Health Care Week In Review: Fifth Circuit Review of ACA Requirement and HRSA Funds Health Centers

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, ACA’s preventive services requirement was reviewed by the Fifth Circuit and the HRSA provided $65 million to health centers to address the maternal mortality crisis. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On May 17, 2023, FDA issued a notice entitled, 21st Century Cures Act: Annual Compilation of Notices of Updates from the Susceptibility Test Interpretive Criteria Web Page, 2021 and 2022 Updates; Request for Comments. FDA is announcing the availability of the Agency’s annual compilation of notices of updates to the Agency’s Susceptibility Test Interpretive Criteria web page, including updates made in 2021 and 2022. The Agency established the Susceptibility Test Interpretive Criteria web page on December 13, 2017, and since then, has provided updates to both the format of the web pages and to the susceptibility test interpretive criteria identified and recognized by FDA on the web pages. FDA is publishing this notice in accordance with procedures established by the 21st Century Cures Act (Cures Act).
• On May 17, 2023, FDA issued draft guidance entitled, Pediatric Drug Development Under the Pediatric Research Equity Act and the Best Pharmaceuticals for Children Act: Scientific Considerations. This draft guidance addresses selected clinical, scientific, and ethical issues involved in developing drugs, including biological products, for pediatric use when such drug products are subject to the Pediatric Research Equity Act (PREA) and/or the Best Pharmaceuticals for Children Act (BPCA). This draft guidance is intended to assist industry in obtaining the data and information necessary to support the approval of drug products in pediatric populations. This draft guidance does not address the clinical development of drug products that are not subject to either PREA or the BPCA.
• On May 17, 2023, FDA issued draft guidance entitled, Pediatric Drug Development: Regulatory Considerations - Complying With the Pediatric Research Equity Act and Qualifying for Pediatric Exclusivity Under the Best Pharmaceuticals for Children Act. This draft guidance, when finalized, is intended to provide recommendations to industry on complying with the pediatric study requirements under PREA, and to describe the process for qualifying for pediatric exclusivity and the protections that pediatric exclusivity offer under BPCA. Combining discussion of PREA and the BPCA together in regulatory guidance emphasizes the sponsor’s need to consider both laws when developing pediatric drugs and biological products.
• On May 17, 2023, FDA issued draft guidance entitled, Draft Guidance for Ethinyl Estradiol; Segesterone Acetate. The draft guidance, when finalized, will provide product-specific recommendations on, among other things, the design of bioequivalence (BE) studies to support abbreviated new drug applications (ANDAs) for ethinyl estradiol and segesterone acetate vaginal rings.
• On May 18, 2023, FDA issued a notice entitled, Product-Specific Guidances; Draft and Revised Draft Guidances for Industry; Availability. The guidance provide product-specific recommendations on, among other things, the design of bioequivalence (BE) studies to support ANDAs. In the Federal Register of June 11, 2010, FDA announced the availability of a guidance for industry entitled, Bioequivalence Recommendations for Specific Products, that explained the process that would be used to make product-specific guidances available to the public on FDA’s website. The guidances identified in this notice were developed using the process described in that guidance.

Event Notices

• June 8-9, 2023: The National Institutes of Health (NIH) announced a partially open meeting of the Advisory Committee to the Director (ACD). The open agenda will include discussion on performing the duties of the NIH Director’s Report; the NIH Public Access Plan; the Cancer Moonshot; addressing the mental health crisis through research; addressing the public health threat of post-acute sequelae of SARS CoV-2 Infection (PASC) – NIH RECOVER Initiative; the Foundation for the National Institutes of Health (FNIH); updates from the HeLA Genome Data Access Working Group on data access requests; the NIH-wide collaborative initiative on climate change and health; clinical trial stewardship; accessibility; updates from the ACD Working Group on Catalyzing the Development and Use of Novel Alternative Methods to Advance Biomedical Research; updates from the ACD Working Group on Re-envisioning NIH-Supported Postdoctoral Training; and other business of ACD. The closed agenda will include review and evaluation of grant applications.
• June 13, 2023: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a partially open meeting of the Center for Substance Abuse Prevention’s (CSAP) Drug Testing Advisory Board (DTAB). The open agenda will include discussions and presentations on the Mandatory Guidelines for Federal Workplace Drug Testing Programs, the history of the Drug Free Workplace Program and the Comprehensive Review, updates from the Department of Transportation (DOT), the Nuclear Regulatory Commission, and the Department of Defense (DED), as well as a discussion regarding FDA’s approval process for drug testing assays and devices. The closed agenda will include updates on the Hair Proficiency Testing Program.
• June 15-16, 2023: The Department of Health and Human Services (HHS) announced a public meeting of the National Vaccine Advisory Committee (NVAC). During this meeting, NVAC will hear presentations to support the recent charges on innovation and safety from Admiral Rachel L. Levine, MD, the Assistant Secretary for Health and Director of the National Vaccine Program. NVAC will also hear presentations on vaccine safety, antimicrobial resistance, pandemic preparedness, and routine immunization.
• July 6-7, 2023: HHSS announced a public meeting of the Advisory Committee on Blood and Tissue Safety and Availability (ACBTSA). The committee will discuss and vote on a recommendation related to surge capacity for blood and blood products.
• September 6, 2023: FDA announced a public meeting of the Center for Devices and Radiological Health (CDRH) Patient Engagement Advisory Committee (the Committee). In this meeting, the Committee will discuss and make recommendations on the topic of “Advancing Health Equity in Medical Devices.” FDA CDRH is committed to working toward ensuring that all patients have access to high-quality, safe, and effective medical devices. This includes ensuring devices are designed to be safe and effective when used by various populations, are evaluated in the diverse populations for which they are intended, and that patients and consumers have the information they need to make decisions about their health, care, and quality of life. Technology, including digital health technology, may help bridge gaps in health equity by extending access and bringing healthcare to patients at home, work, and in their communities. The recommendations provided by the Committee will address considerations for FDA and industry on these topics. The Committee will consider ways to advance access to devices that allow for care outside a hospital or clinical care setting, including for example, in the home setting. The Committee will also discuss considerations for improving reach and comprehension of FDA’s patient and caregiver communications across diverse demographic groups. Additionally, the Committee will discuss patient-focused considerations for when a device should be evaluated in diverse populations to support marketing authorization

II. Hearings & Markups

U.S. House of Representatives

• On May 16, 2023, the House Committee on Ways and Means held a hearing entitled, Health Care Price Transparency: A Patient’s Right to Know. Witnesses present included: Ms. Kendy Troiano, Human Resources Director, Clark Grave Vault Company; Dr. Ron Piniecki, M.D., Co-Founder and Medical Director, Wellbridge Surgical; Dr. Christopher M. Whaley, Ph.D., Professor, RAND Pardee Graduate School; Mr. Bill Kampine, Co-founder and Chief Innovation Officer, Healthcare Bluebook; Mr. William Short, Executive Chairman, Ameriflex; and Dr. Rick Gilfillan, M.D., former CMMI Director and former CEO of Trinity Health.
• On May 17, 2023, the House Committee on Energy and Commerce Subcommittee on Health held a markup entitled, A Health Subcommittee Markup of 17 Bills. Bills included in the markup included: H.R. 1418, the Animal Drug User Fee Amendments of 2023; H.R. 2544, the Securing the U.S. Organ Procurement and Transplantation Network Act; R. 3281, the Transparent PRICE Act; H.R. 2666, the Medicaid VBPs for Patients (MVP) Act; H.R. 3285, the Fairness for Patient Medications Act; H.R. 3284, the Providers and Payers COMPETE Act; H.R. 3290, To amend title III of the Public Health Service Act to ensure transparency and oversight of the 340B drug discount program; H.R. 2559, the Strengthening Community Care Act of 2023; H.R. 2547, the Special Diabetes Program for Indians Reauthorization Act of 2023; H.R. 2550, the Special Diabetes Program Reauthorization Act of 2023; H.R. 1613, the Drug Price Transparency in Medicaid Act of 2023; H.R. 2665, the Supporting Safety Net Hospitals Act; H.R. 2679, the PBM Accountability Act; H.R. 3248, the Diagnostic Lab Testing Transparency Act; H.R. 3262, To amend title XI of the Social Security Act to increase transparency of certain health-related ownership information; H.R. 3282, the Promoting Transparency and Healthy Competition in Medicare Act; and H.R. 3237, To amend title XVIII of the Social Security Act to require each outpatient department of a provider to include a unique identification number on claims for services, and to require hospitals with an outpatient department of a provider to submit to the Centers for Medicare & Medicaid Services an attestation with respect to each outpatient department.
• On May 17, 2023, the House Committee on Oversight and Accountability Select Subcommittee on the Coronavirus Pandemic held a hearing entitled, Like Fire Through Dry Grass: Nursing Home Mortality & COVID-19 Policies. Witnesses present included: Ms. Janice Dean, Family Member of COVID-19 Nursing Home Victim Fox News Senior, Meteorologist; Mr. Bill Hammond, Senior Fellow for Health Policy, Empire Center; Ms. Vivian Zayas, Co-Founder, Voice for Seniors; and Dr. David Grabowski, Professor of Health Care Policy, Harvard Medical School.
• On May 17, 2023, the House Committee on Ways and Means Subcommittee on Health held a hearing entitled, Why Health Care is Unaffordable: Anticompetitive and Consolidated Markets. Witnesses present included: Mr. Glen Mulready, Commissioner, Oklahoma Insurance Department; Mr. Joe Moose, Owner, Moose Pharmacy; Mr. Frederick Isasi, Executive Director, Families USA; Dr. Barak Richman, Professor, Duke Law School; and Dr. Benjamin N. Rome, M.D., M.P.H., Instructor in Medicine, Harvard Medical School.

U.S. Senate

• On May 17, 2023, the Senate Committee on Health, Education, Labor, and Pensions Subcommittee on Primary Health and Retirement Security held a hearing entitled, A Crisis in Mental Health and Substance Use Disorder Care: Closing Gaps in Access by Bringing Care and Prevention to Communities. Witnesses present included: Ms. Maria Celli Psy.D, Deputy Chief Executive Officer (CEO), Brockton Neighborhood Health Center; Mr. Steven Denny, Deputy Director, Four County Mental Health Center; Dr. Warren Ng, President, American Academy of Child and Adolescent Psychiatry; and Dr. Stephen Taylor, President Elect, American Society of Addiction Medicine.
• On May 17, 2023, the Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations held a hearing entitled, Examining Health Care Denials and Delays in Medicare Advantage. Witnesses present included: Ms. Megan H. Tinker, Chief of Staff, HHS Office of Inspector General (OIG); Dr. Jeannie Fuglesten Biniek, Ph.D., Associate Director, Program on Medicare Policy, Kaiser Family Foundation (KFF); Ms. Christine Jensen Huberty, Lead Benefit Specialist Supervising Attorney, Greater Wisconsin Agency on Aging Resources; Ms. Lisa M. Grabert, Visiting Research Professor, Marquette University College of Nursing; and Ms. Gloria Bent, Widow of Gary Bent, Medicare Advantage Enrollee.
• On May 17, 2023, the Senate Committee on Finance Subcommittee on Health held a hearing entitled, Improving Health Care Access in Rural Communities: Obstacles and Opportunities. Witnesses present included: Ms. Erin Aune, MBA, CRHCP, Vice President Of Strategic Programs, Frances Mahon Deaconess Hospital; Ms. Sara Rich, President And CEO, Choptank Community Health System; Dr. David Herman, MD, CEO, Essentia Health; and Mr. Mark Holmes, Director, Cecil G. Sheps Center For Health Services Research, The University of North Carolina at Chapel Hill.
• On May 18, 2023, the Senate Committee on Aging held a hearing entitled, Residents at Risk: The Strained Nursing Home Inspection System and the Need to Improve Oversight, Transparency, and Accountability. Witnesses present included: Ms. Erin Bliss, Assistant Inspector General for Evaluation and Inspections, HHS OIG; Ms. Shelly Williamson, President of the Board of Directors for the Association of Health Facility Survey Agencies (AHFSA), Administrator for the Section for Long Term Care Regulation with the Missouri Department of Health and Senior Services; Ms. Leah McMahon, MA, Director, Colorado State Long-Term Care Ombudsman Program; and Dr. Susan Lu, Phd, MA, Gerald Lyles Rising Star Professor of Management, Mitchell E. Daniels, Jr. School of Business, Purdue University.

III. Reports, Studies & Analyses

• On May 15, 2023, HHS OIG published a report entitled, Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Fourth Quarter of 2022. Congress established the average sales price (ASP) as the basis for reimbursement for Medicare Part B drugs and mandated OIG compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by five percent in the two previous quarters or three of the four previous quarters, the Centers for Medicare & Medicaid Services (CMS) must substitute the ASP-based payment amount with a lower calculated rate. These substitutions provide an opportunity to limit potentially excessive drug payment amounts. As such, OIG reviewed fourth-quarter 2022 ASP and AMP data for Part B drugs from CMS. OIG found that in the fourth-quarter of 2022, 16 drug codes’ ASP exceeded the AMPs by five percent for two consecutive quarters or three of the previous four quarters. OIG recommended that CMS review the 16 drug codes to determine whether to pursue price substitutions that would limit excessive payments for Part B drugs.
• On May 16, 2023, the Government Accountability Office (GAO) published a report entitled, Health Care Capsule: Accessing Health Care in Rural America. This report draws from numerous GAO reports to describe examples of health care access challenges faced by people living in rural areas and federal efforts to help address those challenges. For example, people living in rural areas typically have less access to health care providers and specialty services, are less likely to have insurance coverage, have less access to broadband internet to access telehealth options, and have to travel for longer distances with fewer transportation options to receive care. Rural areas also have more difficulty recruiting and retaining providers, in part due to low reimbursement rates. Although various federal agencies provide funding and services for health care for rural populations, gaps in information about the health care needs of rural populations may affect the agencies’ abilities to improve access to care. As such, GAO recommends the following policy considerations: (1) ensuring all health data collection allows for analysis by rural area; (2) considering rural populations in particular when developing health innovations (e.g., telehealth); and (3) assessing the availability of insurance in the population and financial incentives to encourage provider participation when developing policies for rural communities.
• On May 17, 2023, KFF published a report entitled, 2023 Medical Loss Ratio Rebates. The Affordable Care Act requires insurance companies to spend at least 80 percent (85 percent for large group plans) of premium revenues on health care claims or quality improvement activities, which is known as the Medical Loss Ratio (MLR). Insurers that fail to meet the MLR threshold are required to pay back excess profits in the forms of rebates to their enrollees. KFF estimates that private insurance companies are expected to pay nearly $1.1 billion in rebates this year. This is a decrease from the $2.5 billion record paid in 2020 and $2 billion paid in 2021, and consistent with the $1 billion paid in 2022. Individuals may receive rebates through a check or premium credit and may share the rebate with their employer depending on how the employer offers premium coverage. KFF predicts that these high rebates may indicate even higher premium increases in 2024, as insurers will aim to lower their loss ratios to regain higher margins. However, the authors acknowledge that the uncertainty resulting from increased health care utilization, demand, forgone care, and coverage uncertainty resulting from the unwinding of the COVID-19 public health emergency (PHE) make it difficult to predict how premiums may change.
• On May 18, 2023, HHS OIG published a report entitled, The Risk of Misuse and Diversion of Buprenorphine for Opioid Use Disorder Appears to Be Low in Medicare Part D. Although buprenorphine for the treatment of opioid use disorder (OUD) (buprenorphine) can decrease illicit opioid use or opioid-related overdose deaths, it also has the potential for misuse and is at risk for diversion. As such, providers were required to obtain a waiver through SAMHSA to prescribe or administer buprenorphine in office-based settings and were limited in the number of patients they could treat. This waiver requirement was later repealed by the Consolidated Appropriations Act, 2023 (CAA, 2023). In this report, OIG studied Medicare Part D claims for buprenorphine prior to the repeal of the waiver. OIG found that all Medicare Part D enrollees who received buprenorphine to treat OUD received the recommended amounts and only a small number of patients received very high amounts or were prescribed buprenorphine along with other opioids. OIG concluded that based on these findings, the risk of misuse and diversion of buprenorphine in Medicare Part D is low, and that the repeal of the waiver under CAA, 2023 was appropriate. OIG recommended that CMS continue to closely monitor and take action against any potential misuse or mis-prescribing of buprenorphine.
• On May 18, 2023, GAO published a report entitled, COVID Relief: Fraud Schemes and Indicators in SBA Pandemic Programs. The Small Business Administration (SBA) quickly launched two pandemic relief programs for small businesses during the COVID-19 pandemic, including the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL). These relief funds totaled over $1 trillion and assisted more than 10 million small businesses. However, some of these funds were used in fraudulent ways. Therefore, in this report, GAO assessed 330 PPP and COVID-19 EIDL fraud cases charged by the Department of Justice (DOJ). Of the 330 fraud cases, 155 reached guilty pleas or convictions. These 155 instances of fraud resulted in about $188 million in direct financial losses for the federal government. Additionally, GAO provided results of select data analyses regarding fraud indicators in these programs. Examples of indicators GAO assessed included: if a business did not submit wage data but claimed employees or if a business received more than the allowed number of loans. Although SBA has employed data analytics to enhance fraud prevention and detection, it has opportunities to improve its strategies, including by leveraging external data sources to identify entities that may defraud multiple pandemic relief programs. Therefore, GAO recommended that SBA utilizes mechanisms to facilitate cross-program data analytics and identify external data sources that could aid in fraud prevention and detection.

IV. Other Health Policy News

• The most recent litigation brought against the ACA, Braidwood Management v. Becerra, challenges the ACA requirement that private insurance plans cover recommended preventive care services without cost-sharing. Specifically, the plaintiffs argue that the ACA requirements for specific expert committees (U.S. Preventive Services Task Force (USPSTF), the Advisory Committee on Immunization Practices (ACIP), and the Health Resources and Services Administration (HRSA)) and a federal agency (HHS) recommend which preventative services should be covered is unconstitutional and that the mandate to cover preexposure prophylaxis (PrEP), medication for HIV prevention, violates their religious rights. In September 2022, a Texas district judge agreed with the plaintiffs, ruling that that the USPSTF and HHS do not have authority to direct which services are covered and that requiring coverage of PrEP violates religious rights. The federal government appealed this decision and on May 15, 2023, the 5th Circuit Court of Appeals issued an administrative stay of the district court’s ruling. This means that the federal government can continue enforcing the preventive services requirement while the 5th Circuit considers the Department of Justice’s (DOJ) motion for a stay pending appeal. More information on this decision can be found here.
• On May 17, 2023, HHS, through SAMHSA, announced more than $200 million in new funding for states and local entities to build capacity for the 988 Suicide & Crisis Lifeline (988 Lifeline) and related crisis services. The 988 Lifeline is a national emergency call line, similar to 911, for mental health-specific emergencies. This program was established to address the rising mental health crisis in the U.S. Studies have shown that after speaking with a trained crisis counselor, most 988 Lifeline callers are significantly more likely to feel less depressed, less suicidal, less overwhelmed, and more hopeful. This new allocation of funding can be used by states, tribal organizations, and 988 Follow-Up Programs for a variety of efforts to bolster their activities, including to enhance recruiting, hiring, and training of 988 workforce; to implement technology and security measures to support infrastructure and effectively coordinate care; to improve services for underserved populations; and to improve follow-up care integration. More information on this announcement can be found here.
• On May 17, 2023, the European Union (EU) and the U.S. launched the EU-U.S. Health Task Force. This task force will focus on enhancing cooperation between the EU and U.S. related to three health care priorities: cancer, global health threats, and strengthening the global health architecture. The task force has already established two working groups focused on childhood/young adult cancer and lung cancer in the context of Europe’s Beating Cancer Plan and the U.S. Cancer Moonshot. Further, both the EU and the U.S. hope to use this partnership to pursue efforts to mitigate emerging health threats such as anti-microbial resistance and ensuring access to medical countermeasures in the event of an emergency is available to all. Both parties stated that comprehensive global commitments are needed to improve equity within pandemic prevention, preparedness, and response. Additionally, both the EU and U.S. affirmed their commitment to advance the health and wellbeing of women and girls. The EU-U.S. Health Task Force is also working to establish technical working groups to further its goals and address the three priorities. More information on this announcement can be found here.
• On May 18, 2023, the Department of Education (ED) and HHS announced three actions to provide critical health and mental health services in schools. First, ED is proposing a new rule that would streamline consent provisions when billing for Medicaid services provided for students with disabilities. ED notes that this will result in a uniform process applicable to all Medicaid children regardless of disability to reduce the “red tape” schools and districts face when billing Medicaid. Second, HHS and CMS are releasing a guide entitled, Comprehensive Guide to Medicaid Services and Administrative Claiming, to make it easier for schools to deliver and receive payment for health care services to millions of eligible students. This guide clarifies and consolidates numerous CMS guidances on how schools can receive payment for providing care for Medicaid- and Children’s Health Insurance Program- (CHIP-) enrolled students, and how states can ease the administrative burden on school-based health providers. Third, HHS and CMS approved state plan amendments (SPAs) for New Mexico and Oregon that will allow the states to receive Medicaid funding for services provided to all children covered by Medicaid, rather than only those children with an individualized education program (IEP). This will help expand school-based services to all Medicaid- and CHIP- enrolled students, regardless of their disability status. More information on this announcement can be found here.
• On May 18, 2023, HHS issued a fact sheet on ways communities can stay protected against mpox ahead of the summer. The Biden Administration’s actions to date to mitigate and prevent the spread of mpox has resulted in a 99 percent decline in daily case counts since the outbreak’s peak in August 2022. The administration is now focused on increasing vaccine uptake and making testing more convenient for health care providers and patients. As such, in this fact sheet, HHS recommends people at risk of mpox receive two doses of the vaccine and practice safe sex. The Biden Administration is also focused on ensuring health care providers have the tools, knowledge, and resources they need to address any mpox outbreaks, including making data on mpox more available so individuals, providers, researchers, and other stakeholders can assess trends and risk. Further the Biden Administration is targeting outreach and education to communities who may be at particular risk for mpox, including members of the LGBTQI+ community. More information on this fact sheet can be found here.
• On May 19, 2023, HHS, through HRSA, awarded more than $65 million to 35 HRSA-funded health centers to address the maternal mortality crisis. HRSA-funded health centers are local organizations that provide comprehensive, high-quality primary health care services tailored to their communities regardless of their patients’ ability to pay. Specifically, they provide prenatal care to an estimated 550,000 people and deliver more than 160,000 babies each year. They work in underserved communities where mothers have higher risk of pregnancy-related death, individuals do not have easy access to health care due to geography or cost, and individuals and families are more likely to be uninsured, at risk of homelessness, or financially struggling. The Biden Administration has taken these steps in response to the growing maternal mortality crisis in the U.S. This funding will help HRSA-funded health centers improve maternal care processes, develop post-pregnancy support services, improve data collection and sharing, provide maternal mental health care, train maternal health providers, and more. More on this announcement can be found here.

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