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July 25, 2022

This Week in Health Policy for July 25

This Week (July 25-July 29)

The Senate Health, Education, Labor and Pensions Committee holds a hearing on "Fighting Fentanyl: The Federal Response to a Growing Crisis."

  • Details: 10:00 AM EDT on 07/26/2022, 216 Hart Senate Office Building
  • Witnesses: Miriam Delphin-Rittmon, Assistant HHS secretary for mental health and substance use in the Substance Abuse and Mental Health Services Administration; Carole Johnson, Administrator of the Health Resources and Services Administration; Kemp Chester, Senior policy adviser for supply reduction and international relations in the White House Office of National Drug Control Policy; Christopher Jones, Acting director of the CDC National Center for Injury Prevention and Control.
  • More information available here.

Last Week (July 18-22)

Health Care Highlights

Health-focused reconciliation package taking shape. Democratic leaders, along with the White House, expressed support for a pared down reconciliation package aimed at lowering the cost of prescription drugs and extending enhanced Affordable Care Act (ACA) marketplace subsidies for two years. While the details are still in flux and language has not yet been released, Congress is hoping to act on legislation before members leave for the August recess (which is July 29 for the House, August 5 for the Senate). Proxy voting rules in the House could facilitate a House vote after the House recess begins. Draft drug pricing language from the Senate Finance Committee – which contains provisions to enable Medicare to negotiate a subset of high-spend, sole-source drugs and impose inflationary rebates on drugs in Medicare Part B and D – is currently being vetted by the Senate parliamentarian. Sen. Mike Crapo (R-ID), Ranking Member of the Finance Committee, said: “We’re looking at the entire bill line by line to find anything that is subject to a Byrd objection,” referring to a process where senators can formally object to a provision that falls outside the budget reconciliation process. One provision of note is the reliance on commercial market drug sales as part of the calculation to determine inflationary rebates, which Republicans say may run afoul of the budget rules. The parliamentarian’s rulings, which are expected next week, along with “scoring” the cost of the provisions, could lead to changes in the final bill. The Congressional Budget Office (CBO) came out this week with a new analysis indicating that a two-year extension of the ACA subsidies would cost about $34 billion and found last week that the drug pricing provisions are projected to save about $288 billion over 10 years.

House expected to vote on telehealth bill. The House is expected to take up a bill to extend current Medicare telehealth flexibilities for two years next week. The legislation, which largely tracks the contents of H.R. 2040, is offset with reductions to the Medicare Improvement Fund. The legislation is not expected to be taken up in the Senate.

Surprise billing regulation coming soon. The regulation outlining changes to the proposed “surprise billing” regulations, which has been pending at the Office of Management and Budget (OMB) has been sent back to the Department and is expected to be released soon. The regulation is expected to outline how the independent dispute resolution (IDR) process will work in determining the appropriate payment rate for “surprise bills” between insurers and health care providers. The re-write comes after hospitals won a major lawsuit requiring the administration to reconsider what factors may be considered in determining the payment amount.

House passes FY 2023 minibus. On Wednesday (July 22), the House passed by a vote of 220-207 a six-bill funding package (H.R. 8294) that gives the Food and Drug Administration (FDA) $3.6 billion in discretionary funding for fiscal year (FY) 2023, an increase of $341 million over FY 2022 levels. The package is comprised of six of the 12 funding FY 2023 bills, and does not include the Health and Human Services (HHS) spending bill. Majority Leader Steny Hoyer (D-MD) had said the House could take up the Commerce-Justice-Science, Labor-HHS-Education, and State-Foreign Operations measures before recess. The FDA legislation includes an increase of $64 million for drug and device activities, including efforts to manage the opioid crisis, increase medical supply chain and drug safety surveillance and oversight, and strengthen in-person inspections of foreign drug manufacturers in India. Senate appropriators are set to release their spending bills before recess though there are no plans for committee markups, increasing the chances that a continuing resolution will be needed to keep the federal government open after Sept. 30.

CMS issues proposed CY2023 Hospital Outpatient/ASC payment rule. Last Friday (July 15), the Centers for Medicare & Medicaid Services (CMS) issued their calendar year (CY) 2023 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule. CMS proposes to update OPPS and ASC payment rates for hospitals and ASCs that meet applicable quality reporting requirements by 2.7%. The rule, however, does not yet take into effect the Supreme Courts recent ruling that the agency did not have the authority to cut pay for 340B drugs in previous years. While the agency said it didn’t have enough time to bake that into the proposed rule, it “fully anticipates” returning the hospital pay rate for 340B drugs to 106% of the average drug sales price, which must be done in a budget neutral manner consequently, resulting in cuts to other outpatient services. The proposed rule also outlines enhanced payments and more flexible policies for Rural Emergency Hospitals (REH), a new provider type, which will go into effect on Jan. 1, 2023.

Other proposals in the rule include continuing a pandemic-era flexibility allowing clinical staff of hospital outpatient departments to provide telehealth behavioral care, exempting Rural Sole Community Hospitals from site-neutral clinic visit payments, and adding a bi-weekly lump sum payment for domestically produced National Institute for Occupational Safety and Health (NIOSH)-approved surgical N95 respirators, among other changes. A request for information (RFI) also asks for feedback on how the data it collects “could be used to promote competition across the health care system or protect the public from the harmful effects of consolidation within healthcare.” Comments are due September 13, 2022.

CDC director signs off on Novavax vaccine. This week, Centers for Disease Control and Prevention (CDC) Director Rochelle Walensky endorsed Novavax Inc.'s COVID-19 vaccine following a 12-0 vote recommending the traditional, non-mRNA shot by the agency's Advisory Committee on Immunization Practices. The vaccine is expected to hit the market in the coming weeks, giving American adults a fourth option for a vaccine to protect against COVID-19 and the only one that does not use mRNA technology.

E&C advances privacy bill. On Wednesday (July 20), the Energy and Commerce Committee (E&C) advanced the American Data Privacy and Protection Act (ADPPA) (H.R. 8152) by a vote of 53-2. In a joint statement by Committee Chairman Frank Pallone, Jr. (D-NJ), Ranking Member Cathy McMorris Rodgers (R-WA), Consumer Protection and Commerce Subcommittee Chair Jan Schakowsky (D-IL) and Subcommittee Ranking Member Gus Bilirakis (R-FL) said the bill “puts people back in control of their online data. It creates a strong national standard that will finally minimize the amount of Americans’ information companies are allowed to collect, process, and transfer. This will rein in Big Tech’s power and establish clear, robust protections for people, especially children. Under our solution, companies will face real consequences if they track our kids’ data or use that information to exploit them for profit.” Rep. Anna Eshoo (D-CA), however, expressed concern that the current version of the legislation does not address the health app privacy concerns created by the Supreme Court ruling Roe v. Wade, saying “the bill before us has a major loophole that could allow law enforcement to access private data to go after women.” ADPPA includes an exception to its preemption clause for state laws regarding “health information, medical information, medical records, HIV status, or HIV testing.” The bill advanced along with five other bipartisan consumer protection bills.

House passes contraception bill in response to Supreme Court Ruling. On Thursday, the House voted 228-195 to pass the Right to Contraception Act (H.R. 8373), codifying the federal right to contraception by penalizing those who restrict access to oral, emergency and long-acting reversible contraceptives, in addition to other birth control methods. Eight Republicans joined 220 Democrats in voting for the bill. The legislation faces long odds in the Senate, where 60 votes would be required for passage and Republicans have expressed concerns about the expansive nature of the bill.

The White House this week issued a Statement of Administration Policy in support of the bill and is also said to be considering a limited public health directive intended to protect nationwide access to abortion medication. Democratic lawmakers and reproductive rights groups have urged the White House to utilize PREP Act authority, aimed at safeguarding physicians, pharmacies and others from liability for providing abortion pills to people throughout the United States, regardless of state law.

Biden tests positive for COVID-19. President Joe Biden tested positive for COVID-19 this week and is isolating at the White House while continuing to "carry out all of his duties fully during that time," according to press secretary Karine Jean-Pierre. Biden, who is experiencing "very mild" symptoms, according to the White House, is fully vaccinated, has received two booster shots and has begun a course of Pfizer Inc.'s antiviral treatment Paxlovid.

Reports, Studies, and Journals

CDC: Vital Signs: Drug Overdose Deaths, by Selected Sociodemographic and Social Determinants of Health Characteristics — 25 States and the District of Columbia, 2019–2020. Drug overdose deaths increased 30% in the United States from 2019 to 2020. Known health disparities exist in overdose mortality rates, particularly among certain racial/ethnic minority populations.

Medicaid and CHIP Payment and Access Commission: Transitions Between Medicaid, CHIP, and Exchange Coverage. The Patient Protection and Affordable Care Act (ACA) requires states to coordinate eligibility and enrollment processes between Medicaid, separate State Children's Health Insurance Programs (CHIP), and subsidized coverage on health insurance exchanges. This brief summarizes MACPAC’s analysis of insurance affordability program enrollment data and beneficiary transitions among those programs in 2018.

Kaufman Hall: M&A Quarterly Activity Report: Q2 2022 - Transactions Between Hospitals and Health Systems. M&A activity between hospitals and health systems in the second quarter of 2022 returned to both trendlines authors have been tracking since the pandemic began. First, the number of announced transactions, 13, remained below what they saw in the years leading up to 2020 but was consistent with numbers for Q2 2021, when 14 transactions were announced.

The Commonwealth Fund. The Impact of Pharmaceutical Wholesalers on U.S. Drug Spending. The wholesaler industry influences the purchase and distribution of prescription drugs in four key areas: setting generic drug prices, leveraging list price increases, competing in specialty drug distribution, and mitigating or exacerbating drug shortages. An understanding of wholesalers' broad impact would inform policymakers' efforts to reform pharmaceutical payment practices, reduce drug spending, and ease drug supply shortages.


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