Health Policy Report (7/26)

July 26, 2021

Capitol Hill Update

Senators will reconvene for legislative business this week as negotiations on the bipartisan infrastructure framework continue. The bipartisan “G20” group has expressed optimism that they will settle on a final agreement and produce legislative text by the end of today, followed by another procedural vote to try and advance the bill at some point this week. The two sides have reportedly agreed to further delay the Trump administration’s Medicare rebate rule to help offset some of the plan’s costs, but it is not yet clear whether Senators have resolved a lingering disagreement over transit funding. With an ambitious agenda of clearing both the Biden-endorsed infrastructure deal and a budget resolution prior to the end of the summer, it is likely that the Senate will nix part of its August state work period to free up additional floor time.

In the House, Members will convene today to begin a busy week of appropriations activity. Lawmakers will look to clear at least seven funding measures for fiscal year (FY) 2022 next week by way of a “minibus” containing the spending bills for Labor-HHS-EducationAg-FDAEnergy-WaterInterior-Environment, Military Construction-VA (MilCon-VA), Transportation-HUD (T-HUD), and Financial Services and General Government (FSGG). The bills for Commerce-Justice-ScienceState-Foreign Operations, and Legislative Branch are also on the schedule for this week, but there is no word on when the Defense and Homeland Security bills will be taken up as of now. With respect to the August schedule, Majority Leader Steny Hoyer (D-MD) stated that Members will leave Washington for the month-long district work period as planned. However, he suggested that lawmakers could get called back for votes depending on when the Senate clears the infrastructure deal and budget resolution

CMS Proposes Hospital OPPS and ASC Payment Rates with a Focus on Transparency

On Monday, the Centers for Medicare and Medicaid Services (CMS) proposed its calendar year (CY) 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment rates (textfact sheetpress release). The rule discusses proposed updates and requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program, Hospital Price Transparency requirements, and design of the Radiation Oncology (RO) Model. CMS also included a Request for Information (RFI) focused on health equity standards, quality measures and reporting requirements, and payment policies for Rural Emergency Hospitals (REHs). Thorn Run’s analysis of the rule expands on proposed changes, which include limits on telehealth utilization for mental health.

If finalized, the rule would crackdown on hospital transparency by implementing fines that could amount to $2 million over the course of a year, depending on the hospital’s size. The policy would likely see far-reaching impacts, considering that less than six percent of hospitals are compliant with federal price disclosure requirements. This, and other accountability measures in the proposal, come on the heels of President Biden’s recent Executive Order on Competition. “As President Biden made clear in his executive order promoting competition, a key to price fairness is price transparency,” HHS Secretary Xavier Becerra said in a statement.

Additionally, CMS proposed to halt the previous Administration’s phase-out of the inpatient-only (IPO) list. Under previous longstanding CMS regulations, Medicare payments were only available for services on the IPO list if they were performed in an inpatient setting. In December 2020, CMS finalized a rule to eliminate the list over a three-year period, permitting Medicare payments for these services if also performed in an outpatient setting. At this time, several patient advocacy and hospital groups argued against ending the inpatient-only list, as it could potentially push high-risk procedures into an outpatient setting and lower hospital payments if treatment shifted to lower-cost settings. After hearing these concerns from stakeholders, CMS announced on Monday that it is halting the elimination of the IPO list and is soliciting comments on whether the agency should maintain the longer-term strategy of eliminating the list.

Manufacturers, Distributors to Reach $26B Opioid Settlement

Local government lawyers announced Tuesday that they are finalizing a $26 billion settlement with drugmaker Johnson & Johnson and distribution companies AmerisourceBergen, Cardinal Health, and McKesson. The three wholesalers also agreed to a $1.1 billion settlement in New York this past week. Full details for the $26 billion settlement could be publicized as soon as this week, and each state will have 30 days to opt-in (local governments will then have an additional five months). Under the settlement agreement, AmerisourceBergen, Cardinal Health, and McKesson will contribute $21 billion over 18 years, and Johnson & Johnson would pay the remaining $5 billion over nine years. The settlement total will decrease if governments decline to participate.

If approved, the funding will be allocated towards treatment and mitigation efforts for those impacted by opioid addiction, and Johnson & Johnson will agree to no longer manufacture opioids. However, impacted parties and experts are skeptical that the money will trickle down where it is needed most. Pennsylvania would receive $1 billion from the settlement, and Philadelphia would only receive a projected $5 to $8 million. Philadelphia’s district attorney has already come out against the settlement, calling it a “sellout.” West Virginia’s attorney general also opposes the deal, arguing that the $26 billion is based on population, not the severity of the crisis.

Purdue Pharma is having more difficulty reaching a settlement. The company tried to file for bankruptcy in an attempt to settle about 3,000 lawsuits for aggressive opioid marketing to the tune of $4.5 billion. The plan would block the Sackler family and their associates from future suits, which proved to be a sticking point for the U.S. Department of Justice, which condemned the proposed bankruptcy settlement.

States Look to the White House as Delta Surges

As the Delta variant continues to upset COVID-19 case rates across the country, local health agencies are focusing on getting their populations vaccinated. In Mississippi, holding one of the country’s lowest vaccination rates, thirteen hospitals have run out of ICU capacity. Other states struggling to get their populations vaccinated are experiencing spikes in Delta cases. The Centers for Disease Control (CDC) Director Rochelle Walensky said that Delta accounts for 83 percent of new cases as the country falls behind President Biden’s 70 percent vaccination goal. Many state officials are now turning towards the administration for guidance when asked if they are considering renewed mask-wearing mandates and other restrictions. Some public health researchers are hoping that vaccine rates will increase once the Food and Drug Administration (FDA) grants vaccines full approval. “With over 300M doses given in the U.S., there is ample safety & efficacy evidence,” Dr. Zeke Emanuel, an oncologist who served on President Biden’s Covid-19 transition team, tweeted on July 6. “Moving from emergency authorization to full approval will help increase vaccine uptake.” The Kaiser Family Foundation in June found that 31 percent of unvaccinated adults would be more likely to get the vaccine once it receives full approval.

Formally approving COVID-19 vaccines, which are currently approved under emergency use authorization (EUA), would also give state and local governments and institutions the greater legal authority to require vaccinations. So far, the topic of COVID-19 vaccine mandates has been met with resistance. Some states, venues conducive to large gatherings, and employers have already begun to implement requirements, while over 20 state legislatures have passed bills banning restrictions on unvaccinated people. FDA is projected to grant full approval for Pfizer’s vaccine in January of 2022, though acting FDA Commissioner Janet Woodcock expects to see a decision before then.

Meanwhile, the consequences of COVID-19 are creating new questions begging for an answer. A new study found that nearly one-in-ten COVID-19 patients are seeking treatment for post-acute sequelae of SARS-CoV-2 infection (PASC), or “Long-COVID.” In children, this medical phenomenon is often found in the form of multi-system inflammatory syndrome (MIS-C). The National Institutes of Health (NIH) last week launched a $40 million study to examine Long-COVID and MIS-C last week. Alok Patel, a pediatrician at Lucile Packard Children’s Hospital Stanford notes that “Even though even though covid itself—the acute infection—presented less severe in children, long covid is very debilitating, isolating and scary for families.” As adolescent case numbers rise, Congressional lawmakers are asking for answers as physicians continue to speculate and research how to identify and treat the condition. According to many Congressional Democrats, the answer lies in authorizing vaccines for children under12-years-old. However, FDA is not expecting that EUA until winter, after children are back in school