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 - NOVEMBER 6, 2023

Medicare Physician Fee Schedule Final Rule Published


CMS released the CY 2024 Physician Fee Schedule (PFS) final rule on November 2. According to CMS, the finalized CY 2024 PFS conversion factor is $32.74, a decrease of $1.15 or 3.37% relative to CY 2023. Also note that CMS finalized maintaining a Merit-Based Incentive Payment System (MIPS) performance threshold of 75 points for 2024, rather than increasing it to 82 points, as proposed, which would have made it more challenging for physicians to avoid a penalty in 2026.


FY 2024 Appropriations Update


While both the House and Senate are making progress on their respective fiscal year (FY) 2024 spending bills, appropriators have yet to open any bicameral discussions to reconcile the two chambers’ very different approaches to government funding. Congress currently faces a November 17 deadline to avoid a government shutdown. The House of Representatives has passed seven of the 12 annual appropriations measures (Military Construction-Veterans Affairs (VA), Defense, Homeland Security, State-Foreign Operations, Energy-Water, Legislative Branch, Interior-Environment), while the Senate passed the chamber’s first minibus package containing appropriations for Agriculture-Food and Drug Administration, Military Construction-VA, and Transportation-Housing and Urban Development in a bipartisan 82-15 vote last week. The two chambers’ approaches to FY 2024 government funding vary significantly, however, with the House bills containing steeper spending cuts and contentious policy riders.

During his first meeting with Senate Republicans since being elected House Speaker, Mike Johnson (R-La.) argued in support of another continuing resolution (CR) extending government funding through January 15. House Majority Leader Steve Scalise (R-La.) has said that any stop-gap spending bill will contain both spending cuts and policy changes. Congress faces an effective April 30 deadline to pass FY 2024 appropriations, given that the most recent debt ceiling agreement included a provision to subject all discretionary spending to a 1% cut should a CR still be in place past that date.

The House also passed a $14.3 billion Israel aid package in a 226-196 vote last week. Most Democrats opposed the measure, which includes cuts to the Internal Revenue Service, and the White House has already threatened to veto the bill. Senate Majority Leader Chuck Schumer (D-N.Y.) has pledged that the Senate will consider a broader package including emergency spending for Israel, Gaza, and Ukraine. Speaker Johnson stated that the House will vote on aid to Ukraine as soon as this week as a part of a package that also contains border enforcement measures. Sens. Bernie Sanders (I-Vt.), Mazie Hirono (D-Hawaii), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), and Peter Welch (D-Vt.) sent a letter to Senate leadership last week calling for any emergency supplemental appropriations bill for Ukraine, Israel, and Gaza to contain equal funding for “major crises” domestically, including the state of the U.S. primary health care system and the opioid crisis. The White House has requested $106 billion in emergency aid for Ukraine, Israel, and Gaza.

Republican appropriators in the House of Representatives released a revised version of their FY 2024 Labor-Health and Human Services-Education legislation last week. Similar to other spending bills being advanced by the House, the revised HHS appropriations measure includes a number of contentious policy riders, including a provision to prevent any funding from going toward postgraduate physician training programs that mandate abortion training or penalize students who opt out of such training. The bill also includes language to block the declaration of a public health emergency related to gun violence, along with a measure to prevent funding to implement President Joe Biden’s executive order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. Speaker Johnson plans to bypass a full committee markup and instead bring the bill to the floor for a vote the week of November 13.


Senate Finance to Mark Up Mental Health, PBMs, Medicare Physician Fee Schedule Relief Extension Package This Week


Senate Finance Committee leadership released a bipartisan discussion draft of legislation containing measures related to the pharmacy benefit manager (PBM) industry as well as provisions aimed at increasing access to mental health care. The package would expand eligibility for workforce shortage incentive programs for mental health and substance use disorder clinicians, support the use of licensed clinical social workers in the Medicare program, and require Medicare Advantage plans to have up-to-date and accurate provider directories. Additionally, the draft would add to the Modernizing and Ensuring PBM Accountability Act advanced by the panel in July by mandating that prescription drug plan sponsors with preferred pharmacy networks have a minimum share of in-network pharmacies in underserved areas not tied to a PBM or the sponsor. The bill also directs the U.S. Department of Health and Human Services to collect data on drug acquisition costs, and would require plans to include certain discount-eligible drugs in their formularies. The package also mitigates the impending Medicare physician fee schedule cut by extending the relief from last year at the 2.5% level, rather than letting it drop to 1.25%. The panel plans to markup the package on Wednesday.


Senate to Hold NIH Director Confirmation Vote


The Senate plans to vote early this week on the nomination of Monica Bertagnolli to serve as the next director of the National Institutes of Health. A vote to end debate on the Senate floor is scheduled for Monday, which could set the stage for a final confirmation vote on Tuesday. The Senate Committee on Health, Education, Labor and Pensions advanced her nomination in a bipartisan vote late last month.


Pallone, Neal Push for MA Broker Compensation Oversight


House Energy and Commerce Committee Ranking Member Frank Pallone (D-N.J.) and Ways and Means Committee Ranking Member Richard Neal (D-Mass.) are urging the Centers for Medicare and Medicaid Services (CMS) to increase oversight of broker participation and compensation in the Medicare Advantage (MA) market. The lawmakers raise concerns that misaligned incentives have led to broker and marketing practices that may push seniors away from the insurance plans best suited to their needs. They request that CMS move to require MA plans to report total broker compensation amounts, inclusive of any bonus or incentive payments. They also ask the agency to change the total amount brokers can receive in compensation per enrollee.


Additional GOP Leaders Question Proposed Changes to Nursing Home Standards


Republican leadership of the House Energy and Commerce Committee, House Ways and Means Committee, and Senate Finance Committee have sent a letter to the U.S. Department of Health and Human Services arguing that the administration’s proposed nursing home staffing requirements will jeopardize access to care, particularly for Americans in rural and underserved areas. The new rule from CMS would increase the on-site registered nurse staffing requirement to 24 hours and mandate that nursing homes provide 2.45 hours of care per resident day from nurse aides and 0.55 hours per resident day from registered nurses. The lawmakers ask that the agency withdraw the rule and work on tailored solutions “addressing the severe health care workforce shortages” across the nation.


Warner, Cassidy Launch Health Care Cybersecurity Working Group


Senate Intelligence Committee Chairman Mark Warner (D-Va.) and Health, Education, Labor and Pensions Ranking Member Bill Cassidy (R-La.) announced the creation of a health care cybersecurity working group last week. The lawmakers, joined by Sens. John Cornyn (R-Texas) and Maggie Hassan (D-N.H.), plan to examine proposals to address the cybersecurity of the nation’s health care system. Sen. Warner released a report last year entitled Cybersecurity is Patient Safety which considered the establishment of minimum cyber hygiene practices for health care organizations.



November 6, 2023: | Page 1 Page 2

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