Health Care Week in Review September 8, 2023

Health Care Week In Review: Lower Cost, More Transparency Act Draft Health Bill Released

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, House GOP members released a new draft health bill, the “Lower Cost, More Transparency Act,” and CMS announced a new model to help states redesign delivery and improve equitable access to care. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

  • On September 5, 2023, the Centers for Medicare & Medicaid Innovation (CMS) announced a new voluntary state total cost of care model called the States Advancing All-Payer Health Equity Approaches and Development (AHEAD Model). The aim of this model is to better equip participating states to promote health equity, increase access to primary care services, set health care expenditures on a more sustainable trajectory, and lower health care costs for patients. Through this new voluntary Model, CMS will partner with states to redesign statewide and regionwide health care delivery to improve the total population health of a participating state or region by improving the quality and efficacy of care delivery, reducing health disparities, and improving health outcomes. Under this total cost of care model, participating states will be responsible for managing health care quality and costs across all payers, including Medicare, Medicaid, and private coverage. States will be responsible for ensuring that health providers deliver high-quality care, improve population health, provide greater care coordination, and promote health equity by supporting underserved patients. CMS will select up to eight states to participate in the AHEAD Model. Selected states will have the opportunity to receive up to $12 million from CMS to support implementation of the program. The first Notice of Funding Opportunity (NOFO) application period will be released in late fall 2023. States will have 90 calendar days to apply for a cooperative agreement award during this first application period. The second NOFO application period is anticipated to open in Spring 2024 with a 60-day application period.
  • On September 7, 2023, the Department of Health and Human Services (HHS), through its Office for Civil Rights (OCR), announced a proposed rule that prohibits discrimination on the basis of disability. The rule, called the Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance, updates critical provisions that help persons with disabilities access health and human services under Section 504 of the Rehabilitation Act of 1973.  Originally published in 1977, this rule advances the promise of the Rehabilitation Act and helps to ensure that people with disabilities are not subjected to discrimination in any program or activity receiving funding from HHS just because they have a disability. HHS is proposing to amend the regulations to update them and clarify obligations in several crucial areas not explicitly addressed in the current regulations, and to improve consistency with the Americans with Disabilities Act, the Americans with Disabilities Amendments Act, amendments to the Rehabilitation Act, and significant case law. Public comments are due 60 days after publication in the Federal Register.

Event Notices

  • September 12, 2023: National Institutes of Health (NIH) changed the time of the public meeting of the National Advisory Council on Drug Abuse.
  • September 22, 2023: Centers for Disease Control and Prevention (CDC) announced a public meeting of the Advisory Committee on Immunization Practices (ACIP). The agenda will include discussions of maternal respiratory syncytial virus (RSV) vaccine. A recommendation vote for maternal RSV vaccine is scheduled. A Vaccines for Children vote is scheduled for maternal RSV vaccine.
  • September 28, 2023 and October 26, 2023: Health Resources and Services Administration (HRSA) announced a public meeting of the Secretary’s Advisory Council on Blood Stem Cell Transplantation (ACBSCT). The agenda for the September 28, 2023 meeting may include the following topics: the HHS periodic review of the state of the science of using adult stem cells and birthing tissues to develop new types of therapies for patients, for the purpose of considering potential inclusion of such new therapies in the C.W. Bill Young Cell Transplantation Program; criteria for defining a high-quality cord blood unit for banking specifications; the unmet needs in blood stem cell transplantation and cellular therapy; strategies to improve rates of donation for adult blood stem cell donors; and other areas to increase blood stem cell donation and transplantation. The agenda for the October 26, 2023, meeting will be determined based on discussion, priorities, and/or action items from the September 28, 2023 meeting.
  • October 16, 2023: CDC announced a public meeting for the Lead Exposure and Prevention Advisory Committee (LEPAC). The agenda will include presentations on the following topics: aligning the Department of Housing and Urban Development (HUD) inspection protocols for assisted housing for the last 20 years, the environmental factors impacting lead reduction, EPA’s proposal on lead dust clearance level and hazard standard, updates on blood lead testing instrument, lead related funding opportunities for community-based organizations, state policy actions related to the blood lead reference value, CDC’s efforts to increase blood lead testing in children enrolled in Medicaid, and an update from the Preventing Lead Exposure in Adults workgroup.
  • October 18, 2023: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public meeting of the Interdepartmental Serious Mental Illness Coordinating Committee (ISMICC). The meeting will provide information on federal efforts related to serious mental illness (SMI) and serious emotional disturbance (SED).
  • October 18-19, 2023: CDC announced a public meeting of the Community Preventive Services Task Force (CPSTF). The agenda will consist of deliberation on systematic reviews of literature. Topics proposed for the October 2023 meeting include cancer, preparedness and response, social determinants of health, and substance use.
  • October 24, 2023: HRSA announced a public meeting of the Secretary’s Centers for Disease Control and Prevention (CDC)/HRSA Advisory Committee on HIV, Viral Hepatitis and STD Prevention and Treatment (CHAC). CHAC will discuss issues related to reducing barriers and improving outcomes in HIV and Hepatitis C co-infection, payment models for addressing social determinants of health, incorporating stigma reduction in HIV care and treatment, as well as other special presentations
  • October 31, 2023: Food and Drug Administration (FDA) announced a public meeting of the of the Cellular, Tissue, and Gene Therapies Advisory Committee. The Committee will discuss and make recommendations on BLA 125787 from Vertex Pharmaceuticals, Inc. for exagamglogene autotemcel (exa-cel).
  • November 9, 2023: FDA announced a public meeting on “Endpoints and Trial Designs To Advance Drug Development in Kidney Transplantation.” The goal of this public meeting is to facilitate discussion among FDA, academicians, and industry representatives on endpoint and trial designs to promote drug development in kidney transplantation.
  • November 17, 2023: FDA announced a public meeting of the Pulmonary-Allergy Drugs Advisory Committee. The Committee will discuss new drug application 215010, for gefapixant oral tablets, submitted by Merck Sharp & Dohme Corp., for the proposed indication of treatment of adults with refractory or unexplained chronic cough.

II. Reports, Studies & Analyses

  • On September 5, 2023, the U.S. Government Accountability Office (GAO) issued a report entitled, Medicare Part D: CMS Should Monitor Effects of Rebates on Plan Formularies and Beneficiary Spending. In the report, GAO found that plan sponsors—private companies that provide voluntary Medicare Part D prescription drug coverage—received $48.6 billion in rebates from drug manufacturers in 2021. Three therapeutic drug classes accounted for 73 percent of rebates: (1) endocrine metabolic agents, including antidiabetic drugs; (2) blood modifiers, including anti-stroke drugs; and (3) respiratory agents, including antiasthma drugs. Beneficiary use of highly rebated drugs had different spending implications for plan sponsors, beneficiaries, and Medicare. In general, GAO found that rebates may reduce plan sponsor payments for drugs with a higher gross cost to an amount lower than the payment for a competing drug with a lower cost. This may lower Medicare drug spending, as its plan sponsor payments are based on drug costs after rebates. However, rebates do not lower individual beneficiary payments for drugs, as these are based on the gross cost of the drug before accounting for rebates. Thus, GAO stated that drugs with higher gross costs generally result in higher beneficiary payments relative to payments for competing drugs with lower gross costs. GAO found payments by beneficiaries were more than plan sponsor payments, after accounting for rebates, for 79 of the 100 drugs receiving the most rebates.
  • On September 5, 2023, the Office of Inspector General (OIG) issued a report entitled, Florida Did Not Refund $106 Million Federal Share of Medicaid Managed Care Rebates It Received for Calendar Years 2015 Through 2020. In the report, OIG found that Florida calculated and received the required MCO rebates totaling $448,891,916 ($292,485,420 Federal share) for this audit period in accordance with Florida statutes and the terms of the Medicaid managed care organization (MCO) contracts. However, Florida did not properly refund the Federal share of MCO rebates in accordance with Federal requirements. Florida reported only calendar year 2020 rebates on the CMS-64, which totaled $274,856,893 ($186,332,359 Federal share), but it did not report rebates for calendar years 2015 through 2019 totaling $174,035,023 ($106,153,061 Federal share). Florida did not report the rebates it received from the MCOs for calendar years 2015 through 2019 on the CMS-64 because Florida officials erroneously believed that they were not required to do so before CMS added the January 15, 2021, provision to the special terms and conditions (STCs) specifically requiring Florida to refund the Federal share of rebates. As a result, before January 15, 2021, Florida did not include a step in its written instructions for preparing the quarterly CMS-64 to report the rebates and refund the Federal share to the Federal Government.
  • On September 6, 2023, OIG issued a report entitled, Nursing Homes Reported Wide-Ranging Challenges Preparing for Public Health Emergencies and Natural Disasters. OIG found that even those nursing homes that meet the Federal requirements for emergency preparedness face challenges with critical aspects of emergency preparedness. Specifically, only 24 percent of nursing homes in areas at high risk for disasters received a deficiency for not meeting emergency preparedness requirements established by CMS during their most recent compliance survey, but an estimated 77 percent of nursing homes reported at least one challenge with preparedness activities. OIG also found that nursing homes reporting challenges had lower community resilience compared to other nursing homes, indicating that availability of community resources may be a factor in nursing homes’ experience with preparedness activities. Further, an estimated one in five nursing homes reported difficulties coordinating preparedness activities with multiple community partners.
  • On September 7, 2023, OIG issued a report entitled, Home Health Agencies Failed To Report Over Half of Falls With Major Injury and Hospitalization Among Their Medicare Patients. OIG found that 55 percent of falls we identified in Medicare claims were not reported in associated Outcome Assessment Information Set (OASIS) assessments as required. Falls reporting on OASIS assessments was worse among younger home health patients (compared to older patients) and patients who identified as Black, Hispanic, or Asian (compared to White). Reporting was also lower among for-profit home health agencies (HHAs) as compared to nonprofit and government-owned agencies. Notably, HHAs with the lowest Care Compare major injury fall rates reported falls less often than HHAs with higher Care Compare fall rates, indicating that Care Compare does not provide the public with accurate information about how often home health patients fell. Finally, for many Medicare home health patients who fell and were hospitalized, there was no OASIS assessment at all associated with the hospitalization, which raises additional concerns about potential noncompliance with data submission requirements and its impact on the accuracy of information about falls with major injury on Care Compare.

III. Other Health Policy News

  • On September 5, 2023, the House Republican Health Committee Chairs released a draft health care package. The legislation was assembled by the chairs of the House Energy and Commerce, Ways and Means, and Education and the Workforce committees. The chairs of these committees are expected to formally introduce the package on Friday, September 8, 2023. Many of the provisions in the package had passed the House Energy and Commerce Committee with bipartisan support earlier this summer, but it is unclear whether House Democrats will lend their support to the legislation. The draft package, called the Lower Cost, More Transparency Act, is focused on health care price transparency including increased oversight of Pharmacy Benefit Managers (PBMs), site-neutral reimbursement policies, and extending certain funding that is due to expire on September 30, 2023 for Community Health Centers, the National Health Service Corps, and the Teaching Health Centers Graduate Medical Education Program. This legislation would also delay the start of Medicaid Disproportionate Share Hospital (DSH) payment cuts scheduled to take effect on October 1, 2023 for two years.
  • On September 6, 2023, Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, released a white paper on artificial intelligence (AI) and the technology’s potential benefits and risks to society. Senator Cassidy also requested feedback from stakeholders on the role of government in regulating the AI industry and how to ensure AI technology is designed, developed, and deployed in a responsible manner that protects Americans’ rights and safety. Senator Cassidy said he hopes to use the feedback from the request for information (RFI) to better understand the effects of AI and how potential legislation and regulation could impact the creation and utilization of this technology.  He wrote that, “As the U.S. Senate begins to consider legislation to address AI, we must account for the specific context in which AI’s capabilities are applied. A sweeping, one-size-fits-all approach for regulating AI will not work and will stifle, not foster, innovation.”  Senator Cassidy’s white paper is available here. The deadline to submit feedback is September 22, 2023.
  • On September 7, 2023, Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate HELP Committee, requested information from stakeholders on how to enhance the privacy protections of health data to safeguard sensitive information while balancing the need to support medical research. He emphasized that health data that is collected from new technologies such as wearable and smart devices, and health and wellness apps are not protected under the Health Insurance Portability and Accountability Act (HIPAA). Senator Cassidy said that the aim of this RFI is to use stakeholder feedback to identify solutions to modernize HIPAA and ensure all health data is properly safeguarded. Information on the RFI is available here. The deadline to submit feedback is September 28, 2023.
  • On September 7, 2023, House Ways and Means Committee Chairman Jason Smith (R-MO-08) released an open letter to the health care community requesting comments and input on addressing disparities in access to health care. Specifically, the Committee is requesting proposals that can help, “turn the tide against the very real disparities in access to care that exist for millions of Americans – particularly those in rural and underserved communities.” As part of the RFI, Chairman Smith highlights five key areas of interest: (1) payment disparities between different geographic areas; (2) the long-term financial health of providers and facilities; (3) payments for identical care provided in varying sites of service; (4) bringing new professionals into the health care workforce; and, (5) innovative care models and technology to improve patient outcomes. Chairman Smith’s letter is available here. Responses to this RFI are due by October 5, 2023, at 5:00pm EST.

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