Washington Healthcare Update

April 26, 2021

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This week in Washington: Andrea Palm’s nomination for HHS Deputy Secretary Advances out of Senate Finance Committee, Chiquita Brooks-LaSure’s nomination deadlocked.

Upcoming Hearings/Markups





Proposed Rules



Upcoming Hearings/Markups

April 28

Senate Committee on Health, Education, Labor and Pensions Hearing: “Examining Our COVID-19 Response: Using Lessons Learned to Address Mental Health and Substance Use Disorders”
10:00 a.m.
For more information, click here.

Senate Appropriations Committee Subcommittee on the Interior, Environment, and Related Agencies Hearing: “Addressing Health Disparities in Indian Country: Review of the Indian Health Service’s COVID Response and Future Needs”
10:00 a.m.
For more information, click here.

Senate Appropriations Committee Subcommittee on Military Construction, Veterans Affairs, and Related Agencies Hearing: “VA Telehealth Program: Leveraging Recent Investments to Build Future Capacity”
3:00 p.m.
For more information, click here.

May 4

House Energy and Commerce Committee Hearing: “To Discuss the Reintroduction of the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3)”


House Republicans Introduce Drug Pricing Legislation

On April 21, Reps. Cathy McMorris Rodgers (R-WA), Kevin Brady (R-TX) and Virginia Foxx (R-NC) introduced the Lower Costs, More Cures Act (H.R. 19), which aims to reform drug pricing. In a letter, the representatives called on their Republican colleagues to support their legislation and oppose House Speaker Nancy Pelosi’s Elijah Cummings Lower Drug Costs Now Act (H.R. 3). The letter states that H.R 3 would make the U.S. more reliant on China and lead to fewer cures.

The Lower Costs, More Cures Act would provide out-of-pocket cap and insulin cost cap for seniors in the Medicare Part D program, increase drug price transparency and reduce cancer treatment costs for Medicare beneficiaries, among other measures.

The letter can be found here.

The text of the Lower Costs, More Cures Act of 2021 can be found here.

House Passes Bill to Extend Schedule 1 Classification for Fentanyl-Related Substances

On April 21, the House passed a bipartisan bill to authorize a five-month extension on emergency scheduling of fentanyl-related substances, which classifies the analogues as Schedule 1 drugs. In 2018, the Drug Enforcement Administration (DEA) temporarily scheduled fentanyl-related substances as Schedule 1 substances. Classifying fentanyl-related substances as Schedule 1 designates them as illicit drugs with high potential for abuse and no potential medical use. The scheduling was set to expire on May 6, 2021.If the House bill is enacted, the Schedule 1 designation for fentanyl-related substances will expire on Oct. 22, 2021.

House Energy and Commerce Democrats Reintroduce Prescription Drug Pricing Bill

On April 22, Reps. Frank Pallone (D-NJ), Richard Neal (D-MA) and Bobby Scott (D-VA) reintroduced the Elijah Cummings Lower Drug Costs Now Act (H.R. 3). The bill would allow the federal government to negotiate the cost of prescription drugs and cap seniors’ out-of-pocket costs for prescription drugs, among other things. The House passed H.R. 3 with bipartisan support in 2020.

The House Energy and Commerce Committee will hold a hearing on the bill May 4. The White House is reluctant to include drug pricing in the infrastructure package as it might not have the Senate votes to pass.


Senate Finance Committee Deadlocked on Advancing Nomination of Brooks-LaSure for CMS Administrator

On April 22, the Senate Finance Committee voted 14-14 along party lines to advance the nomination of Chiquita Brooks-LaSure for Centers for Medicare and Medicaid Services (CMS) administrator. The vote came after committee Republicans criticized the Biden administration’s decision to revoke Texas’s 10-year extension of an 1115 Medicaid waiver. The waiver, which had allowed Texas to use federal funding to increase its uncompensated care pool, was revoked on April 16.

Earlier this week, Sen. John Cornyn (R-TX) asked that the Senate Finance Committee vote be delayed to give him time to meet with the White House chief of staff to discuss the Texas 1115 Medicaid waiver revocation, but the vote was not postponed. Sen. Cornyn put a hold on Brooks-LaSure’s floor vote confirmation on April 21. The hold, which is a request to temporarily block a vote from coming to the floor, can be either approved or denied by the majority leader.

The Senate Finance Committee advanced the nomination of Andrea Palm for deputy secretary of the Department of Health and Human Services (HHS) out of the committee.

The tie vote for Brooks-LaSure’s nomination requires Senate Majority Leader Chuck Schumer (D-NY) to file a discharge petition to bring the nomination before the full Senate.

Senate Democrats Introduce Bill to Expand Medicare to Individuals From 50-64

On April 21, Democratic Sens. Debbie Stabenow (D-MI), Sherrod Brown (D-OH) and Tammy Baldwin (D-WI) introduced the Medicare at 50 Act, which would allow adults from ages 50-64 to buy in to Medicare. The legislation comes as some Democrats express support for congressional action to strengthen public health programs in the next legislative package, rather than putting all savings into the Affordable Care Act (ACA). President Biden campaigned on providing Medicare for people age 60 and up.

The Medicare at 50 Act is cosponsored by Sens. Jeff Merkley (D-OR), Tina Smith (D-MN), Jack Reed (D-RI), Ben Cardin (D-MD), Chris Van Hollen (D-MD), Gary Peters (D-MI), Tammy Duckworth (D-IL), Richard Blumenthal (D-CT), Jeanne Shaheen (D-NH), Amy Klobuchar (D-MN), Dick Durbin (D-IL), Kirsten Gillibrand (D-NY), Ed Markey (D-MA) and Bob Casey (D-PA).

The Medicare at 50 Act was previously introduced in 2019.

Democratic Senators Introduce Bill to Let Employers Buy in to New Medicare Part E

On April 15, Sens. Chris Murphy (D-CO), Jeff Merkley (D-OR) and Dianne Feinstein (D-CA) introduced the Choose Medicare Act that would create a new Medicare Part E that would be available to individuals on the Affordable Care Act (ACA) exchanges. The bill would provide the Department of Health and Human Services (HHS) with $2 billion to develop a Medicare E plan that would cover all 10 essential health benefits required under the ACA and items and services covered by Medicare. The bill would also extend the ACA’s tax credits and cost-sharing subsidies, cap Medicare out-of-pocket costs and allow Medicare to negotiate drug prices.

The legislation was cosponsored by Sens. Richard Blumenthal (D-CT), Brian Schatz (D-HI), Tammy Baldwin (D-WI), Tina Smith (D-MN), Jeanne Shaheen (D-NH), Tammy Duckworth (D-IL), Chris Van Hollen (D-MD), Richard Durbin (D-IL) and Jack Reed (D-RI).

A summary of the bill can be found here.


CMS Revokes Texas’s 1115 Waiver

On April 16, the Centers for Medicare and Medicaid Services (CMS) revoked a 10-year extension of the Section 1115 waiver granted to Texas by the Trump administration. The waiver includes federal funding for the state’s uncompensated care funding pool that reimburses hospitals for caring for the uninsured. CMS stated that the waiver was being revoked because Texas did not hold the normal notice and comment process for its plans to renew the uncompensated care funding or provide reasoning for skipping that step. Texas had originally stated the comment period would be bypassed because of the COVID-19 public health emergency, but CMS stated that the state’s request did not explain how the extension was related to COVID-19 or why the circumstances constituted an emergency. The waiver is now set to expire Sept. 30, 2022.

CMS Plans to Recalculate Pass-Through Funding for Reinsurance Programs

In a recently released document, the Centers for Medicare and Medicaid Services (CMS) stated it will recalculate the federal pass-through funding available to states that are administering reinsurance programs under an Affordable Care Act (ACA) Section 1332 waiver to account for the changes expected due to increased tax credits from the American Rescue Plan and the additional special enrollment period.

Section 1332 of the ACA permits states to waive certain parts of the law to conduct their own reforms and collect related federal savings that result from those reforms. CMS has approved waivers for 12 states to run a reinsurance program, and estimates of federal pass-through dollars that states would receive were made in February. Since this estimate was made prior to the announcement of the special enrollment period and the American Rescue Plan, which increased tax credits, states have requested that the departments of Health and Human Services (HHS) and Treasury recalculate this funding.

In the document, CMS states it plans to inform states about the new funding estimates shortly.

HHS Announces CMS Will Offer Navigators $80 Million for Plan Year 2022

On April 21, the Department of Health and Human Services (HHS) stated that the Centers for Medicare and Medicaid Services (CMS) would make $80 million available in grants to Navigators in federal marketplaces for plan year 2022. The 2022 funding represents a substantial increase from the Trump administration levels and will be used for outreach and education efforts. CMS also reported that 12 million people signed up through healthcare.gov or state-based exchanges during the 2021 open enrollment period, an increase of 5 percent from the year prior.

HHS Joins With Organizations to Encourage Latino Enrollment in ACA Coverage

The Department of Health and Human Services (HHS) is partnering with a number of national organizations, including the insurance lobby, Young Invicibles, Voto Latino Foundation and AARP to support outreach efforts to the Latino community during healthcare.gov’s special enrollment period (SEP), which lasts until Aug. 15.

During Latino Action Week (April 18-24) and beyond, these organizations will send targeted messages to the Latino community and engage with the press. HHS also launched a marketing campaign in Spanish and English to spread the message that the exchanges are open and subsidies are available.

White House Offers Tax Credits to Businesses to Increase Employee Vaccinations

On April 21, the Biden administration stated it would reimburse small- and medium-size businesses for any paid time off given to employees who get vaccinated and need time off to recover from any side effects. With the tax credit, businesses will be reimbursed up to $511 per employee per sick day, up to 80 hours or 10 work days, between April 1 and Sept. 30.

FDA to Allow Some COVID-19 Tests to Make Pooled Serial Screening Claims

On April 20, the Food and Drug Administration (FDA) stated it will allow specific authorized COVID-19 tests to be used to test large groups of asymptomatic people on a regular basis if developers can certify that they have validated the tests for pooling. Pooling is the process of combining multiple specimens together to test groups of people more quickly. The FDA stated that this will increase the U.S.’s COVID-19 testing capacity.

In addition, the FDA also issued an amendment to all currently authorized COVID-19 molecular diagnostic tests, stating that once these tests are self-validated for pooling, they can be added to a list of tests that can be used for serial screening programs.

Developers seeking authorization must submit a notification to the FDA with information about their test, pooling procedures and validation data.

FDA Inspection Finds That Emergent May Have Contaminated More Batches of Johnson & Johnson Vaccine

In an April 21 statement, the Food and Drug Administration (FDA) detailed its findings from the most recent inspection of Emergent BioSolutions’ Baltimore facility. The report states that Emergent failed to conduct a thorough investigation into how ingredients from AstraZeneca’s COVID-19 vaccine contaminated the Johnson & Johnson vaccine. FDA observed there is no guarantee that additional Johnson & Johnson batches were not cross-contaminated at the facility.

The FDA observed nine violations in total during its inspection, which ran from April 12-20. In addition to the vaccine cross-contamination issue, the FDA also found that the facility was unsanitary, had inadequate building design, mishandled product components and had poor training practices, among other complaints. Operations at the Baltimore facility were halted on April 19. The FDA states it is working with Emergent to resolve the issues identified in the report, and will not release any product made at the facility until appropriate standards are met.

Federal officials confirmed earlier this month that the Baltimore Emergent facility had contaminated 15 million doses of Johnson & Johnson’s one-dose COVID-19 vaccine with ingredients from AstraZeneca’s two-dose vaccine.

Proposed Rules

CMS Issues Proposed Rule on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities

On April 8, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule titled “Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year (FY) 2022. In the rule, CMS proposes increasing skilled nursing facilities’ (SNF) pay a net 1.3 percent, or $444 million, in FY 2022, and to add two new quality reporting measures in FY 2021: vaccination rates among health care workers and health care–acquired infections.

The proposed rule also asks for public comments on potential ways to readjust the Patient Driven Payment Model (PDPM), a patient payment classification system created in 2019 to be budget-neutral but that data shows caused an unintended $1.7 billion increase in payments in fiscal 2020. It is possible that the data was affected by the COVID-19 pandemic.

CMS proposes to add a new claims-based measure, Healthcare-Associated Infections (HAI), to the quality reporting, which would use Medicare fee-for-service claims data to estimate the rate of health care–associated infections acquired during nursing home care that result in hospitalization. The goal is to assess which nursing homes have higher rates of infections acquired during care. The proposed rule also suggests several changes to the SNF Quality Reporting Program and seeks feedback on plans to define digital quality measures for the program. The proposed rule would also alter the SNF Value-Based Purchasing Program, which offers incentive payments to nursing homes based on the quality of care.

Public comments on the proposed rule will be accepted until June 7.

The rule can be found here.

CMS Issues Proposed Rule Updating Hospice Payment and Cap Increase

On April 8, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule titled “Medicare Program: FY 2022 Hospice Wage Index and Payment Rate Update, Hospice Conditions of Participation Updates, Hospice and Home Health Quality Reporting Program Requirements.” The proposed rule would increase payments in FY 2022 by 2.3 percent, or $530 million. Providers that do not meet the quality reporting requirements will receive a 2 percentage point reduction to their annual market basket update. The proposed rule also would increase the aggregate payment cap from $30,683.93 in 2021 to $31,389.66 for fiscal year 2022, a 2.3 percent increase.

The proposed rule would also revise the labor shares based on the compensation cost weights for each level of care, with labor share at 74.6 percent for continuous home care, 64.7 percent for routine home care, 60.1 percent for inpatient respite care and 62.8 percent for general inpatient care. In addition, the proposed rule would make the pseudo-patient waiver for hospice aide competency testing permanent and let pseudo-patients be used for hospice aide competency training. It would also have hospices conduct a competency evaluation related to whatever deficiencies and related skills a hospice aide supervisor noted. Also, the rule would allow CMS to modify the Hospice Quality Reporting Program by adding measures meant to promote health equity measures.

Comments are accepted until June 7.

The proposed rule can be found here.

CMS Issues Proposed Rule on Inpatient Rehabilitation Facility Prospective Payment System

On April 7, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2022 and Updates to the IRF Quality Reporting Program.” The proposed rule would update Medicare payment policies and rates for facilities under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for fiscal year (FY) 2022. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for IRFs on an annual basis.

For FY 2022, CMS proposes to update the IRF PPS payment rates by 2.2 percent based on the proposed IRF market basket update of 2.4 percent, less a 0.2 percentage point multi-factor productivity (MFP) adjustment. IRFs that do not meet reporting requirements are subject to a 2 percentage point (2.0 percent) reduction in their annual increase factor. With the objective of advancing racial equity, CMS plans to utilize several social determinants of health measures and is seeking feedback. In addition, the rule proposes using COVID-19 vaccination coverage measures and updating transfer of health (TOH) information to determine quality of care.

Comments are accepted until June 7.

The proposed rule can be found here.


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

National Health Law Program Sues to Overturn Trump Administration Approval of Tennessee Funding Demo

On April 22, the National Health Law Program sued to overturn a Trump administration decision to approve Tennessee’s capped Medicaid funding demonstration without giving those affected the required public comment period.

Former CMS administrator Seema Verma approved the Tennessee demonstration in January 2021 shortly before the Trump administration left office. Under the demonstration, Tennessee will have a capped funding amount for its Medicaid program and can reinvest savings into other health programs. The waiver also allows Tennessee to change its program without CMS approval as long as the same level of coverage is maintained.

The lawsuit argues that the public did not have a chance to comment on the demonstration as is required, and that the demonstration was not truly put together when it was approved by CMS.


GAO Report on Emergency Return of U.S. Citizens During the Pandemic

In an April 19 report, the Government Accountability Office (GAO) noted that the Department of Health and Human Services (HHS) experienced coordination and safety issues in its attempt to return or repatriate U.S. citizens who were abroad at the beginning of the COVID-19 pandemic. The report observes that HHS component agencies, the Administration for Children and Families, the Office of the Assistant Secretary for Preparedness and Response, and the Centers for Disease Control and Prevention, did not follow guidance that delineated their roles and responsibilities for repatriating individuals during a pandemic. Problems that resulted due to lack of clarity about roles and responsibilities included: confusion about what agency was in charge of the first repatriation flight from Wuhan, China, HHS delay in issuing its federal quarantine order and HHS personnel’s inconsistent use of personal protective equipment (PPE).

In the report, the GAO recommends that HHS revise or develop new emergency repatriation response plans to clarify agency roles and responsibilities during a pandemic, and plan and conduct repatriation exercises with relevant stakeholders.

The complete report can be found here.

GAO Report on NIH and Foreign Influence

In an April 22 report, the Government Accountability Office (GAO) stated that the National Institute of Health (NIH) can address the threat of undue foreign influence in research by implementing conflict of interest policies and requiring disclosure of potential conflicts. The GAO report found that NIH’s current policy focuses on financial interests but does not specifically address non-financial interests. The GAO recommended that NIH define and address non-financial conflicts of interest in its policy. The report notes that the NIH concurs with this recommendation, and has recently updated its grant application forms to require that applicants disclose more non-financial interests, although NIH has yet to update its conflict of interest policy.

The report can be found here.

GAO Report on Use of Electronic Asset Verification for Medicaid Beneficiaries

On April 23, the Government Accountability Office (GAO) published a report on electronic asset verification for Medicaid beneficiaries who receive Supplemental Security Income (SSI). The report found that individuals who receive assistance from the federal SSI program may also be eligible for Medicaid. Medicaid programs in 42 states and the District of Columbia use the SSI asset limit of $2,000 for an individual or $3,000 for a married couple. Medicaid programs in the remaining eight states can set an asset limit that differs from the SSI asset limit. The Social Security Administration (SSA) administers the SSI program, and state Medicaid programs electronically verify the assets of these individuals to determine financial eligibility.

The report contains an overview of how state Medicaid programs verify assets of applicants who are eligible because they receive SSI and how the SSA verifies SSI applicants.  

The complete report can be found here.

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

Stephanie Kennan, Senior Vice President
Alexandra Gale, 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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