Health Policy Report (9/21)

Capitol Hill Update

Congress will convene today with less than 10 days remaining until the government funding deadline. Congressional leadership is hopeful that lawmakers will be able to take up and pass a continuing resolution (CR) this week that would avert a shutdown on Sept. 30th, but the talks have hit a snag over various lingering issues. Funding for agriculture relief payments, election security, and COVID-19 relief, as well as the overall length of the stopgap funding measure, stand out as key sticking points that have delayed the measure’s official introduction thus far. House Democratic leadership is hopeful they can file the text early this week, but that deadline could end up slipping if the two sides are unable to bridge these differences.

Additionally, with 43 days until the 2020 presidential election, Senators will be gearing up for a politically fraught Supreme Court confirmation process following the death of Justice Ruth Bader Ginsburg on Friday. President Donald Trump is expected to name a replacement for the late Justice Ginsburg early this week, pushing for a confirmation vote ahead of the Nov. 3 elections. Judges Amy Coney Barrett, Barbara Lagoa, and Alison Jones Rushing are names that have emerged from the Trump administration’s inner circle as potential picks to fill the vacant seat.

On the floor this week, House lawmakers have queued up more than 50 bills under suspension of the rules, including some health-related legislation out of the Energy and Commerce Committee. This includes: (1) a bill that would require Medicaid coverage of nonemergency transportation to medically necessary services; (2) legislation that would establish a National Centers of Excellence in Continuous Pharmaceutical Manufacturing at the National Institutes of Health (NIH); (3) a measure that would amend the Public Health Service Act to improve obstetric care and maternal health outcomes; and (4) an act that seeks to bolster the Strategic National Stockpile.

Administration Outlines Plans to Provide Free Coronavirus Vaccine 

The Trump administration released plans last Wednesday to deliver safe and effective COVID-19 vaccines as quickly as possible, and for free. The Department of Health and Human Services (HHS), Department of Defense (DoD), and Centers for Disease Control and Prevention (CDC) detailed plans in a report to Congress and separately developed a “playbook” outlining distribution plans for states, tribal, territorial, and local public health programs. The playbook for states came with a disclaimer that state governments have never needed a pandemic response as complex as the plan delivered Wednesday and noted that “significant additional planning is needed to operationalize a vaccination response.”

The administration explained that the plan is flexible, as some variables will remain unknown until a successful vaccine is approved by the Food and Drug Administration, including appropriate populations for the vaccine, distribution and storage requirements, and dosage requirements. The administration clarified in a call with reporters that they were prepared for all uncertainties. Additionally, the Provider Relief Fund includes over $1 billion to reimburse providers for uninsured patients and ensure that the initial doses of the vaccine will be free of charge. The administration explained that they are working out some “complications” with Medicare, but beneficiaries will only be required to pay $3.50 out-of-pocket in the worst-case scenario.

CMS Issues CY 2022 MA, Part D Advance Notice Part I Early

Last Monday, the Centers for Medicare and Medicaid Services published Part I of its Medicare Advantage (MA) and Part D Advance Notice for calendar year (CY) 2022 rates (Advance Notice, Fact Sheet, Press Release). CY 2022 is the final phase-in year for changes to the MA risk adjustment model required by the 21st Century Cures Act, and CMS published this Advance Notice in part, it says, to provide earlier clarity to stakeholders amid the COVID-19 pandemic.

While CMS has acted early to release Part I of the Advance Notice, it is not clear if Part II, which will deal with rates for MA and Part D plans, will also be released early. Part II is generally released a month after Part I and is accompanied by a call letter, which includes changes in requirements for plans. The 2021 call letter was replaced by a rulemaking process (final rule). CMS may release Part II later this fall and then the Rate Announcement in January. However, CMS also stated that there has not been a decision on whether Part II will be published early, which may be a hedge against the election outcome (and Part II may still be published in February). The final 2022 Rate Announcement must be published no later than April 5, 2021, and bids are due to CMS the first Monday of June 2021.

CY 2022 is the final year of the three-year phased implementation of changes to the MA risk adjustment model. The changes account for additional diagnosis codes related to mental health and substance use disorders, the severity of chronic kidney disease, and the total number of diseases or conditions of a beneficiary. In addition, CY 2022 MA risk scores will fully rely on encounter data for calculation. In 2021, risk scores will be calculated from 75 percent encounter data and 25 percent fee-for-service claims as part of the ongoing phase-in of the new risk adjustment model.

CMS Withdraws Medicaid Fiscal Accountability Regulation

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma tweeted last Monday that the administration would be withdrawing the Medicaid Fiscal Accountability Regulation (“MFAR”). The proposed rule, released last November, was widely opposed by providers, state regulators, governors, patient advocates, and other stakeholders for increasing federal oversight around how states fund their Medicaid programs. Stakeholders argued that the regulation would have led to significant program cuts, and Administrator Verma acknowledged that the withdrawal was due to further study required of the potential “unintended consequences.” The MFAR would have allowed CMS broad new authority and discretion over state financing mechanisms and could have impacted states’ ability to fund other public priorities such as education and transportation. The American Hospital Association estimated that the regulation could have cut total Medicaid funding by up to $49 billion annually (eight percent each year), and stakeholders raised alarm after the COVID-19 pandemic put increased strain on state and Medicaid budgets.

Influential Think Tank Releases Drug Pricing White Paper

Last Thursday, the Center for American Progress (CAP) released a white paper detailing steps it believes should be taken to lower drug prices by the next administration. The paper lays out wide-ranging criticisms of federal policy on the pharmaceutical industry and drug pricing, from product exclusivity to Medicare payments. It also calls for the next administration to use “march-in rights” to compel drug makers to license patents for pharmaceutical countermeasures to COVID-19. Notably, while the report criticizes President Donald Trump’s recent “most favored nations” executive order on drug pricing — which directs Medicare to pay the lowest price out of a group of peer countries for expensive drugs — it also calls for the next administration to “immediately undertake notice-and-comment rulemaking” to achieve similar goals.

CAP is an influential think tank in Democratic policy circles. It is likely that some CAP alumni could count themselves among the staff of a possible Biden administration, and many are on the former Vice President’s campaign team. Policy documents such as this may provide some of the basis for administration policy and actions should Vice President Biden win in November.

Meadows: Trump Health Plan Will be Released by Election

White House Chief of Staff Mark Meadows explained last week that the administration plans to release the president’s anticipated health plan via executive order and legislation sometime before the election. President Trump has repeatedly promised to release a health care plan and stated that his health plan is ready a number of times. Chief of Staff Meadows explained that the administration has “been making a number of not only tweaks but modifications to that legislation.” He clarified that the plan will be rolled out as an “executive order with a legislative component,” because “nothing ever gets done in Congress.” He stated that delays in release are due to time spent trying to figure out what could be done administratively and what needed to go through Congress, noting that the administration had to get “very, very creative with executive powers to try to figure out what we can do to substantially affect the health care costs and bring it down through executive action.” The Chief of Staff told reporters that he isn’t optimistic that Congress could find bipartisan agreement on health care, as getting Democratic lawmakers who “believe the Affordable Care Act is affordable to change their mind becomes very difficult.”

Criticism of Administration Response to COVID-19 Continues

Senate Minority Leader Chuck Schumer (D-NY) called for Department of Health and Human Services (HHS) Secretary Alex Azar to resign on Tuesday following a slew of accusations against how the administration has handled the coronavirus pandemic response. The top Senate Democrat argued in a floor speech that “it has become abundantly clear that the leadership of the Department of Health and Human Services has allowed perhaps the most important federal agency right now to become subservient to the president’s daily whims.” The call for resignation comes after reports emerged that Michael Caputo, Assistant Secretary of Public Affairs for HHS, accused government scientists of plotting against President Trump and urged supporters to buy ammunition in a Facebook Live video. Furthermore, Assistant Secretary Caputo and his team were accused of editing scientific reports on the pandemic from the Centers for Disease Control and Prevention (CDC) to more closely reflect the president’s stance on the virus. House Democrats on the Select Subcommittee on the Coronavirus Crisis launched an investigation on Monday into how Trump’s political appointees pressured officials at the CDC “to block the publication of accurate scientific reports” on COVID-19. It was announced on Wednesday that Assistant Secretary Caputo would be taking a 60-day medical leave from the administration.

President Trump also contradicted statements made by some of his administration’s officials last week, stating that COVID-19 would “disappear” with or without a vaccine and arguing a vaccine would be available more quickly than reported. On Tuesday, the president stated during an ABC News town hall that COVID-19 would go away with time even without a vaccine. Additionally, on Wednesday the president claimed that CDC Director Robert Redfield’s statement that a coronavirus vaccine won’t be available for widespread distribution until the second or third quarter of 2021 was wrong. He said the CDC director was “confused,” as a vaccine would be available immediately to the general public and announced as soon as October