Health Policy Report (5/4)

Capitol Hill Update

Senators will return this afternoon to resume legislative business, but the House will remain away from Washington amid health and safety concerns from the Attending Physician’s office. As the floor and Committee schedules for coming days and weeks take shape, leadership officials stated that Congress is likely to consider another round of COVID-19 legislation as they look to stem emerging and existing issues pertaining to the outbreak. For now, the Senate is expected to primarily focus on clearing judicial nominees and presidential nominations, starting with consideration of Robert Feitel’s nomination to be Inspector General of the Nuclear Regulatory Commission.

Meanwhile, House Democratic leadership stated last week that members will return to Washington once a vote has been scheduled on the “CARES 2.0” legislation. Democrats are using Speaker Nancy Pelosi’s (D-CA) counteroffer to Senate Majority Leader Mitch McConnell’s (R-KY) original CARES Act as a starting point for developing their forthcoming bill, prioritizing funding for state and local governments, election assistance, workforce protections, and reforms to the Paycheck Protection Program (PPP), among other things. Bill text could be released by House Democrats as soon as this week, with a vote occurring the following week of May 11. However, it’s entirely possible that the vote could slip into late May or early June should lawmakers need more time to clinch a broader agreement.

Supreme Court Rules In Favor of Insurers in ACA Risk Corridors Case

The Supreme Court ruled last Monday that the government must pay insurers funds owed under the Affordable Care Act’s risk corridor program. Insurers claim they are owed more than $12 billion in risk corridor payments. The Justices ruled 8-1 in favor of the health insurers in the decision written by Justice Sonia Sotomayor, rejecting the Trump administration’s argument that an appropriations rider passed by Congress and blocking funding had essentially repealed the program and revoked the government’s obligation to pay.

The temporary risk corridor program created by the Affordable Care Act required insurers who earned more than three percent of the premiums they collected to pay into a pool that would then be redistributed to insurers with margins at least three percent less than anticipated. The program created controversy when far more insurers lost money than expected in the first year, resulting in a massive funding gap. The Centers for Medicare & Medicaid Services had promised insurers they would be made whole by the end of the program in 2016, although the appropriations rider passed by Congress blocked outside funding to repay the insurers. Insurers finally sued the government for reimbursement under the Tucker Act.

The case ultimately taken up by the Supreme Court consolidated three separate cases: Maine Community Health Options v. United States, Land of Lincoln v. United States, and Moda v. United States. Justice Sotomayor explained in the decision that “In establishing the temporary Risk Corridors program, Congress created a rare money-mandating obligation requiring the Federal Government to make payments…And by failing to appropriate enough sums for payments already owed, Congress did simply that and no more: The appropriation bills neither repealed nor discharged (the risk corridor program’s) unique obligation. Lacking other statutory paths to relief…petitioners may seek to collect payment through a damages action in the Court of Federal Claims.” Dozens of stakeholders, including the Chamber of Commerce and state regulators, had filed amicus briefs in support of the insurers, warning that letting the government skirt payments could undermine future partnerships with private industry and states’ trust in their federal partners. Justice Samuel Alito wrote a lone dissent, arguing that the court’s ruling creates a private right to sue to government with “the effect of providing a massive bailout for insurance companies that took a calculated risk and lost.”

CMS Announces New COVID-19 Emergency Flexibilities

Last Thursday, the Centers for Medicare and Medicaid Services (CMS) issued a new interim final rule with comment period and announced expansions to its COVID-19 emergency flexibilities, including for Medicare telehealth services, increasing hospital capacity, and encouraging testing. CMS said that the actions are aimed at continuing to implement the CARES Act (H.R. 748) and were informed by requests from health care providers. Last week’s expanded flexibilities are blanket waivers and will be in effect for the duration of the public health emergency.

These new flexibilities provide for Medicare coverage of serology tests, new coverage for services provided by pharmacists, and a waiver of the limitation on the types of practitioner that may furnish Medicare telehealth services. CMS also gave hospitals and other inpatient facilities new flexibilities that are intended to increase acute care hospitals’ capacity during the pandemic, as well as permitting off-campus hospital outpatient departments to apply to temporarily receive reimbursement under Medicare’s hospital outpatient prospective payment system, rather than under the physician fee schedule.

Administration Launches Operation to Accelerate Vaccine Development

The Department of Health and Human Services (HHS), Food and Drug Administration (FDA), and other health agencies have launched a push to speed up COVID-19 vaccine development in the U.S. The federal government effort has been named “Operation Warp Speed.” HHS Assistant Secretary for Public Affairs Michael Caputo explained that “Operation Warp Speed is clearly another extension of President Trump’s bold leadership and unwillingness to accept ‘business as usual’ approaches to addressing the COVID-19 crisis.” Bloomberg News reported that the project will cost billions in funding, the majority of which will be shouldered by taxpayers, and aims to have 100 million doses ready by the end of 2020. Animals will be tested first, and doses will be widely produced as soon as the vaccine moves on to clinical trials. The government is reportedly considering a single large trial to test multiple vaccines simultaneously in order to cut the amount of time needed to advance the most effective options. Despite the fact that health officials have repeatedly cautioned that the fastest appropriate timetable for a vaccine is between 12 and 18 months, President Trump has pushed for pharmaceutical companies to expedite their vaccine development. Administration officials familiar with the project have acknowledged that the effort carries risks beyond the financial burden and noted that the vaccine must prove effective enough to ensure participating Americans won’t be harmed during trials.

NIH Announces $1.5 Billion Initiative to Accelerate Coronavirus Testing

Last Wednesday, the National Institutes of Health (NIH) announced a $1.5 billion initiative to rapidly develop COVID-19 diagnostics. The administration reported the effort will result in the deployment of millions of tests per week by late summer or fall of this year and will rely on a “national COVID-19 testing challenge.” The administration has likened the effort to the Shark Tank Television show, and scientists and inventor will compete for a $500 million pool earmarked for diagnostics development. Successful competitors will be paired with manufacturers and business experts to help quickly scale up production of tests developed. NIH Director Francis Collins stated that the government needs “all innovators, from the basement to the boardroom, to come together to advance diagnostic technologies, no matter where they are in development.”

The effort will be conducted in four phases. First the NIH will collect submissions and pare down applications in a “cutthroat” manner. Next, the NIH will next conduct validations and risk assessments for the most promising entrants, and, finally, conduct clinical tests and seek regulatory approvals for the new test products before they enter mass production. The National Institute of Biomedical Imaging and Bioengineering will oversee the effort and aims to accept around five submissions the NIH could commercialize. The project will focus on tests to diagnose COVID-19 in patients who are currently sick.

Lawmakers Call for Mental Health Emergency Funding in Next COVID-19 Relief Package

Lawmakers from both chambers last week called on congressional leadership to include funding for mental health in the next coronavirus relief package. Seventy-six lawmakers signed onto a letter led by Sen. Elizabeth Warren (D-MA) asking for the next stimulus package to include at least $38.5 billion for behavioral health organizations at risk of being shuttered as part of the pandemic’s economic fallout. The lawmakers argued that the immediate and long-term effects of behavioral health organizations shuttering could not be overstated as millions of Americans rely on the health centers to address mental health and substance use disorder treatment needs, and reported that a “significant portion” of the funds should be allocated to behavioral health organizations treating Medicaid beneficiaries and providing care to underserved groups. Additionally, the letter noted that behavioral health organizations have not been “sufficiently included” in past relief bills and highlights the importance of behavioral health organizations for families grappling with the hardships related to the COVID-19 pandemic.