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November 21, 2022

This Week in Health Policy for November 21

This week (Nov. 21-25)

Congress is on recess for the Thanksgiving holiday.

Last week (Nov. 14-18)

Health Care Highlights

Elections and lame-duck prospects. On Monday (Nov. 14), Congress returned for a lame-duck session that will require an extension of government funding beyond December 16, possibly in an omnibus funding bill that could also include some ride-along health items. The outlook for the lame-duck session of Congress, which will resume after next week's break for Thanksgiving, remained largely unclear as the first week in session after the elections was marked by uncertainty over House control, House and Senate Republican leadership elections, and the announcements regarding Democratic leadership changes. On Wednesday, Nov. 16, House Republicans secured control of the House, ushering in an era of divided government, with Democrats controlling the Senate and the White House. Republicans moved forward with leadership elections, with Sen. Mitch McConnell (R-KY) securing enough votes to remain Senate minority leader and Rep. Kevin McCarthy (R-CA) winning the Republican nomination for House speaker (although he must now win a majority in a public vote on the House floor — at least 218 votes — potentially requiring nearly unanimous consent from his caucus). On the Democrats side, Speaker Nancy Pelosi (D-CA) announced Nov. 17 that she would not seek re-election as the top Democrat in the House but will remain in Congress. Majority Leader Steny Hoyer (D-MD) will also step down from his leadership post. Rep. Hakeem Jeffries (D-NY), chairman of the House Democratic Caucus, officially launched his bid for the top Democratic spot and has secured the backing of Hoyer. Keep an eye out next week for our deep-dive into the post-election health policy agenda.

House Ways & Means Committee unveils oversight agenda. On Friday (Nov. 18), Republicans on the House Ways and Means Committee published their oversight agenda for the 118th Congress. According to the document, Republicans on the committee plan to use their oversight authority to investigate the Biden administration's Affordable Care Act expansions, waste related to COVID-19 pandemic funding, and the handling of innovative medical technology. In addition, Republicans on the committee plan to investigate policies related to nursing homes that may have contributed to unnecessary deaths.

Biden admin signals PHE will continue beyond Jan. 12. On Friday (Nov. 11), the Biden administration signaled it would extend the COVID-19 public health emergency beyond the Jan. 12, 2024, expiration date. The Biden administration has vowed to give states at least 60 days' notice before allowing the PHE to expire. Amid a lack of clarity around the end date, the National Association of Medicaid Directors on Thursday (Nov. 17) sent a letter to Congress asking them to set in statute the date that Medicaid renewals will begin and to phase out the enhanced federal Medicaid matching funds over 12 months.

Senate Finance Committee raises concerns over Medicare Advantage marketing. On Tuesday (Nov. 15), Democrats on the Senate Finance Committee called on the Centers for Medicare and Medicaid Services (CMS) to bolster consumer protections in Medicare Advantage to protect against deceptive marketing practices. The call comes after Senate Finance Committee Chair Ron Wyden (R-OR) on Nov. 3 released a report that highlights an increase in complaints over Medicare Advantage marketing practices, including deceptive mail advertisements and aggressive in-person marketing tactics.

FDA proposes measures to protect baby formula. On Tuesday, (Nov. 15), the Food and Drug Administration (FDA) proposed measures to safeguard baby formula from cronobacter infections, following a formula recall earlier this year that prompted nationwide shortages.

FDA to review naloxone products for over-the-counter sales. On Tuesday, (Nov. 15), the FDA said certain types of overdose reversal drug naloxone may be eligible to be sold without a prescription. The agency said it is conducting an additional data review to identify potential products for over-the-counter sales.

CMS posts guides for hospital price transparency. On Monday (Nov. 14), CMS published three voluntary sample formats that hospitals can use to meet public reporting requirements for machine-readable files in the hospital price transparency rule.

ICYMI: Health Care Highlights During the Congressional Recess

Biden admin looks to data to improve health equity. On Nov. 10, CMS' Office of Minority Health released a report that details the agency's past and future efforts to advance health equity through improved data solutions. CMS said the agency plans to collect new health equity data across CMS programs, align health equity data to acceptable standards, and more.

CMMI unveils updated strategy. On Nov. 7, the Center for Medicare and Medicaid Innovation released a strategy report that details the Center's plans to develop value-based care models for specialty care and suggests more mandatory payment models could be in store.

CMS Issues Physician, Outpatient/ASC, Home Health, and ESRD Final 2023 Payment Rules.

  • On Nov. 1, CMS issued the Calendar Year (CY) 2023 Physician Fee Schedule (PFS) final rule, finalizing a 4.47% payment cut compared with CY 2022. For CY 2023, CMS added five new services to the Medicare Telehealth List on a permanent basis. CMS also added more than 50 services, such as psychophysiological therapy, to the temporary Category 3 list, which CMS stated will expire at the end of 2023. In addition, CMS extended telehealth services allowed on an interim basis but were not given Category 3 status for 151-days post PHE. CMS in the final rule reiterated it does not plan to pay for telephone E/M services beyond their expiration. The final rule also includes updates to the Medicare Shared Savings Program, as well as finalized policies aimed at bolstering the mental and behavioral health workforce, supporting Opioid Treatment Programs, and expanding coverage for dental, oral, and audiology services, as well as colorectal cancer screening. Provider groups have raised concerns about CMS' final payment rate cut and Congress is expected to at least partially address the cuts.
  • On Nov. 1, CMS issued the CY 2023 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule, finalizing a 3.8% payment bump. CMS in the rule said it will return the hospital pay rate for 340B drugs to 106% of the average drug sales price for CY 2023. Since those payments must be made in a budget neutral manner, CMS finalized a -3.09% reduction to payment rates for non-drug services for CY 2023. However, CMS said it will issue separate rulemaking by July 2023 to address 340B repayments for CYs 2018–2022. The final rule also includes policy updates for the Hospital Outpatient/ASC Quality Reporting Programs, the new Rural Emergency Hospital designation, telehealth and more. Hospital groups have warned CMS' rate increase does not keep pace with inflation and on Nov. 4, filed a notice asking the U.S. District Court for the District of Columbia to order the Department of Health and Human Services to promptly repay 340B hospitals for past payment cuts.
  • On Oct. 31, CMS issued the CY 2023 Home Health Prospective Payment System (PPS) final rule, finalizing a 0.7%, or $125 million, payment increase for Home Health Agencies for CY 2023. The final rule includes updates to the wage index, telehealth, as well as Home Health Value-based Purchasing Program and Quality Reporting Program.
  • On Oct. 31, CMS issued the CY 2023 End-Stage Renal Disease (ESRD) Prospective Payment System final rule, finalizing a base rate of $265.57 for the CY 2023 ESRD PPS, which is an increase of $7.67 from CY 2022 rates. The final rule includes updates to the wage index, ESRD Quality Incentive Programs, and more.

For a more detailed overview of the final rules see our WCEY Alert here.

Biden admin targets nursing homes. On Oct. 21, CMS announced new penalties for underperforming nursing homes, as well increased requirements for nursing homes to graduate from the Special Focus Facility program. On Oct. 21, HHS also announced two grant funding opportunities totaling $13 million to strengthen the nursing workforce. On Oct. 3, the Department of Labor announced more than $80 million to grow the nursing workforce through its Nursing Expansion Grant Program. House Republicans on the Ways and Means Committee also plan to use their oversight authority during the 118th Congress to probe nursing homes' performance during the COVID-19 pandemic.

Provider groups back in court over surprise billing rules. On Oct. 19, the American Hospital Association and the American Medical Association jointly filed an amicus brief backing the Texas Medical Association's (TMA) case against CMS' revised final rule detailing the independent dispute resolution process for mitigating surprise bills. The provider groups argue that the revised rule still unlawfully favors insurers by directing arbiters to consider the qualifying payment amount and factors, such as the physician's training and patient severity, when determining payments, as well as whether those additional factors are incorporated in the qualifying payment amount. American Association of Neurological Surgeons, Congress of Neurological Surgeons, the American Society of Anesthesiologists, American College of Emergency Physicians, the American College of Radiology, the Emergency Department Management Association, and other specialty and state medical associations have filed briefs backing TMA in the case.

HHS finalizes 'Family Glitch' rule. On Oct. 11, the Department of Treasury issued a final rule that will enable a worker's dependents to qualify for federal subsidies if the cost of insuring the family through employer-sponsored coverage exceeds 9.5% of the household income. Under the final rule, family coverage must meet a minimum actuarial threshold of 60% and cover inpatient hospital care. House and Senate Republicans have questioned the administration's authority to make the change. As such, House Republicans, particularly those on the Ways & Means Committee, are expected to use their oversight authority to examine the final rule.

Reports, Studies, and Journals

Government Accountability Office: Markets Remained Concentrated through 2020, with Increases in the Individual and Small Group Markets. The report found that the individual, small group, and large group markets were concentrated in 2020 in at least 42 states, with the median market share reaching at least 97% in both the individual and small group markets.

Government Accountability Office: HHS Should Address Strategic National Stockpile Requirements and Inventory Risks. The report concludes that HHS' inventory reviews failed to meet most statutory requirements because the department has not updated protocols to reflect changes enacted in 2019.

Surgeon General: Surgeon General's Framework for Mental Health & Well-Being in the Workplace. The report outlines five items essential for ensuring workers' mental health and wellbeing: protection from harm, connection and community, work-life harmony, mattering at work, and opportunities for growth.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Laura Dillon (