Mar 16, 2020

Washington Healthcare Update

This week in Washington: House passes Families First Coronavirus Response Act, legislation moves to Senate; CMS releases guidance and information on COVID-19.





Proposed Regulations/Guidance

Final Regulations/Guidance




House Passes Families First Coronavirus Response Act

On March 14, the House passed by 363-40, the Families First Coronavirus Response Act to enhance the federal government’s response to the coronavirus outbreak and address the impact of the virus on personal safety and financial security.   

The legislation expands access to free testing, provides $1 billion in food aid, and extends sick leave benefits.  The Senate has not acted on the legislation but will do so this week. The House left for a week long recess after passing the legislation to pressure the Senate into not making changes.  

The White House supported the legislation and urged Republicans to support the bill.

Find a summary and the text of the legislation here.


House and Senate Pass Emergency Supplemental Appropriations Package to Address Coronavirus – President Signs Legislation

On March 6, President Trump signed the $8.3 billion emergency funding package Congress passed in the same week, sending funds to federal agencies and states working to combat a rising number of coronavirus cases in the U.S. The bill, H.R. 6074, provides a total of $7.7 billion in new discretionary spending and authorizes an additional $490 million in mandatory spending through a Medicare change. More than $400 million will be disbursed to states within the first 30 days of the bill’s enactment, with each state receiving no less than $4 million.


President Declares National Emergency

On March 13, the president declared a national emergency in relation to the coronavirus.   

The declaration will provide the Department of Health and Human Services (HHS) with critical authorities to waive:

  • Certain laws to enable telehealth, remote doctors’ visits, and hospital check-ins
  • Licensing requirements so doctors from other states can provide services in areas with the greatest need.
  • Critical Access Hospital requirements to allow those hospitals to have more beds and longer lengths of stay
  • The requirement of a 3-day hospital stay prior to admission to a nursing home.
  • Rules hindering hospitals’ ability to bring additional physicians on board or obtain needed office space.
  • Restrictions on where hospitals can care for patients.

HHS Publishes Final Regulations on Info Sharing and Interoperability

On March 9, the U.S. Department of Health and Human Services finalized two sets of rules that will govern how providers, payers and technology vendors must design their systems to give patients safe and secure access to their digital health data. 

The rules issued by the Office of the National Coordinator for Health Information Technology and the Centers for Medicare and Medicaid Services fulfill the interoperability and information-blocking provisions of the 21st Century Cures Act. 

The ONC rule establishes new regulations to prevent information-blocking practices and anti-competitive behaviors by health care providers, developers of certified health IT products, health information exchanges and other information networks. It also specifies the reasonable and necessary activities that do not constitute information blocking. 

The rule updates certification requirements for health IT developers and establishes new provisions to ensure that providers using certified technologies have the ability to communicate about usability, user experience, interoperability and security. This includes, with some limitations, the ability to document challenges using screenshots and video, which ONC says are critical forms of communication.

It also requires EHRs to provide the necessary clinical data to promote new business models of care. The final rule also has an array of requirements for standards-based application programming interfaces.  

The CMS final rule requires health plans in Medicare Advantage, Medicaid, CHIP and federal exchanges to share claims data electronically with patients. API will allow patients to access their data through any third-party application they choose to connect to the API and could be used to integrate a health plan’s information to a patient’s HER.  

In addition the CMS final rule establishes a new Condition of Participation for all Medicare and Medicaid participating hospitals, requiring them to send electronic notifications to another health facility, community provider or practitioner when a patient is admitted, discharged or transferred. 

CMS will also require states to send enrollee data daily beginning April 1, 2022, for beneficiaries enrolled in both Medicare and Medicaid. This requirement’s goal is to improve the coordination of care for this population. 

For more information on both rules here

Proposed Regulations/Guidance

FDA: Change in Safety Requirements for Diabetic Drugs

On March 9, the Food and Drug Administration (FDA) released a draft guidance to no longer require drug manufacturers to conduct large cardiovascular safety studies for all new type 2 diabetes therapies. The FDA is recommending new safety requirements that will focus on evaluations that are broader than heart disease. Companies will need to include at least 4,000 patients exposed to the drug in phase III clinical trials, with at least 1,500 patients exposed to the drug for at least one year and 500 patients exposed to the drug for at least two years.

Find the draft guidance here. Public comments are due by June 8, 2020.

CMS: Comprehensive Care for Joint Replacement (CJR) Model Proposed Extension and Changes

On Feb. 20, the Centers for Medicare and Medicaid Services (CMS) issued a rule that proposes a three-year extension and changes to the episode definition and pricing in the Comprehensive Care for Joint Replacement (CJR) Model. The Model, which is currently scheduled to end on Dec. 31, 2020, aims to reduce expenditures while preserving or enhancing quality of care by supporting better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements (also called lower extremity joint replacements or LEJR). This rule proposes to change certain aspects of the CJR Model, including incorporating outpatient hip and knee replacements into the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements, gainsharing caps and the appeals process. Additionally, to allow time to evaluate the proposed changes, the rule proposes to extend the length of the CJR Model for an additional three years, through Dec. 31, 2023, for certain participant hospitals.

Find the proposal rule here.

CMS: 2021 Medicare Advantage and Part D Advance Notice Part II

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) released Part II of the calendar year (CY) 2021 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Advance Notice). CMS released Part I of the Advance Notice on Jan. 6, 2020. The notice is seeking comment on whether it should develop measures of generic and biosimilar utilization that could be used to calculate a plan’s star rating, so CMS could reward plans that encourage adoption of lower-cost products.

Find the notice here.

CMS will publish the final Rate Announcement by April 6, 2020.

CMS: Contract Year 2021 and 2022 Medicare Advantage and Part D

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit (Part D) program. Medicare Part D plans will be allowed to offer two specialty tiers on their drug formularies starting in 2021. The proposed rule requires that one of the two specialty tiers be a “preferred” tier that offers lower cost sharing for beneficiaries. The maximum allowed cost sharing for the specialty tiers would be between 25 percent and 33 percent, depending on whether the plan includes a deductible.

Drugs that cost $670 a month or more must currently be placed on one specialty tier. Allowing two tier options should give health plans leverage to work with drug manufacturers to get prices lower if the manufacturer wants to price their product at a more accessible cost to patients compared with their competitors. The proposed rule also requires Part D plans to implement by Jan. 1, 2022, a tool that will provide beneficiaries with real-time details on the cost of drugs based on their plan coverage and alternatives.

Find the proposed rule here.

CMS: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

On Jan. 31, the Centers for Medicare and Medicaid Services (CMS) released the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the proposed 2021 Payment Notice. This is the second year in a row that the proposed rule has been late. 

CMS proposes to maintain the Federally Facilitated Exchange (FFE) user fee rate of 3.0 percent of premium, and the State-based Exchange on the Federal Platform (SBE-FP) user fee rate of 2.5 percent of premium based on the portion of FFE user fee-eligible costs allocated to SBE-FP activities. Alternatively, CMS is considering and seeking comment on reducing the FFE and SBE-FP user fee rate below the 2020 plan year level to reflect estimates of premium increases and enrollment decreases for the 2021 plan year, as well as potential savings resulting from cost-saving measures implemented over the last several years in hopes of reducing the user fee burden on consumers and creating downward pressure on premiums.

CMS is proposing changes to the policy regarding how drug manufacturer coupons accrue towards the annual limitation on cost sharing in response to stakeholder feedback indicating Treatment of Drug Manufacturer Coupons. CMS is proposing to amend current Medical Loss Ratio (MLR) regulations to require issuers to deduct from incurred claims the prescription drug rebates and other price concessions attributable to the issuer’s enrollees and received and retained by an entity providing pharmacy benefit management services to the issuer. CMS also proposes to clarify more generally that issuers must report expenses for services outsourced to or provided by other entities in the same manner as issuers’ expenses for non-outsourced services. These changes would help lower premiums by helping ensure that consumers’ premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses.

Find the proposed rule here. Public comments are due by April 6, 2020.

Final Regulations/Guidance

FDA: Final Guidance on Third-Party Device Reviews

On March 11, the Food and Drug Administration (FDA) released a final guidance on reducing duplicative reviews in the most common pathway medical device manufacturers bring products to market. The guidelines outline what types of low- to moderate-risk devices submitted under the 510(k) program are eligible to be reviewed by third-party firms instead of the FDA. The guidelines also detail how the FDA oversees those firms and how it plans to cut down on the need to routinely re-review their determinations.

Find the final guidance here.

FDA Postponing Routine Foreign Inspections Due to Coronavirus

On March 10, the Food and Drug Administration (FDA) announced it will postpone most foreign inspections of medical products due to the coronavirus, effective immediately. The FDA will still consider conducting “mission-critical” inspections on a case-by-case basis. The decision comes after multiple State Department and Centers for Disease Control and Prevention (CDC) advisories to limit trips to certain countries, other nations’ decisions to restrict foreign visitors and travel guidance from the Office of Personnel Management.

CMS Information Concerning COVID-19

On March 10, the Centers for Medicare and Medicaid Services (CMS) released a supplement to its guidance to home health agencies and dialysis facilities to protect the health and safety of patients and providers in response to the 2019 novel coronavirus (COVID-19) outbreak.

The memoranda were developed from frequently asked questions CMS has received about interacting with patients amid COVID-19. The guidance offers actionable information to health care workers on the screening, treatment and transfer procedures to follow when interacting with patients. This action is part of the broader effort by the White House Task Force to ensure that health care providers and patients—particularly those at high-risk of complications from COVID-19—remain healthy while helping to contain the spread of the disease. 

On March 13, CMS issued Frequently Asked Questions to ensure individuals, issuers and states have clear information on coverage benefits for COVID-19, to clarify information concerning access to the health benefits that can help keep people healthy while helping to contain the spread of this disease.

On March 13, CMS posted a fact sheet to concerning price information of both CDC and non-CDC COVID-19 tests. On February 13 and March 5, CMS announced new Healthcare Common Procedural Coding System (HCPCS) codes for health care providers and laboratories to test patients for SARS-CoV-2. Starting in April, laboratories performing the test can bill Medicare and other health insurers for services that occurred after Feb. 4, 2020, using the newly created HCPCS code (U0001). This code is only to be used for the tests developed by the Centers for Disease Control and Prevention (CDC). Laboratories performing non-CDC laboratory tests for SARS-CoV-2/2019-nCoV (COVID-19) can bill for them using a different HCPCS code (U0002).

  • Medicare’s initial payment for the CDC test will be about $36 and non-CDC tests will be around $51. These prices may vary slightly depending on the local Medicare Administrative Contractor (MAC). View the full price by MAC list here.

CMS: Medicaid Maternal and Infant Health Initiative Briefs

On March 9, the Centers for Medicare and Medicaid Services (CMS) published three Maternal and Infant Health Initiative (MIHI) briefs. The three issue briefs describe work during the first phase of CMS’s MIHI, designed to help states implement quality measurement and improvement projects.

Issue briefs:

  • Improving Postpartum Care: Summary of state projects from the Postpartum Care Action Learning Series and Adult Medicaid Quality Grant Program: This issue brief describes the quality improvement (QI) teams in 10 states, their aims, the interventions they tested, their results and lessons learned. In addition, this fact sheet provides summaries of the postpartum care-related projects that four states undertook as Adult Medicaid Quality (AMQ) grantees.
  • The Maternal and Infant Health Initiative Grant Program to Support Development and Testing of Medicaid Contraceptive Care Measures: CMS MIHI grant supported development and testing of Medicaid contraceptive care measures. This analytic brief discusses the MIHI grant program, describes the contraceptive care measures developed as part of this effort, summarizes data reported by the MIHI grantees, highlights uses of the data and identifies lessons learned.
  • Improving Postpartum Care: State Projects Conducted through the Postpartum Care Action Learning Series and Adult Medicaid Quality Grant Program: This brief outlines the lessons learned about payment strategies to improve postpartum care visit rates and summarizes the changes three states made related to paying for maternity care in order to improve postpartum care.


Find a comprehensive look at “Courts and Healthcare Policy in 2020” here.


MACPAC Releases March 2020 Report to Congress

On March 13, the Medicaid and CHIP Payment and Access Commission (MACPAC) released its March 2020 Report to Congress on Medicaid and CHIP, highlighting three issues of ongoing interest to Congress: payment to safety-net hospitals; the quality of behavioral health care and care provided to children who have health coverage through Medicaid or the state Children’s Health Insurance Program (CHIP); and the timeliness and quality of evaluations of Medicaid demonstrations.

Find the full report here.


GAO: Medicare and Medicaid – Alignment of Managed Care Plans for Dual-Eligible Beneficiaries

On March 13, the Government Accountability Office (GAO) released a report on dual eligibility in Medicare and Medicaid. In certain states, coverage from both programs can be had through “aligned plans,” private plans provided by the same or related companies. This arrangement is intended to better coordinate benefits and care delivery. Some states support the automatic assignment of “dual-eligible” beneficiaries to aligned plans. According to GAO, finding out more about these beneficiaries’ experiences could help the Centers for Medicare and Medicaid Services (CMS) determine whether this practice poses any challenges to coordinating care.

GAO recommended collecting information on the experiences of beneficiaries assigned to aligned plans.

Find the full report here.

GAO: National Biodefense Strategy – Opportunities and Challenges with Early Implementation

On March 11, the Government Accountability Office (GAO) released a testimony on biological threats that can be manmade biological weapons, naturally occurring diseases such as novel coronavirus COVID-19 and more. The National Biodefense Strategy, issued in 2018 along with implementation guidance, spells out the nation’s plan to address these threats. It calls for a joint effort by multiple agencies and private sector partners.

GAO testified about how well the strategy has worked so far. GAO found there are no clear processes, roles or responsibilities for joint decision-making. In Feb. 2020, GAO made four recommendations, including that the Department of Health and Human Services (HHS), lead on this strategy, clearly document these factors.

Find the full report here.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Mariam Eatedali, Research Associate

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in Washington, D.C.

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