Washington Healthcare Update

March 11, 2024

This Week in Washington: Congress passes six appropriations bills including skinny health package; House Ways and Means Committee reports bill to block CMS nursing home minimum staffing levels requirement; HHS requests information on private equity and corporate ownership in healthcare.

Congress

House

Senate

Administration

Proposed Rules

Final Rules

Reports

Courts

Congress

House

Congress Passes Six Appropriations Bills and Health Package

Last week, Congress passed the Agriculture-FDA, Commerce-Justice-Science, Energy-Water, Interior-Environment, Military Construction-VA and Transportation-HUD appropriations bills and a health package. The FDA is set to receive $6.72 billion, of which $50 million will go towards helping the agency prioritize cosmetics oversight, alternatives to animal testing and the mitigation of product shortages.

The health package addresses several issues but did not include transparency legislation or pharmacy benefit manager reforms. The bill:

  • Reduces the Medicare physician fee cut by increasing payments 1.68 percent;
  • Provides $4.27 billion for community health centers;
  • Makes permanent a state plan amendment to circumvent the IMD exclusion;
  • Requires state Medicaid plans to cover state Medicaid assisted treatments;
  • Increases funding for the Special Diabetes Program, the Special Diabetes Program for Native Americans and graduate teaching medical programs;
  • Establishes behavioral health clinic services as an optional Medicaid benefit; and
  • Requires HHS to issue guidance on how states can improve integrating behavioral health with primary care.

House Ways and Means Committee Favorably Reports Bill that Would Block CMS Nursing Home Minimum Staffing Rule

On March 5, the House Ways and Means Committee marked up and reported out of committee the Protecting America’s Seniors’ Access to Care Act. The legislation would block the Centers for Medicare and Medicaid Services from finalizing a rule that would establish minimum staffing levels for skilled nursing facilities.

The committee also reported for the full House to consider two other bills which were:

  • H.R. 5074, the Kidney PATIENT Act of 2023, which would delay the inclusion of oral-only end stage renal disease (ESRD) related drugs in the Medicare ESRD prospective payment system; and
  • H.R. 7512, the Real-Time Benefit Tool Implementation Act, which would implement real-time benefit tools under Part D of the Medicare Program.

For more information, click here.

House Budget Committee Marks Up FY 2025 Concurrent Resolution on the Budget

On March 7, the House Budget Committee marked up and reported out of committee the Fiscal Year 2025 Concurrent Resolution on the Budget. The concurrent resolution contains proposals that support site-neutral payment requirements, Medicaid work requirements and the creation of a bipartisan fiscal commission to address Medicare insolvency. It also contains proposals seeking to eliminate the Medicare Drug Price Negotiation Program and the Affordable Care Act tax credits.

For more information, click here.

Protecting Americans’ Data from Foreign Adversaries Act of 2024 Introduced

On March 5, House Energy and Commerce Committee Chairman Cathy McMorris Rodgers (R-WA) and Ranking Member Frank Pallone (D-NJ) introduced H.R. 7520, the Protecting Americans’ Data from Foreign Adversaries Act of 2024.

In many respects, this bill codifies the executive order that President Biden issued on Feb. 28 concerning sensitive personal data. The legislation seeks to ban the sale, transfer or disclosure of Americans’ sensitive data, including health information, to foreign adversary countries or entities controlled by them.

Senate

Senate Finance Committee Chairman Sends Letter Concerning Medicaid and CHIP Unwinding

On March 5, Senate Finance Committee Chairman Ron Wyden (D-OR) and House Energy and Commerce Committee Ranking Member Frank Pallone (D-NJ) sent a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure concerning the unwinding of Medicaid and Children’s Health Insurance Program continuous enrollment in states.

The chairman and ranking member are concerned that errors in state eligibility and enrollment systems and operations are resulting in the disenrollment of millions of lower-income individuals and their children. They are jointly recommending that CMS require states to commit to specific plans to adopt sustainable, long-term system fixes and to make public state eligibility and enrollment operations data.

For more information, click here.

Senators Send Letter Concerning March-In Rights

On March 4, Senate Health, Education, Labor and Pensions Committee Ranking Member Bill Cassidy (R-LA) led sixteen senators in sending a letter to National Institutes of Health (NIH) Director Monica Bertagnolli concerning a Biden administration proposal to use march-in rights to lower drug prices. The senators are concerned that the NIH’s use of march-in rights will dissuade drug manufacturers from partnering with the agency to develop new cures and treatments and will jeopardize patients’ access to them.

In addition, the ranking member sent a letter to Government Accountability Office (GAO) Comptroller General Gene L. Dodaro, requesting that the GAO investigate whether the proposal meets the definition of a rule under the Congressional Review Act.

To read the letter to the NIH Director, click here.

To read the letter to the GAO Comptroller General, click here.

Sen. Warren Sends Letter to GlaxoSmithKline CEO Concerning Inhaler

On March 1, Sen. Warren (D-MA) sent a letter to GlaxoSmithKline (GSK) Chief Executive Officer Emma Walmsley concerning GSK’s decision to discontinue marketing its Flovent HFA inhaler and to replace it with its own authorized generic alternative.

In the letter, Sen. Warren argues that GSK’s decision to discontinue the marketing of Flovent HFA is an attempt to circumvent provisions in the Inflation Reduction Act that require drug manufacturers to pay new rebates to Medicaid based on historical price increases for their drugs. The senator is requesting that GSK submit information concerning the average list and net prices of Flovent HFA and its generic alternative.

For more information, click here.

Senate Budget Committee Holds Hearing on Primary Care

On March 12, the Senate Budget Committee held a hearing to discuss how primary care can improve the efficiency of healthcare. Announced witnesses were:

  • Christopher Koller, President of the Milbank Memorial Fund
  • Amol Navathe, Associate Professor at the University of Pennsylvania Perelman School of Medicine and the Wharton School
  • Bob Rauner, President of the Partnership for a Healthy Nebraska and Representative of the American Academy of Family Physicians
  • Lisa M. Grabert, Visiting Research Professor at the Marquette University College of Nursing
  • Christina Taylor, Chief Medical Officer of Clover Health Value Based Care and President-elect of the Iowa Medical Society

During the hearing, committee Chairman Sheldon Whitehouse (D-RI) introduced a discussion draft of a bill that would encourage the Centers for Medicare and Medicaid Services (CMS) to establish hybrid primary care payments under the Medicare program, provide Medicare beneficiaries with cost-sharing relief for certain primary care services and create a new technical advisory committee to help CMS more accurately determine Fee Schedule rates.

For more information on the hearing, click here.

For more information on the discussion draft, click here.

Administration

HHS Releases Statement Following Change Healthcare Cyberattack

On Feb. 21, Change Healthcare, a division of UnitedHealth Group, was affected by a significant ransomware attack. The attack disrupted medical claims, payment platforms and electronic pharmacy refill services and prevented hospitals and healthcare providers from submitting insurance claims and processing payments. Since the attack, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) have been in discussion with Change Healthcare, impacted providers and state partners to better understand the impacts of the attack.

On March 5, HHS released a statement on the attack and announced new CMS flexibilities aimed at alleviating payment and operational issues for providers and Medicare and Medicaid organizations. In addition, on March 1, Senate Majority Leader Chuck Schumer (D-NY) sent a letter to CMS Administrator Chiquita Brooks-LaSure, urging CMS to make accelerated and advanced payments available to impacted providers.

For more information on the HHS statement, click here.

For more information on the Majority Leader’s letter to CMS, click here.

HHS Launches Joint Inquiry Concerning Impact of Private Equity in Healthcare

On March 5, the Department of Health and Human Services (HHS), the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division launched a joint public inquiry into the impact of private equity and corporate ownership in healthcare.

The agencies will investigate how healthcare market transactions may facilitate consolidation and corporate profits while threatening healthcare safety, quality and affordability. HHS, FTC and DOJ have issued a request for information concerning healthcare transactions led by private payers, private equity funds and alternative asset managers and transactions that do not qualify for antitrust review.

Comments will be accepted until May 6. For more information, click here.

President Highlights Healthcare Priorities in State of the Union Address

On March 7, President Biden gave his State of the Union Address. During the address, the President highlighted a number of his healthcare priorities, including expanding the number of drugs in the Medicare Drug Price Negotiation Program, strengthening access to reproductive health services, extending the $2000 out-of-pocket cap on prescription Medicare drugs to private insurance plans and making permanent the Affordable Care Act Premium Tax Credit.

For more information, click here.

White House Establishes Strike Force on Unfair and Illegal Pricing

On March 5, the White House announced the formation of the Strike Force on Unfair and Illegal Pricing. The Strike Force will be co-chaired by the Federal Trade Commission and the Department of Justice and will focus on identifying anti-competitive, deceptive or fraudulent business practices that keep prescription drug, healthcare, food, housing and financial services costs high.

For more information, click here.

CMS Releases Informational Bulletin Concerning Tobacco Cessation Services

On March 7, the Centers for Medicare and Medicaid Services Center for Medicaid and Children’s Health Insurance Program Services released an informational bulletin highlighting strategies states have used to improve delivery of tobacco cessation services and help beneficiaries quit smoking.

For more information, click here.

CMS Announces Release of Manufacturer RFA for Cell and Gene Therapy Access Model

On March 7, the Centers for Medicare and Medicaid Services announced the release of the Manufacturer Request for Applications for the Cell and Gene Therapy Access Model. The model will initially focus on gene therapies for sickle cell disease and seeks to improve access to treatments for Medicaid beneficiaries with rare diseases. Applications are due by May 1.

For more information, click here.

CMS Receives Counteroffers From All Medicare Drug Price Negotiation Program Companies

On March 4, the Centers for Medicare and Medicaid Services announced that it had received counteroffers from all ten drug manufacturers selected to participate in the first cycle of Medicare drug price negotiations. Negotiations will continue over the next several months and any agreed upon maximum fair prices will be published by Sept. 1 and will take effect beginning in 2026.

For more information, click here.

FDA Delays Approval Decision on Donanemab

On March 8, the Food and Drug Administration (FDA) unexpectedly delayed its decision on whether to approve donanemab, an Alzheimer’s drug developed by Eli Lilly. The FDA announced that it will hold an advisory committee meeting to review safety and efficacy data of the drug’s Phase 3 trial before making a decision.

FDA Approves First OTC Continuous Glucose Monitor

On March 5, the Food and Drug Administration approved the Dexcom Stelo Glucose Biosensor System, the first over-the-counter continuous glucose monitor (CGM). The Dexcom Stelo is an integrated CGM intended to continuously measure, record, analyze and display glucose values in people 18 years and older who do not use insulin and experience problematic hypoglycemia.

For more information, click here.

FDA Approves Jubbonti

On March 5, the Food and Drug Administration approved Jubbonti (denosumba-bbdz), the first interchangeable biosimilar to Prolia (denosumab) and Xgeva (denosumab). Jubbonti is a subcutaneous injection that seeks to increase calcium levels and bone mass in men and women with osteoporosis who have a high risk for fracture.

For more information, click here.

HRSA Announces $50 Million Initiative to Support Rural Opioid Treatment Services

On March 6, the Department of Health and Human Services Health Resource and Services Administration announced the availability of $50 million for the Rural Opioid Treatment and Recovery Initiative. The initiative will focus on supporting comprehensive substance use disorder treatment and recovery services in rural areas. Applications to participate in the initiative are due by May 6.

For more information, click here.

Proposed Rules

CDC Proposes Rule Amending HHS List of Select Agents and Toxins

On Jan. 30, the Centers for Disease Control and Prevention (CDC) released a proposed rule that amends the Department of Health and Human Services’ list of select agents and toxins that have the potential to pose a severe threat to public health and safety. The proposed rule would:

  • Remove Brucella abortus, Brucella melitensis and Brucella suis from the select agent list;
  • Add definitions and provisions to further clarify inactivation of select agents;
  • Add requirements for reporting discoveries of select agents and toxins;
  • Implement new provisions for facility verification requirements for registered biosafety level 3 and animal biosafety level 3 laboratories; and
  • Update the terminology and clarify the specific clade that is a specific agent by changing “Monkeypox virus” to “Mpox virus (clade I).”

The CDC is requesting comments on the proposed changes and seeks feedback on whether they would create additional burdens for regulated entities.

Public comments will be accepted until April 1, 2024. For more information, click here.

CMS Releases Proposed Rule Concerning Medicare Accrediting Organizations

On Feb. 8, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule concerning the oversight of Medicare accrediting organizations (AOs). The proposed rule seeks to strengthen oversight of AOs, reduce conflicts of interest and promote consistency in survey processes. It would:

  • Apply state survey agency (SSA) accountability standards to AOs;
  • Address conflicts of interest and place certain limitations on the fee-based consulting services AOs provide to healthcare facilities they accredit;
  • Prohibit AO owners, surveyors, employees and their immediate families from having an interest in or relationship with a healthcare facility they accredit or from accessing or having input in survey results;
  • Require AOs to report specific information to CMS about how they will monitor, prevent and handle conflicts of interest;
  • Require AOs with poor performance to submit a publicly reported correction plan; and
  • Align AO survey activity requirements and staff training with those of SSAs.

CMS is seeking comments from stakeholders and AOs on how to refine and revise AO oversight standards and processes and is requesting information on the timeframes and expectations for the submission of AO applications.

Public comments will be accepted until April 15, 2024. For more information, click here.

Final Rules

HHS Final Rule Restores Religious Discrimination Protections in Social Services

On March 1, the Department of Health and Human Services (HHS) released a final rule that will restore religious discrimination protections for beneficiaries of federally funded social services and clarify the rights and obligations of organizations providing such services. The final rule will:

  • Require federal grantees that administer social service programs in the United States, such as job training, academic enrichment opportunities and housing services, to notify beneficiaries of their right to be free from discrimination on the basis of religion;
  • Make clear that all covered social service programs may not discriminate against beneficiaries on the basis of religion; and
  • Encourage government agencies that fund domestic programs to help beneficiaries identify alternative federally funded service providers in their area.

In addition to HHS, the Departments of Agriculture, Education, Homeland Security, Housing and Urban Development, Justice, Labor, Veterans Affairs and the U.S. Agency for International Development issued the rule.

The final rule will go into effect on April 3, 2024. For more information, click here.

CMS Final Rule to Cut Medicaid Disproportionate Share Hospital Payments

On Feb. 24, the Centers for Medicare and Medicaid Services (CMS) released a final rule that will implement changes made to Social Security Act provisions governing Medicaid Disproportionate Share Hospital (DSH) payments by the Consolidated Appropriations Act of 2021 (CAA 2021).

CAA 2021 made several changes concerning Medicaid DSH payments. It notably modified the calculation of the Medicaid portion of the hospital-specific DSH limit to only include costs and payments for services furnished to beneficiaries for whom Medicaid is the primary payer for such services.

This final rule will:

  • Cut DSH payments by $8 billion annually from fiscal years 2024 to 2027;
  • Implement CAA 2021 changes to Medicaid DSH payments and clarify the timing and availability of data, methodology and technical requirements;
  • Revise regulatory payment and financing definitions in addition to other regulatory language that could be subject to misinterpretation;
  • Refine administrative procedures used by states to comply with federal regulations; and
  • Remove regulatory requirements that have been difficult to administer.

The final rule will go into effect on April 23, 2024. For more information, click here.

FDA Releases Final Rule Regarding Biologics License Applications and Master Files

On Feb. 9, the Food and Drug Administration released a final rule regarding biologics license applications and the use of master files by applications licensed under the Public Health Services Act (PHS Act). The final rule will:

  • Clarify that formerly approved applications for biologics products that have been deemed licenses for the biological products under the PHS Act can continue to incorporate by reference DS/DSI/DP information contained in a drug master file, if the information was referenced at the time the application was deemed to be a license;
  • Amend regulations concerning the referencing of information contained in master files by biologics license applications;
  • Clarify that investigational new drug applications for products that would be subject to licensure under the PHS Act may incorporate by reference any information in a master file; and
  • Amend regulations to address the use of master files for the constituent parts of combination products licensed under the PHS Act.

The final rule will go into effect on March 13, 2024. For more information, click here.

OCR Releases Final Rule Concerning SUD Patient Record Confidentiality

On Feb. 8, the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) released a final rule concerning the confidentiality of substance use disorder (SUD) patient records, that seeks to increase coordination among providers treating SUD patients and strengthen confidentiality protections. The final rule will:

  • Permit the use and disclosure of Part 2 records based on a single patient consent given once for all future uses, including disclosures of treatment, payment and healthcare operations;
  • Permit redisclosure of Part 2 records by Health Insurance Portability and Accountability Act covered entities and business associates;
  • Grant patients under Part 2, the right to obtain an accounting of disclosures and the right to request restrictions on disclosures;
  • Expand prohibitions on the use and disclosure of Part 2 records in civil, criminal, administrative and legislative proceedings; and
  • Grant HHS enforcement authority to impose potential civil money penalties for Part 2 violations.

In addition to the OCR, the Substance Abuse and Mental Health Services Administration is proposing the rule. Covered entities must comply with the rule by Feb. 16, 2026.

The final rule will go into effect on April 16, 2024. For more information, click here.

ACL Final Rule Updates Regulations for Implementing OAA Programs

On Feb. 6, the Administration for Community Living (ACL) released a final rule that would update regulations for implementing Older American Act (OAA) programs that provide seniors with services including meals, job training, homemaker services, transportation services, adult day care services, nutrition assistance, caregiver support and more. The final rule will:

  • Clarify requirements for state and area plans on aging and detail requirements for coordination among tribal, state and local programs;
  • Improve consistency of definitions and operations between state and tribal programs;
  • Specify fiscal requirements, who is eligible to receive services and how funds can be used;
  • Clarify required state and local agency policies and procedures and establish expectations regarding conflicts of interest;
  • Require state agencies to streamline processes for area agencies on aging to receive approval and establish contracts and commercial relationships;
  • Provide guidance on the National Family Caregiver Support Program and the Native American Caregiver Support Program;
  • Update definitions, modernize requirements and clarify flexibilities within OAA nutrition programs; and
  • Clarify the role of aging networks in promoting alternatives to guardianship.

Regulated entities will have until Oct. 1, 2025, to fully comply with the final rule.

The final rule will go into effect on March 15, 2024. For more information, click here.

SAMHSA Final Rule Seeks to Expand Access to Medications for Opioid Use Disorder

On Jan. 31, the Substance Abuse and Mental Health Services Administration released a final rule that updates regulations concerning opioid treatments programs (OTPs) and seeks to expand access to medications for opioid use disorder. The final rule will:

  • Make COVID-19 flexibilities that expanded eligibility for patients to obtain take-home methadone doses permanent;
  • Allow new patients who will be treated by an OTP with methadone to be evaluated via audio-visual telehealth platforms;
  • Allow new patients who will be treated by an OTP with buprenorphine to be evaluated via audio-only telehealth platforms;
  • Allow nurse practitioners and physician assistants to order medications in OTPs;
  • Eliminate the requirement that patients demonstrate a full year of addiction before being eligible for treatment;
  • Expand access to interim treatment and allow patients to initiate medication treatment while awaiting further services; and
  • Promote patient-centered models of care.

In addition, the rule removes outdated language among regulations and implements new definitions reflecting current medical usage.

The final rule will go into effect on April 2, 2024. For more information, click here.

CMS Final Rule Improves Prior Authorization Process and Access to Health Information

On Jan. 17, the Centers for Medicare and Medicaid Services released a final rule that seeks to expand access to health information and improve the prior authorization process. The final rule will:

  • Require Medicare Advantage organizations, Medicaid and Children’s Health Insurance Program fee-for-service programs and managed care plan entities to send prior authorization decisions within 72 hours for expedited requests and seven calendar days for standard requests for medical items and services;
  • Require impacted payers to include a specific reason for denying a prior authorization request, publicly report prior authorization metrics and implement a Health Level 7 Fast Healthcare Interoperability Resources Prior Authorization application programming interface (API);
  • Require impacted payers to include information about prior authorizations in their current Patient Access API and implement a Provider Access API to retrieve patient claims, encounter, clinical and prior authorization data;
  • Add a new Electronic Prior Authorization measure for eligible clinicians under the Merit-based Incentive Payment System Promoting Interoperability performance category; and
  • Require hospitals and critical access hospitals in the Medicare Promoting Interoperability Program to report their use of payers’ Prior Authorization APIs to submit an electronic prior authorization request.

The final rule will go into effect on April 8, 2024. For more information, click here.

FDA Final Rule Implements Direct-To-Consumer Prescription Drug Ad Standards

On Nov. 21, the Food and Drug Administration (FDA) released a final rule that implements new standards for direct-to-consumer (DTC) television and radio prescription drug advertisements. The final rule will require advertisers to:

  • Present information using language that is clear and readily understandable by consumers;
  • Place textual information against a contrasting background for a sufficient duration, using a font style and size that is easily legible;
  • Announce prescription drug information in the same volume, articulation and pacing used in the rest of the ad;
  • Certify that no distracting representations including statements, text, images or sounds are used during the ad’s major statement; and
  • Simultaneously present visual and audible information for ads in television format.

The final rule complements a final guidance the FDA issued in June that outlined how advertisers should present quantitative efficacy and risk information in DTC promotional labeling and ads.

The final rule will go into effect on May 20, 2024. The compliance date of the rule is Nov. 20, 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

ASPE Releases Report Concerning Impact of IRA on Rural Medicare Beneficiary Costs

On March 4, the Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE) released a report outlining the projected impact of the Inflation Reduction Act on lower drug costs for Medicare Part D enrollees living in rural areas. ASPE projects that approximately 289,000 enrollees who do not receive financial assistance will save $1000 or more due to IRA drug-related provisions in 2025.

For more information, click here.

CBO Releases Report Outlining Answers to Questions Submitted to the Record During Oversight Hearing

On March 8, the Congressional Budget Office (CBO) released a report that outlines answers to questions that were submitted to the record during the House Budget Committee CBO oversight hearing on Jan. 31, by committee Chairman Jodey Arrington (R-TX) and Reps. Carter (R-GA), Cline (R-VA), Ferguson (R-GA) and Yakym (R-IN).

For more information, click here.

CBO Releases Presentation Outlining How it Estimated Budgetary Effects of No Surprises Act of 2021

On March 7, the Congressional Budget Office released a presentation outlining how it estimated the budgetary effects of the No Surprises Act of 2021. The legislation established protections for patients receiving out-of-network care, created an arbitration process for resolving payment disputes and directed arbiters to consider the qualifying payment amount as the benchmark for payment, among other factors.

For more information, click here.

Courts

U.S. District Court Judge Denies AstraZeneca Lawsuit Against Medicare Drug Price Negotiation Program

On March 1, U.S. District Court for the District of Delaware Chief Judge Colm Connolly dismissed a lawsuit brought by AstraZeneca against the Medicare Drug Price Negotiation Program, ruling that the program is voluntary and does not violate AstraZeneca’s constitutional rights.

The Chief Judge argued that AstraZeneca had failed to establish that it had Article III standing to sue and had suffered or would soon suffer an injury due to the negotiation program. AstraZeneca had argued that the manner in which the Centers for Medicare and Medicaid Services interpreted a statutory definition on what drugs are subject to negotiations would diminish the company’s incentive to look for additional uses of its drug Farxiga. However, the Chief Judge ruled that losing an incentive does not constitute a concrete injury.

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