Health Policy Report (5/18)

May 18, 2020

Capitol Hill Update

House lawmakers have left Washington following passage of the HEROES Act and a resolution to facilitate temporary remote voting and virtual hearings. The rule change will allow Members to submit votes for up to ten absent lawmakers by proxy and permit committees to convene hearings, markups, and depositions through a chief administrative officer-approved software platform. These changes will only last 45 days before needing renewal and will not extend beyond the 116th Congress. In the coming days and weeks ahead, House leadership expects to utilize these remote work flexibilities to convene virtual hearings, markups, and consideration of key 2020 legislative priorities including fiscal year (FY) 2020 appropriations, the National Defense Authorization Act (NDAA), and reauthorization of expiring Surface Transportation and Water Resources Development programs.

Meanwhile, Senators will resume legislative business later this afternoon and are expected to primarily focus on clearing presidential nominations. With House Democrats and Senate Republicans currently far apart on the next round of COVID-19 relief legislation, Senate leadership does not currently have plans to take up legislation pertaining to the outbreak. For today, the Senate will resume consideration of Scott Rash’s nomination to be a District Judge for the District of Arizona.

The lower chamber is scheduled to return to Capitol Hill for legislative business on Wednesday, May 27 to consider a bill that would reauthorize and reform the Foreign Intelligence Surveillance Act (FISA). Additionally, Majority Leader Steny Hoyer (D-MD) noted that the House could consider additional COVID-19 related legislation either next Wednesday or on Thursday, May 28, however, it remains to be seen whether any of these forthcoming votes will be held on a package that reflects a bipartisan compromise.

House Democrats Release Massive $3 Trillion COVID-19 Stimulus Package

House Democrats released their sweeping “CARES 2.0” coronavirus relief package last week, including $3 trillion in funding for COVID-19 relief efforts. The Health Economic Recovery Omnibus Emergency Solutions (HEROES) Act aims to provide support for a plethora of industries, while health care provisions remain at the forefront of lawmakers’ focus. The legislation codifies the Health Care Provider Relief Fund and boosts available funding by $100 billion; greatly expands testing, contact tracing, and surveillance capabilities; prohibits cost sharing for potential COVID-19 therapies and vaccines; secures the health supply chain; and improves and assists the health care workforce, among other things. A manager’s amendment introduced last Thursday added a requirement that federal agencies uphold “scientific integrity” policies, addressed personal protective equipment (PPE) costs, and made technical corrections. Additionally, the manager’s amendment would establish risk corridor programs for Medicare Advantage, Exchange plans, and self-insured, large group plans.

The House passed the Democratic Leadership-crafted package late Friday, although with 14 Democrat defections and a single Republican supporter — Rep. Peter King (R-NY). Republican leaders have already labeled the Democrats’ bill a non-starter, as Democrats did not pre-negotiate terms with the GOP-controlled Senate or White House before assembling the package. The White House issued a formal veto threat against the legislation last week.

Progressive Democrats were also lukewarm to the legislation, calling for a delay on the vote until next week to allow for additional intraparty negotiations. Notably, several progressive Democrats called for price controls on potential therapies or vaccines developed using federal assistance. House Speaker Nancy Pelosi urged Democrats to support the bill, arguing that the legislation would effectively lay down a marker for Democrats’ priorities and set the stage for negotiations on the next relief bill. A concrete timeline on an agreement for the next round of relief legislation is still unclear, as GOP lawmakers and the Trump administration have stated repeatedly that they would prefer to continue assessing the implementation of the initial Coronavirus Aid, Relief, and Economic Security (CARES) Act before moving onto another legislative response package.

Senate HELP Committee Examines Administration Efforts to Reopen Nation

The Senate Health, Education, Labor, & Pensions (HELP) Committee took the opportunity last week to discuss administration efforts to enable the nation to safely reopen with the health experts leading the effort. The federal government’s leaders on the COVID-19 crisis testified before the committee remotely, including: Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health (NIH); Dr. Robert Redfield, Director of the Centers for Disease Control and Prevention (CDC); Dr. Brett Giroir, Assistant Secretary for Health at the Department of Health of Human Services (HHS); and Dr. Stephen Hahn, Commissioner of the Food and Drug Administration (FDA). The hearing marked the first time many of the health experts had had the opportunity to testify on COVID-19 efforts before Congress since the beginning of March.

The majority of members were united behind the need for greatly increased testing capacities before safely reopening the nation, and faced criticism related to testing from both Republicans and Democrats. Sen. Mitt Romney (R-UT) criticized the administration for calling U.S. testing efforts a success, and Ranking Member Patty Murray (D-WA) pushed for public and specific numeric goals for supply acquisition and testing. Sen. Chris Murphy (D-CT) also called for more specific guidance from the administration to guide states and health providers. Sen. Rand Paul (R-KY) questioned Dr. Fauci’s leadership on response efforts and stated his contrary belief that he did not think a surge in cases would occur if the nation was reopened.

The witnesses uniformly cautioned against hasty reopening, explaining that it could result in serious consequences if federally established criteria were not met first to ensure spikes in cases could be efficiently and effectively handled. Dr. Fauci confirmed that the U.S. death toll from COVID-19 is likely larger than the approximately 80,000 deaths that have been reported due to individuals who passed before being tested. Witnesses assured the Committee that evolving understanding of the virus was informing endpoints for therapy and vaccine development, and that the administration was actively monitoring the supply chain to ensure that innovation can be quickly manufactured and distributed.

Democratic Senators Ask for U.S. Participation in Global COVID-19 Efforts

A resolution released last Thursday by a group of forty Democratic Senators urges the U.S. to participate in global efforts to fund and develop COVID-19 therapies and vaccines. The Senators, led by Sen. Dick Durbin (D-IL), are asking for the administration to get involved with the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, and the World Health Organization’s Solidarity clinical trial, and argue that the nation’s opposition to stronger international efforts against the pandemic has undermined potential U.S. access to successful treatment and vaccine innovation. Furthermore, the Senators stated that the lack of U.S. involvement has created a rift among G20 nations. House Democrats similarly released legislation recently authorizing the U.S. to participate in CEPI.

CEPI recently clarified that although the organization does already work with the U.S. indirectly via some of the potential vaccine candidates, it would like to expand work with the U.S. The U.S. currently does not contribute funding to CEPI. The administration recently declined participation in two global collaboration events: a virtual event led by multilateral institutions, government leaders and public health and industry leaders to accelerate new COVID-19 health technologies (April 24), and the European Union Commission’s virtual fundraising summit for COVID-19 vaccine and treatment development (May 4). National Institutes of Health Director Francis Collins told Senators during a recent HELP Committee hearing that he did not think more direct involvement in global efforts was necessary.

CMS Looks to Use Hospital-Reported Prices to Set Payments

Last Monday, the Centers for Medicare and Medicaid Services (CMS) released its proposed hospital inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) payment rule for fiscal year (FY) 2021. The rule updates Medicare’s prospective payment systems (PPS) for acute care hospitals and LTCHs and makes policy adjustments for payments and covered facilities for FY 2021. Notably, CMS proposes to create a new Medicare Severity Diagnosis Related Group (MS-DRG) for CAR-T cell therapy, which could compensate for the expiration of the new technology add-on payment. CMS also seeks to use hospital standard charge data to inform payment rates beginning in FY 2024.

CMS is soliciting comments on the rule through July 10, 2020. Due to CMS’ waiver of the 60-day finalization delay for the COVID-19 crisis, the agency must finalize the rule no later than September 1, 2020. The rule is set to go into effect on October 1, 2020.

CMS says that it has focused its rule making on changes required by statute, essential policies, such as payments, and proposals that could help with the COVID-19 crisis. Due to the COVID-19 crisis and CMS’ use of resources addressing it, the agency is waiving the 60-day delayed effective date for this rule, replacing it with a 30-day delayed effective date. CMS is also granting deadline extensions for certain hospital surveys due to the emergency. Finally, CMS did not include a proposed update to the Overall Hospital Quality Star Rating methodology in the FY 2021 IPPS proposed rule, citing the impact of the COVID-19 public health emergency.

CMS estimated that payments under the IPPS will increase by 1.6 percent in FY 2021. Some of the proposed three percent market basket update will be offset by other proposed changes, including productivity adjustments, changes in uncompensated care payments, and new technology add-on payments. Hospitals that meet electronic health record (EHR) meaningful use criteria and successfully participate in the Hospital Inpatient Quality Reporting Program will see an estimated 3.1 percent payment increase.

In total, CMS estimates that Medicare spending on inpatient hospital services will increase by $2.07 billion in FY 2021. For FY 2021, CMS expects LTCH payments to decrease by approximately 0.9 percent or $36 million, reflecting the continued statutory implementation of the revised LTCH PPS. LTCH PPS payments for FY 2021 for discharges paid using the standard LTCH payment rate are expected to increase by 2.1 percent after accounting for the proposed annual standard Federal rate update for FY 2021 of 2.5 percent and other factors. LTCH PPS payments for cases that will complete the statutory transition to the lower payment rates under the dual rate system are expected to decrease by approximately 20 percent. This accounts for the LTCH site neutral payment rate cases that will no longer be paid a blended payment rate with the end of the statutory transition period, which represent approximately 25 percent of all LTCH cases and 10 percent of all LTCH PPS payments.