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March 11, 2024

This Week in Health Policy for March 11

This Week (March 11 - 15)

The president's budget request is expected to be announced this week and both the House and the Senate will be in session, with work continuing on the remaining FY 2024 appropriations and work beginning on FY 2025 appropriations.

House Ways & Means Committee will hold a hearing on "Enhancing Access to Care at Home in Rural and Underserved Communities"

  • Date: Tuesday, March 12 at 11am ET
  • More information available here.

House Energy & Commerce Health Subcommittee will hold a markup of 19 bills

  • Date: Tuesday, March 12 at 10am ET
  • More information available here.

Senate Finance Committee will hold a hearing on "The President's Fiscal Year 2025 Health and Human Services Budget"

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

Last Week (March 4 - 8)

Health Care Highlights

Congress passes first minibus with health extenders. On Friday (March 8), the Senate passed a $460 billion minibus that includes six appropriations bills and a skinny health care package with notable extenders and other policies. The minibus, which passed the House on Wednesday (March 6), now goes to President Biden for his signature. The minibus includes FY 2024 appropriations for Agriculture-FDA, Military Construction-VA, Commerce-Justice-Science, Energy-Water, Interior-Environment and Transportation-HUD. The package also includes a 1.68% reduction to the 3.37% cut to the Medicare Physician Fee Schedule (MPFS) conversion factor (CF) that took effect January 1, 2024; a 1.88% increase to Alternative Payment Model (APM) bonus payments for performance year 2024, as well as $4.27 billion for community health centers, funding to eliminate disproportionate share hospital cuts, reauthorizing substance use disorder treatment programs under the SUPPORT Act, and other behavioral health provisions. The package does not include site-neutral payment cuts to hospitals or changes to current Hospital Price Transparency rule requirements, nor does it include change to Pharmacy Benefit Manager (PBM) practices and reporting requirements, which lawmakers could revisit when they address the remaining appropriations packages or during the lame duck session at the end of the year. Lawmakers next will turn to the remaining appropriations packages set to expire March 22.

House activity on health care: The House advanced several health care-related bills:

  • On Thursday (March 7), the House passed the END FENTANYL Act, which would require Customs and Border Protection to review and update its policies related to inspections at ports of entry, aimed at preventing fentanyl from being brought into the US. The bill passed the Senate by unanimous consent last June and now heads to the President's desk.
  • On Tuesday (March 5), the House voted 382-12 to pass the Preventing Maternal Deaths Reauthorization Act (H.R. 3838), bipartisan legislation that would reauthorize funding for state maternal mortality review committees through fiscal year 2028 and require the Centers for Disease Control and Prevention to work with the Health Resources Services Administration (HRSA) to disseminate best practices to prevent maternal mortality to hospitals and other health care providers.
  • On Thursday (March 7), the House passed the 9-8-8 Lifeline Cybersecurity Responsibility Act, which aims to boost cybersecurity collaboration with the Department of Health and Humans Services (HHS) for the 988 mental health crisis hotline.
  • On Tuesday (March 5), the House passed the Medicaid Primary Care Improvement Act, which clarifies state Medicaid programs' authority to enter into direct primary-care arrangements.

Biden delivers SOTU address. On Thursday (March 7), President Biden delivered his State of the Union address and health care was featured prominently. Biden spoke on a range of health care topics, beginning with reproductive health care, pharmaceutical advances since the COVID-19 pandemic, and the Inflation Reduction Act's provisions to reduce out-of-pocket costs for seniors. He called on Congress to pass legislation to cap insulin costs for all and out-of-pocket drug spending for all Americans and give Medicare the authority to negotiate prices for 500 drugs over the next decade. Biden touted the Affordable Care Act's successes and called on Congress to make the enhanced tax credits permanent and spoke about efforts to address underserved communities, including a new Women's Health Research initiative and proposals to protect transgender Americans. Biden also spoke about cracking down on crime by investing more in mental health workers, enforcing the Violence Against Women Act, and strengthening penalties on fentanyl trafficking. Before concluding his speech, Biden also spoke of the importance of passing bipartisan privacy legislation to protect children online and place needed guardrails around artificial intelligence while allowing innovation.

HRSA unveils $50M effort to combat opioid misuse in rural areas. On Wednesday (March 6), HRSA announced the $50 million Rural Opioid Treatment and Response Initiative to support opioid treatment and recovery services in rural communities. As part of the announcement HRSA issued the notice of funding opportunity with applications open through May 6. Eligible applicants include state and local governments, for profit organizations, non-profit organizations, small businesses, school districts and more.

CMS opens Cell and Gene Therapy Access Model applications for drugmakers. On Thursday (March 7), CMS issued a request for applications for drugmakers in the Medicaid Drug Rebate Program that make federally approved gene therapies for sickle cell disease seeking to participate in in the Cell and Gene Therapy Access Model. According to the RFA, the application period will remain open through May 1. Manufacturers selected for the model will need to reach an agreement on standard key terms and sign a participation agreement with CMS.

IRS warns about eligible HSA expenses. On Wednesday (March 6), the Internal Revenue Service issued an alert clarifying that personal expenses for general health and wellness do not qualify as medical expenses for health flexible spending arrangements (FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs) or medical savings accounts (MSAs). IRS warned that some companies are misrepresenting the circumstances under which food and wellness expenses can be paid for using such health spending accounts.

White House announces new health care pricing taskforce. On Tuesday (March 5), the White House announced a new task force co-chaired by the Department of Justice and the Federal Trade Commission (FTC) that will focus on lowering costs for Americans. The new Strike Force on Unfair and Illegal Pricing will work to combat anti-competitive, unfair, deceptive, or fraudulent business practices across a variety of industries, including health care and the pharmaceutical industry.

HHS addresses Change Healthcare breach. On Tuesday (March 5), the HHS announced actions CMS is taking to assist providers impacted by the recent cyberattack at Change Healthcare, a subsidiary of UnitedHealth Group. HHS said affected Medicare providers can contact their Medicare Administrative Contractors (MACs) to change data clearinghouses, as well as for details on exceptions, waivers, or extensions related to claims filings. HHS also said CMS will issue guidance to MA and Part D plans encouraging them to relax prior authorization and other utilization management requirements to facilitate timely claims filing and is encouraging MA plans to offer advance funding to providers most affected. CMS is communicating specifics around accelerated payment processes to MACs.

Biden administration takes closer look at private equity's role in health care. On Tuesday (March 5), the FTC, the Department of Justice's (DOJ) Antitrust Division, and HHS launched a cross-government public inquiry into private equity and other corporations' ownership of health care organizations. As part of the inquiry, the agencies issued a Request for Information seeking public comment on health care transactions involving private equity and other alternative asset managers that fall outside of the DOJ's and FTC's current antitrust reviews. The agencies on March 5 also held a virtual public workshop during which federal officials explored the impact of private equity in health care and federal efforts to address potentially harmful effects.

Drug manufacturers make drug price counteroffers. On Monday (March 4), HHS and CMS announced that it has received counteroffers from all manufacturers participating in the Medicare Drug Price Negotiation Program. The next steps in the process are for HHS and participating manufacturers to come to an agreement on a maximum fair price. If they do so, the prices will be published by September 1, 2024, and take effect in 2026.

White House holds listening session on PBM reforms. On Monday (March 4), the White House held a roundtable discussion with representatives from the federal government and industry stakeholders, including Cost Plus Drug Company Founder Mark Cuban. During the roundtable discussion, the Biden administration sought feedback on additional ways to increase transparency into PBM practices and address certain anti-competitive practices. The Pharmaceutical Care Management Association, the lobby representing PBMs, criticized the discussion which did not include its members, including the three largest PBMs in the US.

Hearings, Markups, and Other Committee Activity

House Committee on Oversight and Accountability Select Subcommittee on the Coronavirus Pandemic held a hearing on "Examining the White House's Role in Pandemic Preparedness and Response." On Wednesday (March 6), the Select Subcommittee held a hearing during which they heard testimony from Paul Friedrichs, director of the Office of Pandemic Preparedness and Response Policy, on the Biden administration's plans for future pandemic preparedness.

  • More information available here.

Senate Budget Committee held a hearing on "How Primary Care Improves Health Care Efficiency." On Wednesday (March 6), the Committee heard testimony from individuals representing academics, researchers, family physicians, nurses, and value-based care providers on payment models that could improve and incentivize primary care. There was bipartisan consensus that the current Medicare fee schedule does not encourage primary care and support for moving toward a hybrid payment model.

  • More information available here.

House Ways and Means Committee held a mark up of health care bills. On Wednesday (March 6), the Committee favorably reported three health care bills: H.R. 7513, Protecting America's Seniors' Access to Care Act, which would prohibit the HHS Secretary from finalizing a proposed rule establishing minimum staffing requirements for nursing facilities; H.R. 5074, Kidney PATIENT Act of 2023, which will delay a shift in oral-only drugs to the Medicare Part B End Stage Renal Disease prospective payment system until 2033; and H.R. 7512, The Real-Time Benefit Tool Implementation Act, which requires CMS to implement a digital tool allowing doctors to price shop for medicine before prescribing.

  • More information available here.

Senate Homeland Security and Governmental Affairs Committee held a mark up of several bills. On Wednesday (March 6), the Committee advanced, as amended, S. 3558, a bill to prohibit federal funds from being used to contract with certain biotechnology "companies of concern."

  • More information available here.

The Senate Health, Education, Labor & Pensions Committee will hold a hearing on "The Older Americans Act: Supporting Efforts to Meet the Needs of Seniors." On Thursday (March 7), the Committee heard testimony from HHS official Alison Barkoff and Ramsey Alwin, CEO of the National Council on Aging on the reauthorization of the Older Americans Act.

  • More information available here.

Reports, Studies, and Journals

Committee for a Responsible Budget: Employer Plans in Medicare Advantage: A Flaw in the Quality Bonus System. The report highlights potential reforms targeting the interaction between Employer Group Waiver Plans and the Medicare Advantage quality bonus program.

HHS Office of Inspector General: HRSA Made Some Potential Overpayments to Providers Under the Phase 2 General Distribution of the Provider Relief Fund Program. The report found some instances in which HRSA made Provider Relief Payments that were not correctly calculated and were not supported by appropriate documentation.

Health Affairs: Medicare Part D Plans Greatly Increased Utilization Restrictions On Prescription Drugs, 2011-20. The study examined trends in the prevalence of utilization restrictions on non-protected-class compounds in Medicare Part D plans during the period 2011—2020 and found the prevalence of formulary restrictions grew overtime but accelerated in 2020.

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Contact Information

For additional information concerning this Alert, please contact:

Washington Council Ernst & Young