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July 17, 2023

This Week in Health Policy for July 17

This week (July 17 - 21)

The House Energy and Commerce Health Subcommittee will hold a hearing, “Innovation Saves Lives: Evaluating Medicare Coverage Pathways For Innovative Drugs, Medical Devices, And Technology.”

  • Date: Tuesday, July 18 at 10:30AM ET
  • More information available here.

The Senate Health, Education, Labor & Pensions Committee will hold a markup of the Pandemic and All-Hazards Preparedness and Response Act.

  • Date: Thursday, July 20 at 10:30am ET
  • More information available here.

The Senate Finance Health Care Subcommittee will hold a hearing, “The Cost of Inaction and the Urgent Need to Reform the U.S. Transplant System.”

  • Date: Thursday, July 20 at 10:00 AM ET
  • More information available here.

Last week (July 10 - 15)

Health Care Highlights  

CMS issues CY 2024 Medicare Physician Fee Schedule proposed rule. On Thursday (July 13), the Centers for Medicare & Medicaid Services (CMS) issued their Calendar Year (CY) 2024 Medicare Physician Fee Schedule (MPFS) proposed rule. The proposed rule would reduce the CY 2024 conversion factor by 3.34% compared with CY 2023 and overall proposed payment amounts under the PFS would be reduced by 1.25%. The rule includes several changes aimed at advancing the Biden administration’s goals to improve health equity and access to behavioral health care, as well as provisions to extend many telehealth flexibilities through CY 2024. In addition, the rule makes updates to CMS’ Medicare Shared Savings Program and the Quality Payment Program. CMS is accepting comments through September 11. Press release, Fact sheet on the proposed rule, Fact sheet on the Medicare Shared Savings Program, Fact sheet on the Quality Payment Program, Proposed rule

  • For a more detailed overview please see the attached WCEY Alert - CMS Issues Proposed CY 2024 Medicare Physician Fee Schedule

CMS issues CY 2024 Hospital Outpatient Prospective Payment System proposed rule. On Thursday (July 13), CMS issued the CY 2024 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule. The proposed rule would increase overall payment rates under the OPPS and ASC payment systems by 2.8%. The proposed rule also includes payment and policy updates impacting providers paid under OPPS and ASC, including updates to the partial hospitalization program, dental payments, hospital price transparency requirements, and more. In addition, CMS seeks comments on ways it can better align hospital and insurer price transparency policies. CMS is accepting comments through September 11th. Fact sheet on the proposed rule, Fact sheet on Policies to Expand Behavioral Health Access and Further Efforts to Increase Hospital Price Transparency, Fact sheet on Hospital Price Transparency Proposals, Proposed rule

  • Our team is continuing to review the proposed rule; stay tuned for a WCEY alert offering a more detailed overview of the proposed rule. 

CMS releases RFI on new episode-based payment model. On Friday (July 14), the Center for Medicare and Medicaid Innovation released a request for information (RFI) on ways to design a future episode-based payment model. The RFI is seeking comment on care delivery and incentive structure alignment and six foundational components: Clinical episodes; participants; health equity; quality measures, interoperability, and multi-payer alignment; payment methodology and structure; and model overlap.

FDA approved first non-prescription oral contraceptive. On Thursday (July 13), the Food and Drug Administration (FDA) approved Opill (norgestrel), the first over-the-counter oral contraceptive. FDA said approval of the once, daily medication provides an option for consumers to purchase oral contraceptives without a prescription.

DOJ appeals No Surprises Act ruling. On Wednesday (July 12), the Department of Justice appealed a district court’s ruling to vacate provisions of the August 2022 No Surprises Act final rule related to the independent dispute resolution process.

HHS issues proposed rule to affirm LGBTQI+ rights. On Tuesday (July 11), Health and Human Services (HHS)  Office for Civil Rights and Assistant Secretary for Financial Resources issued a notice of proposed rulemaking to affirm civil rights and equal opportunity to people, particularly LGBTQI+ people, participating in HHS funded programs and services.

White House releases response plan to growing fentanyl crisis. On Tuesday (July 11), the White House released a National Response Plan to coordinate a whole-of-government response to combat the rise in fentanyl mixed with the animal tranquilizer xylazine.

ICYMI: Health Care Highlights From June 26-July 7

CMS issues 340B repayment proposed rule. On July 7, CMS issued a proposed rule detailing the agency’s plan for repaying about 1,600 340B hospitals $9 billion in cuts to hospital outpatient payments under the 340B Drug Discount Program that took place between 2018--2022 after the Supreme Court ruled the cuts unlawful. CMS’ proposed rule includes a hospital-by-hospital breakdown of expected lump sum repayment amounts in Addendum AAA. The proposed rule also details the agency’s plan to recoup spending on the increased payments by reducing payment for non-drug items and services over a 16-year period. CMS is accepting comments on the proposed rule until September 5. CMS anticipates issuing the final rule before the CY 2024 OPPS/ASC final rule is published in Fall 2023 and plans to issue lump sum payments towards the end of 2023 or beginning of 2024. Fact Sheet, Proposed Rule, Addendum AAA

HHS issues proposed rule on STLDI and fixed indemnity insurance. On July 7, HHS, along with the Departments of Treasury and Labor, released a notice of proposed rulemaking (NPRM) to limit the initial duration of short-term limited duration insurance (STLDI) to three months and limit plan renewals to one month, for a maximum coverage period of four months. The proposed rule also would ban the practice of “stacking” in which the same issuer issues multiple STLDI policies to the same policyholder within a 12-month period. In addition, the proposed rule would update standards for certain fixed indemnity insurance to be considered an excepted benefit. The rule proposes to make changes applicable for new plans (STLDI and fixed indemnity excepted benefits plans sold or issued on or after the effective date of the final rule) effective immediately on the date of the final rule. Existing STLDI plans would be grandfathered in, allowing the coverage to be renewed up to 36 months, while changes impacting existing fixed indemnity excepted benefits plans would begin with the plan year that occurs on or after January 1, 2027. The proposed tax updates would take effect with the final rule or January 1, 2024. The Departments will accept comment through September 11. Fact Sheet, Proposed Rule

HHS touts actions to protect consumers and lower health care costs. On July 7, HHS also announced other key actions the administration has taken to protect consumers and lower health care costs, including a request for information on medical credit cards and other medical payment products and a new FAQ on the No Surprises Act.

CMS opens national patient registry for new Alzheimer’s drugs. On July 6, CMS opened an online registry for Monoclonal Antibodies Directed Against Amyloid for the Treatment of Alzheimer's Disease. To be eligible for Medicare payment for the new class of FDA-approved Alzheimer’s drugs, providers are required to submit data to the registry.

CMS posts updated guidance on Medicare Drug Price Negotiation. On June 30, CMS released updated guidance on the implementation of the Medicare Drug Pricing Negotiation Program, which includes a clarification of how CMS will identify selected drugs, updates to the process applicable for participating drug companies, and clarifies several other policies, including how CMS will consider the negotiation factors and how the agency will engage in compliance and oversight activities, among others. CMS also said it updated the confidentiality process in response to comments. Press release, Fact sheet

CMS issues CY 2024 Home Health Prospective Payment System proposed rule. On June 30, CMS issued the CY 2024 Home Health Prospective Payment System proposed rule. While CMS proposed a 2.7% payment increase for home health providers, it estimates that the net effect of other policy changes would reduce home health payments by an estimated $375 million, or 2.2%, in CY 2024, compared with CY 2023. The proposed rule includes requests for comment on access to home health aide services and proposes new payments for compression garments for beneficiaries with lymphedema beginning in January 2024. CMS proposed to adopt two new measures for the CY 2025 home health quality reporting program, including a measure on the percentage of patients who are up to date with their COVID-19 vaccinations. The agency also proposes several changes to the measures and weighting methodology used in the Home Health Value-based Purchasing program. Fact sheet, Proposed rule

OIG issues information blocking final rule. On June 27, the HHS Office of Inspector General (OIG) published a final rule implementing information blocking penalties. Under the rule, individuals or entities can face penalties of up to $1 million per violation if OIG determines they have committed information blocking. The rule applies to health IT developers of certified health IT, entities offering certified health IT, health information exchanges and health information networks. Press release, Final rule

CMS issues ESRD Prospective Payment System proposed rule. On June 26, CMS released the CY 2024 ESRD PPS proposed rule, which includes a base payment rate of $269.99. This represents an increase of $4.42 from the final CY 2023 base payment rate. The proposed rule also includes a proposed payment adjustment that would increase payment for certain new renal dialysis drugs and biological products after the Transitional Drug Add-on Payment Adjustment period ends, as well as other payment and policy updates. CMS will accept comments on the proposed rule until August 25. Fact sheet, Proposed rule.

Hearings, Markups, and Other Committee Action

The Senate Health, Education, Labor & Pensions Subcommittee on Primary Health & Retirement Security held a hearing, “Superbugs: The Impact of Antimicrobial Resistance on Modern Medicine.” On Tuesday (July 11), the Subcommittee held a hearing on antimicrobial resistance (AMR) and heard from a panel of featuring representatives of providers, biopharma, patients, and veterinarians. During the hearing, members from both sides of aisle raised questions about AMR and innovations needed to ensure patients have access to needed treatments.

  • More information available here.

The House Energy and Commerce Health Subcommittee held a markup of 17 health care bills. On Thursday (July 13), the Subcommittee sent to the full committee 17 bills on a range of health care topics. During the hearing, Democrats raised concerns that Republicans were advancing a partisan Pandemic and All-Hazards Preparedness Act (PAHPA) reauthorization that lacks funding increases and improvements to public health data, and fails to address the medical supply chain and ongoing drug shortage crisis. Republicans, meanwhile, expressed a desire to address drug supply chain issues separately. There was also partisan debate over a bill that would ban certain gender-affirming care procedures from being performed at GME-supported Children’s Hospitals. During the hearing, there was bipartisan support for bills to reauthorize several health care and research programs on pediatric cancer, premature birth, maternal mortality, sickle cell disease and heritable blood disorder research, Parkinson’s disease, the dental workforce, substance use disorder, and the firefighter cancer registry.  There was also bipartisan support for a bill to clarify Medicaid’s authority to leverage direct primary care and other models to improve primary care. While there was some bipartisan support for a bill to allow employers to offer stand-alone coverage of telehealth-only services to certain employees, several Democrats raised concerns about the lack of consumer protections and the need to ensure consumers are aware of the type of coverage being purchased.

  • More information available here.

The Committee on Education and the Workforce held a markup of health transparency legislation. On Wednesday (July 12), the Committee advanced four bipartisan bills that aim to increase transparency in health care. Each bill passed with unanimous or near unanimous support with lawmakers speaking in favor of policies to require off-campus hospital outpatient departments to include a unique health identifier on their health claims, codify and strengthen the federal Transparency in Coverage rules, strengthen the No Surprises Act’s gag clause prohibition, and add new disclosure requirements for pharmacy benefit managers (PBMs) and third-party administrators for group health plans. One member, Rep. Eric Burlison (R-MO), spoke against three of the bills targeting PBMs.

  • More information available here.

The House Appropriations Labor, Health and Human Services, Education Subcommittee held a markup of FY 2024 appropriations bills. On Friday (July 14), the Subcommittee held a markup of the appropriations bill for Labor, Health and Human Services, Education, and Related Agencies. The bill would provide $147 billion for programs under the jurisdiction of the subcommittee, which is $60.3 billion, or 29%, below the FY 2023 enacted level.

  • More information available here.

Reports, Studies, and Journals

Center for Medicare and Medicaid Innovation (CMMI): Assessing Equity to Drive Health Care Improvements: Learnings from the CMS Innovation Center. The report provides a retrospective analysis of CMMI model evaluations to determine how health equity was incorporated and the impact. The report found many models encountered data challenges to addressing health equity, including small population sizes and missing data elements. 

Health Affairs: Lowering Medicare Advantage Overpayments From Favorable Selection By Reforming Risk Adjustment. The study explores three approaches to addressing Medicare Advantage overpayments by altering risk adjustment that are intended to inform policymakers future decision-making.

Government Accountability Office: COVID-19: GAO Recommendations Can Help Federal Agencies Better Prepare for Future Public Health Emergencies. The report details recommendations for federal agencies and Congress to improve US response and preparedness related to public health emergencies.


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