HealthCare Roundtable e-News – April 17, 2023


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Webinar – May 9, 2023 – 2:00 PM (EST)

Drivers of Health Care Costs: Hospital Consolidation and Lack of Price Transparency

With healthcare costs growing at an unsustainable rate, employers, taxpayers, and patients have to pay more for the same quality of care. Hospitals are one of the top drivers of rising healthcare costs due to the lack of market competition. Join us to hear from the Public Sector HealthCare Roundtable senior policy team and our group of experts on the impact of hospital consolidation, anti-competitive practices, and the lack of price transparency on patients and market-based solutions to increase hospital competition and reduce healthcare costs.

Top News

Democratic Senators Introduce Bill to Extend IRA Inflation Rebates to Commercial Market

Last month, Sens. Catherine Cortez Masto (D-NV) and Amy Klobuchar (D-MN) introduced the Lower Drug Costs for Families Act, which would expand Medicare’s new inflation rebate policy in Parts B and D to the commercial market. The bill would build on the Inflation Reduction Act’s Medicare drug inflation rebate provisions by adding in the number of units sold to the privately-insured for drugs currently covered under Medicare Part B and Part D when calculating the inflation rebate amount owed by drug manufacturers who raise the price of their drug faster than inflation. According to the senators, this bill would reduce the national deficit by more than $34 billion over a decade. As part of his Fiscal Year (2024) budget proposal, President Joe Biden requested that the Inflation Reduction Act’s inflation rebate policy for Medicare be extended to the commercial market, including employer-sponsored plans, Affordable Care Act (ACA) marketplace plans, and other individual and group market plans. Seven other Democratic senators co-sponsored the bill. Notable endorsees of the bill include Patients for Affordable Drugs Now, AFL-CIO, American Federation of State, County and Municipal Employees (AFSCME), UNITE HERE, United Mine Workers of America, Communications Workers of America (CWA), and the American Federation of Teachers.


MedPAC Unanimously Passes Three Recommendations to Lower Medicare Part B Drug Costs

Last Thursday, members of MedPAC voted unanimously on three recommendations (subscription required) aimed at reducing the high cost of prescription drugs under Medicare Part B. MedPAC is a nonpartisan independent legislative branch agency that provides Congress with analysis and policy recommendations for Medicare. First, MedPAC recommended that Congress require the Secretary of the Department of Health and Human Services (HHS) to cap the Medicare payment rate for Part B drugs and biologics granted accelerated approval by the Food and Drug Administration (FDA) if the drugs meet certain criteria. This recommendation also requests that Congress grant the Secretary authority to cap the Medicare payment rates of Part B drugs and biologics approved under the accelerated approval pathway if their price is excessive relative to the upper bound estimates of value. Pharmaceutical Research and Manufacturers of America (PhRMA) previously expressed concern for this recommendation, stating that it could potentially hinder or delay patient access to treatments and is based on misconceptions about the accelerated approval pathway.

The second recommendation calls on Congress to grant the HHS Secretary authority to establish a single average sales price (ASP) based payment rate for Part B drugs and biologics with similar health effects. This policy would encourage price competition among drugmakers and create incentives for providers to select lower-priced drugs for patient use. Third, MedPAC recommends Congress require the Secretary to reduce add-on payments for costly Part B drugs and biologics based on ASP to minimize the relationship between ASP and add-on payments. The recommendation also directs Congress to give the Secretary authority to eliminate add-on payments for Part B drugs and biologics paid based on wholesale acquisition cost (WAC). According to MedPAC staff, this recommendation is expected to reduce Medicare spending by at least $250 million over one year and $1 billion over five years. The Commission will include these recommendations in its June report to Congress.


Senate HELP Committee to Delay Markup of Unreleased PBM Reform Legislation

The Senate Committee on Health, Education, Labor, and Pensions (HELP) will delay (subscription required) its markup of bipartisan drug pricing legislation focused on pharmaceutical benefit managers (PBMs). Last month, top aides for Chair Bernie Saunders (I-VT) and Ranking Member Bill Cassidy (R-LA) reached out to staffers for other committee members, notifying them of the planned markup after returning from Congress’ spring recess. But according to committee documents and congressional aides, the committee is holding closed-door roundtables with experts and representatives from the PBM and generics industries, which will delay the markup session. Though the provisions of the bill remain unclear, in 2019 the HELP Committee proposed a package from former Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA). The current committee could pull from the 2019 bill’s language requiring PBMs to be more transparent about their business and put limitations on PBMs’ ability to use spread pricing.


GOP Congressional Leaders Send Letter to HHS, CMS Expressing Concern of IRA Implementation

Last Wednesday, three Congressional Republican leaders sent a letter to Secretary of the Department for Health and Human Services (HHS) Xavier Becerra and Administrator of the Centers for Medicare and Medicaid Services (CMS) Chiquita Brooks-LaSure expressing their concern over recent implementation guidance for the Medicare drug price-pricing provisions of the Inflation Reduction Act (IRA). Senate Finance Committee Ranking Member Mike Crapo (R-ID), House Ways and Means Chair Jason Smith (R-MO), and House Energy and Commerce Chair Cathy McMorris Rodgers (R-WA) co-signed the letter, which stated that initial guidance for CMS’ implementation of the IRA’s Medicare drug pricing negotiation provisions may permit Democrats to allow HHS to use march-in rights under the Bayh-Dole Act to advance partisan initiatives. Specifically, the GOP lawmakers expressed concern over HHS’ ability to march-in on the patents of drugs developed with government funding and grant licenses for those drugs to be developed and distributed at cheaper prices for the public.

The lawmakers request that CMS reconsiders several components of the guidance, urging that inaction could stifle innovation, discourage public-private partnerships, undermine intellectual property protections, and offer poor conditions for public input. Additionally, the lawmakers criticize CMS’ lack of transparency and accountability in implementing the IRA provisions. They ask for longer public comment periods for stakeholders and claim the agency should not withhold any portion of its regulatory proposals from public feedback.

Executive Action

On Monday, President Joe Biden signed a House bill immediately ending the COVID-19 national emergency, first enacted in 2020 during the Trump administration. Of note, the COVID-19 National Emergency is distinct from the COVID-19 Public Health Emergency (PHE), which will expire on May 11. While many healthcare flexibilities are still tied to the COVID-19 PHE, the National Emergency notably governs 1135 waiver flexibilities, which provided additional flexibilities to health care providers during the pandemic. Certain policy changes contained in two March 2020 interim final rules and specific policies in the Coronavirus Aid, Relief, and Economic Security (CARES) Act will continue until the expiration of the PHE. The Consolidated Appropriations Act of 2023 extended many telehealth flexibilities through December 31, 2024.

Administrative Action

  • On Tuesday, the U.S. Department of Health and Human Services’ (HHS) Office of the National Coordinator for Health Information Technology (ONC) released a Notice on Proposed Rulemaking to implement various provisions of the 21st Century Cures Act (Cures Act) and make several enhancements to the ONC Health IT Certification Program (Certification Program) to advance interoperability, improve transparency, and support the access, exchange, and use of electronic health information. The proposals include provisions to: 1) Implement the Electronic Health Record Reporting Program as a new Condition of Certification for developers of certified health information technology under the Program. 2) Revise several Certification Program criteria including existing criteria for clinical decision support, patient demographics and observations, electronic case reporting, and application programming interfaces for patient and population services. 3) Implement policies to promote greater trust in the predictive decision support interventions (DSIs) used in healthcare to enable users to determine effectiveness of DSI and improve market competition, among other provisions.

  • On Tuesday, the Substance Abuse and Mental Health Services Administration (SAMHSA) released a draft 2023-2026 Strategic Plan, which will guide their work to lead public health and service delivery efforts that promote mental health, prevent substance misuse, and provide treatments and supports to foster recovery while ensuring equitable access and outcomes. The new Strategic Plan keeps prevention, treatment, and the mental health promotion continuum at its core. Further, it emphasizes four guiding principles: equity, trauma-informed approaches, recovery, and a commitment to data and evidence. To achieve its mission, SAMHSA has identified five priority areas to better meet the behavioral health needs of individuals, communities, and service providers, including: 1) Preventing overdoses 2) Enhancing access to suicide prevention and crisis care 3) Promoting resilience and emotional health for children, youth, and families 4) Integrating behavioral and physical health care 5) Strengthening the behavioral health workforce.

  • Recently, the U.S. Department of Health & Human Services (HHS), through the Office for Civil Rights (OCR), issued (fact sheet) a Notice of Proposed Rulemaking (NPRM) to modify the Health Insurance Portability and Accountability (HIPAA) Privacy Rule to strengthen reproductive health care privacy. OCR administers and enforces the Privacy Rule, which establishes requirements concerning the use, disclosure, and protection of protected health information (PHI) by HIPAA-covered entities, including health plans, health care clearinghouses, and most health care providers. The proposed rulemaking is one of several actions taken by HHS in support of President Biden’s two Executive Orders issued following the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization to protect access to reproductive care.

Congressional Action

Last week, the bill text for the Coordinating Dual Eligible Recommendations Act (S.880) was released. The bill, introduced by Senator Bill Cassidy (R-LA) would require the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC) to jointly report on spending, utilization, and financial performance trends across the Medicare and Medicaid programs for dually eligible beneficiaries every two years, beginning in 2024. Based on these analyses, MedPAC and MACPAC would be required to provide Congress with policy recommendations, to ensure dually eligible beneficiaries have “adequate and efficient access to care.”  


On Monday, the Centers for Medicare and Medicaid Services (CMS) released the fiscal year (FY) 2024 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) proposed rule. For acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting program and are meaningful electronic health record users, the proposed increase in operating payment rates for FY 2024 is projected to be 2.8%. CMS proposes to increase the LTCH PPS standard Federal payment rate by 2.9%. CMS is also proposing to: 1) Make health equity adjustments in the Hospital Value-Based Purchasing Program by providing incentives to hospitals to perform well on existing measures and to those who care for high proportions of underserved individuals, as defined by dual eligibility status. 2) Add 15 new health equity hospital categorizations for the FY 2024 IPPS payment impacts. 3) Change the severity designation of the three ICD-10-CM diagnosis codes describing homelessness (e.g., unspecified, sheltered, and unsheltered) from non-complication or comorbidity (NonCC) to complication or comorbidity (CC), based on the higher average resource costs of cases with these diagnosis codes compared to similar cases without these codes. 4) Designate rural emergency hospitals as graduate medical education training sites. 


On Thursday, the Centers for Medicare and Medicaid Services (CMS) submitted a notice of proposed rulemaking that would enable Deferred Action for Childhood Arrivals (DACA) recipients to enroll in Medicaid, Children’s Health Insurance Programs (CHIP), and Affordable Care Act Marketplace plans. DACA recipients were brought to the U.S. as children, but do not have full citizenship and cannot currently enroll these health insurance plans. The Department of Health and Human Services estimates that 34% of the approximately 58,000 DACA recipients are currently uninsured because of this gap.  


The National Council of State Boards of Nursing (NCSBN) released new research revealing how the nursing workforce was impacted by pandemic, how many nurses left the workforce during this period, and how many nurses intend to leave the workforce in the future. Key findings of the study include: 1) Approximately 100,000 registered nurses (RNs) left the workforce during the COVID-19 pandemic in the past two years due to stress, burnout, and retirements. 2) Another 610,388 RNs reported an “intent to leave” the workforce by 2027 due to stress, burnout, and retirement. Altogether, about one-fifth of RNs nationally are projected to leave the health care workforce. 3) A quarter to half of nurses reported feeling emotionally drained (50.8%), used up (56.4%), fatigued (49.7%), burned out (45.1%), or at the end of the rope (29.4%) “a few times a week” or “every day.”