Health Policy Report (4/5)

April 5, 2021

Congress stands adjourned for the spring district work period. The Senate will return to Washington on Monday, April 12, followed by the House on Tuesday, April 13.

Biden Rolls Out $2.2T Infrastructure Proposal

Last Wednesday, President Joe Biden unveiled the first portion of his American Jobs Plan, a broad $2.2 trillion, 8-year infrastructure proposal. According to the administration’s summary of the plan, the President’s proposal outlines funding for several traditional infrastructure verticals such as (1) roads, bridges, and highways ($115 billion); (2) rail ($80 billion); (3) public transit ($85 billion); (4) airports ($25 billion); and (5) waterways ($134 billion). It also seeks to prioritize clean energy, domestic manufacturing, supply chain capacity, electric vehicle procurement, Medicaid home and community-based services, as well as workforce development. Despite public sentiments that suggest a desire to reach a bipartisan infrastructure agreement, eventually, Democrats will likely opt for the “go it alone” approach and pass the package through budget reconciliation, thus allowing it to pass the Senate with a simple 51-vote majority. Republican lawmakers have already expressed strong opposition to the proposed framework, largely due to concerns with its projected cost. 

With regard to health care infrastructure, the package includes $400 billion for the expansion of long-term care services under Medicaid, including home and community-based services (HCBS) as well as extending the Money Follows the Person demonstration program. The President’s plan also includes an $18 billion investment to modernize Veterans Affairs hospitals and clinics. Further, the proposal also prioritizes future pandemic preparedness efforts through a new $30 billion investment in medical countermeasure manufacturing, technologies for the rapid scaling of vaccine production, domestic production of active pharmaceutical ingredients, and U.S. infrastructure for biopreparedness, biosafety, and biosecurity.

To offset some of the plan’s costs, the Biden administration will propose a series of changes to the corporate tax code, including some key changes to the 2017 Tax Cuts and Jobs Act (TCJA). This includes hiking the corporate tax rate to 28 percent (still lower than it was prior to 2017), eliminating subsidies and foreign tax credits for fossil fuel companies, and establishing a new 21 percent global minimum tax for multinational corporations.

President Biden’s ‘American Jobs Plan’ for infrastructure will be the first step of his American Rescue Plan “recovery” package. He is expected to release the second phase of this plan later next month that could touch on so-called “human infrastructure.” This could include a wide scope of policies pertaining to health care access and affordability, climate change, education, tax reform, and more.

CMS Places Hold on Claims Ahead of Sequester Vote

The Centers for Medicare and Medicaid Services (CMS) announced last Tuesday that it will hold Medicare claims in anticipation that Congress will prevent looming payment reductions. A two percent payment reduction is set to go into effect April 1 for payments under the Medicare program, though Congress is expected to pass legislation upon returning from its Spring recess to avert the cuts. Due to this expectation, CMS instructed Medicare Administrative Contractors (MAC) to hold and not process submitted claims with dates of service on or after April 1, 2021. The MACs will then process held claims after the extension of the moratorium on the reductions — also known as sequestration — is signed into law.

Under the Budget Control Act, automatic sequestrations of both mandatory and discretionary spending were triggered as a result of Congress’s failure to reduce the federal deficit by $1.2 trillion from fiscal years 2012-2021. The sequester of Medicare benefit payments is capped at two percent. However, the Medicare sequester is currently suspended, as the CARES Act and subsequent legislation placed a moratorium on the sequester through March 2021.

Both the House and the Senate have passed versions of legislation to extend the moratorium on the Medicare sequester. The House-passed bill also included a delay of a mandatory four percent payment cut to Medicare payments under the statutory pay-as-you-go (PAYGO) law, which mandates payment cuts if federal spending reaches a certain level. That level was breached by the passage of the American Rescue Plan Act. The four percent reduction is set to take effect in 2022. The Senate-passed bill does not address a fix to cuts under PAYGO. The House is expected to pass the Senate bill upon its return in mid-April, and Congress will look to a separate legislative effort to address fixes to PAYGO-mandated cuts at a later time.

Biden to Tackle Substance Abuse Crisis Exacerbated by Pandemic

Last Thursday, the Biden administration announced seven drug policy priorities they will take on within the first year of the presidency, focusing on tackling the rising overdose epidemic that has been exacerbated by the COVID-19 pandemic. The priorities outlined by the Office of National Drug Control Policy include: (1) expanding access to evidence-based treatment, particularly medicine for opioid use disorder; (2) advancing racial equity in the approach to drug policy; (3) enhancing evidence-based harm reduction efforts; (4) supporting evidence-based prevention efforts to reduce youth substance use; (5) reducing the supply of illicit substances; (6) advancing recovery-ready workplaces and expanding the addiction workforce; and (7) expanding access to recovery support services. The administration reported that the latest data from the Centers for Disease Control and Prevention (CDC) shows that 88,000 Americans died from an overdose from August 2019 to August 2020, which is a 26.8 percent increase over the past reporting period.

The administration emphasized the critical need for heightened focus on the substance abuse crisis, and stated that addressing the overdose and addiction epidemic remains a top priority for President Biden. The American Rescue Plan appropriated nearly $4 billion to enable the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA) to expand access to vital behavioral health services. The Office for Drug Control Policy stated that the seven priorities will serve as guideposts to ensure that the administration promotes evidence-based public health and public safety actions, with a pointed focus on racial equity in drug policy.

HHS Launches Nationwide Campaign to Boost Vaccination

Last Thursday, the Department of Health and Human Services (HHS) announced new measures to promote vaccination and increase vaccine confidence as part of the next phase of its COVID-19 public education efforts. HHS will create a COVID-19 Community Corps, which will encompass a nationwide network of local, trusted voices to encourage Americans to get their COVID-19 vaccines. Vice President Kamala Harris and Surgeon General Vivek Murthy met with the 275 founding members last Thursday, and the administration will regularly share updated public health information and resources for Corps members to use within their communities in vaccine campaigns. The administration also announced a social media campaign for individuals to encourage vaccination, as well as a TV ad campaign to endorse vaccination among key eligible groups in both English and Spanish. Last week’s announcement follows a recent announcement of nearly $10 billion to increase vaccine access and confidence in hard-hit vulnerable communities, including $3 billion of Centers for Disease Control and Prevention (CDC) funding to support outreach efforts in states through community-based organizations and trusted community leaders.