Washington Healthcare Update

November 8, 2021

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This week in Washington: Congressional Democrats reach drug pricing agreement; bipartisan infrastructure bill goes to President Biden’s desk with budget reconciliation bill delayed.

Congress 

House

Senate

Administration

Proposed Rules

Final Rules

Courts

Reports

Congress

House

House Passes Bipartisan Infrastructure Bill, Delays Social Budget Reconciliation Package Bill

On Nov. 6, the House voted 228-206 to pass the $1.2 trillion bipartisan infrastructure bill. The bill now goes to President Biden’s desk for his signature.

House Speaker Nancy Pelosi (D-CA) delayed voting on the $1.75 trillion budget reconciliation package until the Congressional Budget Office (CBO) report on the bill’s spending and revenue is finished. Speaker Pelosi stated that the House will vote on the bill before Thanksgiving.

Drug Pricing Reform Agreement Reached

On Nov. 2, Democratic members in the House and Senate agreed on a prescription drug pricing framework. The plan would allow Medicare to negotiate high-cost prescription drugs, impose a tax penalty for pharmaceutical companies that increase prices faster than inflation and cap Medicare Part D drugs out-of-pocket costs for seniors and people with disabilities at $2,000 a year. The proposal would also cap insulin prices at $35 a month.

The Congressional Budget Office (CBO) scores show that the Medicare drug price controls will save $100 billion and repealing the rebate rule will save $150 billion.

The framework can be found here.

Speaker Pelosi Says the Build Back Better Act is Paid For

On Nov. 4, House Speaker Nancy Pelosi (D-CA) wrote a Dear Colleague letter stating that the Joint Committee on Taxation (JCT) issued a report showing that the Build Back Better Act is paid for. She said that the bill would raise $1.5 trillion over 10 years. Speaker Pelosi also stated that the Rules Committee is preparing the Manager’s Amendment to include privilege fixes received from the Senate.

The JCT report can be found here. The Dear Colleague letter can be found here.

Reps. Rodgers and Guthrie Release Statement on CMS Vaccine Mandate

On Nov. 4, House Energy and Commerce Ranking Member Cathy McMorris Rodgers (R-WA) and Health Subcommittee Chair Brett Guthrie (R-KY) released a statement in opposition to the Centers for Medicare and Medicaid Services (CMS) vaccine mandate for Medicare and Medicaid providers. The representatives are considering using the Congressional Review Act as a way to negate the rule.

The statement can be found here.

Senate

Sens. Baldwin and Braun Introduce Bill to Reduce Anti-Competitive Practices in Healthcare

On Nov. 3, Sens. Tammy Baldwin (D-WI) and Mike Braun (R-IN) introduced the Healthy Competition for Better Care Act, which aims to reduce anti-competitive practices in healthcare. The legislation would prohibit health systems from requiring a payer or employer to contract with an affiliated provider or hospital as a condition of entering into a contract with the healthcare system.

The press release with additional information on the bill can be found here.

Administration

CMS Announces ACA Open Enrollment Period

On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) announced the beginning of the Affordable Care Act’s (ACA) open enrollment period for plan year 2022. Open enrollment will last until Jan. 15, and consumers must sign up by Dec. 15 if they want coverage that starts on Jan. 1.

CDC Recommends Pfizer’s COVID-19 Vaccine for Children Aged 5-11

On Nov. 2, the Centers for Disease Control and Prevention (CDC) recommended Pfizer’s COVID-19 vaccine for children aged 5-11. Since the Food and Drug Administration (FDA) authorized the Pfizer vaccine for children last week, the CDC’s recommendation means that the White House can begin the rollout.

Proposed Rules

FDA Issues Draft Guidance on Premarket Submissions for Device Software Functions

On Nov. 3, the Food and Drug Administration (FDA) published new draft guidance titled “Content of Premarket Submissions for Device Software Functions.” The guidance provides information on documentation sponsors need to submit for FDA’s evaluation of the safety and effectiveness of device software functions. When final, the guidance will replace prior guidance issued in 2005.

Public comments will be accepted until Feb. 2, 2022.

The draft guidance can be found here.

HHS Issues Proposed Rule to Withdraw the SUNSET Rule

On Oct. 29, the Department of Health and Human Services (HHS) issued a proposed rule that would withdraw the January 2021 final rule titled “Securing Updated and Necessary Statutory Evaluations Timely (SUNSET).” The SUNSET final rule required HHS regulations with a significant economic impact to be review every 10 years, with regulations automatically expiring if they were not reviewed. This would have impacted more than 17,000 HHS regulations and required a review process considerably faster than HHS ever conducted.

The rule would have gone into effect in March 2021, but HHS issued a delay following a lawsuit.

Comments will be accepted until Dec. 28, 2021.

The proposed rule can be found here.

FDA Issues Draft Industry Guidance on Real-World Data Standards

On Oct. 22, the Food and Drug Administration (FDA) announced industry draft guidance titled “Data Standards for Drug and Biological Product Submissions Containing Real-World Data.” The guidance includes recommendations to help sponsors comply with the Federal Food, Drug and Cosmetic Act when submitting study data from real-world data sources.

Public comments will be accepted until Dec. 21, 2021.

The draft guidance can be found here.

FDA Issues Proposed Rule on Over-the-Counter Hearing Aids

On Oct. 20, the Food and Drug Administration (FDA) issued a proposed rule titled “Medical Devices: Ear, Nose, and Throat Devices; Establishing Over-the-Counter Hearing Aids.” The proposed rule would establish a new category of over-the-counter (OTC) hearing aids that could be sold to consumers directly without a medical exam or audiologic hearing. The proposed rule comes after President Biden’s July Executive Order aimed at promoting competition in the economy directed the FDA to increase access to OTC hearing aids.

Public comments will be accepted until Jan. 18, 2022.

The proposed rule can be found here.

HHS Issues Proposed Rule to Repeal Two Trump-Era HHS Final Rules

On Oct. 20, the Department of Health and Human Services (HHS) issued a proposed rule to repeal two final rules: the Dec. 7, 2020, rule titled “Department of Health and Human Services Good Guidance Practices” and the Jan. 14, 2021, rule titled “Department of Health and Human Services Transparency and Fairness in Civil Administrative Enforcement Actions.” HHS stated that the 2020 Good Guidance rule conflicts with the Food and Drug Administration’s (FDA) good guidance regulations and complicates the Centers for Medicare and Medicaid Services’ (CMS) issuing of Medicaid and Children’s Health Insurance Program (CHIP) guidance.

Public comments will be accepted until Nov. 19, 2021.

The proposed rule can be found here.

FDA Issues Guidance on Continuous Manufacturing of Drug Substances and Products

On Oct. 12, the Food and Drug Administration issued a draft guidance document titled “Q13 Continuous Manufacturing of Drug Substances and Drug Products,” which was prepared with the support of the International Council for Harmonisation (ICH). The draft guidance provides clarification on the development and operation of continuous manufacturing and builds on prior guidelines Q7-Q10.

Comments will be accepted until Dec. 13, 2021.

The guidance can be found here.

FDA Issues Guidance Updating Unique Device Identification Policy

On Oct. 14, the Food and Drug Administration (FDA) issued a draft guidance titled “Select Updates for Unique Device Identification: Policy Regarding Global Unique Device Identification Database Requirements for Certain Devices.” The guidance revises the 2020 Unique Device Identification Guidance. The updated guidance explains there are certain class I devices for which the FDA will not enforce the Global Unique Device Identification Database (GUDID) submission requirements, and also states how a class I device labeler can determine if the device is in the scope of compliance policy.

Comments will be accepted until Dec. 13, 2021.

The guidance can be found here.

Final Rules

CMS Issues Interim Final Rule Expanding Vaccine Requirements for Staff of Medicare- and Medicaid-Certified Facilities

On Nov. 4, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule requiring vaccinations of all eligible staff at healthcare facilities participating in Medicare and Medicaid programs. Facilities covered by the regulation must create a process for all eligible staff to receive by Dec. 5, 2021, the first dose of a two-dose COVID-19 vaccine or a one-dose vaccine prior to providing any care, treatment or other services. All staff must be fully vaccinated by Jan. 4, 2022. The regulation requires facilities to develop a process to permit medical or religious exemptions that align with federal law.

The regulation goes into effect on Nov. 5, 2021.

Comments will be accepted until Jan. 4, 2022.

A summary of the rule can be found here. The press release on the rule can be found here. The interim final rule can be found here.

CMS Issues Final Rule for End-Stage Renal Disease Prospective Payment System

On Oct. 29, the Centers for Medicare and Medicaid Services (CMS) published a final rule titled “End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model.” The final rule updates payment rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services starting Jan. 1, 2022. The rule also updates the acute kidney injury (AKI) dialysis payment rate for renal dialysis services and the ESRD Treatment Choices (ETC) Model.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

CMS Issues CY 2022 Medicare Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems Final Rule

On Nov. 2, the Centers for Medicare and Medicaid Services (CMS) released a Final Rule titled “Calendar Year (CY) Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center (ASC) Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model.” CMS is required by the January 2021 Hospital Price Transparency Final Rule to update Medicare payment policies for Outpatient Prospective Payment System (OPPS) hospitals and ASCs on an annual basis. The changes in the final rule aim to strengthen enforcement of hospital price transparency requirements and will stop the phased elimination of the Inpatient Only (IPO) list for surgical procedures. CMS will increase the penalty for hospitals that do not comply with the Hospital Price Transparency Rule starting on Jan. 1, 2022. The final rule also halts the elimination of the IPO list. In addition, the rule updates the OPPS payment rates for hospitals that meet quality reporting requirements by 2.0 percent. The final rule also details the Radiation Oncology Model, which is set to begin on Jan. 1, 2022, and last for five years.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS factsheet on the final rule can be found here.

CMS Issues CY 2022 Medicare Physician Fee Schedule Final Rule

On Nov. 2, the Centers for Medicare and Medicaid Services (CMS) issued a final rule titled “Calendar Year (CY) 2022 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Provider Enrollment Regulation Updates; and Provider and Supplier Prepayment and Post-payment Medical Review Requirements.” The rule includes policy changes for Medicare payments under the Physician Fee Schedule (PFS) and would continue the coverage of Medicare telehealth services and finalize changes to the Medicare Diabetes Prevention Program (MDPP) expanded model, among other things. The CY 2022 PFS conversion factor is $33.59, a decrease from the CY 2021 factor of $34.89.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

CMS Issues 2022 Home Health Prospective Payment System Rate Final Rule

On Nov. 2, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule titled “Calendar Year (CY) 2022 Home Health Prospective Payment System Rate Final Rule.” The rule will expand the Home Health Value-Based Purchasing (HHVBP) Model. In addition, the rule updates the Medicare Home Health Prospective Payment System (HH PPS) and the home infusion therapy services payment rates for CY 2022. In addition, the proposed rule makes permanent changes to the home health Conditions of Participation (CoP) implemented during the COVID-19 public health emergency.

The final rule will go into effect on Jan. 1, 2022.

The final rule can be found here. The CMS fact sheet on the final rule can be found here.

Courts

Oklahoma Attorney General Files Suit Against Biden Administration Vaccine Requirement

On Nov. 4, the Oklahoma Attorney General John O’Connor filed a lawsuit in the U.S. District Court for the Western District of Oklahoma to challenge the Biden administration’s COVID-19 vaccination requirement for federal contractors.

Federal Court Rules Against HHS Effort to Require Pharmaceutical Companies to Give 340B Discounts to Pharmacies

On Oct. 29, a judge for the U.S. District Court for the Southern District of Indiana ruled against the Department of Health and Human Services’ (HHS) attempt to require pharmaceutical companies to give 340B discounts to all pharmacies with which hospitals participating in the 340B program contract. In 2020, the HHS Office of General Counsel issued an advisory opinion stating that pharmaceutical companies must give discounts to hospitals in the 340B program, regardless of how many contract pharmacies dispensed the drugs. Pharmaceutical companies ignored the advisory opinion, and the Health Resources and Services Administration (HRSA) withdrew it but said companies violating the opinion would still be fined.

Supreme Court to Hear “Public Charge” Case

On Oct. 29, the Supreme Court agreed to hear a case brought by a group of 13 states seeking to defend the 2019 “public charge rule” issued during the Trump administration. The rule denied green cards to immigrants who used public benefits such as food stamps or Medicaid for more than 12 months in a three-year period. The Biden administration has stopped defending the policy and stated it plans to issue a new regulation.

Texas Medical Association Files a Lawsuit Challenging Surprise Billing Rule

On Oct. 29, the Texas Medical Association (TMA) filed a lawsuit in the U.S. District Court that challenges the Biden administration’s surprise billing interim final rule issued on Oct. 1. The TMA stated that the rule unfairly advantages insurers and violated the Administration Procedure Act by not providing a notice and comment period.

Reports

GAO Report on Improving the Social Security and Medicare Trust Fund Reports

On Nov. 1, the Government Accountability Office (GAO) published a report titled “Social Security and Medicare: Improving the Timeliness of Trust Fund Reports.” The report states that the Treasury took some steps to improve its management of Social Security and Medicare Trustees reports after failing to meet the April 1 deadline for 2020 and 2021 reports. However, the GAO states that more can be done and recommends that the Treasury inform Congress of reporting delays. The GAO also recommends that the Treasury work with other trustees to improve the management of the report development schedules.

The full report can be found here.

GAO Report on Planned Reviews of Federal Vaccine Distribution Efforts

On Nov. 4, the Government Accountability Office (GAO) published a report titled “COVID-19: HHS Agencies’ Planned Reviews of Vaccine Distribution and Communication Efforts Should Include Stakeholder Perspectives.” The report says that the Department of Health and Human Services (HHS) set up federal programs to distribute and administrate COVID-19 vaccines. While these programs helped vaccinate higher-risk populations, stakeholders said they had limited information on the number of doses federal programs sent to pharmacies and health centers. The GOA made four recommendations, including that the Centers for Disease Control and Prevention (CDC) and the Health Resources and Services Administration (HRSA) gather input from stakeholders in their future reviews.

The full report can be found here.

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

Stephanie Kennan, Senior Vice President
Alexandra Gale, Research Associate

Founded in 1998,McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of theMcGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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