Washington Healthcare Update

June 28, 2021

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This week in Washington: Infrastructure deal struck, but it still has a long road ahead to passage; Senate Budget Committee discussed draft resolution with health initiatives included.

Upcoming Hearings/Markups





Proposed Rules



Upcoming Hearings/Markups

July 1

House Oversight and Reform, Subcommittee on the Coronavirus Crisis Hearing: “Building Trust and Battling Barriers: The Urgent Need to Overcome Vaccine Hesitancy”
9:30 a.m.



Cures 2.0 Draft Released

On June 22, Reps. Diana DeGette and Frank Upton (R-MI) released draft legislation that would create an Advanced Research Projects Agency for Health (ARPA-H) and authorize more than $6.5 billion to run the agency. The draft bill also aims to make innovative health care technologies more available, increase diversity in clinical trials, require the FDA to expand the collection of real-world evidence, provide training programs for caregivers, provide patients greater access to health information and increase access to telehealth services for patients under government-based health programs.

A summary of the draft legislation can be found here.

House Appropriations Subcommittee Approves Bill to Increase FDA Funding

On June 25, the House Appropriations Committee Subcommittee on Agriculture, Rural Development, and the Food and Drug Administration (FDA) approved legislation that would allocate $3.47 billion in federal spending to the FDA in fiscal year 2022, a $257 million increase from 2021. The legislation would give the FDA’s drug center $2.1 billion, with a minimum of $8.5 million designated for surprise foreign inspection pilots. In addition, the Center for Biologics Evaluation and Research would receive $454 million, and the medical devices center would receive $652 million. The bill will be sent on to a full committee vote next week.

A draft of the appropriations legislation can be found here.

House Panels Request Information about J&J and AstraZeneca’s Response to Emergent’s Response to Contaminated COVID-19 Vaccines

On June 22, House Oversight Chair Carolyn Maloney (D-NY) and House Coronavirus Crisis Chair Jim Clyburn (D-SC) wrote to the chief executives of AstraZeneca and Johnson & Johnson (J&J), asking them to explain their agreements with Emergent BioSolutions in an effort to better understand how the contractor contaminated millions of COVID-19 vaccines. In the letters, Reps. Maloney and Clyburn state that the Baltimore contract manufacturer Emergent was warned multiple times about manufacturing problems and insufficient controls at the facility but failed to act. Manufacturing of the J&J COVID-19 vaccine at the Emergent facility was halted by the FDA in April after ingredients from the AstraZeneca vaccine contaminated a batch of the J&J vaccine. Emergent had to destroy 85 million doses as a result. The committee chairs instructed J&J and AstraZeneca to respond to the letters by July 6.

The letter to Dr. Pascal Soriot, AstraZeneca CEO, can be found here. The letter to Alex Gorsky, J&J CEO, can be found here.


Senate Budget Draft Resolution Would Add to Medicare

A Senate Democratic discussion budget outline would result in a roughly $6 trillion package of gross spending increases that on net would add $3 trillion to deficits over the next decade. That’s far more than the roughly $850 billion in bigger deficits over 10 years that President Biden had proposed.

Among the health care proposals included in the budget are the inclusion of new Medicare dental and vision benefits and dropping Medicare’s eligibility age to 60. In addition, the health care spending would be offset by $617 billion obtained through Medicare drug price negotiation authority and other drug pricing savings.

A budget resolution is a broad outline of spending and taxing priorities and is not a law. Authorizing committees would have to pass legislation to actually enact the new programs envisioned in the resolution.

Sen. Wyden Releases Principles for Drug Pricing Reform

On June 22, Senate Finance Committee Chair Ron Wyden (D-OR) released a document outlining a proposal to reduce prescription drug prices. The proposal includes provisions that would allow Medicare to negotiate with pharmaceutical companies and apply lower prices to private and public insurance programs. In the document, Sen. Wyden’s plan also includes measures to block a Trump-era ban on rebates and protect small biotechnology companies.

Sen. Wyden’s Principles for Drug Pricing Reform document can be found here.

Better Care Better Jobs Act Introduced

On June 24, a group of Democratic senators introduced the Better Care Better Jobs Act, which would increase Medicaid funding for home and community-based services (HCBS) in line with President Biden’s vision laid out in the American Rescue Plan. The bill was introduced by Sens. Bob Casey (D-PA), Ron Wyden (D-OR), Chuck Schumer (D-NY), Patty Murray (D-WA), Tammy Duckworth (D-IL), Maggie Hassan (D-NH) and Sherrod Brown (D-OH).

A House companion bill was introduced by Reps. Debbie Dingell (D-MI), Frank Pallone (D-NJ), Jan Schakowsky (D-IL) and Doris Matsui (D-CA).

The bill can be found here.

Bipartisan VALID Act Introduced

On June 24, the Verifying Accurate Leading-edge IVCT Development (VALID) Act of 2021 was introduced in the Senate by Sens. Richard Burr (R-NC) and Michael Bennet (D-CO) and in the House by Reps. Diana DeGette (D-CO) and Larry Bucshon (R-IN). The bill, which was first introduced in 2020, would create a new framework for regulating diagnostic tests. The 2021 version of the bill would also remove pre-approval requirements during public health emergencies.


White House Says U.S. Will Not Meet July 4 Vaccination Goal

On June 22, the White House announced that it would not reach its goal of vaccinating 70 percent of Americans by July 4 due to hesitancy in young adults aged 18-26. The U.S. came very close to meeting the goal, as 70 percent of adults 27 and older will have received at least one COVID-19 vaccine shot by July 4. White House COVID-19 response coordinator Jeff Zients said it will take several additional weeks to reach the 70 percent mark for all adults. The White House stated it would increase its outreach efforts to young adults to overcome hesitancy.

Biden Administration Seeks Comments on Health Plan Rx Drug Reporting

On June 23, the departments of Labor, Treasury and Health and Human Services (HHS) and the Office of Personnel Management (OMB) issued a request for information (RFI) on Section 204 of the December spending bill that requires group health plans, including the Federal Employees Health Benefits Program and any insurers offering group or individual plans, to report on pharmacy benefits and drug costs. The administration says the information will be used to draft a rule, and the information ultimately collected will help plans and insurers negotiate lower prescription rates.

The RFI was published in the Federal Register on June 23 and comments are open for 30 days. The request can be found here.

FDA Issues Emergency Use Authorization for Drug to Treat COVID-19

On June 24, the Food and Drug Administration (FDA) issued an emergency use authorization (EUA) for the drug Actemra (tocilizumab) for the treatment of hospitalized adults and pediatric patients receiving systemic corticosteroids and who require supplemental oxygen, mechanical ventilation or extracorporeal membrane oxygenation (ECMO). The FDA stated that Actemra, when used in addition to the routine care patients receive for COVID-19, was shown to reduce the risk of death and decrease hospitalization time. Actemra is not authorized for COVID-19 outpatients.

FDA to Add Warning to Fact Sheets for Pfizer’s and Moderna’s COVID-19 Vaccines

On June 23, a Food and Drug Administration (FDA) official stated that the agency would move rapidly to add a warning sheet for Pfizer’s and Moderna’s COVID-19 vaccines regarding the very small risk of developing inflammatory heart conditions. The conditions are rare, with approximately 1,200 cases under investigation out of the more than 150 million people who have received the Pfizer or Moderna vaccine.

FDA Releases Memos That Reveal Disagreement Over Aducanumab Approval

On June 23, the Food and Drug Administration (FDA) released memos that show that agency reviewers disagreed over whether to give Biogen’s Alzheimer’s drug aducanumab accelerated approval. The memos stated that biostatistic office officials argued against approving aducanumab but were overruled by higher-level officials from the drug and biologics centers. The FDA approved aducanumab on June 7 despite its own advisory panel’s unanimously voting to reject it, concluding that the drug’s benefits outweighed the risks.

OIG Report Found That 40 Percent of Nursing Home Residents Had or Likely Had COVID-19

On June 22, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) released a report that stated that 40 percent of Medicare beneficiaries in nursing homes had or likely had COVID-19. The report notes that Black, Hispanic and Asian beneficiaries were more likely to have contracted COVID-19 than white beneficiaries.

The full report can be found here.

CMS Administrator Revokes Medicaid Waivers in Two States

On June 24, the administrator of the Centers for Medicare and Medicaid Services (CMS) Chiquita Brooks-LaSure sent letters to officials in Indiana and Arizona formally revoking permission for their states to require that some low-income individuals work, volunteer or attend school to receive Medicaid coverage. CMS has previously rescinded Medicaid work waivers in four other states, and the Biden administration has stated that these waivers make it harder for people to get health care and do not promote the objectives of Medicaid.

Proposed Rules

CMS Issues Proposed Rule to Delay Medicaid Multiple Best Price Policy

On May 26, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that would delay the Medicaid Multiple Best Price Policy implementation for six months. The Medicaid Multiple Best Price Policy would require manufacturers to report multiple best prices for a drug under Medicaid if the drug manufacturer is participating in a value-based purchasing arrangement.

The original rule, which was finalized on Dec. 31, 2020, would have implemented the requirements on Jan. 21, 2022, but the Biden administration’s proposed rule would delay the implementation until July 1, 2022.

The most recent proposed rule, titled “Medicaid Program; Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements: Delay of Effective Date for Provision Relating to Manufacturer Reporting of Multiple Best Prices Connected to a Value Based Purchasing Arrangement; Delay of Inclusion of Territories in Definition of States and United States,” can be found here.

CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals

On April 27, the Centers for Medicare and Medicaid Service (CMS) issued a proposed rule titled “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program.”

The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for fiscal year (FY) 2022. CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for IPPS hospitals and LTCHs on an annual basis. A fact sheet that discusses major provisions of the proposed rule can be downloaded from the Federal Register here

The public comment period closes on June 28.

The rule can be found here.

CMS Interim Final Rule Requires LTC Providers to Report Vaccination Rates and Educate Staff and Residents

On May 11, the Centers for Medicare and Medicaid Services released an interim final rule titled “COVID-19 Vaccine Requirements for Long-Term Care Facilities and Intermediate Care Facilities for Individuals with Intellectual Disabilities Residents, Clients, and Staff.”

The rule requires long-term care (LTC) facilities and intermediate care facilities treating individuals with intellectual disabilities to submit weekly reports on the COVID-19 vaccination status of residents and staff. In addition, the interim final rule requires LTC and intermediate care facilities to educate residents and staff about the vaccine and offer shots when supplies are available.

There is a 60-day comment period.

The rule can be found here.


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

Supreme Court Declines to Take Up Insurers’ CSR Case

On June 21, the Supreme Court denied health insurance companies’ bid to seek full reimbursement from the government for the Affordable Care Act’s (ACA) cost-sharing reductions (CSRs). The appeals were brought by private insurers Maine Community Health Options, Community Health Choice and Common Ground Healthcare Cooperative. The insurers argued that they were owed millions of dollars for each year they did not receive payments the governments had pledged to make under the ACA. The recent decision leaves in place an August 2020 U.S. Court of Appeals for the Federal Circuit ruling that the insurers’ reimbursement for money owed could be offset by premium tax credits.

At issue are the cost-sharing reductions (CSRs) that certain silver-level ACA plans provide to low-income individuals. The Obama administration paid the CSRs out of the money used for the ACA’s premium tax credits, but the Trump administration stated that this was illegal since Congress never appropriated the funds, and the payments were stopped in October 2017. After the payments ended, insurers utilized a process, called “silver-loading,” that allowed them to mitigate CSR losses by increasing premiums for silver-tier plans.


GAO Report on Medicare-Funded Graduate Medical Education at Teaching Hospitals

On June 21, the U.S. Government Accountability Office (GAO) released a report titled “Physician Workforce: Caps on Medicare-Funded Graduate Medical Education at Teaching Hospitals.” The report states that Medicare caps both direct and indirect graduate medical education (GME) payments to teaching hospitals. In 2018, 70 percent of hospitals were above one or both caps on Medicare-funded residents, and 20 percent of hospitals were under one or both caps. The report notes that for both payment types, hospitals funded more slots than they left unfilled, but Medicare still funded a majority of resident slots.

The full report can be found here.

GAO Report on COVID-19 Testing in the Federal Air Marshal Service

On June 23, the Government Accountability Office (GAO) released a report titled “COVID-19: Federal Air Marshal Service Should Document Its Response to Cases and Facilitate Access to Testing.” The report notes that air marshals work at airports and on airplanes, where they routinely come in close contact with other people. Despite the steps taken by the U.S. Federal Air Marshal Service to protect employees, 345 employees were infected with COVID-19 and one air marshal died as of Jan. 2021. The GAO report recommended that the Service better document how it responds to COVID-19 cases among employees and makes testing available.

The full 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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