Health Policy Report (7/13)

July 13, 2020

Capitol Hill Update

No votes are currently scheduled in Congress this week, but Members on the House Appropriations Committee are set to resume their full committee markups of fiscal year (FY) 2021 spending bills. Appropriators will take up the spending bills for: (1) Energy-Water Development (report) and Labor-HHS-Education (report) today (2) DefenseCommerce-Justice-Science (CJS), and Transportation-HUD tomorrow; and (3) Homeland Security and Financial Services and General Government (FSGG) on Wednesday. House floor action on the funding bills that clear the full committee is expected to occur prior to the end of the month. Meanwhile, the Senate’s appropriations process remains gridlocked over certain poison pill amendments, and immediate next steps remain unclear. 

In notable COVID-19 legislative news, Senate Majority Leader Mitch McConnell (R-KY) provided more details on the GOP priorities for the next round of COVID-19 relief legislation last week in a sign that another bill could be on the horizon toward the end of this month. Leader McConnell stated that he will be unveiling legislation in the forthcoming weeks that prioritizes health care, jobs, reopening schools and universities, and liability protections. Treasury Secretary Steven Mnuchin noted yesterday that he expects negotiations between Senate Republicans, House Democrats, and the White House to begin in earnest when the upper chamber returns from its July 4 district work period the next week. However, it remains to be seen whether the parties can clinch a bipartisan agreement given the deep policy divides over the size and scope of the next round of relief. 

Biden Campaign ‘Unity Task Force’ Releases Health Care Recommendations

Last Thursday, the Democratic unity task forces convened by former Vice President Joe Biden and Sen. Bernie Sanders (I-VT) released their recommendations to the Democratic National Committee’s (DNC) Platform Committee, including those of a task force on health care. The task force, co-chaired by Rep. Pramila Jayapal (D-WA) and former Surgeon General Vivek Murthy, made recommendations that are mostly in line with the Biden campaign’s existing policies and the proposals put forth by Democrats in the House of Representatives. Like Vice President Biden’s campaign platform, the recommendations declare that health care is a right. However, major priorities of the Sanders campaign, such as Medicare for All, did not make it into the recommendations. Of note, however, is a recommendation to create an independent body to assess drug value and make pricing recommendations.

The Biden and Sanders campaigns convened the task forces to develop recommendations for a “unity” Democratic platform, announcing task force members in May. Each task force is led by two co-chairs, one selected by Vice President Biden and one by Sen. Sanders, with members selected by each of the two rounding out the ranks of the groups. In addition to Rep. Jayapal and Dr. Murthy, the health care task force included former Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick, former Michigan gubernatorial candidate Abdul El-Sayed, New York University economist Sherry Glied, Service Employees International Union President Mary Kay Henry, Obama and Clinton Administrations health policy alumnus Chris Jennings, and Rep. Robin Kelly (D-IL).

The document has been submitted to the DNC’s Platform Committee and will be reviewed by Vice President Biden prior to the nominating convention, however, it is neither the position of the Biden campaign nor the Democratic platform at this time. “I commend the task forces for their service and helping build a bold, transformative platform for our party and for our country,” said Vice President Biden on the document’s release. “I am deeply grateful to Senator Sanders for working together to unite our party, and deliver real, lasting change for generations to come.” Meanwhile, Sen. Sanders said that “though the end result is not what I or my supporters would have written alone, the task forces have created a good policy blueprint that will move this country in a much-needed progressive direction and substantially improve the lives of working families throughout our country.”

Administration Proposes More Leeway for ‘Grandfathered’ Health Plans to Raise Costs

The Trump administration on Friday released a proposed rule allowing employer health plans in existence before the Affordable Care Act (ACA) to change cost-sharing requirements without losing their “grandfathered” status. The proposed rule from the Internal Revenue Service, Department of Labor, and Department of Health and Human Services (HHS) would also allow the health plans to meet minimum cost-sharing requirements for high deductible health plans to enable enrollees to contribute to health savings accounts. The proposed changes wouldn’t apply to grandfathered individual plans, and if finalized as is, the changes would increase out-of-pocket costs for beneficiaries. The administration noted that the changes are appropriate because “they would enable these plans to continue offering affordable coverage while also enhancing their ability to respond to rising health care costs.”

The proposals stem from a 2017 executive order from President Trump instructing the administration to lift “economic and regulatory burdens” from the ACA. Additionally, the administration issued a request for information in February 2019 asking for stakeholders to identify opportunities to help plans and insurers preserve their grandfathered status and improve such plans for employers, plan participants, and enrollees. Several insurers asked the administration to allow them to increase out-of-pocket costs in accordance with rising drug costs. Comments on Friday’s proposed rule are due by August 14.

Trump Administration Formally Withdraws from WHO

The Trump administration submitted formal notice to the United Nations last week that it will withdraw from the World Health Organization (WHO), following an announcement from President Trump in late May. Although the president has indicated his commitment to withdrawing from WHO, the move would not be effective until July 6, 2021. The delay in formal withdrawal leaves open the possibility that former Vice President Joe Biden could reverse the decision should he win the presidential election in November — a move he has already committed to making on the first day of his presidency. The U.S. is the largest contributor to WHO and provided $426 million in funding from 2018-2019. The U.S. currently owes the WHO $203 million for 2020 and previous years, and Secretary of State Mike Pompeo noted Wednesday the administration will work with Congress regarding the delivery of U.S. funds earmarked for WHO. A senior administration official reportedly said the administration had already paid $58 million of its required assessed dues to WHO and is reviewing options on how best to apply the remaining $64 million expected by the September funding deadline. House Democrats included full funding for WHO in their 2021 budget proposal.

CMS Proposes Add-On Payment for Home Dialysis Machines

Last Monday, the Centers for Medicare and Medicaid Services (CMS) proposed changes to Medicare’s End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year (CY) 2021 (rule, press release, fact sheet). In the rule, CMS proposes to no longer provide the transitional drug add-on payment adjustment (TDAPA) for calcimimetics and to make changes to the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES). With the proposed changes, including changes to the ESRD base rate, CMS estimates that ESRD PPS expenditures will increase by approximately $190 million, or 1.6 percent, in 2021. 

In addition to routine updates, CMS announced changes that it says are meant to encourage home dialysis and the development of new home dialysis machines that substantially improve previously available technologies. Specifically, the agency would expand the TPNIES to cover new home dialysis machines. Capital assets had been specifically excluded from the TPNIES in the CY 2020 ESRD PPS rule. “In the midst of a deadly pandemic that poses a particular threat to those with serious underlying conditions, President Trump’s call for increased access to home dialysis has never been more urgent,” said CMS Administrator Seema Verma. “Unfortunately, government rules too often stand in the way. Today’s action represents a sorely needed course direction, making it easier for ESRD facilities to make new and innovative home dialysis machines available to patients who need them.” However, when the two-year TPNIES for new home dialysis machines ends, CMS proposes that no change would be made to the ESRD PPS base rate. For calcimimetics, which under the proposal would lose its TDAPA, a related payment, CMS has proposed to increase the ESRD PPS base rate to include the drugs. CMS is accepting comments on the rule through September 4, 2020. Following that, the agency will review comments and release a final rule in advance of CY 2021.