Health Care Week in Review: HHS Announced the Distribution of $49 Million to Organizations

Below is Alston & Bird's Health Care Week in Review, which provides a synopsis of the latest news in health care 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, HHS announced the distribution of $49 million to organizations working to increase health care coverage for children, parents, expectant parents, and families. Read more about this action and other news below.

I. Regulations, Notices & Guidance

• On July 18, 2022, the Centers for Medicare & Medicaid Services (CMS) issued guidance entitled, Failure to File and Reconcile (FTR) Operations Flexibilities for Plan Year 2023. This guidance relayed that the agency will continue to not act on data received from the Internal Revenue Service (IRS) for consumers who have failed to file tax returns and reconcile a previous year’s advance payments of the premium tax credit (APTC) and with the premium tax credit (PTC) for plan year 2023. The agency noted this flexibility was to account for the delay in processing income tax returns during the COVID-19 pandemic.

• On July 20, 2022, the Food and Drug Administration (FDA) issued draft guidance entitled, Human Prescription Drug and Biological Products--Labeling for Dosing Based on Weight or Body Surface Area for Ready-to-Use Containers--"Dose Banding". This guidance intends to assist applicants in incorporating dose banding information into drug labeling provided in a new drug application (NDA) submitted under the Federal Food, Drug, and Cosmetic Act (FD&C Act), a biologics license application (BLA) submitted under the Public Health Service Act (PHS Act), or a supplement to these applications. The guidance is specifically for applicants who propose to develop ready-to-use containers and seeks to incorporate dose banding information into the prescribing information of the proposed drug product based on dosing information by weight or body surface area (BSA) of a previously approved drug product.

• On July 20, 2022, FDA issued draft guidance entitled, Evaluation of Therapeutic Equivalence. This guidance explains FDA’s therapeutic equivalence evaluations and assignments of related codes. FDA’s therapeutic equivalence evaluations are listed in what is more commonly known as the Orange Book, or the FD&C Act’s Approved Drug Products With Therapeutic Equivalence Evaluations These evaluations serve as public information as well as advice to state health agencies, prescribers, and pharmacists around drug product selection and aim to contain health care costs.

• On July 21, 2022, the Centers for Disease Control and Prevention (CDC) issued a notice entitled, Solicitation of Nominations for Appointment to the Clinical Laboratory Improvement Advisory Committee (CLIAC). The notice requests nominations to CLIAC and provides details on eligibility and the application process. CLIAC is made up of 20 members representing laboratory specialties, professional roles, and practice settings, who provide scientific and technical advice and guidance to the Department of Health and Human Services (HHS). CDC is seeking nominations for a four-year term and for individuals with expertise in various fields, including but not limited to microbiology, immunology, pathology, genetic testing, medical technology, bioinformatics, and public health, as well as consumer representatives. Nominations are due by September 30, 2022.

• On July 21, 2022, FDA issued draft guidance entitled, Real-Time Oncology Review (RTOR). This guidance provides recommendations to applicants on the process for submission of selected NDAs and BLAs with oncology indications for review under RTOR. The RTOR program facilitates earlier engagement of applicants and review of data but does not alter the review performance goals and timelines associated with the applications.

• On July 21, 2022, FDA issued a notice entitled, Authorization of Emergency Use of Certain Medical Devices During COVID-19; Availability. FDA grants emergency use authorization for 32 medical devices that are used for diagnosing, treating, or preventing COVID-19. The devices are categorized as: (1) molecular diagnostic and antigen tests for COVID-19, excluding multianalyte tests; (2) serology tests; (3) multianalyte in vitro diagnostics; (4) SARS-CoV-2 genotyping test; and (5) SARS-CoV-2 diagnostic test that analyzes breath samples.

• On July 22, 2022, FDA issued a proposed rule entitled, Revising the National Drug Code (NDC) Format and Drug Label Barcode Requirements. The NDC is an FDA standard for uniquely identifying marketed drug products. This proposed rule will standardize the format of all NDCs to be 12 digits. In this rule, FDA also proposes to revise requirements for drug product barcode labels to permit the use of other data carriers.

• On July 22, 2022, FDA issued final guidance entitled, Unique Device Identification: Policy Regarding Compliance Dates for Class I and Unclassified Devices, Direct Marking, and Global Unique Device Identification Database Requirements for Certain Devices. This final guidance explains FDA’s compliance policy regarding Global Unique Device Identification Database (GUDID) submission requirements for certain class I devices. The guidance also shares FDA’s intent to extend the compliance policy for certain class I and unclassified devices for an additional 75 calendar days.

• On July 22, 2022, FDA issued draft guidance entitled, Conducting Remote Regulatory Assessments--Questions and Answers. This guidance describes FDA’s current thinking regarding its use of remote regulatory assessments (RRAs) to assist the industry in better understanding RRAs. This draft guidance provides answers to frequently asked questions regarding what RRAs are, when FDA may use them, how FDA may conduct them, and others.

• On July 22, 2022, FDA issued final guidance entitled, Failure to Respond to an Abbreviated New Drug Application Complete Response Letter within the Regulatory Timeframe. This guidance will assist applicants in responding to complete response letters (CRLs) to abbreviated new drug applications (ANDAs) and in submitting their responses to the FDA. This guidance provides information and recommendations regarding potential courses of action for an ANDA applicant after issuance of a CRL, actions that FDA may take if the applicant fails to respond to a CRL and requesting extensions to respond to a CRL.

• On July 22, 2022, FDA issued final guidance entitled, Orange Book - Questions and Answers. This guidance will assist prospective drug product applicants, drug product applicants, approved application holders, and others to use the Orange Book.

• On July 22, 2022, CMS issued a proposed rule entitled, Clinical Laboratory Improvement Amendments Fees: Histocompatibility, Personnel, and Alternative Sanctions for Certificate of Waiver Laboratories. This proposed rule updates the Clinical Laboratory Improvement Amendments of 1988 (CLIA) fees and clarify the CLIA fee regulations. This proposed rule also includes proposals to: (1) provide sustainable funding for the CLIA program through a biennial two-part increase of CLIA fees; (2) incorporate limited/specific laboratory fees, substantiated complaint surveys, and revised certificates; (3) distribute administrative overhead costs of test complexity determination for waived tests and systems with an increase in Certificate of Waiver (CoW) fees; (4) clarify the methodology used to determine program compliance fees; (5) amend histocompatibility and personnel regulations under CLIA to address obsolete regulations and update the regulations to incorporate technological changes; and (6) amend the provisions governing alternative sanctions to allow for the imposition of such sanctions on CoW laboratories. This proposed rule ensures the continuing quality and safety of laboratory testing.

Event Notices

• August 22-23, 2022: CMS announced a virtual meeting of the Advisory Panel on Hospital Outpatient Payment (the Panel) for Calendar Year 2022. The agenda will include discussion and comment on the following topics: (1) addressing whether procedures within an Ambulatory Payment Classification (APC) group are similar both clinically and in terms of resource use, (2) reconfiguring APCs, (3) evaluating APC group weights, (4) reviewing packaging the cost of items and services, including drugs and devices, into procedures and services, including the methodology for packaging and the impact of packaging the cost of those items and services on APC group structure and payment, (5) removing procedures from the inpatient only list for payment under the OPPS, (6) using claims and cost report data for CMS’ determination of APC group costs, (7) addressing other technical issues concerning APC group structure, (8) evaluating the required level of supervision for hospital outpatient services and (9) OPPS APC rates for covered Ambulatory Surgical Center (ASC) procedures.

• September 1-2, 2022: The National Institutes of Health (NIH) National Institute on Minority Health and Health Disparities (NIMHD) announced a meeting of the National Advisory Council on Minority Health and Health Disparities (NACMHD). The first day (September 1, 2022) will be closed to the public and the agenda will consist of reviewing and evaluating grant applications. The second day (September 2, 2022) is open to the public and the agenda will include opening remarks, administrative matters, the Director's Report, presentations, and other business of the council.

• September 13-14, 2022: CDC, the National Center for Health Statistics (NCHS), and the Classifications and Public Health Data Standards Staff, announced a meeting of the ICD-10 Coordination and Maintenance (C&M) Committee. The agenda will include discussions of: (1) the administration of Lovotibeglogene autotemcel (lovo-cel), (2) the administration of Exagamglogene autotemcel (exa-cel), (3) external support devices for AV Fistula Creation, (4) implantation of polymethyl methacrylate cranioplasty plates, (5) insertion of transcatheter bicaval valve systems, (6) implantation of bioprosthetic femoral venous valves, (7) intubated prone positioning, (8) section X updates, and (9) other key updates.

• September 22-23, 2022: FDA announced a meeting of the Oncologic Drugs Advisory Committee (ODAC). The agenda will include discussions of the following new drug applications: (1) (NDA) 215643, for poziotinib tablets, submitted by Spectrum Pharmaceuticals, Inc, (2) (NDA) 214383, for PEPAXTO (melphalan flufenamide) for injection, submitted by Oncopeptides A.B., and (3) (NDA) 211155, for COPIKTRA (duvelisib) capsule, submitted by Secura Bio, Inc.

II. Congressional Hearings

U.S. House of Representatives

• On July 19, 2022, the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled, Roe Reversal: The Impacts of Taking Away the Constitutional Right to an Abortion. Witnesses present included: Renee Bracey Sherman, Founder and Executive Director, We Testify; Leah M. Litman, Assistant Professor of Law, University of Michigan Law School; Dr. Paulina Guerrero, National Programs Manager, All-Options; Dr. Nisha Verma, Fellow, Physicians for Reproductive Health; Dr. Jack Resneck, President, American Medical Association; and Dr. Christina Francis, CEO-Elect, American Association of Prolife Obstetricians and Gynecologists.

• On July 19, 2022, the House Committee on Oversight and Reform Select Subcommittee on the Coronavirus Crisis held a hearing entitled, Understanding And Addressing Long COVID And Its Health And Economic Consequences. Witnesses present included: Katie Bach, Former Managing Director, Good Jobs Institute; Hannah Davis, Co-founder, Patient-Led Research Collaborative; Cynthia Adiling, Patient Advocate; and Dr. Monica Verduzco-Gutierrez, Professor and Chair of the Department of Physical Medicine and Rehabilitation, Director of COVID Recovery Clinic at University Health, University of Texas Health San Antonio.

U.S. Senate

• On July 20, 2022, the Senate Committee on Finance held a hearing entitled, The Role of Tax Incentives in Affordable Housing. Witnesses present included: Andrea Bell, Executive Director, Oregon Housing & Community Services; Jerry Konter, Founder And President, Konter Quality Homes And Chairman Of The Board, National Association of Homebuilders; Dr. Lee E. Ohanian, Hoover Institute Senior Fellow And Distinguished Professor Of Economics, University of California, Los Angeles; Benson “Buzz” Roberts, President And CEO, National Association of Affordable Housing Lenders; and Dana Wade, Chief Production Officer, Real Estate Finance, Walker & Dunlop , MD.

III. Reports, Studies & Analyses

• On July 18, 2022, HHS Office of Inspector General (OIG) released a reported entitled, Audits of Nursing Home Life Safety and Emergency Preparedness in Eight States Identified Noncompliance With Federal Requirements and Opportunities for the Centers for Medicare & Medicaid Services to Improve Resident, Visitor, and Staff Safety. Recognizing the particular vulnerability of nursing home residents in the event of an emergency, OIG assessed eight states’ compliance with CMS’s new life safety and emergency preparedness requirements beginning in 2018. OIG identified 2,233 areas of noncompliance with life safety and emergency preparedness requirements at 150 of the 154 nursing homes audited. The noncompliance was found to be a result of various factors, including inadequate oversight by management, staff turnover, inadequate oversight by State survey agencies, and a lack of any requirement for mandatory participation in standardized life safety training programs. OIG issued several recommendations to CMS, such as reporting requirements related to fire alarm and sprinkler systems, requirements to install carbon monoxide detectors, requirements to mandate related trainings for nursing home staff, and requirements related to emergency planning.

• On July 18, 2022, the Kaiser Family Foundation (KFF) published a report entitled, Marketplace Insurers Are Proposing 10% Premium Hikes for 2023 in 13 States and DC, Though Many Enrollees Could Face Much Higher Increases if Congress Doesn’t Extend Enhanced Tax Credits. The analysis finds that marketplace insurers are seeking higher premium increases than they have in recent prior years by a median of about 10 percent. These increases may be the result of various factors including rising prices paid to hospitals, doctors, and drug companies; the expiration of the American Rescue Plan Act of 2021 (ARPA) subsidies; the COVID-19 pandemic; and increased use of services by beneficiaries.

• On July 19, 2022, GAO released a report entitled, Healthy Eating: Government-wide solutions for promoting healthy diets, food safety, and food security. The report identifies that the pandemic exacerbated food contamination, hunger, and related mortality rates in the U.S. GAO states that the federal government has not developed an approach nor acted upon prior GAO recommendations to address food safety, nutrition, or food security issues. As such, GAO reiterates three recommendations: (1) identify a federal entity to lead a strategy on diet-related efforts, (2) develop a strategy for federal food safety oversight, and (3) develop a strategy for nutrition assistance programs to respond during emergencies.

• On July 20, 2022, OIG issued a report entitled, Special Fraud Alert: OIG Alerts Practitioners to Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies. The report addresses an increase in companies that falsely claim to provide telehealth services and use kickbacks to recruit and reward practitioners and further the fraud. OIG encourages practitioners to use caution when entering relationships with telemedicine companies, because these instances of fraud may result in: (1) an inappropriate increase in costs to federal health care programs for medically unnecessary or unfurnished items and services; (2) potential to harm beneficiaries; and (3) corrupt medical decision-making. OIG further explains which federal laws may be implicated in such relationships, such as the Federal anti-kickback statute of the Social Security Act and provides a list of suspect characteristics of telemedicine companies that may indicate fraudulent intent.

• On July 20, 2022, the Congressional Research Service (CRS) released a report entitled, The Hyde Amendment: An Overview. The report discusses the history of the amendment, which prohibits funds provided to agencies in the annual appropriations act to be expended for abortions or to provide health benefits that include abortion, and the consequent effect of the amendment. The report notes that a significant effect of the Hyde Amendment has been the prohibition of federally funded abortions under federal health care programs, such as Medicaid and Medicare, and its incorporation into other funding sources, such as funding for the Indian Health Service, through statutory cross-reference. The report concludes that the recent Supreme Court decision in Dobbs v. Jackson Women’s Health Organization leaves outstanding questions on access to abortion services regarding: (1) potential litigation of the interplay between the Hyde Amendment and state laws, and (2) the scope of the Hyde Amendment and if it may apply beyond coverage of services to other things, such as travel, that may facilitate abortion access.

• On July 21, 2022, the Congressional Budget Office (CBO) issued a report entitled, Health Insurance Policies. This report is a letter issued in response to Senator Mike Crapo’s (R-ID) request for an explanation of the estimated effects of making permanent the enhanced premium tax credit structure provided in section 9661 of ARPA. The report explained that the current law allows eligible people to use premium tax credits to lower their out-of-pocket monthly premium contributions for health insurance obtained through the marketplaces. Section 9661 of ARPA allows individuals to have increased credit by decreasing the maximum contribution and removing the adjustment to that contribution. It also allows individuals whose income is above 400 percent of the FPL to be eligible for the tax credits in 2021 and 2022. CBO estimates these changes will attract 4.8 million new enrollees, increase federal deficits by $247.9 billion, and allow 2.2 million fewer people to be without health insurance between 2023-2032, among other effects.

• On July 21, 2022, CBO released a cost estimate report entitled, Estimated Direct Spending and Revenue Effects of S. 4348, the Food and Drug Administration Safety and Landmark Advancements Act of 2022. The agency estimated this bill would produce a net savings of $1.385 billion over 10 years. CBO released its cost estimate of the House version of the bill on June 6, 2022, which estimated a net savings of $128 million over 10 years.

IV. Other Health Policy News

• On July 19, 2022, HHS announced $49 million in awards to organizations working to reduce uninsurance rates and to connect families to health care coverage. Grantees will receive up to $1.5 million each over three years to provide enrollment and renewal assistance to children and families, as well as, for the first time, to expectant parents, in Medicaid and the Children’s Health Insurance Program (CHIP). HHS hopes this funding will improve maternal and child health outcomes by partnering with community organizations who will promote enrollment and retention in Medicaid and CHIP, participate in the Connecting Kids to Coverage National Campaign efforts, and establish unique activities of their own. More information on this announcement can be found here.

• On July 20, 2022, the Department of Justice (DOJ) announced criminal charges against 36 defendants for more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes. This was a coordinated federal investigation between DOJ, OIG, CMS, and others, to address schemes involving the payment of illegal kickbacks by laboratories in exchange for patient referrals from providers working with fraudulent telemedicine companies. More information on this announcement can be found here.

• On July 21, 2022, HHS announced the agency’s response to the Monkeypox outbreak. The agency has employed a multi-pronged strategy to accurately provide information to providers, patients, public health entities, and other stakeholders as well as distribute tests and vaccines in an equitable and targeted manner. For example, to date, HHS has made 374,000 vaccine doses available for ordering and delivered over 191,000 of them at no cost to state and city health departments. HHS has also grown testing capacity at laboratories from 6,000 to 80,000 tests per week. The agency is now focusing on increasing awareness, accelerating vaccine timelines, and widening the pool of eligible recipients. More information on this announcement can be found here.

• On July 21, 2022, CMS’s Center for Medicaid and CHIP Services (CMCS) issued an information bulletin entitled, Beneficiary Protections and Medicaid Drug Coverage - Under Value Based Purchasing (VBP) and Other Innovative Payment Arrangements. The bulletin reminds stakeholders of existing beneficiary protections that help ensure access to prescription medications, especially as state programs and stakeholders negotiate new and innovative payment arrangements with drug manufacturers. The bulletin coincides with the launch of new flexibilities that allow manufacturers to report multiple best prices for drugs connected to a value-based purchasing (VBP) arrangement. The agency shares that its goal with respect to novel payment arrangements, is to advance equity and access to high-cost therapeutics and health innovation for underserved populations. More information on this bulletin can be found here.

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