The following LPG Weekly Health Care Watch provides a summary update of legislative and regulatory health care activities from May 11 – 17. 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
On May 14, Majority Leader Mitch McConnell (R-KY) announced that Sen. Richard Burr (R-NC) will temporarily step down as Chairman of the Intelligence Committee while the U.S. Department of Justice (DOJ) investigates whether he used classified information to make stock trades.
NON-CORONAVIRUS REGULATORY UPDATE
On May 12, the Centers for Medicare & Medicaid Services (CMS) released its FY21 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) proposed rule. CMS proposes to increase IPPS payments by 1.6% (roughly $2 billion), as well as expand the alternative new technology add-on payment (NTAP) pathway for antimicrobial products to include products approved under FDA’s Limited Population Pathway for Antibacterial and Antifungal Drugs, and create a new Medicare Severity Diagnosis Related Group (MS-DRG) for CAR-T therapies. Notably, CMS also proposes to require to hospitals to submit data on the median charges they negotiate with insurers for inpatient services – a policy already beingchallenged by hospital groups. CMS adds that they will consider using the newly required pricing data to calculate future MS-DRG relative weights. Comments are due July 10. A fact sheet is available here.
On May 12, the White House Office of Management & Budget (OMB) received CMS’ CY21 Physician Fee Schedule proposed rule.
On May 14, OMB received CMS’ CY21 End-Stage Renal Disease (ESRD) prospective payment system proposed rule.
On May 22, CMS released part one of two of its Part C and Part D rule for Contract Years 2021 -2022 .
CORONAVIRUS UPDATE
White House Update
On May 11, the Trump administration announced a plan to help states test at least 2% of their population by the end of May. According to Center for Medicare & Medicaid Innovation (CMMI) Director Brad Smith, this translates to at least 12.9 million tests. In addition, the Administration said it will distribute $11 billion from the Coronavirus Aid, Relief & Economic Security (CARES) Act to support states’ testing efforts; funds will be allocated based on population size and prevalence of COVID-19.
As of May 11, the White House circulated a memo to staff specifying that masks must be worn inside the West Wing and that the majority of staff must be tested daily.
On May 14, President Trump announced a plan to restructure the Strategic National Stockpile (SNS).
On May 14, President Trump signed an executive order that authorizes the chief executive of the U.S. International Development Finance Corporation (DFC), Adam Boehler, to use the Defense Production Act to boost the domestic production of supplies needed to respond to COVID-19 through loans and other financing. The loans will be funded by the Department of Defense and will not count against DFC’s $60 billion lending cap.
On May 15, the President Donald Trump tapped former GlaxoSmithKline CEO Moncef Slaoui and Army General Gustave Perna to lead “Operation Warp Speed,” an initiative to expedite the development and production of vaccines and treatments. General Perna will serve as the chief operating officer and Slaoui will function as the chief scientist.
On May 15, the U.S. Department of Health & Human Services (HHS) said that all 50 states, Washington D.C., Puerto Rico, and the U.S. Virgin Islands now have supplies of remdesivir. The drug is being distributed based on the percentage of confirmed hospitalized COVID-19 patients in each state.
Legislative Update
On May 12, the HELP Committee held a hearing entitled COVID-19: Getting Back to Work and Back to School. Chairman Lamar Alexander (R-TN), who virtually participated in the hearing while in quarantine, reiterated that the country’s work on testing so far has been “impressive” and that continued advancements in testing, tracking, isolation, treatment, and vaccines will be necessary for workplaces and schools to resume. Furthermore, he argued that testing advancements are imperative as Congress cannot appropriate enough funds to substitute for an open economy. He advocated for passing legislation to better prepare for the next public health crisis this year, while the current pandemic still holds attention. Ranking Member Patty Murray (D-WA) continued to press the Trump administration to implement a national testing strategy and issue more specific guidelines to reopen the country. National Institute of Allergy & Infectious Diseases (NIAID) Director Anthony Fauci cautioned that the consequences of states easing lockdown orders before they meet federal guidelines could be “really serious.” “Testing czar” Adm. Brett Giroir predicted the U.S. will be positioned to administer at least 40 million tests per month by August or September. Witnesses included: Centers for Disease Control & Prevention (CDC) Director Robert Redfield; Assistant Secretary for Health Brett Giroir; Food & Drug Administration (FDA) Commissioner Stephen Hahn; and NIAID Director Fauci.
On May 12, the Judiciary Committee held a hearing entitled Examining Liability During the COVID-19 Pandemic. Chairman Lindsay Graham (R-SC) maintained that companies committed to reopening in a safe and responsible manner should be granted increased liability protections; however, he clarified that any federal legislation should not “give bad actors a break” and be limited enough to allow states to pass legislation that meets the needs of their unique community. Majority Leader McConnell and Sen. John Cornyn (R-TX) are working on legislation that aims to strike this balance. Witnesses include: Kevin Smartt, CEO, Kwik Chek Convenience Stores; Anthony Perrone, International President, United Food and Commercial Workers International Union; Rebecca Dixon, Executive Director, National Employment Law Project; Leroy Tyner, Jr, General Counsel, Texas Christian University; Professor David Vladeck, A.B. Chettle Chair In Civil Procedure Georgetown University Law Center; and Helen Hill, CEO, Explore Charleston.
On May 12, Sens. Jeanne Shaheen (D-NH) and Michael Bennet (D-CO) announced legislation to reduce interest rates and easy repayment obligations for providers who have received financial assistance through CMS’ Accelerated and Advance Payments Program.
On May 12, the Energy & Commerce Committee launched an inquiry into Blue Flame Medical, which has been accused of repeatedly failing to fulfill contracts to provide medical supplies and personal protective equipment (PPE) to states.
On May 13, the newly formed Oversight & Reform Coronavirus Crisis Subcommittee held a highly partisan briefing entitledTesting, Tracing, and Targeted Containment. The briefing marks the panel’s first public meeting. Witnesses included: Scott Gottlieb, former FDA Commissioner; Mark McClellan, former FDA Commissioner and CMS Administrator; Ashish Jha, Director, Harvard Global Health Institute; Tom Inglesby, Director, Center for Health Security, Johns Hopkins Bloomberg School of Public Health; and Georges Benjamin, Executive Director, American Public Health Association.
On May 14, the Energy & Commerce Health Subcommittee held a hearing entitled Protecting Scientific Integrity in the COVID-19 Response. Former Biomedical Advanced Research & Development Authority (BARDA) Director Rick Bright warned that if the nation fails to adopt a national, coordinated, science-based response, then “the pandemic will get far worse and be prolonged.” On May 5, Bright filed a whistleblower complaint accusing the Trump administration of pressuring health officials to rush unproven drugs as COVID-19 treatments, dismissing concerns about mask shortages, repeatedly missing opportunities to address threats posed by the pandemic, and unfairly transferring him to a senior advisor role at the National Institutes of Health (NIH). On May 14, HHS formally rebutted his complaint. Subcommittee Chair Anna Eshoo (D-CA) maintained that the pandemic highlights the importance of reducing the nation’s reliance on foreign countries for medical supplies. Witnesses included: Bright, former BARDA Director; and Mike Bowen, Executive Vice President, Prestige Ameritech.
On May 15, House Democrats voted 208-199 to pass H.R. 6800, the Health & Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The $3 trillion package centers on nearly $1 billion for state and local governments. Thus far, the GOP-controlled Senate has shown little appetite to consider the legislation. Health care provisions are available here; a full section-by-section is available here. Notable provisions include:
· Requirement for insurers – Medicare, Medicaid, private plans, TRICARE, Veterans Affairs (VA), and the Federal Employee Health Benefit Program (FEHBP) – to waive all cost-sharing for treatment and retroactively cover testing since the start of the public health emergency declaration; $75 billion for a national testing and surveillance system; $100 billion to the Public Health & Social Services Emergency Fund (“Provider Relief Fund”); 14% Federal Medical Assistance Percentages (FMAP) increase; issuance of a Special Enrollment Period (SEP) for coverage in HealthCare.gov, Medicare, and Medicare Advantage (MA); 100% premium coverage for furloughed workers and those enrolled in Consolidated Omnibus Budget Reconciliation Act (COBRA); $4.7 billion to NIH for COVID-19 research; $4.5 billion to BARDA to develop vaccines, treatments, and antibiotics; appointment of a Medical Supplies Response Coordinator to steer supply chain concerns; authority for the Federal Trade Commission and state attorney generals to seek civil penalties from entities involved in price gouging; and Medicaid coverage for Pacific Islanders.
On May 15, the House voted 217-189 to pass H.Res. 965, which allows for proxy voting on the floor, as well as remote markups, hearings, and dispositions. The Chamber’s remote work plan is summarized here.
On May 14, Sen. Dick Durbin (D-IL) and 39 Democrats introduced a resolution to encourage the federal government to collaborate with other countries on developing therapies and vaccines.
On May 15, Sen. Bernie Sanders (I-VT), along with six Senate Democrats, introduced the Health Care Emergency Guarantee, a bill to eliminate all out-of-pocket costs for every U.S. resident during the pandemic. A section-by-section summary is availablehere. Rep. Pramilia Jayapal (D-WA) introduced a companion bill in the House.
On May 19, the Energy & Commerce Communications & Technology Subcommittee will hold a teleconference forum with Federal Communications Commission Chairman Ajit Pai to discuss broadband issues related to the pandemic, including its relationship to telehealth.
Regulatory Update
On May 11, it was reported that the Treasury Department has informed lawmakers that it does not support state-level legislation requiring insurers to cover COVID-19 costs retroactively. In a May 8 letter, Treasury Principal Deputy Assistant Secretary Frederick Vaughan maintained that “[w]hile insurers should pay valid claims, we share your concerns that these proposals fundamentally conflict with the contractual nature of insurance obligations and could introduce stability risks to the industry.”
On May 11, the FDA announced it is working with CDC to develop a pathway to resume routine in-person inspections.
On May 11, FDA issued an Emergency Use Authorization (EUA) to Abbott’s SARS-CoV-2 IgG serology blood test on the company’s “Alinity I” system. The FDA already granted an EUA for the test to be used on Abbott’s “ARCHITECT” system.
On May 11, FDA issued final guidance for industry on “Developing Drugs and Biological Products for Treatment or Prevention” of COVID-19. The agency specifies that drug companies should use randomized, controlled, double-blind clinical trials.
On May 11, FDA issued final guidance for clinical laboratories, commercial manufacturers, and FDA staff that describes policies to help accelerate the availability of tests for the duration of the public health emergency. The guidance went into effect immediately.
On May 12, the FDA granted Moderna “Fast Track” status for its vaccine candidate (mRA-1273). This designation allows Moderna to work more closely with the FDA and submit clinical data before it formally files an application for the agency’s approval. The vaccine is entering Phase II trials soon. BARDA supported the planning for these studies and will also support the late-stage clinical development programs.
On May 13, CMS released a “best practices” toolkit for states to combat COVID-19 in nursing homes.
On May 13, the Health Resources and Services Administration (HRSA) awarded $15 million to 159 organizations across five health workforce programs to support their telehealth capabilities. The funds were appropriated in the CARES Act.
On May 14, the U.S. Department of Labor reported that for the week ending on May 9, an additional 3 million Americans filed for unemployment. Since lockdown orders were established in mid-March, 36.5 million have filed for unemployment.
On May 14, NIAID launched a clinical trial to examine the effectiveness of the drug combination hydroxychloroquine (an antimalaria drug) and azithromycin (an antibiotic) to treat patients with mild to moderate cases of COVID-19.
On May 14, the FDA issued a statement that it is investigating the accuracy of Abbott’s ID NOW point-of-care test in light of reports that the test is returning false negatives. The agency maintains that the test, which is currently used by the White House to test staff, can still be used and can correctly identify positive cases. Furthermore, on May 15, President Trump noted “[The test] can always be double checked, but it’s a very good test. Very portable. Very quick.”
Other
On May 11, the World Health Organization warned that the pandemic could cause up to 500,000 additional AIDS-related deaths in sub-Saharan Africa because of disruptions in the drug supply chain and medical services.
On May 11, the Journal of the American Medical Association published results from a cohort study that suggests hydroxychloroquine, with or without azithromycin, does not have an assortation with significantly lower mortality among hospitalized patients.
On May 12, Priority Health announced it will provide financial relief to members and employers due to reduced utilization of health care services.
On May 13, Sanofi CEO Paul Hudson said that, because BARDA has invested $30 million in its vaccine development, the “U.S. government has the right to the largest pre-order of [the company’s] vaccine,” if proven to be successful. The statement reportedly angered France’s Prime Minister Emmanuel Macron who warned that it would be “unacceptable” for any country to have priority access to a COVID-19 vaccine.
On May 13, the Kaiser Family Foundation (KFF) released an analysis that examines the loss of employer-sponsored health insurance among those that became unemployed between March 1 and May 2 and estimates their eligibility for alternative forms of coverage. According their findings, roughly 27 million Americans lost their employer coverage during this window; nearly half of this group is eligible for Medicaid or CHIP and about a third is eligible for Affordable Care Act (ACA) marketplace subsidies.
On May 13, KKF posted an analysis of HHS’ distribution of Provider Relief Funds to hospitals. Specifically, the report focuses on the implications of allocating funding based on total net patient revenue. The report concludes that institutions representing the top 10% of hospitals based on share of private insurance revenue received $44,321 in aid per hospital bed, compared with $20,710 per bed for hospitals in the bottom 10% of private insurance revenue.
On May 14, nine influential provider organizations sent a letter to CMS Administrator Seema Verma requesting more flexibility for Accountable Care Organizations (ACOs) to manage pandemic-induced uncertainty and continue “the transition to value.”
On May 14, the Infectious Diseases Society of America and the HIV Medicine Association sent a letter to Coronavirus Task Force Response Coordinator Deborah Birx requesting a meeting to discuss how the COVID-19 drug therapy remdesivir will be allocated.
On May 15, KFF posted an analysis of Medicaid spending and enrollment trends amid COVID-19. According to KFF’s survey, Medicaid officials anticipate budget shortfalls because of increased enrollment and spending. Nearly all states with projections anticipate that both enrollment and spending will grow more quickly in FY2021 than in FY2020.
As of May 17, the U.S. had 1,467,884 confirmed COVID-19 cases resulting in 88,754 deaths, according to the 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
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 ACA’s 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
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
CY 2021 Home Health Prospective Payment System Rate Update and Quality Reporting Requirements (CMS-1730); Proposed Rule: 5/6/2020
CY 2021 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1734); Proposed Rule; 5/12/20
CY 2021 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1732); Proposed Rule; 5/14/20
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 May 13, CBO sent a letter to House Budget Committee Chairman John Yarmuth outlining answers to questions related to federal funding for state and local governments during the pandemic.
HHS Office of Inspector General (OIG)
On May 12, OIG posted a report entitled HHS Services Met Many Requirements of the Improper Payments Information Act (IPIA) of 2002 but Did Not Fully Comply for FY 2019. OIG reports that HHS did not comply with the IPIA by 1) failing to report an improper payment estimate for the Temporary Assistance for Needy Families program; 2) reporting an improper payment rate in excess of 10% for Medicaid and CHIP; and 3) not conducting recovery audits for the MA program.
UPCOMING HEARINGS
Senate
Aging Committee
May 21, 9:30 a.m., 301 Russell Office Building
Caring for Seniors Amid the COVID-19 Crisis
Details will be forthcoming
House
Appropriations Military Construction, VA & Related Agencies Subcommittee
May 19, 12:00 p.m., 2359 Rayburn House Office Building
Witnesses include: Robert Wilkie, Secretary, VA; Paul Lawrence, Undersecretary for Benefits, VA; Jennifer MacDonald, Chief Consultant to the Deputy VA Undersecretary for Health; and Jon Rychalski, Assistant Secretary for Management and Chief Financial Officer, VA
Education & Labor Workforce Protections Subcommittee
May 20, 10:15 a.m., 2175 Rayburn House Office Building
Examining the Federal Government’s Actions to Protect Workers from COVID-19
Details will be forthcoming
OTHER HEALTH POLICY NEWS
On May 11, the Wall Street Journal reported that Atul Gawande is preparing to step down from his role as CEO of Haven, the health care venture created by Amazon.com Inc., Berkshire Hathaway Inc., and JPMorgan Chase & Co. Gawande has held the position for roughly two years and will continue to work for the venture in a less operational role.
On May 12, Gov. Larry Hogan (R) announced UnitedHealthcare has filed to return to Maryland’s ACA marketplace in 2021 after leaving in 2017. UnitedHealthcare has not disclosed plans to enter additional exchanges; however, a spokesperson noted that as the exchanges "have matured and stabilized, [UnitedHealthcare] intends to offer exchange plans in those states where [it] can provide an efficient network and competitive product.”
On May 12, Minnesota Gov. Tim Walz (D) signed the Prescription Drug Pricing Transparency Act, which requires drug companies to explain price increases that exceed certain thresholds (50% increase for generics and 10% increase for branded drugs over a 12-month period). Starting in October 2021, companies must report to the state health department the reason for the price increase, costs allocated with the drug, foreign prices, and profits from the previous year.
On May 13, presidential candidate Joe Biden announced a task force to help shape his health care platform ahead of the Democratic National Convention. The group includes Rep. Pramilia Jayapal, former Michigan gubernatorial candidate Abdul El-Sayed, former CMS Administrator Don Berwick, Rep. Robin Kelly (D-IL), Service Employees International Union (SEIU) President May Kay Henry, former Obama health policy advisor Chris Jennings, former Surgeon General Vivek Murthy, and economist Sherry Glied.
On May 14, the Biotechnology Innovation Organization (BIO) announced Michelle McMurry-Heath will be the group’s new CEO starting June 1. McMurry-Heath is a former FDA official and Johnson & Johnson Vice President. She will replace former Rep. Jim Greenwood, who has led BIO since 2005.
On May 15, White House Office of National Drug Control Policy (ONDCP) Director Jim Carroll announced the start of a public comment period to help ONDCP develop criteria for designating emerging drug threats. The comment period will be open through June 30.