Health Policy Report (9/12)

September 12, 2022

House lawmakers will return tomorrow to kick off the September work period. According to a “Dear Colleague” letter from Majority Leader Steny Hoyer (D-MD), leadership could file a continuing resolution (CR) to fund the government into mid-December for a vote prior to the end of the week. However, disagreements over policy riders — including the White House’s $47.1 billion supplemental funding request and energy permitting reforms — could shift the timing on this vote. In addition to the stopgap funding bill, lawmakers are slated to consider three bills out of the Oversight and Reform Committee that pertain to: (1) improving federal whistleblower protections (H.R. 2988); (2) modifying certain census bureau authorities to promote accuracy and fairness (H.R. 8326); and (3) prohibiting executive agency positions in the competitive service from being placed in the excepted service (H.R. 302). In the upper chamber, senators will be in session this afternoon to resume consideration of pending judicial nominations.

Meanwhile, Democratic leadership is pushing to add an energy permitting deal championed by Sen. Joe Manchin (D-WV) to the forthcoming CR, but the plan is facing some early headwinds from lawmakers on both sides of the aisle. Specifically, Sen. Bernie Sanders (I-VT) came out in strong opposition to legislation that would speed up the permitting process for energy and infrastructure projects, claiming that it would make it easier for companies to complete “some of the dirtiest and most polluting oil and gas projects in America.” Separately, more than 70 House Democrats signed onto a letter led by Natural Resources Committee Chair Raúl Grijalva (D-AZ) that opposes adding the permitting reform package onto must-pass legislation. Discussions among Democrats are expected to resume when the House returns this week, but the fate of the permitting plan is unclear as of now.

Biden Gives Nod to User Fees Riding on CR

Last week, the White House released alist of programs it would like to see included in a continuing resolution (CR). With government funding set to expire on September 30, lawmakers are looking to pass a short-term extension package to buy more time while they negotiate a more substantial funding bill for fiscal year (FY) 2023. The Biden administration’s list of authorization items is divided between those categorized as “necessary” to be included in a CR and policies with which the administration has “no objection” to including in a CR if they are not enacted before Congress considers text for a short-term extension bill. However, the document does not differentiate between supporting a short-term extension of current user fee agreements versus a full five-year extension. This ambiguity is compounded by ongoing negotiations between Senate Health, Education, Labor, and Pensions (HELP) Chair Patty Murray (D-WA) and Ranking Member Richard Burr (R-NC).

Congress Requests Feedback on MACRA

A group of bipartisan Representatives led by Reps. Ami Bera (D-CA) and Larry Bucshon (R-IN) penned an open letter requesting stakeholder feedback on reforming the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act (MACRA). MACRA was passed in 2015 to promote value-based care (VBC) models, but lawmakers and policy experts have voiced concerns that the bill has negatively affected the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APM). Unless renewed, the expiring five percent bonus for providers and higher thresholds to qualify as an APM could lead to a dwindling number of providers participating in VBC models. Notably, the Biden administration included an extension of the five percent APM incentive payment in its list of programs to be included in a continuing resolution (CR), though the policy’s inclusion is far from certain.

CMS Requests Comments for Ways to Improve Current Programs, Activities

On Tuesday, the Centers for Medicare and Medicaid Services (CMS)  issued a request for information (RFI) regarding the agency’s payment policies and quality programs. The agency is specifically interested in comments from stakeholders on four topics: (1) health care accessibility; (2) provider experiences; (3) advancing health equity; and (4) the impact of COVID-19 Public Health Emergency (PHE) waivers and flexibilities. The agency wants to hear personal experiences from consumers regarding their ability to understand, obtain, access, and pay for services and medications. From a provider perspective, CMS explained that it aims to better understand challenges in meeting patient needs, reporting requirements, communications, and other aspects of the supply and distribution of health care.

The agency has also been focused on health equity under the Biden administration, and CMS notes it wants to better understand community-level hurdles to access care, tackle health-related social needs, and develop strategies to address these concerns. Lastly, the agency is interested in exploring ways in which PHE flexibilities have decreased burdens and addressed disparities. CMS plans to use this feedback to inform which flexibilities could be extended past the PHE. The Department of Health and Human Services (HHS) is expected to extend the PHE again, and the declaration will likely extend into January.

DHS Finalizes Rule Allowing Green Cards Regardless of Government Health Program Use

The Department of Homeland Security (DHS) finalized a rule rescinding the Trump-era “public charge” policy which asserted that the U.S. could deny green card applicants based on their use of Medicaid, Children’s Health Insurance Program (CHIP), and other government health care programs. The new rule out of DHS will bar the use of calculations that would determine an applicant’s likelihood of requiring government assistance, though an applicant’s long-term institutionalization can still be considered in determinations. The rule will take effect on December 23, 2022. According to the Kaiser Family Foundation (KFF), reversing the public charge rule could encourage U.S. residents to utilize public health care programs, though updating communities on the policy change will likely require larger, local-based efforts.

Stakeholders Push CMS on Preventing Physician Fee Cuts

Comments were due on Tuesday regarding the Centers for Medicare and Medicaid Services (CMS) physician fee schedule (PFS). Notably, CMS proposed a conversion factor that would reduce physician payments from Medicare by roughly 4.5 percent in 2023. While CMS is legally required to ensure that PFS policies are budget neutral, provider groups assert that the agency has other tools it can leverage to alleviate proposed cuts. The Medical Group Management Association encouraged CMS to request that Congress intervene and implement a positive adjustment, while the Community Oncology Alliance noted that the cuts would exacerbate the proposed one-to-two percent cut to oncology payments. The American Academy of Family Physicians also pointed out that some necessities — such as laptops and computers — should be considered direct practice costs. Notably, these cuts would be compounded by impending pay-as-you-go (PAYGO) cuts to physician pay and a two percent sequester. However, Congress has never allowed PAYGO to be implemented.

Providers Navigate Rural Hospital Designation Implementation

Established in the Consolidated Appropriations Act of 2021 (CAA, 2021), rural emergency hospitals (REH) will be considered a new provider type starting January 1, 2023, with the goal of improving access to care in rural areas. Overall, providers are excited about the new model to treat patients living in rural areas, which have experienced over 100 hospital closures between 2010 and 2021. These populations also tend to be older, have less expendable income, and have worse health conditions compared to their urban counterparts. However, providers have pinpointed several aspects of the new REH designation that could complicate the model’s potential benefits.

For example, hospital operators want to have flexibility to most effectively use their space, which they say is contradicted by CMS’s requirement that hospitals set aside beds for skilled nursing. There are also uncertainties surrounding participation in the 340B program, specifically if REHs can stay in the program and if payment methodologies would be impacted. Transportation is another concern, as many rural hospitals are dependent upon voluntary services, though CMS did not make additional funding available for transportation. Despite challenges, the program expects to attract around 70 hospitals. REHs would receive a five percent bump in payments through the outpatient prospective payment system (OPPS) and a monthly facility payment if OPPS proposals are finalized.