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May 31, 2022

Washington Healthcare Update

This Week in Washington: HHS Withdraws SUNSET Final Rule

Congress

House

Senate

Administration

Other Activity

Proposed Rules

Final Rules

Reports


Congress

The House and Senate are in recess for Memorial Day. 

House

Rep. Underwood Leads 26 Democratic House Members in Letter Calling for Measures to Lower Healthcare Costs to be Included in Reconciliation Package

On May 23, Rep. Lauren Underwood (D-IL) led a group of 26 Democratic House members in a letter to Speaker Nancy Pelosi (D-CA) and Chuck Schumer (D-NY). In the letter, Rep. Underwood called on House leadership to include measures to lower healthcare costs and expand Medicaid coverage in the upcoming reconciliation legislation. The letter also expressed support for a permanent expansion of the enhanced advance premium tax credits.

Senate

Senate Finance Committee Releases Tele-Mental Health Discussion Draft

On May 26, Senators Ron Wyden (D-OR), Mike Crapo (R-ID), Ben Cardin (D-MD) and John Thune (R-SD) released a discussion draft for one of the committee’s mental health initiatives, tele-mental health. This is the first portion of the committee’s work on mental health to be released since the committee began working on mental health policies in February.

The discussion draft includes policies that would:

  • Remove Medicare’s in-person visit requirement for tele-mental health services.
  • Establish benefit transparency for mental health care services delivered via telehealth to inform Americans with Medicare how and when they can access telehealth.
  • Preserve access to audio-only mental health coverage in Medicare when necessary and appropriate.
  • Direct Medicare and Medicaid to promote and support provider use of telehealth.
  • Incentivize states to use their CHIP programs to establish local solutions to serve behavioral health needs in schools, including through telehealth.

Sens. Kaine, Collins, Hassan and Portman Introduce Bill to Increase Interchangeable Biosimilar Competition

On May 25, Sens. Tim Kaine (D-VT), Susan Collins (R-ME), Maggie Hassan (D-NH) and Rob Portman (R-OH) introduced the Interchangeable Biologics Clarity Act. The bill would allow multiple interchangeable biosimilars to share exclusivity if they are approved on the same day. In addition, the bill clarifies that the Food and Drug Administration (FDA) can tentatively approve interchangeable biosimilars while an earlier interchangeable products exclusivity is still pending. The goal of these changes is to speed the rate that interchangeable biosimilars are brought to market.

Sens. Cantwell and Grassley Introduce Bill to Increase Drug Pricing Transparency and Increase Scrutiny of PBMs

On May 24, Sens. Maria Cantwell (D-WA) and Chuck Grassley (R-IA) introduced the Pharmacy Benefit Manager Transparency Act of 2022. The bill would ban pharmacy benefit managers (PBMs) from receiving money back that they have paid to pharmacies for dispensing drugs, unless the concessions are disclosed to health plans and payers and the PBMs share relevant price, reimbursement and rebate information. In addition, the bill would provide the Federal Trade Commission (FTC) with increased authority to improve drug pricing transparency.

FDA User Fee Bill Introduced in the Senate

The Senate Health, Education, Labor and Pensions (HELP) Committee Chair Senator Patty Murray (D-WA) and Ranking Member Senator Richard Burr (R-NC) introduced the Food and Drug Administration Safety and Landmark Advancements (FDASLA) Act which would reauthorize the Food and Drug Administration’s (FDA) prescription drug, generic drug, biosimilar and medical device user fee agreements. The legislation also includes provisions to strengthen oversight of cosmetics and dietary supplements, modernize the regulation of diagnostic tests, bring more competition to the market, and prepare the FDA for the next generation of medical products.

The Senate FDA user fee bill includes accelerated approval reforms that mirror the House user fee bill with the addition of a new measure to create an “intra-agency coordinating council” to ensure uniform usage of accelerated approvals. This council would periodically review accelerated approvals and issue guidance to ensure that they are applied in a consistent manner.

Legislation Introduced to Study Impact of Non-Profit Drug Manufacturers

On May 27, Sens. Jacky Rosen (D-NV) and Mitt Romney (R-UT) introduced The Advancing Affordable Medicines for Families Act, which would direct the Government Accountability Office (GAO) to study the impact of nonprofit generic drug makers on the drug industry and the barriers to their prominence. The bill would require the GAO to report to Congress on the impact of nonprofit drug makers on drug affordability, drug shortages and patient and federal drug spending. The GAO also would investigate ways nonprofit drug makers could speed development of generics, biosimilars and new biologic drugs and to identify barriers to capital.

Administration

White House Announces First Test-to-Treat Site

On May 26, the White House announced that the first federally supported Test-to-Treat site had opened in a Rhode Island clinic. At the Test-to-Treat site, individuals who test positive for COVID-19 can immediately receive an assessment from a medical provider and, if deemed necessary, be prescribed and receive oral antiviral treatments. The Test-to-Treat site’s operations will be supported by federal reimbursement. In addition, the government is deploying personnel to support Test-to-Treat sites in Minnesota, and will announce new sites in New York and Illinois in the coming weeks.

Administration Announces Two Defense Production Act Authorizations to Increase Supply of Infant Formula

On May 22, President Biden announced two Defense Production Act (DPA) authorizations for infant formula, which will allow two formula manufacturers to receive priority from suppliers. This action aims to increase availability of infant formula as the U.S. currently confronts a shortage.

HHS Secretary Becerra Announces ARPA-H Will Be Housed Within NIH and Names Dr. Adam Russell as Acting Deputy Director

On May 25, Health and Human Services (HHS) Secretary Xavier Becerra formally announced that the Advanced Research Projects Agency for Health (ARPA-H) would be located within the National Institutes of Health (NIHS) and would be led by acting deputy director Dr. Adam Russell. Dr. Russell is currently the Chief Scientist at the University of Maryland’s Applied Research Laboratory for Intelligence and Security.

HHS Agencies Issue Joint Letter Calling on States to Prioritize Children’s Mental Health

On May 25, a number of agencies across the Department of Health and Human Services (HHS) issued a joint letter calling on states, tribes and jurisdictions to prioritize efforts to improve children’s mental health. The agencies that signed the letter include the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), the Centers for Medicare & Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), the Administration for Children and Families (ACF) and the Administration for Community Living (ACL). The letter also explains how HHS plans to support, coordinate and fund mental health services for children.

CMS Releases Report Concerning Cost Savings for 2023 Part B Premium

On May 27, the Centers for Medicare and Medicaid Services (CMS) released a report that recommends cost savings from lower-than-expected Medicare Part B spending be passed along to beneficiaries with Medicare Part B coverage in the calculation of the 2023 Part B premium. Earlier this year, Department of Health and Human Services (HHS) Secretary Xavier Becerra instructed CMS to reassess the 2022 Part B premium amount in response to a price reduction for Aduhelm™, a monoclonal antibody directed against amyloid for use in treating Alzheimer’s disease. Given the information available today, it is expected that the 2023 premium will be lower than 2022. The final determination will be made later this fall.

CMS Expands Medicaid and CHIP Coverage 12 Months Postpartum in California, Florida, Kentucky and Oregon

On May 25, the Centers for Medicare and Medicaid Services (CMS) announced that it had approved efforts to expand Medicaid and Children’s Health Insurance Program (CHIP) coverage for 12 months postpartum in California, Florida, Kentucky and Oregon. This will expand coverage for approximately 126,000 families.

CMS Publishes Home and Community-Based Services (HCBS) Final Rule Update

On May 24, the Centers for Medicare and Medicaid Services (CMS) issued a “Home and Community-Based Services (HBCS) Final Rule Update.” The Final Rule, which was originally published in 2014, was set to go into effect in July 2020 but was delayed until March 17, 2023. The Final Rule Update states that workforce shortages will not be an acceptable excuse for noncompliance, and that states and HBCS are expected to be in compliance with the final rule by March 17, 2023.

CMS Announces Webpage with Information on Renewals for Medicaid and CHIP Beneficiaries

On May 23, the Centers for Medicare and Medicaid Services (CMS) announced a new webpage that explains how Medicaid and Children’s Health Insurance Program beneficiaries (CHIP) can renew coverage upon the end of the COVID-19 public health emergency.

FDA Issues Industry Guidance for the Prescription Drugs Final Rule

On May 26, the Food and Drug Administration (FDA) issued a final guidance for industry titled “Importation of Prescription Drugs Final Rule Questions and Answers.” The guidance aims to help small entities comply with the “Importation of Prescription Drugs” final rule.

FDA Veterinary Center Director to Lead Internal Review of the Agency’s Response to the Infant Formula Shortage

On May 25, Food and Drug Administration (FDA) Commissioner Robert Califf announced that Steven Solomon, director of the FDA veterinary center, would lead an internal agency review of FDA processes that led to the current infant formula shortage.

FDA Advisory Panel to Discuss COVID-19 Vaccines for Children Under 5 on June 14-15

On May 23, the Food and Drug Administration (FDA) announced that its Vaccines and Related Biological Products Advisory Committee would meet on June 14 and 15 to discuss Pfizer’s and Moderna’s emergency use authorization (EUA) requests for their COVID-19 vaccines for children. Moderna has requested an EUA for its vaccine to be approved for children aged 6-17, and this request will be discussed on June 14. Pfizer’s two EUA requests, one for children aged 6 months-5 years and another for 6 months-4 years of age, will be discussed on June 15.

CDC Sends Monkeypox Testing Supplies to States

On May 26, the Centers for Disease Control and Prevention (CDC) announced that it sent monkeypox testing supplies to states with suspected cases. The CDC is currently investing nine potential cases.

Other Activity

FTC Announces Inquiry into Infant Formula Shortage

On May 24, the Federal Trade Commission (FTC) announced it had launched an inquiry into the current infant formula shortage. The inquiry will gather information on any fraudulent or unfair business practices to take advantage of families during the shortage. In addition, the inquiry will research which factors have led the infant formula markets to be so concentrated and their supply chains so fragile.

Proposed Rules

CMS Publishes Proposed Rule on Funding Methodology and Changes to Basic Health Program Regulations

On May 25, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule titled “Basic Health Program; Federal Funding Methodology for Program Year 2023 and Proposed Changes to Basic Health Program Regulations.” The proposed rule includes information on how federal payment amounts for states establishing a Basic Health Program under the Affordable Care Act will be determined in program year 2023.

Public comments will be accepted until June 24, 2022.

FDA Issues Proposed Rules to Ban the Sale of Menthol Cigarettes and Flavored Cigars

On April 28, the Food and Drug Administration (FDA) issued two proposed rules, the “Tobacco Product Standard for Menthol in Cigarettes” and the “Tobacco Product Standard for Characterizing Flavors in Cigars.” Together, the proposed rules would ban the sale of menthol cigarettes and flavored cigars, citing the need to protect public health, combat youth tobacco use and promote health equity. The FDA will hold listening sessions to discuss the proposed rules on June 13 and 15.

Public comment on both rules will be open until June 6, 2022.

CMS Releases FY 2023 Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System Rule

On April 18, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule titled “Medicare Program; 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 (FY) 2023 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Costs Incurred for Qualified and Non-qualified Deferred Compensation Plans; and Changes to Hospital and Critical Access Hospital Conditions of Participation.” The proposed rule, which is referred to as the FY 2023 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) rule, updates the Medicare fee-for-service payment rates for long-term care hospitals (LTCHs). The rule also establishes new requirements for hospitals and critical access hospitals participating in the Medicare Promoting Interoperability Program. In addition, the proposed rule adds three health equity measures to hospital quality programs.

A CMS fact sheet on the proposed rule can found here.

Public comments will be accepted until June 17, 2022.

CMS Releases FY 2023 Skilled Nursing Facilities Prospective Payment System Proposed Rule

On April 15, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Medicare Program: Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program; Long Term Care Facilities to Establish Mandatory Minimum Staffing Levels.” The proposed rule, which is referred to as the fiscal year (FY) 2023 Skilled Nursing Facilities Prospective Payment System (SNF PPS) proposed rule, adds three new measures to the SNF Value-Based Purchasing (VBP) Program. As part of the proposed rule, CMS is seeking public input on how to best establish minimum staffing requirements at nursing homes. CMS is also seeking public comment on how to address staff turnover in nursing homes.

Public comments will be accepted until June 10, 2022.

CMS Issues Proposed Rule to Delay Start of Radiation Oncology Model

On April 8, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Radiation Oncology (RO) Model.” The proposed rule delays the start of the RO to an undetermined future date that will be determined by future rulemaking.

Public comments will be accepted until June 7, 2022.

IRS Publishes Proposed Rule to Address Affordable Care Act “Family Glitch”

On April 7, the Internal Revenue Service (IRS) published a proposed rule titled “Affordability of Employer Coverage for Family Members of Employees.” The proposed rule would make changes to the eligibility for the premium tax credit to ensure that the affordability of employer-sponsored minimum essential coverage for family members of an employee is determined on the employee’s share of the cost of covering themselves and their family members. Currently, regulations define “affordable” employer-based coverage as coverage that is affordable for the employee, not considering whether it is affordable for the employee’s family members. This can lead family members to be ineligible for a premium tax credit, and this situation is referred to as the “family glitch.”

Public comments will be accepted until June 6, 2022.

HHS’ Office for Civil Rights Announces RFI on Security Practices and Monetary Settlements Included in the HITECH Act

On April 6, the Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) announced it was seeking public input on two provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, which was amended in 2021. The Request for Information (RFI) will inform the OCR’s policies to support the healthcare industry’s security practices going forward. In addition, the RFI will inform how the OCR will share funds collected from HIPAA rule violation enforcement.

Public comments will be accepted until June 6, 2022.

CMS Releases Proposed Rule with Updates for the Inpatient Psychiatric Facilities Prospective Payment System

On March 31, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule titled “Medicare Program: Fiscal Year 2023 Inpatient Psychiatric Facilities Prospective Payment System-Rate Update and Quality Reporting.” The proposed rule would make updates to prospective payment rates, the outlier threshold and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPF). The proposed rule would also establish a mitigation policy to facilitate the yearly changes in IPF payments. The changes are summarized in this CMS fact sheet. The proposed changes would be in effect from Oct. 1, 2022, to Sept. 30, 2023.

Public comments will be accepted until May 31, 2022.

CMS Releases Proposed Rule to Update the Hospice Wage Index, Payment Rate and Hospice Quality Reporting Requirements

On March 31, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule titled “Medicare Program: FY 2023 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements.” The proposed rule would establish a mitigation policy to facilitate the yearly changes to the hospice wage index. The proposed rule would also update the hospice wage index, payment rates and aggregate cap amount for Fiscal Year 2023, and make changes to the Hospice Quality Reporting Program (HQRP). The changes are summarized in this CMS fact sheet.

Public comments will be accepted until May 31, 2022.

CMS Releases Proposed Rule to Update Medicare Inpatient Rehabilitation Facility Prospective Payment System and Quality Reporting Program

On March 31, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule titled “Medicare Program: Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2023 and Updates to the Inpatient Rehabilitation Facility Quality Reporting Program.” The proposed rule would update Medicare payment policies and rates under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program for Fiscal Year 2023. The changes are summarized in this CMS fact sheet.

Public comments will be accepted until May 31, 2022.

FDA Announces Request for Public Comments for Adding Maximum Daily Exposure Information to Inactive Ingredient Database

On March 22, the Food and Drug Administration (FDA) issued a notice titled “Prioritizing the Addition of Maximum Daily Exposure Information and Removing Dosage Form Information From the Inactive Ingredient Database” to establish a public docket and request public comment. The public comments will help the FDA determine how to best prioritize maximum daily exposure (MDE) information for inactive ingredients that are not currently included in the Centers for Drug Evaluation and Research’s Inactive Ingredient Database, as well as if the database should be restructured by removing dosage form information.

Public comments will be accepted until June 21, 2022.

FDA Issues Proposed Rule with Potential Standards for Wholesale Drug Distributors and Third-Party Logistics Providers

On Feb. 4, the Food and Drug Administration (FDA) issued a proposed rule titled “National Standards for the Licensure of Wholesale Drug Distributors and Third-Party Logistics Providers.” The proposed rule includes proposed national standards for the licensing of prescription drug wholesale distributors and third-party logistics providers.

Public comments will be accepted until June 6, 2022.

Final Rules

HHS Issues Final Rule Withdrawing SUNSET Rule

On May 27, the Department of Health and Human Services (HHS) published a final rule to withdraw the “Securing Updated and Necessary Statutory Evaluations Timely (SUNSET)” Final Rule of 2021. The SUNSET rule was originally set to go into effect on March 22, 2021, but was delayed until September 22, 2022, following a lawsuit. The SUNSET rule would have required HHS to review every rule to determine if it was still applicable after 10 years, and any rules not reviewed within that time frame would be automatically eliminated. In its withdrawal of the SUNSET rule, HHS stated that the rule faced significant opposition from stakeholders and would not expedite rulemaking.

The rule is effective immediately.

CMS Releases Reassignment of Medicaid Provider Claims Final Rule

On May 12, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “Medicaid Program; Reassignment of Medicaid Provider Claims.” The final rule authorizes states to make payments to third parties on behalf of individual Medicaid practitioners for whom Medicaid is their primary source of revenue. The rule allows payments for health insurance, skills training and other benefits typical for employees. The rule will go into effect on June 15, 2022.

CMS Releases Notice of Benefit and Parameters for 2023 Final Rule

On April 28, the Centers for Medicare and Medicaid Services (CMS) announced the 2023 Notice of Benefit and Payment Parameters Final Rule, which aims to strengthen plan coverage offered on the federal Marketplace. The final rule will require healthcare.gov plans to offer a standardized version of each product an issuer sells in each metal tier for plan year 2023. The final rule also finalizes exchange user fees, updates quality improvement standards related to health equity and reduces the number of verification requirements for special enrollment periods.

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

CMS Releases Final Rule for Medicare Out-of-Pocket (MOOP) Limits and Service Category Cost Sharing

On April 14, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “Medicare Program; Maximum Out-of-Pocket (MOOP) Limits and Service Category Cost Sharing Standards.” The rule finalizes the maximum out-of-pocket (MOOP) limits for Medicare Parts A and B services and cost sharing limits for Medicare Parts A and B services. CMS is also requesting public comment on new ways to update cost sharing limits in the future. The regulations go into effect on June 13, 2022.

Final Rule to Change Qualifications for Products to be Considered “Made in America” Released

On March 4, the Department of Defense, the General Services Administration and the Aeronautics and Space Administration announced a final rule that aims to increase manufacturing of critical supplies in the U.S. as part of President Biden’s “Made in America” policy. The final rule would require pharmaceutical companies that want their products to qualify as being “Made in America” for federal procurement purposes to increase the percentage of drug ingredients made in the U.S. from 55 percent to 75 percent in the next seven years. Specifically, the final rule would increase the threshold to 60 percent in 2022, 65 percent in 2024 and 75 percent in 2029. In addition, the rule will allow the government to apply price preferences to select drug products and components that will support the expansion of the domestic supply chain. The final rule will go into effect on Oct. 25, 2022.

The White House Fact Sheet on the final rule can be found here.

Reports

GAO Report on Defense Healthcare for Perinatal TRICARE Beneficiaries

On May 23, the Government Accountability Office (GAO) published a report titled “Defense Health Care: Prevalence of and Efforts to Screen and Treat Mental Health Conditions in Prenatal and Postpartum TRICARE Beneficiaries.” The report states that the Department of Defense (DOD) encourages mental health screening for perinatal beneficiaries in TRICARE, and that most beneficiaries diagnosed with a mental health condition received treatment.