Health Care Week in Review: CMS Issued ESRD Proposed Rule

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in health care regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news.

Week in Review Highlight of the Week:

This week, CMS issued the ESRD proposed rule and HHS released a fact sheet detailing the potential impacts of ARP Act subsidy expiration. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On June 21, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model. This proposed rule would update and revise the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year 2023. This proposed rule also proposes to update the payment rate for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury. This rule also includes requests for information regarding potential payment adjustments for certain new renal dialysis drugs and biological products as well as health equity issues under the ESRD PPS with a focus on pediatric dialysis payment. In addition, this proposed rule proposes to update requirements for the ESRD Quality Incentive Program. Finally, this proposed rule would make updates to the ESRD Treatment Choices Model.
• On June 22, 2022, the Administration for Children and Families (ACF) Office on Trafficking in Persons (OTIP) issued a request for information (RFI) entitled, Request for Information: Forced Labor in Healthcare Supply Chains. ACF is requesting information on forced labor, a form of human trafficking, in healthcare supply chains including monitoring, training, and research efforts. This RFI is part of OTIP’s ongoing efforts to seek public comments to inform implementation of Executive Order 14001 (A Sustainable Public Health Supply Chain), the National Strategy for a Resilient Public Health Supply Chain, and other related efforts on forced labor.
• On June 23, 2022, the Food and Drug Administration (FDA) issued final guidance entitled, Assessing the Effects of Food on Drugs in Investigational New Drugs and New Drug Applications--Clinical Pharmacology Considerations; Guidance for Industry; Availability. This guidance provides recommendations to sponsors planning to conduct food-effect (FE) studies for orally administered drug products as part of investigational new drug applications (INDs), new drug applications (NDAs), and supplements to these applications.
• On June 23, 2022, FDA issued draft guidance entitled, Considerations for Rescinding Breakthrough Therapy Designation; Draft Guidance for Industry; Availability. This guidance explains how, during its evaluation of a drug development program, FDA may consider whether to rescind a breakthrough therapy designation (BTD) that has been granted. The BTD program is intended to facilitate and expedite the development of those drugs that receive designation and involves a resource commitment from FDA to provide early and frequent advice, conduct multidisciplinary meetings involving senior managers, and expedite the review of resultant marketing applications.
• On June 23, 2022, FDA issued draft guidance entitled, Non-Penicillin Beta-Lactam Drugs: A CGMP Framework for Preventing Cross-Contamination; Draft Guidance for Industry; Availability. This draft guidance describes methods, facility design elements, and controls that are important in preventing drugs from being cross-contaminated with non-penicillin beta-lactam antibacterial drugs or non-antibacterial beta-lactam compounds, and it makes recommendations for how manufacturers can be compliant with current good manufacturing practice requirements for preventing cross-contamination. This draft guidance also provides information regarding the relative health risk of, and the potential for, cross-reactivity in the classes of non-penicillin beta-lactam antibacterial drugs and nonantibacterial beta-lactam compounds.
• On June 24, 2022, FDA issued draft guidance entitled, Clinical Pharmacology Considerations for the Development of Oligonucleotide Therapeutics; Draft Guidance for Industry; Availability. This draft guidance describes FDA’s recommendations regarding clinical pharmacology considerations during the development of oligonucleotide therapeutics, including characterizing the potential for QT interval prolongation, performing immunogenicity risk assessment, characterizing the impact of hepatic and renal impairment, and assessing the potential for drug-drug interactions. The intent of this guidance is to assist industry in the conduct of these studies.
• On June 24, 2022, the Department of Health and Human Services (HHS) issued an RFI entitled, HHS Initiative to Strengthen Primary Health Care. HHS’ Office of the Assistant Secretary for Health (OASH) is requesting input from persons, communities, health care providers, purchasers and payers, educators, researchers, and other members of the public about what the federal government could do to strengthen primary health care in the United States. The HHS Initiative to Strengthen Primary Health Care aims to establish a federal foundation for the provision of primary health care for all that supports improved health outcomes and advanced health equity. The first task is to develop an initial HHS plan for strengthening primary health care that will delineate specific actions that HHS agencies and offices may take to achieve the aims, within the current legislation and funding environment. The purpose of this RFI is to provide OASH with diverse perspectives, experiences, and knowledge that may inform the development of the initial plan for HHS, as well as future steps.

Event Notices

• July 14, 2022: The National Institutes of Health (NIH) announced a public meeting of the Novel and Exceptional Technology and Research Advisory Committee. The agenda will include an update from the Working Group on Data Science and Emerging Technology and discussion of next steps regarding the current charge to the committee.
• July 19-20, 2022: HHS announced a public meeting of the Tick-Borne Disease Working Group (TBDWG). The meeting agenda will include a review of the TBDWG’s 2022 report, which will address a wide range of topics related to tick-borne diseases, such as, surveillance, prevention, diagnosis, diagnostics, and treatment; identify advances made in research, as well as overlap and gaps in tick-borne disease research; and provide recommendations regarding any appropriate changes or improvements to such activities and research.
• August 18, 2022: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public meeting of the Center for Mental Health Services National Advisory Council (CMHS NAC). The meeting agenda will include consideration of the minutes from the March 29, 2022, SAMHSA, CMHS NAC meeting; updates from the CMHS Director; updates from the Office of the Assistant Secretary, and council discussions.

II. Congressional Hearings

U.S. House of Representatives

• On June 21, 2022, the House Committee on Rules held a meeting entitled, R. 7666, H.R. 5585, H.R. 4176, and the Senate Amendment to H.R. 3967. The Committee met to consider the following measures: H.R. 7666—the Restoring Hope for Mental Health and Well-Being Act of 2022, H.R. 5585— the Advanced Research Projects Agency–Health Act, H.R. 4176—the LGBTQI+ Data Inclusion Act, and the Senate Amendment to H.R. 3967—the Honoring our PACT Act of 2022.
• On June 23, 2022, the House Committee on Oversight Select Subcommittee on the Coronavirus Crisis held a hearing entitled, A Hearing with Trump White House Coronavirus Response Coordinator Dr. Deborah Birx. Witnesses present included: Dr. Deborah Birx, Former White House Coronavirus Response Coordinator.
• On June 23, 2022, the House Committee on Appropriations Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies and Military Construction, Veterans Affairs, and Related Agencies held a markup entitled, FY 2023 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, and Military Construction, Veterans Affairs, and Related Agencies Appropriations Bills. The Committees considered the fiscal year (FY) 2023 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies appropriations bill and the Military Construction, Veterans Affairs, and Related Agencies Appropriations bill.
• On June 23, 2022, the House Committee on Appropriations Subcommittee on the Departments of Labor, Health and Human Services, Education, and Related Agencies held a markup entitled, FY 2023 Labor, Health and Human Services, Education, and Related Agencies Bill. The Committee considered the FY 2023 Labor, Health and Human Services, Education, and Related Agencies Appropriations Bill.

U.S. Senate

• On June 23, 2022, the Senate Special Committee on Aging held a hearing entitled, Strengthening Support for Grandfamilies during the COVID-19 Pandemic and Beyond. Witnesses present included: Donna Butts, Executive Director, Generations United; Kim Clifton, MSW, Executive Director, Helping and Lending Outreach Support (HALOS); Gail Engel, Grandparent Caregiver, Founder and Executive Director, Grand Family Coalition; and Ruth Stevens, Grandmother.

III. Reports, Studies & Analyses

• On June 21, 2022, Alston & Bird published a report entitled, Healthy Byte: Provider Relief Fund (PRF) Rolls On with Reporting Period 3. In this Healthy Byte, Alston and Bird’s Brian Lee and CJ Frisina discussed what to expect from the Health Resources & Services Administration (HRSA), ongoing and potential enforcement activities, and best practices to prepare for government investigations in anticipation of PRF Reporting Period 3 opening on July 1, 2022.
• On June 23, 2022, the Government Accountability Office (GAO) published a report entitled, COVID-19: Pandemic Lessons Highlight Need for Public Health Situational Awareness Network. This report examines (1) the extent to which HHS has made progress toward implementing the requirements in the Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2019; and (2) the challenges and lessons learned from COVID-19 that HHS could incorporate in planning for a situational awareness and bio surveillance network.
• On June 23, 2022, GAO published a report entitled, COVID-19: Agencies Increased Use of Some Regulatory Flexibilities and Are Taking Steps to Assess Them. In this report, GAO examined s (1) agencies’ implementation of regulatory flexibilities in response to the pandemic; (2) the plans, policies, and other tools selected agencies used to identify and design regulatory flexibilities; and (3) efforts these selected agencies took to assess the impacts of regulatory flexibilities.
• On June 23, 2022, the Kaiser Family Foundation (KFF) published a report entitled, How Equitable is Access to COVID-19 Treatments? The report examines COVID-19 treatment availability by county and certain county characteristics, including metro vs. non-metro status, poverty rate, and majority Black, Hispanic, or American Indian or Alaska Native (AIAN), the groups who have experienced the largest disparities in COVID-19 health outcomes. KFF found that while nearly all people live in a county with a facility with COVID-19 treatments available, disparities in access persist among the potentially highest risk and highest need counties.

IV. Other Health Policy News

• On June 22, 2022, HHS released a fact sheet detailing the potential effects on premiums and insurance coverage from the expiration of subsidies that were included in the American Rescue Plan (ARP) Act. ARP included subsidies that lower health care costs and expand access to affordable, comprehensive health coverage. Due in part to ARP subsidies, a record-breaking 14.5 million people signed up for health insurance coverage through both federal Marketplace (via HealthCare.gov) and State-Based Marketplaces during the recent Open Enrollment period. With ARP subsidies set to expire in 2022, HHS projected that many Health Insurance Marketplace consumers will see substantial increases in out-of-pocket premium costs and approximately 3 million Americans could lose their health insurance. HHS also projected more than 10 million Americans will have reduced premium tax credits or lose them entirely. More information on this news release can be found here.
• On June 22, 2022, the Centers for Disease Control and Prevention (CDC) began shipping orthopoxvirus tests to five commercial laboratory companies, including the nation’s largest reference laboratories, to quickly increase monkeypox testing capacity and access in every community during the ongoing monkeypox outbreak. These commercial laboratories will dramatically expand testing capacity nationwide and make testing more convenient and accessible for patients and health care providers. Health care providers will be able to use these laboratories by early July and testing capacity through these companies will be ramped up throughout the month. This development will facilitate increased testing, leverage established relationships between clinics, hospitals and commercial laboratories, and support CDC’s ability to better understand the scope of the current monkeypox outbreak. More information on this action can be found here.
• On June 24, 2022, HHS announced the prioritization of 13 programs to include President Biden’s Justice40 initiative, which was created to ensure that federal agencies deliver 40 percent of the overall benefits of climate, clean energy, affordable and sustainable housing, clean water, and other investments to disadvantaged communities. The 13 programs are aimed at helping communities find relief from pollution and climate-related events that can have adverse impacts on human health. Examples of programs prioritized for the Justice40 initiative by HHS include ACF’s Low Income Home Energy Assistance Program (LIHEAP) program, NIH’s Environmental Career Worker Training Program (ECWTP), and CDC’s Climate-Ready States and Cities Initiative (CRSCI). More information on this announcement can be found here.
• On June 24, 2022, the Supreme Court issued its decision in the case of Dobbs v. Jackson Women’s Health Organization (No. 19-1392). The court voted 6-3 to uphold Mississippi’s ban on abortions after 15 weeks of pregnancy, and 5-4 to explicitly overturn Roe v. Wade and Planned Parenthood v. Casey. The court held that, “the Constitution does not confer a right to abortion; Roe and Casey are overruled; and the authority to regulate abortion is returned to the people and their elected representatives.” The majority was led by Justice Samuel Alito, who was joined by Justices Clarence Thomas, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett. Chief Justice John Roberts filed an opinion concurring in judgement that stated he would have upheld Mississippi’s abortion ban after 15 weeks of pregnancy but would not have voted to directly overturn Roe. Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan filed a joint dissent. More information on this decision can be found here.
• On June 24, 2022, the Supreme Court issued its decision in Becerra v. Empire Health Foundation (No. 20-1312). The case concerned calculation of the disproportionate share hospital (DSH) payment adjustment, which increases payments to hospitals that serve an unusually high percentage of low-income patients. The case was taken up to resolve a Circuit split on the issue (Ninth Circuit ruled in favor of the hospital, while the Sixth and DC Circuits have previously sided with HHS). The majority opinion was authored by Justice Kagan, with Justices Thomas, Breyer, Sotomayor, and Barrett joining. Justices Kavanaugh, Alito, Gorsuch, and Chief Justice Roberts dissented. The Court held that the Total Medicare Days fraction denominator in the Disproportionate Patient Percentage (DPP) calculation includes days where a Medicare beneficiary (1) had exhausted their Medicare benefits or (2) was covered by private insurance, because they were nonetheless entitled to Medicare benefits (e.g., age 65 +, or disability benefits). This is significant as the DPP is the first step in calculating a hospital’s DSH adjustment percentage, and more beneficiaries in the denominator calculation will result in a lower DPP and ultimately lower DSH adjustment percentage. If a hospital’s DPP falls below 15 percent, the hospital would no longer receive DSH payments. Further, the DSH adjustment percentage impacts a hospital’s 340B eligibility, meaning the calculation of the total Medicare days could impact 340B hospitals as well. The text of the Supreme Court’s decision can be found here.

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