Washington Healthcare Update

June 8, 2020

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This week in Washington: Senate to hold hearing on unemployment insurance during COVID-19 and will hold a second hearing on going back to school safely. House to hold hearings on COVID-19’s disproportionate impact on environmental justice communities and the Indian Health Service COVID-19 response.  

Upcoming Hearings/Markups






Proposed Regulations/Guidance

Final Regulations/Guidance



Upcoming Hearings/Markups

Tuesday, June 9, 2020

Senate Committee on Finance: “Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment Insurance During the Pandemic”

The Senate Committee on Finance will hold a hearing on the role of unemployment insurance during the COVID-19 pandemic, as the unemployment rate falls to 13.3 percent, down from 14.7 percent in April.

Find more details on the hearing here.

House Energy and Commerce Committee: “Pollution and Pandemics: COVID-19’s Disproportionate Impact on Environmental Justice Communities”

The Subcommittee on Environment and Climate Change of the Committee on Energy and Commerce will hold a remote hearing on the impact the COVID-19 pandemic has had on the environmental justice communities.

Find more details on the hearing here.

Wednesday, June 10, 2020

Senate Health, Education, Labor and Pensions Committee (HELP): “COVID-19: Going Back to School Safely”

The Senate HELP committee will hold a second hearing on preparing Americans to go back to school during the COVID-19 pandemic.

Find more details on the hearing here.

Thursday, June 11, 2020

House Committee on Appropriations: “Indian Health Service COVID-19 Response”

The Subcommittee on Interior, Environment, and Related Agencies of the House Committee on Appropriations will hold a hearing on how the Indian Health Service (IHS) has responded to the COVID-19 pandemic.

Find more details on the hearing here.

Senate Special Committee on Aging: “Combating Social Isolation and Loneliness During the COVID-19 Pandemic”

The Senate Special Committee on Aging will hold a hearing to discuss the mental health implications of social isolation during the COVID-19 pandemic.

Find more details on the hearing here.


House Committee on Energy and Commerce: “How Governors are Battling the COVID-19 Pandemic”

Tuesday, June 2, 2020: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce held a hearing to cover how state governors are addressing the current coronavirus pandemic. The panel of witnesses includes the governors from Colorado, Michigan and Arkansas.

Find more details on the hearing here.

Why this is important: Subcommittee Chair Rep. Diana DeGette (D-CO) called on the Trump administration to encourage testing in all states and criticized the administration for not improving the testing supply in the past. House Democrats have repeatedly criticized the Trump administration for not doing enough to give adequate testing supplies to states, as well as for what they say is a lack of supply chain transparency.

Senate Finance Committee: “COVID-19 and Beyond: Oversight of the FDA’s Foreign Drug Manufacturing Inspection Process”

Tuesday, June 2, 2020: The Senate Finance full committee held a hearing on how the coronavirus pandemic is affecting the FDA’s foreign drug manufacturing inspection process.

Find more details on the hearing here.

Why this is important: Appearing before committee, the Government Accountability Office (GAO) health care director Mary Denigan-Macauley criticized the Food and Drug Administration’s (FDA) oversight of foreign drug manufacturing, including the FDA’s practice of notifying overseas drug manufacturers in advance of inspections, despite U.S. pharmaceutical companies’ not receiving the same prior warnings. Judith McMeekin, the associate commissioner for regulatory affairs at the FDA, addressed the concerns by saying the agency has conducted more inspections of foreign drug manufacturers than U.S. pharmaceutical companies annually since 2015.

Senate Health, Education, Labor and Pensions Committee (HELP): “COVID-19: Going Back to College Safely”

Thursday, June 4, 2020: The Senate HELP committee held a hearing on preparing Americans to go back to college during the COVID-19 pandemic.

Find more details on the hearing here.

Why this is important: The purpose of the hearing was to explore the current challenges and implications of decisions that leaders of institutions of higher education are making as they develop plans to safely reopen colleges and universities this fall. The committee was interested in hearing recommendations for how colleges and universities could effectively coordinate with state and local public health officials and take into consideration the needs of all students when reopening in August. 


House Democrats Seek Information on COVID-19 Vaccine Contracts

On June 2, Rep. James Clyburn (D-SC), the chairman of the Select Subcommittee on the Coronavirus Crisis, and Rep. Carolyn Maloney (D-NY), the chairwoman of the Committee on Oversight and Reform, sent a letter to the Department of Health and Human Services requesting the COVID-19 vaccine research contracts with the private sector. The letter sked if the contracts that fund the development of a potential coronavirus vaccine include provisions to ensure the vaccines or therapeutics are affordable. It also claims that HHS has shared only limited information to date with Congress, with government websites listing a subset of contracts with the private sector, but not disclosing the terms, such as the allocation of any intellectual property rights between the government and private companies.

Find the full letter here.


Senate Passes Revisions to Small-Business Program, President Trump Signs

On June 3, the Senate unanimously approved the Paycheck Protection Program Flexibility Act to relax rules under the $670 billion Paycheck Protection Program, giving borrowers more time to spend the money and use it on a broader set of expenses while still qualifying to have the loans forgiven, a key feature offered in exchange for employers’ maintaining payrolls. On June 5, President Trump signed the revisions into law. The House last week passed the bill in a 417-1 vote.


At Least Three COVID-19 Vaccines to Be Manufactured at Government Facilities

On June 4, the Department of Health and Human Services (HHS) will spend another $628 million to make coronavirus vaccine candidates at a facility built in part with government funding under the Obama administration, adding to the list of contracts for products to be made at the public-private facilities. Government manufacturing of coronavirus vaccines and drugs would give the government more power over price and would secure supplies for Americans amid fierce global competition for those products.

The $628 million goes to Emergent BioSolutions, a private company that manages the public-private facility that was built in 2012 with significant funding from the government to prepare for a flu pandemic. There are now at least three big contracts for COVID-19 vaccine production at government-funded facilities. Johnson & Johnson subsidiary Janssen was given $456 million to develop a vaccine candidate that would be made at the Emergent facility, and HHS said AstraZeneca’s vaccine candidate will be made at a government facility as well. The government committed to spending up to $1.2 billion on the AstraZeneca contract, but $787 billion of that deal depends on the vaccine’s working well enough for Food and Drug Administration (FDA) to grant it an emergency use authorization.

HHS Tells Labs to Report Demographic Info Alongside COVID-19 Tests

On June 4, the Department of Health and Human Services (HHS) announced it will require patient demographic data on all COVID-19 lab tests as Centers for Disease Control and Prevention (CDC) Director Robert Redfield apologized for the inadequacy of CDC’s previously released COVID-19 report on racial disparities. CDC said in its recent report that the effect of COVID-19 on minority groups is still emerging but “current data suggest a disproportionate burden of illness and death among racial and ethnic minority groups.”

HHS Confirms $50 Billion in Provider Relief Divvied Up Based on 2018 Pay

On June 1, the Department of Health and Human Services (HHS) updated its relief fund website to confirm it will base $50 billion in COVID-19 relief funding on providers’ share of overall 2018 patient revenue, rather than on 2019 Medicare revenue. The website previously said all $50 billion of the general distribution payments from the provider relief fund would be distributed based on 2019 Medicare fee-for-service revenue, as was the initial $30 billion distribution.

Find more information here.

CMS: More Enforcement Actions Based on Nursing Home COVID-19 Data and Inspection Results, Publicly Posts COVID-19 Cases, Deaths on Nursing Home Compare

On June 1, the Centers for Medicare and Medicaid Services (CMS) announced enhanced enforcement for nursing homes with violations of longstanding infection control practices. CMS will withhold some CARES Act funds from states that fail to follow oversight requirements on infection control after CMS published data showing that almost 26,000 nursing home residents have died of COVID-19. CMS also started publicly posting COVID-19 data on Nursing Home Compare, after requiring nursing homes to begin reporting COVID-19 cases and deaths to the Centers for Disease Control and Prevention (CDC) in April. The data posted Thursday on Nursing Home Compare include the number of patient and staff cases, as well as deaths, per nursing homes. The data also include the results of targeted infection control surveys CMS ordered in March as nursing homes emerged as early hotspots of COVID-19 outbreaks.

The enhanced and targeted accountability measures are based on early trends in the most recent data regarding incidences of COVID-19 in nursing homes, as well as data regarding the results of the CMS’s targeted infection control inspections. CMS is increasing enforcement (e.g., civil money penalties (CMPs)) for facilities with persistent infection control violations, and imposing enforcement actions on lower level infection control deficiencies to ensure they are addressed with increased gravity. To ensure nursing homes implement infection control best practices, CMS will provide technical assistance through Quality Improvement Organizations (QIOs). CMS and the Centers for Disease Control and Prevention (CDC) will continue to monitor the data it receives through the new nursing home COVID-19 surveillance system to identify nursing homes with outbreaks and work with governors’ offices and states to keep nursing home residents safe.

Find more information here.

Proposed Regulations/Guidance

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 Proposes 2.9 Percent Pay Increase for Inpatient Rehab Facilities

On April 16, the Centers for Medicare and Medicaid Services (CMS) released a proposal to increase pay for inpatient rehabilitation facilities in fiscal 2021, lift the requirements for postadmission evaluations and allow nonphysician practitioners to provide more services. CMS proposes to increase the inpatient rehabilitation facility payment by 2.9 percent, and proposes to maintain outlier payments at 3 percent of total payments. CMS says this would be an overall $270 million increase in fiscal 2021 relative to fiscal 2020. The proposal includes adoption of the Office of Management and Budget’s (OMB) statistical area delineations and would apply a 5 percent cap on wage index decreases from fiscal 2020 to fiscal 2021.

Find the proposed rule here. Public comments are due by June 15, 2020.

Final Regulations/Guidance

CMS: Manufacturer Release on the Misclassification of Drugs for the Medicaid Drug Rebate Program

On June 5, the Centers for Medicare and Medicaid Services (CMS) released a manufacturer release (Release No. 113) to address how manufacturers can ensure they are complying with reporting obligation and requirements of the Medicaid Drug Rebate Program for their covered outpatient drugs. CMS is providing this guidance to ensure that manufactures can determine if they are correctly reporting their data and describes some of the steps that manufacturers should take if corrections are required.

Upon entering the program, and each month and quarter thereafter, manufacturers must report certain pricing and product data to CMS to meet statutory and regulatory requirements for participation. This data helps to determine the rebates that manufacturers pay to states for prescription drugs provided to state Medicaid beneficiaries.

Find the release here.

FDA Clarifies IRB Review Policies as Expanded Access Requests Grow

On June 3, the Food and Drug Administration (FDA) issued Institutional Review Board (IRB) guidance that details how individual patients can more easily obtain nonemergency investigational drugs through the Expanded Access pathway during the COVID-19 crisis and beyond. The guidance says IRBs should only consider the specific patient’s risks and benefits and in some cases IRB reviews can be waived. Though the guidance is only in effect for the duration of the COVID-19 public health emergency, FDA says the recommendations could also help them facilitate individual patient access to drugs through the Expanded Access pathway beyond the pandemic.

Find the final guidance here.


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

Court Weighs Dispute Over ACA Health Insurance Tax in Medicaid

On June 1, oral arguments were held with a three-judge panel of the U.S. Court of Appeals for the 5th Circuit reviewing a ruling from U.S. District Judge Reed O’Connor, which orders the federal government to return $479 million to the six states for the cost of the Health Insurance Providers Fee tax. The fee operates as an annual tax that most health insurers must pay under the Affordable Care Act (ACA). In last year’s budget bill, Congress repealed the tax starting in 2021. The court’s ruling would decide whether states are required to reimburse Medicaid managed care plans for the tax, and if they are not, whether the federal government must pay back nearly $500 million to the six states that challenged the regulation of the tax.


GAO: Infectious Disease Modeling – Opportunities to Improve Coordination and Ensure Reproducibility

On June 4, the Government Accountability Office (GAO) published a report on how the outbreaks of infectious diseases, such as novel coronavirus and pandemic flu, have raised concerns about how federal agencies use modeling to predict a disease’s course. Models can help decision makers set disease control policies and allocate resources. If models are unsound, they may not produce the reliable predictions needed to make good decisions. GAO examined how the Department of Health and Human Services (HHS), which includes the Centers for Disease Control and Prevention (CDC), uses and assesses models.

GAO recommends:

  1. The Secretary of Health and Human Services should develop a mechanism to routinely monitor, evaluate and report on coordination efforts for infectious disease modeling across multiple agencies.
  2. The Secretary of Health and Human Services should direct CDC to establish guidelines that ensure full reproducibility of CDC’s research by sharing with the public all permissible and appropriate information needed to reproduce research results, including, but not limited to, model code.

Find the full report here.

GAO: Private Citizens’ Involvement in Decision Making at the Department of Veterans Affairs: Information on the Purpose, Scope and Time Frames of Interactions Between 2016 and 2018

On June 3, the Government Accountability Office (GAO) published a report on President Trump’s 2017 announcement that his administration and the Department of Veterans Affairs (VA) would consult private citizens to help address VA’s issues related to managing and overseeing its operations. This has raised questions about the influence of these citizens on VA’s decisions. GAO found that the interactions between VA officials and private citizens took place between 2016 and 2018. The analysis showed that the time frames for the interactions between the private citizens and VA officials varied by initiative, and former and current VA officials we spoke with had varying assessments of the impact the citizens had on VA initiatives.

This correspondence describes the various interactions on these initiatives. Further, it describes the mode (e.g., email, phone or in-person meeting), frequency, timing and content of these interactions as well as their common themes. Finally, the correspondence describes the views of current and former VA officials and the private citizens in terms of the roles that the private citizens played in VA decision making on these five initiatives.

Find the full report here.

GAO: Drug Safety – COVID-19 Complicates Already Challenged FDA Foreign Inspection Program

On June 2, the Government Accountability Office (GAO) testified to the Senate Committee on Finance on how the outbreak of COVID-19 has called greater attention to the United States’ reliance on foreign drug manufacturers. Much of the drug manufacturing for the U.S. market happens overseas, and drugs for treating COVID-19 are no exception. The Food and Drug Administration (FDA) inspections of foreign and domestic drug manufacturers are critical to ensuring drug safety and effectiveness. According to the report, FDA began to postpone almost all inspections of foreign manufacturing establishments in March 2020 due to COVID-19. The GAO testified that this lack of foreign inspections removes a critical source of information about the quality of drugs manufactured for the U.S. market.

Find the full testimony here.

GAO: Medicaid – State Views on Program Administration Challenges

On June 1, the Government Accountability Office (GAO) published a report to congressional requestors on how Medicaid is administered at the state level and overseen at the federal level. State Medicaid officials identified some federal policies that pose challenges for effective program administration. Medicaid is working to address some of the challenges identified by state officials.

Of note:

  • Coverage exclusions and care coordination – Officials from 47 states identified challenges with a policy that generally excludes Medicaid coverage for residents of institutions for mental diseases. State officials cited this coverage exclusion as a barrier to their ability to use Medicaid funds to provide a full continuum of care to beneficiaries with complex health care needs, including mental health or substance use treatment needs.
  • Covered benefits and eligibility – Officials from 39 states identified challenges related to the requirement for coverage of outpatient prescription drugs, noting that newer drugs are often higher cost and may not yet have an established clinical benefit.
  • Medicare and Medicaid alignment – Officials from 42 states identified challenges related to integrating care for beneficiaries eligible for both Medicare and Medicaid, due in part to differences between the programs.
  • Payment methods – Officials from 27 states identified challenges with the requirement to pay federally qualified health centers and rural health clinics based on historic costs, citing higher payments than for other providers.

Find the full report here.

GAO: Defense Health Agency – Additional Information and Monitoring Needed to Better Position DOD for Restructuring Medical Treatment Facilities

On May 29, the Government Accountability Office (GAO) published a report on how about 9.6 million beneficiaries are eligible for the Defense Department (DOD) health care from medical treatment facilities and TRICARE civilian providers. DOD issued a plan in February for a required restructure of medical treatment facilities, which called for decreasing capability at 43 of them and closing five. DOD’s restructuring review included required elements, such as assessing the adequacy of nearby civilian health care. However, it was based in part on incomplete and inaccurate information and may overstate the adequacy of available care. GAO made six recommendations, including that DOD use more complete and accurate information in its review.

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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