Health Policy Report (8/8)

August 8, 2022

Senate Democrats clinched final passage of their long-sought reconciliation bill over the weekend, sending the measure to the House for a final vote later this week. Democratic leadership reached a breakthrough late last week after Majority Leader Chuck Schumer (D-NY) offered a series of tweaks to tax and climate policies within the underlying bill to appease some concerns from Sen. Kyrsten Sinema (D-AZ), who was the last remaining holdout on the Inflation Reduction Act. Additionally, the Senate Parliamentarian’s “Byrd bath” rulings — along with the marathon “vote-a-rama” amendment process — resulted in a pair of key changes to the drug pricing policies within the filibuster-proof measure, including: (1) the removal of a provision that would have required drug companies to provide rebates if the cost of their products sold to private insurers exceed inflation; and (2) nixing a proposed price cap for insulin in the private marketplace.

  • What’s next? House lawmakers will return on Friday to consider the Inflation Reduction Act. Passage of the bill — which appears highly likely as the Democratic caucus appears to be unified at the moment — would send the roughly $740 billion measure to President Joe Biden’s desk for signature. This will mark the end of a busy summer work period for both chambers, with the Senate breaking until Tuesday, September 6, and the House until Tuesday, September 13.

Senate Finance Examines Organ Procurement, Transplant Network

On Wednesday, the Senate Finance Committee held ahearing (TRP summary) entitled, “A System in Need of Repair: Addressing Organizational Failures of the U.S.’s Organ Procurement and Transplantation Network (OPTN).” This hearing updated committee members on Chair Ron Wyden’s (D-OR) and Sen. Chuck Grassley’s (R-IA) bipartisan investigation into the United Network of Organ Sharing (UNOS) and shared members’ concerns with UNOS’s oversight of the U.S. Organ Procurement and Transplantation Network (OPTN), specifically regarding its policy compliance and patient safety activities related to organ procurement organizations (OPO).

In reviewing the investigation, senators on both sides of the aisle cited failures in the current organ transplant system, including: (1) failures of OPOs to complete tests for diseases and infections in organs; (2) incorrectly matching blood types of donors and recipients; and (3) delays in blood and urine tests. Committee members also inquired about the outdated information technology (IT) systems that UNOS and OPOs use to record and transmit data, identify unusable organs, and transport and track organs. During the hearing, UNOS’s CEO Brian Shepard defended his organization’s work and expressed interest in improvements to the system. Conversely, other witnesses and senators were critical of the state of the organ network, especially around reports about discarded organs and patients that were harmed.

Sen. Hassan Urges Expansion of Surprise Billings Regs

Sen. Maggie Hassan (D-NH) recentlyurged the Secretaries of the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury to expand their application of the No Surprises Act (NSA). If a patient receives in-network emergency services at an out-of-network (OON) facility or inpatient emergency services from an OON provider, the NSA dictates that the facility cannot bill patients for costs that exceed their in-network costs for the services. While the NSA applies specifically to inpatient hospitals, hospital outpatient departments (HOPD), and ambulatory surgical centers (ASC), the statute allows HHS to expand the applicable settings at its discretion. Sen. Hassan’s letter called for including birthing centers, clinics, hospice facilities, addiction treatment centers, nursing homes, and urgent care centers under the NSA’s purview.

More specifically, she implored HHS to apply the NSA to situations in which a beneficiary is treated at an in-network facility by an OON provider. Consumer groups and think tanks applauded Hassan’s advocacy and agreed that expanding the NSA’s breadth would help prevent balance billing for more consumers. However, several health care attorneys assert that the bill’s required scope is intended to cover situations in which consumers face more confusion and OON costs tend to be the highest. Additionally, they explain that HHS aims to ensure that the regulations are successful before expanding them to other facilities and situations, noting that further expanding the NSA’s reach increases the risk of harming small providers.

Biden Administration Declares PHE for Monkeypox

On August 4, the Biden administration declared a federal public health emergency (PHE) for Monkeypox. Some 6,600 cases of the virus were reported last week — compared to fewer than 5,000 the week before — according to Department of Health and Human Services (HHS) Secretary, Xavier Becerra. A PHE declaration allows federal agencies to access emergency funding and allocate funds and other resources to address the emergency. Generally, PHEs will last for the duration of a timed-defined emergency, or 90 days, unless extended by the HHS Secretary. The PHE will also allow for the waiver of some laws and regulations to enable health care providers to respond to the disease more quickly. Specifically, broader aspects of the administration’s plan include: (1) scaling the production of vaccines; (2) boosting testing capacity and making testing “more convenient;” (3) increasing access to treatments; and (4) conducting “robust” outreach to affected stakeholders and communities.

The HHS declaration follows a similar announcement from the World Health Organization (WHO) on July 23 when it declared Monkeypox to be a global health emergency. Monkeypox is a virus similar to smallpox and is transmitted through close contact with an infected person. However, it is less contagious — and generally less dangerous than smallpox — according to the Centers for Disease Control (CDC). Earlier last week, the Biden administration announced it was naming Robert Fenton of the Federal Emergency Management Agency (FEMA) as the White House National Monkeypox response coordinator and CDC’s Demetre Daskalakis as Deputy Coordinator.

CMS Finalizes FY 2023 Inpatient, Long-Term Care Hospital Payment Rates

Last week, the Centers for Medicare and Medicaid Services (CMS) issued a final rule (TRP analysis; fact sheet) pertaining to Medicare payment policies and rates for the Hospital Inpatient and Long-Term Care Hospital (LTCH) Prospective Payment Systems (PPS), critical access hospitals (CAH), and non-qualified deferred compensation plans (NQDC) for fiscal year (FY) 2023. CMS issues payment rules for each of its PPS on an annual basis. Payment rules update payment methodologies for each system, and the agency often packages policy changes along with the updates. Through this final rule, the agency sets base payment rates prospectively for inpatient hospital stays based on the patient’s diagnosis and severity of illness. Subject to certain adjustments, a hospital receives a single payment for the case based on the payment classification assigned at discharge.

Under the final rule, hospital payments are expected to increase by $2.6 billion in FY 2023, though CMS projects that Medicare disproportionate share hospitals (DSH) and uncompensated care payments would decrease by $300 thousand in FY 2023 as compared to the year prior. Additionally, CMS expects LTCH PPS payment rates to increase by roughly $71 million in FY 2023. The final rule establishes new — and alters previous — requirements for CAHs participating in the Medicare Promoting Interoperability Program. It will also require hospitals and CAHs to continue COVID-19 and seasonal influenza reporting upon the conclusion of the public health emergency (PHE), though the final rule institutes narrower reporting provisions than previously outlined in the proposed rule. Notably, CMS is not finalizing its proposal to implement reporting requirements for future declared PHEs related to a specific infectious disease or pathogen.

CMS Publishes FY 2023 Skilled Nursing Facility Payment Updates

The Centers for Medicare and Medicaid Services (CMS)recently finalized its annual update to Medicare payment policies and rates for skilled nursing facilities (SNF) for fiscal year (FY) 2023 (TRP analysis; fact sheet; press release). Under the final rule, Medicare Part A payments will see an increase of an estimated $904 million, which substantially differs from the projected decrease in the proposed rule of roughly $320 million in FY 2023. SNF payments will also be increased by 5.1 percent in FY 2023, representing a projected $1.7 billion increase over FY 2022. CMS is finalizing a 4.6 percent Patient-Driven Payment Model (PDPM) parity adjustment reduction that is expected to reduce SNF spending by a total of $780 million in FY 2023.

With regard to the SNF Quality Reporting Program (QRP), CMS finalized its proposal to add an Influenza Vaccination Coverage among the Healthcare Personnel (HCP) measure. However, the agency will adopt the new measure in FY 2024, as opposed to the initially proposed FY 2025 start date. Among other policies surrounding the SNF Value-Based Purchasing (VBP) Program, CMS is finalizing a special scoring policy for FY 2023, which includes a proposal to assign a performance score of zero to all SNFs. Additionally, CMS is finalizing three new measures for the SNF VBP program, which will begin in FY 2026 and FY 2027. Similar to other payment rules by CMS for FY 2023, the agency is finalizing a permanent five percent cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments. Regulations will be effective on October 1, 2022. 

Health Affairs Discusses Opioids, RWE, Accelerated Approval, Among Other Issues

Last week, Health Affairs held a webinar (TRP summary) with Food and Drug Administration (FDA) Commissioner Dr. Robert Califf. Health Affairs Editor-in-Chief Alan Weil asked Dr. Califf about a range of topics, focusing specifically on pharmaceutical product regulation. Dr. Califf explained that his key priorities for the FDA include opioids and misinformation. The Commissioner stressed a holistic approach to combatting opioid use, though he emphasized that fentanyl represents a substantial threat that requires additional attention. He also defended the accelerated approval pathway — while identifying its flaws — and FDA advisory panels, for which he advocated support for improved evidence generation for confirmatory studies.

This discussion led to Dr. Califf’s assertion that the FDA should focus more resources on the product lifecycle in addition to the approval process which receives funding through the user fee agreements. Additionally, the Commissioner engaged in discussion about the importance of leveraging real-world evidence (RWE) and elaborated on randomized trials, among other research methods. He also promoted better communication between the Centers for Medicare and Medicaid Services (CMS) and FDA, ultimately supporting coverage with evidence development as a promising tool to improve the coverage determination process once a product is granted FDA approval.