Health Care Week in Review: FY 2024 Appropriations Process Begins

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, Senate Appropriations released guidance that begins the FY 2024 Appropriations process. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On February 21, 2023, the Department of Health and Human Services (HHS) issued a proposed rule entitled, Semiannual Regulatory Agenda. The Regulatory Flexibility Act of 1980 and Executive Order (EO) 12866 require the semiannual issuance of an inventory of rulemaking actions under development throughout HHS, offering for public review summarized information about forthcoming regulatory actions.
• On February 21, 2023, the National Institutes of Health (NIH) issued a notice entitled, Government-Owned Inventions; Licensing. The invention listed below is owned by an agency of the U.S. Government and is available for licensing to achieve expeditious commercialization of results of federally funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing. This notice specifically makes a new replicating RNA (repRNA) vaccine for Crimean-Congo hemorrhagic fever virus (CCHFV), which is a tick-borne bunyavirus endemic in Southern and Eastern Europe, Africa, the Middle East, and Asia, available for licensing for commercial development. Previously, there was no approved specific antiviral or vaccine for CCHFV infection.
• On February 22, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Medicaid Program: Disproportionate Share Hospital Third-Party Payer Rule. This proposed rule would address recent legislative changes to the Social Security Act, which governs the hospital-specific limit on Medicaid disproportionate share hospital (DSH) payments, as a result of the Consolidated Appropriations Act, 2021. This proposed rule aims to afford states and hospitals more clarity on how the limit, the changes to which took effect on October 1, 2021, will be calculated. Additionally, this proposed rule is designed to enhance administrative efficiency by making technical changes and clarifications to the DSH program.
• On February 23, 2023, HHS issued a notice entitled, Announcing Solicitation of Written Comments on the Physical Activity Guidelines Midcourse Report on Older Adults. HHS announced the availability of the draft Physical Activity Guidelines Midcourse Report on Older Adults (Midcourse Report); and solicits written public comment on the draft report. The Physical Activity Guidelines for Americans (Guidelines) provides science-based recommendations on how physical activity can help promote health and reduce the risk of chronic disease. The Guidelines serves as the benchmark and primary, authoritative voice of the federal government for providing science-based guidance on physical activity, fitness, and health in the U.S.
• On February 23, 2023, the National Institutes of Health (NIH) issued a notice entitled, Notice to Announce Updated Minimum Performance Standards for Experienced Firms that Receive Funding through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs. NIH announced the updated minimum performance standards for experienced firms funded through HHS SBIR and STTR Programs. HHS announced changes to the Phase I to Phase II Transition Rate Benchmark and the Phase II to Commercialization Benchmark.
• On February 24, 2023, CMS issued a notice entitled, Application: Continued Approval of the Joint Commission's Psychiatric Hospital Accreditation Program. This notice announces CMS’ decision to approve the Joint Commission for continued recognition as a national accrediting organization for psychiatric hospitals that wish to participate in the Medicare or Medicaid programs.
• On February 24, 2023, the Food and Drug Administration (FDA) issued draft guidance entitled, Neovascular Age-Related Macular Degeneration: Developing Drugs for Treatment. This guidance is intended to provide recommendations to sponsors developing drugs intended to treat neovascular age-related macular degeneration focusing on eligibility criteria, trial design considerations, and efficacy endpoints to enhance clinical trial data quality and to foster greater efficiency in development programs.
• On February 24, 2023, the Health Resources and Services Administration (HRSA) issued a notice entitled, National Vaccine Injury Compensation Program: Revised Amount of the Average Cost of a Health Insurance Policy. HRSA is publishing an updated monetary amount of the average cost of a health insurance policy as it relates to the National Vaccine Injury Compensation Program (VICP). HRSA announced that the revised average cost of a health insurance policy under the VICP is $628.53 per month.
• On February 24, 2023, CMS issued a proposed rule entitled, Medicare Program: Medicare Disproportionate Share Hospital Payments: Counting Certain Days Associated with Section 1115 Demonstrations in the Medicaid Fraction. This proposed rule would revise CMS’ regulations on the counting of days associated with individuals eligible for certain benefits provided by section 1115 demonstrations in the Medicaid fraction of a hospital’s disproportionate patient percentage.

Event Notices

• March 15, 2023: HHS and the Department of State announced a meeting of the U.S. delegation to the Intergovernmental Negotiating Body (INB). INB will convene an informal stakeholder listening session to draft and negotiate a World Health Organization (WHO) convention, agreement or other international instrument on pandemic prevention, preparedness and response. The listening session will discuss potential areas that could be included in a pandemic accord to promote pandemic prevention, preparedness, and response.
• March 16, 2023: FDA announced a public advisory committee meeting of the Antimicrobial Drugs Advisory Committee. The committee will discuss new drug application (NDA) 217188, for PAXLOVID (nirmatrelvir and ritonavir co-packaged tablets) for oral use, submitted by Pfizer, Inc. The proposed indication is treatment of mild-to-moderate COVID-19 in adults who are at high risk for progression to severe COVID-19, including hospitalization or death.
• March 21, 2023: HRSA announced a meeting of the National Advisory Council on the National Health Service Corps (NACNHSC). The agenda may include the identification of NHSC priorities for future program issues and concerns; proposed policy changes by using the varying levels of expertise represented on the NACNHSC to advise on specific program areas; updates from clinician workforce experts; and education and practice improvement in the training development of primary care clinicians. More general items may include presentations and discussions on the current and emerging needs of the health workforce; public health priorities; health care access and evaluation; NHSC-approved sites; HRSA priorities and other federal health workforce and education programs that impact the NHSC.
• April 25, 2023: FDA announced a public meeting entitled Patient-Focused Drug Development for Long COVID. FDA is interested in obtaining patient perspectives on the impact of Long COVID on daily life and patient views on treatment approaches, as well as clinical trial participation.
• May 9, 2023: NIH announced a partially open meeting of the Board of Regents of the National Library of Medicine (NLM). The open agenda will include discussion of NLM programs. The closed agenda will include review and evaluation of grant applications.

II. Reports, Studies & Analyses

• On February 21, 2023, the Kaiser Family Foundation (KFF) published an issue brief entitled, CMS Prior Authorization Proposal Aims to Streamline the Process and Improve Transparency. The authors discuss CMS’ proposed rule that was issued on December 6, 2023, entitled, Medicare and Medicaid Programs: Advancing Interoperability and Improving Prior Authorization Processes for Medicare Advantage Organizations, Medicaid Managed Care Plans, State Medicaid Agencies, etc. The proposed rule aims to advance the federal government’s goals to improve health care administration through “interoperable” systems based on standardized protocols, for both payers and providers, across federal health programs. First, the authors discuss key components of the proposed rule, such: (1) requiring the use of a specific Application Programming Interface (API) for more streamlined prior authorization processes; (2) requiring payers to disclose annually on their website a list of all services requiring prior authorization and specific aggregated metrics; (3) allowing patients to electronically access their own claims and encounter data through a standardized interface; and (4) requiring affected payers to use a specific payer-to-payer data exchange standard. The authors also briefly highlight the five Requests for Information (RFIs) included in the proposed rule that request feedback on data information exchange. Second, the authors discuss some of the key policy issues CMS should evaluate in implementing the proposed rule, including: (1) other mechanisms to reduce administrative burdens associated with prior authorization; (2) patient risk when more of their data is available electronically; (3) potential consequences of not having standardized APIs applicable to all payers; and (4) the cost implications of changing or regulating prior authorization criteria.
• On February 22, 2023, KFF published an issue brief entitled, Women’s Experiences with Provider Communication and Interactions in Health Care Settings: Findings from the 2022 KFF Women’s Health Survey. The authors published key findings from the 2022 KFF Women’s Health Survey (WHS) on women’s experiences with the health care system related to screening for social determinants of health, provider communication, and provider interactions. Among women aged 18-64, 38 percent of women reported having a negative experience with a health care provider (e.g., a doctor dismissed their concerns, a doctor assumed something about them without asking, or a doctor suggested they were personally to blame for a health problem) compared to 32 percent of men. 9 percent of women aged 18-64 reported experiencing some kind of discrimination during a health care visit (e.g., because of their age, gender, race, sexual orientation, etc.) and less than 58 percent of women were asked about social and economic factors that may influence health (e.g., their occupation, housing situation, ability to afford food or access transportation, etc.). Additionally, only 21 percent of women reported that it was difficult for them to find a doctor that explains their health care in ways they can understand. The authors conclude that efforts to improve provider communication and interactions as related to health and social determinants of health can greatly improve women’s experiences within the health care system.
• On February 22, 2023, KFF published an issue brief entitled, 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision. This brief discusses the requirement that Medicaid programs keep people continuously enrolled through the end of the COVID-19 public health emergency (PHE) in exchange for enhanced Federal Medical Assistance Percentages (FMAP) made under the Families First Coronavirus Response Act (FFCRA). The Consolidated Appropriations Act of 2023 (CAA, 2023) separated the end of the Medicaid continuous enrollment condition from the end of the COVID-19 PHE and phases down the enhanced FMAP payments to states through December 2023. As such, authors provide 10 key points about the unwinding of the Medicaid continuous enrollment condition. Some of these points include: (1) Medicaid enrollment has increased throughout the pandemic and it is estimated that anywhere between 5 and 14 million people can lose their coverage at the end of the Medicaid continuous enrollment condition; (2) States are required to create redetermination processes to assess beneficiaries’ eligibility for Medicaid and the Children’s Health Insurance Program (CHIP) during this unwinding and having streamlined renewal processes can ensure individuals have continuous access to coverage if they are no longer eligible for Medicaid/CHIP; and (3) People who have moved since the start of the pandemic, those with limited English proficiency (LEP) and people with disabilities, may be at greater risk for losing Medicaid coverage when the continuous enrollment provision ends. As such, the authors strongly encourage states to work with stakeholders and community organizations, provide and monitor access to timely data, and seek temporary waivers if they need support to ensure people do not lose access to their health coverage.
• On February 23, 2023, KFF published a report entitled, Rural Hospitals Face Renewed Financial Challenges, Especially in States That Have Not Expanded Medicaid. The authors express concern that rural hospitals report that the outlook their financial health has deteriorated following the end of government relief funds provided during the COVID-19 pandemic and due to ongoing effects of the pandemic (e.g., labor shortages, rising prices, and investment losses). The report provides background on rural hospital finances and operating margins before and during the COVID-19 pandemic. Even before the pandemic, rural hospitals have always faced unique financial challenges (e.g., low patient volume) and data shows that median operating margins among rural hospitals were higher in expansion than non-expansion states in 2019. This suggests that expanding Medicaid helps improve the financial performance of hospitals by extending coverage to patients who would otherwise been unable to pay for their care. Similarly, during the pandemic, median operating margins were higher among rural hospitals in expansion states, which led to hospitals in non-expansion states facing even more exacerbated financial challenges. Policymakers have implemented a number of initiatives aimed at assisting rural hospitals (e.g., funding in CAA, 2023), but rural hospitals may still experience financial strain. Authors note that concern about the viability of rural hospitals could encourage states that have not yet expanded Medicaid to do so.
• On February 23, 2023, the HHS Office of Inspector General (OIG) released a report entitled, The Health Resources and Services Administration Should Improve Preventive and Detective Controls To More Effectively Mitigate the Risk of Compromise. OIG assessed whether HRSA’s cybersecurity defenses were effective, if there was a current or prior cyber breach of HRSA’s networks, and if HRSA was able to detect and respond to any cyber breaches appropriately. To do so, OIG conducted its assessment on over 3,850 endpoints that HRSA manages. OIG found that although HRSA had some cybersecurity controls on its network, multiple security controls were not operating effectively. Additionally, OIG found three active threats on HRSA’s network and that HRSA was able to appropriately detect and respond to the threats. From these findings, OIG issued three recommendations for HRSA to improve its cybersecurity defenses of its network: (1) remediate the ineffective security controls identified; (2) update security configurations to align with the most current federal standards; and (3) implement policies and procedures to periodically identify and assess security controls.

III. Other Health Policy News

• On February 21, 2023, the Senate Appropriations Committee released guidance on submitting two types of appropriations requests for the 2023 appropriations process, which may be submitted by an individual Member or a group of Members. The guidance officially begins the fiscal year (FY) 2024 Appropriations process for congressionally directed spending/community project funding. The process, called congressional directed spending in the Senate and community project funding in the House of Representatives, allows members of Congress to make earmark spending requests in the annual appropriations process. For the past two years, the guidelines limited eligibility to non-profit recipients, included transparency requirements, and House congressional offices were limited on the number of requests they could submit.  Now, with the release of the Senate guidance and subcommittee submission deadlines, participating Senators will set up their own process for accepting constituent proposals and establish submission deadlines, which will be posted on their website. The new House leadership has stated they plan to continue the community project funding process but with modifications and plan to release guidance within the next few weeks. More information on the Senate guidance for the FY 2024 Appropriations process can be found here.
• On February 22, 2023, CMS issued a statement to say it will not reconsider the Alzheimer’s Association’s request to reconsider the final National Coverage Determination (NCD) for FDA-approved monoclonal antibodies (mAbs) directed against amyloid for the treatment of Alzheimer’s disease. CMS expressed concern that there is not enough evidence necessary to meet the criteria for reconsideration. Further, CMS noted that its criteria to determine whether or not a medication is reasonable and necessary differs from FDA’s criteria to assess whether medications are safe and effective. The Agency stated that it will review any new evidence that becomes available that could lead to a reconsideration and change in the NCD and that if mAbs directed against amyloid receive traditional FDA approval, CMS will provide broader coverage using the framework for Coverage with Evidence Development (CED). CMS concluded its statement by reaffirming its commitment to work with patients, families, and stakeholders to ensure widespread access to treatments for Alzheimer’s disease. More information can be found here.
• On February 24, 2023, the White House issued a proclamation on the 2023 National Eating Disorders Awareness Week. The Biden Administration reaffirmed its goal to tackle the mental health crisis by supporting programs and funding for the Substance Abuse and Mental Health Services Administration (SAMHSA) and the National Center of Excellence for Eating Disorders (NCEED) to help patients, their caregivers, and their providers access new tools and trainings to help detect and treat eating disorders. The proclamation also touted additional actions the Biden Administration has taken to improve access to mental health care, including expanding Certified Community Behavioral Health Clinics (CCBHCs); integrating mental health into primary care; and supporting school-based mental health interventions. More information on this announcement can be found here.

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