Jun 26, 2023

Washington Healthcare Update

This Week in Washington: Senate Appropriations Committee meets to figure out top-line numbers; Majority Leader Schumer leads Senate in developing a policy response to artificial intelligence; and CMS proposes new Medicare coverage pathway for breakthrough devices

Upcoming Hearings





Proposed Rules

Final Rules



CBO Cost Estimates

Upcoming Hearings


The House has recessed for its Fourth of July district work period.


The Senate has recessed for its Fourth of July state work period.



House Appropriators Approved Six Funding Bills

As Congress left town for their Fourth of July break, the House Committee on Appropriations approved six appropriation bills for FY 2024. That includes Energy-Water, Defense, Military Construction-VA, Legislative Branch, Agriculture-FDA and Homeland Security. The current fiscal year ends on Sept. 30, and Congress plans to be in recess for all of August.

Two Hundred Thirty-Three Representatives Send Letter Concerning Prior Authorization

On June 21, Rep. DelBene (D-WA) led a group of 230 representatives in sending a letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure. The letter was also signed by 61 senators. It urges CMS to speed up the prior authorization process for Medicare Advantage (MA) plans and calls on CMS to implement provisions from the Improving Seniors’ Timely Access to Care Act. The provisions seek to:

  • Establish real-time prior authorization for routine matters;
  • Increase detailed transparency metrics; and
  • Implement a 24-hour deadline for MA plans to respond to prior authorization requests for urgent care.

For more information, click here.


Senate Majority Leader Releases Policy Response to AI

On June 22, Senate Majority Leader Chuck Schumer (D-NY) released a policy outline concerning artificial intelligence (AI) titled the SAFE Innovation Framework for AI. The Majority Leader is concerned about the rise of unregulated AI technologies and has urged since April for the Senate to begin creating a regulatory framework to protect U.S. consumers and national security from them. The SAFE Innovation Framework is five principles from which legislation or regulations can be developed. The principles are:

  • Protect U.S. national security from AI threats and strengthen economic security for workers who may lose their jobs to AI technologies;
  • Support efforts to protect intellectual property, tamp down on misinformation and bias, and address copyright concerns and liability;
  • Curtail harmful AI technologies, ensure that AI systems align with democratic values and promote AI societal benefits;
  • Determine what data and information the federal government and the American public should know about AI developer content and systems; and
  • Strengthen US-led AI innovation and promote security, transparency and accountability.

In addition, the Majority Leader announced that he will convene multiple AI insight forums later this year where AI experts will be asked to provide information on topics such as risk management, intellectual property, liability, privacy and national security concerns.

For more information, click here.

Senate Appropriations Committee Marks Up Agriculture-FDA Funding Bill

On June 22, the Senate Appropriations Committee met to agree on the top-line numbers for budget functions from which the appropriations bills will be derived. This is setting up a fight with the House because of significant differences in the two bodies’ top-line numbers overall. 

Also on June 22, the Senate Appropriations Committee reported out of committee the fiscal year (FY) 2024 funding bill for Agriculture, Food and Drug Administration, and Rural Development. The Senate bill is about $1 billion more than the House version. However, the House bill relies on clawing back $8 billion in unspent pandemic-era funds, a move that is likely dead on arrival in the Senate.

The Senate bill would allocate $3.55 billion in base funding to the FDA in FY 2024, a $20 million net increase compared to FY 2023. Total FDA funding with user fee revenues included is $6.63 billion. The $20 million increase will go toward funding cosmetics oversight, food safety, device and drug shortages, neuroscience research and ALS research programs.

For more information, click here.

CONNECT for Health Act Reintroduced

On June 15, Sens. Schatz (D-HI), Wicker (R-MS), Cardin (D-MD), Thune (R-SD), Warner (D-VA) and Hyde-Smith (R-MS) reintroduced the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act. The legislation would:

  • Permanently remove telehealth service geographic restrictions;
  • Expand telehealth service originating sites to include patient homes and other sites;
  • Remove in-person visit requirements for telemental health services;
  • Allow health centers and rural health centers to provide telehealth services permanently;
  • Allow telehealth service restrictions to be waived during a public health emergency; and
  • Require more data to be collected on telehealth usage, quality of care and improvement options.

A companion bill was introduced in the House by Reps. Thompson (D-CA), Matsui (D-CA), Schweikert (R-AZ) and Johnson (R-OH).

For more information, click here.

Medical Supply Chain Resiliency Act

On June 22, Sens. Carper (D-DE) and Tillis (R-NC) introduced the Medical Supply Chain Resiliency Act. The legislation seeks to strengthen U.S. economic resilience and combat medical device, treatments and equipment shortages. It would authorize the president to engage in trade negotiations with “trusted trading partner” countries to increase access to medical goods and supplies for patients in the U.S. and overseas.

For more information, click here.


U.S. Preventive Services Task Force (USPSTF) Recommends Adults Should Be Screened for Depression and Anxiety

On June 21, the U.S. Preventive Services Task Force (USPSTF) made a recommendation that all adults, including those who are pregnant, postpartum and 65 and older, should be screened for major depressive disorder. In a separate recommendation the USPSTF also recommended screening for adults up to age 64 for anxiety. It did not recommend screening adults 65 and older for anxiety due to insufficient evidence on the balance of its harms and benefits. Both the depression and anxiety screening recommendations are considered a grade B recommendation. A grade B recommendation means that there is high certainty that the net benefit is moderate or there is moderate certainty that the net benefit is moderate to substantial and should be offered or provided in practice.

CMS Proposes Medicare Coverage Pathway for Breakthrough Devices

On June 22, the Centers for Medicare and Medicaid Services (CMS) announced that it is considering establishing the Transitional Coverage for Emerging Technologies (TCET) pathway, a new voluntary Medicare coverage pathway that would ensure that Medicare beneficiaries have more consistent and faster access to breakthrough devices and emerging technologies. The pathway would:

  • Apply to Food and Drug Administration (FDA)-designated Breakthrough Devices that fall within a Medicare benefit category and devices that are not subject to an existing Medicare national coverage determination (NCD) or not otherwise excluded from coverage through a law or regulation;
  • Make manufacturer participation voluntary;
  • Allow CMS to conduct early evidence reviews of a device before the FDA decides on marketing authorization;
  • Allow CMS to initiate discussions with device manufacturers on evidence gaps for coverage purposes and on study designs that could address them; and
  • Encourage CMS to finalize a TCET NCD within six months after FDA market authorization.

CMS announced that the TCET pathway will help Medicare beneficiaries receive high-quality care and make the right healthcare decisions. The pathway was developed with the feedback of medical professionals, device manufacturers, patients and federal agencies. CMS is seeking public comment on the new pathway and will accept comments until Aug. 26, 2023.

For more information, click here.

CMS Releases Fact Sheet on Alzheimer’s Drug Information Registry

On June 22, the Centers for Medicare and Medicaid Services (CMS) released a fact sheet on the nationwide patient registry portal that it will launch to gather information on fully approved Alzheimer’s drugs. CMS recently announced that Medicare would cover the cost of fully approved Alzheimer’s drugs but only if patients and physicians participate in registries that will be used to gather safety and efficacy data on the drugs. CMS has stated that providers will be able to choose whether to use the CMS registry or another one.

For more information, click here.

FDA Approves Gene Therapy Treatment for Pediatric DMD Patients

On June 22, the Food and Drug Administration (FDA) approved Elevidys, the first gene therapy treatment for Duchenne muscular dystrophy (DMD) pediatric patients between the ages of 4 and 5. DMD is a rare genetic condition where muscles grow progressively weaker and waste away. The FDA decided to grant Elevidys approval after a randomized, double-blind, placebo-controlled study showed that the drug helped patients produce dystrophin, the protein that they are unable to produce naturally due to the condition.

For more information, click here.

FDA Issues 189 Warning Letters to E-Cigarette Retailers

On June 22, the Food and Drug Administration (FDA) announced that it sent 189 warning letters to tobacco product retailers for selling unauthorized Elf Bar and Esco Bar disposable e-cigarettes. The Elf and Esco Bar e-cigarettes are among the most popular tobacco products in the U.S. despite lacking marketing authorization from the FDA. The FDA is particularly concerned about Elf Bar products after it received thousands of reports of kids younger than 5 years old being exposed to the e-cigarette, which has a high appeal among youth.

For more information, click here.

FDA Approves Two Pediatric Type 2 Diabetes Medicines

On June 20, the Food and Drug Administration (FDA) approved Jardiance (empagliflozin) and Synjardy (empagliflozin and metformin hydrochloride), two oral medications intended to treat type 2 diabetes in children. Jardiance and Synjardy work by increasing the excretion of glucose in urine, thereby lowering hemoglobin A1C in patients. FDA decided to authorize both medications after a double-blind, randomized, placebo-controlled trial revealed that the A1C level in patients taking the drugs was lower than that of patients who received a placebo.

For more information, click here.

FDA CDER Releases FY 2022 State of Pharmaceutical Quality Report

On June 20, the Food and Drug Administration (FDA) Center for Drug Evaluation and Research (CDER) released the fiscal year (FY) 2022 Report on the State of Pharmaceutical Quality. The report presents data on drug product manufacturing sites, demographics, import alerts, recalls and warning letters. It also outlines information on drug product sampling and testing, the FDA New Inspection Protocol Project (NIPP), the Quality Management Maturity (QMM) program and the CARES Act Drug Amount Reporting Program.

FDA Launches Voluntary Oncology Drug Product Pilot Program

On June 20, the Food and Drug Administration (FDA) launched a new voluntary pilot program for certain oncology drug products that use an in vitro companion diagnostic test. The program intends to help clinicians identify the right cancer treatments for patients and reduce the risks of using unauthorized laboratory developed tests (LDTs) to determine which oncology drug product is best for a cancer patient. The FDA is concerned that unauthorized LDTs are providing inaccurate test results and negatively impacting treatment decisions.

For more information, click here.

SAMHSA Issues Advisory on Long COVID Mental Health Symptoms

On June 21, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued an advisory intended to help identify and manage mental health symptoms and conditions that are caused by Long COVID. The advisory outlines mental health conditions commonly found among Long COVID patients and provides a comprehensive overview of how to assess and treat them. It also provides information on barriers and inequities that Long COVID patients experience when accessing healthcare services.

For more information, click here.

Proposed Rules

ACL Proposed Rule Updates Older Americans Act Program Regulations

On June 15, the Administration for Community Living (ACL) released a proposed rule that would update regulations for the Older Americans Act (OAA) programs. The proposed rule aims to enhance benefits for OAA participants and improve program service delivery. It also seeks to:

  • Clarify requirements for state and area plans on aging;
  • Detail requirements for care coordination among tribal, state and local programs;
  • Specify the range of people who can receive services and how funds can be utilized;
  • Clarify required state and local policies and procedures;
  • Update definition and flexibilities and clarify senior nutrition program guidelines; and
  • Address OAA program emergency preparedness and response measures.

Public comments will be accepted until Aug. 15, 2023. For more information, click here.

FDA Proposes Rule to Broaden Prescription Drug Labeling Regulations

On May 30, the Food and Drug Administration (FDA) released a proposed rule that would amend human prescription drug product labeling regulations for medication guides. The proposed rule would require prescription drug and biological product applicants to include a new one-page medication guide known as the Patient Medication Information (PMI) along with products that are used, dispensed or administered in an outpatient setting. Blood and blood components transfused in an outpatient setting would also require a PMI. The PMI would include essential information such as the product’s name, important safety information, common side effects and directions for use.

Public comments will be accepted until Nov. 27, 2023. For more information, click here.

CMS Proposes Rule to Strengthen Medicaid Drug Price Transparency and Verification

On May 23, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that seeks to increase the transparency of Medicaid prescription drug costs. The proposed rule would implement new policies in the Medicaid Drug Rebate Program (MDRP) and would revise and modify MDRP administrative provisions and definitions. It would:

  • Designate a time limitation on drug manufacturers’ initiating audits with states;
  • Clarify and establish requirements for state fee-for-service (FFS) pharmacy reimbursement;
  • Codify certain conditions relating to states’ claiming Federal Financial Partnership (FFP) for physician-administered drugs (PADs);
  • Clarify requirements for accumulating price concessions when determining best prices;
  • Improve drug price verification and transparency through data collection;
  • Propose two new contracting requirements between states and their Medicaid managed plans; and
  • Revise third-party liability regulation.

Additionally, the proposed rule would require pharmacy benefit managers (PBMs) that contract with Medicaid to disclose the prices they pay for medications, and would establish a Drug Price Verification Survey Process that would require manufacturers and wholesalers of certain high-cost Medicaid drugs to share drug pricing information with CMS.

Public comments will be accepted until July 25, 2023. For more information, click here.

CMS Proposes Rule Concerning Medicaid Access

On May 3, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that seeks to strengthen and improve access to care, quality and health outcomes for Medicaid and Children’s Health Insurance Program (CHIP) managed care enrollees. Among the changes in the Ensuring Access to Medicaid Services are requirements to:

  • Establish national maximum standards for certain appointment wait times for Medicaid and CHIP managed care enrollees;
  • Establish stronger state monitoring and reporting requirements related to access and network adequacy for Medicaid and CHIP managed care plans;
  • Establish a quality rating system for Medicaid and CHIP managed care plans;
  • Require states to conduct annual enrollee experience surveys for Medicaid managed care plans;
  • Implement new standards for states that use in lieu of services and settings (ILOSs) to promote effective utilization; and
  • Specify medical loss ratio (MLR) requirements.

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

CMS Proposed Rule Seeks to Improve Access to Medicaid Services

On May 3, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that seeks to improve access to Medicaid fee-for-service (FFS), managed care delivery system, and in-home and community-based services (HCBS) programs. The proposed rule would:

  • Increase program transparency and accountability;
  • Standardize program data and monitoring;
  • Create opportunities for states to promote active beneficiary engagement; and
  • Strengthen how states use state Medical Care Advisory Committees.

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

FDA Proposes New Tobacco Product Manufacturing Practices Requirements

On March 8, the Food and Drug Administration (FDA) released a proposed rule that would improve the manufacture, design, packing and storage of tobacco products. The proposed rule seeks to ensure that tobacco products comply with the Federal Food, Drug, and Cosmetic (FD&C) Act. The FDA has noted that it will help minimize and prevent tobacco product contamination, as well as inconsistencies in e-cigarette liquid concentrations and labeling. The proposed rule will also:

  • Establish tobacco product design and development controls;
  • Ensure that tobacco products meet established specifications;
  • Crack down on tobacco products that do not meet specifications;
  • Require manufacturers to take action in cases of product contamination;
  • Require investigations of products that do not meet specifications; and
  • Establish the ability to trace all components, ingredients, additives and materials used by tobacco product manufacturers.

Public comments will be accepted until Sept. 6, 2023. For more information, click here.

Final Rules

CMS Final Rule Clarifies Medicare DSH Payment Adjustment Part C Days

On June 7, the Centers for Medicare and Medicaid Services (CMS) released a final rule that establishes a policy that governs how the hospital inpatient days of Medicare Part C beneficiaries should be considered when calculating a hospital’s disproportionate share (DSH) payment adjustment. The policy is intended to provide clarity on how Part C days will be treated for DSH calculations that are not governed by the FY 2014 inpatient prospective payment system (IPPS)/long-term care hospital (LTCH) prospective payment system (PPS) final rule.

The rule will go into effect on Aug. 8, 2023. For more information, click here.

CMS Final Rule Eliminates COVID-19 Healthcare Worker Vaccination Requirement

On May 31, the Centers for Medicare and Medicaid Services (CMS) released a final rule that eliminates the COVID-19 vaccination requirement for healthcare workers. The vaccination requirement, which required all staff working in long-term care (LTC) facilities to receive an initial COVID-19 vaccine, was originally proposed in a Nov. 2021 interim final rule. The rule faced a series of legal challenges and officially went into effect in Jan. 2022, following a ruling by the U.S. Supreme Court.

Although the vaccination requirement is eliminated, the final rule will still require LTC facilities to provide education about COVID-19 vaccines and to offer them to residents, clients and staff. CMS announced that it will rely on proposed quality reporting measures to encourage providers to stay up to date on vaccines.

The rule will go into effect on Aug. 4, 2023. For more information, click here.

DEA Releases Temporary Rule Extending COVID-19 Telemedicine Flexibilities

On May 10, the Drug Enforcement Administration (DEA) and the Substance Abuse and Mental Health Services Administration (SAMHSA) released a temporary rule that extends telemedicine flexibilities adopted during the COVID-19 public health emergency (PHE). The temporary rule follows two Notices of Proposed Rulemaking (NPRM) regarding the virtual prescribing of controlled substances that the DEA released in March 2023, which received more than 38,000 public comments. The temporary rule specifically:

  • Extends through Nov. 11, 2023, the COVID-19 PHE controlled substance prescribing flexibilities that allows practitioners to prescribe controlled substances via telemedicine without having to evaluate patients in person.
  • Implements a one-year grace period through Nov. 11, 2024, for practitioners and patients who have or who develop a telemedicine relationship on or before Nov. 11, 2023. A “telemedicine relationship” is considered to exist if a practitioner has already issued a prescription for a controlled substance to a patient.

The temporary rule will stay in effect through Nov. 11, 2024. For more information, click here.

CMS Finalizes 2024 Medicare Advantage and Part C and D Payment Policies

On March 31, the Centers for Medicare and Medicaid Services (CMS) released a final rule that will finalize the calendar year (CY) 2024 payment policies for the Medicare Advantage (MA) and Medicare Part C and D programs. The final rule implements several changes that were made with regard to the Medicare programs listed above, which are outlined in a Rate Announcement released by CMS. The final rule will:

  • Finalize technical changes and updates made to the MA risk adjustment model, which include transitioning the model to reflect International Classification of Diseases 10 (ICD-10) condition categories and updating the model with recent Medicare data years. CMS intends on phasing in the updated model over the next three years.
  • Finalize changes to the Medicare Part C and D Star Ratings. CMS will provide a list of the eligible disasters for the extreme and uncontrollable circumstances adjustment and of non-substantive updates made to several measure specifications.

CMS’ rate announcement update reflects a 3.32 percent increase in MA payments, equivalent to approximately $13.8 billion. Additionally, the update reflects a 2.28 percent increase in the MA payment effective growth rate, a 1.24 percent decline in star ratings and a 4.4 percent increase in the MA risk score trend.

The rule will go into effect on Jan. 1, 2024. For more information, click here.

FDA Issues Final Rule Regarding Mammography Quality Standards

On March 9, the Food and Drug Administration (FDA) issued a final rule that updates the regulations implemented by the Mammography Quality Standards Act of 1992. The FDA has decided to update the regulations due to advancements made in mammography technology and information. The final rule will:

  • Improve the delivery of mammography services;
  • Strengthen communication of healthcare information;
  • Require mammography facilities to provide patients with additional health information;
  • Ensure the availability of qualified mammography personnel;
  • Bolster medical outcome audits;
  • Modernize technological aspects of mammography services; and
  • Implement enforcement tools to deal with noncompliant facilities.

The rule will go into effect on Sept. 10, 2024. For more information, click here.

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 will go into effect on Nov. 6, 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.


PhRMA Sues to Stop Medicare Drug Price Negotiation

On June 21, PhRMA, the leading drug manufacturer trade association, filed suit in the U.S. District Court for the Western District of Texas arguing Medicare’s new power to negotiate drug prices is unconstitutional. PhRMA was joined in the suit by the National Infusion Center Association and the Global Colon Cancer Association. The suit claims that the law does not provide for checks and balances through public feedback and cuts off administrative and judicial review, which violates the Constitution’s separation of powers and due process clauses. They also argue the provision includes an extreme excise tax aimed at forcing drug manufacturers to accept the government’s prices, making it an excessive fine prohibited by the 8th Amendment. 


GAO Releases Report on Critical Access Hospital Behavioral Health Services

On June 22, the Government Accountability Office (GAO) released a report regarding how critical access hospitals (CAHs) provide behavioral health services and how Medicare fee-for-service (FFS) payment policies affect CAHs’ ability to provide these services. The GAO interviewed several CAH officials and asked them to explain what behavioral health services they offer. The GAO also asked officials whether current Medicare FFS payment policies make it difficult for them to provide these services.

The GAO discovered that CAH behavioral health services are offered in multiple ways and in various settings, including emergency departments, in-patient psychiatric care facilities and out-patient behavioral health clinics. The GAO also discovered that CAHs are divided over whether Medicare FFS payment policies were the biggest challenge in their ability to provide services to patients. The GAO was asked to review CAH behavioral health services by a provision in House Report 116-450.

For more information, click here.

GAO Releases Report on Department of Defense Healthcare System Reform

On June 22, the Government Accountability Office (GAO) released a report regarding ongoing military health system reforms led by the Department of Defense (DoD). Since 2012, the National Defense Authorization Acts (NDAA) have required the DoD to implement various reforms among its healthcare system. This includes improving military medical treatment facility care, private sector care, workforce training and readiness, and system governance and administration.

The GAO analyzed DoD healthcare system reform requirements and discovered that the agency had not released implementation plans or announced when it expects the reforms to be completed. The GAO also discovered that the DoD continues to lack a process to monitor reform actions and progress. The GAO was asked to analyze the DoD’s implementation of statutory requirements for military health system reform by a provision in the fiscal year (FY) 2022 NDAA.

For more information, click here.

GAO Releases Report on CMS Care Compare Website

On June 21, the Government Accountability Office (GAO) released a report regarding Care Compare, a website managed by the Centers for Medicare and Medicaid Services (CMS) that allows individuals to compare and analyze information about the quality of different nursing homes. The website primarily outlines data such as nursing home staffing data, inspection data and quality measures.

The GAO examined the nursing home quality information listed on the Care Compare website and discovered that it did not meet all understandability and relevancy characteristics that the GAO had previously recommended CMS follow when listing information on its website. Additionally, the GAO discovered that the website continues to lack information on nursing home residents’ experience. The GAO conducted this study because it was asked to examine the nursing home section of the Care Compare and Five-Star Rating System websites.

For more information, click here.

CBO Cost Estimates

CBO Releases Cost Estimate on Rules Committee Print 118-9

On June 20, the Congressional Budget Office (CBO) released a cost estimate for Rules Committee Print 118-9 (H.R. 3799, the CHOICE Arrangement Act, as amended by Amendment 8). The bill would make changes to the Employee Retirement and Income Security Act of 1974 and the Internal Revenue Code. It would grant employers additional flexibility in offering health benefits to their employees and would decrease funding for the Prevention and Public Health Fund.

CBO projects that Title I, the Association Health Plans Act, would increase federal deficits by $579 million over the next 10 years. CBO also predicts that the bill would increase the number of people with association health insurance plans by 200,000 per year after 2028. In addition, CBO predicts that Title III, the Self-Insurance Protection Act, would have insignificant effects on direct spending, revenues and the federal deficit over the 2023-2033 period.

CBO also projects that Title II, the CHOICE Arrangement Act, and Title IV, the Small Business Flexibility Act, would not affect direct spending or revenues. CBO did not complete an analysis of the bill’s impact on spending subject to appropriation.

For more information, click here.