Health Policy Report (4/27)

April 27, 2020

Capitol Hill Update

President Donald Trump signed the $483.4 billion “COVID-19 Phase 3.5” bill into law last week after officials clinched a bipartisan agreement on the measure. The bill provides $310 billion to replenish the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) that would allow it to resume lending as soon as today (Monday). The measure also allocates: (1) $75 billion for hospitals; (3) $25 billion to boost testing capacity; and (3) $60 billion for the SBA’s Economic Injury Disaster Loan (EIDL) program. TRP’s comprehensive analysis of the Phase 3.5 legislation can be read here.

Meanwhile, Congress has floated several potential policy priorities that could be addressed in the next round of COVID-19 response legislation. Democratic leadership has outlined numerous of their priorities for the COVID-19 “Phase IV” legislation, including: (1) addressing additional health care needs and bolstering health infrastructure; (2) more funding for unemployment insurance and another round of direct payments; (3) stabilizing the U.S. postal service; (4) additional funding for state and local governments and election support; (5) strengthened oversight and protections for inspector generals; and (6) “technology modernization.” Bill text on certain provisions could be released by House Democrats as early as this week.

Under the current legislative schedule, Congress is not expected to return to Washington until May 4 at the earliest. After canceling the lower chamber’s previously-scheduled vote on a resolution that would have instituted an emergency, 60-day proxy voting authority, House Speaker Nancy Pelosi (D-CA) instead opted to form a bipartisan working group to examine options for remote voting and virtual hearings moving forward, should members need to extend their time away from Capitol Hill. TRP’s analysis on the state of play for remote voting in Congress can be read here.

HHS Announces Further Provider Relief Payments

Last Wednesday, the Department of Health and Human Services (HHS) announced new distributions from the $100 billion Provider Relief Fund created by the CARES Act (H.R. 748). In addition to the $30 billion the Centers for Medicare and Medicaid Services (CMS) has already sent to Medicare fee-for-service (FFS) providers based on their 2019 FFS revenue, the agency announced an additional $20 billion to be distributed so as to allow for all Medicare providers to receive payments based on their 2018 net patient revenue. HHS also announced distributions for certain high-need providers such as rural hospitals and those in COVID-19 hotspots, as well as a fund to pay for COVID-19 care for the uninsured that will be administered by the Health Resources and Services Administration (HRSA).

More specifically, HHS said that it had placed $50 billion in a “general allocation” that would go to Medicare providers based on 2018 net patient revenue. To do so, it folded the $30 billion it had already distributed based on providers’ Medicare fee-for-service revenues in 2019 into the general allocation and said that the further $20 billion would be allocated such that payments under the general allocation were proportional to Medicare providers’ net patient revenue. The next $20 billion was scheduled to start going out last Friday based on their CMS cost report data. As with the first tranche of this allocation, the second comes with terms and conditions, including detailed reporting requirements. HHS had faced criticism over its initial distribution, with observers noting that distributing funds based on FFS revenue disadvantages areas that have higher Medicare Advantage penetration. Such areas tend to be more densely populated — and thus hit hardest by the pandemic. HHS defended its initial allocation, saying that the “simple formula” was used to get funds out quickly.

HHS set aside an additional $10 billion for hospitals in areas hit particularly hard by the pandemic. The administration does not appear to have published its formula for the targeted allocation, but it says it will distribute the funds to where the impact is greatest and will take into account facilities serving a disproportionate number of low-income patients as reflected by their Medicare disproportionate share hospital (DSH) adjustment. HHS also set aside $10 billion for rural health clinics and hospitals citing their often-precarious circumstances and their heightened exposure to revenue dips or cost increases. These funds will be distributed proportionally based on operating expenses as early as this week.

Additionally, HHS will provide reimbursement for the treatment of uninsured COVID-19 payments who received care on or after February 4, 2020. All providers are eligible for reimbursement through the program, and reimbursement will be available for uninsured individuals who qualify for a COVID-19 diagnostic test or have a primary COVID-19 diagnosis. The Kaiser Family Foundation estimated that care for the uninsured for COVID-19 could cost between $13.9 billion and $41.8 billion. There is currently $29.6 unallocated in the Provider Relief Fund, some of which is likely to go to additional allocations. Furthermore, HHS says that some providers will receive further funding, including skilled nursing facilities, dentists, and Medicaid-focused providers.

HHS Advances Information Blocking, Interoperability Rules

The Department of Health and Human Services (HHS) last Tuesday published a pair of rules dealing with health information blocking and interoperability in the Federal Register. The rules were made public at the beginning of March but were not formally published until last week. In light of the COVID-19 public health crisis, certain compliance dates have been moved back. HHS also issued a proposed Office of the Inspector General (OIG) rule seeking to implement the civil monetary penalty (CMP) provisions of the 21st Century Cures Act that give teeth to the finalized information blocking rule. By publishing the rules, HHS started the clock on when they will be implemented. CMS Administrator Seema Verma said in a press release that “in a pandemic of this magnitude, flexibility is paramount for a healthcare system under siege by COVID-19. Our action today will provide hospitals an additional 6 months to implement the new requirements.” Both rules will be effective June 30, 2020, with certain delayed implementation dates and enforcement discretion, discussed below.

OIG’s proposed rule seeks to implement new CMPs related to information blocking in regulation. It also proposes new CMP authority for fraud in grants, contracts, and other agreements and to increase maximum penalties for certain violations. The proposed rule creates incentives for compliance with the soon-to-be implemented rules prohibiting information blocking. OIG is seeking comment on implementation dates, though it notes that enforcement would not begin sooner than the compliance dates in the ONC rule. As proposed, enforcement would be delayed until 60 days after the ONC rule is final — one month less than what ONC head Don Rucker had announced today for ONC’s enforcement discretion on the rule. However, given the general pace of rulemaking, it may be difficult for OIG to finalize the rule in that timeframe. The proposal is open for comment for 60 days, after which OIG must analyze comments and develop a final rule.

The CMS rule will be published in the Federal Register on May 1, 2020. In the final rule as initially made public, affected entities had six months from publication to come into compliance. CMS has since delayed compliance dates for new Conditions of Participation for six months, meaning that hospitals, Medicare Advantage plans, and more will have a year to achieve compliance. CMS also finalized policies relating to application programming interfaces (API) for patient access to data and provider directories. These will be effective January 1, 2021, though CMS will exercise enforcement discretion for six months after implementation and the requirements will be enforced beginning July 2021. The ONC rule will also be published in the Federal Register on May 1, 2020. ONC announced that it would exercise enforcement discretion for three months at the end of current Health IT Certification Program compliance dates.

DEA Opens New Comment Period on EPCS

Last Monday, the Drug Enforcement Administration announced that it would reopen a comment period for its electronic prescriptions for controlled substances (EPCS) interim final rule (IFR) that it published over ten years ago. The agency solicited feedback on certain issues related to EPCS, with a focus on authentication for electronic prescriptions, in preparation for nearly all prescriptions to be electronic starting next year. The comment period will be open through June 20, 2020. The SUPPORT Act required DEA to address biometric components of EPCS authentication and also required nearly all drugs to be e-prescribed starting in 2021.

DEA appears to be mostly seeking comment on ways to simplify EPCS and encourage uptake. The agency calls for public comment on a number of issues, including:

  • Equally secure alternatives to two-factor authentication that could better encourage adoption of EPCS;
  • What sorts of two-factor authentication modalities are in use;
  • Issues with two-factor authentication;
  • Biometric authentication credentials currently in use;
  • Institutional practitioners being allowed but not required to conduct identity proofing;
  • What methods are currently in use to remotely validate the identity of practitioners;
  • If there are changes to access controls that could be implemented to reduce practitioners’ burden while protecting the integrity of EPCS;
  • Experiences with EPCS security incidents and reporting;
  • Workflow issues; and
  • Experiences with failed transmissions.

CMS Updates MA, Part D Plan Guidance Around COVID-19 Flexibilities

The Centers for Medicare & Medicaid Services (CMS) last Tuesday updated its COVID-19 guidance for Medicare Advantage Organizations (MAO), Part D, and Medicare-Medicaid plans. The updated guidance document clarifies CMS’s expectations with respect to other CMS and MAO and Part D sponsor policies and requirements during the coronavirus public health emergency. The updated memo reiterates the MA and Part D plan flexibilities discussed in the Interim Final Rule and other guidance issued by CMS at the beginning of the public health emergency, as well as in the announcement of the final MA Part D rate notice. CMS also emphasized that the agency is adopting a temporary policy of relaxed enforcement associated with the policies discussed in the memo to Medicare plans.

In the updated guidance, CMS encourages MAO and Part D plans to waive or relax prior authorization requirements. Part D sponsors can choose to waive or relax prior authorization requirements at any time for other formulary drugs in order to facilitate access with less burden on beneficiaries, plans, and providers, but any such waiver must be uniformly provided to similarly situated enrollees who are affected by the disaster or emergency. MAOs are also encouraged to waive or relax cost sharing for COVID-19 treatment, as required by the CARES act, for services furnished on or after March 18, 2020. This includes clinical laboratory tests for COVID-19, testing related services, and eventually COVID-19 vaccines and their administration. Additionally, CMS is encouraging plans to take the actions they “deem reasonable and necessary” to keep enrollees and employees safe and curb the spread of this virus, while still ensuring beneficiary access to needed Part D drugs.

Democrats Ask Inspector General for Additional Information on BARDA Shakeup

Democrats have asked the Department of Health and Human Services (HHS) Inspector General to gather additional information on the reassignment of Biomedical Advanced Research and Development Authority (BARDA) Director Rick Bright. The former director was reassigned to a relatively minor role in the National Institutes of Health assisting with its initiative on COVID-19 diagnostic development last week, and has publicly indicated he was ousted after pushing back against the president’s promotion of hydroxychloroquine as a COVID-19 treatment. House Energy & Commerce Chairman Frank Pallone (D-NJ) and Sen. Edward Markey (D-MA) both asked HHS to further investigate the matter last week, and Chairman Pallone noted that, if true, the reassignment of Rick Bright “raises serious questions about the commitment of President Trump and his Administration to science and the public good as the government and the nation work to combat an unprecedented global health pandemic.” Democrats previously raised concerns that the nation’s top health officials were being pressured by the White House to focus on hydroxychloroquine. Sen. Patty Murray (D-WA) recently questioned Food & Drug Administration (FDA) Commissioner Stephen Hahn whether his agency was pressured into issuing an emergency use authorization for hydroxychloroquine and the drug’s predecessor chloroquine.