Health Policy Report (11/22)

November 23, 2021

Capitol Hill Update

Congress has adjourned for the Thanksgiving district work period following House passage of the Build Back Better Act (BBBA) late last week. Lawmakers will return on Monday, November 29, when they will have less than five days to act on the looming December 3 government funding deadline. With Democrats and Republicans still very far apart on a topline funding agreement for fiscal year (FY) 2022, it is likely that another short-term continuing resolution (CR) will be needed to avert a shutdown. While the stopgap funding measure has yet to be formally unveiled, intel from Capitol Hill suggests that the legislation will likely extend the funding date toward the middle or end of December. In addition to appropriations, lawmakers will also need to tackle the December 15 debt ceiling “X date” and the annual National Defense Authorization Act (NDAA), among other key year-end priorities.

CBO Releases BBBA Scores

On Thursday, the Congressional Budget Office (CBO) completed their highly anticipated scoring of the House Energy & Commerce (E&C) Committee (Title III) and Ways & Means (W&M) Committee (Title XIII) provisions in the Build Back Better Act (BBBA). A Thorn Run summary of health care provisions can be viewed here.

Key health care items within Title III include policies relating to affordable health care, Medicaid, the Children’s Health Insurance Program (CHIP), Medicare coverage of hearing services, and public health. CBO estimates that, in its entirety, Title III would increase federal spending by $304.4 billion from federal fiscal year (FY) 2022 through FY 2031 and increase revenues by $22.9 billion during that same time period. The agency calculated that the E&C provisions, as currently written, would increase the deficit by $281.5 billion during those ten years.

Measures within Title XIII related to health care include paid family and medical leave, registered nurse staffing, career pathways and social services, social safety net, and drug pricing. It is calculated that the entirety of Title XIII would increase direct spending by $419.9 billion from FY 2022 through FY 2031 and increase revenues by $1.21 trillion during that same time period. CBO estimated that the W&M provisions, as currently written, would decrease the deficit by $797.7 billion during the ten-year period. CBO’s estimates for the drug pricing provisions assumes that the number of innovative new drugs would be reduced by five over the next ten years. Notably, while certain sections related to health care insurance are contained within Title III of the bill text, CBO scored these measures within Title XIII.

The House passed [220-213] the BBBA last week, sending the social spending package to the Senate for consideration where further modifications to the legislative text are likely to occur. The Senate Parliamentarian’s office is expected to begin reviewing the bill as soon as it is formally reported. Anything found in violation of the chamber’s Byrd rule — which bans provisions that are viewed as “extraneous” to the budget from being tacked onto reconciliation bills — will be struck from the legislation. Additional tweaks will also be needed to appease centrist Senators, including Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-WV), who have expressed uneasiness with a larger spending package due to underlying economic concerns.

DeGette, Upton Introduce Cures 2.0

Early last week, House Energy and Commerce Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) introduced the Cures 2.0 Act (TRP analysis; text; section-by-section; press release). The highly anticipated bill builds on the 21st Century Cures Act of 2016 by offering new policies to expedite disease research and therapeutic approval pathways, bolster public health and pandemic preparedness initiatives, enhance access to health care, and address health insurance coverage, among other things.

Specifically, the legislation would: 

  • Reform how Medicare covers innovative new treatments and technologies to make those new discoveries available to patients sooner.
  • Increase access to telehealth services for Medicare and Medicaid patients, including those covered under the Children’s Health Insurance Program,
  • Provide training and educational programs for at-home caregivers,
  • Require more diversity in clinical trials to ensure any new drugs and treatments approved for use in the U.S. are both safe and effective for a greater – and more representative – portion of the population.
  • Provide patients more information about the illness they face and the treatment options available to them to make them a more integral part of the decision-making process.

The legislation would also take steps to address the ongoing COVID-19 pandemic, including requiring the Department of Health and Human Services to:

  • Conduct a nationwide study on the implications of long COVID; and 
  • Develop a nationwide testing and vaccine distribution strategy to be used in future pandemics. 

The 173-page package incorporates several pieces of legislation that have been previously introduced, including the: (1) Pioneering Antimicrobial Subscriptions to End Up Surging Resistance (PASTEUR) Act; (2) Telehealth Modernization Act; (3) Precision Medicine Answers for Kids Today Act; (4) Telehealth Improvement for Kids’ Essential Services (TIKES) Act; (5) Ensuring Patient Access to Critical Breakthrough Products Act; and (6) Meaningful Access to Federal Health Plan Claims Data Act.

Cures 2.0 also includes $6.5 billion in funding for the Advanced Research Projects Agency for Health (ARPA-H), a new agency proposed in President Biden’s budget proposal that was cut from the Democrats’ reconciliation bill earlier this fall. 

HHS, Labor, Treasury Issue Drug Reporting Requirements

On Wednesday, the Departments of Health and Human Services (HHS), Labor, and Treasury issued an interim final rule with comment (IFC) (press releasefact sheet) to implement the No Surprises Act and transparency requirements included in the Consolidated Appropriations Act, 2021 (CAA). The IFC requires health plans and health insurance issuers in the group and individual markets to submit certain information on prescription drug costs and other health care spending to the Departments each year. It also requires Federal Employees Health Benefits (FEHB) Program carriers to submit this same information to the Office of Personnel Management (OPM).  

This IFC was issued in accordance with a provision in the CAA. Additionally, the CAA requires data submissions stipulated in yesterday’s IFC to include additional information on the most highly utilized and expensive drugs, as well as manufacturer rebates. The IFC follows two previously published IFCs on surprise billing in July (TRP analysis) and October (TRP analysis) as required by the CAA. 

Under the rulemaking, data reporting requirements are to be submitted to the Departments and OPM. Specifically, submissions must include: (1) plan and coverage information; (2) impacts of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs; (3) enrollment and premium information; (4) total health care spending categorized by type and cost; and (5) rebates, fees, and other remuneration paid by drug manufacturers for specified drugs.  Additionally, plans, issuers, and FEHB carriers are required to submit to their respective entities an annual overview of their top 50 drugs across several areas, including the: (1) most frequently dispensed brand prescription drugs; (2) costliest prescription drugs; (3) and prescription drugs with the greatest increase in total plan expenditures over the previous year. 

As per the IFC, the Departments will use this data to synthesize biannual reports on prescription drug pricing trends and rebates, as well as ripple effects on health insurance premiums and out-of-pocket spending. HHS intends for the new requirements and reports to enhance transparency efforts. The IFC stipulates that — rather than submitting this information separately for each plan — plans, issuers, and FEHB carriers will be required to submit the specified information aggregated at their respective state or market level. 

CMS Delays Medicaid Reporting Requirements

Last week, the Centers for Medicare and Medicaid Services (CMS) finalized its proposal to delay, by six months, the forthcoming “multiple best price” approach for Medicaid drug rebates. This new approach was finalized in the December 31, 2020 final rule entitled, Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements. 

The best price definition — finalized in December 2020 — creates a structure in which manufacturers may offer prescription drugs to states at prices that are tied to patient outcomes without affecting the overall best price framework in the Medicaid drug rebate program (MDRP). Under this new approach, manufacturers that offer a value-based purchasing (VBP) arrangement to all states may report a best price that includes varying best price points (“multiple best price”) under that VBP arrangement. The announcement by CMS last week finalized the proposed six-month delay of the current effective date for these reporting requirements, which were originally scheduled to go into effect on January 1, 2022.

CMS also finalized its proposal to delay the inclusion of the U.S. territories in the MDRP until January 1, 2023, citing an inability of most territories to comply with certain reporting requirements due to a lack of needed systems. Notably, CMS proposed to delay this effective date between January 1, 2023 and April 1, 2024 to provide territories with enough time to comply with the MDRP requirements or opt out. CMS finalized the earlier date to allow those territories who have the capacity to participate earlier to do so. Last week’s action by CMS would maintain the status quo regarding territories in the MDRP through January 1, 2023.

This final rule is also notable for what it does not delay. In the VBP rule, both a revision of the definition of “best price” to allow for multiple best prices and a new definition of “line extension” for the purposes of the MDRP were set to go into effect January 1, 2022. Only the delay of the best price definition was included in the proposed rule. Additionally, new requirements that would generally include savings from patient assistance programs for the purposes of average manufacturer price (AMP) and best price in the MDRP are set to go into effect January 1, 2023, and those requirements are not addressed in last week’s final rule.

CMMI Stakeholders Discuss New White Paper

On Thursday, the Centers for Medicare and Medicaid Services (CMS) Innovation Center (CMMI) held a listening session (TRP summary) to discuss the agency’s recent report, Driving Health System Transformation – A Strategy for the CMS Innovation Center’s Second Decade. Fourteen stakeholders shared their perspectives on how to best execute CMMI’s goals in the paper. Specifically, the discussion centered around three main questions:

  1. What is the greatest obstacle to participating in a CMMI or other value-based, accountable care models, and how do you recommend CMMI alleviate this obstacle?
  2. CMS is currently exploring quicker, more actionable data, learning collaboratives, and payment and regulatory flexibilities. What else could CMMS do to support clinicians and help them be successful in models?
  3. How can CMMI better incorporate patient needs and goals into models? How should the impacts of value-based care on patients be measured?

Commenters circled around similar concerns. They suggested more upfront payments and technical assistance, as well as general data transparency, to help participants comply with models. Similarly, several commenters felt that model requirements are too complex and hamper participation and success in the model.