Health Policy Report (1/10)

January 10, 2022

Capitol Hill Update

House lawmakers will kick off the second session of the 117th Congress today, followed by votes on a pair of legislative items throughout the balance of the week. In a “Dear Colleague” letter to Members late Friday, House Majority Leader Steny Hoyer announced that lawmakers will take up a bipartisan bill that would allow local educational agencies participating in the Education Department’s Impact Aid Program to use the student-count or federal-property-valuation data from their fiscal year (FY) 2022 program applications for their FY 2023 applications. Proponents of the legislation — which passed the Senate by unanimous consent late last year — argue that it is needed to prevent schools from losing COVID-19 relief funds by providing flexibility to use pre-pandemic data to calculate needs. 

In the upper chamber,Senators will resume their push to clear the queue of President Joe Biden’s pending nominees, starting with Alan Davidson’s nomination to lead the National Telecommunications and Information Administration (NTIA). Majority Leader Chuck Schumer (D-NY) has also filed cloture on the nomination of Amitabha Bose to lead the Federal Railroad Administration (FRA). Final confirmation votes on both nominees will likely fall into the middle of the week. Meanwhile, Senators on the Health, Education, Labor, and Pensions (HELP) Committee are scheduled to vote on Dr. Robert Califf’s nomination to lead the Food and Drug Administration (FDA) this Wednesday. With the nomination expected to earn strong bipartisan support in the committee, President Biden’s pick to lead the FDA will likely get confirmed by the full Senate later this month.

US Supreme Court Hears Cases on OSHA, CMS Vaccine Mandates

On Friday morning, the U.S. Supreme Court heard oral arguments regarding the Occupational Safety and Health Administration’s (OSHA’s) vaccine-or-test requirement for companies that employ over 100 workers, as well as the Centers for Medicare and Medicaid Services’ (CMS’s) vaccine mandate. The U.S. Solicitor General argues that the 1970 Occupational Safety and Health statute permits the emergency temporary standard (ETS). However, the ETS’s specific requirements are unprecedented, and the arguments did not appear to sway conservative justices. Chief Justice John Roberts seemed most sympathetic to the plaintiffs — comprised of 27 states, several individuals, and small businesses — who asserted that the ETS exceeded OSHA’s jurisdiction.

Turning to the CMS vaccine mandate, Justice Elana Kagan noted that health care workers not receiving a vaccine are potentially harming their patients. However, those challenging the rule say that workers will leave their jobs in droves, putting even more stress on the understaffed industry. The Biden administration noted that facilities with vaccine mandates are losing only about one percent of workers. Justice Brett Kavanaugh noted that health care workers themselves are not challenging the CMS rule, indicating that he might be more receptive to CMS’s regulation than OSHA’s ETS.

CMS Addresses Medicare Advantage, Part D Costs in Proposed Rule

On Thursday, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule (TRP analysis; press releasefact sheet) aimed at offering changes to Medicare Advantage (MA) and Part D plans for calendar year (CY) 2023. Among several provisions, CMS proposed to give all Part D price concessions at the point of sale. Manufacturer stakeholders were pleased with the proposal, as plans are more commonly requesting that pharmacies repay reimbursement amounts, should a pharmacy not meet plans’ performance goals. Pharmacists have expressed concerns that these price concessions implemented by Part D plans are often based on factors outside of a pharmacist’s control.

CMS is also proposing changes to out-of-pocket (OOP) caps in MA plans. Currently, MA plans are required to establish a maximum OOP cap while allowing plans to exclude beneficiaries’ Medicaid OOP contributions from the maximum OOP. CMS notes that this practice disadvantages dually eligible beneficiaries in MA plans. In an effort to create parity for MA providers, CMS is proposing to alter this requirement by specifying that the maximum OOP limit includes all cost-sharing in its calculations, including Medicaid OOP costs.

FDA Public Health Focus to Impact Review Process

The Food and Drug Administration (FDA) released a plan to consider public health impacts into its review process for approving controlled substances and products to treat contagious diseases. However, some pharmaceutical stakeholders are growing concerned that the new approach could lead to the FDA overlooking and rejecting drugs that are vital to patient populations. FDA may consider a drug application’s target population as well as others who may misuse the therapy, according to the new guidance. Specifically, drug manufacturers are worried that people outside of a drug’s target population could block access to medication for those in need.

On the other hand, former FDA regulators are praising the agency’s decision, citing the opioid epidemic as a motive for updating the review process. They added that public health concerns were secondary when FDA approved opioids. The new language also has implications for antibiotics’ labeling that would narrow the usage for some products to reduce the chance for antimicrobial resistance. The guidance is also in line with tobacco regulations, in which the FDA considers those who may adopt smoking.

New York to Implement PBM Requirements Next Year

Beginning in 2023, New York will require pharmacy benefit managers (PBMs) to obtain a license in order to practice in the state that must be renewed every three years. The state superintendent and health commissioner will have jurisdiction over licensing and renewal requirements. This law differs from other PBM laws in that it requires regular reporting requirements, including disclosure of all revenue streams to plans and New York’s Department of Financial Services (DFS), as well as terms and conditions places on pharmacy networks. The law also provides DFS with the authority to review complaints against PBMs, which can lead to licensing revocations and fines for violations of licensing standards.

South Dakota Puts Medicaid Expansion on November 2022 Ballot

South Dakota is one of 12 states that has yet to expand Medicaid coverage under the Affordable Care Act (ACA), though that number may soon shrink. A measure to expand Medicaid will appear for a popular vote in the state’s November 2022 election after a push from a petition signed by roughly 46,000 residents. Florida and South Dakota are the only non-expansion states that can expand their Medicaid programs via popular vote, after Mississippi’s courts ruled against the effort. About 40,000 South Dakotans, about five percent of the population, are uninsured, and the step towards expansion suggests an uptick in similar efforts across the country.