Health Care Checkup: March 22, 2024

Health Care Checkup

March 22, 2024

THE BIG PICTURE: KEY CONGRESSIONAL & EXECUTIVE BRANCH DEVELOPMENTS

On Thursday, the House and Senate Appropriations Committees released the second legislative package of FY 2024 appropriations bills. The $1.2 trillion package includes funding for the remaining six spending bills. The House passed the bill under suspension of the rules on Friday morning, securing the two-thirds majority required for passage. However, Republicans fell short of the majority-of-the-majority threshold, and Rep. Majorie Taylor Greene (R-GA) additionally filed a motion to vacate the Speaker’s chair. The bill now heads to the Senate, where it is expected to be processed quickly. Without President Biden's signature by midnight, agencies would face a partial shutdown.

What to Expect Next Week:

The House and Senate will be in recess for the next two weeks and will return to session the week of April 8.

DEEP DIVE

Congressional:

House Passes Second Fiscal Year 2024 Package, Now Heads to Senate

On Thursday, the House and Senate Appropriations Committees released the second legislative package of FY 2024 appropriations bills, the Further Consolidated Appropriations Act, 2024. The $1.2 trillion appropriations package includes funding for the remaining six spending bills: Defense, Labor-HHS-Education, Legislative Branch, Financial Services, Homeland Security, and State-Foreign Operations. The Department of Health and Human Services would receive $117.4 billion, a $955 million boost. The National Institutes of Health would get $48.6 billion, a $300 million increase. And the Centers for Disease Control and Prevention would get $9.2 billion, a $4.5 million increase. The legislation also includes a $75 million increase for mental health research, a $100 million increase for Alzheimer's disease research, a $120 million increase for cancer research, and a $10 million increase for diabetes research.

On Friday morning, the House passed the legislation in a 286-134 vote under suspension of the rules, securing a two-thirds majority for passage. However, Republicans fell short of the majority-of-the-majority threshold, and Rep. Majorie Taylor Greene (R-GA) additionally filed a motion to vacate the Speaker’s chair. The bill now heads to the Senate, where it is expected to be processed quickly. Without President Biden's signature by midnight, agencies would face a partial shutdown. Read the legislative text for the full package here and the joint explanatory statement for HHS here.

House Passes Dr. Michael C. Burgess Preventive Health Savings Act

On Tuesday, the House passed the Dr. Michael C. Burgess Preventive Health Savings Act by voice vote. The bill from Reps. Michael Burgess (R-TX) and Diana DeGette (D-CO) would require the Congressional Budget Office (CBO) to weigh whether a bill would save money over a 30-year budget window instead of 10 if Congress requests it. The nonpartisan CBO’s cost estimates can be crucial factors in whether a bill is signed into law. The vote had strong bipartisan support in the House, but it is not clear whether Senate Majority Leader Chuck Schumer (D-NY) will take up the bill. Read the bill here.

House Energy and Commerce Advances 17 Health Care Bills out of Committee

On Wednesday, the House Energy and Commerce Committee advanced 17 health care bills out of committee. The legislation largely reauthorizes programs set to expire at the end of the fiscal year, including measures to extend the National Alzheimer’s Project, reauthorize a program to deal with provider burnout and bolster rural emergency medical services. Other bills included continuing programs for traumatic brain injuries and boosting funding for Down syndrome research. The one bill that did not receive unanimous backing was the Kidney PATIENT Act (H.R. 5074), which divided Democrats. Sponsored by Rep. Buddy Carter (R-GA), the bill would delay CMS from integrating payments for oral phosphate binders into a bundled payment model for end-stage renal disease until 2027. Currently covered under Medicare Part D, CMS wants to include these drugs in the bundled payment model for kidney disease treatment under Medicare Part B, ensuring access for patients without Part D coverage. However, Rep. Carter and others stated dialysis centers are not ready to dispense these drugs and could potentially increase premiums for all Part B patients. Committee Ranking Member Frank Pallone Jr. (D-NJ) opposed the bill, stating it would impede seniors' access to necessary medication and raise their healthcare costs by further delaying the inclusion into Medicare Part B. Similar legislation passed out of the Ways and Means Committee earlier this year. It is likely that there will be a push by the sponsors to include some version of the bill in a health care package extending expiring Medicare and other health provisions at the end of the calendar year. Read the markup memo here and the bills here.

House Energy and Commerce Committee Holds Hearing on Diagnostic Test Regulation

On Thursday, the House Energy and Commerce Health Subcommittee held a hearing to examine diagnostic test regulation and the impact of the FDA’s proposed rule to regulate lab tests as medical devices. Republicans on the Subcommittee made their case that the FDA exceeded its authority with the proposed rule. However, Democrats backed the FDA's effort, saying it's needed to ensure accuracy and reliability. There was bipartisan support that legislation would be better than agency action, but there was no clear consensus on how to handle it. Some members suggested that changing the VALID Act, which failed to become law in 2022, could be a path forward. E&C Chair Cathy McMorris Rodgers (R-WA) stated the FDA's regulation would be too pricey to comply with. Ranking member Frank Pallone (D-NJ) stated the FDA’s rule could reduce unnecessary treatments or undertreatment due to inaccurate tests. Read more on the hearing here.

House Appropriations and Ways and Means Committee Hold Hearings with HHS Secretary Becerra

On Wednesday, the House Appropriations Committee, followed by the House Ways and Means Committee, held back-to-back hearings on the $130.7 billion FY2025 discretionary spending request for Health and Human Services (HHS). Witness, HHS Secretary Xavier Becerra, fielded questions on a wide range of topics. Republicans asked Becerra about Medicare's new drug price negotiation initiative, the handling of unaccompanied children at the southern border, and the department's decision to recommend that the Drug Enforcement Administration demote marijuana from Schedule I to Schedule III of the federal drug code. Other health policy issues brought up during the hearings included the HHS response to the Change cyber-attack, parameters around social aid programs, expected revisions to industry guidance on surprise medical bills, and the impact of an expected rule on nursing home staffing requirements. Rep. Bill Pascrell Jr. (D-NJ) also questioned Becerra on the department’s continued decision not to require unique identifiers for medical devices on insurance claims, citing the death of a close friend from a hip operation. Read Becerra’s Ways & Means hearing testimony here, and the Appropriations hearing testimony here.

House E&C Leaders Launch Bipartisan Oversight Inquiry into Organ Transplant Contractor and Implementation of Bipartisan Reforms

On Thursday, bipartisan leaders of the Energy and Commerce Committee launched an investigation into United Network for Organ Sharing (UNOS), the contractor responsible for operating the Organ Procurement and Transplantation Network (OPTN). The Leaders are also seeking information from the Health Resources and Services Administration (HRSA) regarding ongoing reforms. The effort seeks to examine issues with OPTN’s prior operation and ensure proper implementation of the bipartisan Securing the U.S. Procurement and Transplantation Network Act, which was passed unanimously by the Committee and by Congress and signed into law by President Biden on September 22, 2023. The Committee Leaders wrote to HRSA requesting information on how its OPTN contract solicitation plan will support fair and competitive practices during the contracting process, promote data transparency and patient safety, and ensure system security and operability. Read the press release and letter here.

MedPAC Calls for Medicare Physician Payment Update

Late last week, the Medicare Payment Advisory Commission (MedPAC), recommended Congress update pay for doctors based on inflationary pressures. In its report to Congress, MedPAC’s recommended that Medicare payments to doctors in 2025 be tied to 50 percent of the Medicare Economic Index, which would adjust payments based on inflation. MedPAC’s recommendation comes less than a week after the president signed into law a bipartisan spending deal that narrowed some of the 2024 cuts to physician Medicare pay. The agreement softened the 3.4 percent doctor pay decrease enacted in the 2024 Medicare Physician Fee Schedule final rule, providing a 1.7 percent bump. Read the report here.

Notable Bills Introduced:

Sens. Scott, Schatz Introduce Telehealth Modernization Legislation

On Wednesday, Senator Tim Scott (R-SC) and Senator Brian Schatz (D-HI) led six of their Senate colleagues in reintroducing the Telehealth Modernization Act, which updates coverage restrictions. With telehealth flexibilities set to expire at the end of 2024, this legislation would protect Medicare beneficiaries' access to telehealth services, especially patients in rural communities. Rep. Buddy Carter (R-GA) is leading companion legislation in the House. Read the press release here and the bill here.

Reps. Spanberger, Bacon Introduce Bipartisan Bill to Create an Emergency Reserve of Active Pharmaceutical Ingredients

Late last week, Reps. Abigail Spanberger (D-VA) and Don Bacon (R-NE) reintroduced bipartisan legislation to create an emergency supply of key ingredients used in essential generic medicines and incentivize domestic manufacturing of these ingredients. The Promoting Readiness and Ensuring Proper Active Pharmaceutical Ingredient Reserves of Essential Medicines (PREPARE) Act would require the Secretary of the U.S. Department of Health and Human Services (HHS) to maintain a list of essential generic medicines and create an emergency supply of the API necessary for those medicines — with a preference for American manufacturers and contractors. Read the press release here and the bill here.

Executive Branch:

HHS Responds to Cyberattack on Change Healthcare, Faces Backlash from Congress

On Monday, the Department of Health and Human Services (HHS) officials met with Medicare and Medicaid insurers to urge them to make payments to rural and independent providers impacted by the Change Healthcare hack. During the meeting, HHS officials stated the crisis has improved since last week, with claims starting to flow, but they are still hearing from small, rural safety net providers facing significant cash flow issues as a result of the hack. HHS officials also noted they secured assurances from insurers they would provide financial assistance, but did not name specific insurers. Payers were told at the meeting they should follow the example of the Centers of Medicare and Medicaid Services, which has made accelerated and advance payments to Part A and Part B providers. HHS officials stated they did not have data yet on how many requests have been received from that program or how much funding has been disbursed. Read the HHS press release here.

However, HHS continues to face backlash in Congress over its response to the cyberattack. Sens. Bill Cassidy (R-LA) and Tommy Tuberville (R-AL) criticized the department for an inadequate response and failure to provide regular updates to Congress in a letter to HHS Secretary Xavier Becerra on Thursday. Their letter comes on the heels of another letter from 96 lawmakers earlier this week urging the HHS to ensure timely payments to providers.

CMS Announces Voluntary ACO Primary Care Payment Model

On Tuesday, the Centers for Medicare and Medicaid Services announced a new voluntary model that empowers primary care providers in eligible Accountable Care Organizations (ACOs) to treat people with Medicare using innovative, team-based, person-centered proactive care. The ACO Primary Care Flex Model (ACO PC Flex Model) will provide a one-time advanced shared savings payment and monthly prospective primary care payments (PPCPs) to ACOs. The advanced shared savings payments provide ACOs with needed resources and flexibility to cover costs associated with forming an ACO (where relevant) and administrative costs for required model activities. PPCPs will be distributed by ACOs to primary care practices, giving them improved resources and flexibility to provide care that best suits individuals’ needs. The model will begin January 1, 2025, and will last for five years. CMS is planning to select approximately 130 ACOs to participate in the model. Read the press release here.

HHS Updates Online-Tracking Guidance After Hospitals’ Lawsuit

On Monday, the HHS’ Office for Civil Rights offered new information related to compliance with the 1996 Health Insurance Portability and Accountability Act in an update to guidance initially published in a December 2022 bulletin. The revisions added a section on the office’s enforcement priorities when providers deploy digital analytics and advertising tools and included more qualifying language. The changes come after four hospital and health groups sued HHS in November 2023, alleging the original guidance constituted a significant policy shift that should have been subject to the regulatory rulemaking process. Read the updated guidance here.

President Biden Issues Executive Order and Announces New Actions to Advance Women’s Health Research and Innovation

On Monday, President Biden signed a new Executive Order that directs a comprehensive set of executive actions to expand and improve research on women’s health. The directives focus on the integration and prioritization of women’s health across the federal research portfolio and budget and will galvanize new research on a wide range of topics, including women’s midlife health. The President and First Lady also announced more than twenty new actions and commitments by federal agencies, including through the Department of Health and Human Services (HHS), the Department of Defense (DoD), the Department of Veterans Affairs (VA), and the National Science Foundation (NSF). This includes the launch of a new NIH-wide effort that will direct key investments of $200 million in Fiscal Year 2025 to fund new, interdisciplinary women’s health research. Read the White House press release here.

CMS Approves Private Medicare Plans to Cover Wegovy for Heart Attack Prevention

On Thursday, the Centers for Medicare and Medicaid Services (CMS) provided coverage guidance to private Medicare Part D drug plans for Novo Nordisk’s drug Wegovy, which received FDA approval earlier this month to reduce heart attack and stroke risk in addition to obesity. Medicare Part D plans are prohibited from covering weight loss drugs due to the 2003 Medicare Modernization Act. CMS stated Medicare prescription drug plans can cover the weight loss drug Wegovy, but only when prescribed to reduce the risk of heart attacks. It remains unclear what additional Medicare coverage of these drugs will mean for federal spending. The Congressional Budget Office said Wednesday that coverage of the drugs will cost the government more over the next decade than it will save in reducing spending on obesity-related conditions, such as diabetes or heart disease.

Legal & Other:

AstraZeneca and GlaxoSmithKline Announce Caps to Patient Inhaler Costs

Earlier this week AstraZeneca and GlaxoSmithKline separately announced they would cap costs for all of their inhalers at $35, to both commercially insured and uninsured patients, though federal rules prohibit the company from offering the copays to enrollees of government programs like Medicare and Medicaid. AstraZeneca also said it reduced the list price of its inhaler Symbicort in January, which followed the approval of the first generic competitor, Viatris's Breyna, last July. Inhaler prices are currently in the crosshairs of both lawmakers and regulators. In January, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Bernie Sanders (I-VT) launched an investigation into inhaler prices, while the Federal Trade Commission in November challenged more than 100 patents for inhalers and other products. The announcement leaves Teva Pharmaceutical Industries as the only major asthma drugmaker singled out by Senate HELP Chairman Sanders that has not announced a cap.