Health Policy Report (9/27)

September 27, 2021

Capitol Hill Update

Congress will reconvene for a pivotal week of legislative business that will likely shape the future of President Joe Biden’s term. Speaker Nancy Pelosi (D-CA) is pressing forward on a plan to bring both the bipartisan infrastructure deal and the fiscal year (FY) 2022 reconciliation package to the floor for votes this week, emphasizing in a “Dear Colleague” letter that both of these items are “must-pass.” The House Budget Committee approved the $3.5 trillion framework over the weekend as Democratic leadership looks to shore up support on a path forward with both the progressive and moderate flanks of the party. However, lingering disagreements over these big-ticket measures still have the potential to derail progress depending on how intraparty negotiations pan out.

Meanwhile, the Senate will convene for legislative business later this afternoon as Majority Leader Chuck Schumer (D-NY) eyes action on the House-passed continuing resolution (CR). The stopgap funding measure would punt the new deadline to December 3 while also raising the federal debt ceiling until December 16, 2022. The debt ceiling provision has been adamantly opposed by GOP lawmakers, thus raising the possibility of a partial government shutdown absent 60 votes in the Senate. Senate Democrats could move to strip the debt ceiling provision from the stopgap funding bill, but leadership remains entrenched in its position that the debt ceiling should be addressed in a bipartisan manner. Meanwhile, the Treasury Department has issued increased warnings that it will exhaust its “extraordinary measures” to prevent a default sometime in October.

Centrist Democrats Waiver on Reconciliation Drug Pricing Provisions

As Democrats continue to negotiate a reconciliation package, it has become clear that Sen. Kyrsten Sinema (D-AZ) does not support the drug pricing provisions in either the House or Senate packages. Additionally, she has not embraced Reps. Scott Peters’ (D-CA) and Kurt Schrader’s (D-OR) Reduced Costs and Continued Cures Act (RCCCA) (text; press release; one-pager) which would substantially limit Medicare negotiation compared to policy provisions being considered in leadership’s package. Every Democratic vote counts to push this bill to the finish line, and Sinema’s apparent reluctance to support even more moderate drug pricing policies throws a wrench into the tumultuous negotiation process.

The policies that Sinema opposes also have broader implications for the package. Not only is the drug price negotiation component a key piece of Biden’s domestic policy initiatives, it is also projected to save $700 billion to pay for other ambitious policy proposals in the reconciliation package. Without those savings, other programs in the bill would be in jeopardy.

It is still unclear how flexible Sinema is willing to be, though she and fellow moderate Sen. Joe Manchin (D-WV) made it clear that the reconciliation bill’s $3.5 trillion price tag is far too high for their liking. Biden and Manchin left a meeting between the two men last week in a stalemate, though the president must also worry about losing progressives’ votes in his quest to compromise with moderates. Manchin requested that Congress pass the bipartisan infrastructure package before reaching a reconciliation agreement. However, Biden told Manchin that without a commitment on reconciliation, the infrastructure will have to wait in the wings.

CMS Finalizes Changes to the 2022 Payment Benefit Parameters

On Monday, the Centers for Medicare and Medicaid Services (CMS) published a final rule (fact sheetpress release) that eliminates several Trump-era changes to the Exchanges and seeks to make enrollment in an Affordable Care Act (ACA) plan more accessible. The final rule, entitled “Patient Protection and Affordable Care Act; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond” lengthens the open enrollment period by one month for all individual market Exchanges and creates a new special enrollment period (SEP) for certain Advance Premium Tax Credit (APTC)-eligible individuals. 

This rulemaking seeks to further the Biden administration’s goals of providing greater access to coverage, improving affordability for consumers, and reducing the burden for issuers and consumers. The final rule marks the completion of the recent rulemaking process for the 2022 Payment Notice, as preceded by parts one (TRP analysispress releasefact sheet) and two (TRP analysispress releasefact sheet) of the Notice of Benefit and Payment Parameters for 2022 final rule, published on January 19 and May 5, 2021, respectively. The final rule also makes several changes to policies pertaining to 1332 waivers, including (1) rescinding 2018 guidance (TRP analysisfact sheet) surrounding 1332 waivers, (2) repealing certain codifications in part one of the Payment Notice Final Rule, and (3) finalizing policies from its proposed rule (TRP analysisfact sheet; press release) regarding the coordinated waiver process, guardrail interpretation and coverage implications, and affordability. Additionally, it repeals the Trump-era separate billing regulation for abortion services as well as the Exchange Direct Enrollment option.  

CMS is also expanding services provided by the federally facilitated Marketplace (FFM) Navigators to reinstate the requirement that FFM Navigators provide consumers with information and assistance on certain post-enrollment topics. Furthermore, this rule codifies provisions in the proposed rule related to user fee rates and essential health benefits (EHBs).  The final rule is expected to be published in the Federal Register on September 27, 2021, with an expected effective date of October 27, 2021.

HHS OIG Report Scrutinizes MA Insurers

The Department of Health and Human Services (HHS) published a report this past Wednesday which found that Medicare insurers obtained roughly $9.2 billion in federal payments through controversial billing practices in 2017. HHS was concerned that Medicare Advantage (MA) contracts leverage chart reviews and health risk assessments (HRAs) to maximize risk-adjusted payments despite beneficiaries not receiving services for those diagnoses. HHS’ Office of the Inspector General (OIG) noted that unsupported risk-adjusted payments have been the main source of improper MA payments and, consequently, a predominant driver of MA costs. HHS has had its eye on MA insures for several years, as two prior OIG reports found that insurers were overutilizing chart reviews and HRAs. However, federal prosecutors and investigators have been paying closer attention to industry practices in recent years.

The 2021 report led HHS to assert that payment mechanisms require more targeted oversight. The investigation focused heavily on the ways in which MA insurers document diagnoses for their enrollees. Insurers receive higher payments for patients with poorer health, leading insurers to leverage chart reviews and HRAs to cash in on higher risk-adjusted payments. The report discovered that 20 companies representing 31 percent of MA enrollment disproportionality accounted for 54 percent of the $9.2 billion in improper payments. The remaining 46 percent of improper payments were attributed to over 240 companies that make up 69 percent of MA membership.

The report ultimately recommended three options based on its findings. The first option is to provide targeted oversight of the top 20 companies that obtained a disproportionate share of risk-adjusted payments. Secondly, HHS suggests that CMS perform additional oversight of the MA company that had a high and disproportionate share of the payments from both chart reviews and HRAs for beneficiaries who may not have received any other services for the diagnoses reported only on these mechanisms. Finally, HHS proposed that CMS should conduct periodic reviews to identify MA companies that generate shares of payments from chart reviews and HRAs that are disproportionately higher than their respective shares of enrolled MA beneficiaries.

White House Continues Push for Vaccine IP Waiver

Last Wednesday, President Biden announced a number of pandemic response goals as part of the administration’s global vaccine summit. One of the goals is to reach a 70 percent vaccine rate for the world by September of 2022, a few months after the World Health Organization’s (WHO’s) mid-2022 goal. The administration chose September because it aligns with the 77th session of the United Nation’s General Assembly. The administration plans to work closely with the WHO’s Access to COVID-19 Tools (ACT) Accelerator and the Multilateral Task Force on COVID-19. Supporting global and regional production are amongst Biden’s efforts to ensure a sufficient supply of vaccines for the medium- and long-term.

Expanding mRNA development, financing possible booster shots, and procuring three billion additional doses should WHO endorse boosters are among other mechanisms that the administration plans to leverage. The U.S. is also asking foreign governments to join in helping to finance and supply vaccines doses for developing nations. The administration aims to provide one billion doses in addition to the already promised two billion doses, and Biden encourages other countries to expedite their vaccine deliveries. Estimates place the cost of support to developing countries at $3 to $7 billion to fund health workforce needs, combat vaccines hesitancy, and address legal requirements.

The World Trade Organization (WTO) and the Biden administration are still negotiating the possibility of waiving some intellectual property (IP) obligations for COVID-19 related products. Lawmakers and activist groups are pushing Biden to propel the negotiations forward, though there has been little progress since WTO members moved to text-based negotiations for the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver. In anticipation of the TRIPS waiver, a South African group is already working to stand up an mRNA vaccine technology transfer hub that would coordinate training for vaccine manufacturers in developing countries.

Medicare Announces Nursing Home Vaccine Tool

Since May, Medicare and Medicaid-certified nursing homes have been required to report COVID-19 vaccine data, available on the COVID-19 Nursing Home Data website. Now, the Centers for Medicare and Medicaid Services (CMS) is addressing complaints that the data is too difficult to find by making it available on the “Care Compare” feature of With the Care Compare tool, users can compare up to three nursing homes and view vaccination rates for staff and residents. The feature also shows state and national averages compared to the facility’s rate. The tool indicates to consumers that facilities with higher vaccination rates are higher-quality facilities. Heightening accessibility to vaccine data also applies pressure for facilities to encourage their staff to get vaccinated in order to remain competitive.

The national vaccine rate for nursing home residents is 84 percent, while staff rates lag at about 64 percent. Low staff vaccination rates are raising concern as unvaccinated nursing home staff are perpetuating infections in facilities. Specifically, Senate Finance Chair Ron Wyden (D-OR) and Special Committee on Aging Chair Bob Casey (D-PA) urged Medicare to address the issue. However, the vaccination rate of nursing home staff has only risen two percent from 62 percent since CMS issued a requirement for nursing home staff to receive vaccinations in August. The emergence of the delta variant catalyzed the regulation as nursing homes disproportionately bear the brunt of pandemic-related deaths.