HealthCare Roundtable e-News – February 22, 2021

U.S. House Moves Closer to a Vote on COVID-19 Relief Package, Oversight Committee Includes $350 Billion in Relief for States and Localities

Committees of jurisdiction in the U.S. House made progress toward passage of another sweeping COVID-19 relief package by the Democratic-controlled chamber. House Majority Leader Steny Hoyer (D-MD) indicated that vote on the final package would occur on Thursday or Friday of this week.

The House Oversight & Reform Committee passed a bill last week that would commit $350 billion in COVID-19 relief specifically for state and local governments to use on pandemic-related expenses. According to a press release from the office of Committee Chair Carolyn Maloney (D-NY), $195.3 billion will go directly to states and $130.2 billion to local governments, while tribes and territories would get the remainder. $570 million will also be committed for emergency leave for federal and postal workers, as well as $117 million for oversight entities to promote transparency and accountability of all federal coronavirus relief funds.

States are expected to receive their relief funds up to 60 days after certifying their use or need of the funds and will be able to use the $350 billion for more than just COVID-19 expenses. Localities may also use the funds to aid the economic impact of the pandemic and replace lost, delayed or decreased revenue due to COVID-19. (InsideHealthPolicy)

Malone spoke on the bill after it passed, stating that members of her party “fended off dozens of irrelevant Republican amendments—on everything from fossil fuels to abortion to immigration—that had absolutely nothing to do with helping families, communities, and local governments in need.” Committee Republicans were unsuccessful in blocking the bill after spending more than eight hours marking up provisions. The bill passed on a party line vote. (InsideHealthPolicy)

Chaquita Brooks-LaSure Nominated to Lead CMS, Elizabeth Fowler to CMMI

President Joe Biden announced last week his nomination of Chiquita Brooks-LaSure, Partner at Manatt Health, to be the next CMS administrator. Brooks-LaSure had previously served as a co-lead of the Department of Health and Human Services review team during the Biden-Harris transition period.

Several news outlets had reported earlier this month that the president’s decision for the top CMS job would come down to Obama administration alumnus Brooks-LaSure and Mandy Cohen, current North Carolina health secretary. In her role as a senior CMS official under Obama, Brooks-LaSure helped implement the Affordable Care Act and other bills under healthcare reform. While a staffer on the House Ways & Means Committee, Brooks-LaSure helped draft parts of the ACA with Xavier Becerra, whose hearing to be confirmed as Biden’s HHS Secretary is queued up this month. (InsideHealthPolicy)

While the announcement of Biden’s pick to lead CMS has been months overdue, Brooks-LaSure is expected to reverse many of the previous administration’s policies—set by former administrator Seema Verma—in her first few months in the role. Under the new administration, the agency will likely focus on boosting funding for Obamacare marketing and outreach and expanding the open enrollment period.

Biden also announced his choice to lead the CMS Innovation Center: Elizabeth Fowler, Executive Vice President at the Commonwealth Fund. Unlike the CMS Administrator nomination, CMMI Director position does not require Senate confirmation.

CBO Expects Energy & Commerce Medicaid Rebate Bill to Save $15.9 Billion

According to the Congressional Budget Office, a House Energy and Commerce bill removing the cap on inflationary drug rebates in Medicaid that will likely be included in the House COVID-19 relief package is expected to save taxpayers $15.9 billion over the course of ten years. According to its sponsors, the bill savings will help pay for increasing federal government funding of state Medicaid programs, which is part of pandemic-relief legislation passed by the committee last week.

Currently, the inflationary rebate is capped at 100% of the Average Manufacturer Price to avoid making drug companies pay rebates greater than the price of drugs. The cap would be eliminated starting in 2023, with the CBO anticipating that section 3107 would increase the number of rebates that manufacturers pay Medicaid and would reduce direct spending in Medicaid by $15.9 billion over the 2021-2030 period.

Drug lobbyists are pushing for Congress to delay the 2023 implementation of eliminating the cap, which would buy the industry time to reverse the measure should the power structure of Congress change. (InsideHealthPolicy)

CMS Price Transparency Rule Shines Light on Hospital Drug Cost Mark-ups

A recent report from Sanford C. Bernstein analyzes a CMS rule that went into effect earlier this year that could result in more patients receiving physician-administered drugs in health care settings with lower drug prices than hospitals.

CMS began requiring hospitals to post prices online for items and services they provide, including drugs, on January 1st of this year. The rule was an expansion on a previous requirement where hospitals had to publish chargemaster rates online, which provided some transparency but weren’t as useful to consumers. The Pharmaceutical Research and Manufacturers of America recently used the data to criticize hospitals for marking up drug prices. (InsideHealthPolicy)

According to the report, drug and service prices vary considerably among hospitals; some have an incentive to administer expensive drugs over less-expensive ones, and hospitals favor brands over biosimilars because hospitals profit more from brand biologics. But with the new rule requiring hospital charges to be public, drug mark-ups will likely get more attention and create “profit pressures”.

“These price mark-ups may be reasonable within the context of the totality of procedures, but policy changes that limit drug pricing profitability (e.g. through transparency or 340B) would cause pressure for hospitals,” the report states. (InsideHealthPolicy)