Tax News Update    Email this document    Print this document  

September 11, 2023

This Week in Health Policy for September 11

This Week (Sept. 11 - 15)

House Energy and Commerce Subcommittee on Health will hold a hearing on "Legislative Proposals to Prevent and Respond to Generic Drug Shortages."

  • Date: Thursday, September 14 at 10:00am ET
  • More information available here.

House Committee on Oversight and Accountability Subcommittee on Health Care and Financial Services will hold a hearing on "The Inflation Reduction Act: A Year in Review."

  • Date: Thursday, September 14 at 2:00pm ET
  • More information available here.

House Committee on Oversight and Accountability Subcommittee on Cybersecurity, Information Technology, and Government Innovation will hold a hearing on "How are Federal Agencies Harnessing Artificial Intelligence?"

  • Date: Thursday, September 14 at 1:00pm ET
  • More information available here.

House Committee on Oversight and Accountability Select Subcommittee on the Coronavirus Pandemic will hold a hearing on "Oh Doctor, Where Art Thou? Pandemic Erosion of the Doctor-Patient Relationship."

  • Date: Thursday, September 14 at 10:00am ET
  • More information available here.

House Ways & Means Committee will hold a member day.

  • Date: Thursday, September 14 at 9:00am ET
  • More information available here.

Senate Committee on Commerce, Science, & Transportation will hold a hearing on "The Need for Transparency in Artificial Intelligence."

  • Date: Tuesday, September 12 at 2:30pm ET
  • More information available here.

Last Week (Sept. 4 - 8)

Health Care Highlights

Congress returns from August recess. This week, the Senate returned from recess and the House is slated to return next week, leaving Congress less than a dozen working days to either pass annual appropriations bills or to reach an agreement on a continuing resolution to avoid a government shutdown on October 1.

House Republicans unveil health care package. On Friday (September 8), the House Energy & Commerce, Ways & Means, and Education & Workforce Committees introduced a bipartisan legislative package. The Lower Costs, More Transparency Act includes provisions to enhance pharmacy benefit manager (PBM) transparency and reporting to employers, ban spreadpricing contracts between PBMs and Medicaid Managed Care Organizations, expand site-neutral payments to Medicare drug administration services, require Medicare hospitals to include separate identification numbers for off-campus outpatient departments, and more. In addition, the bill addresses Medicaid disproportionate share hospital payment cuts and extends funding for Community Health Centers, National Health Services Corps, Teaching Health Center GME programs, and special diabetes programs. Click here for a section-by-section of the bill and here for the bill text.

Ways and Means Committee seeks health care input. On Thursday (September 7), the House Ways and Means Committee published a request for information asking for ways to address disparities in access to care in rural and underserved communities. As part of the public open letter request for information, Chairman Jason Smith (R-MO) highlights five key areas of interest:

  • Payment disparities between different geographic areas.
  • The long-term financial health of providers and facilities.
  • Payments for identical care provided in varying sites of service.
  • Bringing new professionals into the health care workforce.
  • Innovative care models and technology to improve patient outcomes.

Comments are due October 5.

CMMI unveils new multi-payer payment model. On Tuesday (September 5), the Center for Medicare & Medicaid Innovation (CMMI) announced a new voluntary multi-payer payment model that seeks to replicate global budget, or total cost of care, models used in other states to increase investment in primary care. As part of the States Advancing All-Payer Health Equity Approaches and Development Model, or AHEAD Model, up to eight states will receive up to $12 million to implement the model via a cooperative agreement with CMS, which will operate for a total of 11 years, from2024 through 2034. CMS anticipates releasing a Notice of Funding Opportunity (NOFO) in late Fall 2023, with a subsequent application period in Spring 2024.

CMS extends comment deadline for 340B repayment remedy. On Tuesday (September 5), CMS extended until September 11, the deadline for comments on the agency's proposed remedy for repaying about 1,600 340B hospitals $9 billion in cuts to hospital outpatient payments under the 340B Drug Discount Program after the Supreme Court ruled the cuts unlawful.

  • More information available here.

CMS allows submitted IDR requests to continue. On Tuesday (September 5), CMS said independent dispute resolution (IDR) entities could continue processing eligibility determinations for single and bundled disputes submitted on or before August 3. CMS said the IDR portal remains closed for new disputes following a recent court ruling.

CMS fines more hospitals over transparency noncompliance. On Tuesday (September 5), CMS fined two additional hospitals for failing to comply with federal hospital price transparency rules. To date, CMS has fined 13 hospitals for price transparency violations, with fines ranging from $56,940 to $979,000.

HHS issues nondiscrimination proposed rule. On Thursday (September 7), The Department of Health and Human Services (HHS) Office for Civil Rights issued a proposed rule to update and clarify nondiscrimination requirements for recipients of HHS funding (e.g. Medicare providers). The proposed rule clarifies the application of Section 504 of the Rehabilitation Act of 1973, which implements the prohibition of discrimination on the basis of disability, to several areas not explicitly addressed through the existing regulation, including medical treatment decisions; the use of value assessments; web, mobile, and kiosk accessibility; and accessible medical equipment. CMS will accept public comments for 60 days after the rule is published.

FTC to discuss improper listing of patents. The Federal Trade Commission (FTC) will meet next Thursday (Sept. 14) to discuss whether the improper listing of patents in the FDA's Orange Book should be viewed as an unfair competitive tactic that contributes to rising drug prices, and consider issuing a policy statement concerning the problem. The discussion comes as members of Congress — including Senator Elizabeth Warren (D-MA) and Rep. Pramila Jayapal (D-WA) — have urged the FDA to help the U.S. Patent Trademark Office address the issue.

ICYMI: Health Care Highlights From August Recess

HHS issues minimum staffing standards proposed rule. On September 1, CMS issued a proposed rule to establish staffing requirements for nursing homes, including a national minimum nurse staffing standard. Among other things, the rule would require a collective 3.0-hours per resident day (HPRD) requirement. The proposal would require at least one registered nurse onsite 24 hours a day and require each resident to have .55 hours of attention a day from a registered nurse and 2.45 hours from nurse aides. CMS estimates that about 75% of nursing homes would have to increase staffing in their facilities under the proposed standards

FTC announces settlement in Amgen-Horizon deal. On September 1, the Federal Trade Commission (FTC) said it has reached a settlement with Amgen that will allow the biopharmaceutical company to move forward with its $27.8 billion acquisition of Horizon Therapeutics.

HRSA awards funds to address opioid overdose in rural areas. On August 31, the Health Resources and Services Administration (HRSA) announced more than $80 million in awards to help rural communities in 39 states respond to overdose risks from fentanyl and other opioids.

CMS publishes list of 10 drugs subject to price negotiation. On August 29, CMS published the first list of 10 Medicare Part D drugs that will be subject to the Medicare Drug Price Negotiation Program created under the Inflation Reduction Act (IRA). The Medicare Drug Price Negotiation Program is facing several legal challenges from U.S. Chamber of Commerce, PhRMA, the National Infusion Center Association, the Global Colon Cancer Association, and drugmakers, with Novartis filing the latest lawsuit on September 1. On September 6, Astellas Pharma withdrew its lawsuit challenging the program after its products were not included on the list.

  • For more details on the CMS list, see the attached WCEY Alert — CMS Unveils the First 10 Drugs Subject to Price Negotiation.

CMS awards 2024 navigator grants. On August 26, CMS announced it has awarded 57 organizations $98.6 million in navigator grants to help consumers enroll in health coverage in the 29 states participating in the federal health insurance marketplace for plan year 2024.

FDA delays enforcement of Drug Supply Chain Security Act. In August, the Food and Drug Administration (FDA) said it has postponed enforcement of a provision of the Drug Supply Chain Security Act that requires pharmaceutical manufacturers, wholesalers, and pharmacies to electronically track transactions in an effort to detect fake medicines and identify where they entered the supply chain.

HHS loses another No Surprises Act lawsuit. On August 24, U.S. District Judge Jeremy Kernolde blocked several provisions of the No Surprises Act impacting the methodology for how insurers calculate the qualifying payment amount, or QPA. Specifically, the court blocked provisions enabling insurers to factor contracted rates for services that providers have not provided into QPA calculations, as well as allowing self-insured group health plans to use rates from all plans administered by a third-party administrator. The ruling comes after Kernolde ruled August 3 against HHS' process for raising Independent Dispute Resolution administrative fees and certain rules related to batching claims for arbitration.

Judge upholds HRSA's PRF distribution methodology. On August 24, U.S. District Judge John Bates upheld HRSA's methodology for calculating and distributing provider relief funds (PRF). The ruling came in a lawsuit brought by the New York-based Hospital for Special Surgery over HRSA's decision to change the allocation method for phase 3 provider relief fund distribution.

CMS issues draft guidance on Medicare Prescription Payment Plan. On August 21, CMS issued draft guidance to implement the Medicare Prescription Payment Plan created under the Inflation Reduction Act to give Medicare Part D enrollees the option to pay out-of-pocket costs on a monthly basis beginning in 2025. CMS is accepting comments on the proposals. Click here for a fact sheet on the payment plan. Click here for an implementation timeline for the payment plan.

CMS updates ACO REACH. On August 16, CMS announced updates to the Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH) Model starting in performance year 2024 to increase participation in the program and advance health equity.

Treasury Department, IRS issue notice on looking IRA tax rule. On August 4, the Treasury Department and the Internal Revenue Service (IRS) issued a notice informing manufacturers, producers and importers of certain drugs that they plan to issue proposed regulations related to the excise tax under 5000D of the Internal Revenue Code created under the Inflation Reduction Act.

CMS issues FY 2024 IPPS final rule. On August 1, CMS issued the Fiscal Year 2024 Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) Final Rule. CMS finalized a 3.1% payment increase for general acute care hospitals paid under the IPPS. CMS plans to distribute about $5.94 billion in uncompensated care payments to eligible disproportionate share hospitals and finalized updates to how it will calculate Medicare DSH payments in states with 1115 demonstrations. Click here for the press release and here for a fact sheet.

Medicare announces pilot program for dementia care. On July 31, the Center for Medicare & Medicaid Innovation (CMMI) announced a new voluntary payment model, the Guiding an Improved Dementia Experience (GUIDE) Model, that aims to improve care coordination and management for Medicare beneficiaries with dementia and their caregivers. The model, which will provide participating providers with a lump-sum payment for certain services, is set to launch on July 1, 2024, and run for eight years.

Medicare Part D premiums to fall in 2024. On July 31, CMS announced average monthly Medicare premiums for Part D prescription drug coverage are projected to decline by 1.8% to $55.50 in 2024. CMS credited the Inflation Reduction Act's drug pricing provisions for the decline.

Reports, Studies, and Journals

CMS: 2022 Compliance Review Findings Report. The report highlights common standard and operating rule violations found during compliance reviews and includes new data from 24 compliance reviews completed between April 2022 and March 2023.

Health Affairs: The Challenge Of Federal Coverage And Payment For AI Innovation In Health Care. The article explores the regulatory environment and proposes ways CMS could regulate artificial intelligence and other forms of machine learning, including software as a medical device.

Government Accountability Office: Medicare Part D: CMS Should Monitor Effects of Rebates on Plan Formularies and Beneficiary Spending. The report provides an overview of drugmaker rebates in the Medicare Part D program and recommends Medicare examine how rebates may affect formulary placement and Medicare and beneficiary spending.


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


List of drugs subject to price negotiation