Health Policy Report (7/25)

July 25, 2022

Senators will meet for legislative business today, eyeing passage of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act. The final vote on the bill, which includes funding and incentives to spur domestic semiconductor production, is expected to occur in the middle of the week absent a “time agreement” to expedite the process. Once the bill clears the Senate, House lawmakers are expected to move on the CHIPS legislation quickly next week for a vote to send it to President Biden’s desk before the August break. Meanwhile, House Democratic leadership has been pushing to shore up support among the caucus amid criticism from progressive lawmakers over the semiconductor subsidies. Should there be defections among progressives, Speaker Nancy Pelosi (D-CA) will likely need the help of GOP lawmakers to ensure that the bill gets across the finish line.

The House returns tomorrow for the last week of legislative business ahead of the August break. In addition to the CHIPS legislation, Members will consider a bipartisan bill that would extend certain COVID-19 telehealth flexibilities past the end of the public health emergency (PHE). While the measure will likely pass with support on both sides of the aisle, it is not clear where the Senate currently stands on the House’s version. Additionally, lawmakers are also slated to take up a package of bills that seek to promote wildfire prevention and drought resilience.

Democrats Consider ACA Subsidy Extension Amid New CBO Score

Last week, lawmakers participated in ongoing negotiations over the Affordable Care Act (ACA) premium tax credit, which Democrats plan on including in their reconciliation bill. Sen. Joe Manchin (D-WV) — the lynchpin of negotiations — called for a two-year subsidy extension, but leadership reportedly is considering a three-year extension of the ACA tax credits that passed in the American Rescue Plan Act (ARPA). Should the tax credits be included in a final reconciliation bill and make their way to President Biden’s desk for final passage, millions of covered Americans would avoid a major premium hike just before mid-term elections. In addition to what appears to be ongoing negotiations surrounding a possible subsidy extension, Republicans are still working to scrap ACA subsidies from Democrats’ plans.

On Thursday, the Congressional Budget Office (CBO) scored a permanent ACA subsidy enhancement, at the request of Republican leadership, which priced the policy at around $250 billion over 10 years. Sens. Richard Burr (R-NC), Senator Mike Crapo (R-ID), and Lindsey Graham (R-SC) had requested the CBO to re-score the measure in a recent letter, which resulted in the CBO and Joint Committee on Taxation (JCT) releasing an analysis of the new score. Notably, the new cost estimate is $30 billion more than the CBO had previously estimated. However, the report concluded that a two-year subsidy extension would cost around $34 billion, which is $6 billion less than the $40 billion that Sen. Manchin previously supported.

Bipartisan Group of Lawmakers Plan to Unveil Mental Health Legislation

Last year, Senate Finance Committee Chair Ron Wyden (D-OR) arranged for bipartisan pairs of lawmakers to create different portions of what would eventually become a mental health package. Since then, the telehealth and pediatric components of the prospective package were included in the gun safety bill that President Biden signed into law earlier this month. However, Chair Wyden confirmed last week that his committee is still working to accomplish its initial policy goals, which will be released in the coming days. Sens. Debbie Stabenow (D-MI) and Steve Daines (R-MT) are working on policies to improve the behavioral health care workforce, Sens. Michael Bennet (D-CO) and Richard Burr (R-NC) are crafting policies to ensure behavioral and physical health parity, and Sens. Catherine Cortez Masto (D-NV) and John Cornyn (R-TX) are continuing to explore policy avenues to improve coordinated care through integrated systems.

Industry Prepares for Final Surprise Billing Rule

Since the Centers for Medicare and Medicaid Services (CMS) began implementing surprise billing legislation, stakeholders and lawmakers have raised numerous concerns about regulations pertaining to the independent dispute resolution (IDR) process. The highly-anticipated final rule is predicted to be published in the coming weeks. The process is intended for hospitals and insurers to resolve out-of-network (OON) rate disputes, though CMS has jurisdiction over their implementation. Stakeholders are at odds over CMS’ determination in its interim final rule (IFR) that IDR entities should first consider the median in-network rate — also called the qualifying payment amount (QPA) — when determining payment amounts.

Providers argue that Congress intended for IDR entities to consider the QPAand five other factors. Provider groups sued over the IDR language, resulting in CMS nixing any guidance referring to the QPA. However, some QPA supporters assert that if CMS wanted to alter the IDR language from the IFR, the rule would already be out. In general, physician groups are concerned that defaulting to the QPA would reduce provider payments, while insurers and patients are supportive of the current structure to lower their costs. Providers are also encouraging the administration to issue more guidance to ensure compliance with the rule. While CMS worked to craft its final rule, the agency engaged in meetings, read letters, and considered comments from a plethora of stakeholders.

Senate VA Examines EHRM Program

On Wednesday, the Senate Veterans’ Affairs committee held a hearing (TRP summary) to examine the Department of Veteran Affairs’ (VA) Electronic Health Record Modernization (EHRM) program. This hearing focused on a recent review from the VA’s Office of Inspector General (OIG) that found that the new electronic health record (EHR) system’s “unknown queue” — intended to capture orders entered by providers that the new EHR cannot deliver to the intended location — caused multiple events of patient harm. Recently, the VA delayed deployments of the EHR system to other VA medical facilities until 2023 to address these outages that have interrupted the software’s performance at the site where the program has been launched.

This hearing featured two panels of witnesses: the first featuring leaders from the VA and the second panel including the Deputy Inspector General of the OIG and an executive from Oracle — a multinational computer technology corporation that recently acquired the Cerner system. Members on both sides of the aisle raised concerns with the costs and timeline of the EHRM program implementation, in addition to concerns surrounding the unknown queue, patient safety, and disruptions of care. Witnesses fielded questions throughout the hearing to clarify program implementation dates, expectations around cost-estimates, and the potential need for additional federal appropriations, among other issues.

House Budget Committee Discusses Investments in Children and Families

The House Budget Committee held a hearing (TRP summary) to discuss the Committee’s report on “Examining the Powerful Impact of Investments in Early Childhood for Children, Families, and Our Nation’s Economy.” Democrats on the Committee expressed strong support for several safety net programs, including the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Supplemental Nutrition Assistance Program (SNAP). Along with several witnesses, Democrats made the argument that these programs improve child outcomes and yield program savings.

Democratic lawmakers also called for improving access to child care — as did their Republican colleagues — though Republican Committee members referenced concerns regarding school choice. In general, GOP lawmakers centered their discussion around high inflation rates, explaining that more federal program funding would exacerbate the economic issue and further harm children and families who are struggling to afford basic goods.

House Select Subcommittee on the Coronavirus Crisis Holds Hearing on Long COVID

On Tuesday, the Select Subcommittee on the Coronavirus Crisis held a hybridhearing (press release) on understanding and addressing Long COVID and its consequences. A public health expert, an economist, and a patient advocate testified to the impacts of Long COVID, and how the federal government can help Americans managing Long COVID as the nation continues to move beyond the coronavirus crisis.

Long COVID has affected millions of Americans, sometimes causing serious, long-term health issues that have forced people out of the workforce and interfered with daily life. A recent federal government estimate indicates that nearly 1 in 5 adults who have previously been infected with the coronavirus are still experiencing symptoms of Long COVID, such as fatigue, shortness of breath, cognitive dysfunction (e.g., “brain fog”), and chronic pain, among others. Approximately one million Americans may have been pushed out of work because of the condition, causing them to lose wages and, in some cases, employer-based health insurance. Witnesses described how many Americans face difficulties in receiving a diagnosis and treatment due to a lack of awareness and barriers to care.

CMS Proposes Calendar year 2023 OPPS and ASC Payment Rates

Last week, the Centers for Medicare and Medicaid Services (CMS) proposed its Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment rates for calendar year (CY) 2023 (TRP analysis; textfact sheetpress release). Under the proposed rule, payment rates would be increased by 2.7 percent for hospitals and ASCs meeting applicable quality reporting requirements for CY 2023 in comparison to CY 2022 rates. Updates to this rule are published annually, as required in statute. In line with President Biden’s focus on health equity, this proposed rule aims to address closing health care gaps and improving access to care. The policies included in the proposed rule — namely, price transparency measures — are in accordance with the President’s recent Executive Order (EO) on Promoting Competition in the American Economy (textfact sheet).

Notably, within the 340B Program, CMS is proposing to maintain its payment rate of the average sales price (ASP) minus 22.5 percent for separately payable drugs, though the agency notes that it expects to apply a rate of ASP plus six percent in the CY 2023 final rule. The proposed rule additionally provides updates to the payment policies, provider enrollment regulations, and self-referral laws for Rural Emergency Hospitals (REH), including a five percent payment bump for each covered outpatient department service furnished by an REH. Further, the agency is proposing changes to the Hospital Outpatient Quality Reporting (OQR), Ambulatory Surgical Center Quality Reporting (ASCQR), and Rural Emergency Hospital Quality Reporting (REHQR) programs in an effort to foster more robust measurement and reporting on care quality in the outpatient setting.