The following LPG Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from July 6 – 10. 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 stands in recess until July 20.
House
On July 7, the Appropriations Departments of Labor, Health & Human Services (HHS), Education & Related Agencies Subcommittee marked up and, in a 9-6 party-line vote, advanced its Fiscal Year (FY) spending bill to the full committee. The bill would appropriate $96.4 billion to HHS, a $1.5 billion increase from the FY2020 enacted level. Annual appropriations for HHS would include: $42 billion for the National Institutes of Health (NIH), a $500 million increase; $8 billion for the Centers for Disease Control & Prevention (CDC), a $232 million increase; $6 billion for the Substance Abuse & Mental Health Services Administration (SAMHSA), a $96 million increase; $7.2 billion for the Health Resources & Services Administration (HRSA), a $157 million increase; $2.8 billion for the Public Health & Social Services Emergency Fund (“Provider Relief Fund”), a $90 million increase; and $4 billion for Centers for Medicare & Medicaid Services (CMS) administrative expenses, a $315 million increase. Notably, the bill directs CMS to use $100 million in carryover funds from Affordable Care Act (ACA) user fees to support outreach and education during the ACA open enrollment period. In addition, the measure appropriates $24.4 billion in pandemic emergency relief, including $4.5 billion to the Biomedical Advanced Research & Development Authority (BARDA) and $5 billion to establish a permanent public health emergency fund. A summary of the bill is available here.
On July 9, the Appropriations Committee voted 29-21 to approve 302(b) allocations for its 12 subcommittees. The allocations total nearly $1.3 trillion in discretionary funding, including $182.9 billion for the Labor-HHS-Education bill. The allocations include $250 billion in emergency spending, which GOP lawmakers argued violates the budget caps deal reached last summer (H.R. 3877).
On July 9, the Appropriations Committee unanimously approved its FY2021 Agriculture-Rural Development-Food & Drug Administration (FDA) spending bill. The bill would appropriate $3.2 billion in discretionary funds to the FDA, an increase of $41 million from current levels. After accounting for industry user fees, FDA’s total funding would be nearly $5.8 billion. The bill also includes over $1 billion to expand broadband, an increase of $435 million. By voice vote, the Committee adopted an amendment to allow FDA to recall unsafe prescription and over-the-counter drugs. A summary of the bill is available here.
On July 9, the Appropriations Committee voted 30-20 to approve its FY2021 Military Construction-Veterans Affairs spending bill. The measure includes $104.8 billion in discretionary funding for the Department of Veterans Affairs (VA), $12.3 billion above the FY2020 enacted level. The bill also includes $12.5 billion in emergency spending for the VA to address rising health care costs. A summary of the bill is available here.
On July 10, Katie Porter (D-CA) and Karen Bass (D-CA) urged CMS to finalize its proposed rule that would provide more federal oversight and accountability of organ procurement organizations (OPOs). OPOs have requested to delay the rule until after the COVID-19 pandemic.
The House is not expected to hold its next votes until July 20.
NON-CORONAVIRUS ADMINISTRATION UPDATE
White House
On July 6, White House Chief of Staff Mark Meadows indicated that President Trump plans to sign an Executive Order (EO) related to prescription drug prices. The President is also expected to take action on drug supply chain safety which could occur under a separate Executive Order.
On July 7, the Trump administration formally notified the United Nations of its withdrawal from the World Health Organization (WHO), effective July 6, 2021. President Trump expressed interest in leaving the organization in May, criticizing WHO for favoring China in its response to the coronavirus outbreak. Presumption Democratic nominee Joe Biden promised that, if elected, he would rejoin the organization.
Regulatory Update
On July 6, CMS issued a proposed rule entitled End-Stage Renal Disease (ESRD) Prospective Payment System (PPS), Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, and ESRD Quality Incentive Program (QIP). CMS proposed increasing the ESRD PPS base rate to $255.59 for Calendar Year (CY) 2021, an increase of $16.26 over CY2020. In addition to annual technical updates, the proposed rule includes: an addition to the base rate to include calcimetrics in the ESRD payment bundle; changes to the eligibility criteria and determination process for the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES); an expansion of the TPNIES to include new and innovative home dialysis machines; an adjustment to the low-volume adjustment eligibility criteria and attestation requirement to account for the COVID-19 Public Health Emergency (PHE); and an update to the ESRD PPS wage index to adopt new Office of Management & Budget (OMB) delineations with a transition period. The proposed rule also proposes updates to the ESRD QIP and a 1.8% increase to the Acute Kidney Injury (AKI) payment rate. Comments are due by September 4, 2020. A fact sheet is available here.
On July 9, OMB received a CMS final rule entitled FY2021 Skilled Nursing Facility (SNFs) Prospective Payment System Rate and Value-Based Purchasing Program Updates.
On July 9, OMB received a CMS final rule entitled FY2021 Hospice Wage Index Payment Rate Update.
On July 9, OMB received a HRSA notice entitled National Vaccine Injury Compensation Program: Revisions to the Vaccine Injury Table.
On July 10, the Departments of HHS, Labor, and Treasury released a proposed rule entitled Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage. The Departments proposed allowing “grandfathered” employer-based health plans to continue to be exempt from certain regulations. The Obama administration allowed these plans to continue operating without complying to all of the ACA’s regulations, as long as they did not significantly increase employees’ cost sharing obligations. However, this proposed rule would allow grandfathered high-deductible health plans (HDHP) to increase fixed-amount cost sharing requirements to the extent necessary to maintain their HDHP status. It also proposes a new method to determine allowable increases in fixed-amount cost sharing. The proposed rule follows President Trump’s 2017 EO to “minimize economic and regulatory burdens of the ACA.” Comments are due by August 14. A press release is available here.
CORONAVIRUS UPDATE
White House Update
On July 7, Vice President Mike Pence and HHS Secretary Alex Azar indicated that the PHE will likely be extended past its July 25 expiration. On July 8, the National Governors Association released a statement urging the administration to renew this emergency declaration.
Legislative Update
On July 7, Energy & Commerce Committee Chairman Frank Pallone (D-NJ), Education & Labor Committee Chairman Bobby Scott (D-VA), Ways & Means Committee Chairman Richie Neal (D-MA), HELP Committee Ranking Member Patty Murray (D-WA), and Finance Committee Ranking Member Ron Wyden (D-OR) urged to the Departments of HHS, Labor, and Treasury to reassess health plan coverage for return-to-work and surveillance COVID-19 testing to comply with the Families First Coronavirus Response Act (Families First Act) and the Coronavirus Aid, Relief & Economic Security (CARES) Act. The lawmakers assert that both laws include provisions to ensure that health plans cover diagnostic and serological tests and related services without any cost-sharing requirements.
On July 8, the Energy & Commerce Committee held a hearing entitled Addressing the Urgent Needs of our Tribal Communities. Chairman Frank Pallone (D-NJ) claimed tribal communities are disproportionately impacted by COVID-19, with more than one-third of tribal members at high-risk of serious COVID-19 complications. Chairman Pallone advocated for the Moving Forward Act, which would increase funding and resources for personal protective equipment and testing for tribal populations and increase broadband access for telehealth services. Rep. Markwayne Mullin (R-OK) called for the Indian Health System to receive mandatory and advanced appropriations. Navajo Nation President Jonathan Nez testified that there was a three-month delay in CARES Act funding for tribal communities. Witnesses included: Charles Grim, Secretary, Chickasaw Nation Department of Health; Jonathan Nez, President, Navajo Nation; Christine Sage, Chairman, Southern Ute Indian Tribe; Fawn Sharp, President, National Congress of American Indian; and Pilar Thomas, Partner, Quarles & Brady LLP. The Memorandum from Chairman Pallone is available here.
On July 8, the Homeland Security Committee held a hearing entitled Examining the National Response to the Worsening Coronavirus Pandemic. Chairman Bennie Thompson (D-MS) considered the Trump administration’s decision to withdraw from the WHO and the nation’s rising coronavirus cases to be a global health risk. Ranking Member Mike Rogers (R-AL) criticized China in its alleged coverup and response to the coronavirus outbreak and commended President Trump in his efforts to give states funding and supplies. Illinois Governor J. B. Pritzker testified for increased and permanent clarity in insurance coverage for COVID-19 testing and a national mask mandate. Witnesses included: J. B. Pritzker, Governor, Illinois; Jason Shelton, Mayor, City of Tupelo, Mississippi; and Umair Shah, MD, Executive Director and Local Health Authority, Harris County Public Health, Texas.
On July 8, the Financial Services Committee Task Force on Artificial Intelligence (AI) held a hearing entitled Task Force on Artificial Intelligence: Exposure Notification and Contact Tracing: How AI Helps Localities Reopen Safely and Researchers Find a Cure. Chairman Bill Foster (D-IL) highlighted the tradeoff between privacy and the need to collect data to mitigate the COVID-19 crisis, but voiced support to contact tracing efforts. Ranking Member Barry Loudermilk (R-GA) expressed privacy and effectiveness concerns with digital contract training. Witnesses included: Brian McClendon, Chief Executive Officer (CEO), Co-founder, CVKey Project; Krutika Kuppalli, MD, Infectious Diseases Physician; Andre M. Perry, Fellow, Metropolitan Policy Program, Brookings Institution; and Ramesh Raskar, Professor, MIT, Founder, PathCheck Foundation.
On July 8, the Budget Committee held a virtual hearing entitled Fueling American Innovation and Recovery: The Federal Role in Research and Development. Chairman John Yarmuth (D-KY) emphasized the importance of federal investment in research and development for the nation’s COVID-19 response and warned of the dangers of recent declines in such funding. Ranking Member Steve Womack (R-AR) echoed Chairman Yarmuth’s statements, supporting research funding for the NIH but warned of the nation’s increasing debt. Witnesses included: Sudip Parikh, CEO, American Association for the Advancement of Science; Paul Romer, Professor, New York University; and Deborah Wince-Smith, President & CEO, Council on Competitiveness.
On July 9, HELP Committee Ranking Member Murray released a report entitled A Nation in Crisis: The Consequences of Federal Leadership Failures on the COVID-19 Diagnostic Testing System. This report suggested that early testing delays and supply shortages could have been avoided with stronger leadership from the federal government. The report notes that states remain concerned that they lack the testing supplies needed to allow schools and workplaces to reopen.
Majority Leader Mitch McConnell (R-KY) has indicated that the Senate will start considering a package starting July 20, after its July 4 recess. He has claimed the measure will not exceed $1 trillion and may include targeted stimulus checks, while also addressing liability protections, education, jobs, and health care. Some Senate Republicans have argued they will not approve a package that includes the higher level of unemployment insurance, which expires on July 31. Speaker Nancy Pelosi (D-CA) has suggested $1 trillion is too low and has stated that funding for state and local government and the unemployment insurance policy must be included. Given the conflicting “red lines” on both sides, it could be the most contentious relief package to-date.
Regulatory Update
On July 7, HHS and the Department of Defense (DoD) announced a $1.6 billion agreement with Novavax, Inc. to manufacturer company’s investigational COVID-19 vaccine. In exchange, the federal government will own 100 million doses of the vaccine to use in clinical trials or, if the vaccine is successful, as part of a vaccination campaign. The deal marks the largest federal award given to a vaccine candidate through BARDA. In addition, the Departments reached a similar agreement with Regeneron Pharmaceuticals. Under a $450 million contract, Regeneron will manufacturer its investigational antiviral antibody treatment and the federal government will own the all of the doses produced (estimated to be between 70,000 and 300,000). Both contracts are part of Operation Warp Speed (OWS) and each product, if proven successful, will be available to patients at no cost.
On July 6, FDA issued an Emergency Use Authorization (EUA) for a COVID-19 diagnosis test by Becton Dickinson (BD) that can produce results in 15 minutes. BD expects to produce more than 10 million tests between July and September and plans to manufacture at least two million tests per week by the end of September.
On July 7, HHS announced free COVID-19 testing in communities seeing significant increases in new cases and hospitalizations starting July 7, including Jacksonville, Florida; Baton Rouge, Louisiana; and Edinburg, Texas. Sites will be able to run 5,000 tests per day and will operate for five to 12 days. There are no restrictions on who may get tested at surge locations.
On July 7, FDA released a document showing that at least 87 people around the world died from using hydroxychloroquine and chloroquine as COVID-19 treatments from December 1 through May 6.
On July 8, NIH launched the COVID-19 Prevention Trials Network (COVPN) to enroll volunteers to participate in large-scale clinical trials related to potential COVID-19 vaccines and monoclonal antibody efficacy studies.
On July 9, HHS awarded more than $21 million to support health centers' COVID-19 response efforts; $17 million of this funding is designated to support 78 Health Center Program look-alikes (LALs) to expand capacity for COVID-19 testing.
On July 10, FDA announced it will begin conducting more onsite domestic facility inspections starting July 20. Onsite inspections have been postponed since March.
COVID-19 information released by CMS is posted here; specific waivers are available here.
Other
On July 4, WHO cut hydroxychloroquine and lopinavir/ritonavir from its “Solidarity Trial,” which aims to identify treatments for hospitalized COVID-19 patients, after researchers concluded that the drugs produced little or no reduction in mortality.
On July 6, WHO announced 73 countries are at risk of running out of stock of antiretroviral medicines used to treat HIV as a result of the COVID-19 pandemic. Experts fear that supply chain disruptions may cause an increase in AIDS-related deaths.
On July 6, it was reported that 239 scientists will publish a report in the Journal of Clinical Infectious Diseases intended urge WHO to recognize the potential for airborne transmission of COVID-19. By the evening of July 6, WHO acknowledged the report and evidence of airborne transmission and emphasized the need for more research on modes of COVID-19 transmission.
On July 7, Presidential candidate Biden released The Biden Plan to Rebuild U.S. Supply Chains and Ensure the U.S. Does Not Face Future Shortages of Critical Equipment. To prevent future shortages of critical supplies and equipment, Biden proposes to leverage the Defense Produce Act and the federal government’s purchasing power to promote domestic manufacturing. He also highlighted the importance of building a resilient pharmaceutical supply chain over the long-term, strengthening federal stockpiles of critical supplies, and incentivizing drug companies to “onshore” their manufacturing plants. Biden claimed his Administration would work to increase domestic production and secure the supply chain for American patients without raising drug prices.
On July 9, more than 20 pharmaceutical companies launched the AMR Action Fund, pledging to invest $1 billion in small biotech companies to produce new antibiotics. The Fund, set to begin by the end of 2020, aims to create two to four new antibiotics by 2030.
On July 9, WHO announced the creation of the Independent Panel for Pandemic Preparedness and Response to review the global response to the coronavirus pandemic. Former Liberian President Ellen Johnson Sirleaf and former New Zealand Prime Minister Helen Clark will chair the panel. WHO dismissed suggestions that the panel was created in response to the U.S. terminating WHO membership.
On July 10, the Kaiser Family Foundation (KFF) released an analysis entitled Growing COVID-19 Hotspots in the U.S. South and West will Likely Widen Disparities for People of Color. KFF concluded that the large number of people of color living in COVID-19 hotspots, coupled with the already disproportionate impact for people of color, will likely lead to further racial and ethnic health disparities. KFF recommends prioritizing health equity and directing resources to high risk and disproportionately impacted communities.
As of July 12, the U.S. had 3,269,531 confirmed COVID-19 cases resulting in 134,898 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); Received 6/6/19
International Pricing Index Model for Medicare Part B Drugs (CMS-5528-P); Proposed Rule; Received 6/20/19
Medicare Coverage of Innovative Technologies (CMS-3372-P); Received 7/30/2019
Medicaid & CHIP Managed Care (CMS-2408-F); Final Rule; Received 9/26/2019
Strengthening 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
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
CY2021 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1734); Proposed Rule; 5/12/20
Request for Information; Electronic Prescribing for Controlled Substances (CMS-3394); Notice; Received 6/22/20
FY 2021 Inpatient Psychiatric Facilities Prospective Payment System Rate Updates (CMS-1731); Final Rule; Received 7/6/20 FY 2021
FY2021 Skilled Nursing Facility (SNFs) Prospective Payment System Rate and Value-Based Purchasing Program Updates (CMS-1737); Final Rule; Received 7/9/20
Hospice Wage Index, Payment Rate Update (CMS-1733); Final Rule; Received 7/9/20
HHS-FDA
Annual Summary Reporting Requirements Under the Right to Try Act; Proposed Rule; Received 3/31/20
Opioid Use Disorder: Endpoints for Demonstrating Effectiveness of Drugs for Medication-Assisted Treatment; Guidance for Industry; Notice; Received 5/28/20
Compliance Policy for the Quantity of Bioavailability and Bioequivalence Samples Retained Under 21 CFR 320.38(c); Guidance for Industry; Notice; Received 5/26/20
Multiple Function Device Products: Policy and Considerations; Guidance for Industry and Food and Drug Administration Staff; Notice; Received 7/8/20
Expiration Dating of Unit-Dose Repackaged Solid Oral Dosage Form Drug Products; Guidance for Industry; Availability; Notice; Received 7/8/20
HHS-HRSA
National Vaccine Injury Compensation Program: Revisions to the Vaccine Injury Table; Notice; Received 7/9/20
HHS-OS
Health & Human Services Grants Regulation; Final Rule; Received 5/26/20
COVID-19 Hoarding Prevention Under the Defense Production Act; Interim Final Rule; 6/23/20
REPORTS
HHS OIG
On July 7, OIG issued a report to CMS Administrator Seema Verma entitled Loophole in Drug Payment Rule Continues to Cost Medicare and Beneficiaries Hundreds of Millions of Dollars. According to OIG, self-administered drugs are generally not covered under Medicare Part B. However, in a November 2017 report, OIG identified a loophole that caused CMS to account for two noncovered, self-administered versions of Orencia and Cimzia when setting Part B payment amounts. This caused in Medicare beneficiaries to pay an extra $366 million between 2014-2016. In this report, OIG concluded that CMS continued to include noncovered, self-administered versions when calculating Part B payment amounts for Orencia and Cimzia but did not find any additional drugs that took advantage of the loophole. OIG calculated that closing the loophole would have saved $497 million in 2017 and 2018. OIG reiterated their 2017 recommendation, encouraging CMS to pursue legislative to close this loophole and exclude noncovered, self-administered versions of drugs in the calculation of Part B payment amounts. A summary of the report is available here.
On July 7, OIG issued a report to the Administration for Community Living (ACL) Center for Innovation and Partnership Deputy Administrator Kelly Cronin entitled 2019 Performance Data for the Senior Medicare Patrol (SMP) Projects. The SMP projects receive grants from ACL to recruit and train retired professionals and other older adults and community members to prevent, recognize, and report health care fraud, errors, and abuse. SMP reported $2.4 million in expected Medicare recoveries, an increase of $2,384,864 – almost all of which came from a project that uncovered a large-scale fraud scheme.
UPCOMING HEARINGS
Senate
Note of note.
House
Appropriations Committee
July 13, 1:00 p.m., 1100 Longworth House Office Building
Markup of FY2021 Labor-HHS-Education Spending Bill
Homeland Security Oversight, Management & Accountability Subcommittee
July 14, 12:00 p.m., virtual
Reviewing Federal and State Pandemic Supply Preparedness and Response
Witnesses include: Craig Fugate, Former Administrator, Federal Emergency Management Agency, Senior Advisor, Blue Dot Strategies; Chris Currie, Director, Homeland Security and Justice team, U.S. Government Accountability Office; and Mark Ghilarducci, Director, Office of Emergency Services, Governor’s Office, California.
Energy & Commerce Oversight Subcommittee
July 21, time and location TBD
Hearing Featuring COVID-19 Vaccine Manufacturers
Witnesses include: Officials from AstraZeneca, Johnson & Johnson, Merck, Moderna, and Pfizer.
Education & Labor Early Childhood, Elementary & Secondary Education Subcommittee
July 23, time and location TBD
Hearing to Examine the Reopening of Schools
CDC Director Robert Redfield was invited to testify.
OTHER HEALTH POLICY NEWS
On July 6, Justice Brett Kavanaugh delivered an opinion alluding that the Supreme Court is unlikely to declare the ACA unconstitutional when it considers Texas v. California this fall. Specifically, during a session on upholding a blanket ban on robocalls, Justice Kavanaugh stated the Court is not likely to eliminate an entire law even if one of its parts is found to be unconstitutional.
On July 7, GoodRx reported that the prices of 837 medicines increased between January 1 and June 30. This rate is similar to prior years; however, the number of prices increase for branded drugs is higher than last year. The Pharmaceutical Research & Manufacturers of America (PhRMA) argued these findings are misleading as they focus “solely on list prices and ignore the dynamics of the biopharmaceutical market that control medicine spending.”
On July 7, Supreme Court spokeswomen Kathleen Arberg confirmed Chief Justice John Roberts suffered a fall on June 21 that required an overnight stay in the hospital. His doctors believe the fall was likely caused by dehydration.
On July 8, the Supreme Court ruled 7-2 to uphold a Trump administration’s rule that effectively allows any employer to circumvent the ACA’s “contraception mandate” by claiming a religious or moral exception to providing free birth control to its employees.
On July 8, the Biden-Sanders Joint Task Force issued policy recommendations that seek to unify the Democratic Party ahead of the November election. The Health Care Task Force, led by Rep. Pramila Jayapal (D-WA) and former Surgeon General Vivek Murthy, proposed a series of policies to achieve “universal, affordable, quality” health care, such as lowering Medicare’s eligibility age to 60 and creating a public option administered by the traditional Medicare program. The Task Force proposed expanding subsidies for the ACA marketplaces such that premiums are capped at 8.5% of enrollees’ income, as well as ending the practice of surprise billing. It also outlined policies to lower prescription drug costs, overlapping considerably with House Democrat’s drug-pricing package (H.R. 3). To expand coverage during the pandemic, the Task Force recommended that the federal government fully cover COBRA premiums, issue a broad special enrollment period (SEP) for the ACA marketplaces, expand federal subsidies for the marketplaces, and create a platinum-level, federally administered plan on the marketplaces with low fees and no deductibles.
On July 8, President Trump challenged CDC guidelines for reopening schools, calling them too “tough & expensive.” He also suggested his Administration would pull federal funds from schools that do not fully reopen. Furthermore, White House Press Secretary Kayleigh McEnany claimed the Administration is considering increasing funding for education in the next pandemic relief package, ensuring that new funds go to students and not to closed school districts. Meanwhile, Leader McConnell expressed support for the CDC’s guidelines and acknowledged that reopening schools will require more federal aid. CDC is expected to release updated guidelines, per the President’s request.
On July 9, 10 patient advocacy groups urged CMS to establish a new Medicare Severity-Diagnosis Related Group (MS-DRG) for Chimeric Antigen Receptor (CAR) T-cell Immunotherapy in its 2021 Inpatient Prospective Payment System (IPPS) rule.
On July 10, the Washington State Health Care Authority named five “apparently successful bidders” that are interested in participating in the state’s public option during its first year, including Bridgespan, Community Health Network of Washington, Coordinated Care, LifeWise, and UnitedHealthcare.