Washington Healthcare Update

October 11, 2021

Pardon Our Dust

We recently launched this new site and are still in the process of updating some of our archived content. Some details of this article may be incomplete, links may be broken, and other elements may not display properly yet. We appreciate your patience and understanding.

This week in Washington: Reconciliation delayed; short-term debt ceiling fix passed.





Proposed Rules




Reconciliation Update

Votes on both the reconciliation package and the infrastructure bill were delayed last week after Democratic party divisions threatened the needed consensus.

Sen. Joe Manchin (D-WV) stated the most he would support spending on a reconciliation package is $1.5 trillion. The reconciliation package is currently $3.5 trillion. Sen. Kyrsten Sinema (D-AZ) has also opposed the reconciliation package. It is possible that healthcare measures included in the earlier version of the bill would be cut or otherwise impacted to reduce overall cost.

Debt Ceiling

On Oct. 7, Senate Republicans and Democrats reached a deal to vote on a short-term extension of the debt ceiling. The full Senate passed the debt ceiling measure on Oct. 7. The House is disrupting its scheduled recess to return on Tuesday to vote on the measure. This short-term measure will raise the debt ceiling until early December.


House Committee Leadership Write to Agencies Regarding ACA Contraceptive Coverage

On Oct.7, four Democratic House committee chairs wrote to the Departments of Health and Human Services (HHS), Labor (DOL) and Treasury to stress that the full range of contraceptives approved by the Food and Drug Administration (FDA) continue to be enforced by the Affordable Care Act. The letter expressed concern that health plans are not fully complying with the requirements, citing cases of coverage denials and extensive requirements that limited access to some FDA-approved contraceptives.

The letter can be found here.


Sens. Cassidy and Murphy Request Stakeholder Input on Mental Health and Substance Use Disorder Programs

On Oct. 5, Sens. Bill Cassidy (R-LA) and Chris Murphy (D-CT) wrote a letter requesting feedback from stakeholders, including patients, families, providers, advocacy organizations and state and local governments, on the effectiveness of certain mental health and substance use disorder programs.

The letter notes that many of the mental health and substance use disorder programs included in the 21st Century Cures Act will have their authorization periods end in fiscal year 2022. The letter requests feedback be directed to the congressional offices no later than Nov. 5, 2021.

The letter can be found here.

Sen. Mike Crapo and Rep. Kevin Brady Request GAO Look into Potential ACA Premium Tax Credit Fraud

On Oct. 5, Sen. Mike Crapo (R-ID) and Rep. Kevin Brady (R-TX) wrote to the Comptroller General, of the Government Accountability Office (GAO), Gene Dodaro requesting that the agency look into potential fraud occurring with the Affordable Care Act’s (ACA) premium tax credit program.

The letter can be found here.


HHS Announces Medicaid Expansion in Missouri

On Oct. 4, the Department of Health and Human Services (HHS) announced that Medicaid expansion has gone into effect in Missouri, making approximately 275,000 more people eligible for the program. Missouri will be eligible for $968 million in federal Medicaid funding in the next two years due to the Medicaid expansion initiatives included in the American Rescue Plan. 

Missouri voters approved a ballot initiative to expand Medicaid coverage to individuals making up to 138 percent of the federal poverty level in August 2020. The process was delayed when state legislators refused to appropriate the funds needed to expand Medicaid. This led to a lawsuit from three Missouri women in the expansion population. In July 2021, the Missouri State Supreme Court upheld the Medicaid expansion.

HHS Announces Climate Adaptation and Resiliency Plan

On Oct. 7, the Department of Health and Human Services (HHS) announced its Climate Adaptation and Resilience Plan. The HHS joins other federal agencies in publishing their climate action plans in compliance with President Biden’s January executive order on climate.

The press release with additional details about the plan can be found here.

HHS Assistant Secretary for Legislation Melanie Anne Egorin Sworn In

On Oct. 7, Health and Human Services (HHS) Secretary Xavier Becerra swore in the new HHS Assistant Secretary for Legislation Melanie Anne Egorin previously served as deputy staff director for the Energy and Commerce Committee’s Health Subcommittee and professional tax staff for the House Ways and Means Committee.

CMS Announces State-Based Exchanges in Three New States

On Oct. 4, the Centers for Medicare and Medicaid Services (CMS) announced that Kentucky, Maine and New Mexico have completed their transition from federally run to state-based marketplace exchanges. CMS said that this will allow 173,000 residents to renew coverage directly through the new state-based marketplaces (SBMs). The three states will join 15 existing SBMs.

New Mexico’s SBM beWellnm launched on Oct. 1. Kentucky’s SBM Kynect and Maine’s SBM CoverMe.gov will be available for shopping on Oct. 15. Plan year 2022 open enrollment period begins on Nov. 1.

CMS’s press release can be found here.

CMS Announces 2022 Medicare Advantage and Part D Star Ratings

On Oct. 8, the Centers for Medicare and Medicaid Services (CMS) released the 2022 Star Ratings for Medicare Advantage (Medicare Part C) and Medicare Part B prescription drug plans. Star ratings are released annually and reflect the experience of people on the plans. The ratings allow Medicare beneficiaries to compare plans.

The press release with additional information can be found here.

FDA Issues Revised Draft Guidance for Hospital and Health System Use of Compounded Drugs

On Oct. 6, the Food and Drug Administration (FDA) issued a revised draft guidance document regarding hospital and health system pharmacies that distribute compounded drugs before receiving patient prescriptions. The new guidance, titled “Hospital and Health System Compounding Under Section 503A of the Federal Food, Drug, and Cosmetic Act,” removes the one-mile radius provision following stakeholder feedback. The draft guidance establishes a new two-part compliance policy that describes circumstances when the FDA does not intend to take action against a hospital or pharmacy that compounds and distributes a drug without receiving a valid prescription from an individual patient first. 

The revised draft guidance can be found here.

FDA Vaccine Advisors to Meet to Vote on Booster COVID-19 Vaccine Doses

On Oct. 1, the Food and Drug Administration (FDA) announced that the agency’s Vaccines and Related Biological Products Advisory Committee will meet on Oct. 14 and 15 to vote on whether to authorize booster doses of Moderna and Johnson & Johnson’s COVID-19 vaccine for individuals aged 18 and above. The advisors will also discuss mixing different vaccines.

Pfizer Requests FDA Authorization for COVID-19 Vaccine for Children Aged 5-11

On Oct. 7, Pfizer submitted a request to the Food and Drug Administration (FDA) to authorize its COVID-19 vaccine for children aged 5-11. If granted, Pfizer’s vaccine would be authorized for people aged 5 and above.

AstraZeneca Asks for FDA EUA Authorization for COVID-19 Antibody Treatment

On Oct. 5, AstraZeneca asked the Food and Drug Administration (FDA) for emergency use authorization (EUA) for its long-acting antibody combination treatment. The treatment offers additional protection from developing COVID-19 symptoms or severe COVID-19 for people in vulnerable groups.

Johnson & Johnson Seeks FDA Authorization of COVID-19 Booster

On Oct. 5, Johnson & Johnson asked the Food and Drug Administration (FDA) to authorize a booster dose of its COVID-19 vaccine for individuals aged 18 and older. Johnson & Johnson stated that a second dose given two months after the first increased protection against moderate to severe COVID-19 to 94 percent.

NIH Director Francis Collins to Step Down by the End of Year

On. Oct. 5, the National Institutes of Health (NIH) announced that NIH Director Dr. Francis Collins would be stepping down by the end of the year. Dr. Collins has served as director for 12 years under three U.S. presidents. No interim director has been announced. The next NIH director will need to be appointed by President Biden and confirmed by the Senate.

The NIH press release can be found here.

DOJ Announces Settlement in Pharmaceutical Companies’ Price-Fixing Allegations

On Oct. 1, the Department of Justice (DOJ) said that three generic pharmaceutical companies agreed to pay a total of $447 million in civil settlements over five years to resolve price-fixing allegations. The DOJ claims that from 2013 to 2015, Taro Pharmaceuticals USA, Sandoz and Apotex used illegal arrangements on prices, supplies and costumer allocation with competitors, which resulted in higher prices for federal healthcare programs. Taro Pharmaceutical will pay $213 million, Sandoz will pay $185 million and Apotex will pay $49 million.

Proposed Rules

CMS Issues Proposed Rule to Repeal Trump-Era Medicare Breakthrough Device Coverage Rule

On Sept. 15, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule that would repeal Medicare Coverage of Innovative Technology (MCIT) and the “Reasonable and Necessary” final rule published Jan. 14, 2021. CMS stated that the rule would be repealed due to patient safety risks posed by requiring CMS to immediately cover devices going through the FDA approval path.

The Trump administration rule automatically granted four years of Medicare coverage to breakthrough devices awarded FDA market authorization. In addition, the rule codified the Medicare definition of “reasonable and necessary.”

Public comments on the proposed rule will be accepted for 30 days.

The proposed rule can be found here.

Air Ambulance Reporting Regulations Proposed

On Sept. 16, the Office of Personnel Management, the Internal Revenue Service, Departments of the Treasury, Labor, Health and Human Services (HHS), Employee Benefits Security Administration and Centers for Medicare and Medicaid Services issued a set of proposed rules to implement provisions of the Consolidated Appropriations Act (CAA) of 2021. The CAA provisions to be enacted include reporting requirements for group health plans, insurers and providers regarding air ambulance services as well as disclosure requirements for agents and brokers for compensation received in connection with the sale of individual health insurance.

The CAA requires air ambulance providers to report information about services, costs, locations and denied claims to HHS and the Department of Transportation. In addition, the proposed rules provide context for reporting requirements to help providers understand potential issues and reporting timelines.

The proposed rules can be found here.

Final Rules

HHS Issues Final Rule to Rescind Trump-Era “Gag Rule” on Title X Grantees

On Oct. 4, the Department of Health and Human Services (HHS) issued a final rule that would rescind a 2019 Trump-era rule that prevented Title X grantees from referring patients for abortion, often referred to as the “gag rule.” The Biden administration had announced its intention to roll back the rule in an April 14 rulemaking, stating that it had decreased the number of Title X grantees by 25 percent and could have led to 181,477 unintended pregnancies.

The rule will go into effect 30 days after publication.

The final rule can be found here.

FDA Issues Final Rules for Premarket Review of New Tobacco Products

On Oct. 4, the Food and Drug Administration (FDA) issued two final rules related to the premarket review of new tobacco products. The rules provide information for the content and review of Premarket Tobacco Product Applications (PMTAs) and Substantial Equivalence (SE) Reports, two pathways commonly used to receive FDA marketing authorization. Both rules will be effective Nov. 4, 2021.

The final rule titled “Premarket Tobacco Product Applications and Recordkeeping Requirements” can be found here.

The final rule titled “Content and Format of Substantial Equivalence Reports; Food and Drug Administration Actions on Substantial Equivalence Reports” can be found here.

The FDA press release on the rules can be found here.

FDA Issues Final Rule on De Novo Pathway for Medical Devices

On Oct. 4, the Food and Drug Administration (FDA) published a final rule titled “Medical Device De Novo Classification Process,” which establishes requirements for the medical device De Novo classification process. The final rule also provides information on how medical device markers can pursue marketing authorization via the De Novo pathway for low and moderate risk devices with no existing predicate comparison device. Although the De Novo pathway has existed since 1997, this rule will be the first to explain the FDA procedures for reviewing De Novo applications and specify what needs to be included in an application.

The rule goes into effect Jan. 3, 2022.

The final rule can be found here.

HHS Issues Final Rule to Rescind 2020 Rule on Insulin and Epinephrine

On Oct. 1, the Department of Health and Human Services (HHS) issued a final rule to rescind a December 2020 final rule titled “Implementation of Executive Order on Access to Affordable Life-Saving Medications.” The Trump-era rule required health centers to pass on 340B discounts for insulin and injectable epinephrine to patients. Health centers had opposed the rule. In its rule to rescind the Trump administration rule, HHS stated that the 2020 rule had excessive administrative costs and burdens for health centers that would have resulted in reduced resources for critical services for patients who use insulin and epinephrine. The rule states that HHS is exploring nonregulatory options to implement the executive order. 

The rule is effective Nov. 1, 2021.

The final rule can be found here.

Part II of Surprise Billing Proposed Interim Rule Issued

On Sept. 30, the Departments of Health and Human Services (HHS), Labor (DOL) and Treasury released an interim final rule with the collaboration of the Office of Personnel Management (OPM). The interim final rule with comment period is titled “Requirements Related to Surprise Billing; Part II” and builds on Part I of the rule issued on July 13, 2021. The Sept. 30 rule establishes new protections for consumers receiving healthcare items and services, and outlines provisions related to the dispute resolution process, good faith estimates for uninsured individuals, the patient-provider dispute resolution process and expanded rights to external review.

Comments will be accepted for 60 days after rule publication.

The interim final rule can be found here.


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

U.S. District Court Judge Blocks Texas Abortion Law

On Oct. 6, a U.S. District Court judge issued a preliminary injunction to block Texas’ recent abortion law, SB 8, in a lawsuit brought by the Biden administration. SB 8 went into effect on Sept. 1 and prohibits abortions after six weeks of pregnancy. The law also allows private citizens to file lawsuits against individuals who help a woman obtain an abortion past the deadline. The Supreme Court voted 5-4 not to block the Texas law from going into effect.

In the Oct. 6 ruling, the federal judge said the law was intentionally designed to be difficult to challenge and prevents women from exercising their right to an abortion. However, since the injunction is temporary, there is still confusion among healthcare providers regarding whether they can still be held liable for abortions performed under the injunction if the law is reinstated at a later date.


GAO Report on Medicare’s Merit-Based Incentive Payment System

On Oct. 1, the Government Accountability Office (GAO) published a report titled “Medicare: Provider Performance and Experiences under the Merit-based Incentive Payment System.” The report states that the Centers for Medicare and Medicaid Services (CMS) administers the Merit-based Incentive Payment System (MIPS) under Medicare, which results in MIPS-eligible providers receiving a score based on their performance in four categories. CMS data shows that provider scores were generally high, with 72 to 84 percent of providers earning an exceptional performance bonus. However, the report notes some challenges in the MIPS system observed by stakeholders. Some stakeholders questioned whether the program improves quality of care and if providers are choosing to report on quality measures they are performing well. CMS stated that new reporting requirements coming in 2023 called the MIPS Value Pathways (MVP) will address some of these concerns.

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.

To sign up for the Weekly Washington Healthcare Update, use our onlinesubscription form.