M+ Check-Up: February 17, 2023

THIS WEEK’S DOSE

With only the Senate in session this week, the Senate Health, Education, Labor and Pensions (HELP) Committee examined healthcare workforce issues in its first hearing of the new Congress. The Congressional Budget Office (CBO) released its updated budget and economic outlook. The Centers for Medicare & Medicaid Services (CMS) released a proposed rule on nursing home ownership disclosures and announced new Innovation Center models on drug pricing.

CONGRESS

CBO Releases Updated Budget Projections. On February 15, the nonpartisan CBO released its Budget and Economic Outlook: 2023 to 2033. This 10-year outlook is regularly updated and published by CBO to offer baseline projections of what the federal budget and the economy would look like in the current year and over the next 10 years if current laws governing taxes and spending generally remained unchanged.

CBO’s projection of the deficit for 2023 is now $0.4 trillion, more than it was in May 2022, and the cumulative deficit over the 2023–2032 period is now projected at $3.1 trillion (or about 20%) more than the previous projection, largely because of newly enacted legislation and changes in CBO’s economic forecast, including higher projected inflation and interest rates.

CBO also released updated projections on the federal debt limit. CBO projects that, if the debt limit is not raised or suspended, the government’s ability to issue additional debt will be exhausted between July and September 2023.

These projections will help frame the debate as Congress considers annual spending bills and deficit reduction measures, particularly heading into the debt limit debate that Congress will need to resolve this summer, based on the CBO’s timing projection. While Republicans and Democrats appear to agree that cuts to Medicare or Social Security are off the table as part of any debt limit deal, we continue to monitor these talks closely for news of potential cuts to healthcare stakeholders.

Senate HELP Committee Holds Hearing on Healthcare Workforce.  On February 16, the Senate HELP Committee held a hearing titled Examining Health Care Workforce Shortages: Where Do We Go From Here? It was the committee’s first hearing in the 118th Congress, under the new leadership of Chair Bernie Sanders (I-VT) and Ranking Member Bill Cassidy (R-LA).

In announcing the hearing, the committee noted that the United States will face a shortage of up to 124,000 physicians by 2034, according to the Association of American Medical Colleges, including 48,000 primary care physicians. Further, according to the Health Resources and Services Administration, nearly 100 million Americans live in areas without enough primary care providers, and about 70 million Americans live in areas without enough dental providers.

During the hearing, committee members and the panel of witnesses discussed the fact that workforce shortages have led to rising costs and increased competition for qualified health professionals, and that the COVID-19 pandemic has exacerbated the challenges facing the healthcare system and has led to provider burnout. The committee examined potential solutions to address challenges with recruitment and retention in the healthcare workforce, particularly in rural and underserved areas.

This hearing was likely the first in a series, and additional committees in the House and Senate are also likely to undertake similar efforts, as addressing healthcare workforce shortages is an issue with the potential for bipartisan cooperation in the divided 118th Congress.

ADMINISTRATION

CMS Issues Proposed Rule on Disclosures of Nursing Home Ownership. On February 13, CMS released a proposed rule to implement portions of section 6101 of the Affordable Care Act, which requires the disclosure of certain ownership, managerial and other information regarding Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities.

Under the proposed rule, nursing facilities would be required to disclose the following information to CMS or, for Medicaid nursing facilities, to the applicable state Medicaid agency:

• Each member of the governing body of the facility, including the name, title and period of service of each member
• Each person or entity who is an officer, director, member, partner, trustee or managing employee of the facility, including the name, title and period of service of each such person or entity
• Each person or entity who is an additional disclosable party of the facility
• The organizational structure of each additional disclosable party of the facility and a description of the relationship of each such additional disclosable party to the facility and to one another.

Nursing facilities owned by private equity companies or real estate investment trusts (REITs) would have to report that ownership structure under this proposed rule, and CMS will publish this information. CMS is also soliciting comment on the propriety of the proposed definitions of private equity and REITs; on whether the proposed definition of private equity company should include publicly traded private equity companies; and any other types of private ownership besides private equity companies and REITs about which CMS should consider collecting information from SNFs as part of the enrollment process.

Comments on the proposed rule are due by April 14. A fact sheet from CMS provides additional information.

CMS Announces New Innovation Center Models on Drug Pricing. On February 14, CMS announced three new models for testing by the CMS Innovation Center to help lower the high cost of drugs, promote accessibility to life-changing drug therapies and improve quality of care. The new models are detailed in a report from Health and Human Services (HHS) Secretary Becerra in response to President Biden’s Executive Order on lowering prescription drug costs.

The three models selected by Secretary Becerra for testing by the Innovation Center are:

• The Medicare $2 Drug List. Under this voluntary model (the Medicare High-Value Drug List Model), Part D plans would be encouraged to offer a low, fixed co-payment across all cost-sharing phases of the Part D drug benefit for a standardized Medicare list of generic drugs that treat chronic conditions. Patients picking plans that participate in the model will have more certainty that their out-of-pocket costs for these generic drugs will be capped at a maximum of $2 per month per drug.
• The Cell and Gene Therapy Access Model. Under this voluntary model, state Medicaid agencies would assign CMS to coordinate and administer multi-state, outcomes-based agreements with manufacturers for certain cell and gene therapies. As new therapies come to market, the goal is to help Medicaid beneficiaries gain access to life-changing, high-cost specialty drugs for illnesses like sickle cell disease and cancer.
• The Accelerating Clinical Evidence Model. This mandatory model would adjust Medicare Part B payment amounts for Accelerated Approval Program drugs to give manufacturers an incentive to expedite and complete confirmatory clinical trials. This mandatory model for applicable Part B fee-for-service providers is in response to concerns that manufacturers may fail to complete confirmatory trials by the date to which they committed at the time of accelerated approval, and was specifically addressed in provisions of the Consolidated Appropriations Act of 2023.  The fact sheet directs CMS to consult with the Food & Drug Administration (FDA) to explore this model starting in 2023 and may require future rulemaking.

The report also focuses on additional areas of research, with the potential for lowering prescription drug costs, including:

• Accelerating biosimilar adoption
• Data access changes to support price transparency
• Cell and gene therapy access in Medicare fee-for-service.

Additional information can be found in an Innovation Center fact sheet and a frequently asked questions document.

QUICK HITS

• The Senate Committee on Commerce, Science, and Transportation held a hearing focused on efforts to increase transparency in pharmacy benefit manager (PBM) business practices and prohibit PBM conduct that can drive up costs for consumers. The discussion included the recently introduced Pharmacy Benefit Manager Transparency Act (S. 127), sponsored by Commerce Committee Chair Maria Cantwell (D-WA) and Senator Chuck Grassley (R-IA).
• The Senate Appropriations Committee announced its subcommittee leaders and rosters. Of note to healthcare stakeholders, Senator Tammy Baldwin (D-WI) will chair the Labor-HHS Subcommittee, and Senator Shelley Moore Capito (R-WV) will serve as ranking member.
• Senate HELP Committee Democrats released a majority staff report on profits of pharmaceutical companies during the COVID-19 pandemic, and announced a related March 22 hearing titled, Taxpayers Paid Billions For It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine? The same day, Moderna announced that its COVID vaccine would remain free for “uninsured or under-insured  people.”
• Senate Finance Committee Chair Ron Wyden (D-OR) sent a letter to CMS, asking the agency to finalize a recent proposed rule to increase consumer protections in Medicare Advantage, including efforts to curb deceptive marketing practices by insurance agents and brokers, and improvements to provider directories.
• CMS released a proposed National Coverage Determination decision that would, for the first time, expand coverage for power seat elevation equipment on certain power wheelchairs to Medicare beneficiaries. Comments are due by March 17.
• The Office of the National Coordinator for Health Information Technology published a blog post on the Trusted Exchange Framework and Common Agreement (TEFCA) and applauded the first set of networks to be approved to implement TEFCA as prospective Qualified Health Information Networks.

NEXT WEEK’S DIAGNOSIS

The House and Senate are both in recess next week and will return to session the week of February 27. With Congress in recess, this Check Up will also be on hiatus next week and will return on Friday, March 3.

For more information, contact Debra Curtis, Kristen O’Brien or Erica Stocker.

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