Washington Healthcare Update

January 22, 2024

This Week in Washington: Congress passes continuing resolution; CMS releases final rule concerning prior authorization.

Congress

House

Senate

Administration

Proposed Rules

Final Rules

Courts

Reports

Congress

House

The House is in district work week.

Congress Passes Continuing Resolution

On Jan. 18, the House and Senate passed a continuing resolution (CR) and averted a partial government shutdown. The CR will maintain staggered funding deadlines and will extend funding to March 1 and 8. Funding had originally been scheduled to expire on Jan. 19 and Feb. 2.

Funding for the departments of Agriculture, Energy, Veterans Affairs, Transportation and Housing and Urban Development has been extended to March 1 and funding for the departments of Commerce, Justice, Defense, Homeland Security, Interior, Labor, Education and Health and Human Services has been extended to March 8. The CR notably extends healthcare extenders such as funding for community health centers, teaching hospitals and diabetes programs and a delay of Medicaid disproportionate hospital share cuts.

House Budget Committee Favorably Reports Fiscal Commission Act of 2024

On Jan. 18, the House Budget Committee marked up and reported out of committee H.R. 5779, the Fiscal Commission Act of 2024. The legislation would create a bipartisan debt commission, which would be tasked with addressing the national debt and making spending and revenue reform recommendations. Some Democrats and Medicare advocates argue that the bill will fast-track cuts to Social Security, Medicare and Medicaid.

In addition to H.R. 5779, the committee also reported H.R. 6952, the Fiscal State of the Nation Act and H.R. 6957, the Debt to GDP Transparency and Stabilization Act out of committee.

For more information, click here.

Senate

Senate HELP Committee to Vote on Issuing Subpoenas to Pharmaceutical Company CEOs

On Jan. 18, Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders (I-VT) announced that the committee will vote on Jan. 31 on whether to issue subpoenas for Johnson and Johnson chief executive officer (CEO) Joaquin Duato and Merck CEO Robert Davis to testify before the committee concerning the higher prices they charge for medicine in the U.S. compared to other countries.

For more information, click here.

Senate HELP Committee Ranking Member Seeks Information on Pharmacy 340B Revenue

On Jan. 17, Senate Health, Education, Labor and Pensions Committee Ranking Member Bill Cassidy (R-LA) sent letters to president and chief executive officer (CEO) of CVS Health Karen Lynch and Walgreens CEO Tim Wentworth, requesting they submit information on CVS Health’s and Walgreens’ participation in the 340B Drug Discount Program.

The ranking member has been investigating how healthcare providers use revenue generated from the 340B program and is interested in understanding how major contract pharmacies generate revenue and whether that revenue is directly benefiting patients.

For more information, click here.

Senate HELP Committee Holds Hearing on Long COVID

On Jan. 18, the Senate Health, Education, Labor and Pensions Committee held a hearing on Long COVID and discussed how Long COVID research and patient care could be improved. Witnesses included:

  • Angela Meriquez Vázquez, M.S.W., Long COVID Patient
  • Rachel Beale, M.B.A., Long COVID Patient
  • Nicole Heim, Parent of Long COVID Patient
  • Michelle Harkins, M.D., University of New Mexico Professor of Medicine
  • Ziyad Al-Aly, M.D., Clinical Epidemiologist at Washington University in St. Louis
  • Charisse Madlock-Brown, Ph.D., University of Iowa Associate Professor of Health Informatics
  • Tiffany Walker, M.D., Emory University School of Medicine Assistant Professor

For more information, click here.

Health Care PRICE Transparency Act 2.0 Introduced

On Jan. 10, Sens. Braun (R-IN), Grassley (R-IA), Smith (D-MN) and Hickenlooper (D-CO) and Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders (I-VT) introduced the Health Care PRICE Transparency Act 2.0.

The legislation seeks to strengthen the transparency of healthcare pricing by:

  • Requiring machine-readable files of all negotiated rates and cash prices between plans and providers;
  • Requiring actual prices for 300 shoppable services to be published, with all services by 2025;
  • Increasing maximum annual penalties to $10,000,000;
  • Codifying the Transparency in Coverage rule; and
  • Providing group health plans the right to access, audit and review claims encounter data.

For more information, click here.

Administration

ARPA-H Launches PARADIGM Program

On Jan. 16, the Advanced Research Projects Agency for Health launched the Platform Accelerating Rural Access to Distributed and InteGrated Medical care program. The program seeks to address health disparities in rural areas and facilitate the development of mini CT-scanners and remote medical device software.

For more information, click here.

CMS Announces Innovation in Behavioral Health Model

On Jan. 18, the Centers for Medicare and Medicaid Services announced the Innovation in Behavioral Health model. The model aims to improve the quality of care for Medicaid and Medicare populations with severe mental health and substance use disorders.

For more information, click here.

CMS IDR Operations Proposed Rule Comment Period to Reopen for 14 Days

The comment period for a proposed rule concerning the No Surprises Act independent dispute resolution process, which was proposed by the Centers for Medicare and Medicaid Services, the Internal Revenue Service, the Employee Benefits Security Administration and the Office of Personnel Management in November 2023, will reopen for 14 days.

A notice will be published in the Federal Register on Jan. 22 and comments will be due by Feb. 5.

FDA Releases Joint Statement Concerning Diagnostic Test Oversight

On Jan. 18, the Food and Drug Administration (FDA) released a statement written by FDA Center for Devices and Radiological Health Director Jeff Shuren and Centers for Medicare and Medicaid Services Center for Clinical Standards and Quality Acting Chief Medical Officer Dora Hughes, concerning the oversight both agencies currently provide over diagnostic tests. The statement also explains why the FDA seeks to restore its oversight of laboratory-developed tests.

For more information, click here.

FDA Approves CASGEVY Therapy for Transfusion-Dependent Beta Thalassemia Patients

On Jan. 16, the Food and Drug Administration approved the use of CASGEVY, a CRISPR-based genetic therapy, in patients 12 years and older with transfusion-dependent beta thalassemia (TDT). TDT is a genetic disease that impairs the production of beta-globin in red blood cells.

FDA CDRH Releases FY 2023 Annual Report

On Jan. 18, the Food and Drug Administration Center for Devices and Radiological Health (CDRH) released its fiscal year 2023 annual report. The report highlights the work the CDRH undertook in 2023 regarding medical device authorizations, shortages, innovation and safety.

For more information, click here.

FDA CDER Office of Compliance Releases FY 2023 Annual Report

On Jan. 16, the Food and Drug Administration Center for Drug Evaluation and Research Office of Compliance released its fiscal year 2023 annual report. The report summarizes the policy and outreach actions taken by the Office of Compliance concerning drug manufacturing compliance, clinical trial oversight, bioresearch monitoring and more.

For more information, click here.

FDA Releases Report on Mitigating Clinical Study Disruptions During Disasters Public Meeting

On Jan. 16, the Food and Drug Administration released a report summarizing the discussions that took place during an October 2023 public meeting it held in collaboration with the Clinical Trials Transformation Initiative concerning the mitigation of clinical study disruptions during disasters and public health emergencies.

For more information, click here.

Proposed Rules

DOJ Civil Rights Division Proposes Rule Regarding Medical Diagnostic Equipment Access for the Disabled

On Jan. 9, the Department of Justice Civil Rights Division released a proposed rule that seeks to improve access to medical diagnostic equipment (MDE) for people with disabilities. The proposed rule would update regulations under Title II of the Americans with Disabilities Act (ADA) and would implement new technical standards that state and local governments would have to adhere to, to meet obligations under Title II of the ADA.

The proposed rule would:

  • Adopt the U.S. Access Board’s MDE standards as the technical standards for accessible MDE;
  • Require state and local government entities to ensure that programs, services and activities using MDE are accessible to individuals with disabilities;
  • Require entities to address access barriers resulting from a lack of existing accessible MDE;
  • Implement new requirements for newly acquired MDE; and
  • Ensure that staff are able to successfully operate accessible MDE and assist with transfers and positioning of individuals with disabilities.

Public comments will be accepted until Feb. 12, 2024. For more information, click here.

FDA Proposes Rule Regarding Classification of Wound Dressings and Washes

On Nov. 30, the Food and Drug Administration (FDA) released a proposed rule that would classify certain types of wound dressings and liquid wound washes containing antimicrobials and other chemicals, as solid wound dressings. The FDA currently regulates gel, cream, ointment and liquid wound dressings and washes as unclassified devices requiring premarket notification.

Under the proposed rule, the FDA would classify wound dressings and liquid wound washes with a high level of antimicrobial resistance concern as Class III medical devices. In addition, wound dressings and washes with a medium or low level of antimicrobial resistance would be classified as Class II medical devices.

Public comments will be accepted until Feb. 28, 2024. For more information, click here.

IHS Proposed Rule Removes Outdated Regulations

On Jan. 8, the Indian Health Service (IHS) released a proposed rule that aims to remove outdated regulations in the Code of Federal Regulations that do not align with current statutory text of the Hyde Amendment. The proposed rule intends to eliminate confusion regarding the legal effect of outdated regulations and seeks to align IHS guidelines with congressional guidelines governing the Department of Health and Human Services.

Public comments will be accepted until March 8, 2024. For more information, click here.

Final Rules

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.

FCC Final Rule Updates Rural Health Care Program

On Jan. 10, the Federal Communications Commission (FCC) released a final rule that updates the Rural Health Care (RHC) Program and strengthens access to telehealth services in rural areas. The rule seeks to support rural healthcare providers with the costs of broadband and other eligible services and implements four updates to the RHC program, which include:

  • Permitting conditional approval of eligibility for healthcare providers to allow them to begin competitive bidding and request funding;
  • Granting program participants more flexibility by pushing back the deadline for providers to change their Service Provider Identification Number to align with the invoice deadline;
  • Eliminating the “standard urban distance” component of the urban rate rules; and
  • Allowing healthcare providers to request changes to the dates of their evergreen contracts following a funding commitment.

In addition, the FCC also released a proposed rule that seeks to remove barriers to building advanced broadband networks and expedite utility pole improvements and copper network retirements.

The final rule will go into effect on Feb. 12, 2024. For more information, click here.

OCR Final Rule Strengthens Conscience Protections

On Jan. 9, the Department of Health and Human Services Office for Civil Rights (OCR) released a final rule that seeks to strengthen the process for enforcing federal conscience laws and provide new protections against conscience and religious discrimination. The final rule will:

  • Partially rescind a May 2019 conscience final rule that was deemed unlawful by three federal district courts. The rule strengthened the rights of healthcare workers to refuse to provide services such as abortions and gender-affirming care based on moral and religious beliefs;
  • Restore OCR’s role in overseeing the enforcement process for federal healthcare conscience protection statutes;
  • Strengthen protections against discrimination on the basis of conscience;
  • Encourage entities to post a notice of rights to inform providers and patients of their rights under federal healthcare conscience protection statutes; and
  • Implement a severability provision to preserve portions of the rule if part of the rule is deemed unlawful.

In addition, the final rule states that OCR investigations will be prompt and clarifies that certain conscience statutes apply to more than just providers.

The final rule will go into effect on March 11, 2024. For more information, click here.

CMS Final Rule Updates CLIA Fees and Clarifies Fee Regulations

On Dec. 28, the Centers for Medicare and Medicaid Services (CMS) released a final rule that updates Clinical Laboratory Improvement Amendments of 1988 (CLIA) fees and clarifies CLIA fee regulations. The final rule will:

  • Implement a sustainable funding process for the CLIA program through a biennial two-part increase of CLIA fees;
  • Finalize the incorporation of limited/specific laboratory fees, including fees for follow-up surveys, substantiated compliant surveys and revised certificates;
  • Finalize the distribution of administrative overhead costs of test complexity determination for waived tests and test systems with a nominal increase in Certificate of Waiver (CoW) fees;
  • Clarify the methodology used to calculate program compliance fees;
  • Amend histocompatibility and personnel regulations under CLIA to address obsolete regulations and update the regulations to incorporate technological changes; and
  • Amend provisions governing alternative sanctions, including civil money penalties, a directed plan of correction, a direct portion of a plan of correction and on-site state monitoring, to allow for their imposition on CoW laboratories.

In addition to CMS, the Centers for Disease Control and Prevention is also proposing the rule.

The rule will go into effect on Jan. 27, 2024. However, some sections will go into effect on Dec. 28, 2024.

For more information, click here.

ONC Final Rule Establishes Transparency Requirements for Artificial Intelligence and Predictive Algorithms

On Dec. 13, the Department of Health and Human Services Office of the National Coordinator for Health Information Technology (ONC) released a final rule that updates the ONC Health IT Certification Program and establishes new standards, implementation specifications and certification criteria. The final rule will:

  • Establish transparency requirements for artificial intelligence and other predictive algorithms that are part of certified health IT;
  • Adopt the United States Core Data for Interoperability Version 3 as the new baseline standards within the ONC Health IT Certification Program as of Jan. 1, 2026;
  • Revise certain information-blocking definitions and exceptions to support information sharing; and
  • Require developers of certified health IT to report certain metrics as part of their participation in the Certification Program, to better understand how certified health IT is used to support care delivery.

The final rule will go into effect on Feb. 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, 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

DOJ Withdraws Appeal in Drug Copay Assistance Case

On Jan. 16, the Department of Justice announced that it would withdraw an appeal it submitted to a September 2023 ruling by the U.S. District Court for the District of Columbia, which struck down the Department of Health and Human Services 2021 Notice of Benefit and Payment Parameters, which allowed health plans to not count drug manufacturer copay assistance toward a beneficiary’s deductible and out-of-pocket maximum.

Reports

GAO Releases Report Regarding VA Monitoring of Maternal Deaths and Mental Health Screenings

On Jan. 16, the Government Accountability Office (GAO) released a report regarding the monitoring of maternal deaths and mental health screenings of pregnant and postpartum veterans by the Department of Veterans Affairs (VA).

The GAO analyzed VA data on deaths and severe maternal morbidity, interviewed VA officials and staff and reviewed VA policies and guidelines and discovered that the VA has not yet specified whether it will monitor severe maternal morbidity rates by race and ethnicity or stated when it will begin monitoring the occurrence of anxiety and post-traumatic stress disorder among veterans. The GAO conducted this study because it is required to review veterans’ maternal health by a congressional provision in statute.

For more information, click here.

GAO Releases Report Regarding ASPR Workforce Planning

On Jan. 16, the Government Accountability Office (GAO) released a report concerning workplace planning challenges the Administration for Strategic Preparedness and Response (ASPR) is facing.

After reviewing ASPR documentation and data and interviewing Department of Health and Human Services and Office of Personnel Management officials, the GAO discovered that ASPR has struggled with addressing hiring costs, time-to-hire, service quality and unique workforce needs and has not yet implemented tailored recruitment and hiring strategies or carried out an agency-wide workforce assessment. The GAO conducted this study because a Coronavirus Aid, Relief, and Economic Security Act provision requires it to report on oversight efforts related to the COVID-19 pandemic.

For more information, click here.

Authors

Stephanie Kennan
Senior Vice President
Federal Public Affairs
Washington, DC