Dec 5, 2022

Washington Healthcare Update

This Week in Washington: Waiting for the election results from Georgia Senate race; mental health legislation continues to be discussed and CBO publishes option book





Proposed Rules

Final Rules




House Rules Committee Meets to Determine Rule for House Consideration of the Jackie Wolerski Maternal and Child Home Visiting Reauthorization Act of 2022

On Nov. 29, the House Rules Committee met to determine the rule by which the Jackie Walorski Maternal and Child Home Visiting Reauthorization Act of 2022 will be considered on the House floor. The legislation reauthorizes MIECHV for five years, increasing the annual funding level to $800 million in 2027 and providing increased investment in home visiting in every state and territory. It also updates program policies to provide an even stronger focus on improving outcomes for families and to provide clarity and stability for successful state and territorial programs.


Senate Finance Committee Looks at Medicare Advantage and Medicaid Managed Care “Ghost Networks”

On Dec.1, the Senate Finance Committee released its fifth and final mental health discussion draft. The draft would eliminate “ghost networks” by requiring Medicare Advantage (MA) plans and Medicaid managed care organizations to regularly update their provider directories. The draft legislation would also require the Government Accountability Office (GAO) to compare Medicaid payments for behavioral health services with reimbursement for medical or surgical services, as well as compare MA mental and physical health benefits. Additionally, the bill would require MA plans to update a provider’s status in the insurer’s directory within two days and have the Centers for Medicare and Medicaid Services (CMS) collect those directories to post on a public website.

For more information, click here.

Sen. Mike Lee (R-UT) Introduces Bill to Increase Competition in Biological Drug Market

On Nov. 17, Sen. Mike Lee (R-UT) introduced the Biosimilar Red Tape Elimination Act to increase competition in the biological drug market. The bill would prohibit the FDA from requiring biosimilars to undergo switching studies to receive an “interchangeable” designation.

Unlike generic drugs, many states will not allow pharmacists to substitute a biosimilar unless the FDA declares it to be “interchangeable.” The legislation would allow pharmacists to substitute biosimilars in lieu of the branded version.


HHS Announces $350 Million Initiative to Boost COVID-19 Vaccinations in Underserved Population Communities

On Nov. 22, the Department of Health and Human Services, through the Health Resources and Services Administration (HRSA), announced a $350 million initiative to increase COVID-19 vaccines administered by HRSA-supported health centers. The initiative specifically aims to assist underserved communities and individuals and will provide resources directly to health centers. To improve access to COVID-19 vaccination, the initiative will foster strengthened coordination with community-based organizations that provide child care, housing, food, employment and behavioral health services, as well as others. HHS hopes that health centers will strengthen their vaccination events, expand their operating hours and increase vaccination education and interpretation services.

For more information, click here.

CMS Reminds States About Medicaid and CHIP Mandatory Adult Vaccine Coverage

On Nov. 30, the Centers for Medicare and Medicaid Services (CMS) issued a reminder to states, informing them that Medicaid and Children’s Health Insurance Program (CHIP) programs will be required to provide coverage for approved adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) without cost sharing for certain enrollees beginning Oct. 1, 2023. The requirement can be found in Section 11405 of the Inflation Reduction Act (IRA).

The following enrollees must have their ACIP adult vaccines covered:

  • Most Medicaid Categorically Needy enrollees.
  • All Medicaid Medically Needy enrollees.
  • CHIP enrollees 19 years of age or older (i.e., pregnant and postpartum individuals covered by CHIP).

CMS Publishes Request for Information on ACA’s Essential Health Benefits Package

On Nov. 30, the Centers for Medicare and Medicaid Services (CMS) released a request for information (RFI) regarding the Affordable Care Act’s (ACA) essential health benefits (EHB) package. CMS is seeking input on how emergency health benefits are described under the ACA state benchmarking approach. CMS believes that current state benchmark plans describe essential health benefits in differing ways. However, the agency does not believe the differences have caused overt harm, because states have generally been effective in ensuring that benefits are treated as EHBs. CMS is also seeking input on whether benefits in the employer market have become more or less generous since 2014, and whether the ability to substitute EHBs within the same category should be revised. Additionally, the agency is considering taking a shift away from using the U.S. Pharmacopeia (USP) guidelines for the ACA prescription drug benefit plan, and it is taking steps toward setting up a review process to ensure the EHB framework works for consumers. Responses are due by Jan. 31, 2023.

For more information, click here.

FDA Revokes Eli Lilly COVID-19 Drug EUA

On Nov. 30, the Food and Drug Administration (FDA) revoked the Emergency Use Authorization (EUA) for Eli Lilly’s COVID-19 drug bebtelovimab. The FDA’s decision follows its announcement that the drug is not expected to be effective against Omicron variants BQ.1 and BQ.1.1, which currently comprise the majority of cases in the U.S. Eli Lilly and authorized distributors have paused commercial distribution of the drug until further notice. The FDA recommends that existing bebtelovimab stock be retained, in the event that subvariants susceptible to it become more prevalent in the future.

For more information, click here.

Proposed Rules

HRSA Proposed Rule Changes Concerning 340B Disputes

On Nov. 29, the Health Resources and Services Administration (HRSA) released a proposed rule that outlines changes to how the administrative dispute resolution (ADR) process should be handled, for diversions, duplicate discounts and overcharges under the 340B program. HRSA aims to make the process less formal and more expeditious. The proposed changes include:

  • Establishing a more accessible and timely ADR process, while structuring the process to be less formal and rigid.
  • Eliminating the $25,000 minimum dispute threshold for drug makers and 340B providers to use the process.
  • Restructuring the ADR panel to be composed of subject-matter experts from HRSA’s Office of Pharmacy Affairs.
  • Requiring that covered entities and drug companies attempt to resolve disputes in good faith on their own before the ADR process is initiated.
  • Allowing for a reconsideration process when either covered entities or drug companies are dissatisfied with the ADR panel’s decision.

For more information, click here.

SAMHSA Introduces Proposed Rule to Better Align SUD Patient Privacy with HIPAA

On Nov. 28, the Substance Abuse and Mental Health Services Administration (SAMHSA) released a proposed rule that would align certain policies in the Confidentiality of Substance Use Disorder Patient Records with the Health Insurance Portability and Accountability Act (HIPAA), per Congress’ instruction in the CARES Act.

The proposed rule would allow providers to disclose Part 2 records after patients give consent once, and that consent would apply to all future uses. They would also be able to redisclose those records as permitted by the HIPAA privacy rule. Additionally, the rule would give patients the ability to obtain a list of disclosure situations and the right to request restrictions on certain disclosures. It would also give the Department of Health and Human Services (HHS) new enforcement powers, like civil money penalties for those that violate Part 2 protections.

Public comments will be accepted until Jan. 31, 2023. For more information, click here.

FDA Proposes Increasing Certification Service Fees and Amending Color Additive Certification

On Nov. 2, the Food and Drug Administration (FDA) released a proposed rule that would amend the color additive regulation to increase the fee for certification services. The fees are intended to recover the full operational costs of the FDA’s color certification program. The change in fee would allow the FDA to continue maintaining an adequate color certification program as required by the Federal Food, Drug, and Cosmetic Act (FD&C Act).

Public comments will be accepted until Jan. 3, 2023. For more information, click here.

HHS Proposes Modifying Current Retail Pharmacy Transaction Standards

On Nov. 9, the Office of the Secretary of the Department of Health and Human Services (HHS) released a proposed rule that seeks to adopt updated versions of the retail pharmacy standards for electronic transactions, adopted under the Administrative Simplification subtitle of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Apart from retail pharmacy transactions, the updated versions would modify healthcare claims or equivalent encounter information, health plan eligibility, referral certification and authorization, and benefits coordination. The proposed rule would also broaden the applicability of the Medicaid pharmacy subrogation transaction to all health plans. Additionally, it would rename and revise the definition of the transaction and adopt an updated standard that would be a modification for state Medicaid agencies and an initial standard for all other health plans.

Public comments will be accepted until Jan. 9, 2023. For more information, click here.

Final Rules

FDA Delays Tobacco Product Required Warning Final Rule Effective Date

On Nov. 25, the Food and Drug Administration (FDA), in compliance with an order issued by the U.S District Court for the Eastern District of Texas, delayed the effective date of a final rule published on March 18, 2020, titled “Tobacco Products; Required Warnings for Cigarette Packages and Advertisements.” The rule, which was originally supposed to go into effect on June 18, 2021, establishes new cigarette health warnings for cigarette packages and advertisements.

The rule is now set to go into effect on Nov. 6, 2023. For more information, click here.

CMS Final Rule Revises Medicare Hospital Outpatient and Ambulatory Surgical Center Payment Systems for Calendar Year (CY) 2023

On Nov. 23, the Centers for Medicare and Medicaid Services (CMS) issued a final rule with comment period that revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2023. The rule outlines changes to the amounts and factors used when determining payment rates for Medicare services paid under the OPPS and the ASC payment systems. It also updates requirements for Organ Acquisition, Rural Emergency Hospitals (REHs), Prior Authorization and Overall Hospital Quality Star Rating.

Additionally, the final rule will:

  • Establish a new provider type for REHs.
  • Finalize proposals regarding REH payment policies, quality measures and enrollment policies.
  • Finalize the Conditions of Participation that REHs must meet in order to participate in Medicare and Medicaid programs.
  • Finalize changes to Critical Access Hospital (CAH) Conditions of Participation for location and distance requirements.
  • Finalize patient rights requirements and flexibilities for CAHs that are part of a larger health system.
  • Finalize a number of provisions that were implemented in COVID-19 interim final rules.
  • Update and refine requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) Program and the Rural Emergency Hospital Quality Reporting (REHQR) Program.

The rule goes into effect Jan. 1, 2023. Public comments will be accepted until Jan. 3, 2023. For more information, click here.

CMS Issues Correction on Clinical Laboratory Improvement Amendments (CLIA) Final Rule

On Nov. 17, the Centers for Medicare and Medicaid Services (CMS) corrected a technical error that was found in a final rule published in the Federal Register on July 11, 2022. The final rule updates proficiency testing (PT) regulations under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), to address analytes and newer technologies.

The rule goes into effect July 11, 2024. For more information, click here.

CMS Final Rule Updates and Revises the End-Stage Renal Disease (ESRD) Prospective Payment System for Calendar Year (CY) 2023

On Nov. 7, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that updates and revises the ESRD Prospective Payment System for CY 2023. The rule also updates the payment rule for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury. Additionally, the rule updates requirements for the ESRD Quality Incentive Program and finalizes changes to the ESRD Treatment Choices Model.

The rule goes into effect Jan. 1, 2023. For more information, click here.

CMS Issues Final Rule Implementing Updates to Medicare Home Health Payment System

On Nov. 4, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that updates the Medicare home health payment rates for calendar year (CY) 2023, in accordance with existing statutory and regulatory requirements. The final rule also finalizes a methodology for determining the impact of the difference between assumed versus actual behavior change on estimated aggregate expenditures for home health payments. Additionally, the rule finalizes changes to the Home Health Quality Reporting Program (HHQRP) requirements, changes to the expanded Home Health Value-Based Purchasing (HHVBP) Model and updates to the home infusion therapy services payment rates for CY 2023.

The rule goes into effect Jan. 1, 2023. For more information, click here.

CMS Issues Final Rule Implementing Certain Provisions of the Consolidated Appropriations Act of 2021 and Medicare Enrollment and Eligibility Rules

On Nov. 3, the Centers for Medicare and Medicaid Services (CMS) issued a final rule, implementing provisions of the Consolidated Appropriations Act of 2021. The final rule also proposes removing references to specific Medicare forms from the text, to provide for greater administrative flexibility. It also updates various federal regulations that affect a state’s payment of Medicare Part A and B premiums for beneficiaries enrolled in Medicare Savings programs and other eligibility groups.

The rule goes into effect Jan. 1, 2023. For more information, click here.

Hospital Outpatient Final Rule Promotes Health Equity in Rural Care Access

On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2023 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule with comment period. The final rule will allow Critical Access Hospitals (CAHs) and small rural hospitals to convert to a Rural Emergency Hospital (REH), as an option for rural hospitals facing closure and supports access to care in rural and underserved communities. An REH is a new Medicare provider type that furnishes outpatient services, emergency services and observation care. In this rule, Medicare will also pay hospital outpatient departments to provide remote behavioral health services to people at home, which will improve access to care in rural communities and promote health equity.

The rule goes into effect Jan. 1, 2023. For more information, click here.

CMS Issues Final Physician Payment Rule Emphasizing Access to Behavioral Health Services and Whole-Person Care

On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) expanded access to behavioral healthcare, cancer screening coverage and dental care through the calendar year 2023 Physician Fee Schedule (PFS) final rule. The rule makes regulatory revisions to reduce barriers to behavioral health services for Medicare beneficiaries. Specifically, the rule makes an exception to the direct supervision requirement to allow behavioral health services to be provided under the general supervision of a physician or nonphysician practitioner (or NPP). 

CMS is also clarifying that any service furnished primarily for the diagnosis and treatment of a mental health or substance use disorder can be furnished by auxiliary personnel under the general supervision of a physician or NPP who is authorized to furnish and bill for services provided incident to their own professional services. 

The rule goes into effect Jan. 1, 2023. For more information, click here.


District Court Sides with FTC, Orders Delisting of Xyrem REMS Patent

On Nov. 18, Delaware district court judge Gregory Williams ordered Jazz Pharmaceuticals to remove the risk evaluation and mitigation strategy (REMS) distribution patent for its narcolepsy drug Xyrem from the Food and Drug Administration’s (FDA) Orange Book. The decision comes after the Federal Trade Commission (FTC) sent an amicus brief to the court, stating that as a general matter, patents that claim a REMS pharmaceutical distribution system do not meet the Orange Book criteria because they claim a method of distribution rather than a method for using a drug. Judge Williams agreed that the Jazz Pharmaceutical REMS patents did not meet the criteria for being listed. It is unclear what Judge William’s decision may mean for the drug industry, but it is significant that both a court and the FTC agreed that REMS patents are not listable in the Orange Book.

For more information, click here.


HHS’s Long COVID Report Offers New Insights into Supporting Patient Community

On Nov. 21, the Department of Health and Human Services (HHS) released a report highlighting the experiences of patients with Long COVID. The report is intended to help government leaders, clinicians and patient advocates understand the complexities and drive creative responses to Long COVID. Long COVID is defined as a set of conditions that linger in patients recovering from a COVID-19 infection. Research suggests that between 5 percent and 30 percent of those who had a COVID-19 infections may have Long COVID symptoms. The HHS report builds upon existing Long COVID scientific literature and offers new insights and expertise of caregivers, frontline workers and people experiencing Long COVID symptoms. It also provides recommendations on how to deliver high-quality care and resources to support individuals and families impacted by Long COVID.

The report outlined the following recommendations:

  • Healthcare providers should develop and share materials about Long COVID to educate patients and their loved ones.
  • Insurance providers should update plan guidelines that align coverage with medical treatments that improve health outcomes for people with Long COVID.
  • Educators and employers should support accommodations for people living with Long COVID that allow them to continue to work and study.
  • Federal agencies should disseminate Long COVID messaging to let people know Long COVID is a real and serious public health issue.

For more information, click here.

GAO Report: Veterans Affairs: Projection, Use and Oversight of COVID-19 Relief Funding

Nov. 29, 2022. GAO-23-105730

On Nov. 29, the Government Accountability Office (GAO) released a report highlighting how the Department of Veterans Affairs (VA) allocated and used supplemental funding it received for COVID-19–related relief. The VA received approximately $36.70 billion in supplemental funding outside of its annual appropriation from three COVID-19 relief laws between 2020 and 2021, specifically the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA) and the American Rescue Plan Act (ARPA). The report revealed that as of Aug. 23, 2022, the VA had obligated approximately 99 percent of its funds from the CARES Act and FFCRA and 55.9 percent of funds from ARPA. The VA primarily used these funds to finance community care, information technology and educational system modernization efforts. The GAO conducted the study in response to the VA Transparency and Trust Act of 2021, which included a provision for the GAO to review supplemental VA funding for COVID-19.

For more information, click here.

CBO to Release Latest Budget Options Report Dec. 7

On Dec. 7, the Congressional Budget Office (CBO) will release the latest edition of its recurring budget options report titled Options for Reducing the Deficit: 2023 to 2032. The report will outline 76 policy options that would either decrease federal spending or increase federal revenues over the next decade. Policy options covered by the report include defense, health, Social Security and tax code provisions. The report makes no recommendations. It will be released in two separate volumes. Volume I will outline options that could reduce the federal deficit by more than $300 billion while Volume II will focus on options that could reduce it by smaller amounts.