Health Care Week In Review: Biden Administration Releases Rules and Awards for Rural Residency Programs

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, Tri-agencies released a proposed rule to strengthen mental health parity, CMS issued final payment rules, and HHS distributed $11 million in awards to establish rural residency programs. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On July 24, 2023, the Food and Drug Administration (FDA) issued final guidance entitled, M7(R2) Assessment and Control of DNA Reactive (Mutagenic) Impurities in Pharmaceuticals to Limit Potential Carcinogenic Risk (M7(R2) Guidance). It also issued two supplemental documents entitled, M7(R2) Addendum: Application of the Principles of the ICH M7 Guidance to Calculation of Compound-Specific Acceptable Intakes” (M7(R2) Addendum) and M7(R2) Assessment and Control of DNA Reactive (Mutagenic) Impurities in Pharmaceuticals to Limit Potential Carcinogenic Risk Questions and Answers (M7(R2) Questions and Answers). The M7(R2) Guidance, M7(R2) Addendum, and M7(R2) Questions and Answers were prepared under the auspices of the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). The guidance and supplemental documents are intended to harmonize the considerations for assessment and control of DNA reactive (mutagenic) impurities. The M7(R2) Guidance and M7(R2) Addendum replace the guidance for industry entitled, M7(R1) Assessment and Control of DNA Reactive (Mutagenic) Impurities in Pharmaceuticals To Limit Potential Carcinogenic Risk, issued on March 14, 2018. The M7(R2) Guidance, M7(R2) Addendum, and M7(R2) Questions and Answers, also finalize the draft guidances for industry entitled, M7(R2) Addendum: Application of the Principles of the ICH M7 Guideline to Calculation of Compound-Specific Acceptable Intakes and M7 Assessment and Control of DNA Reactive (Mutagenic) Impurities in Pharmaceuticals To Limit Potential Carcinogenic Risk--Questions and Answers issued on April 7, 2022, and September 29, 2020, respectively.
• On July 26, 2023, FDA issued final guidance entitled, CDER’s Program for the Recognition of Voluntary Consensus Standards Related to Pharmaceutical Quality. This guidance describes a program at FDA’s Center for Drug Evaluation and Research (CDER) to make public a comprehensive listing of recognized voluntary consensus standards related to pharmaceutical quality. This program facilitates submissions by external stakeholders and FDA staff proposing voluntary consensus standards related to pharmaceutical quality for recognition. CDER believes that this program will help promote innovation in pharmaceutical development and manufacturing and streamline the preparation and assessment of marketing applications for products regulated by CDER. This guidance finalizes the draft guidance of the same title issued on February 14, 2019.
• On July 26, 2023, FDA issued final guidance entitled, Hydrogen Peroxide-Based Contact Lens Care Products: Consumer Labeling Recommendations--Premarket Notification (510(k)) Submissions. FDA is issuing this guidance to provide labeling recommendations for Hydrogen Peroxide-Based Contact Lens Care Products (HPCPs) submitted in premarket notification (510(k)) submissions. The labeling recommendations in this guidance are intended to promote the safe and effective use of HPCPs and help consumers receive and understand information regarding the benefits and risks associated with the use of the device.
• On July 27, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a final rule entitled, Medicare Program; FY 2024 Inpatient Psychiatric Facilities Prospective Payment System – Rate Update. This final rule updates the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPF), which include psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital. Additionally, this final rule rebases and revises the IPF market basket to reflect a 2021 base year. These changes will be effective for IPF discharges occurring during the fiscal year (FY) beginning October 1, 2023 through September 30, 2024 (FY 2024). In addition, this final rule discusses quality measures and reporting requirements under the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program with changes beginning with the FY 2025 payment determination through changes beginning with the FY 2028 payment determination. These regulations are effective on October 1, 2023.
• On July 27, 2023, CMS issued a final rule entitled, Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2024 and Updates to the IRF Quality Reporting Program. This final rule updates the prospective payment rates for inpatient rehabilitation facilities (IRFs) for FY 2024. As required by statute, this final rule includes the classification and weighting factors for the IRF prospective payment system’s case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2024. It also rebases and revises the IRF market basket to reflect a 2021 base year. Further, it confirms when IRF units can become excluded and paid under the IRF PPS. This rule also includes updates for the IRF Quality Reporting Program (QRP). These regulations are effective on October 1, 2023.
• On July 27, 2023, FDA issued a notice entitled, Biosimilar User Fee Rates for Fiscal Year 2024. FDA is announcing the rates for biosimilar user fees for FY 2024. The Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended by the Biosimilar User Fee Amendments of 2022 (BsUFA III), authorizes FDA to assess and collect user fees for certain activities in connection with biosimilar biological product development; review of certain applications for approval of biosimilar biological products; and each biosimilar biological product approved in a biosimilar biological product application. BsUFA III directs FDA to establish, before the beginning of each FY, the amount of initial and annual biosimilar biological product development (BPD) fees, the reactivation fee, and the biosimilar biological product application and program fees for such year. These fees apply to the period from October 1, 2023, through September 30, 2024.
• On July 27, 2023, FDA issued a notice entitled, Generic Drug User Fee Rates for Fiscal Year 2024. The FD&C Act, as amended by the Generic Drug User Fee Amendments of 2022 (GDUFA III), authorizes FDA to assess and collect fees for abbreviated new drug applications (ANDAs); drug master files (DMFs); generic drug active pharmaceutical ingredient (API) facilities, finished dosage form (FDF) facilities, and contract manufacturing organization (CMO) facilities; and generic drug applicant program user fees. In this document, FDA is announcing FY 2024 rates for GDUFA III fees. These fees are effective on October 1, 2023, and will remain in effect through September 30, 2024.
• On July 27, 2023, FDA issued a notice entitled, Medical Device User Fee Rates for Fiscal Year 2024. FDA is announcing the fee rates and payment procedures for medical device user fees for FY 2024. The FD&C Act, as amended by the Medical Device User Fee Amendments of 2022 (MDUFA V), authorizes FDA to collect user fees for certain medical device submissions and annual fees both for certain periodic reports and for establishments subject to registration. This notice establishes the fee rates for FY 2024, which apply from October 1, 2023, through September 30, 2024, and provides information on how the fees for FY 2024 were determined, the payment procedures you should follow, and how you may qualify for reduced small business fees.
• On July 27, 2023, FDA issued a notice entitled, Outsourcing Facility Fee Rates for Fiscal Year 2024. FDA is announcing the FY 2024 rates for the establishment and reinspection fees related to entities that compound human drugs and elect to register as outsourcing facilities under the FD&C Act. The FD&C Act authorizes FDA to assess and collect an annual establishment fee from outsourcing facilities, as well as a reinspection fee for each reinspection of an outsourcing facility. This document establishes the FY 2024 rates for the small business establishment fee ($6,196), the non-small business establishment fee ($20,036), and the reinspection fee ($18,588) for outsourcing facilities; provides information on how the fees for FY 2024 were determined; and describes the payment procedures outsourcing facilities should follow.
• On July 27, 2023, FDA issued a notice entitled, Prescription Drug User Fee Rates for Fiscal Year 2024. FDA is announcing the rates for prescription drug user fees for FY 2024. The FD&C Act, as amended by the Prescription Drug User Fee Amendments of 2022 (PDUFA VII), authorizes FDA to collect application fees for certain applications for the review of human drug and biological products and prescription drug program fees for certain approved products. This notice establishes the fee rates for FY 2024. These fees apply to the period from October 1, 2023, through September 30, 2024.
• On July 27, 2023, FDA issued draft guidance entitled, Clinical Considerations for Studies of Devices Intended to Treat Opioid Use Disorder. Design of clinical studies for devices intended to treat opioid use disorder (OUD) is challenging. This guidance provides recommendations for the design of pivotal clinical studies for devices intended to treat opioid use disorder (“OUD device studies”) and used to support marketing submissions. These recommendations are applicable to the design and development of clinical studies to provide a reasonable assurance of safety and effectiveness for a device intended to treat OUD. This draft guidance is not final nor is it for implementation at this time.
• On July 28, 2023, CDC issued a notice entitled, Solicitation of Nominations for Appointment to CDC’s Advisory Committee to the Director Data and Surveillance Workgroup. CDC is seeking nominations for membership on the Advisory Committee to the Director Data and Surveillance Workgroup (DSW). The DSW consists of approximately 15 members who are experts in fields associated with public health science and practice; policy development, analysis, and implementation; and surveillance and informatics. Nominations for membership on the DSW must be received no later than August 30, 2023.
• On July 27, 2023, CMS issued a rule entitled, Medicare Program; Alternative Payment Model (APM) Incentive Payment Advisory for Clinicians – Request for Current Billing Information for Qualifying APM Participants. This advisory is to alert certain clinicians who are Qualifying APM participants (QPs) and eligible to receive an Alternative Payment Model (APM) Incentive Payment that CMS does not have the current billing information needed to disburse the payment. This advisory provides information to these clinicians on how to update their billing information to receive this payment. Updated billing information must be received no later than September 1, 2023.
• On July 28, 2023, CMS issued a final 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 final rule updates the hospice wage index, payment rates, and aggregate cap amount for FY 2024. This rule discusses the comments received regarding information related to the provision of higher levels of hospice care; spending patterns for nonhospice 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 finalizes conforming regulations text changes related to the expiration of the COVID-19 public health emergency (PHE). In addition, this rule updates to the Hospice Quality Reporting Program (HQRP); discusses the Hospice Outcomes and Patient Evaluation (HOPE) tool; provides an update on Health Equity and future quality measures; and provides updates on the Consumer Assessment of Healthcare Providers and Systems (CAHPS), Hospice Survey Mode Experiment. This rule also codifies hospice data submission thresholds and discusses updates to hospice survey and enforcement procedures. Additionally, the rule requires hospice certifying physicians to be Medicare-enrolled or to have validly opted-out. These regulations are effective on October 1, 2023. The implementation date for the provider enrollment provisions in this final rule is May 1, 2024.

Event Notices

• August 29, 2023: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public meeting of the Center for Substance Abuse Treatment (CSAT) National Advisory Council (NAC). The agenda will include consideration of minutes from the SAMHSA CSAT NAC meeting of April 25, 2023, a discussion with SAMHSA leadership, a discussion on harm reduction, and discussion on addressing stigma in substance use disorder (SUD) care. It will also cover updates on CSAT activities from the Office of the Director (OD); the Division of Pharmacologic Therapies (DPT); the Division of States and Community Systems (DSCS); the Division of Services Improvement (DSI); Office of Program Analysis and Coordination (OPAC); Office of Performance Analysis and Management (OPAM).
• August 29, 2023: The National Institutes of Health (NIH) announced a partially open meeting of the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS) Advisory Council. The open agenda will include discussion of program policies and issues. The closed agenda will include review and evaluation of grant applications.
• August 30, 2023: SAMHSA announced a public joint meeting of the four National Advisory Councils: the SAMHSA National Advisory Council (NAC), the Center for Mental Health Services (CMHS) NAC, the Center for Substance Abuse Prevention (CSAP) NAC, the Center for Substance Abuse Treatment (CSAT) NAC; and the two SAMHSA Advisory Committees: Advisory Committee for Women’s Services (ACWS) and the Tribal Technical Advisory Committee (TTAC). The meeting will include remarks from the Assistant Secretary for Mental Health and Substance Use; an In Memoriam of a TTAC member; follow up discussion from a April 26, 2023 meeting with the Assistant Secretary for Mental Health and Substance Use; updates and discussion of the individual meetings for the ACWS, TTAC, CSAT NAC, CSAP NAC, and CMHS NAC of August 29, 2023; presentations and discussions on Integration, Long COVID; Equity, LGBTQI+; and Recovery Support, followed by general council discussion and public comments.
• August 31, 2023: SAMHSA announced a public meeting of the Substance Abuse and Mental Health Services Administration National Advisory Council (SAMHSA NAC). The meeting will include, but not be limited to, remarks from the Assistant Secretary for Mental Health and Substance Use; consideration and approval of the meeting minutes of April 27, 2023; updates and follow up from the SAMHSA NAC meeting of April 27, 2023; recap of the joint meetings of the councils (JNAC) and Lessons Learned; presentations and council discussions on the following topics: Kids Online Health and Safety; Technical Assistance and Training Strategy, and Strategic Plan updates; and a general council discussion and public comments.
• September 8, 2023: NIH announced a partially open meeting of the National Advisory Council for Complementary and Integrative Health (NACCIH). The open agenda will include reports and updates about recent and ongoing National Center for Complementary & Integrative Health (NCCIH) led or involved activities. The closed agenda will include review and evaluation of grant applications.
• September 12, 2023: The Centers for Disease Control and Prevention (CDC) announced a meeting of the National Center for Health Statistics (NCHS), Classifications and Public Health Data Standards Staff, ICD-10 Coordination and Maintenance (C&M) Committee. The agenda will include discussion on the following proposed modifications to the International Classification of Diseases, Tenth Revision, Clinical Modification (CM) and ICD-10 Procedure Coding System (PCS): (1) Administration of Iodine (131I) Apamistamab; (2) Irreversible Electroporation for Cardiac Ablation; (3) Computer-aided Anesthesia and Oxygen Delivery System; (4) Sub-epidermal Moisture Sensor; (5) Insertion of Palladium-103 Radioactive Implant; (6) Implantation of Bone Void Filler; (7) Section X updates; and (8) other key updates.
• September 14, 2023: CDC announced a meeting of the Board of Scientific Counselors, National Center for Health Statistics (BSC, NCHS). The meeting agenda will include an update from the NCHS Director; an update on the role of artificial intelligence (AI) and machine learning (ML) in NCHS programs; an update from NCHS on long-term health care data collection; an update from NCHS on the National Health Interview Survey; and discussion regarding current issues and topics.
• September 18-19, 2023: NIH announced a partially open meeting of the National Human Genome Research Institute (NHGRI) National Advisory Council (NACHGR). The open agenda will include a report from the NHGRI Director and NHGRI staff. The closed agenda will include review and evaluation of grant applications.
• September 20, 2023: CDC announced a partially open meeting of the Board of Scientific Counselors, National Center for Injury Prevention and Control (BSC, NCIPC). The open session of the meeting will include a discussion on the updated Intimate Partner Violence Prevention Research Priorities. The closed session of the meeting will focus on the Secondary Peer Review of extramural research grant applications received in response to one (1) Notice of Funding Opportunity: RFA-CE-24-001 – “Grants for Injury Control Research Centers.”
• September 27, 2023: FDA announced a public meeting of the Cellular, Tissue, and Gene Therapies Advisory Committee (the Committee). The Committee will discuss and make recommendations on BLA 125782 from BrainStorm Therapeutics, Inc. for debamestrocel (autologous bone marrow-derived mesenchymal stromal cells induced to secrete neurotrophic factors). The applicant has requested an indication for the treatment of ALS.

II. Hearings & Markups

U.S. House of Representatives

• On July 26, 2023, the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled, Stopping the Exploitation of Migrant Children: Oversight of HHS' Office of Refugee Resettlement. Witnesses present included: The Honorable Xavier Becerra, Secretary, U.S. Department of Health and Human Services (HHS).
• On July 26, 2023, the House Committee on Ways and Means held a markup entitled, Markup of H.R. 4822 and H.R. 3284. Legislation considered at this markup included: H.R. 4822, the Health Care Price Transparency Act of 2023, and H.R. 3284, the Providers and Payers COMPETE Act.
• On July 27, 2023, the House Committee on the Judiciary Subcommittee on the Constitution and Limited Government held a hearing entitled, The Dangers and Due Process Violations of 'Gender-Affirming Care' for Children. Witnesses present included: Paula Scanlan, former University of Pennsylvania swimmer; Chloe Cole, detransitioner, advocate; Jennifer Bauwens, Ph.D., Director, Center for Family Studies, Family Research Council; May Mailman, senior legal fellow, Independent Woman's Law Center.
• On July 27, 2023, the House Committee on Oversight and Accountability Select Subcommittee on the Coronavirus Pandemic held a hearing entitled, Because I Said So: Examining the Science and Impact of COVID-19 Vaccine Mandates. Witnesses present included: Danielle Runyan, Senior Counsel, First Liberty; Dr. Kevin Bardosh, Affiliate Assistant Professor, University of Washington; Allison Williams, Reporter, Fox Sports.

U.S. Senate

• On July 26, 2023, the Senate Committee on Finance held an executive session entitled, Open Executive Session to Consider the Modernizing and Ensuring PBM Accountability (MEPA) Act. A discussion draft considered at this executive session included: the Modernizing and Ensuring PBM Accountability (MEPA) Act.
• On July 27, 2023, the Senate Committee on Appropriations held a business meeting entitled, Full Committee Markup of Fiscal Year 2024 Defense, Interior and Environment, Labor, Health and Human Services, Education, and Homeland Security Appropriations Acts. The committee marked up the following appropriations bills: Defense Appropriations Act, 2024; Interior, Environment, and Related Agencies Appropriations Act, 2024; Labor, Health and Human Services, Education, and Related Agencies Appropriations Act, 2024; and Homeland Security Appropriations Act, 2024.

Joint Committees

• On July 27, 2023, the Joint Economic Committee held a hearing entitled, The Economic Impact of Diabetes. Witnesses present included: Buu Nygren, Ed.D., President, Navajo Nation; Janet Brown-Friday, RN, M.S.N., M.P.H., President, Health Care and Education, American Diabetes Association; Benedic N. Ippolito, Ph.D., Senior Fellow, American Enterprise Institute; and Mark A. Herman, M.D., E.L. Wagner, M.D., Chair of Internal Medicine II, Chief, Section of Endocrinology, Diabetes, and Metabolism, Baylor College of Medicine.

III. Reports, Studies & Analyses

• On July 24, 2023, the Kaiser Family Foundation (KFF) published a blog post entitled, What are the Implications of New Anti-Obesity Drugs for Racial Disparities? In this article, authors explore the rising interest in anti-obesity medications (AOMs) and implications regarding access and racial health disparities. Reducing obesity could help people reduce their risks for other chronic illnesses, such as diabetes or heart disease. Nearly one-third of U.S. adults were classified as obese. Although most people with obesity are White, many people of color are at increased risk for obesity due to systemic factors, such as higher rates of food insecurity. Given the high prevalence of obesity, particularly among people of color, innovative treatments, such as AOMs, to address obesity are critical. However, AOMs may not be appropriate for all patients, due to side effects and due to cost. AOMs are currently excluded from Medicare coverage and covered in a limited manner through Medicaid and private plans. In fact, estimates show that out-of-pocket costs without coverage can be nearly $1,300 per month. Expanding coverage of AOMs can help reduce health care disparities related to obesity, improve people’s outcomes, and decrease overall health care costs.
• On July 25, 2023, the Government Accountability Office (GAO) issued a report entitled, Open Matters for Congressional Consideration: Action Can Produce Billions of Dollars in Financial and Other Benefits for the Nation. Since 2000, GAO has recommended that Congress consider more than 1,100 ways to address problems that it identified. Of those, 218 remain open as of June 2023. GAO published this report to highlight the 218 outstanding recommendations as of June 2023, of which, seven percent (or 15) are related to health care. For example, one outstanding recommendation suggests Congress should direct a federal entity to develop and implement a federal strategy to coordinate diet-related efforts that aim to reduce Americans' risk of chronic health conditions. Another outstanding recommendation suggests Congress should improve the transparency and accountability of Medicaid non-disproportionate share hospital (DSH) supplemental payments. GAO notes that by addressing the outstanding recommendations Congress can help improve the effectiveness of the federal government, save billions in financial benefits and taxpayer dollars, and better position the U.S. to address future challenges.
• On July 26, 2023, KFF published an issue brief entitled, Key Facts About Medicare Part D Enrollment and Costs in 2023. The Medicare Part D program provides an outpatient prescription drug benefit to beneficiaries in private plans, including stand-alone prescription drug plans (PDPs) to supplement traditional Medicare and Medicare Advantage prescription drug plans (MA-PDs). This issue brief examines Medicare Part D enrollment and costs in 2023 and over time. In their analysis, KFF authors found that more than half of all Medicare Part D enrollees are in MA-PDs. They also found that three firms cover nearly 60 percent of all Medicare beneficiaries enrolled in Part D – UnitedHealth, CVS Health, and Humana. Additionally, the authors note that 62 percent of all beneficiaries receiving the Part D Low-Income Subsidy (LIS) are enrolled in MA-PDs. They highlight that the average monthly premium for Part D coverage is four times higher for PDPs ($40 in 2023) compared to MA-PDs ($10 in 2023) and that the weighted average annual Part D deductible is seven times larger in PDPs ($411 in 2023) compared to MA-PDs ($58 in 2023). Finally, the authors describe that while all beneficiaries with Part D coverage (both in a PDP or MA-PD) typically face low monthly copays for generic drugs, they face substantially higher copays for other drugs compared to beneficiaries not enrolled in Part D.

IV. Other Health Policy News

• On July 25, 2023, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury issued a proposed rule entitled, Requirements Related to the Mental Health Parity and Addiction Equity Act: Proposed Rules. The proposed rules include requirements for health plans to evaluate their coverage rules to make sure people have equivalent access between mental health and medical benefits, including evaluating provider networks, how much the insurer pays out-of-network providers and how often prior authorization is required. The proposed rules also require more than 200 non-federal governmental health plans, like those offered to state and local government employees, to comply with the 2008 law. The three agencies also released a report to Congress on the implementations of the change to federal mental health parity laws that were put in place in late 2020. With these proposed rules, the Biden Administration aims to make mental health more accessible and equitable for people seeking mental health and SUD treatment. The proposed rule can be found here and more information can be found here.
• Proposed rules for the Mental Health Parity and Addiction Equity Act bring significant new obligations for group health plans and issuers. Our Employee Benefits & Executive Compensation Group examines the major changes to nonquantitative treatment limitations that impact mental health and substance abuse disorder benefits. An Alston & Bird client advisory can be found here.
• On July 26, 2023, HHS, through the Health Resources and Services Administration (HRSA), announced the distribution of nearly $11 million to 15 recipients to strengthen the health workforce by establishing new residency programs in rural communities. Awardees will each receive up to $750,000 to establish new rural residency programs. The funding will support awardee’s accreditation costs, curriculum development, faculty and study recruitment and retention efforts, and one-on-one advisor/consultation support. Three awardees are specifically using the funding to establish new family medicine residency programs with enhanced obstetrical training given the rising rural maternal health care crisis. HHS notes that these awards will help address the rising physician shortages in rural areas that contribute to communities’ poor access to care and poor health outcomes. More information on this announcement can be found here.

View our Health Care Legislative & Public Policy team.

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