The following LPG Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 30 – September 6. 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 Senate is expected to return for votes on September 8 and the House will return on September 14.
House
On September 1, the Oversight and Reform committee issued a subpoena to AbbVie Inc. as part of the committee’s investigation of drug company pricing practices. The committee is seeking information on price hikes, competition for the company’s drugs, and the impact of price increases on earnings and share price. The committee requested information regarding Humira and Imbruvica three times in 2019.
NON-CORONAVIRUS REGULATORY UPDATE
On August 31, Centers for Medicare & Medicaid Services (CMS) proposed a rule entitled Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary” that would implement the October 3, 2019 Executive Order (EO) on Protecting and Improving Medicare for Our Nation’s Seniors. The proposed rule would create a new Medicare coverage pathway, MCIT, for Food and Drug Administration (FDA)-designated breakthrough medical devices. The new pathway would provide national Medicare coverage “on the same day” as Food & Drug Administration (FDA) market authorization for breakthrough devices and coverage would last for four years. According to CMS, the MCIT time period for coverage would allow clinical studies with Medicare patients to be completed while providing broad immediate access and fostering innovation. Following the MCIT period, the traditional coverage options would be available such as a National Coverage Determination (NCD), one or more Local Coverage Determinations (LCD), and claim by claim decisions. The MCIT pathway would be voluntary and device manufacturers would notify CMS if they want to utilize this coverage option. The proposed rule also codifies the definition of “reasonable and necessary” to bring “clarity and consistency” to the existing coverage determination processes for items and services under Part A and Part B. Comments are due by October 31. A summary of this proposed rule is available here and a fact sheet is available here.
On September 1, the Federal Communications Commission, Health and Human Services (HHS), and Department of Agriculture announced the Rural Telehealth Initiative to address health disparities, address service provider challenges, and promote rural broadband services and technology in order to expand telehealth in rural areas. This initiative is based on the EO on Improving Rural Health and Telehealth Access. The Memorandum of Understanding for this initiative is available here.
On September 2, CMS issued the final rule entitled Hospital Inpatient Prospective Payment Systems (PPS) for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System ; and fiscal year (FY) 2021 Rates (CMS-1735). CMS estimates that total Medicare spending on acute care inpatient hospital services will increase by $3.5 billion in FY 2021, a 2.7% increase from FY 2020. The agency increased payment rates for general acute care hospitals by up to 2.9%. CMS projects that LTCH-PPS payments will decrease by approximately 1.1 percent. Notably, CMS finalized the collection of hospitals’ median payer-specific negotiated charges for Medicare Advantage organizations on the Medicare cost report beginning January 1, 2021. CMS also finalized the adoption of this data in a new market-based methodology to set MS-DRG relative weights used to determine inpatient payment rates. Additionally, CMS created a new Medicare Severity Diagnostic Related Group (MS-DRG) for Chimeric Antigen Receptor (CAR) T-cell therapies and approved a record number of 24 New Technology Add-on Payments (NTAP) for FY2021. A fact sheet on the rule is available here.
On September 3, CMS launched Care Compare to streamline existing Medicare.gov health care comparison tools. This program combines information about doctors, hospitals, nursing homes, and other health care services onto one website.
On September 3, HHS released the Rural Action Plan to report on existing and upcoming efforts to improve rural healthcare and strengthen departmental coordination.
NON-CORONAVIRUS WHITE HOUSE UPDATE
On September 1, Office of Management and Budget (OMB) received the interim final rule from the Health Resources and Services Administration (HRSA) entitled the Implementation of EO 13937, "EO on Access to Affordable Life-saving Medications” which requires Federally Qualified Health Centers (FQHCs) to pass 340B discounts on insulin and EpiPens directly to patients.
Reports indicate the White House offered a counter proposal to the PhRMA’s drug pricing reforms. Reports suggest this offer was rejected by the PhRMA board of directors, increasing the likelihood that the President’s most favored nations policy will be formally released.
CORONAVIRUS UPDATE
Legislative
On August 31, Treasury Secretary Steven Mnuchin said that Senate Majority Leader Mitch McConnell (R-KY) will “hopefully” propose a revised relief bill the week of September 7. On September 3, Senate Minority Leader Chuck Schumer (D-NY) sent a letter criticizing Senate Republicans for the proposed GOP “skinny” relief package, calling the package “emaciated,” and called for a larger bipartisan package.
On August 31, the Select Subcommittee on the Coronavirus Crisis released eight White House Coronavirus Task Force reports previously sent to state leaders. This investigation determined that private conversations between the White House and states often contradicted public statements, states are still struggling to comply with Task Force recommendations, and the administration refuses to publicly support Task Force recommendations. The Select Subcommittee also identified that Task Force meetings and reports were not public and that some local government and public health officials were also excluded from these conversations.
On August 31, the House Energy & Commerce Committee held a briefing regarding the FDA’s response to the COVID-19 pandemic with FDA Commissioner Stephen Hahn, Center for Biologics Evaluation and Research Director Peter Marks, and Center for Drug Evaluation and Research Acting Director Patrizia Cavazzoni. The Committee will schedule a public hearing in September with FDA Commissioner Hahn.
On September 1, the House Ways & Means committee released a list of COVID-19 resources, including HHS Guidance, past letters to agencies, and other resources to navigate COVID-19 funding opportunities.
Regulatory
On September 1, CMS proposed an interim rule entitled Medicare and Medicaid Programs, Clinical Laboratory Improvement Amendments, and Patient Protection and Affordable Care Act (ACA); Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency (PHE). This rule would strengthen CMS’ ability to enforce Medicare and Medicaid compliance for long-term care (LTC) facility reporting requirements of COVID-19 information, testing, impact, and lab reporting. The rule went into effect September 2 and comments are due by November 1.
On September 1, the National Institutes of Health (NIH) released a statement that there is insufficient data surrounding the use of convalescent plasma for the treatment of COVID-19 and that convalescent plasma should not be the standard of care for the treatment of COVID-19 patients. The COVID-19 Treatment Guidelines Panel concluded that there needs to be more clinical trials to determine the effectiveness of convalescent plasma for the treatment of COVID-19.
On September 1, the U.S. announced it will not participate in the Covid-19 Vaccines Global Access (COVAX) Facility, which aims to speed vaccine development, secure doses for all countries and distribute them to the most high-risk segment of each population. The COVAX coalition is co-led by the WHO, the Coalition for Epidemic Preparedness Innovations and Gavi, the vaccine alliance. Notably, more than 170 countries are in talks to participate, and Japan, Germany and the European Commission have already joined. By not participating, the U.S. will have limited access to vaccine candidates developed elsewhere.
On September 1, HHS extended the Provider Relief Fund (PRF) Phase 2 General Distribution to assisted living facilities. The deadline for applying to the PRF is September 13.
On September 1, National Institute of Allergy and Infectious Diseases Director Anthony Fauci said that if late phase COVID-19 clinical trials produce overwhelmingly positive results, the NIH Data and Safety Monitoring Board could allow a vaccine to be available before the trials are officially completed.
On September 2, HHS Secretary Alex Azar and Operation Warp Speed (OWS) chief scientific advisor Moncef Slaoui released an op-ed advocating for the efforts of OWS and reassured the public that any COVID-19 vaccine that is approved will be safe and effective.
On September 3, HRSA announced the $2 billion PRF performance-based incentive payment distribution for nursing homes. Nursing homes do not have to apply to participate in this funding opportunity; HHS will measure nursing home performance through required data submissions and will distribute payments based on these data.
On September 4, the FDA issued an Emergency Use Authorization (EUA) for Roche’s test, cobas® SARS-CoV-2 & Influenza A/B Test, to detect and differentiate COVID-19 from the seasonal flu.
HHS will deliver recently purchased Abbott Laboratories rapid COVID-19 tests to governors of states and territories to support school reopenings, day care centers, first responders, and “critical infrastructure.”
CMS has not started garnishing Medicare pay, as part of the Medicare Accelerated and Advance Payment Program fund requirements. Per the loan requirements, CMS will halt fee-for-service reimbursement after four months if the hospital loans were not recouped. Nevertheless, as deadlines have passed, CMS has not yet started garnishing payments.
According to leaked Centers for Disease Control and Prevention (CDC) guidance, CDC Director Robert Redfield asked state governors to expedite permits for COVID-19 vaccination distribution facilities and consider waiving certain requirements. The guidance references an operational start date of November 1, 2020 for these facilities. The guidance also discussed how to distribute early doses of two vaccines and a tiered priority plan, beginning with health care workers and other high-priority groups, potentially in late October or early November. But on September 3, Slaoui said there is a “very, very low chance” that a vaccine will be ready before the end of October.
HHS is rumored to publish the names of hospitals with missing or inconsistent COVID-19 data tracking beginning next week.
FDA Commissioner Hahn said the FDA would consider issuing an EUA to a COVID-19 vaccine before Phase III clinical trials are complete if data is supportive.
The FDA will hold its first coronavirus vaccine advisory meeting on October 22.
Other
On August 31, AstraZeneca began enrolling 30,000 people in a Phase III clinical trial for the company’S COVID-19 vaccine, AZD1222.
On August 31, Vir Biotechnology and GlaxoSmithKline began a Phase II/III clinical trial of an antibody drug COVID-19 treatment, VIR-7831.
August 31, PhRMA chairman-elect and Eli Lilly CEO David Ricks voiced his support for sharing a final COVID-19 vaccine globally, rather than a single country receiving much of the world’s vaccines and vaccinating their entire population.
On September 1, the Chinese government began mass-COVID-19 testing of thousands of Hong Kong citizens.
On September 1, the Kaiser Family Foundation released a report finding that LTC facilities made up 8% of all COVID-19 cases, but more than 40% of all COVID-19 deaths. The report found that LTC facility related deaths have stayed constant since May and cases in LTC facilities have decreased.
On September 1, the National Academies of Sciences, Engineering, and Medicine Committee on Equitable Allocation of Vaccine for the Novel Coronavirus released a report entitled Discussion Draft of the Preliminary Framework for Equitable Allocation of COVID-19 Vaccine. The plan outlines tiers, prioritizing those most 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 to receive the vaccine first.
On September 1, a study published in the New England Journal of Medicine found that COVID-19 antibodies did not decline within 4 months after diagnosis.
On September 2, WHO Rapid Evidence Appraisal for COVID-19 Therapies Working Group published a study in JAMA finding that corticosteroid drugs reduce mortality of seriously ill COVID-19 patients in one in three cases. The WHO published guidance the same day in support of corticosteroid drugs because these drugs are low cost, easy to administer, and readily available globally.
On September 3, Sanofi and GlaxoSmithKline began a Phase I/II COVID-19 clinical trial of their adjuvanted recombinant protein-based vaccine candidate with the goal of beginning Phase III clinical trial by end of 2020. The companies plan to request regulatory approval in the first half of 2021.
On September 3, eight biotech CEOs and the Biotechnology Innovation Organization released an open letter, calling for companies researching COVID-19 vaccines and treatments and the federal government to disclose clinical data and rely on scientific instead of politics in reviewing and approving vaccines.
On September 3, Pfizer CEO Albert Bourla predicted that the company’s Phase III COVID-19 clinical trial will produce enough data by the end of October to predict the effectiveness of the mRNA-based vaccine, BNT162b2.
As of September 6, the U.S. had 6,260,543 confirmed COVID-19 cases resulting in 188,704 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
Modernizing and Clarifying the Physician Self-Referral Regulations (CMS-1720); Final Rule; Received 7/21/20
HHS-FDA
Annual Summary Reporting Requirements Under the Right to Try Act; Proposed Rule; Received 3/31/20
HHS-HRSA
Implementation of Executive Order 13937, "Executive Order on Access to Affordable Life-saving Medications"; Interim Final Rule; Received 9/1/20
HHS-OCR
HIPAA Privacy: Changes To Support, and Remove Barriers to, Coordinated Care and Individual Engagement; Proposed Rule; 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
REPORTS
HHS Office of Inspector General (OIG)
On August 31, OIG released a report entitled Foreign Assistance to Combat HIV/AIDS, Tuberculosis, and Malaria: Fiscal Year 2021 Inspectors General Coordinated President's Emergency Plan For AIDS Relief (PEPFAR) Oversight Plan. The report details that the CDC received over $1.9 billion in fiscal year 2019 PEPFAR funds for AIDS related programming, services, and infrastructure in partner countries. The report includes a 5-year plan (FYs 2019-2023) to continue program oversight, including HHS and OIG completing domestic and international audits and conducting fraud-prevention training in FY 2021. A summary of the report is available here.
On September 1, OIG released a report entitled Indiana Paid $3.5 Million for Medicaid Nonemergency Medical Transport Claims That Did Not Comply With Federal and State Requirements. The report found that some Indiana transportation Medicaid reimbursements did not comply with Federal and State requirements, resulting in at least $3.5 million in non-compliant nonemergency medical transportation (NEMT) claims. OIG identified that there was a gap in monitoring and oversight of the Medicaid program that led to non-compliant claims. OIG recommends that the state agency refund the misfiled claims and strengthen the monitoring and oversight of the NEMT program. The state agency disagreed with the findings but OIG maintained that the findings and recommendations are correct. A summary of the report is available here.
On September 1, OIG released a report entitled Michigan Did Not Bill Manufacturers for Some Rebates for Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations. The report found that Michigan did not fully comply with Federal Medicaid requirements for billing manufacturers for rebates for drugs dispensed to Medicaid managed-care organizations (MCOs) enrollees, totaling at least $31.5 million in pharmacy drugs and physician-administered drugs. OIG identified that Michigan and its contractor did not identify all of the rebate-eligible drugs in the utilization data submitted by the MCOs. OIG recommended that Michigan bill for and collect manufacturers' rebates and refund the Federal Government, work with CMS to identify drugs eligible for rebates, and improve the processes for determining drug rebate eligibility. Michigan agreed with OIG’s recommendation. A summary of the report is available here.
On September 1, OIG released a report entitled Illinois Claimed Unallowable Telemedicine Payments. The report found that Illinois made telemedicine payments that were not in accordance with Federal and State requirements, resulting in unallowable payments of $198,124. OIG recommended that Illinois refund the unallowable payments, training providers on telemedicine billing requirements, and better monitor provider compliance of telemedicine billing requirements. Illinois agreed with OIG’s recommendations. A summary of the report is available here.
On September 1, OIG released a report entitled Indiana's Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal Background Check Requirements at 17 of 30 Providers Reviewed. The report found that Indiana’s monitoring of child care providers did not ensure provider compliance with State requirements related to criminal background checks. OIG found that the state agency did not effectively monitor the child care providers or did not ensure that providers turned in background check paperwork on a timely basis. OIG recommends that Indiana conduct the required criminal background checks and identify disqualified employees for the individuals identified in this audit and new individuals and develop a system to initiate and notify required background checks for new employees. Indiana partially agreed with the recommendations and recently launched a new portal for this purpose. A summary of the report is available here.
On September 2, OIG released a report entitled CMS Generally Met Requirements for the DMEPOS Competitive Bidding Program Round 1 Recompete. The report found that CMS consistently followed Competitive Bidding Program procedures and applicable Federal requirements but did not consistently follow procedures and requirements for selecting suppliers during the bid process and did not property monitor suppliers’ licenses, resulting in $24,054 in overpayments to suppliers. OIG recommends that CMS create oversight mechanisms to ensure that suppliers meet financial documentation and licenses requirements. A summary of the report is available here.
On September 2, OIG released a report entitled Tribal Health Programs: Concerns About Background Verifications for Staff Working With Indian Children. The report found that Tribal health programs that received Indian Self-Determination and Education Assistance Act funds from the Indian Health Service (IHS) did not always comply with background check requirements for all employees, contractors, and volunteers who have regular contact with Indian children. OIG recommends that the IHS immediately create oversight mechanisms to ensure that programs conduct background checks for those interacting with children. A summary of the report is available here.
On September 3, OIG released a report entitled Colorado Claimed Unsupported and Incorrect Federal Medicaid Reimbursement for Beneficiaries Enrolled in the New Adult Group. The report found that Colorado did not always comply with Federal and State requirements using the Federal Medical Assistance Percentage (FMAP) for Medicaid claims. The state incorrectly claimed $4.1 million due to a lack of supporting documentation and an additional $1.8 million for beneficiaries enrolled in the new adult group but who were eligible for the Transitional Medicaid eligibility group. OIG found that Colorado did not have adequate system controls to ensure that its claims for Federal Medicaid reimbursement were adequately supported and were claimed at the correct FMAP. OIG recommends that Colorado update its eligibility determination system and ensure accurate beneficiary eligibility changes and eligibility group changes. Colorado agreed with the recommendations. A summary of the report is available here.
On September 3, OIG released a report entitled Medicare Hospital Provider Compliance Audit: Flagstaff Medical Center. The report found that Flagstaff Medical Center complied with almost all Medicare billing requirements, resulting in $79,216 of overpayments. OIG recommends that the hospital refund the overpayments; identify, report, and return other potential overpayments; and strengthen controls to ensure full compliance with Medicare requirements. After review, the hospital agreed with the recommendations. A summary of the report is available here.
On September 3, OIG updated its FAQs for the Application of OIG's Administrative Enforcement Authorities to Arrangements Directly Connected to the Coronavirus Disease 2019 (COVID-19) Public Health Emergency. OIG advised that FQHCs may furnish emergency cash assistance cash to address social determinants of health for beneficiaries.
On September 4, OIG released a report entitled National Background Check Program for Long Term Care Providers: Assessment of State Programs Concluded in 2019. The report found that Hawaii, Oregon, and Puerto Rico did not implement all 13 selected National Background Check Program requirements during the grant period because the states lacked existing legislative authority and encountered challenges in coordinating between state-level departments. OIG also found that Ohio, Oregon, and Puerto Rico did not report sufficient data to accurately assess program outcomes. OIG recommends that CMS should continue to implement OIG's prior recommendation, to encourage states to obtain legislative authority to fully implement program requirements. OIG also recommended that CMS should assist states in addressing coordination challenges between state-level departments and require participating states to consistently submit data that allow for CMS and each state to calculate determinations of ineligibility. A summary of the report is available here.
On September 4, OIG released a report entitled Hawaii's Monitoring Generally Ensured Child Care Provider Compliance With State Criminal Background Check Requirements. The report found that Hawaii's monitoring generally ensured provider compliance with State requirements related to criminal background checks established under the Child Care and Development Block Grant Act. OIG recommended that Hawaii confirm that the licensing unit implement a corrective action plan to ensure that background checks are completed. A summary of the report is available here.
Government Accountability Office (GAO)
On August 31, GAO released a report entitled COVID-19: Brief Update on Initial Federal Response to the Pandemic. The report found that federal obligations and expenditures of COVID-19 relief funds totaled $1.5 trillion and $1.3 trillion, respectively, as of June 30. The Public Health and Social Services Emergency Fund was allocated $231.7 billion during the COVID-19 PHE. Among other recommendations, GAO repeated the recommendation from June for Congress to implement an adjusted FMAP formula for the federal government to match states’ Medicaid spending to better reflect current economic conditions. A summary of the report is available here.
Congressional Budget Office (CBO)
On August 31, CBO announced the 2021 Panel of Health Advisors for the agency.
On September 2, CBO released a report entitled An Update to the Budget Outlook: 2020 to 2030. CBO projects a federal budget deficit of $3.3 trillion in 2020, the largest shortfall relative to the size of the economy since 1945, a large increase from the $984 billion deficit in 2019. The report identifies that this increase was caused by the COVID-19 pandemic and legislation responding to it. CBO predicts that the deficit would shrink after 2020, and by 2023, it would be $1.1 trillion, the amount that CBO projected for 2020 before the pandemic.
On September 2, CBO released a report entitled The Outlook for Major Federal Trust Funds: 2020 to 2030. This report projects that balances held by federal trust funds will fall by $43 billion in fiscal year 2020 and trust fund spending will exceed income by $18 billion in 2021, contributing to a $502 billion deficit by 2030.
UPCOMING HEARINGS
Senate
None of note.
House
None of note.
OTHER HEALTH POLICY NEWS
On August 31, Delaware Chancery Court Judge Travis Laster ruled that the failed merger between Cigna Corp. and Anthem Inc. would have likely been blocked on antitrust grounds, though Cigna breached its negotiations obligations. In the original case, Cigna demanded $15 billion in damages and termination fees and Anthem demanded $21 billion in damages but Judge Laster ruled neither entity had to pay damages.
On August 31, California State Legislature passed S.B. 852 the California Affordable Drug Manufacturing Act of 2020. This bill would allow the California Health and Human Services Agency to produce and distribute generic drugs to reduce drug prices. The bill prioritizes manufacturing or distributing drugs for chronic and high-cost conditions, specifically mentioning insulin.
On August 31, the Committee for a Responsible Federal Budget released a report entitled Understanding Joe Biden's 2020 Health Care Plan. The report estimates that Democratic presidential nominee Joe Biden’s health plan to expand the ACA by increasing marketplace subsidies, adopting auto-enrollment, and offering a new public option would insure between 15 million and 20 million currently uninsured Americans and add $850 billion to the deficit, through 2030.
On September 1, the Ohio Department of Medicaid announced it is permanently expanding the state program’s telehealth options originally made for the duration of the PHE.
On September 1, Eli Lilly announced that they will not extend 340B drug discounts to their products to 340B providers that purchase the drugs through contract pharmacies – except for insulin products and if those providers do not have an on-site pharmacy.