Health Care Checkup: December 8, 2023

Health Care Checkup

December 8, 2023

THE BIG PICTURE: KEY CONGRESSIONAL & EXECUTIVE BRANCH DEVELOPMENTS

The House endorsed by voice vote Monday, the Tranq Research Act, Senate-amended legislation that would require the National Institute of Standards and Technology (NIST) to coordinate science and research into illegal drugs containing the horse tranquilizer xylazine. The bill now heads to President Joe Biden for his signature.

On Wednesday, the House Energy and Commerce Committee advanced 19 healthcare bills to the House floor, which included legislation aimed at overhauling the practices of pharmacy benefit managers, lowering drug costs, increasing transparency, and changing various Medicare coverage rules.

What to Expect Next Week:

In the Senate, the Health, Education, Labor, and Pension (HELP) Committee will hold a markup on four bills on Tuesday, which includes the SUPPORT Act and the Modernizing Opioid Treatment Access Act. The Senate is also expected to finish consideration of the NDAA during the first half of next week and send the bill to the House for its consideration.

In the House, the Lower Costs, More Transparency Act, as amended (H.R. 5378), and the Support for Patients and Communities Reauthorization Act, as amended (H.R. 4531), are expected to be considered under suspension of the rules on the House floor. The House will also consider an FAA extension through March 8th under suspension of the rules, vote to authorize a formal impeachment inquiry, and clear the National Defense Authorization Act (NDAA) following Senate passage.

DEEP DIVE

Congressional:

Tranq Research Act Passes House and Senate, Heads to President Biden

The House endorsed by voice vote Monday a Senate-amended legislation requiring the National Institute of Standards and Technology (NIST) to coordinate science and research into illegal drugs containing the horse tranquilizer xylazine. The Tranq Research Act authorizes critical research and development to help authorities better understand, detect, and handle combinations of xylazine, also known as Tranq, and other drugs. The bill now heads to President Joe Biden for his signature.

House Passes Bill Addressing Home Care and Caregiver Programs by the Department of Veterans Affairs

On Tuesday, the House passed the Elizabeth Dole Home Care Act (H.R. 542) in a 414-5 vote under suspension of the rules. The legislation would expand caregiver support for veterans who live in the community, with the condition that the cost of providing noninstitutional alternatives to nursing home care may not exceed 100% of the cost that would have been incurred if a veteran had been furnished VA nursing home care. Exceptions are allowed if the VA determines the higher cost is in the best interest of the veteran. The bill now moves to the Senate.

NDAA Includes Several Health Policy Changes

On Wednesday, the House and Senate National Defense and Authorization Act (NDAA) Conference released a compromise version of the fiscal 2024 NDAA (H.R. 2670), which proposes $886.3 billion in national security spending, mostly within the Department of Defense. Healthcare provisions in the NDAA report included:

A cost-sharing waiver for three mental health outpatient visits for some TRICARE Select and TRICARE Prime beneficiaries, including for family members of active-duty personnel.
An expansion of hearing aid eligibility for children of active duty and some retired members.
A requirement that the defense secretary, in coordination with the secretaries of the military departments, issue regulations ensuring naloxone is available for members of the armed forces, including on all military installations.
A requirement that the defense secretary conduct a study on opioid alternatives for pain management in military treatment facilities.
A program within the DOD to study the treatment of certain conditions using psychedelic substances.
A requirement that the defense secretary conduct a study to assess and evaluate any health conditions arising in members of the armed forces on active duty one year after receiving the first dose of a COVID-19 vaccine.

The package did not include House Republican-supported language barring coverage of gender-affirming care for troops or a prohibition on Covid-related mask mandates in military facilities. It also did not include a pilot program on medical marijuana use for veterans, a report on telemental health care given to service members, Senate-passed provisions targeting fentanyl trafficking, artificial insemination, and assisted reproductive technology as mandatory health care services for troops and dependents. The legislation also stripped a reauthorization of the Radiation Exposure Compensation Act (RECA) and a substantial expansion of that program with compensation and benefits for those harmed by government radiation that had been included in the Senate version of the bill. In addition, an extension of the 9-11 health fund was offset by a one-month extension in 2033 of across-the-board Medicare sequester cuts. The Senate is expected to vote on the legislation next week. Read the Conference Report here.

House to Consider Two Healthcare Bills Under Suspension of the Rules Next Week

On Tuesday, the House announced the Lower Costs, More Transparency Act, as amended (H.R. 5378), and the Support for Patients and Communities Reauthorization Act, as amended (H.R. 4531), are expected to be considered under suspension of the rules on the House floor next week, after the bills were pulled from the schedule in September. The Lower Costs, More Transparency Act was negotiated among the three committees with jurisdiction over health issues and would impose increased transparency requirements for insurers, hospitals, and pharmacy benefit managers. The Support for Patients and Communities Reauthorization Act of 2023 would provide access to substance use disorder treatment and recovery support services, prevention programming, and long-term recovery services. See the full list of bills expected to be considered next week here.

Senate Finance Committee Holds Hearing on Drug Shortages

On Tuesday, the Senate Finance Committee held a hearing on policy solutions to drug shortages. The Senators and witnesses discussed a wide range of policy solutions to improve drug shortages at multiple stages of drug manufacturing, including boosting the domestic production or procurement of pre-curser chemicals, encouraging domestic manufacturing of critical drugs, pay-for-performance drug purchasing incentives, and mandating buffer inventory stock. There was a bipartisan divide on legislative policies to address the shortages, with Democrats focused on the need for government policy solutions to create financial incentives to encourage hospitals and providers to purchase drugs from high-quality manufacturers and incentivize hospitals, manufacturers, or government agencies such as the Drug Enforcement Agency (DEA) to keep a buffer supply of essential drugs. Republicans were in support of market-based solutions and generally opposed to the government incentivizing drugs based on quality, as it would require a federal agency to evaluate all generic drugs and manage incentives. Read Mehlman Consulting’s hearing summary here.

Energy and Commerce Committee Advances 19 Healthcare Bills to the House Floor

On Wednesday, the House Energy and Commerce Committee advanced 19 healthcare bills out of committee to the House floor, which included legislation aimed at overhauling the practices of pharmacy benefit managers, lowering drug costs, and changing Medicare coverage rules. Both PBM bills received broad bipartisan support. Rep. Buddy Carter (R-GA) and Lisa Blunt Rochester’s (D-DE) PBM bill would prohibit PBMs that participate in Medicare Part D from linking service fees to a drug’s list price (H.R. 2880). The other PBM bill (H.R. 5385) from Reps. Greg Landsman (D-OH) and Diana Harshbarger (R-TN) mirrors draft legislation approved by the Senate Finance Committee earlier this year and would create reporting requirements for PBMs under Medicare Part D beginning in 2026. The committee also advanced legislation that would make CMS’ national coverage determination process more transparent and address doctor pay under Medicare. Other bills advanced included legislation facilitating midyear formulary changes for new biosimilars and another bill requiring CMS to review drugs individually in coverage decisions. Read Mehlman’s markup summary here.

Senate HELP Announces Markup on the SUPPORT Act and ESRA

On Tuesday, Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee Bernie Sanders (I-VT) and Ranking Member Bill Cassidy (R-LA) announced that they have reached an agreement to markup legislation reauthorizing the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Reauthorization Act and the Education Sciences Reform (ESRA) Act on Tuesday, December 12 at 10:00 AM. The bills would renew through 2028 portions of a 2018 bipartisan opioid law that lapsed Oct. 1, as well as separate legislation allowing doctors to prescribe methadone, a treatment for opioid use disorder. Read the press release here.

Senate HELP Ranking Member Cassidy Requests Information from Stakeholders on Improving Americans’ Access to Gene Therapies

On Tuesday, Senator Bill Cassidy (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, requested information from stakeholders on ways to improve and protect access to gene therapies for Americans with ultra-rare diseases. Cassidy hopes to use the feedback to inform future legislation to modernize and improve the market structure for gene therapies to ensure that the U.S. commercial health insurance market supports Americans with ultra-rare diseases while ensuring the continued development of innovative gene therapies. The deadline to submit feedback is January 22, 2024. Read the press release and request for information here.

Senators Wyden and Crapo Report Legislative Text from Senate Finance Committee Health Care Markup

On Thursday, Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) announced that the Committee has reported legislation that was marked up in the committee in November. The “Better Mental Health Care, Lower-Cost Drugs, and Extenders Act” expands mental health care and substance use disorder services under Medicaid and Medicare, reduces prescription drug costs for seniors at the pharmacy counter, extends essential Medicaid and Medicare provisions that will expire this year, and increases Medicare payments to support physicians and other providers. Read the final reported legislative text here, and the section-by-section summary can be found here.

Senators Launch Probe of Private Equity Role in Health Care

On Wednesday, Senate Budget Committee Ranking Member Chuck Grassley (R-IA) and Chair Sheldon Whitehouse (D-RI) opened a bipartisan investigation into the impacts of private equity ownership on hospitals. Grassley and Whitehouse sent letters to the chief executive officers (CEOs) of Apollo Global Management, Lifepoint Health, Medical Properties Trust, Leonard Green & Partners, Prospect Medical Holdings, and Ottumwa Regional Health Center. The senators are demanding answers regarding financial transactions that may have impacted the quality of care for patients in hospitals under private equity ownership. To assess the impact of these transactions and address their harmful effects, the Senators are asking for documents and detailed answers about related-party transactions and the degree to which the private equity firms make decisions at these hospitals. Read the press release and letters here.

Notable Bills Introduced:

Reps. Eshoo and McCaul Introduce Bill to Strengthen Development of Pediatric Drugs

On Thursday, Representatives Anna G. Eshoo (D-CA) and Michael McCaul (R-TX) introduced the bipartisan Innovation in Pediatric Drugs Act of 2023 to ensure drugs for rare diseases are studied in children and drug companies are accountable for completing pediatric study requirements. The legislation would require drugs for rare diseases to be studied in children, grant the U.S. Food and Drug Administration (FDA) additional authority to penalize companies that do not complete required pediatric studies on time, and increase funding for the National Institutes of Health (NIH) BCPA Program from $25 million to $50 million. Read the press release here and the bill here.

Senators Padilla, Tillis Introduce Bipartisan Bill to Enhance and Expedite Access to the 9-8-8 Suicide and Crisis Lifeline

On Thursday, Senators Alex Padilla (D-CA) and Thom Tillis (R-NC), co-founders of the bipartisan Senate Mental Health Caucus, introduced legislation to improve and expedite access to the 9-8-8 Suicide and Crisis Lifeline. The Local 9-8-8 Response Act of 2023 would expedite the process of connecting callers with their nearest call center so they can receive appropriate care from mental health professionals as quickly and as safely as possible, while still protecting user privacy. Representative Tony Cárdenas (D-CA), co-chair of the bipartisan House 988 & Crisis Services Task Force, introduced companion legislation in the House of Representatives. Read the press release here and the bill here.

Rep. Schakowsky, Sen. Warren Reintroduce Bicameral Affordable Drug Manufacturing Act

On Wednesday, Representative Jan Schakowsky (D-IL) and Senator Elizabeth Warren (D-MA) reintroduced the Affordable Drug Manufacturing Act, bicameral legislation to address the increasing price of prescription drugs and increase competition in the generic pharmaceutical market by establishing an Office of Drug Manufacturing within the Department of Health and Human Services (HHS) tasked with manufacturing select generic drugs and offering them to consumers at a fair price that guarantees affordable patient access. Read the press release here and the bill here.

Senator Fischer Introduces Legislation to Protect Rural Seniors' Access to Care

On Wednesday, Senator Deb Fischer (R-NE) introduced the Protecting Rural Seniors’ Access to Care Act. The legislation would prohibit the U.S. Department of Health and Human Services (HHS) Secretary from finalizing a proposed nursing home staffing rule that would hurt facilities across rural Nebraska and could force many to close. The legislation is cosponsored by Senators Roger Marshall (R-KS), James Lankford (R-OK), Jon Tester (D-MT), Kyrsten Sinema (I-AZ), Joe Manchin (D-WV), Roger Wicker (R-MS), Susan Collins (R-ME), and Angus King (I-ME). The legislation would also establish an advisory panel on nursing home staffing that includes voices from both urban and rural communities. The panel would submit a report to Congress that analyzes workforce shortages and makes practical recommendations to strengthen the workforce. Read the press release here and the bill here.

Reps. Lieu, Latta, and Kamlager-Dove Introduce Bipartisan Bill to Prevent Fentanyl Overdoses

On Tuesday, Representatives Ted Lieu (D-CA), Bob Latta (R-OH), and Sydney Kamlager-Dove (D-CA) introduced Tyler’s Law, bipartisan legislation aimed at preventing fentanyl overdoses in the United States. Specifically, the bill requires the Department of Health and Human Services (HHS) to complete a study on how frequently hospitals test for fentanyl in patients experiencing an overdose, and to use the results of the study to issue guidance to hospitals on implementing fentanyl testing in emergency rooms. Senator Joe Manchin (D-WV) plans to introduce companion legislation in the Senate. Read the press release here and the bill here.

Senators Budd, Murray Lead Bipartisan Bill Help Military Retain Skilled Nurses

On Monday, Senators Ted Budd (R-NC) and Patty Murray (D-WA) introduced the Retain Educated Workers and Registered Nurses Developing (REWARD) Experience Act, which would empower the Military Health System to retain skilled nurses as they pursue higher education. The legislation gives the hiring manager of a military medical center the ability to waive certain General Schedule (GS) qualification standards related to work experience for nurses at military medical treatment facilities if they deem the nurse or practical nurse fit to perform the required duties. Read the press release here and the bill here.

Executive Branch:

Biden-⁠Harris Administration Announces New Actions to Lower Health Care and Prescription Drug Costs by Promoting Competition

On Thursday, the Biden-Harris Administration announced new actions to promote competition in health care and support lowering prescription drug costs, including the release of a proposed framework for agencies on the exercise of march-in rights on taxpayer-funded drugs and other inventions, which specifies that price can be a factor in considering whether a drug is accessible to the public. As part of the Administration’s efforts to stop anticompetitive mergers and anticompetitive practices, the Department of Justice (DOJ), the Federal Trade Commission (FTC), and HHS will issue a joint Request for Information to seek input about how private equity and other corporations’ increasing power and control of our health care is affecting Americans. The agencies will use this joint Request for Information to identify areas for future regulation and enforcement prioritization. As part of this effort, HHS will appoint a Chief Competition Officer, and DOJ’s Antitrust Division and FTC will name Counsels for Health Care to lead these efforts. Read the fact sheet here.

HHS Announces Next Steps in Ongoing Work to Enhance Cybersecurity for Health Care and Public Health Sectors

On Wednesday, the Department of Health and Human Services (HHS) released a concept paper that outlines the Department’s cybersecurity strategy for the healthcare sector. The concept paper builds on the National Cybersecurity Strategy that President Biden released last year, focusing specifically on strengthening resilience for hospitals, patients, and communities threatened by cyber-attacks. The paper details four pillars for action, including publishing new voluntary healthcare-specific cybersecurity performance goals, working with Congress to develop supports and incentives for domestic hospitals to improve cybersecurity, and increasing accountability and coordination within the healthcare sector. Read the press release here and the concept paper here.

HHS Issues Rule on Enforcement of Medicaid Renewal Requirements

On Monday, the HHS issued an interim final rule allowing the Centers for Medicare and Medicaid Services (CMS) to enforce penalties on state Medicaid programs found out of compliance with income redetermination best practices. The rule will allow CMS to force states to submit correction plans if they fail to meet reporting requirements, do not follow recommended timelines for dropping people, or erroneously kick too many off coverage. States found out of compliance with CMS reporting requirements would see a 0.25 percentage point drop in federal matching funds each quarter they fail to report. Those that fail to submit or implement a corrective action plan would also be forced to suspend all terminations of Medicaid beneficiaries and could see fines of up to $100,000 per day. Read the rule here.

HHS’ Office of Inspector General Uncovers $3.4 Billion in Misspent Funds

Late last week, the Department of Health and Human Services’ Office of Inspector General detailed significant expected recoveries of unauthorized reimbursement from Medicare, Medicaid, and other HHS programs between October 2022 and September 2023 in its semiannual report to Congress. Over $3.4 billion is projected to be returned, including $3.16 billion from investigative work and $283 million from program audits. The report also highlighted instances of fraud and abuse among mental health providers, estimating that Medicare improperly paid $580 million for psychotherapy services that did not meet program requirements in the first year of the COVID-19 public health emergency, including $348 million for unallowable telehealth services. Likewise, the review revealed inaccurate nursing home reporting on Medicare’s Care Compare website. The OIG estimates over 10,000 nursing homes on Care Compare had deficiencies identified during inspections that were not publicly disclosed as required, preventing consumers from making informed choices about nursing home quality and safety. Read the report here.

DEA Eyes Telemedicine Regulations this Month

On Wednesday, the Office of Management and Budget published its fall 2023 unified agenda, which lays out the government’s regulatory plans over the next few months. A new proposal to determine whether doctors can continue to prescribe a drug used to treat opioid use disorder via telemedicine is expected this month, though dates are not set in stone. The DEA’s proposed rule comes after the agency received backlash on its previous proposal to limit telemedicine prescribing of buprenorphine, a drug used in medication-assisted treatment, to a 30-day initial supply. Under pandemic rules, providers could prescribe such controlled substances without an in-person visit. Those rules were extended through November after pushback from treatment advocates. The agency held listening sessions this fall on whether it should create a special registration process to continue those rules. Read the unified agenda here.

FDA Delays Rule Banning Menthol Cigarettes and Flavored Cigars

On Wednesday, the Food and Drug Administration (FDA) delayed rules that would ban menthol cigarettes and flavored cigars. The administration signaled the decision by updating its regulatory agenda to bump the rules from their original target date in August to March 2024. The White House Office of Management and Budget has scheduled meetings on the rules with lobbyists and advocates through January.

Legal & Other:

CVS to Change the Way it Prices Prescription Drugs

On Tuesday, CVS Health announced it is changing the way it sets prices for prescription drugs, shifting away from the complex model pharmacies usually use to determine reimbursement. The company said its nearly 9,500 pharmacies will be reimbursed by contracted pharmacy benefit managers (PBMs) and payors using a formula built on the cost of the drug, a set markup, and a flat fee to cover pharmacy services, expected to launch for commercial payors in 2025. CVS said the new model, called CostVantage, aims to bring “greater transparency and simplicity to the system.” A similar payment model has been promoted by entrepreneur Mark Cuban and his Cost Plus Drugs company, which sells prescription medications at a 15 percent markup plus a $3 pharmacy fee. CVS’s announcement comes as the traditional reimbursement model faces scrutiny with bipartisan bills in both chambers aiming to regulate the PBM industry. Read CVS’ announcement here.

HHS Settles First Phishing Settlement with Medical Group

On Thursday, the Department of Health and Human Services reached a settlement with a Louisiana medical group over a 2021 data breach, marking the first enforcement action the agency has taken against a healthcare organization over a phishing cyberattack. Lafourche Medical Group, which provides emergency medicine, occupational health, and lab testing, agreed to pay $480,000 to the HHS after hackers used a phishing attack to access a company email account containing the protected health information of nearly 35,000 patients. The announcement comes as healthcare organizations face increased scrutiny over cybersecurity in the wake of several major data breaches. The agency found the medical group had conducted no prior risk analysis of potential electronic breaches per HIPAA guidelines. Read the resolution agreement here.

CONGRESSIONAL HEARINGS & EVENTS

House Hearings and Markups:

House Select Subcommittee on the Coronavirus Pandemic - Hearing

Reforming the WHO: Ensuring Global Health Security and Accountability

Wednesday, December 13, at 2:00 PM

Senate Hearings and Markups:

Senate Health, Education, Labor, and Pensions Committee - Markup

To consider S. 1840, SCREENS for Cancer Act of 2023, S. 3392, Advancing Research in Education (AREA) Act, S. 3393, SUPPORT for Patients and Communities Reauthorization Act, and S. 644, Modernizing Opioid Treatment Access Act.

Tuesday, December 12, at 10:00 AM

Senate Health, Education, Labor, and Pensions Committee – Hearing

What is Fueling the Diabetes Epidemic?

Thursday, December 14, at 10:00 AM