POLICY BRIEFINGS

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.


THIS WEEK'S BRIEFING - OCTOBER 2, 2023

U.S. Averts Government Shutdown


Congress narrowly averted the threat of a federal government shutdown over the weekend following passage of a clean continuing resolution (CR) that funds the government through November 17. House Speaker Kevin McCarthy (R-Calif.) brought the bipartisan stopgap spending bill (H.R. 5860) to the floor on Saturday. It passed by a vote of 335-91, with 90 Republicans and one Democrat voting in opposition. The legislation extends fiscal year (FY) 2023 funding for 45 days. It also extends funding for several programs that were set to expire at the end of September, including the Community Health Center program, National Health Service Corps, Teaching Health Center Graduate Medical Education program, Special Diabetes Program, Special Diabetes Program for Indians, pandemic preparedness authorities, and delays scheduled cuts to Medicaid payments for disproportionate share hospitals. The bill reauthorizes animal drug user fees through FY 2028. The bill also includes the full $16 billion in disaster relief funding requested by the Biden administration, but does not include supplemental aid to Ukraine. It also struck a pay raise for Members of Congress that had been included in the Senate’s version of the temporary spending bill. The Senate voted 88-9 to concur with the House amendments to the CR. The Senate vote was reportedly delayed over concern regarding the elimination of funding for Ukraine. In calling up the vote, Senate Majority Leader Chuck Schumer (D-N.Y.) said that he and Minority Leader Mitch McConnell (R-Ky.) have “agreed to continue fighting for more economic and security aid for Ukraine.” President Joe Biden signed the measure into law late Saturday. Speaker McCarthy is expected to face a motion to vacate the chair this week from a small group of House Republicans seeking to oust him as speaker. The group, headed by Rep. Matt Gaetz (R-Fla.), opposed a bipartisan approach to government funding and sought to enact steep budgetary cuts.


Wyden, Pallone to Investigate Medicaid MCOs’ Use of Prior Authorization


Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Energy and Commerce Committee Ranking Member Frank Pallone (D-N.J.) sent a series of letters to the nation’s largest Medicaid managed care organizations (MCOs) regarding their high rates of care denials. The lawmakers are requesting details about the insurance carriers’ use of prior authorization, including any algorithms and reliance on artificial intelligence used to make prior authorization coverage decisions. The lawmakers highlight a recent finding from the Health and Human Services Office of the Inspector General which found that one in eight MCO prior authorization requests were denied, double the rate in the Medicare Advantage program. “It is critical that MCOs are not improperly denying access to care in an effort to maximize profits given that they are obligated by statute, regulation, and contracts with states to pay network providers for furnishing covered services to enrollees,” Pallone and Wyden write. “MCOs should not be prioritizing corporate or shareholder profits ahead of the health and well-being of American families.”


MA Premiums to Increase $0.64


The average premium for Medicare Advantage (MA) plans will increase from $17.86 to $18.50 per month in 2024, according to the latest estimates from the Centers for Medicare and Medicaid Services. The total number of MA plans will also increase, from 5,674 to 5,700. The agency projects that MA will account for more than half of all Medicare enrollment next year, with 33.8 million people expected to choose an MA plan during the upcoming open enrollment period, which opens on October 15 and closes December 7.


Cassidy Issues RFIs on Reforming CDC, NIH


Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Bill Cassidy (R-La.) is soliciting comments to inform potential legislation to modernize the Centers for Disease Control and Prevention (CDC). Cassidy specifically seeks input on four high-level topics – fostering innovation and collaboration, making data work for everyone, improving upon what works well, and mechanisms to modernize – as well as other relevant information. Cassidy’s request for information (RFI) mirrors a similar request for feedback issued by the House Energy and Commerce Committee in April. Comments should be submitted no later than October 20th via email to [email protected].

Cassidy also issued an RFI on ways to reform the National Institutes of Health (NIH). Specifically, the HELP Ranking Member is seeking information on how the NIH could improve its process for approving federal research grants, better support the biomedical research workforce, bolster collaboration across academia and industry, and increase transparency into agency activities. The deadline to submit feedback to [email protected] is October 27th.


FDA Proposes LDT Enforcement Rule


The Food and Drug Administration (FDA) released a proposal last week that would result in most laboratory developed tests (LDTs) being subject to agency review as medical devices. The rule is aimed at ensuring the safety, accuracy, and effectiveness of LDTs. It seeks to amend the FDA’s regulations to make explicit that in vitro diagnostic products (IVDs), including LDTs, are devices under the Federal Food, Drug, and Cosmetic Act, including when the manufacturer of the IVD is a laboratory. Along with this amendment, the FDA is proposing a policy under which the FDA intends to provide greater oversight of LDTs through a five-stage, multi-year phaseout of its current general enforcement discretion approach. The FDA estimates that the proposed rule would save the health care system more than $22.3 billion and the FDA $5.6 billion annually. Comments on the proposed rule are due by December 1, 2023.


Administration to Begin Enforcement of Drug Price Reporting Requirements


The departments of Health and Human Services, Labor, and Treasury have issued joint guidance regarding the enforcement of drug price reporting requirements for health insurers. The departments announced their decision to rescind a 2021 regulation that had delayed enforcement of the drug pricing provisions of the Trump-era transparency in coverage rule. That regulation requires health insurers to publicly disclose the negotiated rates of covered prescription drugs in machine readable files. Going forward, the Biden administration plans to address enforcement of the requirements on a case-by-case basis, and does not plan to issue further rulemaking in the near future.


Medicare Drug Price Negotiations to Proceed


Federal Judge Michael J. Newman denied a request to halt Medicare drug price negotiations while litigation challenging the process is ongoing. The lawsuit, brought by the U.S. Chamber of Commerce and other local and state chambers of commerce, argued that the Inflation Reduction Act violates the First, Fifth, and Eighth amendments of the Constitution. In its defense of the law, the Justice Department asserted that the Chamber and its members cannot show imminent harm and questioned whether the Chamber had standing to bring its case. “The Court is not convinced that granting Plaintiffs preliminary injunctive relief will protect them from imminent and irreparable harm,” Newman wrote in his opinion. “Any economic harm — which, on its own, is insufficient to satisfy this prong of a preliminary injunction analysis — will not occur for years in the future.” Pharmaceutical manufacturers of the 10 drugs selected for the first round of negotiation had until October 1st to agree to participate in the process, to withdraw their products from the Medicare program, or to face excise taxes. While companies are not required to announce their decision to opt into the program, Merck, Boehringer Ingelheim, AstraZeneca and Bristol Myers Squibb have publicly confirmed that they will participate in negotiations.


CBO Issues Report on CMMI


The Center for Medicare and Medicaid Innovation (CMMI) spent $7.9 billion operating care models that reduced spending by $2.6 billion, according to a new analysis by the Congressional Budget Office (CBO). Previous CBO forecasts had projected that CMMI would save $2.8 billion in its first decade of work, since its inception as a part of the Affordable Care Act in 2010. CBO now projects that CMMI will increase net federal spending by $1.3 billion over its second decade. CBO attributes CMMI’s performance to the slow pace at which successful models are scaled up and the voluntary nature of most pilot programs.


ARPA-H Announces Cambridge, Dallas as Latest Hubs


The Advanced Research Projects Agency for Health (ARPA-H) announced the selection of its next two headquarters last week. ARPA-H’s customer experience hub will be in Dallas and its investor catalyst hub will be in Cambridge, Mass. Dallas and Cambridge join Washington, D.C., which will serve as the stakeholder and operations hub, as a part of the new agency’s hub-and-spoke model. ARPA-H continues to recruit a network of regional private, public, and nonprofit organizations to serve as spokes, with 10 spokes having been announced so far.

Earlier in the week, ARPA-H announced the award of almost $115 million for three new cancer research programs. Rice University will receive up to $45 million for the development of an implant to sense and deliver specific doses of medicine to increase cancer therapy response rates. The University of Missouri will receive up to $9 million for the development of a cancer therapy that uses engineered bacteria to target tumors’ immune cells to treat cancer without the traditional side effects of cancer treatment. The Georgia Institute of Technology and Emory University will receive up to $50 million to develop biosensor tools to recognize cancer-specific biomarkers, with the goal of identifying cancers when they are at their most treatable.


Ways and Means Passes Legislation to Expand Use of HSAs


The House Ways and Means Committee advanced the Bipartisan HSA Improvement Act (H.R. 5688) last week. The bill passed the committee in a 28-14 vote, with four Democrats joining Republicans in voting in support of the measure. The legislation would allow individuals who utilize direct primary care arrangements and worksite health clinics to contribute to a health savings account (HSA). The panel also advanced the HSA Modernization Act (H.R. 5687) along a party line vote. The bill would expand eligibility for HSAs to Medicare beneficiaries who are still working and veterans, allow spouses to make catch-up contributions to the same HSA, and increase the limits on contributions.


Senate Committee Advances SAFER Banking Act


The Senate Banking Committee advanced legislation last week that would enable the nation’s cannabis businesses to access banking services more easily. The SAFER Banking Act (S. 2860) would create a safe harbor for banks, credit unions, and payment processors that provide services to state-sanctioned businesses. The legislation aims to promote public safety by reducing cannabis businesses’ reliance on cash and increasing access to deposit accounts, insurance, other financial services.


Democrats Push for Opioid Settlement Fund Oversight


Agroup of 12 congressional Democrats have sent a letter to the Office of National Drug Control Policy regarding oversight of the more than $50 billion states will receive in opioid settlement money over the next 15 years. The letter, spearheaded by Sen. Ed Markey (D-Mass.) and Rep. David Trone (D-Md.), argues that the funds must be spent on substance use disorder treatment and prevention, not on other general state expenditures. “This funding, drawn from the profits that pharmaceutical companies made by overprescribing opioids and underselling their potential dangers, presents a significant opportunity to redistribute ill-gained earnings to the people who the opioid epidemic harmed,” the lawmakers state. “We must take full advantage of these settlements to combat this crisis, therefore we urge the Biden administration to closely track opioid settlement fund spending, to ensure that populations in need of additional support receive it and to avoid duplicative federal efforts.”


Sen. Dianne Feinstein Dies at 90


Six-term California Democratic Senator Dianne Feinstein, 90, passed away at her home in Washington on Friday. She was the chamber’s longest serving female senator. Feinstein sat on four committees prior to her death: Appropriations, Judiciary, Intelligence, and Rules. Senate Democrats are expected to select a member to replace her in the coming days to maintain their majority on each panel. Feinstein had already announced that she would not be running for a seventh term in 2024. California Governor Gavin Newsom will be responsible for appointing Feinstein’s successor. Newsom has stated that he will appoint a Black woman, but that he will not appoint anyone already running for the position so as not to interfere in the primary race. He has also confirmed that his appointee will be free to run for a full Senate term in 2024, should they choose to do so. Reps. Barbara Lee (D-Calif.), Katie Porter (D-Calif.), and Adam Schiff (D-Calif.), along with former Google executive Lexi Reese, have announced their candidacies for the 2024 Senate race.



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