Washington Healthcare Update

August 3, 2020

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This week in Washington: COVID-19 bill negotiations continue.






Proposed Regulations/Guidance

Final Regulations/Guidance




Senate Committee on Finance: Part 1: Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic

Tuesday, July 28, 2020: The Senate Committee on Finance held a hearing on the COVID-19 pandemic’s effects on the U.S. medical supply chain in a two-part series.

Find more details on the hearing here.

Why this is important: Chairman Chuck Grassley (R-IA) argued that the main concerns around PPE and medical equipment are the fault of the U.S.’s major supplier, China. Ranking Member Ron Wyden (D-OR) believes that the concerns revolve around a lack of organization and oversight by the Trump administration and its agencies. Members agreed that increased domestic production was a first step toward solving the supply chain concerns.

House Committee on Energy and Commerce: Improving Access to Care: Legislation to Reauthorize Key Public Health Programs

Wednesday, July 29, 2020: The Subcommittee of Health on the Committee on Energy and Commerce held a hearing to discuss the following legislation:

  • H.R. 2075, the “School-Based Health Centers Reauthorization Act of 2019”
  • H.R. 4078, the “EARLY Act Reauthorization of 2019”
  • H.R. 4439, the “Creating Hope Reauthorization Act”
  • H.R. 4764, the “Timely Reauthorization of Necessary Stem-cell Programs Lends Access to Needed Therapies Act of 2019” or the “TRANSPLANT Act of 2019”
  • H.R. 5373, the “United States Anti-Doping Agency Reauthorization Act of 2019”

Find more details on the hearing here.

Senate Committee on Finance: Part 2: Protecting the Reliability of the U.S. Medical Supply Chain During the COVID-19 Pandemic

Thursday, July 30, 2020: The Senate Committee on Finance held a second hearing on the COVID-19 pandemic’s effects on the U.S. medical supply chain, in a two-part series.

Find more details on the hearing here.

Why this is important: The witnesses across the supply chain agreed that more oversight by the agencies of the Trump administration, and more transparent allocation and bidding could help lessen the counterfeit personal protective equipment (PPE) and price gouging.


House Approves $1.3 Trillion Spending Package for 2021

On July 31, the House approved a $1.3 trillion appropriations package for the 2021 fiscal year, 217-197. The package included the spending bills for Defense; Labor, Health and Human Services, and Education; Commerce, Justice and Science; Energy and Water; Financial Services and general government; and Transportation and Housing and Urban Development.

House Republicans Accuse States of Not Using CARES Act Funds

On July 30, the House Ways & Means Republicans said a recently released Treasury Inspector General (IG) report proves states do not need extra COVID-19 funds, as several states have not even spent half of their CARES Act allocations. House Ways & Means Ranking Member Kevin Brady (R-TX) pointed out that the IG report shows while Michigan and New Jersey’s governors have specifically asked for more relief, they have spent 3 percent and 2.1 percent respectively of their CARES Act funds from March 1 through June 30. The Senate GOP proposal gives states greater flexibility in spending their CARES Act funds instead of sending them more money.


Senate GOP Proposal Includes Liability Limits, Telehealth Waiver Extensions

On July 27, Senate Republicans unveiled their proposal for the next COVID-19 response bill. The draft includes a provision that would keep Medicare Part B premiums in place for next year instead of increasing the premium. The idea is to protect Medicare’s 62.5 million beneficiaries from a spike in the Part B premium which is anticipated because of less money flowing into the program in the midst of the pandemic. However, beneficiaries would pay an average of $3 a month extra until the shortfall caused by freezing the premiums is recouped. In addition, the proposal would delay providers’ repayment of Medicare funds they received as part of the initial COVID-19 response. Repayment would be delayed until Jan. 1, 2021.

Find the proposal here.


HHS and Trump Administration Release Report on Surprise Billing

On July 29, the Department of Health and Human Services (HHS) and the Trump administration released a report calling on Congress to end surprise billing but without saying whether Congress should opt for a bill that relies on arbitration or on set payment rates to settle out-of-network payments. The report describes steps the Trump administration has taken so far to increase price transparency and calls on Congress to act. The report does affirm that the patient should not be forced to shoulder extra costs for charges from out-of-network providers they did not choose and that patients should not face extra costs if their insurer does not cover a provider.

FDA Issues Template for OTC COVID-19 Tests for Use in Offices, Schools

On July 29, the Food and Drug Administration (FDA) issued a new emergency use authorization (EUA) template for developing over-the-counter COVID-19 diagnostic tests that can be used outside of a laboratory. When the nonprescription tests become available, FDA hopes to see them used at locations like offices and schools, in addition to at home. The template includes numerous recommendations for commercial manufacturers pursuing an EUA for nonprescription COVID-19 tests, including the preferred sensitivity, specificity and validations for the tests.

FDA Increases PDUFA Program Fee for Fiscal 2021, Cites COVID Workload

On July 29, the Food and Drug Administration (FDA) announced that it will decrease application costs for its prescription drug user fee program in fiscal 2021, but it will increase overall program fees by about $11,000 over fiscal 2020 levels, for a total of about $336,000. FDA is also increasing medical device user fees across the board in fiscal 2021. FDA estimates it will need a total of $12.56 million in fiscal 2021 to account for staffing needs in its drug and biologics centers. The drug center will need $3.92 million to fund an equivalent of 13 full-time equivalents (FTEs), and the biologics center will need 29 additional FTEs in fiscal 2021, which comes out to about $8.64 million.

CMS to Use Procedure Codes to Track Remdesivir, Plasma Use

On July 30, the Centers for Medicare and Medicaid Services (CMS) announced its plans to put in place new hospital procedure codes starting Aug. 1 that will allow CMS and other insurers to track the use and effectiveness of COVID-19 treatments in real time. The ICD-10 codes for hospital inpatient procedures can be reported to Medicare, and other insurers may also use them to identify when COVID-19 therapies are used and to help facilitate monitoring and data collection.

CMS to Pay Providers to Ask Suspected COVID-19 Patients to Isolate

On July 30, the Centers for Medicare and Medicaid Services (CMS) and the Centers for Disease Control and Prevention (CDC) announced Medicare and Medicaid will pay providers to ask that beneficiaries self-isolate as they await results of COVID-19 tests. CMS says modeling shows early isolation can reduce COVID-19 transmission by up to 86 percent. Providers testing patients for COVID-19 also should discuss the importance of the patient’s informing their immediate household that they also need to be tested for COVID-19, and should review the signs, symptoms and services available to those isolating at home. CMS also put out a counseling checklist for providers.

Find more information here.

CMS Announces Average Basic Premium for Medicare Part D

On July 29, the Centers for Medicare and Medicaid Services (CMS) announced the average basic premium for Medicare Part D prescription drug plans, which cover prescription drugs that beneficiaries pick up at a pharmacy. The average basic Part D premium will be $30.50 in 2021. The 2021 and 2020 average basic premiums are the second lowest and lowest, respectively, average basic premiums in Part D since 2013.

Find more information here.

CMS Ends Flexibility on Document Verification for Special Enrollment

On July 29, the Centers for Medicare and Medicaid Services (CMS) said it will no longer allow consumers to enroll in an Affordable Care Act (ACA) plan through healthcare.gov without document verification, ending flexibility CMS had offered for the past few months. The flexibility ended as of July 16.

OMB Reviewing FDA’s Proposed Rule to Amend “Intended Use” Definition

On July 28, the Office of Management and Budget (OMB) reviewed a Food and Drug Administration (FDA) proposed rule that clarifies what evidence the FDA will consider when determining a product’s intended use. FDA sent its notice of proposed rulemaking, “Amendments to ‘Intended Use’ Regulations,” to OMB weeks after listing the proposal in its spring 2020 Unified Agenda. The rule aims to describe the types of evidence that may be considered when determining a medical product’s intended uses.

Proposed Regulations/Guidance

FDA Seeks Input on Proposed “Right To Try” Reporting Requirements

On July 23, the Food and Drug Administration (FDA) proposed annual reporting requirements for drug manufacturers who provide investigational drugs to patients under the Right to Try pathway. The FDA proposes the reports be submitted separately from investigational new drug application reports, and it asks stakeholders for input on which entities should be responsible for submitting the annual Right to Try summary reports. The proposed rule is required under the Right to Try Act, which mandates companies that make their investigational drugs available through that pathway submit annual summaries to FDA. FDA then will make a consolidated version of those reports publicly available.

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

CMS: Calendar Year 2021 Payment and Policy Changes for Home Health Agencies and Calendar Year 2021 Home Infusion Therapy Benefit

On June 25, the Centers for Medicare and Medicaid Services (CMS) proposed to permanently expand home health telehealth options, initially approved for use during the COVID-19 pandemic, as part of its proposed 2021 home health pay rule. The rule would also implement new wage index calculations while capping cuts that could be tied to those calculations. According to CMS, home health agencies would see a 2.6 percent Medicare pay bump under the rule. The proposal updates the home health wage index, but also includes a 5 percent cap on decreases in a geographic area’s wage index value for 2021.

Find the proposed rule here. Public comments are due by Aug. 31, 2020.

Final Regulations/Guidance

CMS Finalizes Certain Provider Rules

On July 31, the Centers for Medicare and Medicaid Services (CMS) finalized three Medicare payment rules inpatient psychiatric facilities (IPF), skilled nursing facilities (SNF) and hospices.

Fiscal Year 2021 Final Medicare Payment and Policy Changes for Inpatient Psychiatric Facilities (CMS-1731-F)

This rule updates Medicare payment policies and rates for the IPF Prospective Payment System (PPS) for Fiscal Year (FY) 2021. In this final rule, CMS is finalizing a 2.2 percent payment rate update and finalizing its proposal to adopt revised Office of Management and Budget (OMB) statistical area delineations resulting in wage index values being more representative of the actual costs of labor in a given area.

Find the rule here

Fiscal Year 2021 Payment and Policy Changes for Medicare Skilled Nursing Facilities (CMS-1737-F)

This final rule updates the Medicare payment rates and the quality programs for skilled nursing facilities (SNFs). These updates include routine technical rate-setting updates to the SNF PPS payment rates, as well as finalizes adoption of the most recent OMB statistical area delineations and applies a 5 percent cap on wage index decreases from FY 2020 to FY 2021.

Find the rule here.

Fiscal Year 2021 Hospice Payment Rate Update Final Rule CMS-1733-F

For FY 2021, hospice payment rates are updated by the market basket percentage increase of 2.4 percent ($540 million). Hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to the annual market basket percentage increase for the year.

Find the rule here.


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

Circuit Court: CMS Has Authority to Cut 340B Hospitals’ Drug Pay

On July 31, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the Centers for Medicare and Medicaid Services (CMS) has authority to cut 340B hospitals’ Part B drug reimbursement rates by almost 30%, reversing a federal district court decision that got rid of the cuts. A third judge of the court, however, disagreed and said Congress did not appear to allow CMS to cut pay for a subset of hospitals without first gathering the necessary data. Chief Judge Sri Srinivasan wrote in the majority opinion that the Department of Health and Human Services (HHS) relied on data of undisputed reliability when setting out cuts to the 340B hospitals’ drug reimbursement and, as such, the cuts were reasonable. Judge Cornelia Pillard’s dissent argued that CMS’ action cannot be squared with the text of the hospital outpatient pay statute, and CMS needed to stay with the statutory default pay rate if it did not gather specific acquisition cost data from the 340B hospitals.

District Judge Blocks Public Charge Rule Throughout COVID-19 Emergency

On July 29, U.S. District Judge George Daniels of the Southern District of New York blocked the Trump administration from implementing, enforcing or applying the Public Charge Rule nationwide throughout the declared COVID-19 public health emergency. The rule, finalized in August, expands federal immigration authorities’ ability to deny green cards or visas to legal immigrants based on their potential use of government benefits, including Medicaid.


GAO: COVID-19 Contracting – Observations on Federal Contracting in Response to the Pandemic

On July 29, the Government Accountability Office (GAO) released a report on federal agencies awarded $17.8 billion in contracts as of mid-June 2020 for critical goods and services supporting responses to the COVID-19 pandemic. The Departments of Health and Human Services, Homeland Security, Defense, and Veterans Affairs accounted for 85 percent of the money awarded in contracts. About $11 billion was awarded in contracts for goods, such as ventilators, gowns and N95 respirators, to treat coronavirus patients and protect health care workers. The agencies awarded about $9.4 billion in contracts without competition, often citing urgency as the reason.

Find the full report here.

GAO: Over-the-Counter Drugs – Information on FDA’s Regulation of Most OTC Drugs

On July 29, the Government Accountability Office (GAO) released a report on how over-the-counter drugs followed requirements called “monographs” for each category of drugs (e.g., sunscreen or cough and cold medicine). To update a monograph, the Food and Drug Administration (FDA) allowed the federal rulemaking process, which could take years. GAO’s report covers the FDA’s announcing this process and insufficient resources limited its ability to quickly respond to safety issues. In March 2020, the CARES Act gave FDA new tools to regulate these over-the-counter drugs, such as a new process for updating and finalizing requirements authority for FDA to collect user fees to support its activities in an expedited process for addressing serious safety issues.

Find the full report here.

GAO: Public Health Preparedness – HHS Has Taken Some Steps to Implement New Authority to Speed Medical Countermeasure Innovation

On July 29, the Government Accountability Office (GAO) released a report on the COVID-19 pandemic and other infectious disease outbreaks that have raised concern about the nation’s ability to prevent, respond to or mitigate potential public health emergencies.

Congress allowed the Department of Health and Human Services (HHS) to partner with a private, nonprofit entity to work on this problem. The nonprofit can use venture capital practices to invest in companies developing promising, innovative medical countermeasures (i.e., drugs, vaccines and devices to prevent or address potential threats). GAO found that HHS has developed preliminary plans for structuring and overseeing the partnership but had not chosen a partner as of July 2020.

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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