Health Policy Report (8/31)

Capitol Hill Update

House Speaker Nancy Pelosi (D-CA) and White House Chief of Staff Mark Meadows did not move closer to a deal on the next round of pandemic relief aid, as the two sides remain far apart on the size and scope of the next package. The two lead negotiators held a roughly 25-minute phone call last week to discuss the legislation, with Speaker Pelosi noting that the Democrats are willing go to down to $2.2 trillion as a starting point for the next bill. With Congress set to return after Labor Day, it’s likely that negotiations will remain on ice until after the holiday.

With respect to the next round of COVID-19 legislation, White House officials and Congressional Democratic Leadership remain far apart on key issues such as unemployment insurance, state and local aid, funding for the U.S. Postal Service (USPS), and education assistance, among other things. Despite the willingness to resume discussions, a deal is unlikely to come together until later in September. However, Meadows noted that the White House would support tacking the measure onto a forthcoming continuing resolution (CR) needed to avert the Sept. 30 government funding deadline, adding that President Donald Trump is continuing to mull over additional executive actions in lieu of legislation.

Deadline for ‘Most Favored Nation’ Drug Pricing EO Passes with No Action

Despite the president tweeting August 22 that he had signed the executive order (EO) to base Medicare reimbursement on the lowest drug prices among developed countries, the administration did not formally publish the policy in the Federal Register last week as initially promised. In late July, the president explained that the ‘most favored nation’ EO would be held for a month and published August 24, to allow the pharmaceutical industry time to propose alternatives. The White House has declined to disclose any details on how the policy would be implemented until formally published in the Federal Register, although the president explained in his tweet that the EO “means that the USA gets a price on Prescription Drugs that matches the price of the Country that pays the lowest price anywhere in the World. 50%, 60%, maybe 70% reduction.” However, the order is expected to merely direct the Department of Health and Human Services to write a regulation that sets Medicare reimbursement at international levels, and the Centers for Medicare and Medicaid Services (CMS) will determine the policy through a public process that lets drug makers and others influence the outcome.

Negotiations with the pharmaceutical industry reportedly extended into last week, with two policy alternatives emerging as the leading replacements favored by the industry. The first, a Part B demonstration, would direct drug manufacturers to pay Medicare rebates equal to the discounts they already provide in the commercial market, which is estimated to be 10 percent off the average sales price. The proposal would lower the physician reimbursement by subtracting discounts that 340B hospitals receive from the average drug sales prices on which all doctor reimbursement is based. Drug manufacturers also proposed a Part D demonstration based loosely on the Senate Finance-passed drug pricing bill. It would implement a demonstration to test a pay model that caps beneficiary catastrophic cost-sharing and makes drug companies bear a bigger portion of catastrophic costs. Experts have noted this policy would more greatly impact manufacturers of higher-price drugs that are targeted to small patient populations. Additionally, the pharmaceutical industry would commit to work with the administration on further Part B and Part D reforms. The proposals are estimated to save over $100 billion over ten years.

Trump Outlines Health Goals for Second Term, Touts Past Accomplishments at RNC

President’s Trump’s re-election campaign recently released a list of second-term health policy goals, including policies aimed at lowering drug prices and ending surprise billing. The president would also target policies that “put patients and doctors in charge of the health care system,” lower health care insurance premiums, protect preexisting conditions, secure Medicare and Social Security, and provide “world-class health care to veterans.” Notably, the list did not include plans to repeal the Affordable Care Act, despite the fact that the administration is currently pushing the Supreme Court to rule against the health law. No additional details on how President Trump would pursue the policies were given.

Trump used speaking time at the Republican national Convention this past week to tout his health care accomplishments and present his goals for his potential second term, claiming he had cut drug prices for the first time in 51 years and would continue to do so. Although he referenced his “most favored nations” executive order among the four aimed at drug prices he recently signed, he offered few details other than it would lower prices up to 70 percent. Further, the president again promised the U.S. will produce a COVID-19 vaccine by the end of the year (or sooner) and promoted convalescent plasma –which recently received a controversial emergency use authorization from the FDA — as a tool to save “thousands of lives” from coronavirus.

CMS Ties Funds to COVID-19 Reporting Requirements  

The Centers for Medicare and Medicaid Services (CMS) released an interim final rule last Tuesday requiring nursing homes, hospitals, and labs to uphold COVID-19 testing and reporting requirements or face withheld federal funding or penalties. Nursing homes will need to test staff routinely or face penalties — more than $400 per day or $8,000 for cases of noncompliance — and those in COVID-19 hotspots will be required to test staff twice a week. Facilities could also be denied payment for new admissions if noncompliant. In order to assist with increased testing, CMS will distribute 15,000 rapid point of care testing devices and $5 billion in Provider Relief Funds. Additionally, on Tuesday, CMS launched a staff training program on infection control and prevention for CMS-certified nursing homes.

Hospitals and critical access hospitals will be required to report COVID-19 data daily under the interim final rule. The data must include the number of confirmed or suspected COVID-19 positive patients, ICU beds occupied, and availability of supplies and equipment. Hospitals that miss a day will be given a warning, with a few weeks to come into compliance, before Medicare and Medicaid payments are withheld. CMS Administrator Seema Verma noted that hospitals could be terminated from the Medicare and Medicaid programs if they do not meet compliance. Furthermore, facilities completing COVID-19 testing will be required to report test results daily or face a fine of $1,000 the first day and $500 for each subsequent day. Facilities completing testing will be given a three-week grace period to begin reporting the data. Under the rule, Medicare beneficiaries can now receive one COVID-19 test without an order from a physician or health practitioner, a change from the allowed repeated testing.

New CDC COVID-19 Testing Guidelines Face Criticism

Last Wednesday, the Centers for Disease Control (CDC) released new guidelines for COVID-19 testing recommending against testing asymptomatic individuals who have been in contact with confirmed COVID-19 cases. Despite being released by the CDC, the new guidance was crafted by the White House Coronavirus task Force, and reportedly finalized while leading infectious disease expert Anthony Fauci was undergoing surgery. Admiral Brett Giroir, Assistant Secretary of Health and Human Services, initially stated that “all the docs” on the task force signed off on the new guidelines. Health experts immediately criticized the change, noting that asymptomatic individuals can still be infectious, and stated it will make it more difficult to track and isolate individuals spreading COVID-19 early in an effort to control transmission. After reports also emerged last week that the White House recently pushed the Food and Drug Administration to issue an emergency use authorization for convalescent plasma —which does not have substantial evidence as a successful COVID-19 treatment — many health experts expressed concern that the President could push health agencies to prematurely approve a COVID-19 vaccine before the November election.

CDC Director Robert Redfield attempted to clarify the new guidance last Thursday, noting that testing “may be considered” for asymptomatic contacts of individuals with confirmed or probable cases of COVID-19. He noted the guidelines were intended to place “an emphasis” on testing people with symptoms, as well as people in long-term care facilities, in nursing homes, and those who may be more vulnerable to COVID-19. He stressed that “everyone who needs a COVID-19 test can get a test,” although note everyone who gets tested may need one.