Health Care Week in Review: Senate Votes to End COVID-19 National Emergency, CMS Releases Rate Notice

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, the U.S. Senate passed a bill ending the COVID-19 National Emergency Declaration and CMS released the CY 2024 Medicare Advantage and Medicare Part D Rate Notice. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On March 27, 2023, the Agency for Healthcare Research and Quality (AHRQ) issued a notice entitled, National Advisory Council for Healthcare Research and Quality: Request for Nominations for Members. AHRQ is seeking nominations for members to serve on the National Advisory Council for Healthcare Research and Quality (the Council). The Council advises the Department of Health and Humans Services (HHS) Secretary and the AHRQ Director with respect to activities proposed or undertaken to carry out AHRQ’s statutory mission. Seven new members will be appointed to replace seven current members whose terms will expire in November 2023. Nominations are due by May 27, 2023.
• On March 27, 2023, the Food and Drug Administration (FDA) issued final guidance entitled, General Considerations for Animal Studies Intended to Evaluate Medical Devices; Guidance for Industry and Food and Drug Administration Staff; Availability. FDA developed this guidance document to assist medical device sponsors, testing facilities, and other persons involved in designing, conducting, and reporting the results of animal studies intended to assess the safety of medical devices to support premarket submissions. These animal studies typically provide initial evidence of device safety, which may include device performance and handling, and the biological effects of medical devices when used in a living system.
• On March 27, 2023, FDA issued final guidance entitled, Soft (Hydrophilic) Daily Wear Contact Lenses--Performance Criteria for Safety and Performance Based Pathway; Guidance for Industry and Food and Drug Administration Staff; Availability. The device-specific guidance identified in this notice was developed in accordance with the final guidance entitled, Safety and Performance Based Pathway. This device-specific guidance document provides performance criteria for premarket notification (510(k)) submissions to support the optional Safety and Performance Based Pathway outlined in the guidance.
• On March 28, 2023, FDA issued draft guidance entitled, Orthopedic Non-Spinal Bone Plates, Screws, and Washers--Premarket Notification (510(k)) Submissions; Draft Guidance for Industry and Food and Drug Administration Staff; Availability. This draft guidance document provides recommendations for information to include in 510(k) submissions for non-resorbable bone plate, screw, and washer devices. The scope of this draft guidance includes devices that are indicated for orthopedic bone fixation but does not include devices indicated for spinal, mandibular, maxillofacial, cranial, and orbital fracture fixation.
• On March 29, 2023, FDA issued final guidance entitled, Identification of Medicinal Products--Implementation and Use; Guidance for Industry; Availability. This guidance explains FDA’s position and progress on aligning the Agency’s standards to Identification of Medicinal Products (IDMP) standards, which the Agency supports, to identify and describe marketed medicinal products with the exception of investigational medicinal products, with the goal of harmonizing the standards for the international exchange of medicinal product data. The guidance is intended to assist sponsors, applicants, and registrants who are involved in the regulatory submission of medicinal product data.
• On March 29, 2023, FDA issued final guidance entitled, Cybersecurity in Medical Devices: Refuse to Accept Policy for Cyber Devices and Related Systems under section 524B of the FD&C Act; Guidance for Industry and Food and Drug Administration Staff; Availability. FDA generally intends not to issue “refuse to accept” (RTA) decisions for premarket submissions submitted for cyber devices based solely on information required by the new amendments to the Federal Food, Drug, and Cosmetic (FD&C) Act for ensuring cybersecurity of devices before October 1, 2023, but instead, work collaboratively with sponsors of such premarket submissions as part of the interactive and/or deficiency review process. This provision establishes new cybersecurity requirements for cyber devices, which includes information that a sponsor of a premarket submission for a cyber device must provide in its submission.
• On March 29, 2023, FDA issued a final rule entitled, Medical Devices; Orthopedic Devices; Classification of Spinal Spheres for Use in Intervertebral Fusion Procedures. FDA is issuing a final rule to classify spinal spheres for use in intervertebral fusion procedures (an unclassified, pre-amendments device) into class III for which FDA is separately requiring the filing of a premarket approval application (PMA). A spinal sphere is a prescription device used to provide stabilization of a spinal segment as an adjunct to fusion. FDA currently regulates these unclassified devices as devices requiring premarket notification, with the product code NVR. FDA has determined that general controls and special controls together are insufficient to provide reasonable assurance of safety and effectiveness for this device.
• On March 30, 2023, FDA issued draft guidance entitled, Marketing Submission Recommendations for a Predetermined Change Control Plan for Artificial Intelligence/Machine Learning-Enabled Device Software Functions; Draft Guidance for Industry and Food and Drug Administration Staff; Availability. This draft guidance demonstrates FDA’s commitment to developing innovative approaches to the regulation of machine learning-enabled medical devices and describes an approach that would often be the least burdensome and would support iterative improvement through modifications to machine learning-enabled device software functions (herein referred to as ML-DSF) while continuing to ensure device safety and effectiveness. This draft guidance provides recommendations on the information to be included in a Predetermined Change Control Plan (PCCP) in a marketing submission for an ML-DSF. Such a plan describes the anticipated ML-DSF modifications and the associated methodology to implement those modifications, which would be reviewed in the marketing submission to ensure the continued safety and effectiveness of the device without necessitating additional marketing submissions for each modification described in the PCCP.
• On March 30, 2023, FDA issued draft guidance entitled, Research Involving Children as Subjects and Not Otherwise Approvable by an Institutional Review Board: Process for Referrals to Food and Drug Administration and Office for Human Research Protections, Guidance for Institutional Review Boards, Investigators, and Sponsors; Draft Guidance for Industry; Availability; Agency Information Collection Activities; Proposed Collection; Comment Request. This guidance is intended to assist institutional review boards (IRBs), institutions, investigators, and sponsors in understanding the processes used for review of research involving children as subjects that is not otherwise approvable by an IRB and has been referred to FDA, the Office for Human Research Protections (OHRP), or both, for review.
• On March 31, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Medicare Program; FY 2024 Hospice Wage Index and Payment Rate Update, Hospice Conditions of Participation Updates, Hospice Quality Reporting Program Requirements, and Hospice Certifying Physician Provider Enrollment Requirements. This proposed rule would update the hospice wage index, payment rates, and aggregate cap amount for fiscal year (FY) 2024. This rule includes information on hospice utilization trends and solicits comments regarding information related to the provision of higher levels of hospice care; spending patterns for non-hospice services provided during the election of the hospice benefit; ownership transparency; equipping patients and caregivers with information to inform hospice selection; and ways to examine health equity under the hospice benefit. This rule also proposes conforming regulations text changes related to the anticipated expiration of the COVID-19 public health emergency (PHE). This rule also proposes to codify hospice data submission thresholds and discusses updates to hospice survey and enforcement procedures. Additionally, the rule proposes to require hospice certifying physicians to be Medicare-enrolled or to have validly opted-out.
• On March 31, 2023, CMS issued a notice entitled, Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. The Rate Notice notifies Medicare Advantage (MA) organizations, prescription drug plan sponsors, and other interested parties of the annual capitation rate for each MA payment area for CY 2024 and the risk and other factors to be used in adjusting such rates. After considering all comments received for the CY 2024 Advance Notice, CMS is finalizing policies in the Rate Notice that reflect CMS’ commitment to ensuring that people with Medicare receive equitable, affordable, high quality, and whole-person care now and in the future, especially the most vulnerable. The CY 2024 Rate Announcement finalizes an important transition to an updated risk adjustment model that implements a set of commonsense, clinically-based technical updates needed to keep MA payments up-to-date and to improve payment accuracy to MA plans. Specifically, the updated risk adjustment model is developed using ICD-10 codes to align with the rest of the health care system, which has been using ICD-10 since 2015. It also incorporates newer data – the current MA risk adjustment model is calibrated with 2014 diagnosis data and 2015 FFS expenditure data and the new model uses 2018 diagnosis data and 2019 expenditure data. Finally, the revised model includes clinically-based adjustments to ensure that conditions included in the model are stable predictors of costs.

Event Notices

• April 14, 2023: FDA announced a joint public meeting of the Psychopharmacologic Drugs Advisory Committee (PDAC) and the Peripheral and Central Nervous System Drugs Advisory Committee (PCNS). The general function of the committees is to provide advice and recommendations to FDA on regulatory issues. The committees will discuss supplemental new drug application (sNDA) 205422 s009, efficacy supplement for REXULTI (brexpiprazole) tablets, submitted by Otsuka Pharmaceutical Company, Ltd., and Lundbeck, Inc., for the proposed treatment of agitation associated with Alzheimer’s dementia.
• April 24, 2023: The National Institutes of Health (NIH) announced a public meeting of the Diabetes Mellitus Interagency Coordinating Committee (DMICC). DMICC meetings, held several times a year, provide an opportunity for Committee members to learn about and discuss current and future diabetes programs in DMICC member organizations and to identify opportunities for collaboration. The topic for this meeting will be “Type 1 Diabetes (T1D): Evolving Concepts in the Pathophysiology, Screening and Prevention”.
• April 26-28, 2023: The Health Resources and Services Administration (HRSA) announced a public meeting of the National Advisory Committee on Rural Health and Human Services (NACRHHS). The meeting will take place over the course of three days in Bend, Oregon and include discussion of rural health issues.
• May 4, 2023: NIH announced a public meeting of the National Toxicology Program (NTP) Board of Scientific Counselors (BSC). The BSC, a federally chartered, external advisory group composed of scientists from the public and private sectors, will review and provide advice on programmatic activities.
• May 9-10, 2023: FDA announced a joint meeting of the Nonprescription Drugs Advisory Committee (NDAC) and the Obstetrics, Reproductive and Urologic Drugs Advisory Committee (ORUDAC). The committees will discuss supplemental new drug application (sNDA) 017031/S-041, for OPILL (norgestrel) Tablet, 0.075 mg, submitted by Laboratoire HRA Pharma. OPILL is proposed for nonprescription use as a once daily oral contraceptive to prevent pregnancy.
• May 10, 2023: The Centers for Disease Control and Prevention (CDC) announced a public meeting of the Advisory Committee on Breast Cancer in Young Women (ACBCYW). The agenda will include discussions on current topics related to breast cancer in young women. These will include mental/behavioral health, sexual health, genetics and genomics, and provider engagement.
• May 11, 2023: FDA announced a public meeting of the Pulmonary-Allergy Drugs Advisory Committee (PADAC). The committee will discuss new drug application (NDA) 214697, for epinephrine nasal spray, submitted by ARS Pharmaceuticals Inc., for the proposed indication of emergency treatment of allergic reactions (Type I) including anaphylaxis in adults and children ≥ 30 kilograms.
• May 24-25, 2023: HRSA announced a public meeting of the National Advisory Council on Migrant Health (NACMH). NACMH provides advice and recommendations to the HHS Secretary on policy, program development, and other matters of significance concerning the activities under section 217 of the Public Health Service (PHS) Act. During the May 24-25, 2023, meeting, NACMH will discuss issues related to migratory and seasonal agricultural worker health.

II. Hearings & Markups

U.S. House of Representatives

• On March 28, 2023, the House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education held a hearing entitled, Budget Hearing – Fiscal Year 2024 Request for the Department of Health and Human Services. The witness for the hearing was the Honorable Xavier Becerra, Secretary, HHS.
• On March 28, 2023, the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, Lowering Unaffordable Costs: Examining Transparency and Competition in Health Care. Witnesses present included: Chris Severn, Co-Founder & Chief Executive Officer (CEO), Turquoise Health; Matthew Forge, CEO, Pullman Regional Hospital; Marilyn Bartlett, Senior Policy Fellow, National Association of State Health Policy; Sophia Tripoli, Director of Health Care Innovation, Families USA; and Dr. Benedic Ippolito,Senior Fellow in Economic Policy Studies, American Enterprise Institute.
• On March 28, 2023, the House Committee on Ways and Means held a hearing entitled, Hearing on President Biden’s Fiscal Year 2024 Budget Request with Health and Human Services Secretary Becerra. The witness for the hearing was the Honorable Xavier Becerra, Secretary, HHS.
• On March 29, 2023, the House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education held a hearing entitled, Oversight Hearing – Addressing the Challenges of Rural America. Witnesses present included: Carrie Cochran-McClain, Chief Policy Officer, National Rural Health Association (NRHA); Dr. Tearsanee Davis, Director of Clinical Programs and Strategy, University of Mississippi Medical Center; Dr. Brittany Hott, Associate Professor, University of Oklahoma; The Honorable Lenita Jacobs-Simmons, Deputy Assistant Secretary, Employment and Training Administration (ETA), Department of Labor (DOL); The Honorable Tom Morris, Associate Administrator for Rural Health Policy, HRSA, HHS; and The Honorable Ruth Ryder, Deputy Assistant Secretary for Policy and Programs, Office of Elementary and Secondary Education (OESE), Department of Education (DOE).
• On March 29, 2023, the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, Fiscal Year 2024 Department of Health and Human Services Budget. The witness for the hearing was the Honorable Xavier Becerra, Secretary, HHS.
• On March 29, 2023, the House Committee on Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration held a hearing entitled, Budget Hearing - Fiscal Year 2024 Request for the Food and Drug Administration. The witness for the hearing was the Honorable Robert Califf, Commissioner, FDA.
• On March 30, 2023; the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, Reauthorization of the Animal Drug User Fee Programs. Witnesses present included: Tracey Forfa, Director, Center for Veterinary Medicine (CVM), FDA; Rachel Cumberbatch, Director, Regulatory Affairs, Animal Drugs, Animal Health Institute (AHI); Stephanie Batliner, Chair, Generic Animal Drug Alliance (GADA); and Lori Teller, DVM, President, American Veterinary Medical Association (AVMA).

U.S. Senate

• On March 29, 2023, the Senate Committee on Finance Subcommittee on Health held a hearing entitled, An Oral Health Crisis: Identifying and Addressing Health Disparities. The witnesses present included: Jonathan Forte, President & CEO, RiverStone Health; Dr. Cherae M. Farmer-Dixon; Dean And Professor, School Of Dentistry, Meharry Medical College; Dr. Marko Vujicic, Chief Economist And Vice President, Health Policy Institute; American Dental Association (ADA).
• On March 30, 2023, the Senate Committee on Finance held a hearing entitled, Pharmacy Benefit Managers and the Prescription Drug Supply Chain: Impact on Patients and Taxpayers. Witnesses present included: Robin Feldman, Arthur J. Goldberg Distinguished Professor Of Law And Director Of The Center For Innovation, Hastings College Of Law, University of California; Dr. Karen Van Nuys, Executive Director, Value Of Life Sciences Innovation, University of Southern California; Dr. Lawton Robert Burns, James Joo-Jin Kim Professor Of Health Care Management And Co-Director Of The Roy & Diana Vagelos Program In Life Sciences & Management, Wharton School, University of Pennsylvania; Dr. Matthew Gibbs, President, Capital Rx; and Jonathan Levitt, Founding Partner, Frier Levitt Attorneys at Law.

III. Reports, Studies & Analyses

• On March 28, 2023, the Congressional Research Service (CRS) published a report entitled, Centers for Disease Control and Prevention (CDC) Funding Overview. The report provides an overview of CDC’s budget and appropriations with a focus on fiscal year (FY) 2023 enacted appropriations and the FY 2024 President’s budget request. The report also discusses supplemental appropriations for CDC and trends in state and local funding for public health. The report notes that from FY 2011 to FY 2021, CDC’s core public health funding level has remained between approximately $6.5 and $8 billion. Funding has increased in recent years with the President’s FY 2024 budget request set at $11.67 billion. CRS also details how analysis shows that public health funding at the state and local level has remained flat or declined over the past decade.
• On March 28, 2023, CRS published a report entitled, The Dietary Guidelines for Americans: Development, Implementation, and Considerations for Congress. The Dietary Guidelines for Americans (DGA) provides federally developed food-based recommendations designed to promote health and prevent disease, and must be updated every five years as directed by the National Nutrition Monitoring and Related Research Act of 1990. This report describes the history of the DGA, the process by which HHS and the Department of Agriculture (USDA) update the DGA, and implementation of the DGA in selected federal programs. The report also provides an overview of issues that have arisen with the DGA in recent years and discusses the DGA’s impact on the health of the U.S. population. CRS then suggests that Congress could consider legislation that modify the DGA by requiring HHS and USDA to adopt certain recommendations for subsequent editions of the DGA.
• On March 31, 2023, the Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds published a report entitled, 2023 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. The Social Security Act (SSA) requires that the Board, among other duties, report annually to the Congress on the financial and actuarial status of the Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) trust funds. This year’s report estimates that the HI Trust Fund will be able to pay 100 percent of total scheduled benefits until 2031, three years later than reported last year. Despite the downward revision to economic assumptions outlined in the report, the projected long-term finances of the HI Trust Fund improved since last year’s report. The report notes that the improvement is mainly due to lower projected health care spending stemming from updated analysis that uses more recent data. Also, the SMI Trust Fund is estimated to be adequately financed into the indefinite future because, unlike the other trust funds, its main financing sources – premiums on enrolled beneficiaries and federal contributions from the Treasury – are automatically adjusted each year to cover costs for the upcoming year.
• On March 31, 2023, the Kaiser Family Foundation (KFF) published a report entitled, How Many Uninsured Are in the Coverage Gap and How Many Could be Eligible if All States Adopted the Medicaid Expansion? This report projects the number and characteristics of uninsured people in the ten Medicaid non-expansion states who could be reached by Medicaid if their states adopted the Medicaid expansion using data from 2021, the most recent year available. Those individuals in non-Medicaid expansion states who are not eligible for Medicaid coverage or subsidies in the ACA Marketplace are referred to as being in the “coverage gap”. KFF found that in the remaining 10 states that have not expanded Medicaid, an estimated 1.9 million individuals, fall into the coverage gap. Further, KFF analysis showed that states that have not implemented the expansion have uninsured rates that are nearly double the rate of expansion states (15.4 percent compared to 8.1 percent). Nationally, over 60 percent of individuals falling in the coverage gap are people of color. KFF concluded that 3.5 million uninsured adults would become newly eligible for Medicaid if the remaining states adopted Medicaid expansion.

IV. Other Health Policy News

• On March 27, 2023, HHS announced that it was providing Substance Abuse and Mental Health Services Administration (SAMHSA) Emergency Response Grants (SERG) to the state of Ohio to support community wellness and resilience, following the Norfolk Southern freight train derailment and related chemical spill in East Palestine, Ohio, that took place in February 2023. The state will receive an initial 90-day SERG grant of $209,402, with additional funding expected after the 90 days to continue for an additional 12 months to support activities. The grant funding is expected to support the immediate and ongoing behavioral health needs of the community related to the initial incident and subsequent traumatic experiences, to minimize the long-term impacts and foster resilience in the community, and to expand and enhance the capacity of local crisis response systems to ensure adequate and effective intervention in situations of crisis. More information on this funding can be found here.
• On March 29, 2023, FDA announced that it had approved the first nonprescription, over-the-counter (OTC) naloxone nasal spray, Narcan, which can reverse an opioid-related overdose. HHS stated that Narcan can serve as a critical tool to prevent fatal overdoses, connect more people to treatment for substance use disorder (SUD), and save lives. With FDA approval of nonprescription Narcan, 4 milligram (mg) naloxone hydrochloride nasal spray, HHS will launch a department-wide approach to work with stakeholders to implement the Narcan switch from prescription to nonprescription status, facilitate the continued availability of naloxone nasal spray products during the time needed to implement the transition, and help ensure appropriate coverage and continued access to all forms of naloxone. In addition to being used by healthcare professionals, naloxone is increasingly being distributed to first responders, and family members who may witness and respond to an opioid overdose. The availability of nonprescription and prescription naloxone could help to further increase its distribution and accessibility, potentially saving more lives and reducing the burden of opioid overdose on individuals, families, and communities. More information on this announcement can be found here.
• On March 29, 2023, the U.S. Senate passed H.J. Res. 7, which terminates the National Emergencies Act declaration concerning COVID-19 made by President Trump on March 13, 2020. The bill was originally introduced by Representative Paul Gosar (R-AZ-9), passing by a vote of 229-197 in the House, and then passing in the Senate by a vote of 68-23. President Biden has already indicated that he intends to sign the bill into law, despite the fact that he had originally planned to end the national emergency declaration on May 11, 2023. The passage of H.J. Res. 7 is more symbolic and will not impact the other COVID-19 emergencies that have been declared, including the HHS Secretary’s COVID-19 PHE declaration or President Trump’s Stafford Act emergency declaration. As a result, the various waivers and flexibilities made available under these authorities, including the 1135 waivers, will remain in effect until the HHS Secretary’s COVID-19 PHE is terminated. Absent any further changes, the COVID-19 PHE is expected to end on May 11, 2023. More information on this bill can be found here.

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