Alston & Bird Health Care Week in Review, April 30, 2021

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in healthcare 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, CMS released its FY 2022 Hospital Inpatient Prospective Payment System and Long-Term Care Hospital Rates Proposed Rule. Read more about the rule and other news below.

I. Regulations, Notices & Guidance

• On April 26, 2021, the Food and Drug Administration (FDA) issued guidance entitled, Nonclinical Testing of Individualized Antisense Oligonucleotide Drug Products for Severely Debilitating or Life-Threatening Diseases; Draft Guidance for Sponsor-Investigators. FDA is publishing this draft guidance to help sponsor-investigators with developing the nonclinical information that FDA recommends to support an investigational new drug application (IND) for certain individualized antisense oligonucleotide (ASO) drug products. ASO drug products that are the focus of this draft guidance are those being developed to treat rapidly progressing, severely debilitating or life-threatening (SDLT) disease attributable to a unique genetic variant or variants that may be amenable to RNA-directed treatment.
• On April 27, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program. CMS is proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from CMS’s continuing experience with these systems for FY 2022 and to implement certain recent legislation. In addition, CMS is proposing to rebase and revise the hospital market baskets for acute care hospitals, update the labor-related share, and provide the market basket update that would apply to the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis, subject to these limits for FY 2022. CMS is also proposing policies relating to Medicare graduate medical education (GME) for teaching hospitals to implement certain recent legislation. The proposed rule would also update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2022. CMS is also proposing to extend New COVID-19 Treatments Add-on Payment (NCTAP) for certain eligible products through the end of the fiscal year in which the PHE ends and to discontinue the NCTAP for discharges on or after October 1, 2021 for a product that is approved for new technology add-on payments beginning FY 2022. CMS is also proposing to repeal the collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology, as finalized in the FY 2021 IPPS/LTCH PPS final rule.

Additionally, CMS is proposing to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare Promoting Interoperability Program. CMS is also providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and proposing updated policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, and the PPS-Exempt Cancer Hospital Reporting (PCHQR) Program, and the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). Additionally, due to the impact of the COVID-19 PHE on measure data used in the value-based purchasing programs, CMS is proposing to suppress several measures in the Hospital VBP, HAC Reduction, and Hospital Readmissions Reduction Programs. CMS is also proposing to revise the scoring and payment methodology for the FY 2022 program year such that hospitals will not be scored using quality measure data that are distorted by the effects of the COVID-19 public health emergency (PHE) and will not receive Total Performance Scores or adjustments to their payments as a result. Similarly, CMS is proposing to suppress affected measures for the FY 2022 HAC Reduction Program such that hospitals will not be scored using distorted quality measure data and will not receive Total HAC Scores based on those data. For the Hospital Readmissions Reduction Program, CMS is proposing to suppress one affected measure under the proposed measure suppression policy for the FY 2023 applicable period such that hospitals will not be assessed using distorted quality measure data and will not receive payment reductions based on those data.

In addition, CMS is proposing to change, clarify, and codify Medicare organ acquisition payment policies relative to organ procurement organizations (OPOs), transplant hospitals, and donor community hospitals. Also, CMS is proposing to add regulations requiring that state Medicaid agencies accept valid enrollments from all Medicare-enrolled providers and suppliers for purposes of processing claims for Medicare cost-sharing liability for services furnished to Medicare-Medicaid dually eligible individuals in order to alleviate a long-standing problem related to claiming Medicare bad debt. Finally, CMS is proposing to amend the Medicare Shared Savings Program regulations to allow eligible accountable care organizations (ACOs) participating in the BASIC track’s glide path the opportunity to maintain their current level of participation for performance year 2022.

• On April 27, 2021, CMS issued an interim final rule with comment period entitled, Modification of Limitations on Redesignation by the Medicare Geographic Classification Review Board (MGCRB). This interim final rule with comment period (IFC) amends CMS’s current regulations to allow hospitals with a rural redesignation under the Social Security Act ( the Act) to reclassify through the Medicare Geographic Classification Review Board (MGCRB) using the rural reclassified area as the geographic area in which the hospital is located. These regulatory changes align CMS policy with the decision in Bates County Memorial Hospital v. Azar, effective with reclassifications beginning with fiscal year (FY) 2023. CMS would also apply the policy in this IFC when deciding timely appeals before the Administrator of applications for reclassifications beginning with FY 2022 that were denied by the MGCRB due to the current policy, which does not permit hospitals with rural redesignations to use the rural area’s wage data for purposes of reclassifying under the MGCRB.
• On April 29, 2021, CMS issued a final rule entitled, Comprehensive Care for Joint Replacement Model Three-Year Extension and Changes to Episode Definition and Pricing; Medicare and Medicaid Programs; Policies and Regulatory Revisions in Response to the COVID-19 Public Health Emergency. This final rule extends the length of the Comprehensive Care for Joint Replacement (CJR) model through December 31, 2024 by adding an additional 3 performance years (PYs). PY 6 will begin on October 1, 2021 and end on December 31, 2022; PY 7 will begin on January 1, 2023 and end on December 31, 2023; and PY 8 will begin on January 1, 2024 and end on December 31, 2024. In addition, this final rule revises certain aspects of the CJR model including the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements, and the appeals process. For PY 6 through 8, this final rule also eliminates the 50 percent cap on gainsharing payments, distribution payments, and downstream distribution payments for certain recipients. This final rule extends the additional flexibilities provided to participant hospitals related to certain Medicare program rules consistent with the revised episode of care definition.
• On April 30, 2021, the Department of Health and Human Services (HHS) issued a final rule entitled, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards. This final rule sets forth payment parameters and provisions related to the risk adjustment program and cost-sharing parameters. It includes changes related to special enrollment periods; direct enrollment entities; the administrative appeals processes with respect to health insurance issuers and non-federal governmental group health plans; the medical loss ratio program; income verification by Exchanges; and other related topics. It also revises the regulation requiring the reporting of certain prescription drug information by qualified health plans or their pharmacy benefit managers.

Event Notices

• May 5, 2021: The Centers for Disease Control and Prevention (CDC) announced a public meeting entitled, Meeting of the Advisory Committee on Immunization Practices (ACIP). The agenda will include discussions on dengue vaccine and rabies vaccines. No recommendation votes are scheduled.
• May 5, 2021: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a public meeting entitled, Meeting of the Advisory Committee for Women’s Services (ACWS). The meeting will include discussions on assessing SAMHSA’s current strategies, including the mental health and substance use needs of the women and girl’s population. Additionally, the ACWS will be addressing priorities regarding the impact of COVID-19 on the behavioral health needs of women and children and directions around behavioral health services and access for women and children.
• May 11-12, 2021: The Food and Drug Administration (FDA) announced a public meeting entitled, Meeting of the Pediatric Oncology Subcommittee of the Oncologic Drugs Advisory Committee. The general function of the subcommittee is to provide advice and recommendations to FDA on regulatory issues.
• May 13-14, 2021: The Health Resources and Services Administration (HRSA) announced a public meeting entitled, Meeting of the Advisory Committee on Heritable Disorders in Newborns and Children (ACHDNC). During the meeting, ACHDNC will hear from experts in the fields of public health, medicine, heritable disorders, rare disorders, and newborn screening.
• May 18-19, 2021: FDA announced a public meeting entitled, Potential Medication Error Risks with Investigational Drug Container Labels. The purpose of the public meeting is to solicit input from stakeholders (e.g., sponsors, clinical sites, entities that supply or otherwise label investigational drugs) on the risk of medication errors potentially related to the content and format of information on investigational drug container labels, the prevalence and nature of such errors, and to gather information on practices that minimize the potential for medication errors.
• June 9, 2021: FDA announced a public workshop entitled, Model Informed Drug Development Approaches for Immunogenicity Assessments. The purpose of this public workshop is to discuss the best practices and future directions of quantitative methods for predicting immunogenicity of biological products.
• June 16-17, 2021: HHS announced a public meeting entitled, Meeting of the National Vaccine Advisory Committee (NVAC). During this meeting, NVAC will hear presentations on vaccine safety, communication activities for COVID-19 vaccines, and immunization equity.
• June 23, 2021: FDA announced a public workshop entitled, Fiscal Year 2021 Generic Drug Science and Research Initiatives Workshop. The purpose of the public workshop is to provide an overview of the status of science and research initiatives for generic drugs and an opportunity for public input on these initiatives.
• June 24, 2021: CMS announced a public meeting regarding new and reconsidered clinical diagnostic laboratory test codes for the Clinical Laboratory Fee Schedule for calendar year (CY) 2022. This notice announces a public meeting to receive comments and recommendations (including data on which recommendations are based) on the appropriate basis for establishing payment amounts for new or substantially revised Healthcare Common Procedure Coding System codes being considered for Medicare payment under the Clinical Laboratory Fee Schedule (CLFS) for CY 2022. This meeting also provides a forum for those who submitted certain reconsideration requests regarding final determinations made last year on new test codes and for the public to provide comment on the requests.
• July 28-29, 2021: CMS announced a public meeting entitled, Meeting of the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests. The purpose of the Panel is to advise the HHS Secretary and CMS Administrator on issues related to clinical diagnostic laboratory tests.

II. Congressional Hearings

U.S. Senate

• On April 28, 2021, the Senate Committee on Health, Education, Labor, and Pensions held a hearing entitled, Examining Our COVID-19 Response: Using Lessons Learned to Address Mental Health and Substance Use Disorders. Witnesses present included: Dr. Jonathan Muther, Vice President of Medical Services-Behavioral Health, Salud Family Health Centers & Clinical Integration Advisor, Eugene S. Farley, Jr. Health Policy Center; Dr. Tami Benton, Psychiatrist-in-Chief and Executive Director and Chair of the Department of Child and Adolescent Psychiatry and Behavioral Sciences, Children’s Hospital of Philadelphia; Sara Goldsby, Director, South Carolina Department of Alcohol and Other Drug Abuse Services; and Dr. Andy Keller, President and CEO and Linda Perryman Evans Presidential Chair, Meadows Mental Health Policy Institute.

U.S. House of Representatives

• On April 28, 2021, the House Committee on Ways and Means Subcommittee on health held a hearing entitled, Charting the Path Forward for Telehealth. Witnesses present included: Sinsi Hernandez-Cancio, Vice President for Health Justice, National Partnership for Women and Families; Ellen Kelsay, President & CEO, Business Group on Health; Dr. Thomas Kim, Chief Behavioral Health Officer, Prism Health North Texas; Dr. Ateev Mehrotra, Associate Professor of Health Care Policy, Department of Health Care Policy, Harvard Medical School; and Joel White, Executive Director, Health Innovation Alliance (HIA).
• On April 28, 2021, the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, The Long Haul: Forging a Path through the Lingering Effects of COVID-19. Witnesses present included: Dr. Francis Collins, Director, National Institutes of Health (NIH); Dr. John Brooks, Chief Medical Officer, CDC COVID-19 Response; Dr. Steven Deeks, Professor of Medicine, University of California, San Francisco; Dr. Jennifer Possick, Associate Professor, Section of Pulmonary, Critical Care and Sleep Medicine, Yale School of Medicine, Director, Post-COVID Recovery Program, Winchester Center for Lung Disease, Yale-New Haven Hospital; Natalie Hakala, Patient; Lisa McCorkell, Patient; and Chimere Smith, Patient.
• On April 29, 2021, the House Committee on the Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law held a hearing entitled, Treating the Problem: Addressing Anticompetitive Conduct and Consolidation in Health Care Markets. Witnesses present included: Alden Abbott, Senior Research Fellow, George Mason University Mercatus Center; the Honorable Richard Blumenthal, U.S. Senator; Michael Carrier, Distinguished Professor and Co-Director, Rutgers Institute for Policy and Law; the Honorable John Cornyn, U.S. Senator; Dr. Leemore Dafny, Bruce V. Rauner Professor of Business Administration, Harvard Business School; Robin Feldman, Arthur Goldberg Distinguished Professor of Law, the University of California Hastings College of Law; the Honorable Chuck Grassley, U.S. Senator; the Honorable Amy Klobuchar, U.S. Senator; the Honorable Mike Lee, U.S. Senator; and the Honorable Carolyn Maloney, Congresswoman, U.S. House of Representatives.

III. Reports, Studies & Analyses

• On April 27, 2021, the Kaiser Family Foundation (KFF) published an issue brief entitled, How Lowering the Medicare Eligibility Age Might Affect Employer-Sponsored Insurance Costs. This analysis illustrates the potential for employer savings and finds that lowering the age of Medicare eligibility to 60 could reduce costs for employer health plans by as much as 15 percent if all eligible employees shifted from employer plans to Medicare. Similarly, costs for employer plans could drop by as much as 30 percent if all people age 55 and over were no longer in employer-sponsored insurance, the analysis finds, and by up to 43 percent if everyone 50 and older chose to enroll in Medicare. The actual impact on health spending for employers would depend on how many older workers shifted from employer coverage to Medicare.
• On April 28, 2021, the Government Accountability Office (GAO) published a report entitled, Prescription Drugs: U.S. Prices for Selected Brand Drugs Were Higher on Average than Prices in Australia, Canada, and France. GAO was asked to review U.S. and international prescription drug prices. This report examines how prices at the retail and manufacturer levels in the U.S. compare to prices in three selected comparison countries—Australia, Canada, and France—and provides information on consumers' out-of-pocket costs for prescription drugs in these countries.
• On April 29, 2021, KFF published a report entitled, How Corporate Executives View Rising Health Care Cost and the Role of Government. To better understand how large employers may react to these and similar proposals, the Purchaser (formerly “Pacific”) Business Group on Health (PBGH) and KFF surveyed executive decision-makers at over 300 large private employers about how they view the costs of health care and health coverage and the potential advantages and disadvantages of increasing the government’s role in providing health coverage and reducing costs. The interviews were conducted in December 2020 and January 2021 by Beresford Research. This report summarizes the results of these interviews.
• On April 29, 2021, KFF published an issue brief entitled, COVID-19 Test Prices and Payment Policy. This analysis examines what large hospitals nationwide charge for out-of-network COVID-19 tests. It finds a wide range of publicly posted prices; in many cases, the prices exceed what Medicare pays for COVID testing.

IV. Other Health Policy News

• On April 27, 2021, HHS announced the availability of new buprenorphine practice guidelines that among other things, remove a longtime requirement tied to training, which some practitioners have cited as a barrier to treating more people. More information about the new guidelines can be found here.
• On April 27, 2021, HHS announced the availability of $1 billion in funding from the American Rescue Plan Act for Health Resources and Services Administration (HRSA)-Health Center Program funded health centers to support major construction and renovation projects across the country. Health centers that receive this funding will be able to use it for COVID-19 related capital needs and to construct new facilities, renovate and expand existing facilities, and purchase new equipment. More information about the funding can be found here.
• On April 29, 2021, HHS announced that it is awarding over $32 million in American Rescue Plan Act funding to 122 organizations that provide training and technical assistance support to HRSA Health Center Program-supported health centers nationwide. These organizations—Primary Care Associations (PCAs), National Training and Technical Assistance Partners (NTTAPs), and Health Center Controlled Networks (HCCNs)—will use the funds to provide health centers with critical COVID-19 related training, technical assistance, and health information technology support. More information about this funding can be found here.

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