May 3, 2021

Washington Healthcare Update

This week in Washington: President Biden Announces American Families Plan Vision in Speech to Joint Session of Congress.

Upcoming Hearings/Markups





Final Rules

Proposed Rules


Upcoming Hearings/Markups

May 4

House Oversight and Reform Committee, Subcommittee on Economic and Consumer Policy Hearing: “The Urgent Need to Reform the Organ Transplantation System to Secure More Organs for Waiting, Ailing, and Dying Patients”
11:00 a.m.
For more information, click here.

House Energy and Commerce Committee, Subcommittee on Health Hearing: “Negotiating a Better Deal: Legislation to Lower the Cost of Prescription Drugs”
11:30 a.m.
For more information, click here.

May 5

House Education and Labor Committee, Subcommittee on Health, Employment, Labor, and Pensions Hearing: “Lower Drug Costs Now: Expanding Access to Affordable Health Care”
12:00 p.m.
For more information, click here.


House Education and Labor Committee to Hold Hearing to Discuss Drug Pricing Bill

On May 5, the House Education and Labor Committee’s Subcommittee on Health, Employment, Labor, and Pensions will hold a hearing to discuss the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3). The bill, which was first introduced in 2019, would allow the federal government to negotiate the cost of prescription drugs and cap seniors’ out-of-pocket costs for prescription drugs, among other things. The House passed the Lower Drug Costs Now Act with bipartisan support in 2020. However, the Senate did not take up the legislation.

House Energy and Commerce to Hold Hearing on Drug Pricing Legislation

The House Energy and Commerce Committee’s Subcommittee on Health will hold a hearing on May 4, at 11:30 a.m., titled “Negotiating a Better Deal: Legislation to Lower the Cost of Prescription Drugs” to discuss drug pricing legislation. Eight bills will be discussed at the hearing, and can be found listed below:

  • H.R. 3, the “Elijah E. Cummings Lower Drug Costs Now Act”
  • H.R. 19, the “Lower Costs, More Cures Act of 2021”
  • H.R. 153, the “Protecting Consumer Access to Generic Drugs Act of 2021”
  • H.R. 2815, the “Bolstering Innovative Options to Save Immediately on Medicines Act” or the “BIOSIM Act”
  • H.R. 2831, the “Prompt Approval of Safe Generic Drugs Act”
  • H.R. 2843, the “Stop The Overuse of Petitions and Get Affordable Medicines to Enter Soon Act of 2021” or the “STOP GAMES Act”
  • H.R. 2846, to amend title XVIII of the Social Security Act to require PDP sponsors of a prescription drug plan under part D of the Medicare program that use a formulary to include certain generic drugs and biosimilar biological products on such formulary, and for other purposes
  • H.R. 2853, the “Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act of 2021” or the “BLOCKING Act”


Senate Finance Chair Ron Wyden to Move on Drug Pricing

Although President Biden stressed his commitment to addressing drug pricing in his April 28 address to Congress, drug pricing reform was not included in the American Families Plan. In response to this, Senate Finance Chair Ron Wyden (D-OR) stated he will start drafting drug pricing reform legislation.

Senators Thune and Carper Reintroduce Bill on Chronic Disease Management

On April 28, Sens. Tom Carper (D-DE) and John Thune (R-SD) reintroduced legislation to ensure that high-deductible health plans (HDHP) linked to health savings accounts (HSA) can cover services to manage chronic disease prior to a beneficiary’s reaching their plan deductible.

The legislation was previously introduced in 2020, and the text can be found here.


American Families Plan to Make ACA Tax Credits Permanent

On April 28, President Biden announced the “American Families Plan,” which will invest $200 billion to make the American Rescue Plan’s Affordable Care Act (ACA) tax credits permanent.

In his speech to Congress Wednesday night, Biden stated that 800,000 people have signed up for ACA coverage through the special enrollment period (SEP).

President Biden stressed his commitment to letting Medicare negotiate drug prices, lowering the Medicare enrollment age to 60 and creating a public option, but these policies are not specifically mentioned in the American Families Plan.

The White House’s Fact Sheet on the American Families Plan can be found here.

Biden Administration to Divert Raw Materials for COVID-19 Vaccine and Provide Other Supplies to India

On April 26, the Biden administration announced it would divert its order of raw materials for AstraZeneca’s COVID-19 vaccine to help India scale up its vaccine manufacturing. India is currently experiencing a surge of COVID-19 cases, and has reported 300,000 cases every day since April 22. The White House will also send supplies of oxygen and oxygen equipment, ventilators, rapid test kits, personal protective equipment (PPE) and therapeutics to India, and will deploy a team of public health advisors to help with vaccine messaging.

The same day, the administration revealed separate plans to share 60 million doses of AstraZeneca’s vaccine with countries around the globe, pending the Food and Drug Administration’s (FDA) review of U.S.-made batches and facilities. The AstraZeneca vaccine has not yet been authorized for use in the U.S., and the administration stated it does not need the supply since there are already three authorized COVID-19 vaccines available domestically.

CDC Issues New Guidance for Vaccinated Americans

On April 27, the Centers for Disease Control and Prevention announced that people who are fully vaccinated no longer need to wear a mask outdoors, except in crowded settings. In addition, fully vaccinated asymptomatic people who have not been exposed to COVID-19 can be exempted from routine screening testing, if possible.

People are considered fully vaccinated for COVID-19 more than two weeks after they have received the second dose of a two-dose vaccine (Pfizer or Moderna) or more than two weeks after receiving one dose of the Johnson & Johnson vaccine.

The CDC maintains that fully vaccinated people should still wear masks for indoor activities, attending a small gathering of vaccinated and unvaccinated people from multiple households or attending crowded outdoor events.

FDA Panel Votes to Keep Tecentriq on the Market

On April 27, the Food and Drug Administration’s (FDA) oncology advisory committee voted 7-2 to allow Genentech to continue marketing its oncology drug Tecentriq (atezolizumab) to treat adults with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) in combination with nab-paclitaxel. This decision comes despite the fact that the drug has not demonstrated a clinical benefit in postmarket confirmatory trials. Genentech will need to conduct postmarket confirmatory trials to determine if the drug is effective for the TNBC indication.

Tecentriq, a death-ligand 1 (PD-L1) blocking antibody, received accelerated approval from the FDA in 2019 for use in combination with nab-paclitaxel for patients with TNBC, but confirmatory studies have since not shown the drug actually has clinical benefit against TNBC.

In the April 27 meeting, the FDA voted against maintaining the current status of Merck’s Keytruda for certain bladder and gastric cancers and Bristol Myers Squibb’s Opdivo for certain liver cancers. Companies can still provide unapproved drugs through the FDA’s expanded access program or make them available for free while waiting for confirmatory trials.

FDA to Propose Menthol Ban in Next Year

On April 29, the Food and Drug Administration (FDA) announced plans to issue two proposed rules that would ban menthol in cigarettes and ban all characterizing flavors, including menthols, in cigars. The FDA stated it hopes to release the proposed rules within the next year.

The announcement comes as the Action on Smoking and Health and the African American Tobacco Control Leadership Council (AATCLC) filed a lawsuit against the FDA in June 2020 stating that the FDA never provided a substantive response to a 2013 petition urging FDA to prohibit menthol as a flavor in cigarettes and cigarette smoke.

HHS Will Distribute $1 Billion for Community Health Centers

On April 27, the Health and Human Services (HHS) department announced that a $1 billion capital improvement grant funded by the American Rescue Plan will allow for the expansion and renovation of community health centers. There are currently 1,376 community health centers in the U.S., and they are more likely to serve communities disproportionately impacted by COVID-19.

The Health Resources and Services Administration (HRSA) stated that grants will begin at $500,000 and include another $11 per patient. The grants will be used to build new facilities, buy moveable equipment and expand or renovate existing facilities.

Community health centers can apply for the capital improvement funds through June 24.

HHS Removes Some Prescribing Barriers for Buprenorphine

On April 27, the Department of Health and Human Services (HHS) removed some of the prescribing barriers for buprenorphine, a drug used to treat opioid use disorder. The new guidelines allow an expanded group of practitioners, including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse midwives, to prescribe buprenorphine without needing to undergo hours of training currently necessary. Practitioners will also be exempt from having to certify their ability to provide counseling, although they must still submit a notice to the Substance Abuse and Mental Health Services Administration (SAMHSA) and possess a valid Drug Enforcement Administration (DEA) registration. The guidance does not remove the so-called X-Waiver, as eliminating the waiver would require legislative action.

The Trump administration proposed a similar guidance on buprenorphine prescriptions in mid-January that would have exempted physicians from some training requirements, but the guidance was never officially published and did not go into effect. The Biden administration revoked the proposed guideline upon taking office.

The new guidance comes as provision data shows that approximately 88,000 people died from overdose deaths from August 2019 to August 2020, a 26 percent increase from the year prior.

Final Rules

CMS Announces 2022 Notice of Benefit and Payment Parameters Final Rule Part Two

On April 30, the Centers for Medicare and Medicaid Services (CMS) adopted new provisions aimed at lowering consumers’ maximum out-of-pocket costs. The second 2022 Notice of Benefit and Payment Parameters final rule, also known as the 2022 payment notice, includes several provisions to help consumers differentiate between plan options and increase opportunities to qualify for future special enrollment periods (SEP). The rule also finalizes a maximum annual limitation on cost-sharing that is $400 below what CMS proposed in November 2020.

The annual payment notices make regulatory changes in the individual and small-group health insurance markets, and outline parameters issuers need to design plans and set rates for the upcoming plan year. CMS is finalizing the payment notice in multiple phases. The first 2022 payment notice final rule was released in January 2021. The April 30 final rule represented the second 2022 payment notice final rule.

CMS plans to issue additional rulemaking for the 2022 payment notice later this year.

The final rule can be found here.

CMS Extends Comprehensive Joint Replacement Model Demonstration for Three Years

On April 29, the Centers for Medicare and Medicaid Services (CMS) finalized an extension of the Comprehensive Care for Joint Replacement demonstration. CMS also stated that results from the additional three years of testing could justify expanding the demonstration under a revised pay method. The hip-and-knee demonstration was launched in 2016 and was initially mandatory, but was made voluntary for certain hospitals under the Trump administration.

The rule revises certain parts of the Comprehensive Care for Joint Replacement model, including the episode of care definition, target price calculation, reconciliation process, beneficiary notice requirements and appeals process. The final rule would extend the demonstration through 2024, but would only apply to the mandatory parts of the demonstration.

The final rule can be found here.

Proposed Rules

CMS Issues Proposed Rule to Address Medical Workforce Needs of Rural and Underserved Communities

On April 27, the Center for Medicare and Medicaid Services (CMS) issued a proposed rule that would fund medical residency positions in hospitals located in rural and underserved communities to address workforce shortages. In addition, the rule would require hospitals to report COVID-19 vaccination rates among their workers.

The interim final rule with a comment period goes into effect May 10.

The proposed rule can be found here.

CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals

On April 27, the Centers for Medicare and Medicaid Service (CMS) issued a proposed rule titled “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program.”

The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for fiscal year (FY) 2022. CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for IPPS hospitals and LTCHs on an annual basis. A fact sheet that discusses major provisions of the proposed rule can be downloaded from the Federal Register here

The public comment period closes on June 28.

The rule can be found here.

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

On April 8, the Centers for Medicare and 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 adding 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 year 2020. It is possible that the data was affected by the COVID-19 pandemic.

CMS proposes to add a new claims-based measure, health care–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 and 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.


GAO Report Finds U.S. Prescription Drug Prices Are Two to Four Times Higher Than in Australia, Canada and France

On April 28, the Government Accountability Office (GAO) publicly released a report on prescription drug prices. The study involved an analysis of 20 brand-name drug prices in the U.S. for the year 2020, and then a comparison of prices for the same drugs in Australia, Canada and France. The study found that U.S. retail prices were two to four times higher than prices in the comparison countries. The report noted that this comparison utilized rebates and did not include confidential discounts that are sometimes offered, and as a result, the actual difference in price between the U.S. and other countries is likely larger.

The complete report can be found here.

GAO Report on Behavioral Health Access, Payment and the Effect of the COVID-19 Pandemic

On April 30, the Government Accountability Office publicly released a report on how the COVID-19 pandemic has changed the demand and availability of mental health and substance use disorder services. The data suggests that mental health conditions and substance use disorders have increased and access to care has decreased. The Centers for Disease Control and Prevention (CDC) found that 38 percent of survey respondents reported symptoms of anxiety or depression from April 2020 to February 2021, an 11 percent increase from the year prior. In addition, emergency department visits for overdoses and suicide attempts from March-October 2020 were up 36 and 26 percent, respectively, from 2019. Many behavioral health service providers reported increasing demand and decreasing staff numbers.

The full report can be found here.

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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