Washington Healthcare Update

June 15, 2020

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This week in Washington: Senate begins considering appropriation bills and hearings on COVID-19 and health disparities continue.

Upcoming Hearings/Markups





Proposed Regulations/Guidance

Final Regulations/Guidance



Upcoming Hearings/Markups

Wednesday, June 17, 2020

House Committee on Energy and Commerce: “Health Care Inequality – Confronting Racial and Ethnic Disparities in COVID-19 and the Health Care System”

The Subcommittee on Health of the Committee on Energy and Commerce will hold a hearing on the disproportionate effect of the COVID-19 epidemic on minority races and ethnicities, and the same effect in the country’s health care system as a whole. Find more details on the hearing here.

Senate Committee on Health, Education, Labor and Pensions (HELP): “Telehealth: Lessons from the COVID-19 Pandemic”

The Senate HELP committee will hold a hearing on the use of telehealth services during the COVID-19 pandemic, and methods to better the service. Find more details on the hearing here.

Tuesday, June 23, 2020

Senate Committee on Health, Education, Labor and Pensions (HELP): “COVID-19: Lessons Learned to Prepare for the Next Pandemic”

The Senate HELP committee will hold a hearing to cover the lessons learned from shortcomings of the COVID-19 pandemic, in preparation for the future. Find more details on the hearing here.


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

Tuesday, June 9: The Subcommittee on Environment and Climate Change of the Committee on Energy and Commerce held a remote hearing on the impact the COVID-19 pandemic has had on the environmental justice communities.

Find more details on the hearing here.

Why this is important: House Energy and Commerce Committee Chairman Frank Pallone’s (D-NJ) open remarks note the high rates of infection and death for communities of color, low-income communities, Native American communities and fence-line communities (for example, communities that are adjacent to chemical plants or superfund sites).  

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

Wednesday, June 10: The Senate HELP committee held a second hearing on preparing Americans to go back to school during the COVID-19 pandemic.

Find more details on the hearing here.

Why this is important: Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, recently hesitated to make any broad statements about the safety of schools’ reopening, but said that conversation needs to happen with a particular focus on the infection level in each community.

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

Thursday, June 11: The Subcommittee on Interior, Environment, and Related Agencies of the House Committee on Appropriations held a hearing on how the Indian Health Service (IHS) has responded to the COVID-19 pandemic.

Find more details on the hearing here.

Why this is important: Statistics shown at the hearing claim that the Indian Health Service (HIS) needs at least $9.1 billion to meet the needs of their covered communities. IHS’s current budget currently falls far short of that amount. Tribal communities are suffering during the pandemic, with data in Montana, New Mexico, Oregon, South Dakota and Wyoming showing that American Indians and Alaska Natives are being infected at higher rates than the general population.

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

Thursday, June 11: The Senate Special Committee on Aging held a hearing to discuss the mental health implications of social isolation during the COVID-19 pandemic.

Find more details on the hearing here.

Why this is important: Even in pre-pandemic times, seniors faced risk factors such as social isolation, financial challenges, illness, grief and loss, all associated with greater rates of anxiety and depression. Because of the COVID-19 pandemic, geriatric mental health issues are at high risk of an increase.


Sen. Alexander Releases White Paper on Pandemic Preparedness, Requests Feedback by June 26

On June 9, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) released “Preparing for the Next Pandemic,” a white paper with five recommendations to address future pandemics based on lessons learned from COVID-19 and the past 20 years of pandemic planning.

The white paper recommends Congress should work with federal departments and agencies, states and the private sector to address these specific issues and newly identified gaps:

  1. Tests, Treatments and Vaccines – Accelerate Research and Development
  2. Disease Surveillance – Expand Ability to Detect, Identify, Model and Track Emerging Infectious Diseases
  3. Stockpiles, Distribution and Surges – Rebuild and Maintain Federal and State Stockpiles and Improve Medical Supply Surge Capacity and Distribution
  4. Public Health Capabilities – Improve State and Local Capacity to Respond
  5. Who Is on the Flagpole? – Improve Coordination of Federal Agencies During a Public Health Emergency

Comments, responses and any additional recommendations for the Senate HELP Committee to consider are due on June 26, 2020.

Find the white paper here.

Senators Seek Details on HHS’s Plan for Handling Next COVID-19 Wave

On June 9, a bipartisan group of senators asked Trump administration officials how many diagnostic tests and how much protective gear the administration has stockpiled for the next wave of the coronavirus. Members of the Senate Committee Homeland Security and Governmental Affairs hearing last week said that they still do not know the country’s testing capacity and that it is impossible to estimate how widespread the virus is without more testing. Chair Ron Johnson (R-WI) said that it is evident that the country’s preparedness enterprise, resources and supply chains were stressed past the capacity required to meet a nationwide pandemic.

Find more details here.


CMS: Nursing Home Residents’ Right to Retain Federal Economic Incentive Payments

On June 11, the Centers for Medicare and Medicaid Services (CMS) made an announcement that they were aware of allegations that some nursing homes are seizing residents’ economic impact payments (or “stimulus checks”) authorized under the CARES Act. CMS has not received any specific complaints. The announcement reiterates that the practice is prohibited, and nursing homes that seize these payments from residents could be subject to federal enforcement actions, including potential termination from participation in the Medicare and Medicaid programs. Residents or their family who were compelled to sign their stimulus check over to their nursing home are encouraged to file a complaint with their state survey agency for investigation of the nursing home.

Find more information here.

HHS to Give $25B Relief to Safety Net, Medicaid, CHIP Providers

On June 9, the Department of Health and Human Services (HHS) announced it will distribute $25 billion to safety net hospitals and Medicaid and Children’s Health Insurance Program providers who were not previously eligible for provider relief funding. The funding distribution began last week, when HHS launched an expanded portal for Medicaid and CHIP providers to report their annual patient revenue. Providers will receive at least 2 percent of reported gross revenue from patient care and could see payments as soon as 10 days after they submit their application. Safety net hospitals are eligible for a minimum of $5 million and can receive no more than $50 million in provider relief funds.

Proposed Regulations/Guidance

IRS: Payments to Health Sharing Ministries, Direct Primary Care Deductible

On June 8, the Internal Revenue Service (IRS) proposed that premiums and fees paid for direct primary care or health care sharing ministries be eligible for reimbursement by employers under health reimbursement arrangements (HRAs) and for deduction as a medical expense. The draft IRS rule stems from a June 24, 2019, executive order that required the IRS to issue regulations within six months to allow certain arrangements, including direct primary care and HCSMs, as eligible medical expenses under section (213)d of the IRS code.

Find the draft rule here.

Final Regulations/Guidance

CMS Guidance on Reopening Health Facilities Calls for Patient Testing

On June 9, the Centers for Medicare and Medicaid Services (CMS) released guidance on opening health care facilities in states that have moved into phase 2 of reopening. The guidance recommends patients receiving non-COVID-19 care undergo COVID-19 testing 24 hours before their procedure. CMS continues to emphasize using telehealth services where possible and recommends vulnerable populations remain sheltered-in-place. In phase 2, CMS says states should have no evidence of a COVID-19 rebound and should be able to preserve capacity for a surge of COVID-19 cases while also being able to sustain nonemergency care at the same time.

Find the final guidance here.

FDA Allows Prescription Drug Samples to Be Mailed Directly to Patients

On June 8, the Food and Drug Administration (FDA) announced it will temporarily allow manufacturers to mail prescription drug samples directly to patients’ homes, upon request from a health care provider, to facilitate access to medications for patients who typically obtain samples from their doctors. The FDA is temporarily relaxing its policies in light of COVID-19-related social distancing guidelines, which have led to fewer face-to-face medical visits and increased use of telemedicine. Patients who have typically obtained drug samples from their health care providers, and providers that typically obtain samples from distributors, may now need to access samples through mail delivery services.

Under the temporary guidance, which is in effect during the COVID-19 public health emergency, FDA says licensed health care practitioners can request prescription drug samples be delivered by manufacturers to the practitioners’ own homes, to hospital pharmacies or directly to patients. The guidance does not apply to retail pharmacies.

Find the temporary guidance here.

CMS: Details on Medical Loss Ratio in Medicaid Managed Care

On June 5, guidance from Calder Lynch, the director for the Center for Medicaid and CHIP Services, was published to instruct states on how to implement the medical loss ratio requirements in the 2016 managed care rule, as well as a provision of the 2018 SUPPORT Act that adjusted one aspect of those requirements. States have flexibility to determine what method they will use to recoup money from Medicaid managed care plans that spend too much on administrative costs or take in profits that are too high. While states that recoup money from managed care plans generally must return to the Centers for Medicare and Medicaid Services (CMS) the federal government’s share of that money, the guidance also lays out an exception tied to Medicaid expansion that allows states to keep a larger share of the money.

Find the informational bulletin here.

HHS Requires 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. The new reporting requirements will provide information needed to better monitor disease incidence and trends by initiating epidemiologic case investigations, assisting with contact tracing, assessing availability and use of testing resources, and anticipating potential supply chain issues.

Find the final guidance here.


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

State Attorneys General Sue 26 Generic Drug Manufacturers for Price Fixing

On June 10, Attorneys general from 46 states, the District of Columbia and four U.S. territories sued major drug manufacturers for colluding on generic dermatologic drug prices. The case is in the U.S. District Court for the District of Connecticut. The suit targets 26 manufacturers and focuses on 80 topical generic drugs. The suit alleges that between 2009-20016, the companies struck agreements to drive down the costs of generic drugs while raising prices. Connecticut Attorney General William Tong is leading the plaintiffs.

The lawsuit is the third from an anti-trust investigation. The first complaint, which is still pending in the U.S. District Court of the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate defendants, two individual defendants and 15 generic drugs. The second complaint, also pending in the same Pennsylvania court, was filed in 2019 against Teva and 91 other large generic drug makers. The states are preparing for trial on the second complaint.


GAO: Ongoing Stakeholder Involvement Needed in the Department of Veterans Affairs’ Modernization Effort

On June 5, the Department of Veterans Affairs (VA) announced it  is replacing its electronic health record (HER) system with a commercial system to better support patient care. VA held several workshops to allow stakeholders, including clinicians, staff and other experts, to weigh in on the configuration of the new software that will help it deliver care and administer medication. While VA made its configuration decisions on time, it is assessing the impact of the COVID-19 pandemic on its planned implementation schedule.

GAO recommends:

  • For implementation of the EHR system at future VA medical facilities, that the secretary of VA direct the EHRM executive director to clarify terminology and include adequate detail in descriptions of local workshop sessions to facilitate the participation of all relevant stakeholders including medical facility clinicians and staff.

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

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