Apr 12, 2021

Washington Healthcare Update

This week in Washington: House and Senate return from congressional work period.

Upcoming Hearings/Markups





Health and Human Services (HHS)

Office of Drug Control Policy

Department of Labor

Proposed Rules



Upcoming Hearings/Markups

April 14

House Energy and Commerce Committee Subcommittee on Health Hearing: “An Epidemic within a Pandemic: Understanding Substance Use and Misuse in America”
10:30 a.m.
For more information, click here.

April 15

Senate Finance Committee: Hearing to Consider the Nomination of Chiquita Brooks-LaSure to be Administrator of the Centers for Medicare & Medicaid Services (CMS) and Andrea Palm to be Deputy Secretary of the Department of Health and Human Services (HHS)
9:30 a.m.
For more information, click here.

House Select Subcommittee on Coronavirus Crisis Hearing: “Reaching the Light at the End of the Tunnel: A Science-Driven Approach to Swiftly and Safely Ending the Pandemic”
10:30 a.m.
For more information, click here.


House Energy and Commerce Hearing on Substance Use to Consider 11 Bills

On April 14 at 10:30 a.m., the House Energy and Commerce Committee Subcommittee on Health will hold a hearing titled “An Epidemic within a Pandemic: Understanding Substance Use and Misuse in America.” The subcommittee will discuss the 11 bills listed below.

  • H.R. 654, the “Drug-Free Communities Pandemic Relief Act”
  • H.R. 955, the “Medicaid Reentry Act of 2021”
  • H.R. 1384, the “Mainstreaming Addiction Treatment Act of 2021”
  • H.R. 1910, the “Federal Initiative to Guarantee Health by Targeting Fentanyl Act”
  • H.R. 2051, the “Methamphetamine Response Act”
  • H.R. 2067, the “Medication Access and Training Expansion Act”
  • H.R. 2355, the “Opioid Prescription Verification Act”
  • H.R. 2364, the “Synthetic Opioid Danger Awareness Act”
  • H.R. 2366, the “Support, Treatment, and Overdose Prevention of Fentanyl Act of 2021”
  • H.R. 2379, the “State Opioid Response Grant Reauthorization Act”
  • H.R. 2405, the “Streamlining Research on Controlled Substances Act”

Appointments to State All Payer Claims Databases Advisory Committee Announced

On March 29, Gene L. Dodaro, Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO), announced the appointment of six members to the newly created State All Payer Claims Databases Advisory Committee (SAPCDAC). SAPCDAC was created in December 2020 to make recommendations to the Secretary of Labor on the standardized format and associated guidance for the voluntary reporting by group health plans to State All Payer Claims Databases. The newly appointed members are Niall Brennan, Cheryl Damberg, Emma Hoo, Frederick Isasi, Mike Kapsa and Josephine Porter.


CHOICE Act Reintroduced

On March 26, Sens. Sheldon Whitehouse (D-RI) and Sherrod Brown (D-OH) reintroduced the Consumer Health Options and Insurance Competition Enhancement (CHOICE) Act. The bill would require the Department of Health and Human Services (HHS) to create a public option to compete on the individual market and allow HHS to negotiate drug prices and provider reimbursement rates.

The CHOICE Act is one of several public option plans being developed in Congress. Sens. Mark Warner (D-VA), Tim Kaine (D-VA) and Michael Bennet (D-CO) recently reintroduced their version, called the Medicare-X Choice Act. The Democratic senators stated they planned to use these proposals to reach a consensus legislation. Rep. Jan Schakowsky (D-IL) also introduced companion legislation in the House.

Senate Parliamentarian Rules Democrats Have More Chances at Budget Reconciliation

On April 5, the Senate parliamentarian ruled that the reconciliation process can be used multiple times on the same underlying budget resolution, meaning that Democrats have at least one more chance to pass legislation via a simple majority this year. Senate Majority Leader Chuck Schumer (D-NY) had asked the parliamentarian to confirm that the process could be used again if the 2021 budget resolution was revised. Democrats already used the budget fast-track process to enact the American Rescue Plan and the COVID-19 relief package, and will likely try to use it for President Biden’s infrastructure bill. The parliamentarian’s answer means that Democrats could potentially split the infrastructure bill into two, with the second section likely to include health care coverage expansions and drug pricing measures.


Biden’s Fiscal Budget Blueprint to Increase Funding for Federal Health Agencies

On April 9, President Biden released his budget blueprint for fiscal year (FY) 2022. Under the blueprint, the Centers for Disease Control and Prevention (CDC) would get a budget increase of $1.6 billion, bringing its total to $8.7 billion. The National Institute of Health (NIH) would get a $9 billion increase to $51 billion.

The official request can be found here.

Biden Administration Looking to Fix “Family Glitch” Blocking Affordable Care Act Credits

The Biden administration is examining the regulatory process to fix the “family glitch” that has blocked millions of dependents from accessing Affordable Care Act (ACA) credits. Addressing the issue with the rulemaking process would reduce the need for payment offsets that would be required with the legislative process.

Biden Announces Vaccine Eligibility for All Adults by April 19

On April 6, President Joe Biden announced that all adults in the U.S. should be made eligible for a COVID-19 vaccine by April 19. This is two weeks earlier than the original deadline of May 1. As of April 9, one in four Americans are fully vaccinated, and one in three have received at least one dose.

Biden Administration Considering Suspension of Intellectual Property Protections for COVID-19 Vaccine

The Biden administration is considering temporarily suspending intellectual property protections for COVID-19 vaccines and treatments. Congressional Democrats, activists and developing countries have lobbied the administration to weaken projections, stating that this change would allow other countries to replicate existing vaccines, expanding global supplies.

Pharmaceutical companies oppose the idea, stating that removing patent protections could backfire and asserted there are more effective ways to ensure that vaccines reach developing countries.

Health and Human Services (HHS)

HHS Secretary Announces That Half a Million Americans Enrolled During Affordable Care Act Special Enrollment Period

On April 7, the Secretary of Health and Human Services (HHS) Xavier Becerra stated that more than 528,000 Americans have enrolled in Affordable Care Act (ACA) coverage since the special enrollment period began on Feb. 15.

Special Council Letter Calls on FDA to Strengthen Inspections

In a March 31 letter, the U.S. Office of Special Counsel, an independent federal investigative agency, told President Biden and several congressional committees that a credible whistleblower complaint shows that the Food and Drug Administration (FDA) watered down inspection findings at least four times at biologics plants in recent years. The sites implicated in the whistleblower complaint include a Merck plant that currently produces Johnson & Johnson vaccines. The letter called on the FDA to re-examine its inspection compliance.

FDA Guidance Drug Applications During the COVID-19 Pandemic

On April 5, the Food and Drug Administration (FDA) issued and immediately implemented a new guidance that provides recommendations for prospective generic drug applicants. The guidance include information on generic drug product development and regulatory submissions. The FDA stated that the guidance will help ensure that the development of generic drugs and the submission of applications continue during the COVID-19 pandemic.

The guidance can be found here.

FDA Inspection Backlog Puts Generic Drug Exclusivity in Jeopardy

In an April 8 guidance, the Food and Drug Administration (FDA) indicated that the backlog of on-site facility inspections may cause some generic companies to not meet requirements for tentative approval for their drugs, and, as a result, not qualify for 180-day exclusivity. This delay puts generic drug sponsors at risk of losing out on 180-day exclusivity for their products. If an applicant does not receive tentative approval within 30 months, the applicant forfeits exclusivity. The FDA has granted exception to some sponsors in the past, but never because of inspection delays.

The Centers for Disease Control and Prevention (CDC) Declares Racism a Threat to Public Health

In an April 8 statement, the CDC stated that racism is a serious threat to public health in the U.S. and that the administration will take steps to address it. CDC Director Rochelle Walensky stated that the agency was using COVID-19 funding to invest in communities of color. The agency added a new section to its website dedicated to racism and health.

CDC Issues New Travel Guidelines for Fully Vaccinated People

On April 2, the Centers for Disease Control and Prevention (CDC) released new travel guidelines that stated that fully vaccinated people can travel within the U.S. and internationally at low risk to themselves if they continue to take precautions like wearing a mask. The CDC stated that fully vaccinated people do not need to quarantine or take a test unless required by local officials.

CMS Receives State Insurance Commissioners’ Request for Recalculated Insurance Funds

Seven insurance commissioners running state-level reinsurance programs under 1332 waivers are asking the Centers for Medicare and Medicaid Services (CMS) and the Treasury to recalculate their federal pass-through dollars to properly account for the larger enrollment predicted due to the Affordable Care Act (ACA) credits in the American Rescue Plan. In a letter, the insurance commissioners state that they designed parameters for the 2021 reinsurance program prior to the new credits and special enrollment periods now available. CMS did not respond on whether it was considering the request.

Medical Associations Ask CMS to Delay New Prior Authorization Requirements

On April 7, the American Medical Association joined physician groups and patient advocates to request that the Centers for Medicare and Medicaid Services (CMS) delay its decision to require prior authorization for two service areas under the 2021 Medicare hospital outpatient prospective payment rule, and to delay any future prior authorization policies until more data is collected. The groups noted that the outpatient prospective payment rule went into effect several months after CMS implemented prior authorization for five new services in 2020, and expressed concern that expanded prior authorization could create barriers to medical care for beneficiaries.

CMS Announces Beginning of Recoupment Payments

On April 1, the Centers for Medicare and Medicaid Services (CMS) announced that it has started recouping payments under the Medicare Accelerated and Advance Payments Program, leaving hospitals to decide if they should immediately repay their Medicare loans or have payments taken out of their claims. CMS created the loans to help providers during the pandemic, but froze the program after Congress created the provider relief fund. The renegotiation gives providers one year from when they accepted the loans until CMS starts recouping payments.

CMS Delays CHART Model ACO Transformation Track Application Release Date

The Centers for Medicare & Medicaid Services (CMS) stated that the Community Health Access and Rural Transformation (CHART) Model ACO Transformation Track Request for Applications (RFA) release date has been delayed from spring 2021 to spring 2022. This delay applies only to the ACO Transformation Track of the CHART Model.

Office of Drug Control Policy

Biden Administration Details Office of National Drug Control Policy Goals for 2021

In an April 1 Drug Control Policy statement, the Biden administration stressed its commitment to increasing access to medications for opioid use disorder and expanding access to recovery support services. The administration detailed seven drug policies for the Office of National Drug Control Policy (ONDCP). These policies include removing barriers to prescribing buprenorphine, offering incentives to prescribe substance abuse disorder medication, extending the opioid public health emergency and making COVID-19 telehealth waivers for Medicare and Medicaid permanent. ONDCP will also focus on improving access to substance abuse treatment for people of color and those experiencing poverty and inequality. In addition, ONDCP will support organizations that offer harm reduction services like naloxone, sterile syringes and fentanyl test strips. ONDCP will prioritize youth use of tobacco, alcohol and illicit drugs and cracking down on illicit drug trafficking and building up the workforce. Lastly, ONDCP will work with states, local governments and stakeholders to improve the capacity of addiction programs.

Department of Labor

Departments Issue Mental Health Parity Requirements

On April 2, the U.S. Departments of Labor (DOL), Treasury and Health and Human Services (HHS) issued guidance on the new mental health parity requirements for group health plans and insurers established by the Consolidated Appropriations Act (CAA) of 2021. The recent CAA amended the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, which had established that a group health plan or health insurer may not impose a nonquantitative treatment limitation on mental health or substance use disorder benefits unless certain conditions are satisfied.

Specifically, the CAA amended the 2008 MHPAEA to require group health plans and health insurers that impose nonquantitative treatment limitations on mental health or substance use disorders to document their comparative analyses of the limitations and make these analyses available to departments or state authorities upon request.

End of COBRA Subsidies Triggers Special Enrollment Period

On April 7, the Department of Labor (DOL) issued a notice that unemployed workers can enroll in exchange plans once the American Rescue Plan’s temporary Consolidated Omnibus Budget Reconciliation Act (COBRA) federal subsidies created by the American Rescue Plan end in September. The notice also reminds Americans they may be eligible for Affordable Care Act (ACA) coverage for up to 60 days before their COBRA assistance ends, but the special enrollment period (SEP) will end 60 days after the coverage is no longer subsidized by an employer.

On April 6, Democratic leaders of the congressional health committees had urged the Centers for Medicare and Medicaid Services (CMS) to create and publicize a SEP that would allow people that receive fully subsidized COBRA under the American Rescue Plan to enroll in ACA coverage after their benefits end in September. Without the SEP, consumers in most states would have to pay the full cost of COBRA or potentially go uninsured until ACA open enrollment begins in November.

Proposed Rules

CMS Issues Proposed Rule on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities

On April 8, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule titled “Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year (FY) 2022. In the rule, CMS proposes increasing skilled nursing facilities’ (SNF) pay a net 1.3 percent, or $444 million, in FY 2022, and to add two new quality reporting measures in FY 2021: vaccination rates among health care workers and health care–acquired infections.

The proposed rule also asks for public comments on potential ways to readjust the Patient Driven Payment Model (PDPM), a patient payment classification system created in 2019 to be budget-neutral but that data shows caused an unintended $1.7 billion increase in payments in fiscal 2020. It is possible that the data was affected by the COVID-19 pandemic.

CMS proposes to add a new claims-based measure, Healthcare-Associated Infections (HAI), to the quality reporting, which would use Medicare fee-for-service claims data to estimate the rate of health care–associated infections acquired during nursing home care that result in hospitalization. The goal is to assess which nursing homes have higher rates of infections acquired during care. The proposed rule also suggests several changes to the SNF Quality Reporting Program and seeks feedback on plans to define digital quality measures for the program. The proposed rule would also alter the SNF Value-Based Purchasing Program, which offers incentive payments to nursing homes based on the quality of care.

Public comments on the proposed rule will be accepted until June 7.

The rule can be found here.

CMS Issues Proposed Rule Updating Hospice Payment and Cap Increase

On April 8, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule titled “Medicare Program: FY 2022 Hospice Wage Index and Payment Rate Update, Hospice Conditions of Participation Updates, Hospice and Home Health Quality Reporting Program Requirements.” The proposed rule would increase payments in FY 2022 by 2.3 percent, or $530 million. Providers that do not meet the quality reporting requirements will receive a 2 percentage point reduction to their annual market basket update. The proposed rule also would increase the aggregate payment cap from $30,683.93 in 2021 to $31,389.66 for fiscal year 2022, a 2.3 percent increase.

The proposed rule would also revise the labor shares based on the compensation cost weights for each level of care, with labor share at 74.6 percent for continuous home care, 64.7 percent for routine home care, 60.1 percent for inpatient respite care and 62.8 percent for general inpatient care. In addition, the proposed rule would make the pseudo-patient waiver for hospice aide competency testing permanent and let pseudo-patients be used for hospice aide competency training. It would also have hospices conduct a competency evaluation related to whatever deficiencies and related skills a hospice aide supervisor noted. Also, the rule would allow CMS to modify the Hospice Quality Reporting Program by adding measures meant to promote health equity measures.

Comments are accepted until June 7.

The proposed rule can be found here.

CMS Issues Proposed Rule on Inpatient Rehabilitation Facility Prospective Payment System

On April 7, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2022 and Updates to the IRF Quality Reporting Program.” The proposed rule would update Medicare payment policies and rates for facilities under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for fiscal year (FY) 2022. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for IRFs on an annual basis.

For FY 2022, CMS proposes to update the IRF PPS payment rates by 2.2 percent based on the proposed IRF market basket update of 2.4 percent, less a 0.2 percentage point multi-factor productivity (MFP) adjustment. IRFs that do not meet reporting requirements are subject to a 2 percentage point (2.0 percent) reduction in their annual increase factor. With the objective of advancing racial equity, CMS plans to utilize several social determinants of health measures and is seeking feedback. In addition, the rule proposes using COVID-19 vaccination coverage measures and updating transfer of health (TOH) information to determine quality of care.

Comments are accepted until June 7.

The proposed rule can be found here.


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

Anesthesia Partners Files Lawsuits Against United Healthcare

On Wednesday, March 31, U.S. Anesthesia Partners, a large private equity–backed group of anesthesiologists, filed lawsuits against United Healthcare. The lawsuits, filed in Colorado and Texas, accuse United Healthcare of stifling competition by pressuring hospitals and surgeons to refer patients to other doctors. In the Texas lawsuit, Anesthesia Partners claimed that United was using “unlawful tactics and pressure campaigns,” which included “bribing” surgeons with higher-paid contracts if they steered patients away from the group’s anesthesiologists. In a statement, United said that the lawsuit was an example of private equity–backed groups’ attempting to pressure United into meeting their rate demands.

Supreme Court Temporarily Suspends Medicaid Work Requirements

On April 5, the Supreme Court announced it temporarily suspended its review of the Medicaid work requirements that the Trump administration had approved for Arkansas and New Hampshire. The Biden administration had revoked Arkansas’s and New Hampshire’s Medicaid work requirement 1115 waivers on March 17. The cases are still on hold, pending another Supreme Court order.

On April 6, the Biden administration revoked Wisconsin’s and Michigan’s Medicaid work requirement waivers granted by the Trump administration. The Biden administration had revoked waivers granted to Arkansas and New Hampshire nearly a month ago, bringing the current total to four. Unlike several other states, Michigan and Wisconsin did not defend their work requirement programs to CMS in March.


Better Medicare Alliance Study Finds Medicare Advantage Beneficiaries’ Savings

A study carried out by the Better Medicare Alliance (BMA) was published on March 30. The study found that in 2018, Medicare Advantage (MA) beneficiaries spent an average of $1,640 less on out-of-pocket and premium costs than traditional Medicare beneficiaries.

This is the third consecutive year of data showing savings for MA beneficiaries. MA beneficiaries reported slightly higher rates of access to a usual source of care and were more satisfied with how easy it was to get to a doctor. However, fee-for-service beneficiaries were marginally more satisfied with the quality of care they received. The two populations of beneficiaries had very similar rates of chronic conditions including congestive heart failure, chronic obstructive pulmonary disease and dementia or Alzheimer’s, and nearly identical rates of functional impairment.

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