Health Care Checkup: July 14, 2023

Health Care Checkup

July 14, 2023

THE BIG PICTURE: KEY CONGRESSIONAL, EXECUTIVE BRANCH, AND LEGAL DEVELOPMENTS OVER THE PAST TWO WEEKS

This week, the Centers for Medicare & Medicaid Services (CMS) issued several important proposed rules regarding Medicare payment policy. On Thursday, CMS issued the calendar year (CY) 2024 Medicare Physician Fee Schedule (PFS) proposed rule to announce rate updates. Overall proposed payment amounts under the PFS would be reduced by 1.25% compared to CY 2023. CMS is also proposing increases in payment for many visit services, such as primary care, and these proposed increases require offsetting and budget neutrality adjustments to all other services paid for under the PFS, by law. The proposed CY 2024 PFS conversion factor is $32.75, a decrease of $1.14, or 3.34%, from CY 2023. Read the fact sheet here, and the PFS proposed rule here.

Also this week, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2024 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule, which included several polices to expand behavioral health access and increase hospital price transparency that if finalized, would be effective starting January 1, 2024. Read the CMS press release here, and proposed rule here.

This week, the White House announced that it is reviewing a proposal updating mental health parity requirements that employers sponsoring health plans have been calling for. The proposal is meant to clarify plans’ and issuers’ obligations under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The proposal also will make changes to the existing rules to bring them in line with requirements under the Consolidated Appropriations Act, 2021, according to the notice (RIN: 1210-AC11) posted July 10 by the Office of Management and Budget. The new proposed rule will be issued by the departments of Labor and Health and Human Services, and the Internal Revenue Service.

On Thursday, The House Energy and Commerce, Subcommittee on Health held a markup of 17 health bills that included a reauthorization of a key federal pandemic preparedness law, the Pandemic and All-Hazards Preparedness Act (PAHPA) (H.R. 4420). All 17 bills passed, mostly on party lines. The full Energy and Commerce Committee is expected to vote on the measure tentatively on July 19. Read more information on the bills, amendments, and votes here.

On Tuesday, Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Ranking Member Robert C. “Bobby” Scott (D-VA) announced the introduction of a bipartisan health care package comprised of four bills (H.R. 4509, H.R. 4507, H.R. 4527, and H.R. 4508) all of which passed during the markup on Wednesday.

On Thursday, House Appropriations Republicans released the Labor-HHS-Education bill proposing funding cuts to dozens of federal programs. The House appropriators’ Labor-HHS-Education bill would lower discretionary spending for the Department of Health and Human Services (HHS) by $14 billion, leaving the agency with $103.3 billion for fiscal year (FY) 2024. In addition, the legislation would eliminate Title X family planning grants and the Agency for Healthcare Research and Quality. Overall, the Labor-HHS bill would eliminate 61 total federal programs. The bill will likely face strong opposition in the Democratic-controlled Senate. Read the bill here and a summary accompanying the release here.

On Thursday, Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) introduced the Community Health Care Reauthorization Act (as-yet-unnumbered bill), which if passed would approve additional funding for community health centers, the National Health Service Corp and graduate medical education programs. Cassidy’s bill comes after little progress in negotiations between him and Committee Chair Bernie Sanders’ (I-VT) in the nearly two months since the chair’s plan was announced. Without reauthorization, the programs’ funding will expire at the end of September. Read the Community Health Care Reauthorization Act bill here.

Late last week, President Biden announced four new actions aimed at lowering health care costs and limit short term insurance plans as part of a “Bidenomics” push. These actions include: (1) limiting short-term limited duration insurance plans (STLDI) (2) reducing surprise medical billing contractual loopholes, (3) launching an inquiry on medical credit cards and loan products and (4) a new HHS report on predicted prescription drug savings for Medicare beneficiaries with policies implemented the under the Inflation Reduction Act (IRA). Read the fact sheet here.

Also last week, in consideration of the Supreme Court’s decision in American Hospital Association v. Becerra, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining the proposed remedy for the 340B-acquired drug payment policy for Calendar Years (CY) 2018-2022. CMS is publishing this proposed rule to remedy the payment rates the Court held were invalid. CMS is proposing to make a $9 billion payment to affected providers for 340B-acquired drugs as a one-time lump sum payment for claims covering CYs 2018 through 2022. More information on the proposed rule can be found in the CMS fact sheet here, and read the proposed rule here.

On Wednesday, a coalition of 31 attorneys general released a letter asking lawmakers to back the Reentry Act (H.R. 2400) to allow Medicaid-eligible inmates within 30 days of release to resume receiving Medicaid benefits, such as opioid use disorder treatment, and the Due Process Continuity of Care Act (S.971) to allow incarcerated individuals awaiting trial to remain eligible for Medicaid prior to conviction. A hearing in the House Energy and Commerce subcommittee is scheduled for July 21. Read the letter here.

What to Expect Next Week:

The Energy and Commerce Committee tentatively plans to consider reauthorization of the Pandemic and All-Hazards Preparedness Act (PAHPA) at a full E&C Committee markup on July 19, but could be pushed to July 27.
The Senate Health, Education, Labor, and Pensions Committee is planning to hold a markup of legislation to reauthorize the Pandemic and All-Hazards Preparedness Act (PAHPA) on July 20.
The Senate Appropriations Committee tentatively plans to mark up its version of the Labor-HHS-Education spending bill on July 27.
The Federal Trade Commission (FTC) tentatively plans to vote on issuing a statement on July 20, to caution against use of pharmacy benefit manager studies “that no longer reflect current market realities.”

DEEP DIVE

Executive Branch:

CMS Issues Calendar Year 2024 Medicare Physician Fee Schedule (PFS) Proposed Rule

On Thursday, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2024 Medicare Physician Fee Schedule (PFS) proposed rule to announce rate updates. Overall proposed payment amounts under the PFS would be reduced by 1.25% compared to CY 2023. CMS is also proposing increases in payment for many visit services, such as primary care, and these proposed increases require offsetting and budget neutrality adjustments to all other services paid for under the PFS, by law. The proposed CY 2024 PFS conversion factor is $32.75, a decrease of $1.14, or 3.34%, from CY 2023.

CMS is also proposing coding and payment for several new services to help underserved populations, including paying for certain caregiver training services in specified circumstances, separate coding and payment for community health integration services, payment for Principal Illness Navigation services, coding and payment for social determinants of health risk assessments, and payments for certain dental services prior to and during several different cancer treatments. CMS is additionally proposing adding additional telehealth services under the PFS to the Medicare Telehealth Services List. Read the fact sheet here, and the PFS proposed rule here.

CMS Issues Calendar Year OPPS and ASC Payment System Proposed Rule to Expand Behavioral Health Access and Further Efforts to Increase Hospital Price Transparency

On Thursday, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2024 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule, which included several polices to expand behavioral health access and increase hospital price transparency that if finalized, would be effective starting January 1, 2024:

Establish payment and program requirements for the benefit across various settings and establish payment for intensive outpatient program services provided by Opioid Treatment Programs (OTPs)
Strengthen the hospital price transparency regulations to include new requirements to standardize the hospital’s display of standard charge information in their machine-readable file and new requirements governing how hospitals must publicly post those files on their websites.
Improve and streamline CMS enforcement capabilities for hospitals and health systems.

Read the CMS press release here, and proposed rule here.

Hospital Outpatient Prospective Payment System: Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022 Proposed Rule (CMS 1793-P)

Late last week, in consideration of the Supreme Court’s decision in American Hospital Association v. Becerra, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining the proposed remedy for the 340B-acquired drug payment policy for Calendar Years (CY) 2018-2022. Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs or biologicals from manufacturers at discounted prices. CMS is publishing this proposed rule to remedy the payment rates the Court held were invalid. CMS is proposing to make a $9 billion payment to affected providers for 340B-acquired drugs as a one-time lump sum payment for claims covering CYs 2018 through 2022. As part of this proposed remedy, CMS proposes to maintain budget neutrality as required by statute, reducing future non-drug item and service payments by adjusting the Hospital Outpatient Prospective Payment System (OPPS) conversion factor by minus 0.5% starting in CY 2025. This proposed rule will have a 60-day comment period, which will end on September 5, 2023. More information on the proposed rule can be found in the CMS fact sheet here, and read the proposed rule here.

HHS Issues Proposed Rule to Advance Non-discrimination in Health and Human Service Programs for LGBTQI+

On Wednesday, the Department of Health and Human Services (HHS) through the Office for Civil Rights (OCR) and the Assistant Secretary for Financial Resources (ASFR) announced a Notice of Proposed Rulemaking (NPRM) to affirm civil rights and equal opportunity for people nationwide in HHS funded programs and services. The proposed rule, Health and Human Services Grants Regulation (HHS Grants Rule), if finalized, would clarify and reaffirm the prohibition on discrimination on the basis of sexual orientation and gender identity in federal statutes administered by HHS, consistent with the Supreme Court’s decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020). The proposed rule would confirm non-discrimination protections in HHS programs, including Head Start, as well as services and grants that provide aid to refugees, assistance to people experiencing homelessness, substance abuse treatment and prevention, community mental health services, maternal and child health services, and community services. The proposed HHS Grants Rule also includes a provision that ensures that those with religious objections may seek an exemption from or modification of program requirements, as appropriate. HHS encourages all stakeholders, to submit comments within 60 days of publication in the Federal Register available here. Read the HHS press release here.

GAO Finds Risk Evaluation and Mitigation Strategy (REMS) Revisions Rules Are Not Able to Be Overturned Under the Congressional Review Act

Late last week the Government Accountability Office (GAO) published a report finding that, the U.S. Food and Drug Administration’s (FDA) revision of a Risk Evaluation and Mitigation Strategy (REMS) drug safety program is not a rulemaking and is not subject to a legislative overrule under the Congressional Review Act, preserving FDA’s authority to tighten or loosen drug safety restrictions independently. The GAO report specifically concerned FDA’s January alterations to the REMS for mifepristone and shields the agency’s loosening of the mifepristone REMS from a possible repeal. FDA determined that a requirement to dispense the pill in person was no longer necessary, but that pharmacies should be specially certified to dispense mifepristone. The decision is significant for the FDA, since a determination to the contrary would have allowed a congressional veto on drug approvals and would have limited the agency’s independent decision-making powers on pharmaceuticals. Read the GAO decision here.

President Biden Announces New Actions to Lower Health Care Costs and Protect Consumers

Late last week, President Biden announced four new actions aimed at lowering health care costs and limit short term insurance plans as part of a “Bidenomics” push. These actions include: (1) limiting short-term limited duration insurance plans (STLDI) to three months with a one-month renewal period, (2) reducing surprise medical billing contractual loopholes, (3) the Consumer Financial Protection Bureau (CFPB), the U.S. Department of Health and Human Services (HHS), and Treasury to launch an inquiry on whether health care providers and third-party efforts encourage consumers to sign up for medical credit cards and loan products without fully understanding the risks, and (4) a new report from the Department of Health and Human Services (HHS) on predicted prescription drug savings for Medicare beneficiaries with policies implemented the under the Inflation Reduction Act (IRA). Read the fact sheet here.

HHS Issues Proposed Rule to Modify Definition of Short-term, Limited-Duration Insurance (STLDI)

Late last week, the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments) released a notice of proposed rulemaking (NPRM) to modify the definition of short-term, limited-duration insurance (STLDI) and modify the conditions for hospital indemnity or other fixed indemnity insurance to be considered an excepted benefit. These changes are largely viewed as a reversal of Trump Administration rules regarding STLDI. The Departments propose to amend the federal definition of STLDI to limit the length of the initial contract period to no more than three months and the maximum coverage period to no more than four months, taking into account any renewals or extensions. This proposal, if finalized, would reduce the maximum length of STLDI from the current initial contract term length of less than 12 months and maximum total duration of up to a total of 36 months, including renewals and extensions. The proposed rule estimated its provisions regarding short-term limited duration coverage would increase ACA marketplace enrollment by 60,000 each year in 2026, 2027, and 2028. The NPRM also solicits comments regarding specified disease excepted benefits coverage and comments regarding level-funded plan arrangements. The NPRM further includes a proposal from the Department of the Treasury and the Internal Revenue Service that would clarify the tax treatment of certain benefit payments in fixed amounts received under employer-provided accident and health plans. Written comments must be received by September 11. Read the fact sheet here and the proposed rule here.

HHS Issues the First Reports to Congress on the Impact of the No Surprises Act

The Department of Health and Human Services (HHS), through the Assistant Secretary for Planning and Evaluation (ASPE), late last week on July 6, issued the first in a series of reports to Congress on the impact of the No Surprises Act. The No Surprises Act was passed as part of the omnibus legislation funding the federal government for fiscal year 2021 and took effect January 2022. The report establishes a framework for evaluation of the law’s impact on surprise billing, health care costs, and consolidation that will be used in future reports evaluating the impact of the law. The Departments also released a frequently asked questions (FAQs) document further clarifying surprise billing and out-of-pocket cost protections for consumers under the No Surprises Act and the Affordable Care Act (ACA), helping to ensure that consumers receive the appropriate protections under these laws. The FAQs also reiterate requirements for plans and issuers to make price information available to consumers, including information on facility fees. See the FAQ sheet here, and read the ASPE report here.

CFPB, HHS, and Treasury Issues Request for Information on High-cost Specialty Financial Products Offered to Patients for Health Care Costs

Late last week, the Consumer Financial Protection Bureau (CFPB), U.S. Department of Health and Human Services (HHS), and U.S. Department of Treasury (Treasury) launched an inquiry into high-cost specialty financial products, such as medical credit cards and installment loans, that are offered to patients as a way to pay for routine medical care and which can drive up health care costs and medical debt. The request for information builds on CFPB research on medical payment products and medical billing and collections, in addition to other actions by the CFPB and Federal agencies to relieve the burden of medical debt and collections practices. The three agencies seek information about the prevalence of these products, patients’ experiences with them, and health care providers’ incentives to offer these high-cost products to patients, which may include avoiding the insurance claims process and financial assistance programs. The CFPB will use public input as it considers ways to address potential patient harms caused by these specialty financial products. The CFPB encourages comments and data from the public and all interested stakeholders. Comments must be received within 60 days of the request for information being published in the Federal Register. Read the press release here and the request for information here.

HHS Report Projects 36% Of Part D Enrollees to Save $400 Each Post-Benefit Redesign

A new report released late last week from the Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE), predicts nearly 19 million seniors will save $400 on average per year on prescription drugs after Medicare implements its new $2,000 annual drug spending cap in 2025. This is one of several new policies to take effect as part of the Inflation Reduction Act’s (IRA) overhaul of the Part D benefit design. Among this subset of beneficiaries, nearly 1.9 million are expected to save at least $1,000 on prescription drugs in 2025 due to the annual spending cap. Once all the elements of the Part D redesign are implemented, including elimination of the coverage gap phase and elimination of the 5% enrollee cost-sharing in the catastrophic phase, out-of-pocket spending is projected to drop by $7.4 billion collectively, according to ASPE. Read the full report here.

White House Releases National Response Plan to Address the Emerging Threat of Fentanyl Combined with Xylazine

On Tuesday, the White House Office of National Drug Control Policy (ONDCP) released a National Response Plan outlining action steps the federal government will pursue to address the threat of fentanyl combined with xylazine, to protect public health and public safety. This follows on the heels of the TRANQ Research Act (H.R.1734), which passed the House May 11, and would require the National Institute of Standards and Technology (NIST) to support research related to xylazine. The White House is seeking to reduce xylazine-related fatalities by 15% in at least three of the country’s four census regions by 2025. The plan outlines action steps and key responsibilities for departments and agencies across the federal government and directs them to develop and submit an Implementation Report to the White House in 60 days. Read the fact sheet here, and the full National Response Plan to Fentanyl Combined with Xylazine here.

White House Reviews Mental Health Parity Proposal

This week, the White House is reviewing a proposal updating mental health parity requirements that employers sponsoring health plans have been calling for. The proposal is meant to clarify plans’ and issuers’ obligations under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The law requires most health plans or health insurers that offer mental health substance use disorder coverage to make the benefits comparable to medical and surgical benefits. Employers that sponsor health plans have called on the Department of Labor (DOL) to provide examples of the type of analysis the plans should be providing to document the basis for nonquantitative mental health treatment limits that differ from other medical benefits. In January 2022, the DOL issued a report to Congress finding that health plans and insurers were not meeting the analysis requirements. The proposal also will make changes to the existing rules to bring them in line with requirements under the Consolidated Appropriations Act, 2021, according to the notice (RIN: 1210-AC11) posted July 10 by the Office of Management and Budget. The new proposed rule will be issued by the departments of Labor and Health and Human Services, and the Internal Revenue Service.

CMS Deputy Administrator Addresses Bona Fide Marketing for Medicare Drug Price Negotiations

At a roundtable on Monday, the Centers for Medicare and Medicaid Services (CMS) Deputy Administrator Meena Seshamani addressed how the agency will implement Medicare drug price negotiations this year, including what criteria the agency might use to determine whether a drug has a generic competition. Seshamani stated if a drug has generic competition, it would be excluded from the list of drugs CMS will select for drug price negotiations later this year and in the future, and implied CMS will make determinations for exemptions case by case. The criteria discussion was partly sparked by a new article in The New England Journal of Medicine in which academics argued CMS must more clearly define what counts as so-called bona fide marketing of a generic or biosimilar drug; a term that describes how much market share and over what time period a generic or biologic gains after FDA approval.

CMS Drafting PET Scan National Coverage Determination, To Cover Alzheimer’s MRIs

CMS will soon propose a national coverage determination loosening current PET scan restrictions and will cover reasonable and necessary MRIs, alongside gathering observational data on potential adverse effects linked to the newly approved Alzheimer’s drug Leqembi (lecanemab). Currently Medicare covers one positron emission tomography (PET) scan per lifetime to detect amyloid beta plaque, but the agency is reconsidering, and intends to issue a proposed national coverage determination (NCD) soon. FDA granted full approval to Leqembi, made by Biogen Inc. and Eisai Inc., on Thursday, July 6. CMS immediately made available its registry for prescribing physicians, which patients must participate in as a condition of receiving Medicare coverage. CMS plans to conduct an observational study of patients using anti-amyloid drugs, based on registry and Medicare claims data, with initial results to be posted once a minimum sample size has been observed for 24 months.

Congressional:

E&C Health Subcommittee Markup of 17 Bills Including Pandemic and All-Hazards Preparedness Act

on Thursday, The House Energy and Commerce, Subcommittee on Health held a markup on 17 health bills that included a reauthorization of a key federal pandemic preparedness law, the Pandemic and All-Hazards Preparedness Act (PAHPA) (H.R. 4420), as well as two contentious bill (H.R. 3887) that would prohibit children’s hospitals that perform gender-affirming care from accessing Medicare training funding for pediatricians, and (H.R. 824) the Telehealth Benefit Expansion for Workers Act which is exempted from Affordable Care Act guidelines. All 17 bills passed, many narrowly on party lines. The markup, however, did not include a Food and Drug Administration (FDA) program, which expires Sept. 30, that incentivizes development of new drugs to prevent or treat biological, chemical, radiological, or nuclear threats. Rep. Richard Hudson (R-NC), who was leading PAHPA said it was necessary to keep the bill narrowly focused to ensure it can pass on the House floor. In the Senate, a discussion draft to reauthorize the pandemic preparedness law contained a partisan GOP proposal to expand the priority review voucher program. The full Energy and Commerce Committee is expected to vote on the measure tentatively on July 19. Read more information on the bills, amendments, and votes here.

Education and the Workforce Committee Leaders Markup Bipartisan Health Care Package

On Tuesday, Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Ranking Member Robert C. “Bobby” Scott (D-VA) announced the introduction of a bipartisan health care package comprised of four bills, all of which passed during the markup on Wednesday:

Transparency in Billing Act: H.R. 4509 would require hospitals to have accurate bill practices in place to get paid by group health plans. Read the bill text here.
Transparency in Coverage Act: H.R. 4507 would codify federal price transparency rules and require pharmacy benefit managers to provide health plans certain information about drug spending and fees. Read the bill text here.
Health DATA Act: H.R. 4527 would prohibit contracts between health plans and providers that limit access to cost or quality-of-care information about their plan. Read the bill text here.
Hidden Fee Disclosure Act: H.R. 4508 would strengthen federal requirements that pharmacy benefit managers and third-party administrators disclose compensation data to fiduciaries. Read the bill text here.

Republicans Propose Funding Cuts for Dozens of Federal Programs in the Labor-HHS-Education Bill

On Thursday, House Appropriations Republicans released the Labor-HHS-Education bill proposing deep funding cuts to dozens of federal programs. The House appropriators’ Labor-HHS-Education bill would lower discretionary spending for the Department of Health and Human Services (HHS) by $14 billion, leaving the agency with $103.3 billion for fiscal year (FY) 2024, which is about 12% lower than enacted for FY2023, and $26 billion below President Biden’s request for FY2024. In addition, the legislation would eliminate Title X family planning grants and the Agency for Healthcare Research and Quality, as the committee argued the agency duplicates other HHS research programs. The committee also proposes reducing funding for both the Centers for Disease Control and Prevention and the National Institute of Health. Overall, the Labor-HHS bill would eliminate 61 total federal programs. The bill will likely face strong opposition in the Democratic-controlled Senate. Read the bill here and a summary accompanying the release here.

Senate Veterans’ Affairs Committee Hearing Addresses Bipartisan Health Care Legislative Package

On Wednesday, the Senate Veterans’ Affairs Committee held a hearing to work on a bipartisan health care legislative package. The committee considered 19 bills, which included efforts to put more scrutiny on the VA’s electronic health record program, bolster long-term care and reduce veterans’ homelessness, and increasing community care to allow veterans to get care outside the VA. Committee Chair Jon Tester (D-MT) spoke on the Making Community Care Work for Veterans Act (as-yet-unnumbered bill), which would help strengthen the community care program established in the VA MISSION Act (S.2372), which became law in 2018. The VA came out against key parts of the legislation in written testimony, saying it could create "significant operational challenges,” and also opposed significant portions of Ranking Member Jerry Moran’s (R-KS) community care bill (S.1315). The Disabled American Veterans group also was critical of Tester and Moran’s bills, saying their provisions codifying access standards will not “by itself” increase access to care, but boosting infrastructure and staffing would. Sen. Moran suggested there could be a compromise bill with Tester’s legislation and his own. Read the witness testimonies here.

Senators Wyden and Crapo Announce Finance Markup of Pharmacy Benefit Manager Proposals

On Wednesday, Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) announced that the committee will mark up legislative proposals to modernize and enhance federal prescription drug programs on Wednesday, July 26^th at 2 p.m. The committee package will focus on addressing pharmacy benefit manager practices (PBM) including the Modernizing and Ensuring PBM Accountability Act (at-yet-unnumbered bill). In addition, the Senators sent a letter to the Congressional Budget Office (CBO) requesting budgetary estimates in advance of the markup for the following policies: (1) Strengthening Part D patient access to pharmacies of their choice in their communities; (2) Reducing patient out-of-pocket costs and abating perverse incentives caused by prescription drug rebates; (3) Mitigating PBM steering on specialty medicines; (4) Bolstering transparency and reporting requirements for PBM-owned pharmacies; and (5) Increasing patient access to lower cost biosimilar and generic medicines. Read the press release here and the bill draft here.

Senator Cassidy Introduces Health Reauthorization Bill

On Thursday, Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) introduced the Community Health Care Reauthorization Act (as-yet-unnumbered bill), which if passed would approve additional funding for community health centers, the National Health Service Corp and graduate medical education programs. Top senators on the HELP Committee have agreed on most provisions but differ in their consensus over how to fund the program. Ranking Member Cassidy’s bill proposes a $400 million increase for community health centers over two years, whereas Committee Chair Bernie Sanders’ (I-VT) reauthorization plan proposes $130 billion for community health centers and $60 billion in funding to help grow the workforce over five years. Cassidy’s bill comes after little progress in negotiations between him and Sanders in the nearly two months since the chair’s plan was announced. Without reauthorization, the programs’ funding will expire at the end of September. Read the Community Health Care Reauthorization Act bill here.

Senators Bennet (D-CO) and Young (R-IN) Pushes for PASTEUR Act to be Included in Reauthorization of the Pandemic and All Hazards Preparedness Act (PAHPA)

Senators Michael Bennet (D-CO) and Todd Young (R-IN) are working to get their bill, the Pioneering Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act (S.1355), into the upcoming reauthorization of the Pandemic and All Hazards Preparedness Act (PAHPA), set to expire at the end of September. The Senate HELP Committee, Subcommittee on Primary Health and Retirement Security, held a hearing on Tuesday addressing the threat of antimicrobial resistance with the rise of drug-resistant “superbugs.” Hearing witnesses were largely in support of the PASTEUR Act, which if passed, would boost development of treatments to fight drug-resistant infections by paying drug developers upfront for access to new antibiotics. The PAHPA reauthorization has faced opposition with leaders of the Senate HELP Committee, in disagreement over whether the package should include drug pricing or drug approval measures. Read Sen. Bennet’s press release on the PASTEUR Act here.

Senator Sanders (I-VT) Presses HHS to Act to Lower Price of Alzheimer’s Drug Leqembi

On Monday, Senate HELP Committee Chair Bernie Sanders (I-VT) reasserted his threat in a letter to U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra, to hold up HHS nominees, unless the administration takes new policy steps to lower the price of Leqembi, an Alzheimer’s drug covered under Medicare Part B, and other high-priced drugs. Senator Sanders wrote that HHS has not responded to an earlier letter he sent in June asking how the $26,500 price tag for Leqembi would impact Medicare premiums, the overall finances of the Medicare program and out-of-pocket drug costs for beneficiaries. Sanders remains resolved to have the Biden administration craft and promote a new comprehensive plan for lowering prescription drug costs across the country. Sanders is prepared to withhold hearings for key federal health nominees, including President Biden’s pick of Monica Bertagnolli to head the National Institutes of Health (NIH) and Mandy Cohen to lead the Centers for Disease Control and Prevention (CDC), until such a plan is created. Sanders also demanded that Becerra answer several of his questions about Leqembi’s estimated cost for older adults and Medicare and noted that if he does not receive a response by July 21, he will invite Becerra to testify before the HELP Committee. Read the letter here.

E&C Investigation Alleges Key NIH Officials Served Unlawfully

On Monday, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) alleges in a letter that 14 National Institutes of Health (NIH) officials, including former National Institutes of Allergy and Infectious Diseases (NIAID) Director Dr. Anthony Fauci, were not properly reappointed to their positions in December of 2021. Chair Rodgers, along with Subcommittee on Health Chair Brett Guthrie (R-KY) and Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), began their investigation in March of 2022 and revealed their findings publicly in a letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra. The committee stated in the letter, "the failure to reappoint the above NIH IC Directors jeopardizes the legal validity of more than $25 billion in federal biomedical research grants made in 2022 alone." Section 2033 of the 21st Century Cures Act, titled Increasing Accountability at the National Institutes of Health, lays out the framework by which NIH IC Directors must be appointed and reappointed. Specifically, it requires the Secretary of HHS to reappoint NIH IC Directors, including those who were serving at the time of the law’s enactment when their five-year terms expired on December 12, 2021.The 21st Century Cures Act also requires NIH IC Directors “review and make the final decision with respect” to all competitive grant awards issued by their Institute or Center. This makes the NIH IC Directors the final decision maker on grant awards. Rodgers and her colleagues plan to detail their case publicly on July 11. Their letter asks Becerra for a response by July 21. Read the press release here, and the letter here.

Legal Developments & Other:

Home Care and Hospice Group Challenges Medicare Payment Cuts

Late last week, the National Association for Home Care and Hospice (NAHC) sued Medicare and the Department of Health and Human Services (HHS) over changes in home health payment. The NAHC filed the lawsuit, National Association for Home Care & Hospice v. Becerra, in the US District Court for the District of Columbia after Medicare reduced payment rates to 3.925% in 2023, and is now proposing an additional 2.2% decrease in 2024, or an estimated $375 million cut for home health agencies. The NAHC sued, just days after the Biden administration proposed the Medicare cuts, arguing that calculated payment cuts were invalid and will, or are already, limiting access to care for patients. The NAHC alleges the Medicare and HHS methodology was “illogical and invalid” in determining whether expenditures from payment rates established in 2020 were “budget neutral,” in comparison to estimated expenditures that would otherwise have occurred under the previous payment model. The NAHC seeks declaratory and injunctive relief, including a reversal of the rate adjustments in the 2023 rule and requiring Medicare to implement the budget neutrality mandate. Medicare now has 60 days to respond.

Congress Asked to Expand Medicaid to Prisoners

A coalition of attorneys general and law enforcement advocates are pushing Congress to ensure that Medicaid-eligible incarcerated individuals have greater access to substance use disorder treatment. On Wednesday, a coalition of 31 attorneys general released a letter asking lawmakers to back the Reentry Act (H.R. 2400) to allow Medicaid-eligible inmates within 30 days of release to resume receiving Medicaid benefits, such as opioid use disorder treatment, and the Due Process Continuity of Care Act (S.971) to allow incarcerated individuals awaiting trial to remain eligible for Medicaid prior to conviction. Both measures were introduced by Sen. Bill Cassidy (R-LA) and cosponsored by a bipartisan alliance of senators including Jeff Merkley (D-OR), Edward Markey (D-MA), Thomas Tillis (R-NC), Raphael Warnock (D-GA), J. D. Vance (R-OH), and Mark Kelly (D-AZ). A hearing in the House Energy and Commerce subcommittee is scheduled for July 21. Read the letter here.

U.S. Chamber of Commerce Asks Court to Pause Drug Price Negotiations

The U.S. Chamber of Commerce, a lobbying group, and several state and local affiliates want a federal judge to put a hold on the Medicare agency’s drug price negotiation program while the group’s legal challenge proceeds. On Wednesday, the U.S. Chamber of Commerce filed a motion in the US District Court for the Southern District of Ohio requesting a preliminary injunction on the program put in place by the Inflation Reduction Act. The law allows Medicare for the first time to negotiate the prices of some of the drugs it spends the most on. The chamber wants the court to act before October 1, when drug manufacturers subject to the first round of negotiations must sign agreements to enter the price talks, or risk financial penalties under the law. The Centers for Medicare & Medicaid Services must publish by September 1, the list of the first 10 Part D drugs that must lower their drug prices starting in 2026.