Washington Healthcare Update

July 28, 2024

This Week in Washington: HHS announces reorganization of health technology offices; House recesses early because of an inability to pass appropriations bills; Senate Finance Committee chairman introduces legislation to penalize fraudulent insurance broker tactics.

Congress

House of Representatives

Senate

Administration

Proposed Rules

Final Rules

Reports

House is in its August recess.

House of Representatives

House Recesses Early After Appropriations Frustrations 

Instead of voting on appropriations bills, House leadership decided to recess early after it was unable to ensure passage of the 2025 funding bills that were scheduled to be considered.

The Agriculture-FDA and related agencies bill and the Financial Services bill were pulled from consideration after it became clear there were not enough votes for passage. This comes after the surprise and embarrassing failure of the Legislative Branch appropriations bill to be passed earlier this month.

Like last year, policy riders are the roadblock. In the Agriculture bill, language that would make it harder for the FDA to regulate menthol cigarettes was an issue. In the Financial Services spending bill, Republican appropriators did not include language that would have made it easier for financial institutions to serve certain cannabis businesses. In addition, many also objected to language that would block a Washington, D.C. local law to prevent employers from discriminating against workers who seek contraception or other family planning services.

Leadership ultimately decided to leave town rather than work through issues, leaving some of the hardest-to-pass bills until later, instead of forcing those in difficult districts to walk the plank. This also allows more time to campaign.

When they return, Congress will have to focus attention on passing a short-term Continuing Resolution (CR) by Oct. 1. There are divides among the House Republican Caucus about how long that CR should run. The Speaker has suggested a CR until January, while others have suggested March. Such a move would ensure no lame-duck omnibus deal.

Others are also pushing to include legislation concerning noncitizen voting to any CR, a move that increases the chance of a government shut down just before the November elections. Such a CR would not pass the Senate.

House Energy and Commerce Committee Chairmen Request Information Concerning Process Behind the Rescheduling of Marijuana

On July 25, House Energy and Commerce Committee Chairman Cathy McMorris Rodgers (R-WA) and Subcommittee on Health Chairman Brett Guthrie (R-KY) sent a letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra and U.S. Attorney General Merrick Garland, requesting information on the process the departments used to support the Drug Enforcement Administration’s (DEA) proposed transfer of marijuana from Schedule I to Schedule III in the Controlled Substances Act (CSA).

The chairmen are concerned that:

  • HHS and the DEA did not use the CSA five-part test for determining whether marijuana has a medical use and a potential for abuse and dependence prior to proposing its reschedule;
  • The Food and Drug Administration has not yet approved a New Drug Application that proves the safety and efficacy of medical marijuana;
  • The Delta-9-tetrahydrocannabinol potency of marijuana has continued to increase since 1991; and
  • The rescheduling of marijuana could impede the ability for law enforcement and prosecutors to hold people accountable for improper handling of the drug and create confusion around different federal and state marijuana policies.

For more information, click here.

House Energy and Commerce Committee Subcommittee on Health Holds Hearing on Centers for Disease Control and Prevention Priorities 

On July 23, the House Energy and Commerce Committee Subcommittee on Health held 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. Members discussed how the CDC coordinates with federal agencies during public health emergencies, supports diabetes and mental health services, increases awareness of early cancer detection and strengthens state and local health department emergency readiness and response capacity. Witnesses were:

  • 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.

House Committee on Oversight and Accountability Holds Hearing on PBM Transparency and Accountability

On July 23, the House Committee on Oversight and Accountability held a hearing concerning pharmacy benefit manager (PBM) transparency and accountability. Members discussed the role of PBMs, the impact of PBM market consolidation and PBM reimbursement of affiliated and independent pharmacies. The hearing at times was heated as the industry pushed back over assertions made by members of the committee. Witnesses were:

  • Adam Kautzner, PharmD, President of Evernorth Care Management and Express Scripts
  • David Joyner, Executive Vice President of CVS Health and President of CVS Caremark
  • Patrick Conway, M.D., Chief Executive Officer of OptumRx

For more information, click here.

Senate

Insurance Fraud Accountability Act Introduced

On July 24, Senate Finance Committee Chairman Ron Wyden (D-OR) introduced the Insurance Fraud Accountability Act. The legislation would financially penalize insurance brokers and marketers who profit from fraudulent insurance plan marketing tactics. This legislation is a response to complaints by consumers that some brokers were enrolling individuals in plans they did not select without their permission. The legislation would:

  • Apply civil penalties no less than $10,000 and no more than $50,000 to insurance agents and brokers submitting fraudulent Affordable Care Act (ACA) enrollments and incorrect information;
  • Require the Secretary of Health and Human Services (HHS Secretary) establish a consent verification process for new enrollments and coverage changes and notify individuals when their enrollment, agent of record or tax subsidy has changed;
  • Mandate that ACA market agents and brokers act in the best interest of enrollees;
  • Require field and third-party marketing organizations to register with the HHS Secretary and comply with state and federal marketing standards;
  • Establish periodic audits of agent and broker enrollments to investigate complaints and fraudulent enrollment patterns; and
  • Require the HHS Secretary to share a list of suspended and terminated agents or brokers with qualified health plans and states.

Earlier this year, the chairman urged the Centers for Medicare and Medicaid Services to impose penalties on fraudulent healthcare brokers. In addition, the committee held a hearing concerning deceptive Medicare Advantage enrollment practices in Oct. 2023.

For more information, click here.

Senators Introduce Competing Bills Concerning Chevron Doctrine 

On July 23, two members of the Senate introduced opposing legislation related to the Chevron Doctrine. The introduction of both bills comes a month after the U.S. Supreme Court’s decision overturned the Chevron doctrine that granted federal agencies the authority to interpret ambiguous statutes in rules they administer.

Sen. Cassidy (R-LA)’s legislation would strengthen the role of Congress in oversight of federal rulemaking while Sen. Warren (D-MA) introduced legislation that would codify the Chevron Doctrine.

Sen. Cassidy’s legislation, the Upholding Standards of Accountability Act, would:

  • Require federal agency directors who sign a major rule to testify before committees of jurisdiction within 30 days of the rule being published;
  • Require all nominees to Senate-confirmed positions to testify before committees of jurisdiction before conformation;
  • Mandate federal agencies to conduct retrospective reviews of major rule cost-benefit analyses within five years of the rule’s effective date; and
  • Clarify that agencies must respond to congressional oversight requests in a timely and substantive manner.

Sen. Warren’s legislation, the Stop Corporate Capture Act, would:

  • Limit the time period for White House federal regulation reviews to 120 days;
  • Authorize federal agencies to reimplement rules rescinded through Congressional Review Acts;
  • Establish the Office of the Public Advocate to streamline public participation in the federal rulemaking process;
  • Require rulemaking participants to disclose industry-funded research and conflicts of interest; and
  • Implement financial penalties on corporations that submit false information during the rulemaking process.

For more information on the Upholding Standards of Accountability Act, click here.

For more information on the Stop Corporate Capture Act, click here.

Federal Food Administration Act Introduced

On July 23, Senate Majority Whip Dick Durbin (D-IL) introduced the Federal Food Administration Act. The legislation would:

  • Establish a new food safety agency within the Department of Health and Human Services called the Federal Food Administration (FFA);
  • Eliminate the Food and Drug Administration’s (FDA) authority to regulate food safety and nutrition;
  • Transfer all FDA food-related authorities, programs and funding to the FFA; and
  • Rename the FDA to the Federal Drug Administration.

The FFA would be required to designate food facilities as high, intermediate or low risk and inspect infant formula facilities every six months. In addition, it would establish advisory committees who would develop recommendations concerning regulatory science and processes, communications, performance standards, research and communications.

A companion bill was introduced in the House by Rep. Rosa DeLauro (D-CT).

For more information, click here.

MACPAC Releases Issue Brief Concerning Enrollment and Access Barriers for LEP Individuals

On July 23, the Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC) released an issue brief concerning barriers individuals with limited English proficiency (LEP) face when enrolling in and accessing the Medicaid and CHIP programs.

The issue brief outlines results of a MACPAC analysis of the availability of state Medicaid and CHIP translated materials, applications and renewal forms, which revealed that:

  • Paper applications are more likely to be translated into non-English languages than electronic application portals;
  • Translations of non-Modified Adjusted Gross Income applications and renewal forms varied greatly among states;
  • Staff capacity and funding constraints limit the actions states can take to improve language accessibility; and
  • Finding state staff to operate in-person interpretation services can be challenging.

For more information, click here.

Administration

HHS Announces Reorganization of Health Technology Offices

On July 25, the Department of Health and Human Services (HHS) announced it would undergo organizational changes to streamline technology, cybersecurity, data and artificial intelligence (AI) strategy and policy functions. The changes include the following:

  • The Office of the National Coordinator for Health Information Technology will be renamed the Assistant Secretary for Technology Policy and Office of the National Coordinator for Health Information Technology (ASTP/ONC);
  • Oversight of technology, data and AI policy and strategy will move from the Assistant Secretary for Administration to ASTP/ONC, including the roles of the HHS Chief Technology (CTO), Chief Data (CDO) and Chief AI (CAIO) Officers;
  • The 405d Program will move from ASA to the Administration for Strategic Preparedness and Response; and
  • National Coordinator Micky Tripathi will be named Assistant Secretary for Technology Policy/National Coordinator for Health Information Technology and will become the HHS Acting Chief AI Officer.

In addition, ASTP/ONC announced it is seeking applicants for the CTO, CDO and CAIO positions and will host a webinar on Aug. 1 to discuss the opportunities.

For more information, click here.

CMS Sends State Health Official Letter Concerning Incarcerated Youth Medicaid and CHIP Coverage Provisions

On July 23, the Centers for Medicare and Medicaid Services (CMS) sent a letter to state health officials outlining 2023 Consolidated Appropriations Act Medicaid and Children’s Health Insurance Program eligibility and coverage provisions for incarcerated youth. The provisions will go into effect on Jan. 1, 2025.

For more information, click here.

FDA Releases Guidance Concerning Electronic-Format OTC Monograph Submissions

On July 25, the Food and Drug Administration (FDA) released guidance outlining the electronic over-the-counter (OTC) monograph submissions requirement in section 505G(j) of the Federal Food, Drug and Cosmetic Act. The guidance provides recommendations and information on how sponsors may submit electronic format OTC monograph submissions to the FDA.

For more information, click here.

FDA Releases Guidance Regarding Use of EHRs and Real-World Evidence to Support Regulatory Decision-Making

On July 25, the Food and Drug Administration (FDA) released guidance intended to inform sponsors on how to use electronic health records (EHRs) and real-world evidence to support the approval of a new indication for a drug already approved under section 505(c) of the Federal Food, Drug and Cosmetic Act or satisfy postapproval study requirements.

For more information, click here.

FDA Releases Draft Guidance Concerning Biosimilars and Interchangeable Product Manufacturing Changes

On July 22, the Food and Drug Administration (FDA) released draft guidance concerning post-approval manufacturing changes to biosimilars and interchangeable biosimilar products. The draft guidance describes the nature and type of information that product applicants should submit in support of manufacturing changes.

In addition, the FDA announced it is seeking information and public comments on how it can best support biosimilar product development and whether it should develop product-specific or product class-specific guidance documents. Comments are due by Oct. 23.

For more information on the draft guidance, click here.

For more information on the request for information, click here.

FDA Releases Guidance Regarding Investigational and Licensed COVID-19 Convalescent Plasma Recommendations

On July 21, the Food and Drug Administration (FDA) released guidance outlining recommendations for the submission of Biologics License and Investigational New Drug applications for the manufacture of COVID-19 convalescent plasma for transfusion.

For more information, click here.

SAMHSA Announces $45.1 Million in Grants to Youth Behavioral Health Initiatives

On July 24, the Substance Abuse and Mental Health Services Administration (SAMHSA) announced that it had awarded $45.1 million in grants to state and school-based youth programs that provide substance use disorder, mental illness, trauma, grief and harm-reduction treatment services.

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. 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 (HTI-2): Patient Engagement, Information Sharing, and Public Health Interoperability 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 will be published in the Federal Register on Aug. 5, and public comments will be accepted until Oct. 4.

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.

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.

Reports

CBO Releases Cost Estimates for H.R. 619 and H.R. 3813

On July 23, the Congressional Budget Office (CBO) released cost estimates for H.R. 619, NAPA Reauthorization Act, and H.R. 3813, CDC Leadership Accountability Act of 2023.

H.R. 619: Reauthorizes the National Alzheimer’s Project Act (NAPA) through Dec. 31, 2025, expands the membership of the project’s advisory council and adds new reporting requirements. The CBO projects that the legislation would cost $3 million over the 2024-2029 period.

H.R. 3813: Accelerates the applicability of a Public Health Service Act requirement concerning Senate confirmation of the Director of the Centers for Disease Control and Prevention. Under this bill, the requirement effective date would be moved from Jan. 20, 2025 to June 1, 2023. The CBO projects that the bill would have no effect on the federal budget.

For more information on the cost estimate of H.R. 619, click here.

For more information on the cost estimate of H.R. 3813, click here.

GAO Releases Report Concerning CDC Assessment of Jurisdictions’ Isolation and Quarantine Plans

On July 25, the Government Accountability Office (GAO) released a report concerning the Centers for Disease Control and Prevention’s (CDC) assessment of jurisdictions’ isolation and quarantine plans. After interviewing Department of Health and Human Services and Federal Emergency Management Agency officials and reviewing documentation, the GAO discovered that the CDC:

  • Did not provide advance notice of isolation and quarantine guidance to jurisdictions before publication during the COVID-19 pandemic;
  • Has not documented its intentions to provide advance notice; and
  • Has not assessed jurisdictions’ planning for isolation and quarantine.

The GAO conducted this study because a 2023 Consolidated Appropriations Act provision required it to review selected jurisdictions’ isolation and quarantine planning.

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