY NEWS
On April 27, the Supreme Court ruled 8-1 that the federal government owes insurers that participated in the ACA’s expired risk corridor program up to $12 billion in unpaid funds. Insurers successfully argued that that under the ACA, the government guaranteed reimbursement for higher-than-anticipated costs while requiring participating plans to return higher-than-anticipated savings; however, Congress circumvented this commitment by repeatedly passing appropriation riders that reduced the amount it owed plans. The court concluded that Congressional spending restrictions do not excuse the government from its original guarantee to fund the risk corridor program. Justice Samuel Alito, the lone dissident, argued that “under the court’s decision, billions of taxpayer dollars will be turned over to insurance companies that bet unsuccessfully on the success of the program in question."