The following LPG Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 10 – August 15. 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
The House Energy & Commerce Committee and the Senate Health, Education, Labor & Pensions Committee are rumored to be amending their surprise billing legislation to attract additional support. Their current bill, the Lower Health Care Costs Act, would use a benchmark to resolve out-of-network payment disputes. Meanwhile, House Ways & Means Chair Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) are standing by their alternative proposal, the Consumer Protections Against Surprise Medical Bills Act, which would use arbitration.
On August 13, Sens. Tammy Baldwin (D-WI) and Chris Murphy (D-CT) raised concerns to the Congressional Budget Office (CBO) and the Joint Committee on Taxation regarding short-term health insurance products (what they described as “junk plans”). The lawmakers requested CBO reevaluate the definition of private health insurance, specifically if Short-Term, Limited-Duration Insurance should apply, and reexamine private health insurance coverage projections.
Senate
No updates of note.
House
On August 11, Majority Leader Steny Hoyer (D-MD) unveiled the House’s floor schedule for the rest of the year. No votes are scheduled until the evening of September 14, leaving just 11 voting days until government funding expires on September 30.
NON-CORONAVIRUS REGULATORY UPDATE
The Food and Drug Administration’s (FDA) biologics labs will remain closed until there are fewer COVID-19 cases in the counties surrounding the labs.
On August 11, Centers for Medicare & Medicaid Services (CMS) announced the creation of the Center for Medicare & Medicaid Services Innovation’s (CMMI) Community Health Access and Rural Transformation (CHART) Model, following President Trump’s Executive Order (EO) on Improving Rural Health and Telehealth Access. The model aims to increase access and choice, improve quality, and lower costs of care in rural areas. One of the participation options is the Community Transformation Track, which invests up to $75 million in providing: capitated payments focused on quality and patient outcomes, upfront funding, increasing operational and regulatory flexibility, and expanding reimbursed services, such as telehealth services. This track also allows hospitals to waive cost-sharing for certain Part B services, provide transportation support, and gift cards for chronic disease management. This program is predicted to begin in July 2022. The second participation option is the Accountable Care Organization (ACO) Track, which builds on the ACO Investment Model (AIM) for providers to participate in the Medicare Shared Savings Program (MSSP) two-sided risk arrangements. Providers may also use all MSSP program waivers. This program is projected to begin in January 2022. Up to 20 rural ACOs and 15 rural communities will be accepted to begin participation in these models in 2021. The Request for Application will be available in early 2021. A fact sheet is available here.
On August 12, CMS proposed coverage changes for artificial hearts and ventricular assist devices. The changes include eliminating the Coverage with Evidence Development (CED) requirement and allowing local Medicare Administrative Contractors (MACs) to make coverage determinations for artificial hearts.
On August 12, Health and Human Services (HHS) issued a Notice of Funding Opportunity to expand the use of electronic health information via Health Information Exchanges (HIEs) to support state and local public health agencies. HHS will award $2.5 million to up to five cooperative agreements to improve HIE services by strengthening existing state and local HIE infrastructure so that public health agencies can better access, share, and use health information. Applications are due September 1.
On August 13, CMS released fourth quarter calendar year 2019 Program for Evaluating Payment Patterns Electronic Reports for Home Health Agencies and Partial Hospitalization Programs. These reports summarize data to identify Medicare services at risk for improper payments.
On August 13, the Office of Management and Budget (OMB) concluded its review of the CMS proposed rule entitled Medicare Coverage of Innovative Technologies.
On August 14, CMS released a report entitled November 2019 Technical Expert Panel: Hospice Quality Reporting Program (HQRP) Summary Report. This report summarizes the November 2019 Technical Expert Panel Meeting, which focused on considerations for improving the HQRP.
MACs will resume fee-for-service medical review activities on August 17, 2020. Reviews were put on hold due to the COVID-19 public health emergency (PHE). MACs will resume post-payment reviews of items/services provided before March 1, 2020.
CORONAVIRUS UPDATE
Legislative
Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin have both signaled they are willing to restart negotiations around a narrower COVID-19 relief package. This follows stalled negotiations on August 7 and, in turn, executive action to extend unemployment benefits at a decreased rate, temporarily prohibit evictions, postpone student loans, and allow businesses the option to defer payroll taxes. On August 12, House and White House leadership met briefly, without beginning significant negotiations. Following the meeting, Speaker Pelosi said leaders are "miles apart" on negotiations and President Trump warned that a deal is “not going to happen.” Speaker Pelosi has indicated she wants to see a package in the $2 trillion dollar range, down from the $3.5 trillion House-passed bill, while Senate Majority Leader Mitch McConnell has maintained his position that a bill not exceed $1 trillion.
On August 11, Senate Finance Committee Chairman Chuck Grassley (R-IA) and Sen. Maggie Hassan (D-NH) introduced the State and Local Coronavirus Relief Fund Extension Act to extend the deadline for states and local governments to use federal Coronavirus Aid, Relief, and Economic Security (CARES) Act assistance and future pandemic relief funding through 2021.
On August 11, House Energy & Commerce Chair Frank Pallone (D-NJ), Ranking Member Greg Walden (R-OR), Health Subcommittee Chair Anna Eshoo (D-CA), Health Subcommittee Ranking Member Michael Burgess (R-TX), Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO), and Oversight and Investigations Subcommittee Ranking Member Brett Guthrie (R-KY) requested for HHS Secretary Alex Azar to brief the Committee on trends in substance use and overdoses, the impact of COVID-19 on substance use and overdoses, and how to address the resurgence of these issues.
On August 12, House Energy & Commerce Ranking Member Walden, Health Subcommittee Ranking Member Burgess, Environment & Climate Change Subcommittee Ranking Member John Shimkus (R-IL), and Oversight & Investigations Subcommittee Ranking Member Guthrie requested information from the CDC on COVID-19 surveillance and posed wastewater surveillance to the CDC as a method that would not require additional testing.
On August 12, House Appropriations Health Subcommittee Chair Rosa DeLauro (D-CT) released a statement on Secretary Azar and FDA Commissioner Stephen Hahn missing her requested deadline to release information on the purchase of hydroxychloroquine for the Strategic National Stockpile. The original letter, sent July 21, asked for information on costs, reimbursements, and unintended consequences of hydroxychloroquine, specifically in state veterans homes.
On August 13, House Coronavirus Crisis Select Subcommittee announced an investigation into transparency and potential conflicts of interest in Operation Warp Speed (OWS). The Committee requested information from HHS Secretary Azar, Advanced Decision Vectors LLC President and Chief Executive Officer David Harris, and OWS Chief Advisor Moncef Slaoui. The letters request information and communications with companies involved with vaccine development, subcontractor communications, and financial information, among other things.
White House
On August 11, OWS purchased 100 million doses of the Moderna’s vaccine (mRNA-1273) for $1.525 billion. This is in addition to a previous $955 million agreement for vaccine and therapeutics development, which allows OWS to purchase up to 400 million additional doses.
On August 12, President Trump announced his administration will provide 125 million reusable face masks to school districts to encourage beginning in-person education "as soon as possible.” The White House also published recommendations to reopen schools.
On August 12, the Department of Defense launched an OWS website, which includes a projected vaccine timeline.
Regulatory
On August 10, FDA Commissioner Hahn announced that the FDA would consider granting COVID-19 vaccines an Emergency Use Authorization (EUA) for use on specific populations, if proven effective only for such populations.
On August 10, National Institute of Allergy & Infectious Diseases (NIAID) began Phase III trial enrollment for two experimental monoclonal antibody (mAb) vaccines, including Regeneron’s double mAb combination vaccine (REGN-COV-2) and Eli Lilly’s mAb isolated vaccine (LY-CoV555).
On August 10, HHS released states’ testing projections through December, which include projections of diagnostic testing by month.
On August 10, HHS opened its application for additional Provider Relief Fund Phase 2 General Distribution payments for providers who missed the June 3, 2020 deadline. Applications are due August 28.
On August 11, the Centers for Disease Control and Prevention (CDC) published a study finding that nursing home residents on kidney dialysis tested positive for COVID-19 at three times the rate of those not receiving treatment. The study advised strict infection control practices and surveillance in nursing homes and dialysis centers.
On August 11, the CDC published a study finding facility-wide testing of nursing home staff and residents helps better identify COVID-19 in the facility and control transmission. The study recommends targeted testing to better control the spread of COVID-19 in nursing homes.
On August 11, the FDA issued two EUAs for COVID-19 molecular tests, including for LumiraDx UK Ltd.’s RNA Selective Temperature Amplification Reaction and Biomeme's Real-Time RT-PCR Test.
On August 12, members of the Healthcare Infection Control Practices Advisory Committee expressed concern to HHS Secretary Azar regarding the transition of reporting COVID-19 data from the CDC to HHS. The letter raised issues hospitals have experienced with reporting their data and questioned the data’s integrity.
On August 13, HHS announced a collective investment of $6.5 million in Aegis Sciences Corporation and in Sonic Healthcare USA to expand testing capacity to four million additional COVID-19 tests per month by early October. HHS will provide the companies with lab equipment from Beckman Coulter Life Sciences and Thermo Fisher Scientific and additional funding for staffing and infrastructure.
On August 13, HHS Deputy Chief of Staff for Policy Paul Mango announced the federal government will pay for COVID-19 vaccines and their distribution, and is working with commercial insurers to offer the vaccines free of charge and without a co-pay.
On August 13, the FDA released communications from March regarding allowing imports of hydroxychloroquine and chloroquine from IPCA Laboratories, a company with prior data handling investigations.
On August 13, President Trump called for state mask mandates, including outdoor mask use.
On August 14, the CDC published a study entitled Mental Health, Substance Use, and Suicidal Ideation During the COVID-19 Pandemic. The CDC reported an increase of adverse mental health outcomes, increased substance use, and elevated suicidal ideation associated with COVID-19, during June 24–30, 2020. These conditions disproportionately affected younger adults, racial and ethnic minorities, essential workers, and unpaid adult caregivers. The CDC recommends increasing intervention and prevention efforts to address mental health conditions during the PHE.
On August 14, OWS announced McKesson Corporation will be a central distributor of COVID-19 vaccines and related supplies to support vaccine distribution. CDC is executing an existing contract option with McKesson from 2016 to support vaccine distribution in the event of a pandemic. McKesson will work under CDC’s guidance to ship COVID-19 vaccines to administration sites.
On August 14, the Health Resources and Services Administration announced an additional $1.4 billion in targeted distribution funding for 80 free-standing children’s hospitals nationwide as part of the Provider Relief Fund.
On August 14, CMS announced it has imposed more than $15 million in civil money penalties to over 3,400 nursing homes since March 4, 2020 for noncompliance with infection control requirements and the failure to report COVID-19 data.
The FDA will hold its first coronavirus vaccine advisory meeting on October 22.
Other
On August 10, Gilead announced it has submitted its brand name version of remdesivir (Veklury) to the FDA for approval. FDA has already granted the investigational antiviral an EUA to treat hospitalized patients with severe cases of COVID-19; an approval from the Agency would establish the safety and effectiveness of the drug and grant Gilead exclusivity from generic competition.
On August 11, Russian President Vladimir Putin announced the approval of the Gamaleya Research Institute’s experimental COVID-19 vaccine, coined “Sputnik-V,” with some health providers having access to the vaccine within two weeks. The company and its partners are preparing to manufacture over 500 million doses of vaccine annually in five countries. The vaccine has not gone through Phase III trial and data has not been released from previous testing. Public health experts, including NIAID Director Anthony Fauci have expressed skepticism towards the vaccine’s effectiveness.
August 10, Moderna announced that the company’s vaccine candidate (mRNA-1273) may be jointly owned by the National Institutes of Health and Moderna, due to questions surrounding the company’s patent application.
On August 10, Novax Inc. announced it will be able to manufacture enough of its experimental vaccine (NVX‑CoV2373) to meet demand in 2021. Novavax aims to begin large-scale production in the beginning of 2021 and make over two billion doses annually, pending FDA authorization.
On August 10, the National Governors Association (NGA) expressed their administrative and costs concerns to President Trump regarding reductions in Federal Emergency Management Agency (FEMA) funding for National Guard-COVID-19 activities in many states. NGA requested an additional $500 billion in unrestricted state aid and called for a legislative solution to the continuation of unemployment benefits. FEMA will fund 100% of National Guard activities until August 21st. After this deadline, FEMA will fund 75% of National Guard activities until the end of 2020, leaving the states to fund the remaining 25%. Florida, Texas, Arizona, California, and Connecticut are exempted from this cut, with FEMA continuing to provide 100% funding for National Guard activities through 2020. On August 11, 117 members of Congress also called to reverse the cut in funding.
On August 10, Humana filed a lawsuit against HHS regarding more than $2 million in cost-sharing reduction (CSR) subsidies and damages from the elimination of CSR payments in ACA exchanges in 2017.
On August 11, Stanford University School of Medicine published a study in ScienceDirect that found e-cigarette users aged 13-24 were five to seven times more likely to be diagnosed with COVID-19.
On August 12, Pfizer and BioNTech published the Phase I/II data from the company’s mRNA-based COVID-19 vaccine candidate, BNT162b2, in the journal Nature. This follows July preliminary reports that the vaccine is safe and triggers a strong immune response.
On August 14, Presumptive Democrat Presidential candidate Joe Biden launched two ad campaigns to encourage governors to implement mask mandates for at least three months, including outdoor mask use, and to target seniors with positive outlooks and protections during COVID-19.
As of August 15, the U.S. had 5,335,398 confirmed COVID-19 cases resulting in 168,952 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
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
Payment Policies for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) (CMS-1738); Proposed Rule; Received 4/28/20
Advance Notice of Methodological Changes for CY2022 for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies – Part I, CMS-HCC Risk Adjustment Model; Notice; Received 7/17/20
Modernizing and Clarifying the Physician Self-Referral Regulations (CMS-1720); Final Rule; Received 7/21/20
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and fiscal year (FY) 2021 Rates (CMS-1735); Final Rule; Received 8/3/20
Clinical Laboratory Improvement Amendments and Patient Protection and Affordable Care Act; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency (CMS-3401); Interim Final Rule; Received 8/10/20
HHS-FDA
Annual Summary Reporting Requirements Under the Right to Try Act; Proposed Rule; Received 3/31/20
HHS-OCR
HIPAA Privacy: Changes To Support, and Remove Barriers to, Coordinated Care and Individual Engagement; Received 7/31/20
HHS-OIG
Revisions to the Safe Harbors Under the Anti-Kickback Statute and Beneficiary Inducements Civil Monetary Penalties Rules Regarding Beneficiary Inducement; Final Rule; Received 7/21/20
HHS-OS
COVID-19 Hoarding Prevention Under the Defense Production Act; Interim Final Rule; Received 6/23/20
REPORTS
HHS Office of Inspector General (OIG)
On August 10, OIG released a report entitled OIG's Top Unimplemented Recommendations 2020: Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs. This report highlights the top 25 unimplemented recommendations that would positively affect cost savings, program effectiveness and efficiency, and public health and safety of HHS programs. The top three unimplemented recommendations for CMS are: ensuring that incidents of potential abuse or neglect of Medicare beneficiaries are identified and reported; reevaluating the inpatient rehabilitation facility (IRF) payment system to align IRF payment rates and costs; and reform the hospital wage index system.
On August 10, OIG released a report entitled Medicare Home Health Agency Provider Compliance Audit: Condado Home Care Program, Inc. OIG found that Condado incorrectly billed Medicare for services to beneficiaries not homebound or not in need of skilled services, incorrect Health Insurance Prospective Payment System payment codes, or services that did not meet Medicare requirements. These errors were due to inadequate procedures to prevent incorrect billing. OIG recommends for Condado to refund the $97,210 in overpayments identified in the report and other potential overpayments and better identify, report, and return overpayments in accordance with the 60-day rule. A summary of the report is available here.
On August 10, OIG released a report entitled Visionquest Industries, Inc.: Audit of Medicare Payments for Orthotic Braces. The report found that Visionquest did not fully comply with Medicare requirements when billing for selected orthotic braces and billed for not medically necessary orthotic braces. OIG recommended that Visionquest refund the $2.5 million in overpayments identified in the report and other potential overpayments and assure claims for orthotic braces meet Medicare requirements for medical necessity in the future. Visionquest did not agree with the report’s original findings and recommendations. OIG reviewed its original analysis and identified fewer medically unnecessary claims, but still a majority of the sample. OIG revised the original recommendation to reflect this change. A summary of the report is available here.
On August 14, OIG released a report entitled Medicare Laboratory Test Expenditures Increased in 2018, Despite New Rate Reductions. The report found that total Medicare spending for clinical diagnostic lab tests increased from $7.1 billion in 2017 to $7.6 billion in 2018, despite lower payment rates for most tests. Spending on genetic tests increased from $473 million in 2017 to $969 million in 2018 due to new and expensive tests in the Clinical Laboratory Fee Schedule and an increase in existing genetic tests. OIG recommends that CMS seek legislative authority to establish a mechanism to control costs for automated chemistry tests. CMS neither agreed nor disagreed with the recommendation but claimed it would monitor utilization and spending. A summary of the report is available here.
CBO
On August 10, CBO released a report entitled the Monthly Budget Review for July 2020. This review estimates that the federal budget deficit was $2.8 trillion in the first 10 months of FY2020, $1.9 trillion more than the deficit during the same period for FY2019. CBO attributes this increase to delays in individual and corporate income tax payment deadlines, decreased revenues, and an increase in federal spending – especially for enhanced unemployment compensation.
On August 13, CBO released a report entitled the Sequestration Update Report: August 2020. This report estimates the caps on discretionary funding for FY2020 to be $757 billion for defense programs and $1,147 billion for non-defense programs, as well as $671.5 billion for defense and $626.5 billion for nondefense for FY2021. CBO found that the discretionary appropriations provided to date for 2020 do not exceed the caps for this year.
UPCOMING HEARINGS
Senate
None of note.
House
None of note.
OTHER HEALTH POLICY NEWS
On August 11, Americans for Tax Reform sent a coalition letter signed by 80 free market groups to President Trump, voicing opposition to his pending EO to impose the International Pricing Index model on Part B drugs, the so-called “Most Favored Nation” policy. This EO is scheduled for release on August 24, unless the pharmaceutical industry provides President Trump with a suitable alternative policy and/or Congress passes drug pricing reform before them.
On August 11, Biden announced that his Vice Presidential running mate will be Sen. Kamala Harris (D-CA). In 2017, Sen. Harris co-sponsored Sen. Bernie Sanders’ (D-VT) Medicare for All Act. During the Democratic Primary, Sen. Harris initially advocated for eliminating private insurance but quickly backtracked and pitched her own health care plan to expand Medicare as a public option, while allowing private insurance to sell regulated plans.
On August 11, Oklahoma formally withdrew its proposal to receive federal funding for the state’s Medicaid expansion population in the form of a block grant, after voters elected to expand Medicaid as a constitutional amendment in June. Oklahoma would have been the first state to participate in the “Healthy Adult Opportunity” demonstration that CMS introduced in January.
On August 12, the U.S. Chamber of Commerce launched a campaign against a Medicare buy-in or public option and in support of employer-sponsored insurance.
On August 13, the U.S. Circuit Court of Appeals for the Second Circuit ruled that the delay of implementation of the “public charge” rule will only apply to New York, Connecticut, and Vermont. This decision overrules an injunction issued in late July by U.S. District Judge George Daniels of New York to delay the implementation of the rule nationwide until after the PHE.
On August 13, the Department of Justice announced a settlement of $3.5 million with Advanced Care Scripts, a Teva Pharmaceuticals subsidiary, regarding Medicare kickbacks for Medicare patients taking multiple sclerosis treatment Copaxone.
On August 13, a new study published by the Health Care Cost Institute found that commercial prices for professional health care services were, on average, 22% higher than Medicare rates nationally in 2017. There was wide variation across states, from average commercial prices of 98% of Medicare in Alabama to 188% of Medicare in Wisconsin. There was also variation within states, such as Bakersfield, CA with an average commercial price of 94% of Medicare and Santa Cruz, CA seeing average prices 178% of Medicare.
On August 14, a brief released by Altarum showed that national health spending continued to rebound in June and health care regained half of jobs lost in spring. National health spending in June was $3.62 trillion, a decrease from $3.81 trillion in June 2019, but an increase from $3.32 trillion in May 2020 and $2.92 trillion in April 2020.
On August 11, the Medicaid Transformation Project released a report on the progress of its 30-member health systems and the Veterans Health Administration included in the program. The report details its Phase I actions evaluating digital solutions to address health system problems and evidence-based care models to improve care for vulnerable groups and communities. The project focused on the four most common areas of health that members experienced challenges with: emergency department utilization, behavioral health, maternal and infant health, and substance use disorder.
On August 14, the U.S. Court of Appeals for the Federal Circuit ruled by a three-judge panel that the federal government owes Maine Community Health Options and Community Health Choice damages from the elimination of Cost-Sharing Reduction (CSR) payments in the Affordable Care Act exchanges in 2017; however, the insurers will not receive the unpaid CSR subsidies that they already recovered by raising premiums to attain bigger tax credits – a practice known as “silver loading.” The panel ruled separately that the federal government owes Sanford Health Plan and Montana Health Co-op the CSR subsidies since they did not recover the lost subsidies. The judges ruled that insurers must prove what damages they are owed.