Washington Healthcare Update

July 21, 2024

This Week in Washington: House Rules Committee to consider FY2025 Agriculture-FDA and Related Agencies funding bill amendments; MedPAC releases July 2024 data book on Medicare program spending; National drug shortages fall to lowest level in 18 months.

Congress

House of Representatives

Senate

Administration

Proposed Rules

Final Rules

Courts

Reports

House of Representatives

House Rules Committee to Consider FY2025 Agriculture-FDA and Related Agencies Funding Bill Amendments

On July 22, the House Rules Committee will consider the amendments filed for the fiscal year 2025 Agriculture-Food and Drug Administration (FDA) and Related Agencies funding bill. The House Rules Committee decides what amendments can be offered on the House floor and how long the bill will be debated on the floor.

Among the many amendments that have been filed for the Rules Committee to consider are amendments aimed at:

  • Prohibiting the FDA from using funds to implement or enforce modifications made to the Risk Evaluation and Mitigation Strategy for mifepristone since 2016;
  • Reaffirming the authority of States to establish and enforce laws concerning the regulation, production, manufacture and sale of hemp products;
  • Prohibiting the implementation of Diversity, Equity and Inclusion initiatives and revoking funding of executive orders concerning gender identity and sexual orientation discrimination;
  • Restraining FDA enforcement actions against homeopathic products;
  • Increasing funding for the Center for Biologics Evaluation and Research by $1 million to strengthen antifungal drug development;
  • Increasing funding for the Center for Devices and Radiological Health by $1 million to accelerate approval of Artificial Intelligence and Machine Learning-Enabled Medical Devices; and
  • Prohibiting funding for COVID-19 vaccines and the implementation of mask mandates.

For more information, click here.

House Energy and Commerce Committee Subcommittee on Health to Hold Hearing Concerning Center for Disease Control and Prevention Priorities

On July 23, the House Energy and Commerce Committee Subcommittee on Health will hold a hearing with Centers for Disease Control and Prevention (CDC) directors to examine whether current CDC priorities are focused on improving public health and preventing the spread of disease. Witnesses are:

  • Dr. Karen Hacker, M.D., M.P.H., Director of the CDC Center for Chronic Disease Prevention and Health Promotion
  • Dr. Allison Arwady, M.D., M.P.H., Director of the CDC National Center for Injury Prevention and Control
  • Dr. Daniel Jernigan, M.D., M.P.H., Director of the CDC National Center for Emerging and Zoonotic Infectious Diseases
  • Dr. Demetre Daskalakis, M.D., M.P.H., Director of the CDC National Center for Immunization and Respiratory Diseases
  • Dr. Henry Walke, M.D., M.P.H., Director of the CDC Office of Readiness and Response
  • Dr. Jennifer Layden, M.D., Ph.D., Director of the CDC Office of Public Health Data, Surveillance and Technology

For more information, click here.

Senate

Healthcare Cybersecurity Act Introduced

On July 11, Sens. Rosen (D-NV), Young (R-IN) and King (I-ME) introduced the Healthcare Cybersecurity Act. The legislation would direct the Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Health and Human Services (HHS) to:

  • Collaborate on and improve cybersecurity;
  • Provide resources to non-federal entities concerning cyber threat indicators and appropriate defense measures; and
  • Establish a special liaison to HHS within the CISA to coordinate efforts during cybersecurity incidents and support healthcare and public health sector entities.

For more information, click here.

MedPAC Releases July 2024 Data Book on Medicare Program and Healthcare Spending

On July 16, the Medicare Payment Advisory Committee released the 2024 data book on Medicare program and healthcare spending. The data book is separated into 11 sections that focus on the following:

  • National healthcare and Medicare spending;
  • Medicare beneficiary demographics;
  • Medicare beneficiary and other payer financial liability;
  • Dual-eligible beneficiaries;
  • Alternative payment models;
  • Acute inpatient services;
  • Ambulatory care;
  • Post-acute care;
  • Medicare Advantage; and
  • Other services including dialysis, hospice and clinical laboratory tests.

For more information, click here.

Administration

CMS Announces AMA Proposed Telehealth Audio and Video Reimbursement Codes Cannot be Used

On July 18, the Centers for Medicare and Medicaid Services (CMS) announced that it cannot use 16 out of 17 new audio and video telehealth reimbursement codes proposed by the American Medical Association in the draft 2025 Physician Fee Schedule because they have similar relative value units to existing Medicare telehealth evaluation and management codes. CMS will only adopt one code that refers to brief virtual check-ins.

CMS Releases Medicare Prescription Payment Plan Program Final Part Two Guidance

On July 16, the Centers for Medicare and Medicaid Services (CMS) released the final part two guidance for the Medicare Prescription Payment Plan Program. The program allows enrollees to pay for prescription drug out-of-pocket costs through monthly payments instead of lump sums at a pharmacy.

The guidance outlines:

  • Outreach and education requirements for Part D plan sponsors relating to member ID cards, separate mailings, material updates and website contents;
  • Requirements for sponsor communications addressing payment plan election, voluntary removal, non-payment and termination;
  • Information on how CMS will conduct outreach and education activities, modify enrollee resources, engage interested parties and develop materials; and
  • Additional operational requirements and non-retail pharmacy and Medical Loss Ratio instructions.

In addition, CMS released six model documents intended to support sponsors in meeting education, outreach and communications requirements.

For more information, click here.

CMS Sends State Health Official Letter Concerning Updating Medicaid Provider Directory

On July 16, the Centers for Medicare and Medicaid Services (CMS) sent a letter to state health officials outlining requirements and expectations for compliance with provider directory updates for Medicaid including managed care plans.These requirements were established by the 2023 Consolidated Appropriations Act. The directories must be updated by July 1, 2025 and within 30 days thereafter once notified of a change.

For more information, click here.

FDA Releases Guidance Concerning Human Radiolabeled Mass Balance Study Clinical Pharmacology Considerations

On July 18, the Food and Drug Administration (FDA) released guidance concerning the clinical pharmacology considerations of human radiolabeled mass balance studies of investigational drugs. The guidance intends to assist sponsors in determining whether to conduct a study, when to conduct them and how to report results.

For more information, click here.

FDA Announces Plan to Establish Rare Disease Innovation Hub

On July 17, the Food and Drug Administration (FDA) announced that it will establish a Rare Disease Innovation Hub. The Hub will:

  • Coordinate and engage with rare disease community stakeholders on matters related to the Center for Drug Evaluation and Research, the Center for Biologics Evaluation and Research, medical devices, diagnostics tests and combination products;
  • Address common scientific, clinical and policy issues related to rare disease product development and cross-disciplinary approaches concerning product review and consistency between offices and Centers; and
  • Advance regulatory science and considerations of novel endpoints, biomarker development and assays, trial design, real world evidence and statistical methods.

For more information, click here.

FDA Releases Guidance Concerning Combination Product Application User Fees

On July 16, the Food and Drug Administration (FDA) released guidance concerning application user fees for combination products. The guidance outlines how the FDA will apply user fees for single and dual combination product applications and how user fee waivers may be requested.

For more information, click here.

FDA Sends Cease-and-Desist Letters to Companies Selling Delta-8 THC Snacks

On July 16, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) jointly sent letters to companies selling edibles that contain Delta-8 tetrahydrocannabinol and are wrapped in packaging that resemble children snacks. The FTC is requesting companies stop marketing edible Delta-8 products that imitate conventional foods.

For more information, click here.

FDA CDRH Announces Office Reorganization

On July 15, the Food and Drug Administration (FDA) Center for Devices and Radiological Health (CDRH) announced it would reorganize offices to strengthen its organizational ability and promote public health. The CDRH will:

  • Elevate the Office of Communication and Education into the Office of Communication, Information Disclosure, Training and Education and establish the Office of Communication and Content Development and the Office of Training and Education;
  • Restructure the Office of Clinical Evidence and Analysis into five divisions; and
  • Divide the Office of Surgical and Infection Control into two divisions.

For more information, click here.

Proposed Rules

CMS Releases CY2025 Physician Fee Schedule Proposed Rule

On July 10, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2025 Medicare Physician Fee Schedule (PFS) proposed rule. The proposed rule would:

  • Reduce the PFS conversion factor by 2.8 percent to $32.36;
  • Expand payments for opioid treatment programs (OTPs) for new overdose reversal medications approved by the Food and Drug Administration;
  • Broaden coverage of Hepatitis B vaccines for Medicare beneficiaries;
  • Enhance coverage of colorectal cancer screenings;
  • Establish new coding and payment for caregiver training for direct care services and behavior management and modification training;
  • Extend flexibilities for the use of telehealth modalities;
  • Extend certain telehealth waivers through 2025;
  • Implement six new optional Merit-based Incentive Payment System Value Pathways; and
  • Mitigate the impact of significant, anomalous and highly suspect (SAHS) billing activity under the Medicare Shared Savings Program (MSSP) for CY2024.

Accountable care organizations have expressed concerns over the proposed expansion of MSSP quality measures and medical group and provider associations are urging Congress to pass legislation to tie physician payment updates to the inflation-based Medicare Economic Index.

Public comments will be accepted until Sept. 9, 2024. For more information, click here.

CMS Releases CY2025 Medicare Hospital and ASC PPS Proposed Rule

On July 10, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2025 Medicare Hospital Outpatient and Ambulatory Surgical Center (ASC) Prospective Payment System (PPS) proposed rule. The proposed rule would:

  • Update PPS payment rates for hospitals and ASCs that meet quality reporting requirements by 2.6 percent;
  • Update intensive outpatient program and partial hospitalization program payment rates for services furnished in hospital outpatient departments and Community Mental Health Centers;
  • Implement temporary additional payments for certain non-opioid treatments for pain relief in hospital outpatient departments and ASCs from Jan. 1, 2025 to Dec. 31, 2027;
  • Clarify requirements for outpatient PPS payments for services furnished remotely;
  • Increase the All-Inclusive Rate Add-On payment for certain high-cost drugs for Medicare beneficiaries who receive care at Indian Health Service and tribal hospitals;
  • Improve payment for specialized diagnostic radiopharmaceuticals;
  • Provide an additional $10 payment for technetium-99m produced by non-highly enriched uranium sources or derived from molybdenum-99;
  • Extend a single blended payment policy to trials for drugs and devices that meet coverage and evidence development requirements;
  • Narrow the definition of “custody” in the Medicare payment exclusion rule;
  • Amend Medicaid and Children’s Health Insurance Program Continuous Eligibility requirements and create exceptions to the Medicaid Clinic Services Four Walls Regulation; and
  • Implement new measures under the Rural Emergency Hospital, Hospital Inpatient and ASC Quality Reporting Programs.

The proposed rule would also implement baseline health and safety requirements for hospitals and critical access hospitals for obstetrical services. These requirements would improve maternal health efforts and obstetrical unit organization, staffing, delivery of care, emergency services readiness, transfer protocols and annual staff training.

Public comments will be accepted until Sept. 9, 2024. For more information, click here.

CMS Releases CY2025 End-Stage Renal Disease PPS Proposed Rule

On June 27, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2025 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) proposed rule. The proposed rule would:

  • Increase the ESRD PPS base rate by $2.18 to $273.20. CMS projects a 3.9 percent increase in total payments for hospital-based ESRD facilities and 2.1 percent increase in total payments for freestanding facilities;
  • Adjust the Acute Kidney Injury (AKI) dialysis payment rate to be $273.20;
  • Implement a new ESRD PPS-specific wage index;
  • Expand the list of ESRD outlier services to include drugs and biological products;
  • Incorporate technical changes to the methodologies for calculating outlier services fixed-dollar loss amounts and Medicare allowable payment amounts;
  • Modify the Low-Volume Payment Adjustment (LVPA) and create a two-tiered LVPA;
  • Provide information on how CMS will operationalize the inclusion of oral-only drugs and biological products into the ESRD PPS;
  • Allow payment for AKI dialysis services furnished to beneficiaries in their homes;
  • Permit ESRD facilities to bill Medicare for the home and self-dialysis training add-on payment adjustment for beneficiaries with AKI;
  • Update ESRD facility Conditions for Coverage; and
  • Modify the ESRD Quality Incentive Program.

Public comments will be accepted until Aug. 26, 2024. For more information, click here.

CMS Releases CY2025 Home Health PPS Proposed Rule

On June 26, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2025 Home Health Prospective Payment System (PPS) proposed rule. The proposed rule would:

  • Reduce net home health payments by an estimated $280 million in CY2025, 1.7 percent less relative to the current year;
  • Decrease the base payment rate by 4.1 percent due to the implementation of the Patient-Driven Groupings Model;
  • Add a new standard to the Home Health Agency (HHA) Conditions of Participation that would require HHAs to develop, apply and maintain a policy for accepting patients to service;
  • Adopt and modify certain patient assessment items related to health-related social needs in the Home Health Quality Reporting Program;
  • Revise infection prevention and control requirements for long-term care facilities; and
  • Require reporting of data related to respiratory syncytial virus and influenza beginning Jan. 1, 2025.

Public comments will be accepted until Aug. 26, 2024. For more information, click here.

ONC Releases HTI-2 Proposed Rule

On July 10, the Department of Health and Human Services Office of the National Coordinator for Health Information Technology (ONC) released the Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability (HTI-2) proposed rule. The proposed rule implements two new sets of criteria under the ONC Health IT Certification Program and would:

  • Implement a range of technology and standards updates, including those concerning the exchange of clinical images and the addition of multi-factor authentication support;
  • Require the adoption of United States Core Data for Interoperability (USCDI) version 4 by Jan. 1, 2028;
  • Require the implementation of section 119(b)(3) of the 2021 Consolidated Appropriations Act and a new, real-time prescription benefit tool certification criterion;
  • Establish certain Trusted Exchange Framework and Common Agreement governance rules; and
  • Clarify certain information-blocking exceptions.

The proposed rule has not yet been published in the Federal Register. Public comments will be accepted for 60 days after its publication.

For more information, click here.

Final Rules

CMS Final Rule Establishes Disincentives for Health Information Blocking

On June 24, the Centers for Medicare and Medicaid Services (CMS) released a final rule that would establish disincentives for healthcare providers that interfere with, prevent or materially discourage access, exchange or use of electronic health information (EHI). Disincentives for entities who engage in information blocking will consist of the following:

  • Hospitals under the Medicare Promoting Interoperability Program will experience a reduction of the market basket update by 75 percent;
  • Critical access hospitals will experience a reduction from 101 to 100 percent of reasonable costs;
  • Clinicians in the Medicare Merit-based Incentive Payment System (MIPS) will receive a score of zero in the MIPS Promoting Interoperability performance category;
  • Accountable care organization providers will be ineligible to participate in the Medicare Shared Savings Program for at least one year and may not be eligible to receive revenue they earn through the program.

In addition to CMS, the Department of Health and Human Services Office of the National Coordinator for Health Information Technology is proposing the rule.

The rule will go into effect on July 31, 2024. For more information, click here.

FDA Final Rule Revises Medical Gas CGMP, Postmarketing Safety Reporting and Labeling

On June 17, the Food and Drug Administration (FDA) released a final rule that will revise current good manufacturing practices (CGMP), postmarketing safety reporting and labeling that applies to certain medical gases. The final rule will:

  • Add operations required to produce a medical gas to the list of operations that are performed by its manufacturer;
  • Specify requirements for the declaration of net quantity of contents in the labeling of designated medical gases and medically appropriate combinations;
  • Require standard format labeling for all designated medical gases;
  • Revise medical gas container labeling regulations; and
  • Implement medical gas cleaning, adverse event reporting and certification ownership transfer requirements.

The rule will go into effect on Dec. 18, 2025. For more information, click here.

CMS Final Rule Expands Access to Healthcare for DACA Recipients

On May 3, the Centers for Medicare and Medicaid Services (CMS) released a final rule to expand access to healthcare for Deferred Action for Childhood Arrivals (DACA) recipients. The rule will allow DACA recipients to:

  • Enroll in a Qualified Health Plan through the Affordable Care Act Health Insurance Marketplace; and
  • Obtain coverage through a Basic Health Program.

DACA recipients and other newly eligible individuals will be able to select a health plan through the Marketplace during a 60-day special enrollment period following the implementation of the rule.

The rule will go into effect on Nov. 1, 2024. For more information, click here.

FTC Final Rule Revises Health Breach Notification Rule

On April 26, the Federal Trade Commission (FTC) released a final rule that revises the Health Breach Notification Rule that requires vendors of personal health records (PHR) and related entities not covered by the Health Insurance Portability and Accountability Act, to notify individuals and the FTC of unsecured PHR data breaches. The rule will:

  • Modify the definition of PHR identifiable health information and add new definitions for covered healthcare provider and healthcare services or supplies;
  • Clarify that a “breach of security” includes an unauthorized acquisition of identifiable health information that occurs as a result of a data security breach or unauthorized disclosure;
  • Revise the definition of a PHR-related entity to make clear that the rule applies to entities that offer products and services through online services, including mobile applications;
  • Clarify multiple sources of PHR-identifiable health information;
  • Expand the use of electronic notification and consumer notice content; and
  • Require covered entities to report breaches involving 500 or more individuals to the FTC at the same time notices are sent to affected individuals and no later than 60 calendar days after discovery of the breach.

The rule will go into effect on July 29, 2024. For more information, click here.

FDA Issues Final Rule Regarding Mammography Quality Standards

On March 9, 2023, the Food and Drug Administration (FDA) issued a final rule that updates the regulations implemented by the Mammography Quality Standards Act of 1992. The FDA has decided to update the regulations due to advancements made in mammography technology and information. The final rule will:

  • Improve the delivery of mammography services;
  • Strengthen communication of healthcare information;
  • Require mammography facilities to provide patients with additional health information;
  • Ensure the availability of qualified mammography personnel;
  • Bolster medical outcome audits;
  • Modernize technological aspects of mammography services; and
  • Implement enforcement tools to deal with noncompliant facilities.

The rule will go into effect on Sept. 10, 2024. For more information, click here.

Courts

U.S. District Court Rules in Favor of CMS in Georgia Medicaid Program Extension Lawsuit

On July 16, U.S. District Court for the Southern District of Georgia Judge Lisa Godbey Wood dismissed a lawsuit brought by Georgia officials against the Centers for Medicare and Medicaid Services (CMS) that would have extended the Georgia Pathways to Coverage Medicaid expansion program until 2028. Georgia officials had requested a program extension because a previous lawsuit between Georgia and CMS delayed the program’s implementation.

Judge Wood ruled that CMS did not violate the Administrative Procedure Act when it denied Georgia’s request to extend the program because the request failed to comply with rules governing program extensions. Georgia officials must now submit a formal program extension request if they wish to prolong the program past the current September 2025 expiration date.

In 2022, Georgia officials sued CMS after it officially rescinded approval for the program a year after it began. This was prompted by Biden administration objections to the program’s work requirements that mandate enrollees work or receive job training for a minimum of 80 hours per month to maintain Medicaid coverage. A district court ultimately ruled that CMS’ recession of the program was unlawful.

Reports

National Drug Shortages Drop to Lowest Level in 18 Months

A recently released report by the American Society of Health System Pharmacists states that the number of national drug shortages dropped last quarter to the lowest level in 18 months.The decrease was across multiple drug categories according the Society’s drug shortage tracker.However, the number of active shortages remains historically high despite government efforts to mitigate short supplies of essential medications for cancer, and attention deficit hyperactivity disorder

CBO Releases Cost Estimates for S. 1852, H.R. 7406, H.R. 6160 and H.R. 7189

Last week, the Congressional Budget Office (CBO) released cost estimates for S. 1852, Sickle Cell Disease and Other Heritable Blood Disorders Research, Surveillance, Prevention and Treatment Act of 2023; H.R. 7406, DeOndra Dixon INCLUDE Project Act of 2024; H.R. 6160, a bill to amend the Public Health Service Act to reauthorize a lifespan respite care program; and H.R. 7189, Congenital Heart Futures Reauthorization Act of 2024.

S. 1852: Reauthorizes $8 million in appropriations for the Centers for Disease Control and Prevention and the Health Resources and Services Administration between 2024 and 2028 to conduct research, surveillance, prevention and treatment of sickle cell disease and other blood disorders. The CBO estimates that the legislation would increase appropriation outlays by $32 billion between the 2024-2034 period.

H.R. 7406: Authorizes $90 million annually from 2025 to 2029 for the National Institutes of Health to carry out the Investigation of Co-occurring conditions across the Lifespan to Understand Down Syndrome Project (INCLUDE) and report on studies, clinical trials and training related to down syndrome and other conditions. The CBO projects that the legislation would increase appropriation outlays by $355 million between the 2024-2029 period and by $91 million after 2029.

H.R. 6160: Reauthorizes $10 million in appropriations between 2025 and 2029 forAdministration for Community Living state grants aimed at improving the delivery and quality of respite services for caregivers to older adults and people with disabilities. The CBO estimates that the legislation would increase appropriation outlays by $43 million over the 2024-2029 period and by $7 million after 2029.

H.R. 7189: Reauthorizes $10 million in appropriations between 2025 and 2029 for the Department of Health and Human Services to conduct and report on research, surveillance and awareness activities concerning congenital heart disease. The CBO projects that the legislation would increase appropriation outlays by $43 million between the 2024-2029 period and by $7 million after 2029.

For more information on the cost estimate of S. 1852, click here.

For more information on the cost estimate of H.R. 7406, click here.

For more information on the cost estimate of H.R. 6160, click here.

For more information on the cost estimate of H.R. 7189, click here.

GAO Releases Report Concerning CMS Oversight of State Medicaid Redeterminations

On July 18, the Government Accountability Office (GAO) released a report examining the Centers for Medicare and Medicaid Services’ (CMS) oversight of state Medicaid unwindings and the changes states made during the eligibility redetermination process.

After interviewing Medicaid officials and reviewing CMS and state unwinding documentation,the GAO discovered that:

  • States conducting redeterminations have encountered issues when assessing Medicaid eligibility and have failed to comply with redetermination requirements;
  • The unwinding has gone longer than originally expected, and it remains unclear when states will resume normal operations due to CMS extensions of temporary flexibilities; and
  • State challenges have been exacerbated due to staff shortages, a lack of enrollee engagement and heavy workloads.

The GAO conducted this study because a Coronavirus Aid, Relief and Economic Security Act provision directed it to study the federal response to the COVID-19 pandemic.

For more information, click here.

GAO Releases Report Concerning Veteran Transitional Mental Health Services

On July 15, the Government Accountability Office (GAO) released a report concerning the Department of Defense (DOD) inTransition program, which provides mental health support services to veterans transitioning from military service to civilian life.

After analyzing program data, reviewing DOD and Department of Veterans Affairs (VA) mental health service information and interviewing officials, the GAO discovered that:

  • inTransition program administrators do not conduct outreach to veterans automatically enrolled in the program until 2 to 3 months after their separation;
  • The program was unable to connect with more than 70 percent of automatically enrolled service members in 2022; and
  • The DOD and VA Joint Executive Committee has not assessed the effectiveness of department efforts intended to facilitate access to transitional mental health services.

The GAO conducted this study because it was asked to review access to mental health services for transitioning members.

For more information, click here.

Authors

Stephanie Kennan
Senior Vice President
Federal Public Affairs
Washington, DC
Gina Sherick
Policy Consultant
Federal Public Affairs
Washington, DC
Gabriel Wiedenhoever
Research Associate
Federal Public Affairs
Washington, DC