Health Policy Report (4/20)

Capitol Hill Update

Congressional leadership and White House officials are closing in on an agreement for the next round of COVID-19 legislation after funding for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) lapsed late last week. Following days of tense negotiations and partisan messaging exercises, the deal is expected to include a boost in funding for the PPP with language that aims to offset Democratic concerns about access to the loan program for minority owned and disadvantaged small businesses. The two sides have also coalesced around additional funding for health care providers and COVID-19 testing. However, more financial support for state and local governments appears to be off the table as of right now.

Once lawmakers strike a deal on this next round of funding, the Senate would likely move to pass the bill by unanimous consent during one of its forthcoming pro forma sessions this week. However, a path forward in the House is clouded by the fact that Rep. Thomas Massie (R-KY) is expected to object to unanimous consent passage in the lower chamber over concerns about moving a large package of funding absent a quorum. As such, the timing for consideration and enactment on the Phase 3.5 measure remains in flux.

Meanwhile, House Rules Committee Chairman James McGovern (D-MA) outlined a plan last week that would allow for emergency remote voting aimed at quelling concerns about bringing lawmakers back to Washington during the pandemic. Designed as a temporary change to the House rules during the outbreak, the plan would require the lower chamber to gavel into session and officially vote to change its rules. As of now, it’s unclear whether the Democrats’ plan enjoys bipartisan support — a key factor that will ultimately determine the feasibility of remote voting moving forward.

Senate Democrats Unveil $30 Billion Plan to Increase COVID-19 Testing

Last Wednesday, Senate Democrats unveiled a plan to ramp up COVID-19 testing in order to facilitate lifting social distancing measures. The proposal rolled out by Senate Minority Leader Chuck Schumer (D-NY) and Sen. Patty Murray (D-WA) would provide $30 billion in emergency funding to strengthen testing infrastructure and capabilities across the country. Minority Leader Schumer noted that the administration’s testing regime was “at best incomplete and at worst in shambles,” and Sen. Murray added that constituents have been questioning the lack of access to testing from the beginning of the pandemic. The Democratic leadership behind the proposal clarified that the only way to get the economy “back up and running” is by addressing comprehensive testing in the short term while the nation waits for a vaccine to be developed.

The Senators clarified that the funding would cover “testing-related activities,” and a significant portion of the funding would be geared towards optimizing the national supply chain for manufacturing tests and “developing different types of tests for monitoring and controlling COVID-19.” The proposal also establishes a $4.5 billion per year fund for public health infrastructure that could be used to strengthen the ability to increase testing and the ability to trace who an infected individual has been in contact with. Additionally, a myriad of legislative provisions in the proposal would allow Congress to ramp up the ability to do widespread testing and the infrastructure needed to establish such a system. The proposal encourages Congress to pass legislation to bolster the testing supply chain, including: incentivizing the production of testing supplies within the United States; urging the Department of Health and Human Services (HHS) and Federal Emergency Management Agency (FEMA) to share information on a weekly basis about the amount of testing supplies and potential shortages; and pushing the administration to develop multiple types of tests. The Senate Democrats are recommending establishing a joint HHS and Department of Labor watchdog to ensure testing remains free and serve as point of contact for patients who have been charged.

Administration Requires Coverage of COVID-19 Antibody Tests 

The Centers for Medicare & Medicaid Services (CMS), the Treasury, and Department of Labor issued new guidance recently to require private insurers regulated by those agencies to cover COVID-19 diagnostic testing and certain other related services, including antibody testing, at no cost. This includes exchange plans and ERISA plans, but does not include products “excepted benefits,” such as short-term limited-duration insurance (STLDI). CMS Administrator Seema Verma noted in a press release that “it is critical that Americans have peace of mind knowing that cost won’t be a barrier to testing during this national public health emergency.” The guidance encourages the use of antibody testing that may help to enable health care workers and other Americans to quickly identify if they have had the disease and may have temporary immunity, which the administration hopes will help get Americans back to work more quickly.

The guidance implements the requirement for group health plans and group and individual health insurance to cover both diagnostic testing and certain related items and services provided during a medical visit with no cost sharing. Under the new legislation, plans are required to cover services related to COVID-19 testing, including urgent care visits, emergency room visits, and in-person or telehealth visits to the doctor’s office that result in an order for or administration of a COVID-19 test. The guidance clarifies that covered COVID-19 tests include all FDA-authorized COVID-19 diagnostic tests, COVID-19 diagnostic tests that developers request authorization for on an emergency basis, and COVID-19 diagnostic tests developed in and authorized by states. Additionally, COVID-19 antibody testing will be covered once it is widely available, which the administration noted “could become a key element in fighting the pandemic by providing a more accurate measure of how many people have been infected and potentially enabling Americans to get back to work more quickly.”

Some stakeholders have expressed concern around a lack of proper regulation for COVID-19 antibody tests, although Food and Drug Administration (FDA) Commissioner Stephen Hahn has ensured that the agency will “take appropriate action” against companies making false claims or selling inaccurate tests. During a recent interview, the Commissioner admitted that some tests on the market that have not been validated by FDA “may not be as accurate as we’d like them to be.” One antibody test has been authorized by FDA so far.

CMS Doubles Medicare Payment for High-Capacity COVID-19 Tests

The Centers for Medicare & Medicaid Services (CMS) announced Wednesday that they would nearly double Medicare payment for lab tests that use high-throughput technologies to rapidly diagnose large numbers of COVID-19 cases. The announcement represents a step by the administration to expand COVID-19 testing, particularly among vulnerable populations such as Medicare beneficiaries. CMS Administrator Seema Verma noted that the move to nearly double funding “is an absolute game-changer for nursing homes, where risk of Coronavirus infection is high among our most vulnerable.”

CMS explained Medicare will increase payment to $100 for clinical diagnostic lab tests making use of high-throughput technologies capable of increased testing capacity and faster results. The technology targeted by the announcement can process more than 200 tests a day but requires specially trained technicians and more time-intensive processes to assure quality. The increased payment will immediately go into effect for tests processed after April 14, and will be available throughout the duration of the COVID-19 national emergency. The administration clarified that for other COVID-19 laboratory tests not targeted by this change, local Medicare Administrative Contractors (MACs) remain responsible for developing the payment amount in their respective jurisdictions. MACs are currently paying approximately $51 for those tests.

By increasing payments for high-throughput tests while leaving slower methods at a lower rate, CMS is incentivizing the adoption of the more rapid tests which are valuable for their ability to quickly and accurately screen potential COVID-19 cases. It is possible that this use of payment policy to promote development, production, and uptake of a favored product may be replicated for other COVID-19-related services down the road. Given CMS’ market power, providers are likely to respond to shifts in payment policy that favor one service over another or incentivize the use of a certain method.

CMS Proposes Three FY 2021 Payment Rules

The Centers for Medicare and Medicaid Services recently issued three proposed rules updating fee-for-service (FFS) Medicare payments for fiscal year (FY) 2021. The three notices of proposed rulemaking (NPRM), which address payments for skilled nursing facilities (SNF), inpatient psychiatric facilities (IPF), and hospice providers, propose few policy changes. All three rules address new Office of Management and Budget (OMB) statistical area delineations, and the SNF rule includes minor new proposals relating to Patient-Driven Payment Model (PDPM) and the SNF Value-Based Purchasing Program.

In fact-sheets accompanying the three rules, CMS says that it is focusing on the COVID-19 pandemic and that the annual payment rules are being released to make sure that providers have information about 2021 payment updates. However, the three rules do not appear to go further than making statutorily-mandated updates to payment policy. The rules were not accompanied by a press release, underscoring the lack of groundbreaking changes contained in them. Given the relative lack of substantive policy changes in these three rules and the ongoing crisis, groundbreaking updates are not expected in the outstanding payment rules.

All three proposed rules include updates to adopt OMB’s revised statistical area delineations. These revisions update delineations for metropolitan statistical areas, micropolitan statistical areas, and combined statistical areas, resulting in changes to wage indices. CMS proposed a five percent cap in any wage index reductions resulting from re-designations in the first year of the adoption of the new delineations to ease the transition process.

CMS Proposes Making Emergency IRF Policy Permanent

Last Thursday, the Centers for Medicare and Medicaid Services (CMS) released its annual inpatient rehabilitation facility (IRF) payment rule. The notice of proposed rulemaking (NPRM) would cover the IRF prospective payment system (PPS) in fiscal year (FY) 2021. Notably, the rule seeks to permanently codify a change advanced by CMS as part of its response to the COVID-19 crisis. Like three other 2021 payment rules released recently, the IRF rule seeks to adopt the Office of Management and Budget’s (OMB) revised statistical area delineations. The rule is open for comment through June 15, 2020.

On April 6, CMS published an interim final rule in the Federal Register temporarily dispensing with the requirement for IRFs to provide and document a post-admission physician evaluation within 24 hours of admission. It also permitted physicians to conduct the three-times-weekly face-to-face visits required of IRFs via telehealth. In last Thursday’s proposal, the agency sought to permanently remove the post-admission evaluation requirement beginning in FY 2021, though it noted that the proposal would not preclude such an evaluation if the IRF thought it necessary. CMS is also seeking to permit non-physician practitioners to perform any of the duties that would be performed by a rehabilitation physician to the extent permitted under state law and their scope of practice. With regard to the post-admission evaluation requirement, CMS states that the rescinding of the requirement during the COVID-19 emergency “will provide us with experience to determine whether this requirement can be removed permanently.”

As the administration eyes the emergency period as something of a trial run for policies implemented on an emergency basis, stakeholders may be looking to see what other policies — such as expanded telehealth coverage in Medicare — the administration may seek to retain when the emergency is over. The proposed rule also includes updates to adopt OMB’s revised statistical area delineations. These revisions update delineations for metropolitan statistical areas, micropolitan statistical areas, and combined statistical areas, resulting in changes to wage indices. CMS is proposing a five percent cap in any wage index reductions resulting from re-designations in the first year of the adoption of the new delineations to ease the transition process.