Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


GOP Appropriators Set Spending Limits Below Debt Limit Deal

After blocking floor votes on several bills in opposition to the spending caps set by the recent debt ceiling compromise negotiated by the White House and House Speaker Kevin McCarthy (R-Calif.), a small group of conservative Republicans in the House of Representatives appear to have won concessions from the Speaker to cut spending by an additional $120 billion. In defending his new agreement, McCarthy stated that the debt deal decided “a ceiling, not a floor” for spending, and that it was always his intention to pass appropriations legislation below the Fiscal Responsibility Act’s caps. The new plan would permit $1.47 trillion in discretionary spending for fiscal year (FY) 2024. The Departments of Labor, Education, and Health and Human Services would be cut by 29% under the GOP plan.

The House Appropriations Committee advanced its FY 2024 Agriculture-Rural Development-Food and Drug Administration (FDA) spending bill last week. The package, which was approved via a party-line vote, would trim 2.1% in overall spending compared to FY 2023. The bill provides $6.6 billion for the FDA, including user fee funding, less than the $7.2 billion requested by the agency in the President’s budget. It includes a provision to restrict access to the abortion medication mifepristone. The policy would nullify the FDA’s January decision to remove the in-person dispensing requirement for the drug. The legislation also includes a measure to prevent the agency from prohibiting the sale of menthol cigarettes and flavored cigars, or from limiting the amount of nicotine allowed in cigarettes. The Senate Appropriations Committee will begin consideration of the first of its FY 2024 spending bills this week, marking up the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2024 and the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2024 on Thursday.

Lawmakers Grapple with Ongoing Drug Shortages

Democrats on the House Energy and Commerce Committee are threatening to oppose a package to reauthorize the Pandemic and All-Hazards Preparedness Act (PAHPA) if provisions to address the nation’s ongoing drug shortages are not included. The reauthorization package was negotiated by Energy and Commerce Committee members Richard Hudson (R-N.C.) and Anna Eshoo (D-Calif.), but Eshoo recently stated that she has pulled her support for the bill after Republicans refused to include a measure to increase transparency in the drug supply chain. During a legislative hearing focused on the PAHPA reauthorization last week, panel Republicans argued that a narrow reauthorization would help ensure House passage of the legislation, but committed to separately work on a bipartisan basis to address the problem of drug shortages. PAHPA’s pandemic preparedness programs expire September 30.

Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) and Energy and Commerce Chair Cathy McMorris Rodgers (R-Wash.) are seeking information from health care stakeholders about the emerging and persistent drug shortages currently facing the nation. The lawmakers pose a series of 14 questions to inform their examination of the drivers of medication shortages and potential policy solutions “to bolster patient access and shore up our critical drug supply chains.” Feedback should be submitted to [email protected] by July 7.

Sanders Releases Report on Drug Pricing, Public Investment in Medical Research

Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Bernie Sanders (I-Vt.) has released a report highlighting the costs of drugs and medical devices that received funding from the National Institutes of Health (NIH). Sanders calls on the NIH to reinstate the use of reasonable pricing clauses in the agency’s contracting requirements. These clauses would force companies to set reasonable prices when they license NIH inventions. The HELP Committee has yet to notice a date for the confirmation hearing of Monica Bertagnolli to serve as the next NIH Director. Sanders has said that he will oppose any administration health nominee who does not commit to lowering drug prices.

Preventive Services Mandate Restored as Legal Challenge Proceeds

The Department of Justice (DOJ) has reached an agreement with the plaintiffs challenging the Affordable Care Act’s (ACA) preventive care mandate to protect no-cost coverage of certain services while the legal case proceeds. In exchange, DOJ has pledged to not enforce the mandate for the parties challenging the law who claim that coverage of HIV prevention drugs and other preventive care services violates their religious beliefs. The employers and individuals challenging the law have asserted that because members of the U.S. Preventive Services Task Force (USPSTF) are not Senate confirmed nor overseen by Senate confirmed federal employees, their recommendations for what services must be covered by insurers at no cost to the beneficiary cannot be enforced. They have also argued that coverage of pre-exposure prophylaxis medication – PrEP – to prevent the transmission of HIV violates their religious rights. The 5th U.S. Circuit Court of Appeals signed the stipulated order partially halting the lower court’s March ruling which struck the ACA’s requirement. While a ruling in the case is expected in the coming months, an appeal to the U.S. Supreme Court is likely no matter what decision the 5th Circuit reaches.

MedPAC, MACPAC Release June Reports to Congress

The Medicare Payment Advisory Commission (MedPAC) is recommending that the Centers for Medicare and Medicaid Services (CMS) lower its payment rates for telehealth services. MedPAC’s annual June Report to the Congress recommends that the agency rescind fee increases initially instituted in response to the COVID-19 pandemic as early as 2024. The Commission argues that providing care via telehealth does not cost practices as much as in-person care. The report suggests that the increased use of telehealth throughout the COVID-19 public health emergency did not adversely impact the quality of care, and only slightly increased costs for the Medicare program. MedPAC recommends that CMS work with Congress to standardize telehealth payments so as not to disincentivize in-person care, and expresses support for the use of beneficiary cost-sharing to help avoid overuse of virtual services.

The latest MedPAC report also recommends that lawmakers implement changes to the Medicare Part B benefit to lower drug spending. The panel suggests capping the payment rate for Part B drugs made available via the accelerated approval pathway, and recommends that Medicare be given the authority to use reference pricing to establish a single average sales price-based payment rate for Part B drugs and biologics with similar health effects. The report details the Commission’s concerns that current Medicare wage indexes are not accurate and create inequities in the health care system, and recommends that Congress replace current wage indexes with a new system for hospitals and providers. The June 2023 report also includes a recommendation that Congress align payment rates for the same services provided across different ambulatory settings.

The Medicaid and CHIP Payment and Access Commission (MACPAC) also released its June 2023 report last week. MACPAC recommends automatic adjustments to disproportion

New Research Paper Details MA Overpayments

Anew white paper from the Leonard D. Schaeffer Center for Health Policy & Economics indicates that Medicare Advantage (MA) plans were overpaid by 14.4% in 2020 due to favorable patient selection. Researchers found that patients with lower-than-average expenditures than those with similar risk factors were significantly more likely to switch from traditional Medicare to the MA program. As a result, the risk-score-adjusted expenditures for these 16.9 million beneficiaries who switched coverage between 2006 and 2019 were substantially below average. The report asserts that basing MA payment benchmarks on fee-for-service (FFS) expenditures is “increasingly problematic” as FFS enrollment continues to decline. Researchers stress the need for reforming how MA payments are set, such as by decoupling MA payments from FFS benchmarks or instituting competitive bidding.

Upcoming Congressional Hearings and Markups

House Energy and Commerce Subcommittee on Health legislative hearing “Responding to America’s Overdose Crisis: An Examination of Legislation to Build Upon the SUPPORT Act;” 10:00 a.m.; June 21

House Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions hearing “Competition and Transparency: the Pathway Forward for a Stronger Health Care Market;” 10:15 a.m.; June 21

House Veterans’ Affairs Subcommittee on Health hearing on H.R. 3520, Veterans Care Improvement Act; H.R. 1182, Veterans Serving Veterans Act; H.R. 1774, VA Emergency Transportation Act; H.R. 2683, VA Flood Preparedness Act; H.R. 2768, PFC Joseph P. Dwyer Peer Support Program Act; H.R. 2818, Autonomy for Disabled Veterans Act; H.R. 3581, Caregiver Outreach and Program Enhancement (COPE) Act; H.R. 1278, DRIVE Act; H.R. 1639, VA Zero Suicide Demonstration Project Act; and H.R. 1815, Expanding Veterans’ Options for Long Term Care Act; 10:30 a.m.; June 21

Senate Veterans’ Affairs Committee hearing “Examining the Effectiveness of the Office of Integrated Veteran Care;” 3:30 p.m.; June 21

House Energy and Commerce Subcommittee on Oversight and Investigations hearing “MACRA Checkup: Assessing Implementation and Challenges that Remain for Patients and Doctors;” 10:30 a.m.; June 22

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