Health Policy Report (1/17)

January 17, 2023

House lawmakers adjourned for the Martin Luther King Jr. district work period last week after passing [331-97] legislation that would ban the sale of crude oil reserves to China. Both chambers will return to action next week, with the Senate meeting first on Monday, January 23, and the House on Tuesday, January 24. Meanwhile, it is anticipated that the House Republican Steering Committee will continue doling out committee assignments and subcommittee gavels over the coming days, including leadership posts for the Committees on Appropriations, Ways and Means, and Energy and Commerce.

Secretary Xavier Becerra Extends COVID-19 PHE for Additional 90 Days

Last week, Department of Health and Human Services (HHS) Secretary Xavier Becerra announced an extension of the COVID-19 public health emergency (PHE) for an additional 90 days. Former HHS Secretary Alex Azar issued a PHE declaration on January 27, 2020, for COVID-19 and renewed it four times until the administration changed. Secretary Xavier Becerra has renewed the PHE an additional eight times, including this most recent announcement. Effective January 11, 2023, this extension marks the continuation of several temporary authorities afforded under the PHE.

CMS Lays Out First Year of IRA’s Medicare Drug Price Negotiation Implementation

On Wednesday, the Centers for Medicare and Medicaid Services (CMS) released a memorandum announcing key dates for the agency’s implementation of the first year of the Inflation Reduction Act’s (IRA) (text; TRP analysis) Medicare Drug Price Negotiation Program. This memorandum outlines CMS’ intent surrounding engagement with the public, program implementation guidance, data collection efforts, and key dates for implementation.

The agency noted its commitment to engaging with stakeholders throughout this process, sentiments that are echoed by administration leadership. “Today we are releasing our plan for how we will implement Medicare drug price negotiation under this landmark law — and we will be transparent and aggressive in implementation every step of the way,” said Department of Health and Human Services (HHS) Secretary Xavier Becerra. “We cannot do this important work alone and will engage with the public early and often. We are proactively seeking feedback and insights from a broad range of interested parties throughout implementation of this historic law,” said CMS Administrator Chiquita Brooks-LaSure.

MedPAC Holds Meeting on Medicare Part D Status Report

On Thursday and Friday of last week, the Medicare Payment Access Commission (MedPAC) held its monthly session, during which the Commission discussed a wide range of data and payment trends impacting the Medicare program. In the seventh session of the Commission’s January meeting, commissioners convened a discussion on Medicare Part D, particularly with regard to enrollment in 2022, plan offerings for 2023, and program operation trends. Within this session, both commissioners and MedPAC staff paid particular attention to the implications of the newly enacted Inflation Reduction Act (IRA) on the program, combing through both the concrete and potential impacts of the law on beneficiary access and costs. While no recommendations were made, commissioners made several suggestions to MedPAC staff regarding data sets and measures to include in the upcoming March 2023 report on the subject.

CMS to Issue Guidance on Optional Medicaid COVID-19 Coverage for the Uninsured

When Congress passed the Consolidated Appropriations Act for 2023, it allowed states to terminate their maintenance of effort requirements (MOE) that required them to keep all Medicaid beneficiaries enrolled throughout the COVID-19 public health emergency (PHE) as a condition of receiving additional federal funding for the program. During the PHE, many states, in addition to upholding these MOE requirements, took Congress up on its policy to allow the creation of an optional COVID-19 eligibility group that provides Medicaid coverage of COVID-19 testing, vaccines, and treatment for uninsured residents.

However, the end-of-year package has created a gray area around Medicaid redeterminations for the 15 state Medicaid agencies offering an optional COVID-19 benefit, and on Thursday, the Centers for Medicare and Medicaid Services (CMS) announced that it will develop clarifying guidance to address the uncertainty. In October of 2022, the Biden administration said it would conclude the COVID-19 optional coverage group when the PHE ends, at which point states would need to use their own funding if they wanted to continue offering the benefit.

As Committee Assignments Take Form, Appropriators Face Uphill Battle

During House Speaker Kevin McCarthy’s (R-CA) tumultuous bid for Speaker, he promised to cap fiscal year (FY) 2024 appropriations bills at levels enacted two years ago. For this commitment to come to fruition, Republicans would need their narrow majority in the House to slash spending by eight percent. This steep promise has Committee members speaking up, with House Appropriations Chair Kay Granger (R-TX) asserting that her committee would not cut defense spending. In this case, non-defense spending would need to be cut by 18 percent to achieve McCarthy’s eight percent total reduction goal.

While these conservative budget ambitions are a non-starter for Democrats, the fundamental disagreement over general spending measures foreshadows a long road ahead for FY 2024 spending bills. In anticipating these conflicts, Senate Appropriations Chair Patty Murray (D-WA) and Ranking Member Susan Collins (R-ME) have promised to mark up each appropriations bill individually and bring the package to the floor under regular order. If the lawmakers can follow through, negotiations in the House will likely ease, as McCarthy and Granger have made the same promise. Intraparty schisms will also add a layer of complexity to spending talks, as some members of the House Freedom Caucus are even more hostile to government spending.