The following LPG Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 24 – August 30.  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 and Senate are on recess but chamber and party leaders have instructed members to be ready to return to Washington on 24-hours notice for a potential vote on relief funding. Both chambers are currently scheduled to return to DC after Labor Day.

NON-CORONAVIRUS REGULATORY UPDATE

·       On August 25, the Department of Justice (DoJ) charged Teva Pharmaceuticals with conspiring to fix prices, rig bids, and allocate customers for generic drugs, which resulted in consumers being overcharged at least $350 million. Teva is facing fines of at least $300 million. Teva is the seventh generic drug manufacturer charged in an ongoing federal antitrust investigation.

 ·       On August 25, the Health Resources and Services Administration announced $117 million in quality improvement awards for 1,318 health centers in order to strengthen quality improvement activities and expand quality primary health care service delivery.

·       On August 26, Centers for Medicare & Medicaid Services (CMS) extended the timeline for the rule entitled Modernizing and Clarifying the Physician Self-Referral Regulations Extension of Timeline for Publication of Final Rule. This notice delays the finalization of reforms to the Stark Law to prohibit physician self-referrals and anti-kickback statute reforms to August 2021.

·       On August 27, CMS published a correction to the Fiscal Year (FY) 2021 Inpatient Psychiatric Facilities Prospective Payment System Final Rule.  The correction notice corrects the statement of economic significance in the final rule, indicating that the rule is economically significant and a “major” rule. This rule was originally published August 4 and the correction is effective October 1, 2020. 

·       On August 27, Substance Abuse and Mental Health Services Administration awarded $1.5 billion in State Opioid Response Awards to states and tribes for FY 2020 to address drug addiction. This program awards funds to provide community-level resources for people in need of prevention, treatment, and recovery support services. 

·       On August 27, CMS announced special enrollment periods for the Federal Health Insurance Exchange for certain Medicare beneficiaries and individuals impacted by Hurricane Laura in Louisiana and Texas. CMS’ Kidney Community Emergency Response program is also working with the state’s End Stage Renal Disease Networks to assist evacuated patients receive dialysis services.

·       On August 28, CMS published a correcting amendment to an FY 2016 hospice payment final rule, providing technical corrections and adding extension and exemption requirements that were inadvertently omitted.

 NON-CORONAVIRUS WHITE HOUSE UPDATE

·       On August 25, it was reported that the drug industry proposed an alternative plan to President Trump’s “Most Favored Nations” (MFN) Executive Order (EO), which directs CMS to test a Part B model that bases Medicare reimbursement for certain Part B drugs and biologicals on the lowest drug prices among developed countries.  President Trump announced the MFN EO about a month ago, but indicated that it would not go into effect if the drug industry presented an acceptable alternative plan by August 24.  The industry’s reported alternative centers around two Center for Medicare & Medicaid Innovation (CMMI) voluntary models: (1) a Part B model whereby participating manufacturers would provide a “market-based” adjustment discount (estimated to be a 10% reduction in the average sales price (ASP)) for participating drugs; and (2) a Part D model that caps the 5% catastrophic cost-sharing for beneficiaries.  Reports indicate that the industry would also commit to drug pricing reforms, including the above models, that would save at least $100 billion over 10 years.

CORONAVIRUS UPDATE  

Legislative

·       On August 24, Rep. Cheri Bustos (D-IL) introduced H.R.8091 To direct the Secretary of Defense to provide to States the total amount of funds for the costs to the States of activating the National Guard in response to the COVID-19 pandemic. This bill would require Federal Emergency Management Agency (FEMA) to provide 100% funding for National Guard activities through 2020. On August 25, the National Governors Association and other state and local groups expressed concern over potential cuts to COVID-19 public assistance coverage, including funding for personal protective equipment (PPE), by FEMA.

·       On August 24, Energy & Commerce Chairman Frank Pallone (D-NJ), Health Subcommittee Chairwoman Anna Eshoo (D-CA), and Oversight & Investigations Subcommittee Chair Diana DeGette (D-CO) urged Food and Drug Administration (FDA) Commissioner Stephen Hahn to ensure that the FDA’s COVID-19 vaccine approval process is driven by science and the protection of public health, not “political expediency.” The Energy & Commerce leaders raised their concerns of potential political pressure to expedite a vaccine and the transparency of the COVID-19 vaccine approval process, citing recent tweets by President Trump.

·       On August 24, Sens. Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), and Rep. Pramila Jayapal (D-WA) asked Health and Human Services (HHS) Secretary Alex Azar and the CEO of Advance Decision Vectors for details about bringing Moncef Slaoui, a pharmaceutical executive, on as chief advisor for Operation Warp Speed (OWS). These letters follow previous requests for information regarding potential conflicts of interests and requests for Slaoui to be brought on as a special government employee, subject to federal ethics law and guidelines.

 ·       On August 26, White House Chief of Staff Mark Meadows indicated that a pandemic relief package should be combined with a stopgap spending bill to avoid a government shutdown, but predicted that a deal will not be reached before the end of September. On August 27, House Speaker Nancy Pelosi (D-CA) and Chief of Staff Meadows had a call to restart negotiations but there has not been any further progress. Speaker Pelosi offered a $2.2 trillion relief package while Republicans have proposed $1 trillion relief packages and have been adamant keeping a package around this amount.

White House

·       On August 26, OWS advisors Slaoui and Mathew Hepburn published an op-ed in the New England Journal of Medicine entitled Developing Safe and Effective Covid Vaccines — Operation Warp Speed’s Strategy and Approach. The op-ed announced that two more COVID-19 vaccine candidates will be added to the program, bringing the number of vaccine candidates supported by OWS up to eight. OWS did not announce what companies or vaccine candidates will be included but referenced that the companies will enter trials soon.

·       On August 26, OMB concluded the review of the interim final rule entitled 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).

·       On August 27, OMB concluded the review of the notice entitled Advance Notice of Methodological Changes for calendar year 2022 for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies – Part I, CMS-HCC Risk Adjustment Model.

Regulatory

·       On August 24, CMS released guidance for states to increase flexibilities for nursing homes, including increasing Medicaid reimbursements for nursing homes to create isolation wings for COVID-19 patients and paying for additional PPE. 

·       On August 24, FDA Commissioner Hahn acknowledged that his statements on the benefits of convalescent plasma were overstated and reassured the public that FDA decisions are made without political pressure, including the decision to grant convalescent plasma an Emergency Use Authorization (EUA).

·       On August 24, the Centers for Disease Control & Prevention (CDC) updated the COVID-19 testing considerations, after reported pressure from the White House. The revised guidelines suggest that people without symptoms do not necessarily need a test, instead focusing on symptomatic individuals, those with significant exposure, and those who are advised by public health officials to be tested. Some public health officials raised concerns over this shift in testing since many people with COVID-19 are asymptomatic. 

·       On August 24, HHS’s Office for Civil Rights announced that health care providers and health plans are permitted to contact patients who have recovered from COVID-19 to inform them about how to donate their plasma to help the treatment of COVID-19. 

·       On August 25, CMS released an interim final rule for COVID-19 testing and reporting requirements for hospitals, nursing homes, and labs in order to better track and control COVID-19. Previously, hospitals had to submit COVID-19 data to HHS or their state in order to inform the distribution of medicines and PPE to communities and hospitals in need and this rule codifies these reporting requirements. Facilities risk expulsion from the Medicare and Medicaid programs if they do not comply with reporting requirements. This rule also codifies previous recommendations for nursing homes to test all residents and staff twice a week, weekly or monthly depending on the prevalence of COVID-19 in the surrounding area. Lastly, this rule enforces daily reporting with fines for noncompliance for nursing homes and labs. The rule’s effective date is August 26, but the comment period ends October 25. Some organizations, including the Federation of American Hospitals and the Association of Public Health Laboratories, voiced their concerns that the enforcement mechanisms are too harsh and the lack of flexibility may be an additional burden for hospitals, nursing homes, and labs.

·       On August 25, CMS launched a national nursing home training program entitled the CMS Targeted COVID-19 Training for Frontline Nursing Home Staff and Management. This program aims to improve infection control practices for nursing home staff and management.

 ·       On August 25, HHS released 1.5 million N95 respirators from the Strategic National Stockpile to be distributed to 3,336 nursing home facilities.

 ·       On August 26, the FDA issued an EUA for BinaxNOW™ COVID-19 Ag Card rapid test, a 15-minute coronavirus created by Abbott Laboratories. Abbott will sell this test for $5 and is planning to make up to 50 million tests a month beginning in October 2020.

·       On August 26, CMS proposed COVID-19 vaccine distribution guidelines that prioritize health care workers, essential personnel, and at-risk individuals, including the elderly and those with underlying health conditions. The work group ranks priority within these groups, including giving priority to those essential in sustaining the COVID-19 response; those at greatest risk of severe illness and death, and their caregivers; and those most essential to maintaining core societal functions. The work group plans on reviewing clinical trial data for vaccine candidates, reviewing public engagement in the vaccine distribution process, and ensuring equitable vaccine allocation.

·       On August 26, the DoJ requested COVID-19 data from the governors of New York, New Jersey, Pennsylvania, and Michigan that issued orders that may have resulted in the deaths of nursing home residents.

·       On August 26, the Department of Defense indicated interest in the use of Humira, an anti-inflammatory drug, as a potential COVID-19 treatment and requested conducting a randomized Phase II clinical trial.

·       On August 27, HHS awarded $760 million to Abbott to provide 150 million rapid point-of-care COVID-19 antigen tests for nursing homes, schools, and high risk populations.

·       HHS again extended the deadline for applying for provider relief funds for Phase 2 General Distribution Funding to September 13.

·       According to a previously unreleased memo from April 21, HHS required hospitals to report COVID-19 information to TeleTracking Technologies Inc., the company that created HHS Protect, in order to receive Coronavirus Aid, Relief and Economic Security (CARES) Act funding. This requirement predates the official transition of hospitals reporting COVID-19 data to HHS and HHS Protect, from the CDC, and was not included in the bill.

·       The FDA will hold its first coronavirus vaccine advisory meeting on October 22.

·       COVID-19 information released by CMS is posted here; specific waivers are available here.

 Other

·       On August 24, AstraZeneca announced a Phase I clinical trial for a monoclonal antibody COVID-19 treatment, AZD7442, for the prevention and treatment of COVID-19.

 ·       On August 24, a Kaufman Hall report found that Hospital Operating Margins decreased 96% since the beginning of 2020, compared to 2019, due to the COVID-19 pandemic. The report finds some signs of potential recovery month-over-month but warns that these trends may be further impacted by COVID-19. 

 ·       On August 24, 80 higher-income economies expressed interest in participating in COVAX, the coalition of Gavi, the Vaccine Alliance, and the World Health Organization, to provide equitable access to vaccines worldwide, along with 92 low- and middle-income countries. Notably, the U.S. nor China have indicated interest in this effort.

·       On August 24, D.C. Mayor Muriel Bowser ordered all DC health plans to cover the cost of weekly COVID-19 testing for some high-risk residents, without requiring prior physician approval.

 ·       On August 25, researchers in Hong Kong announced the first confirmed case of COVID-19 reinfection. The paper has been accepted by the journal Clinical Infectious Diseases but has not yet published.

 ·       On August 26, Moderna released Phase I COVID-19 vaccine trial data for the company’s vaccine, mRNA-1273. The data supports that the vaccine is safe and produces a strong immune response in older adults.

·       On August 26, the Economic Policy Institute released a report entitled Health insurance and the COVID-19 shock: What we know so far about health insurance losses and what it means for policy. This report finds that 6.2 million workers lost access to employer-sponsored health insurance since the beginning of the COVID-19 Public Health Emergency.

·       On August 26, the Committee for a Responsible Federal Budget highlighted that $412 billion in federal COVID-19 funds have been authorized to support the health industry. 

·       On August 27, America’s Health Insurance Plans released a report entitled Price Gouging in a Public Health Crisis: Out-of-Network COVID-19 Test Costs Far Exceed In-Network Charges. The report found that almost 1 in 10 of all claims for COVID-19 testing were from out-of-network providers. The report also found that of these out-of-network bills, 1 in 10 were higher than $390. This report follows health insurers, companies, and individuals expressing concerns over loopholes in regulation allowing out-of-network labs and providers to increase the price of COVID-19 testing. 

·       As of August 30, the U.S. had 5,962,507 confirmed COVID-19 cases resulting in 182,785 deaths, according to the Johns Hopkins University & Medicine Coronavirus Resource Center.  COVID-related hospitalizations have dropped 37% in the last month and the number of deaths per day appears to be leveling off. 

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

·       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

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 25, OIG released a report entitled Indiana Properly Reported Adjustments Related to the Drug Rebate Program. The report found that Indiana followed its CMS-approved methodology and properly reported $8.3 million in increasing adjustments to the drug rebate program. The summary of the report is available here.

 ·       On August 26, OIG released a report entitled CMS's Encounter Data Lack Essential Information That Medicare Advantage Organizations (MAOs) Have the Ability to Collect. The report found that CMS's Medicare Advantage (MA) encounter data lacks essential information, including ordering provider National Provider Identifiers (NPIs) for durable medical equipment, prosthetics, orthotics, and supplies and for laboratory, imaging, and home health services. OIG also found that almost all MAOs are able to collect this missing information. OIG recommends that CMS mandates MAOs to report NPI to reduce fraud. CMS largely agreed with the recommendations. A summary of the report is available here.

 ·       On August 27, OIG released a report entitled Medicare Contractors Were Not Consistent in How They Reviewed Extrapolated Overpayments in the Provider Appeals Process. The report found that CMS did not always provide sufficient guidance and oversight to ensure that reviews of extrapolated overpayments were consistent. OIG also identified data reliability issues in the Medicare Appeals System (MAS). OIG recommends that CMS provide additional guidance to contractors to ensure reasonable consistency in procedures used to review extrapolated overpayments and identify and resolve procedural and system discrepancies in the review of appeals for extrapolations. CMS agreed with the recommendations. A summary of the report is available here.

 ·       On August 28, OIG released a report entitled Texas Relied on Impermissible Provider-Related Donations To Fund the State Share of the Medicaid Delivery System Reform Incentive Payment Program. The report found that much of the funding Texas used as the State share of Delivery System Reform Incentive Payment Program payments was funded through federally non-compliant impermissible provider-related donations. OIG found that Texas did not decrease its Medicaid expenditures and inappropriately received $83.8 million in Federal funds. OIG recommends Texas refunds the identified inappropriate payments, provide better guidance for impermissible provider-related donations, and end federally non-compliant partnerships. Texas did not agree with the first two recommendations, but OIG stands by their recommendations. A summary of the report is available here.

 Congressional Budget Office (CBO)

·       CBO will release An Update to the Budget Outlook: 2020 to 2030 on September 2, including the latest baseline budget projections.

 UPCOMING HEARINGS

Senate

·       None of note.

House

·       None of note.

 OTHER HEALTH POLICY NEWS

·       On August 24, the Supreme Court ordered to extend arguments for California v. Texas, the lawsuit challenging the constitutionality of the Affordable Care Act. This order follows a petition from the defense for an extra 10 minutes for the House to present its case. Both sides will have 40 minutes to argue their case on November 10.

·       On August 24, Pew Charitable Trusts published a study in the JAMA Network finding that half of clinicians who meet the federal requirements to prescribe buprenorphine for opioid use disorder (OUD) did so, often at rates far lower than permitted under federal regulations.

·       On August 24, a study published in JAMA Internal Medicine found that private equity–acquired hospitals saw larger increases in income and improvement in some quality measures, compared to non-acquired hospitals.

·       On August 24, Google Cloud announced a $100 million partnership with Amwell to expand telehealth and technology for virtual doctors’ visits.

·       On August 25, the Association for Accessible Medicines (AAM) refiled a case in the U.S. District Court for the Eastern District of California against the state’s “pay-for-delay” measure, CA AB824 (19R). The measure allows for greater generic drug competition and requires manufacturers to prove deals between branded and generic companies benefit consumers. AAM claims the law causes harm and would make it more difficult to bring lower-cost drugs to market. Previously, a federal appeals court panel ruled that AAM lacked the legal standing to bring the case to court and failed to show a “substantial risk” of injury.

·       On August 25, a study published in JAMA found that patients seeking opioid addiction treatment have limited access to buprenorphine in residential treatment facilities. The study found that only 29% of facilities offer buprenorphine to reduce cravings for opioids, though previous research supports the use of buprenorphine to reduce the risk of relapse, overdose, and death.

·       On August 26, the Urban Institute released a study entitled Naloxone Products and Their Pricing in Medicaid, 2010-18: Trends for Opioid Overdose Reversal Drugs. This report found increases in Medicaid prescriptions for and spending on naloxone between 2010 and 2018, potentially due to new available forms of naloxone. The Urban Institute found that the average generic naloxone rebate-adjusted prices in Medicaid increased by 29% between 2010 and 2018. The report suggests that, without new federal policies regulating prices, access to naloxone will remain limited for Medicaid enrollees.

·       On August 27, the New Jersey legislature approved a bill capping profits for nursing homes by requiring at least 90% of revenues to be used on resident care. Nursing homes would have to pay a pro rata dividend or credit to New Jersey for noncompliance. Gov. Phil Murphy has not yet signed the bill but has indicated support for this issue in the past. 

·       The Republican National Convention ran from August 24 to August 27. The convention highlighted President Trump’s COVID-19 response and promised a COVID-19 vaccine by the end of the year. President Trump also emphasized his second term agenda, including cutting drug prices and ending ‘surprise billing.

·       The Medicare Payment Advisory Commission (MedPAC) will hold its next public meeting on September 3 and 4.  An agenda can be found here.