Appropriations Update. On March 3, Congress released bill text for the CAA, 2024, which includes funding for six of the 12 appropriations bills: Agriculture-FDA, Military Construction-VA, Energy-Water, Transportation-HUD, Interior and Commerce-Justice-Science. The legislation provides funds through the end of the current fiscal year (FY) (September 30, 2024).
The bill includes healthcare extenders through the end of the calendar year, such as funding for community health centers, National Health Service Corps, teaching health centers, the Medicare-dependent hospital program, the low-volume hospital payment adjustment and the Special Diabetes Programs, as well as funding to avert pending Medicaid disproportionate share hospital cuts. The bill also includes several notable healthcare policies, such as a partial fix to the Medicare Physician Fee Schedule conversion factor cut via a 1.68% reduction to the 3.37% cut, effective as of March 9. Additionally, the bill provides a one-year extension (for performance year 2024, affecting payments in 2026) of advanced alternative payment model incentive payments at 1.88%, lower than the 3.5% level provided through 2023. It does not, however, address many other healthcare policies that are ripe for congressional action. These policies include healthcare price transparency, Medicare site neutral payment policies, pharmacy benefit manager reforms and drug price competition policies, all of which are now likely to be held until the post-election lame duck session.
The House passed the bill on March 6 by a vote of 339 – 85. Once again, Speaker Johnson (R-LA) had to rely on Democrats to advance the bill in the face of ongoing resistance from the most conservative wing of his party, but a majority of Republicans did vote in support of it as well. The Senate is on track to approve the bill before the end of the week, after which it will be signed into law by President Biden. The deadline for the remaining six FY 2024 bills is March 22.
Senate Budget Committee Holds Hearing on Primary Care. The hearing discussed payment models that could improve and incentivize primary care. There was consensus that the current Medicare fee schedule disincentivizes primary care and increases healthcare spending. There was also bipartisan support for moving away from the fee-for-service model and utilizing a hybrid payment model to shift toward value-based payment.
Senate HELP Committee Holds Hearing on the Older Americans Act. The hearing discussed reauthorization of the Older Americans Act and how to support the needs of seniors in the United States. Witnesses shared the positive impacts that the Older Americans Act has had on individuals. Many witnesses highlighted the need to increase funding for the Older Americans Act. Many senators emphasized the need to improve and modernize the Older Americans Act, and underscored the importance of caring for seniors and allowing them to age with dignity.
The committee also released an RFI on the Older Americans Act reauthorization. The RFI asks for feedback on the effectiveness of pandemic-era flexibilities, as well as policies enacted by the 2020 reauthorization, in responding to the needs of older adults across the United States. The Older Americans Act was last reauthorized in 2020 and will expire on September 30, 2024. Written responses must be submitted to OAA@help.senate.gov by March 21.
House Ways & Means Committee Holds Markup of Healthcare Bills. The purpose of this markup was for the committee to consider and advance three healthcare bills, along with a letter to the House Budget Committee. The committee advanced all four measures, with additional details and vote outcomes as follows:
President Addresses Healthcare Policies in SOTU. On March 7, President Biden delivered his SOTU address. The SOTU did not heavily focus on healthcare issues; however, it did highlight reproductive rights, prescription drug pricing, and preserving Medicare and Social Security.
Generally, President Biden called for an expansion of the drug pricing provisions in the Inflation Reduction Act (IRA). He also spoke on the importance of reproductive freedom and in vitro fertilization (IVF) treatment. He called on Congress to guarantee the right to IVF. He also pledged to re-instate Roe v. Wade. Additionally, he mentioned several other healthcare priorities in his speech, including Medicare and Social Security, advanced premium tax credits, women’s health research, home- and community-based services, price gouging and junk fees as well as the Advanced Research Projects Agency for Health (ARPA-H).
The White House also released a fact sheet outlining his health care priorities which can be found here. The full text of the speech can be found here.
President Announces Strike Force to Address Unfair and Illegal Pricing. The specific members of the strike force have yet to be announced, but are expected to include federal officials from HHS and the Federal Trade Commission (FTC). In the press release, the White House discusses actions it has already taken to make healthcare more affordable and competitive, including cracking down on false or misleading Medicare Advantage (MA) TV marketing ads and breaking up the Organ Procurement and Transplantation Network vendor monopoly, among others.
This announcement came shortly after the FTC released an RFI in conjunction with HHS seeking comments on the potential role of group purchasing organizations and other middlemen in the creation of generic drug shortages.
Administration Responds to Cyberattack on Change Healthcare. In a press release, HHS discussed its work to coordinate efforts to avoid disruptions to care throughout the healthcare system and announced immediate steps that the Centers for Medicare & Medicaid Services (CMS) will take to ensure providers can continue to serve patients. The announced flexibilities include the following:
The attack on Change Healthcare, a healthcare technology company that is a business unit of Optum and owned by UnitedHealth Group, has disrupted operations at pharmacies and health systems across the country that rely on their tools for healthcare payment and revenue cycle management. Learn more about actionable next steps for impacted Change Healthcare customers by reading McDermott’s On the Subject.
FTC, DOJ and HHS Jointly Issue RFI on Private Equity in Healthcare. The RFI requests public comment on deals conducted by health systems, private payers, private equity funds and other alternative asset managers that involve healthcare providers, facilities, or ancillary products and services. In a press release, the FTC, HHS and the US Department of Justice (DOJ) stated that feedback will inform the agencies’ enforcement priorities and future action, including rulemaking to promote and protect competition in healthcare markets. Comments are due on May 6.
White House Receives Counteroffers in Medicare Drug Price Negotiations. This response follows HHS’s release of initial offers on February 1 as part of the IRA implementation. If HHS and participating manufacturers agree on a maximum fair price at the end of the months-long negotiation period, the prices will be published by September 1, 2024, and take effect in 2026. For more information, read the press release.
Alongside this announcement, HHS’s Office of the Assistant Secretary for Planning and Evaluation released a fact sheet detailing the projected impact of the IRA’s prescription drug policies.
The House and Senate are scheduled to be in session next week, with healthcare activity at the committee level, including a House Ways & Means Committee hearing on access to care at home in rural and underserved communities, and a Senate Finance Committee hearing on the President’s FY 2025 HHS Budget with Secretary Becerra. The President’s FY 2025 Budget is expected to be released on March 11.
For more information, contact Debra Curtis, Kristen O’Brien, Priya Rathakrishnan or Erica Stocker.
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