Health Care Week In Review: CMS Issues Proposed Rule, CBO Releases Health Insurance Coverage Projections

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 a proposed rule to implement policies in the Medicaid Drug Rebate Program (MDRP) and CBO released health insurance coverage projections for 2023 to 2033. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On May 22, 2023, the National Institutes of Health (NIH) issued a request for information (RFI) entitled, Request for Information on the Prioritization of Drug, Vaccine, and Dietary Supplement Research Needs for Pregnant, Postpartum, and Lactating Persons. The National Institute of Child Health and Human Development (NICHD) is seeking suggestions for drug, vaccine, and dietary supplement research needs to be considered in the development of a Priority List of Drug, Vaccine, and Dietary Supplement Research Needs for Pregnant, Postpartum, and Lactating Persons. NICHD is gathering nominations for drugs prescribed for conditions specific to or that co-occur during pregnancy and the postpartum period, including for lactation; dietary supplements that may be used in preparation for, during, or after pregnancy; and vaccines used by pregnant or lactating persons to prevent or treat disease. Additionally, NICHD is seeking information on factors and processes it could consider in prioritizing these nominations. Nominations are requested from public and private stakeholders such as, but not limited to, researchers, academia, small- and large-scale industries, non-profit organizations, patients, providers, advocacy groups, payors, and federal agencies. The RFI is open for public comment and responses will be accepted through September 29, 2023.
• On May 23, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Medicaid Program; Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program. This proposed rule would seek to implement policies in the Medicaid Drug Rebate Program (MDRP) related to the new legislative requirements in the Medicaid Services Investment and Accountability Act of 2019 (MSIAA), which are needed to address drug misclassification, as well as drug pricing and product data misreporting by manufacturers. Additionally, CMS is proposing several other program integrity and program administration provisions or modifications in this proposed rule including revising and proposing key definitions used in the MDRP. This proposed rule also designates a time limitation on manufacturers initiating audits with states; clarifies and establishes requirements for state fee-for-service (FFS) pharmacy reimbursement; codifies conditions relating to states claiming federal financial participation (FFP) for physician-administered drugs (PADs); clarifies the requirement of accumulating price concessions when determining best price; designates drug price verification and transparency through data collection; and proposes two new contracting requirements between states and their Medicaid managed care plans. In addition, this rule includes a proposal unrelated to MDRP that would revise the third-party liability regulation due to Bipartisan Budget Act (BBA) of 2018.
• On May 24, 2023, the Food and Drug Administration (FDA) issued final guidance entitled, Use of Whole Slide Imaging in Nonclinical Toxicology Studies: Questions and Answers; Guidance for Industry; Availability. This guidance represents FDA’s current thinking on the use of whole slide images during good laboratory practice (GLP)-compliant toxicology studies. Documentation practices during generation, use, and retention of whole slide images have not been clearly defined and vary among nonclinical testing facilities. This question-and-answer document is intended to clarify FDA’s recommendations concerning the management, documentation, and use of whole slide images in histopathology assessment and/or pathology peer review for nonclinical studies conducted in compliance with the GLP regulations.
• On May 24, 2023, FDA issued draft guidance entitled, Generally Accepted Scientific Knowledge in Applications for Drug and Biological Products: Nonclinical Information; Draft Guidance for Industry; Availability. This draft guidance is intended to assist sponsors in determining whether it may be appropriate to rely on generally accepted scientific knowledge (GASK) to fulfill certain legal and regulatory requirements applicable to the new drug application (NDA) or biologics licensing application (BLA) in question. When final, this guidance will represent FDA’s current thinking on this topic.
• On May 25, 2023, FDA issued final guidance entitled, Non-Clinical Performance Assessment of Tissue Containment Systems Used During Power Morcellation Procedures; Guidance for Industry and Food and Drug Administration Staff; Availability. This guidance document provides recommendations that may help manufacturers comply with the special controls related to non-clinical performance data for gynecologic and general laparoscopic power morcellation containment systems (“tissue containment systems”). Tissue containment systems are used to enable isolation and containment of tissue during a power morcellation procedure performed following a laparoscopic procedure for the excision of benign tissue that is not suspected to contain malignancy.
• On May 25, 2023, FDA issued draft guidance entitled, Diabetes Mellitus: Efficacy Endpoints for Clinical Trials Investigating Antidiabetic Drugs and Biological Products; Draft Guidance for Industry; Availability. This draft guidance is intended to help sponsors develop antidiabetic drugs for adults and children with type 1 and type 2 diabetes mellitus. This draft guidance provides recommendations for demonstrating efficacy for drugs that are intended to reduce diabetes-related hyperglycemia (i.e., antihyperglycemic drugs) and to mitigate iatrogenic hypoglycemia associated with diabetes management. The use of hemoglobin A1c as a primary endpoint for glycemic-control trials is discussed along with recommendations for trial design and conduct to allow for adequate data interpretation. The draft guidance also provides hypoglycemia definitions, trial design considerations for hypoglycemia efficacy endpoints, and hypoglycemia measurement methods.
• On May 25, 2023, FDA issued final guidance entitled, Adjusting for Covariates in Randomized Clinical Trials for Drugs and Biological Products; Guidance for Industry; Availability. The guidance represents the current thinking of FDA on adjusting for covariates in randomized clinical trials for drugs and biological products. The guidance discusses general recommendations for performing covariate adjustment, recommendations for performing covariate adjustment using linear models, and recommendations for performing covariate adjustment using nonlinear models. The guidance is intended to facilitate covariate adjustment in the analysis of randomized clinical trials of drugs and biological products and to clarify recommendations for its use.

Event Notices

• June 6-7, 2023: NIH announced a public meeting of the National Institute of Environmental Health Sciences (NIEHS) National Advisory Environmental Health Sciences Council (NAEHSC). The meeting agenda will include a report from the NIEHS Director, a discussion of hypothetical interventions to reduce racial and ethnic disparities in phthalate exposure and the impact on preterm birth, and a discussion on efforts to strengthen peer review.
• June 14, 2023: The Centers for Disease Control and Prevention (CDC) announced a public meeting of the National Committee on Vital and Health Statistics (NCVHS). The purpose of this meeting is to provide a public forum for NCVHS to consider what comments it will make on the April 17, 2023, Notice of Proposed Rulemaking (NPRM) entitled, HIPAA Privacy Rule to Support Reproductive Health Care Privacy. In addition, NCVHS will consider what recommendations it will make in response to updated and new operating rules proposed by the Council for Affordable Quality Health Care (CAQH), Committee on Operating Rules for Information Exchange (CORE).
• June 15, 2023: The Department of Health and Human Services (HHS) announced a public meeting of the Health Information Technology Advisory Committee (HITAC). HITAC will develop and submit recommendations to the Office of the National Coordinator for Health Information Technology (ONC) on the topics of interoperability, privacy and security, patient access, and use of technologies that support public health. In addition, the committee will also address any administrative matters and hear periodic reports from ONC.
• June 16, 2023: NIH announced a public meeting of the National Eye Institute’s (NEI’s) National Advisory Eye Council (NAEC). The meeting agenda will include a report from the NEI Director, a discussion of NEI programs, and concept clearances.
• June 21, 2023: CDC announced a public meeting of the World Trade Center Health Program Scientific/Technical Advisory Committee (WTCHP-STAC).” The main focus of the WTC Health Program STAC meeting will be a discussion of the new youth research cohort being established by the WTC Health Program. The meeting agenda will include a presentation on establishing the cohort, as well as an overview of young survivors. In addition, the WTC Survivors Steering Committee will lead presentations on young survivors’ views and community-based participatory research.
• June 22, 2023: NIH announced a public meeting of the Office of AIDS Research Advisory Council (OARAC). The meeting agenda will include presentations related to HIV and women; the Office of AIDS Research (OAR) Director’s report; updates from the Clinical Guidelines Working Groups of OARAC; updates from NIH HIV-related advisory councils; report outs and discussions on OAR’s Early-Career Investigators and HIV & Aging signature programs; and public comment.
• June 23, 2023: NIH announced a public meeting of the Interagency Pain Research Coordinating Committee (IPRCC). The meeting will cover committee business items and IPRCC member updates. Items discussed will also include updates on the Helping to End Addiction Long-Term (HEAL) Initiative and research progress for the Federal Pain Research Strategy (FPRS).
• June 28, 2023: FDA announced a public meeting of the Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC). The committee will discuss NDA 215559, for palovarotene capsules, submitted by Ipsen Biopharmaceuticals, Inc. The proposed indication is the prevention of heterotopic ossification in adults and children (females aged 8 years and above and males 10 years and above) with fibrodysplasia ossificans progressiva.
• June 28-29, 2023: HHS announced a public meeting of the Presidential Advisory Council on HIV/AIDS (PACHA or the Council). PACHA was established to provide advice, information, and recommendations to the HHS Secretary regarding programs and policies intended to promote effective HIV diagnosis, treatment, prevention, and quality care services.
• June 29, 2023: NIH announced a public meeting of the Advisory Committee to the Deputy Director for Intramural Research (DDIR). The meeting is being held to conduct an outside review of the NIH Lasker Clinical Research Scholars Program, which supports clinical researchers in the early stages of their independent research careers. The meeting agenda will be announced in the weeks leading up to the meeting.

II. Hearings & Markups

U.S. House of Representatives

• On May 23, 2023, the House Committee on Oversight and Accountability held a hearing entitled, The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part I: Self-Interest or Health Care? Witnesses present included: Dr. Miriam Atkins, President, Community Oncology Alliance; Greg Baker, Chief Executive Officer (CEO) of AffirmedRx; Dr. Kevin Duane, PharmD; and Frederick Isasi, Executive Director, Families USA.
• On May 24, 2023, the House Committee on Energy and Commerce held a markup of 19 bills. Among the legislation included in the markup, seven were related to health care. These bills included: H.R. 1418, the Animal Drug User Fee Amendments of 2023; H.R. 2544, the Securing the U.S. Organ Procurement and Transplantation Network Act; H.R. 3561, the Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act of 2023; H.R. 2666, the Medicaid VBPs for Patients (MVP) Act; H.R. 3284, the Providers and Payers COMPETE Act; H.R. 3290, To amend title III of the Public Health Service Act to ensure transparency and oversight of the 340B drug discount program; and H.R. 3285, the Fairness for Patient Medications Act.

III. Reports, Studies & Analyses

• On May 23, 2023, the HHS Office of the Inspector General (OIG) published a report entitled, Seventeen of Thirty Selected Health Centers Did Not Use or May Not Have Used Their HRSA COVID-19 Supplemental Grant Funding in Accordance With Federal Requirements. OIG’s objective was to assess whether selected health centers used their COVID-19 supplemental grant funding in accordance with federal requirements and grant terms. OIG examined grant funding totaling over $70 million awarded during fiscal year (FY) 2020 to 30 selected health centers. OIG found that seventeen of the 30 selected health centers did not use or may not have used a portion of their COVID-19 supplemental grant funding as required under federal requirements and grant terms. To remedy the issues, OIG recommended that HRSA require sampled health centers to return unallowable or improperly allocated costs to the federal government, while also aiding non-compliant health centers to ensure grant funding is used for allowable purposes.
• On May 24, 2023, the Congressional Budget Office (CBO) released a report entitled, Health Insurance For People Younger Than Age 65: Expiration Of Temporary Policies Projected To Reshuffle Coverage, 2023–33. The report included updated projections of health insurance coverage for individuals under 65 from 2023 to 2033. Overall, CBO reported that the percentage of individuals under age 65 who are uninsured is at a historic low of 8.3 percent. Additionally, within the under-65 population, 28.1 percent are covered by Medicaid, 5.2 percent are covered subsidized Marketplace plans, and 57.3 percent are covered by private insurance. CBO also found that uninsurance decreased from 17 percent in 2019 to 10 percent in 2023 for people with incomes below 150 percent of the federal poverty level (FPL). Despite coverage gains, CBO projected that the share of people lacking insurance will increase because Medicaid enrollment is expected to decrease with the end of the continuous enrollment provision that was in place during the COVID-19 public health emergency (PHE), as well as the presumed expiration of Affordable Care Act (ACA) premium tax credits after 2025. By 2033, the share of people who are uninsured is projected to be 10.1 percent. Additionally, CBO is projecting that private health insurance premiums will increase more in the near-term to reflect a return to normal levels of utilization (estimated average of 5.9 percent in 2024 and 2025), and then lower to an estimated 4.6 percent growth over the 2028–2033 period.
• On May 25, 2023, the Kaiser Family Foundation (KFF) published a report entitled, Behavioral Health Crisis Response: Findings from a Survey of State Medicaid Programs. To inform the report, KFF interviewed state Medicaid officials about the services that were in place in states for FY 2022 or implemented/planned for FY 2023, as well as challenges they face. First, KFF outlined the three behavioral health core crisis services: (1) crisis hotlines; (2) mobile crisis units; and (3) crisis stabilization. KFF found that three-quarters of responding states (33 of 45) do not cover all three core crisis services for Medicaid FFS adults, but that 41 out of 45 states cover at least one service. Of the three core services, crisis hotlines were the least often covered (22 of 45 states). In terms of utilizing federal funding, the survey found that over 50 percent of responding states (28 of 44) report that they have taken up or plan to implement the American Rescue Plan Act (ARPA) mobile crisis intervention services option. The option is available under ARPA until April 1, 2027, and states that use the funds for mobile crisis services receive 85 percent matching funds for the first three years of implementation. Further, KFF asked states to detail the challenges they face in implementing core behavioral health services for Medicaid beneficiaries. Almost all responding states (38 of 44) reported experiencing or expecting at least one obstacle to implementing crisis services, particularly workforce shortages, scope-of-practice limitations, and geography-based challenges.
• On May 25, 2023, the Bipartisan Policy Center (BPC) published a report entitled, Achieving Behavioral Health Care Integration in Rural America. BPC’s report assessed methods to achieve behavioral health and primary care integration across the U.S. BPC identified training, technical assistance, adequate reimbursement, and access to a larger pool of behavioral health providers for both consultations and referrals, as necessities for encouraging larger numbers of primary care providers to increase their role in providing mental health and substance use services. BPC highlighted that rural Americans face significant shortages of psychiatrists, psychologists, clinical social workers, and other behavioral health specialists. BPC’s policy recommendations are broken up into four categories: (1) foundational to integration; (2) building and supporting the rural integrated care workforce; (3) payment and delivery system reform; and (4) supporting veterans, tribal communities, and individuals with high behavioral health needs. Among its recommendations, BPC advocated for HHS to identify a set of standardized quality and performance metrics for delivering integrated care. BPC also recommended that Congress incentivize behavioral health providers to practice in rural areas by permitting additional behavioral health provider types to receive bonuses through Medicare’s Health Professional Shortage Area (HPSA) physician bonus program.

IV. Other Health Policy News

• On May 22, 2023, the American Clinical Laboratory Association (ACLA) led a letter, which included sign-on from 33 other provider organizations to House and Senate leadership urging them to protect patient access to lab tests by passing the Saving Access to Laboratory Services Act (SALSA) (H.R. 2377 / S. 1000). The letter describes how Medicare reimbursement cuts could jeopardize access to many clinical laboratory tests that are used to diagnose, monitor, prevent, and manage common diseases for Medicare beneficiaries. Further, the provider organizations assert that with congressional action, approximately 800 tests will receive up to 15 percent cuts on January 1, 2024. Specifically, the letter discusses SALSA, which is designed to address issues related to incomplete and unrepresentative payment data collected under the 2014 Protecting Access to Medicare Act(PAMA), which providers say has led to substantial cuts to payments for routine laboratory tests that inform clinical decision-making. More information on this action can be found here.
• On May 23, 2023, Surgeon General Dr. Vivek Murthy released a new Surgeon General’s Advisory entitled, Social Media and Youth Mental Health. The Advisory reported that up to 95 percent of young people between the ages of 13 and 17 use a social media platform, with more than a third saying they use social media almost constantly. Additionally, the Advisory highlights that children and adolescents are more susceptible to the harms of social media due to the critical brain development occurring during that time period. Specifically, adolescents who spend more than three hours per day on social media were found to have twice the risk of experiencing poor mental health outcomes, such as symptoms of depression and anxiety. The Advisory further stressed that social media may exacerbate body dissatisfaction, disordered eating behaviors, social comparison, and low self-esteem, especially among adolescent girls. The Surgeon General is urging policymakers, technology companies, researchers, families, and young people to take steps to better understand the impacts of social media and work to create safer online environments for children and adolescents. More information on this announcement can be found http:here.
• On May 25, 2023, the Substance Abuse and Mental Health Services Administration (SAMHSA) awarded 13 grants to communities to create new and enhance existing mobile crisis response teams, which will respond to mental health and substance use crises in high-need areas, in coordination with local law enforcement. Funding recipients must build crisis system capacity by offering post-crisis follow-up, developing and implementing criteria for coordination with law enforcement, providing evidence-based crisis training to health care providers and first responders, mapping community crisis systems, and enhancing the use of data. Grantees may also support a range of other allowable activities that enhance their crisis systems. These crisis response teams are designed to ensure individuals struggling with mental and substance use crises are able to access mental health professionals in a timely manner, easing the burden on law enforcement and creating public trust. More information on this funding announcement can be found here.

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