Health Policy Report (8/1)

August 1, 2022

The Senate will return to action on Monday as Democrats prepare to act on their newly-released Inflation Reduction Act. Text of the reconciliation bill, which includes an array of health, tax, clean energy, and climate policies, is currently being reviewed by the Senate Parliamentarian — a process that could result in additional changes to the legislation if its provisions run afoul of the chamber’s arcane budgetary rules.

As the bill gets reviewed, leadership will be working to ensure that intraparty disagreements do not delay the process beyond the next two weeks. In particular, Majority Leader Chuck Schumer (D-NY) will need to shore up the support of Sen. Kyrsten Sinema (D-AZ), who was not looped into the Leader’s negotiations with Sen. Joe Manchin (D-WV) and has expressed prior reservations about passing tax increases through the reconciliation process. Leaders will also need to be wary of dissent from Members from high-tax states who have been pushing for a repeal of the current $10,000 cap on state and local tax deductions, although reports suggest that some lawmakers within the New Jersey and New York delegations have softened their opposition in favor of getting a bill across the finish line.

Once the Parliamentarian issues a ruling, Democratic leadership will look to get the $700 billion measure on the floor to kick off the marathon “vote-a-rama” process. However, the review is expected to take several days, and floor action could slip into the next week depending on when the legislation is officially filed. If the Senate can wrap up consideration of the reconciliation bill by this weekend, the House could return as soon as Monday, August 8 to hold the final vote. However, timing on this remains fluid.

Senate HELP Committee Deliberates Substance Use, Fentanyl, Opioids

On Tuesday, the Senate Committee on Health, Education, Labor and Pensions (HELP) held ahearing (TRP summary) centered around the increasing number of fentanyl-related overdoses in the U.S., focusing heavily on ways in which to combat distribution of illicit substances to curtail overdoses. Much of the conversation during the hearing surrounded substance use disorder (SUD) and opioid use disorder (OUD) prevention, treatment, and recovery programs, with bipartisan support emerging for solutions to expand access to education programs for youth on the dangers of substance use. While members largely agreed that overdoses related to fentanyl were typically unintentional, disagreements emerged surrounding the most effective way to ensure that access to fentanyl is decreased. Generally, Democrats called for increased supports for prevention and treatment programs, while Republicans honed in on the need to increase border and port security to reduce the likelihood of illicit substances entering the U.S.

Senate Aging Committee Discusses Accessible Tech for People with Disabilities, Veterans, Seniors

The Senate Aging Committee held a hearing (TRP summary) entitled, “Click Here: Accessible Federal Technology for People with Disabilities, Older Americans, and Veterans.” There was strong bipartisan support for making telehealth services more accessible across federal programs, especially for individuals with disabilities and veterans. During the hearing, witnesses testified that many federal agency websites are inaccessible and difficult to use, despite the existing requirements within Section 508 of the Rehabilitation Act. Specifically, this statute requires federal agencies to make their technology accessible for all individuals with disabilities to have access to and use of the information and data that is comparable to the access of information by those who are not individuals with disabilities.

Witnesses spoke to their experiences with government websites, recommending that federal agencies incorporate accessibility into the early stages of website or platform design. The panelists explained that this strategy would enable federal agencies to save costs on remediation efforts to remove barriers posed to such individuals. Additionally, witnesses advocated for legislation to increase transparency and enforce compliance with the website and information technology (IT) accessibility standards in the federal government.

House VA Subcommittee Examines VA EHRM Program

On Wednesday, the House Veterans’ Affairs Subcommittee on Technology Modernization held ahearing (TRP summary) to examine the Department of Veteran Affairs’ (VA) Electronic Health Record Modernization (EHRM) program. This hearing — similar to the Senate Veterans’ Affairs Committee hearing (TRP summary) held the previous week — 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” caused multiple events of patient harm. Notably, the VA recently delayed deployments of the EHR system to other VA medical facilities until 2023 to address 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 Deputy Inspector General of the OIG and the second panel featuring executives from Oracle, which recently acquired the Cerner system. Throughout the hearing, frustrations arose from members on both sides of the aisle surrounding the VA and Oracle’s implementation of the new EHR system. Members raised concerns surrounding patient safety stemming from issues with the unknown queue, poor training programs for VA staff, and increased cost estimates for implementation. Witnesses fielded questions throughout the hearing to update the committee on their plans to improve the training programs and mitigate issues with the unknown queue. Additionally, the witnesses clarified program implementation dates, expectations around cost-estimates, and the potential need for additional federal appropriations, among other issues.

Education and Labor Subcommittee Deliberates Domestic Workforce Protections

The House Education and Labor Subcommittee on Workforce Protections held ahearing (TRP summary) to deliberate workplace protections for domestic workers. Specifically, members discussed the merits of the Domestic Workers Bill of Rights Act (H.R. 4826) which would extend workplace protections and penalty authorities over violations. Republicans and Democrats generally held differing viewpoints on the bill. Republicans expressed concern about the impact of higher regulatory standards on employers, which they argued would raise costs for employers and effectively harm the domestic care industry. GOP lawmakers also discussed the possible ramifications of the bill on the legal system, paying particularly close attention to the civil enforcement provisions outlined in the legislation.

Democrats on the committee focused on the positive impacts for employers that would stem from the legislation, such as improved quality of care and enabling parents to reenter the workforce. They also discussed the importance of providing benefits for domestic care workers, including paid leave, unemployment benefits, and adequate pay for caregivers. Notably, many Democrats on the committee highlighted wage theft, sexual harassment, and other issues that disparately impact women of color, who comprise the majority of domestic workers. Several witnesses and committee members pointed to the impact of the Domestic Workers Bill of Rights Act on workforce shortages, with Democrats asserting that the bill would improve shortages while GOP lawmakers argued that the bill would worsen current shortages.

CMS Finalizes Inpatient Rehab, Psychiatric Facility Prospective Payment Systems

Last week, the Centers for Medicare and Medicaid Services (CMS)finalized (TRP analysis) an update to Medicare payment policies and rates for the Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) for fiscal year (FY) 2023 (fact sheet). Under the final rule, CMS will increase payments to inpatient psychiatric facilities by 3.8 percent, which the agency expects to boost total payments to IPFs by 2.5 percent — or $90 million — in FY 2023. Additionally, the agency is updating the outlier threshold to keep estimated outlier payments at two percent of total payments, which it expects will catalyze an estimated 1.2 percent decrease in aggregate payments. 

The agency also issued a final rule (TRP analysis; fact sheet) to update the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for fiscal year (FY) 2023. This rule would increase IFR PPS payment rates by 3.9 percent, which would increase IFR payments by an estimated 3.2 percent, or $275 million, relative to FY 2022. Notably, this rate represents a 0.11 rate increase from the proposed rule. CMS’s final rule includes classification and weighing factors for case-mix groups (CMG), and it finalizes codification and clarification of CMS’s teaching status adjustment policy, as proposed. The final rule also includes a policy to require quality data reporting on all IRF patients starting in FY 2026, compared to a proposed start date for FY 2025. Furthermore, the rule finalizes a policy to establish a permanent cap to smooth impacts of year-to-years changes in the IRF wage index.

MACPAC Holds Special Session on Medicaid Post-PHE Unwinding

On July 28, the Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC) held a special session (TRP summary) to discuss the preparations underway by the Centers for Medicare and Medicaid Services (CMS) and individual states to unwind flexibilities afforded under the COVID-19 public health emergency (PHE). Of particular interest to the Commission were the implications of reversing the continuous coverage requirement, as well as the enhanced Federal Medical Assistance Percentage (FMAP), particularly given the uncertainty surrounding a definitive end date for the PHE.

Throughout the discussion, commissioners focused heavily on ways to alleviate the presumed poor fiscal implications for states when the enhanced FMAP ceases at the conclusion of the PHE. To this end, commissioners explored the idea of recommending a gradual phase-out of the FMAP and noted their intent to discuss this point further during the upcoming September 2022 meeting. Commissioners also inquired about the need to focus on a glidepath to allow for a more efficient transition from the Medicaid program to other federal- or state-based coverage programs, including the Affordable Care Act (ACA) marketplace and/or CHIP programs.