Washington Healthcare Update

March 30, 2020

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This week in Washington: President signs phase three COVID-19 stimulus bill; House and Senate are not scheduled to return to Washington until the week of April 20




The Senate and the House are not scheduled to return to the Hill until the week of April 20.


Proposed Regulations/Guidance

Final Regulations/Guidance



President Trump Signs “Phase Three” COVID-19 Stimulus Bill

On March 27, President Trump signed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Earlier the same day, the House passed the economic stimulus bill by voice vote, and the Senate passed the bill with a vote of 96-0 the week before. The Joint Committee on Taxation estimates the budget impact of the bill to be about $591 billion over the next decade. The legislation would provide roughly $250 billion in rebate checks to most Americans, help struggling businesses meet payrolls and enhance state and local relief efforts.

Find the bill text here.


HHS Tells States to Use Emergency Powers to Expand Providers’ Scope

On March 24, the Department of Health and Human Services (HHS) asked governors to expand access to providers during the COVID-19 emergency by relaxing provider licensure and supervision requirements and increasing liability protections. HHS asked states to allow health professionals licensed or certified in one state to practice in other states either in-person or over telemedicine. HHS asked governors to waive state licensure or certification fees and to work with state licensure boards to put a moratorium on scope of practice limits.

HHS Warns of Medicare Fraud with Fake COVID-19 Tests

On March 23, the Department of Health and Human Services (HHS) Office of Inspector General warned that scammers are targeting Medicare beneficiaries with promises of illegitimate COVID-19 tests in order to steal beneficiaries’ medical information and fraudulently bill federal health care programs. The fake treatments are being offered through telemarketing calls, social media platforms and door-to-door visits.

Find more information here.

Proposed Regulations/Guidance

DEA: Controls to Enhance the Cultivation of Marijuana for Research in the U.S.

On March 20, the Drug Enforcement Agency (DEA) released a proposed rule for adding additional research marijuana growing licenses. The only research-grade medical marijuana currently grown in the U.S. is at the University of Mississippi, while 37 prospective producers have applied for and are awaiting decisions on their applications to grow research marijuana.

Find the proposed rule here. Public comments are due by May 22, 2020.

FDA: Change in Safety Requirements for Diabetic Drugs

On March 9, the Food and Drug Administration (FDA) released a draft guidance to no longer require drug manufacturers to conduct large cardiovascular safety studies for all new type 2 diabetes therapies. The FDA is recommending new safety requirements that will focus on evaluations that are broader than heart disease. Companies will need to include at least 4,000 patients exposed to the drug in phase III clinical trials, with at least 1,500 patients exposed to the drug for at least one year and 500 patients exposed to the drug for at least two years.

Find the draft guidance here. Public comments are due by June 8, 2020.

CMS: Comprehensive Care for Joint Replacement (CJR) Model Proposed Extension andChanges

On Feb. 20, the Centers for Medicare and Medicaid Services (CMS) issued a rule that proposes a three-year extension and changes to the episode definition and pricing in the Comprehensive Care for Joint Replacement (CJR) Model. The Model, which is currently scheduled to end on Dec. 31, 2020, aims to reduce expenditures while preserving or enhancing quality of care by supporting better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements (also called lower extremity joint replacements or LEJR). This rule proposes to change certain aspects of the CJR Model, including incorporating outpatient hip and knee replacements into the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements, gainsharing caps and the appeals process. Additionally, to allow time to evaluate the proposed changes, the rule proposes to extend the length of the CJR Model for an additional three years, through Dec. 31, 2023, for certain participant hospitals.

Find the proposal rule here. Public comments are due by April 24, 2020.

CMS: 2021 Medicare Advantage and Part D Advance Notice Part II

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) released Part II of the calendar year (CY) 2021 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Advance Notice). CMS released Part I of the Advance Notice on Jan. 6, 2020. The notice is seeking comment on whether it should develop measures of generic and biosimilar utilization that could be used to calculate a plan’s star rating, so CMS could reward plans that encourage adoption of lower-cost products.

Find the notice here.

CMS will publish the final Rate Announcement by April 6, 2020.

CMS: Contract Year 2021 and 2022 Medicare Advantage and Part D

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit (Part D) program. Medicare Part D plans will be allowed to offer two specialty tiers on their drug formularies starting in 2021. The proposed rule requires that one of the two specialty tiers be a “preferred” tier that offers lower cost sharing for beneficiaries. The maximum allowed cost sharing for the specialty tiers would be between 25 percent and 33 percent, depending on whether the plan includes a deductible.

Drugs that cost $670 a month or more must currently be placed on one specialty tier. Allowing two tier options should give health plans leverage to work with drug manufacturers to get prices lower if the manufacturer wants to price their product at a more accessible cost to patients compared with their competitors. The proposed rule also requires Part D plans to implement by Jan. 1, 2022, a tool that will provide beneficiaries with real-time details on the cost of drugs based on their plan coverage and alternatives.

Find the proposed rule here.

CMS: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

On Jan. 31, the Centers for Medicare and Medicaid Services (CMS) released the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the proposed 2021 Payment Notice. This is the second year in a row that the proposed rule has been late. 

CMS proposes to maintain the Federally Facilitated Exchange (FFE) user fee rate of 3.0 percent of premium, and the State-based Exchange on the Federal Platform (SBE-FP) user fee rate of 2.5 percent of premium based on the portion of FFE user fee-eligible costs allocated to SBE-FP activities. Alternatively, CMS is considering and seeking comment on reducing the FFE and SBE-FP user fee rate below the 2020 plan year level to reflect estimates of premium increases and enrollment decreases for the 2021 plan year, as well as potential savings resulting from cost-saving measures implemented over the last several years in hopes of reducing the user fee burden on consumers and creating downward pressure on premiums.

CMS is proposing changes to the policy regarding how drug manufacturer coupons accrue towards the annual limitation on cost sharing in response to stakeholder feedback indicating Treatment of Drug Manufacturer Coupons. CMS is proposing to amend current Medical Loss Ratio (MLR) regulations to require issuers to deduct from incurred claims the prescription drug rebates and other price concessions attributable to the issuer’s enrollees and received and retained by an entity providing pharmacy benefit management services to the issuer. CMS also proposes to clarify more generally that issuers must report expenses for services outsourced to or provided by other entities in the same manner as issuers’ expenses for non-outsourced services. These changes would help lower premiums by helping ensure that consumers’ premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses.

Find the proposed rule here. Public comments are due by April 6, 2020.

Final Regulations/Guidance

FDA Allows Distribution of Face Masks Without Clearance

On March 26, the Food and Drug Administration (FDA) announced that it will not pursue enforcement action against the distribution and use for medical purposes of “improvised” face masks that have not complied with certain device regulatory requirements. For the duration of the COVID-19 public health emergency, FDA will not take action against distribution of masks, including those improvised by individuals and health care professionals, that do not meet requirements for premarket notification, registration and listing, unique device identification and quality system regulation, as long as the masks are properly labeled. FDA also wants to expedite access to N95 filtering respirators.

Find more information here.

FDA to Implement All COVID-19 Guidances Without Notice, Comment

On March 25, the Food and Drug Administration (FDA) announced new procedures that will allow the agency to issue COVID-19-related guidance documents as fast as possible. Some of the approaches FDA will take include: publishing guidances without prior public participation, immediately implementing guidances, periodically publishing a consolidated notice of availability for multiple guidances, and setting up one docket for each agency center or office that may issue guidances related to the novel coronavirus response efforts.

FDA Allows Emergency Use of Investigational Plasma, Antibody Injections

As of March 24, FDA is allowing emergency use of investigational convalescent plasma, which involves using plasma collected from recovered COVID-19 patients as a potential therapy for the novel coronavirus disease. FDA published a webpage with more information for health care providers interested in getting permission to collect and use plasma under a single patient emergency investigational new drug application.

Find the webpage here.

Find the notice here.

VA Pauses Non-Urgent Referrals to Private Doctors, Citing Pandemic

On March 25, the Department of Veteran Affairs (VA) discontinued offering non-urgent community care referrals to veterans during the coronavirus pandemic due to infection risks and concern over stressing the health system. The VA’s memo said that urgent or emergency care referrals will continue as necessary, and that efforts to increase the use of telehealth would help “minimize exposure” to the coronavirus.

Find more information here.

CMS Approves Additional Section 1135 Waivers

As of March 27, the Centers for Medicare and Medicaid Services (CMS) approved Section 1135 Medicaid waiver requests for 34 states. All Section 1135 approval letters will be posted here as they are issued.

CMS: New Guidance on Nursing Home Inspections

On March 23, the Centers for Medicare and Medicaid Services (CMS) further limited its nursing home inspection protocol, postponing routine inspections to focus solely on infection control and immediate jeopardy, based on its findings in a Washington state nursing home that experienced a COVID-19 outbreak. The only federal inspections that will be conducted in the next few weeks will be complaint inspections, including a streamlined infection control review survey; targeted infection control inspection of providers identified by CMS and the Centers for Disease Control and Prevention (CDC); and self-assessments by providers and suppliers with a checklist provided by CMS, particularly for cases where there is a lack of personal protective gear.

Find the guidance here.


Find a comprehensive look at “Courts and Healthcare Policy in 2020” here.


GAO: Drug Misuse – Sustained National Efforts Are Necessary for Prevention, Response and Recovery

On March 26, the Government Accountability Office (GAO) released a report on drug misuse, with national rates rising from 15 percent in 2003 to 19 percent in 2018. Therefore, GAO added drug misuse to its High Risk List in 2021 to encourage progress. The High Risk List covers areas in need of transformation, or at high risk from fraud, waste, abuse and mismanagement. The report notes that federal agencies may struggle to focus on drug misuse during the COVID-19 pandemic, yet adds that the pandemic could fuel contributing factors of misuse, such as unemployment, stressing the long-term need to sustain and build upon ongoing efforts.

Find the full report here.

GAO: Patient-Centered Outcomes Research Institute – Review of the Audit of the Financial Statements for FY 2019

On March 26, the Government Accountability Office (GAO) released a report on the Patient-Centered Outcomes Research Institute (PCORI), a federally funded, nonprofit corporation that was established to fund and evaluate research aimed at helping patients, doctors and policymakers make better health care decisions. PCORI is required to have its financial statements audited annually, and GAO is required to review those audits. PCORI’s auditor issued an unmodified (clean) opinion on its fiscal year 2019 financial statements, concluding that these fairly presented PCORI’s financial position and activities.

GAO reviewed certain aspects of this financial audit and found no significant issues requiring attention.

Find the full report here.

If you have any questions, contact the following individuals atMcGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Mariam Eatedali, Research Associate

Founded in 1998,McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of theMcGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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