Health Policy Report (10/3)

October 3, 2022

Capitol Hill Update

President Joe Biden signed a two-month continuing resolution (CR) (text; summary) late last week after congressional leadership struck a deal to keep the government funded until December 16. Barring a sudden and unforeseen change in the schedule, final passage of the CR will be the final vote either chamber takes until after the November midterm elections. Senators were originally slated to come in for a nine-day legislative work period to tackle the fiscal year (FY) 2023 National Defense Authorization Act (NDAA), but instead will remain in their respective states during the final weeks of the 2022 campaign. Regardless of who comes out on top on November 8, lawmakers will be faced with a hectic “lame duck” work period to close out the 117th Congress, with a particular focus on trying to strike an omnibus spending package for FY 2023 that could potentially carry a host of health policy priorities before the start of the new Congress.

MS to Establish New Group to Implement Medicare Rebates, Drug Price Negotiation

As the Centers for Medicare and Medicaid Services (CMS) takes on its new authority to negotiate drug prices, the agency is establishing a Medicare Drug Rebate and Negotiations Group. The group will contain six divisions which will focus on: (1) rebate agreements and drug price negotiations; (2) policy; (3) data assessments and analytics; (4) manufacturer data and inflation rebate operations; (5) manufacturer compliance and oversight; and (6) contract support. These roles will be filled by 95 full-time employees, ranging from contracting officers to pharmacists. CMS’s organizational chart for the new group can be viewed here.

The initial framework for implementing these Inflation Reduction Act (IRA) provisions will be rolled out in regulatory guidance. The first of these guidance documents will pertain to inflationary rebates, as the look-back period to calculate Part D rebates began on October 1, 2022. For additional perspective on how CMS will implement its new authorities over negotiation, rebates, and the redesign of Part D cost-sharing, click to view TRP’s analysis.

House Passes Behavioral Health Bills, Creates Possible Path to End-of-Year Action

On Thursday, the House passed the Mental Health Matters Act (H.R. 7780; fact sheet; 220-205 vote). The bill would address mental health parity requirements, provide in-school mental health services, contribute to mental health staffing in schools, create requirements around disabilities in school settings, and supplement additional efforts geared towards mental health well-being. The House also passed the Maximizing Outcomes through Better Investments in Lifesaving Equipment for (MOBILE) Health Care Act (H.R. 5141), which would allow Federally Qualified Health Centers (FQHC) to use New Access Point grants to create and maintain mobile health units in rural and underserved communities. The MOBILE Health Care Act was specifically tailored to match a Senate-passed version of the legislation, indicating possible final action on the bill before the end of this Congress. Mental health advocates are cautiously optimistic an end-of-year omnibus package could include some of these House-passed policies. Meanwhile, the House Ways and Means Committee and Senate Finance Committee are still working to pass — and craft — legislation geared towards the behavioral health workforce.

Stakeholders Push for User Fee Priorities in Wake of ‘Clean’ User Fee Reauthorization

In the wake of Congress passing a short-term continuing resolution (CR) to maintain government funding, a wide range of stakeholders and policy experts are focused on additional policies that could be included in a more comprehensive end-of-year bill. Specifically, organizations focused on the Food and Drug Administration (FDA) user fee bills are homing in on policies that were left out of the CR’s five-year “clean” reauthorization of user fee programs that impact the approval process of generic, biosimilar, and branded drugs, as well as medical device products. The initial House-passed user fee bills included riders intended to increase generic drug competition, improve clinical trial diversity, increase FDA inspection authority, address concerns related to the accelerated approval pathway, and enhance medical device cybersecurity, among other provisions.

While the full Senate did not pass its user fee package, its bill included oversight of cosmetics and dietary supplements. Despite these policies being carved out of the CR, Congressional leadership has noted their intention of reviving some of these FDA-related policies before the end of the 117th Congress. Some insiders point to clinical trial diversity measures and accelerated approval policies as ripe for revival by the end of December, though advocacy groups across the user fee development spectrum are pushing for their respective interests.

MA Premiums Set to Drop 8% in 2023

On Thursday, the Centers for Medicare and Medicaid Services (CMS)announced that premiums for Medicare Advantage (MA) plans will drop to an average of $18 per month in 2023 when open enrollment opens on October 18. This average represents an eight percent decrease from 2022, and CMS projects that about 31.8 million people will sign up for MA plans in 2023. However, the Medicare plan finder tool for MA and Part D plans will not inform consumers of the Inflation Reduction Act’s (IRA) policy to limit insulin costs to $35 a month, nor Medicare’s out-of-pocket coverage of seniors’ vaccines.

While these IRA policies will indeed apply to beneficiaries, CMS suggested that when clicking through the Plan Finder tool, consumers focus more on annual plan costs instead of coverage for specific drugs. MA advocates, such as the Better Medicare Alliance, applauded CMS’s announcement, and consumers are likely to see the cost differences just before the midterm election season.

Federal Judge Orders Imminent Halt of 340B Rate Cuts for Rest of 2022

In a win for 340B hospitals on Wednesday, a federal judge ordered 340B payment cuts to be halted for the rest of 2022. The judge characterized the cuts — stemming from a Department of Health and Human Services (HHS) 30 percent rate decrease introduced in 2018 — as “defective” and concluded that remedying payment cuts for the rest of the year would not be disruptive to the system. The Outpatient Prospective Payment System (OPPS), which dictates hospital payments for the 340B program, is otherwise in effect for the remainder of 2022. The American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), and America’s Essential Hospitals (AEH) celebrated the ruling, though 340B Health continues to push for reimbursement for the 30 percent cuts they experienced over the past few years.