Health Policy Report (1/24)

January 24, 2022

Late last week, House Speaker Nancy Pelosi (D-CA) provided lawmakers with an update on the chamber’s schedule for next month. At the top of the list is government funding for fiscal year (FY) 2022, as Congress has less than a month until the February 18 deadline. Leadership has expressed optimism that appropriators can reach an agreement on an omnibus spending package and avoid a shutdown, but another short-term continuing resolution (CR) cannot be ruled out should more time be needed to broker a deal. Speaker Pelosi also noted that the House will “soon” introduce counterpart legislation to the Senate’s United States Innovation and Competition Act (USICA), with the goal of going to conference with senators and producing a finalized version that can pass both chambers.

Meanwhile, House and Senate lawmakers have adjourned for a week-long state work period. Senators will return first on Monday, January 31, followed by the House on Tuesday, February 1.  

Democrats Go Back to Drawing Board on BBBA

After facing insurmountable hurdles to get their voting rights legislation onto President Biden’s desk, Democrats are pivoting back to provisions in the Build Back Better Act (BBBA). Democrats are revisiting policies such as health care, child care, and climate policies included in the House-passed BBBA. Last month, Senator Joe Manchin (D-WV) opposed the plan largely due to the roughly $2 trillion price tag, though his fellow Democratic colleagues are hopeful that they can still reach a deal on a skinnier package.

House Speaker Nancy Pelosi (D-CA) pushed back on the notion that the economic plan could be passed in multiple pieces, however, noting that Democrats would focus on crafting a single bill. However, President Biden’s willingness to be flexible shows that the White House is keeping all options open in the hopes of brokering an agreement. Most recently, Democrats are rumored to be looking to include $500 billion to incentivize carbon emission reductions, lower health care costs, and expand child care programs. The package is expected to exclude Medicare hearing coverage, 12-week paid leave, and free community college.

CMMI Sets Sights on Lowering Beneficiary Costs

At an event on Wednesday, Center for Medicare and Medicaid Innovation (CMMI) Director Liz Fowler indicated that the Center is focusing on programs aimed at lowering beneficiary costs. She said that lowering out-of-pocket (OOP) costs at the pharmacy counter ranked among her chief goals. The White House has been holding off on drug pricing demonstration programs while Congressional Democrats continue to hammer out possible drug pricing legislation, although some policy makers are growing impatient. A commissioner on the Medicare Payment Advisory Commission (MedPAC), for example, suggested reinstating a Trump-era CMMI demonstration that would cap insulin costs and applying the model to other highly rebated drugs.

Along these lines, it bears noting that the former CMMI director under President Donald Trump had considered applying insulin cap policies to other drugs, and Fowler’s “Innovation Strategy Refresh” plan echoes similar calls. The strategy is intended to refresh CMMI’s models due to an insufficient number of successful models in the past ten years, according to Fowler. She referenced discussions with patient focus groups in which participants explained that beneficiaries do not understand the benefits from earlier demonstrations and deducted that OOP costs would more directly benefit model participants.

Pro-Life Groups Push Back Against Biden FDA Pick

The full Senate has yet to vote on the nomination of Robert Califf, M.D. to head the Food and Drug Administration (FDA). Califf’s nomination recently passed through the Senate Health, Education, Labor, and Pension (HELP) Committee, though a final vote Senate vote has been delayed due to growing concerns that Democrats are losing votes to confirm the nominee. These anxieties have led Senate leadership to delay a final vote until Democrats are confident that they have enough support for a successful outcome.

Recently, the FDA loosened regulations around abortion pills, leading pro-life advocates to denounce Califf’s nomination to head the agency. Republican Senators Tommy Tuberville (R-AL) and Roger Marshall (R-KS) — both of whom previously voiced support for Califf — voted against him during the HELP hearing due to disagreements over abortion rights as pro-life groups make the rounds on Capitol Hill. Five Democrats have announced they will not vote to confirm Califf, and only four Republicans have confirmed that they will vote to support the nominee. With such a close tally, Senate leadership will likely hold off on bringing Califf’s nomination to the floor until Democrats are confident that they have whipped the necessary votes.

Hospitals Call for Provider Relief Funding

Hospitals are targeting the administration and Congress to release the remaining Pandemic Relief Fund (PRF) and appropriate more money into the fund. The Health Recourses and Services Administration (HRSA) has reportedly allocated the remnants of the PRF, designating the money for Phase 4 payments, uninsured populations, and reconsidering applications from Phase 3. Most recently, Congress added $3 billion to the PRF in December of 2020, then created an additional funding tranche in March of 2021 via the American Rescue Plan (ARP). HRSA dispensed $17 billion in provider relief, along with $8.5 billion for rural communities, in late September, but HHS has yet to touch $8 billion still sitting in the Phase 4 PRF coffers. HRSA assured hospital stakeholders that it will award the funding once it distributes the remainder of ARP’s rural payments.

Over 700 hospitals sent a letter to congressional leadership and the administration to allocate $20 billion to the PRF and disseminate the $25 billion left in the fund. Additionally, hospital stakeholders are concerned that Phase 4 distributions only consider pandemic expense through the end of March 2021 and do not cover the omicron surge. The American Hospital Association (AHA) sent its own letter to congressional leadership articulating this point, and the hospital signatories are teaming up with America’s Essential Hospitals to advocate for the Provider Relief Fund Improvement Act (H.R. 5963). The bill would require HRSA to allocate the remaining PRF by March 30, 2022.

HHS Awards Health Care Mental Health Workforce Grants 

On Thursday, the Department of Health and Human Services (HHS) dispensed $103 million in grants to tackle burnout and mental health issues in the health care worker community. This program comes as health care professionals continue to experience pandemic related trauma. About half of the workforce has reportedly experienced exhaustion during COVID-19, leading to a sizable exit of health care professionals from the field. The Health Recourses and Services Administration (HRSA) split funding, provided by the American Rescue Plan (ARP), among 45 recipients. Funds are intended to address hiring resiliency trainers to support health care workers, design and implement a system to address mental health stigma, and develop wellness programs. To support the grantees, HRSA is setting up a Health and Public Safety Workforce Resiliency Technical Assistance Center to deliver lessons learned and provide support.