Washington Healthcare Update

September 19, 2022

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This Week in WashingtonCongress Focuses on FDA User Fee Legislation, Telehealth and Continuing Resolution; Administration Issues Executive Order on Biomanufacturing





Proposed Rules

Final Rules



House Passes Legislation to Streamline Prior Authorization in Medicare Advantage

On Sept. 14, the House unanimously passed legislation by voice vote to streamline the Medicare Advantage prior authorization system. The vote came shortly after the Energy & Commerce health subcommittee unanimously passed a version of the Improving Seniors’ Timely Access to Care Act earlier in the day. A vast majority of the House cosponsored the bill, along with 40 senators in the upper chamber. It is expected that the legislation will be part of the year-end package in the Senate.

The bill establishes an electronic prior authorization process for Medicare Advantage, as well as a real-time approvals process for routinely approved products and services, and increased data transparency surrounding MA and the prior authorization process. Prior authorization in MA has come under fire after a controversial HHS Office of the Inspector General report found inappropriate denials.

The legislation was sponsored in the House by Reps. Suzan DelBene (D-WA), Mike Kelly (R-PA), Ami Bera (D-CA) and Larry Bucshon (R-IN). It had more than 320 cosponsors.

Bipartisan Legislation Introduced to Mitigate Physician Fee Schedule Cuts

On Sept. 13, Reps. Ami Bera (D-CA) and Larry Bucshon (R-IN) introduced legislation to mitigate CMS’s proposed physician fee schedule cuts slated for 2023. Physicians have been concerned about reductions in the fee schedule since the Centers for Medicare and Medicaid Services released the fee schedule for 2023. CMS proposed a 4.4 percent decrease in the conversion factor for 2023. While the rule is not yet final, there is concern CMS may not have the ability to make changes to increase reimbursement as it has with other pay rules in the past, because some of the fee reductions CMS proposed were tied to evaluation and management changes already in place, because of prior years’ cuts mitigated by Congress and because Medicare Access and CHIP Reauthorization Act (MACRA) set up pay updates of the fee schedule, which includes a 0 percent pay update for 2023. 

Bera and Bucshon also recently asked stakeholders how to change MACRA. They also introduced a Sense of Congress that the Department of Health and Human Services and the House and Senate should work to ensure Medicare’s payment system is predictable and stable. 


Senate Pushed to Pass Extension of Pandemic Telehealth Waivers

On Sept. 13, a group of 375 telehealth stakeholders sent a letter to the Senate urging it to pass a two-year extension of pandemic telehealth waivers that also includes access to clinically appropriate controlled substances without in-person prescribing requirements and pre-deductible coverage for telehealth services under high-deductible health plans. Senate movement on the House-passed telehealth extensions, coupled with the controlled substances and HDHP waivers, would give stakeholders an extra couple years to lobby for permanent reforms.

The Alliance for Connected Care, American Telemedicine Association (ATA), College of Healthcare Information Management Executives (CHIME), Connected Health Initiative, Consumer Technology Association, Executives for Health Innovation, Health Innovation Alliance, HIMSS and Partnership to Advance Virtual Care organized the coordinated effort among the nearly 400 telehealth stakeholders.

The groups are asking the Senate to pass a two-year extension of pandemic telehealth flexibilities, as the House recently did when it passed HR 4040. However, the groups also want to extend a provision that lets health plans offer coverage of telehealth services pre-deductible to people enrolled in high-deductible health plans linked to health savings accounts or remove in-person requirements for prescription of controlled substances via telehealth, which is not included in the House bill. 

The Joint Committee on Taxation and Congressional Budget Office scored the temporary HDHP provision included in the CARES Act at $90 million a year. Ninety-six percent of employers adopted the pre-deductible coverage for telehealth services under the CARES Act and 76 percent would like to make the provision permanent, according to the Employee Benefit Research Institute issue brief on pre-deductible coverage in HSA-eligible health plans.

HELP Committee Members Write

This week, a group of 29 Democrats led by Senate HELP Committee chair Patty Murray (D-WA) wrote to Secretary of HHS Becerra urging the administration to strengthen federal privacy protections under the Health Information Portability and Accountability Act (HIPAA) to broadly restrict providers from sharing patients’ reproductive health information without their explicit consent—particularly with law enforcement or in legal proceedings over accessing abortion care. The senators specifically said HHS should update the HIPAA Privacy Rule to prevent covered entities from sharing reproductive health information, especially for purposes of potential criminal or civil proceedings. The senators also said HHS should increase education for patients about their rights under the HIPAA Privacy Rule and should ensure all cases involving reproductive health information receive timely compliance and enforcement response.


Advanced Research Projects Agency for Health

On Sept. 12, the president announced that he will appoint former Defense Advanced Research Projects Agency program manager Renee Wegrzyn as the first director of the administration’s new biomedical research office, the Advanced Research Projects Agency for Health (ARPA-H). Wegrzyn, who also brings private-sector experience to the role, says she hopes to spur equitable access to breakthrough technologies and cures.

Wegrzyn will have a hand in deciding where to physically place the ARPA-H headquarters. Members of Congress from around the country, including Texas, Georgia, Massachusetts and Ohio, have argued for ARPA-H to be located in their states.

Executive Order to Promote Biotechnology and Biomanufacturing

On Sept. 12, the president announced an executive order that will

  • Grow Domestic Biomanufacturing Capacity: The initiative will build, revitalize and secure national infrastructure for biomanufacturing across America, including through investments in regional innovation and enhanced bio-education, while strengthening the U.S. supply chain that produces domestic fuels, chemicals and materials.
  • Expand Market Opportunities for Biobased Products: The fact sheet notes that the U.S. Department of Agriculture’s (USDA) BioPreferred Program “is the standard for sustainable procurement by government agencies, both providing an alternative to petroleum-based products and supporting good-paying jobs for American workers.” The initiative will increase mandatory biobased purchasing by federal agencies and ensure that the Office of Management and Budget (OMB) and USDA regularly publish progress assessments. The fact sheet states that doing so “will provide specific directions to industry about gaps in biobased product options, leading to the creation of new products and new markets.” Together, the initiative will grow and strengthen the BioPreferred Program, increase the use of renewable agricultural materials and “position American companies to continue to lead the world in bio-innovation.”
  • Drive Research and Development (R&D) to Solve Our Greatest Challenges: According to the fact sheet, focused government support for biotechnology can quickly produce solutions, “as seen with the first-of-their-kind mRNA vaccines during the COVID-19 pandemic.” This initiative directs federal agencies to identify priority R&D needs to translate bioscience and biotechnology discoveries into medical breakthroughs, climate change solutions, food and agricultural innovation, and stronger U.S. supply chains.
  • Improve Access to Quality Federal Data: Combining biotechnology with massive computing power and artificial intelligence can produce significant breakthroughs for health, energy, agriculture and the environment. The Data for the Bioeconomy Initiative will ensure that biotechnology developers have streamlined access to high-quality, secure and wide-ranging biological data sets that can drive solutions to urgent societal and global problems.
  • Train a Diverse Skilled Workforce: The United States is facing a shortage of relevant talent spanning all levels, from community college to graduate school. The initiative will expand training and education opportunities for all Americans in biotechnology and biomanufacturing, with a focus on advancing racial and gender equity and support for talent development in underserved communities.
  • Streamline Regulations for Products of Biotechnology: Advances in biotechnology are rapidly altering the agricultural, industrial, technological and medical products landscape, which can create challenges for developers and innovators. The initiative will improve the clarity and efficiency of the regulatory process for products of biotechnology so that valuable inventions and products can come to market faster without sacrificing safety.
  • Advance Biosafety and Biosecurity to Reduce Risk: The initiative will prioritize investments in applied biosafety research and incentivize innovations in biosecurity to reduce risk throughout the biotechnology R&D life cycles.
  • Protect the U.S. Biotechnology Ecosystem: The initiative will protect the U.S. biotechnology ecosystem by advancing privacy standards and practices for human biological data, cybersecurity practices for biological data, standards development for bio-related software and mitigation measures for risks posed by foreign adversary involvement in the biomanufacturing supply chain.
  • Build a Thriving, Secure Global Bioeconomy with Partners and Allies: According to the fact sheet, the initiative advances international cooperation to leverage biotechnology and biomanufacturing to tackle the most urgent global challenges—from climate change to health security—and to work together to ensure that biotechnology product development and use aligns with our shared democratic ethics and values, and that biotechnology breakthroughs benefit all citizens.

For more information



Food and Drug Administration

FDA Revises Conditions of Authorization for Novavax COVID-19 Vaccine

On Sept. 13, the U.S. Food and Drug Administration (FDA) reissued the Aug. 19, 2022, letter of authorization for Novavax COVID-19 Vaccine, Adjuvanted to revise the conditions of authorization related to the Vaccine Adverse Event Reporting System (VAERS) reporting requirements for vaccination providers and Novavax, Inc., to include myocarditis and pericarditis. Because some cases of myocarditis or pericarditis following vaccine administration may not meet the definition of serious adverse events, this change will help ensure that cases of myocarditis and pericarditis are reported by Novavax, Inc., and vaccination providers to VAERS. The Fact Sheet for Healthcare Providers Administering Vaccine (Vaccination Providers) has also been updated to reflect this revision to the conditions of authorization regarding VAERS reporting requirements. The letter of authorization and revised fact sheet are available on the FDA’s website.

FDA and Opioid Safety

The Food and Drug Administration (FDA) is considering asking Congress to create new authorities to better regulate new opioids. FDA Commissioner Califf has said he wants the FDA to be able to ensure new opioids go through trials that test the drugs against existing opioids rather than placebos to ensure the new drugs are materially safer than existing ones. 

Legal experts believe FDA wants Congress to step in in order to protect it from potential lawsuits. Some observers believe the FDA does not need new authorities to impose additional requirements. Years ago, members of a National Academies of Sciences, Engineering, and Medicine committee also agreed that FDA could use its public health authority to compare opioid safety. The NASEM considered that existing authority when it drafted recommendations in 2017 for how FDA should respond to the opioid crisis. The NASEM report called for FDA, which traditionally has taken a product-specific approach to drug approval decisions, to weigh the societal impacts of opioids in its opioid-related regulatory decisions.

FDA, NIH and Critical Path Institute to Work Together to Accelerate Drug Development

The FDA and the National Institutes of Health have teamed up with the Critical Path Institute to launch a public-private partnership to accelerate drug development for rare neurodegenerative diseases, including amyotrophic lateral sclerosis (ALS). FDA, NIH and C-Path will use patient-focused drug development and the FDA-funded Rare Disease Cures Accelerator to advance understanding of rare neurodegenerative diseases and spur development of therapies.

The partnership, dubbed the Critical Path for Rare Neurodegenerative Diseases (CP-RND), will bring together scientific data on rare neurodegenerative diseases to facilitate characterization of the diseases and their natural history; identify molecular targets; and increase efficiency, predictability and productivity of clinical development of therapies.

CP-RND is a requirement of the Accelerating Access to Critical Therapies for Amyotrophic Lateral Sclerosis Act, signed into law on Dec. 23, 2021, and is a component of the FDA’s “Action Plan for Rare Neurodegenerative Diseases including Amyotrophic Lateral Sclerosis (ALS)” released in June.

HHS, Labor, Treasury and OPM Issue Request for Information on Surprise Billing Provisions Concerning Data Transfer

On Sept. 16, the HHS, the Department of Labor, the Department of Treasury and the Office of Personnel Management posted a request for information to help inform rulemaking on provisions of the surprise billing law that involve transferring data from providers to insurers, and then passing that information to consumers in advance of services, and the economic impact of those requirements. Comments are due within 60 days.

The request refers to sections of the No Surprises Act that require providers to send a patient’s insurer a good faith estimate (GFE) of costs for a particular service within a set time of a consumer’s request. The insurer is then required to send the patient an Advanced Explanation of Benefits (AEOB). The requirement applies to group and individual market plans, as well as the Federal Employee Health Benefits (FEHB) program that is managed by OPM.

While the provisions were to go into effect Jan. 1, 2022, the administration deferred enforcement of both policies in response to stakeholders’ requests that the departments first establish standards for data transfers and give providers and insurers time to build the needed infrastructure.

Recognizing the complexity involved in crafting the rules, the departments welcomed stakeholders’ input on numerous policy questions.

Proposed Rules

HHS Announces Proposed Rule to Implement Section 1557 of the ACA

On July 25, the Department of Health and Human Services (HHS) released a proposed rule to implement Section 1557 of the Affordable Care Act (ACA) that bans discrimination based on race, color, national origin, sex, age and disability in certain health programs and activities. The proposed rule expands civil rights protections for patients in certain federally funded programs by clarifying the scope and application of Section 1557. An HHS press release on the proposed rule can be found here.

FDA Releases Proposed Rule to Standardize the National Drug Code Format

On July 25, the Food and Drug Administration (FDA) issued a proposed rule titled “Revising the National Drug Code Format and Drug Label Barcode Requirements.” The proposed rule would amend the National Drug Code (NDC) to require one standardized format for all NDCs.

Public comments will be accepted until Nov. 22, 2022.

Final Rules

Homeland Security Issues Final Rule Reversing Trump “Public Charge” Rule

On Sept. 8 the administration issued final rules making it clear that the Department of Homeland Security will not refuse entry to non-citizens seeking admission to the U.S. or a green card due to their likelihood to receive Medicaid/CHIP or other health benefits except for long-term institutionalized care. The rule reverses the Trump administration’s public charge rules issued in 2019. 

CMS Publishes Final Rule to Update FY 2023 Hospice Payment Rate

On July 27, the Centers for Medicare and Medicaid Services (CMS) published a final rule titled “Medicare Program; FY 2023 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements.” The final rule makes updates to Medicare hospice payments and the aggregate cap amount for Fiscal Year (FY) 2023. The FY 2023 hospice payment update will be increased to 3.8 percent and a permanent budget-neutral 5 percent cap will be established on any decrease to an area’s wage index. The final rule also discusses the Hospice Outcomes and Patient Evaluation tool and provides an update on FY 2023 Quality Measures, the Consumer Assessment of Healthcare Providers and Systems, and Hospice Survey Mode Experiment. A press release on the final rule with additional information can be found here.

The final rule will go into effect on Oct. 1, 2022.

CMS Publishes FY 2023 Inpatient Psychiatric Facilities Prospective Payment System Final Rule

On July 27, the Centers for Medicare and Medicaid Services published a final rule titled “Medicare Program: FY 2023 Inpatient Psychiatric Facilities Prospective Payment System; Rate Update and Quality Reporting; Request for Information.” The final rule will update Medicare payment rates for the Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) for Fiscal Year (FY) 2023 and sets a permanent 5 percent cap. The rule does not make any changes to the IPF Quality Reporting Program. A press release with additional information can be found here.

The final rule will go into effect on Oct. 1, 2022.

Final Rule to Change Qualifications for Products to be Considered “Made in America” Released

On March 4, the Department of Defense, the General Services Administration and the Aeronautics and Space Administration announced a final rule that would increase manufacturing of critical supplies in the U.S. as part of President Biden’s “Made in America” policy. The final rule would require pharmaceutical companies that want their products to qualify as being “Made in America” for federal procurement purposes to increase the percentage of drug ingredients made in the U.S. from 55 percent to 75 percent in the next seven years. Specifically, the final rule would increase the threshold to 60 percent in 2022, 65 percent in 2024 and 75 percent in 2029. In addition, the rule will allow the government to apply price preferences to select drug products and components that will support the expansion of the domestic supply chain. The final rule will go into effect on Oct. 25, 2022.

The White House Fact Sheet on the final rule can be found here.