Health Care Week in Review: HHS Coverage Flexibilities and MedPAC/MACPAC Reports

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, the COVID-19 PHE expired, and DEA issued a final rule that provides a six-month extension of PHE flexibilities that allow the prescription of controlled substances via telemedicine.

I. Regulations, Notices & Guidance

• On June 13, 2023, the Agency for Healthcare Research and Quality (AHRQ) issued notices entitled, Supplemental Evidence and Data Request: Evaluation of Dietary Protein Intake Requirements and The Effect of Protein Intake on Health. AHRQ is seeking scientific information submissions from the public to inform its review on Evaluation of Dietary Protein Intake Requirements, which is currently being conducted by the AHRQ’s Evidence-based Practice Centers (EPC) Program. Access to published and unpublished pertinent scientific information is intended to improve the quality of this review. Information must be submitted by July 14, 2023.
• On June 13, 2023, the Food and Drug Administration (FDA) issued final guidance entitled, Content of Premarket Submissions for Device Software Functions. This guidance document is intended to provide information regarding the recommended documentation sponsors should include in premarket submissions for FDA’s evaluation of safety and effectiveness of device software functions, which are functions that meet the definition of a device under the Federal Food, Drug, and Cosmetic Act (FD&C Act). This document replaces FDA’s “Guidance for the Content of Premarket Submissions for Software Contained in Medical Devices” issued on May 11, 2005, and updates FDA’s thinking related to the documentation FDA recommends sponsors include for the review of device software functions in premarket submissions.
• On June 14, 2023, FDA extended the comment period for draft guidance entitled, Questions and Answers About Dietary Guidance Statements in Food Labeling: Draft Guidance for Industry. FDA is taking this action in response to requests for an extension to allow interested persons additional time to submit comments. The draft guidance, when finalized, will provide FDA’s current thinking on the use of Dietary Guidance Statements on packaged food labels and more broadly in the labeling of foods, including any written, printed, or graphic material accompanying a food, such as labeling on websites. This draft guidance is not final nor is it in effect at this time.
• On June 15, 2023, the Department of Health and Human Services (HHS) issued draft guidance entitled, Frequently Asked Questions: Limited Institutional Review Board Review and Related Exemptions. This draft guidance document applies to research activities involving human subjects that are conducted or supported by HHS. It is intended primarily to help entities implement the requirement for limited review of research by an Institutional Review Board (IRB) to meet the conditions of four exemptions outlined in the 2018 Requirements (the Common Rule). The draft guidance discusses the concept of limited IRB review, which appears in these exemptions, and provides information about how limited review may be conducted. When finalized, this will provide the Office for Human Research Protections’ (OHRP) first formal guidance on this topic. This draft guidance was developed after taking into consideration input received from HHS and other Common Rule departments and agencies.
• On June 15, 2023, the National Institutes of Health (NIH) issued a notice entitled, Implementation of the NIH Small Business Innovation Research Program and Small Business Technology Transfer Program Foreign Disclosure Pre-award and Post-Award Requirements. This notice announces publication and serves as a notice for the extramural community on recent policy changes made for the Small Business Innovation Research Program (SBIR) and the Small Business Technology Transfer Program (STTR). This notice implements additional disclosure requirements and post-award reporting requirements for small business concerns (SBCs) for covered relationships. In addition, this serves as notification of NIH’s due diligence program to assess security risks and denial of award when foreign relationships or commitments with countries of concern pose a significant risk as provided in the SBIR and STTR Extension Act of 2022. This policy also updates the Grants Policy section which will be incorporated in the fiscal year (FY) 2024 publication. In addition, the NIH Application Guide will be updated to reflect instructions for submission of required documentation.

Event Notices

• June 27, 2023: HHS announced the annual President's Council on Sports, Fitness & Nutrition (PCSFN) meeting. The PCSFN will discuss plans for future projects and programs that may address but are not limited to: (1) implementing the National Strategy on Hunger, Nutrition, and Health, including supporting the White House Challenge to End Hunger and Build Healthy Communities; (2) raising awareness about the importance of mental health as it pertains to physical fitness and nutrition; (3) promoting the implementation of the National Youth Sports Strategy; (4) revitalizing the Presidential Youth Fitness Program; and (5) the launch of the Physical Activity Guidelines Midcourse Report: Implementation Strategies for Older Adults.
• June 28, 2023: The Centers for Disease Control and Prevention (CDC) announced a town hall meeting regarding the history and future of CDC-funded public health preparedness and response centers. The purpose of this town hall meeting is to provide an overview and discussion of CDC-funded public health preparedness and response centers including the Centers for Public Health Preparedness and Response (CPHPs), Preparedness and Response Learning Centers (PERLCs), and Preparedness and Response Research Centers (PERRCs). The agenda will include presentations and discussions on three topic areas: (1) strengths and limitations of past CPHP, PERLC, PERRC and similar programs; (2) new program priorities as directed by sec. 2231 of the Consolidated Appropriations Act, 2023 (CAA, 2023); and (3) discussion of how best to meet state, territorial, local, and tribal public health preparedness and response needs in the design, implementation, and coordination of regional centers under CAA, 2023.
• August 3, 2023: HHS announced a public meeting and related Request for Information (RFI) of the National Committee on Vital and Health Statistics (NCVHS) Workgroup on Timely and Strategic Action to Inform ICD-11 Policy. The purpose of the International Classification of Diseases (ICD-11) workgroup meeting is to gather information and identify gaps in currently available information and research essential for analysis and policy decisions on the U.S. approach to support adoption and implementation of ICD-11 for morbidity. A supplemental goal is to enable coordination of public and private entities that may affect ICD-11 integration into U.S. health information environments by obtaining broad stakeholder input on studies or assessments HHS should undertake to inform the transition and on what timeline. Together with comments received in response to the RFI, the input received at the roundtable will inform the Workgroup’s findings to be provided to the full Committee in contemplation of recommendations to the Secretary of HHS.

II. Hearings & Markups

U.S. House of Representatives

• On June 13, 2023, the House Committee on Education & The Workforce held a hearing entitled, Examining the Policies and Priorities of the Department of Health and Human Services. Witnesses present included: The Honorable Xavier Becerra, Secretary, HHS.
• On June 13, 2023, the House Committee on Oversight and Accountability Subcommittee on the Coronavirus Pandemic held a hearing entitled, Oversight of CDC Policies and Decisions During the COVID-19 Pandemic. Witnesses present included: Rochelle Walensky, M.D., M.P.H., Director, CDC.
• On June 13, 2023, the House Committee on Energy and Commerce Subcommittee on Health held a legislative hearing entitled, Legislative Solutions to Bolster Preparedness and Response for All Hazards and Public Health Security Threats. Legislation considered during this hearing included: H.R. __, To reauthorize certain programs under the Public Health Service Act with respect to public health security and all-hazards preparedness and response, and for other purposes; H.R. __, the Public Health Guidance Transparency and Accountability Act; H.R. __, the PHEMCE Advisory Committee Act; H.R. __, the PHE Congressional Review Act of 2023; H.R. __, the Improving Contract Transparency for the SNS Act; H.R. __, the Improving Contract Transparency at BARDA Act; H.R. __, the Biosecurity Infrastructure for Operational (BIO) Early Warning Act; H.R. 3813, the CDC Leadership Accountability Act; H.R. 3631, the State Strategic Stockpile Act of 2023; H.R. 3577, the Medical and Health Stockpile Accountability Act of 2023; H.R. 3837, the Improving Public Health Preparedness Act; H.R. 3832, the Disease X Act of 2023; H.R. 3613, the Doctors at the Ready Act; H.R. 2416, To amend the Public Health Service Act to reauthorize a military and civilian partnership for trauma readiness grant program; H.R. 3840, the Ensuring Sufficient Supply of Testing Act; H.R. 3795, To amend the Public Health Service Act to require the development of a diagnostic testing preparedness plan to be used during public health emergencies, and for other purposes; H.R. 3703, the Helping Evaluate Appropriate Logistical Infrastructure for National Government (HEALING) Response Act of 2023; H.R. 3742, To direct the Comptroller General of the United States to evaluate the Federal Government’s collection and sharing of public health data to respond to public health emergencies; H.R. 3820, To amend the Public Health Service Act to strike the requirement that the Director of the Centers for Disease Control and Prevention be appointed by and with the advice and consent of the Senate; H.R. 3794, the Fast-Track Logistics for Acquiring Supplies in a Hurry (FLASH) Act of 2023; and H.R. 3791, the Improving Data Accessibility Through Advancements (DATA) in Public Health Act.
• On June 14, 2023, the House Committee on Energy and Commerce Subcommittee on Health held a legislative hearing entitled, Examining Proposals that Provide Access to Care for Patients and Support Research for Rare Diseases. Legislation considered during this hearing included: H.R. 3226, the PREEMIE Reauthorization Act of 2023; H.R. 3838, the Preventing Maternal Deaths Reauthorization Act of 2023; H.R. 3843, the Action for Dental Health Act of 2023; H.R. 3884, the Sickle Cell Disease and Other Heritable Blood Disorders Research, Surveillance, Prevention, and Treatment Act of 2023; H.R. 3821, the Firefighter Cancer Registry Reauthorization Act of 2023; H.R. 2365, the National Plan to End Parkinson’s Act; H.R. 3391, the Gabriella Miller Kids First Research Act 2.0; H.R. 3887, the Children’s Hospital GME Support Reauthorization Act of 2023; and H.R. 3836, the Medicaid Primary Care Improvement Act.

U.S. Senate

• On June 15, 2023, the Senate Committee on Aging held a hearing entitled, Before Disaster Strikes: Planning for Older Americans and People with Disabilities in All Phases of Emergencies. Witnesses present included: DeeDee Bennett Gayle, Ph.D., M.S., Professor of Emergency Preparedness, Homeland Security, and Cybersecurity, SUNY; Annie Lloyd, Disability Policy Advocate; Jonathan Bydlak, Director of the Governance Program, R Street Institute; and Mahshid Abir, M.D., M.Sc., Emergency Physician and Health Services Researcher, RAND Corporation.
• On June 15, 2023, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held an executive session entitled, 133, S. 134, S. 265, S. 1844, S. 1852, and S. 1855. Legislation considered during this executive session included: S. 133, NAPA Reauthorization Act; S. 134, Alzheimer’s Accountability and Investment Act; S. 265, SIREN Reauthorization Act; S. 1844, Animal Drug and Animal Generic Drug User Fee Amendments of 2023; S. 1852, Sickle Cell Disease and Other Heritable Blood Disorders Research, Surveillance, Prevention, and Treatment Act of 2023; and S. 1855, Special Diabetes Program Reauthorization Act of 2023.

III. Reports, Studies & Analyses

• On June 12, 2023, the Kaiser Family Foundation (KFF) published an issue brief entitled, Employment Among Immigrants and Implications for Health and Health Care. In this issue brief, authors examine the socioeconomic characteristics and employment patterns among immigrant workers compared to U.S.-born workers and the implications of these patterns on the health and well-being of immigrants and the overall economy. The authors found that in 2021, nearly one in five adult workers between 19 and 64 years of age were immigrants and that among this population, noncitizen workers were more likely than citizen workers to work in construction, agricultural, and service jobs regardless of education level. Additionally, compared to citizen workers, noncitizen workers were more likely to be Hispanic or Asian, younger, and have lower levels of educational attainment. Even among those with college degrees, noncitizen workers were more likely than citizen workers to be low-income and uninsured. Further, while some noncitizen workers are in lower-wage jobs due to limited experience or lack of work authorization, others may be overqualified for their positions, which negatively affects immigrant families and the overall economy. Therefore, the authors conclude that increasing job opportunities that are more reflective of skill levels can improve the health and wellbeing of immigrants and their families as well as support the overall U.S. economy.
• On June 13, 2023, the RAND Corporation published a study entitled, Expansion of Telehealth Availability for Mental Health Care After State-Level Policy Changes From 2019 to 2022. The authors note that although the COVID-19 pandemic was the catalyst for the expansion of telehealth, state legislation may have also helped make the transition to telehealth more feasible. As such, they investigated the association between four state policies and telehealth availability at nearly 13,000 outpatient mental health treatment facilities in the U.S. Specifically, the four policies assessed included: (1) payment parity for telehealth services among private insurers; (2) authorization of audio-only telehealth services in Medicaid and the Children’s Health Insurance Program (CHIP); (3) participation in the Interstate Medical Licensure Compact (IMLC), which allowed for psychiatrists to provide telehealth across state lines; and (4) participation in the Psychology Interjurisdictional Compact (PSYPACT), which allowed for psychologists to provide telehealth across state lines. Authors found that in September 2022, over 88 percent of the facilities surveyed provided telehealth, compared to just 40 percent of facilities in April 2019. Although all four policies were associated with expansion of telehealth, authors found that telehealth services were less likely to be offered in counties with greater populations of Black residents and in facilities that accepted Medicaid and CHIP. The study concluded that more targeted action and policies could improve and expand telehealth to all populations.
• On June 14, 2023, the CMS Office of the Actuary published its 2022-2031 National Health Expenditure Projections. A related article summarizing its findings was entitled, National Health Expenditure Projections, 2022–31: Growth To Stabilize Once The COVID-19 Public Health Emergency Ends. Authors projected that national health expenditures will grow by 5.4 percent each year from 2022 to 2031, accounting for 19.6 percent of the gross domestic product (GDP) by 2031, compared to 18.3 percent in 2021. Additionally, authors predict that about 92.3 percent of the population will be insured in 2022 and 2023, a historic high, but will decrease to about 90.5 percent of the population by 2031 as flexibilities and policies that expanded health insurance coverage during the COVID-19 pandemic expire. Medicare is expected to be the fastest growing payer over the course of 2022 to 2031, averaging about 7.5 percent per year. Further, hospital spending is expected to grow more rapidly (averaging 5.8 percent for 2022–31) than spending both for physician and clinical services (5.3 percent) and for prescription drugs (4.6 percent). The authors also predict that legislation and policies, such as the Inflation Reduction Act (IRA) will also drive changes in spending and prices. For example, they predict that the prescription drug provisions in the IRA will lower overall growth in out-of-pocket payments and the end of the COVID-19 public health emergency (PHE) will reduce Medicaid enrollment and increase private insurance and Marketplace enrollment. In conclusion, federal actuaries predict that medical spending will continue to grow and become a larger part of household spending over the next 10 years.
• On June 15, 2023, the Government Accountability Office (GAO) published a report entitled, Federal Research: NIH Could Take Additional Actions to Manage Risks Involving Foreign Subrecipients. Responding to a congressional request, GAO assessed the amount of federal funding provided to three select Chinese entities – Wuhan University; the Wuhan Institute of Virology (WIV); and the Academy of Military Medical Sciences – in calendar years (CY) 2014 through 2021 and steps the agencies and award recipients have taken to assess potential risks. GAO found that most of the funding awarded to the three Chinese entities came from NIH and that NIH awarded over $2 million in total to them. GAO noted that NIH did not always ensure that foreign institutions complied with award terms and conditions, including biosafety requirements. In January 2023, HHS’ Office of Inspector General (OIG) recommended NIH take steps to enhance monitoring, documentation, and reporting requirements for award recipients with foreign subrecipients, to which NIH noted it will need additional authorities and time to fulfill. As such, GAO recommends that NIH take steps to enhance its internal oversight in the more immediate timeframe as it takes pursues longer-term actions for award recipients.
• On June 15, 2023, the Congressional Budget Office (CBO) published a cost estimate entitled, R. 2813, Self-Insurance Protection Act. H.R. 2813 would impose an intergovernmental mandate that preempts any state laws that prevent certain group health plans from using stop-loss policies to insure against excess or unexpected claims losses. CBO and the Joint Committee on Taxation (JCT) estimate that enacting H.R. 2813 would have insignificant effects on direct spending, revenues, and deficits over the 2023-2033 period. CBO and JCT’s analysis of state laws indicates that few states prohibit the sale of stop-loss coverage; thus, the bill’s preemption of state laws would affect only a small number of people. The bill would also not impose any private-sector mandates.
• On June 15, 2023, the Medicare Payment Advisory Commission (MedPAC) released its June Report to Congress. The report included chapters on topics such as standardized benefits in Medicare Advantage (MA) plans, disparities in outcomes for Medicare beneficiaries with different social risks, telehealth in Medicare, and aligning fee-for-services (FFS) payment rates across ambulatory settings. Among its recommendations, MedPAC expressed support for more closely aligning Medicare payment rates between hospital outpatient departments, ambulatory surgical centers, and freestanding physician offices. MedPAC also presented data on the utilization of telehealth services during the COVID-19 PHE. MedPAC’s findings suggest that during the pandemic, increased telehealth utilization was associated with minimal change in measured quality, slightly improved access to care for some beneficiaries, and slightly increased costs to the Medicare program.
• On June 15, 2023, the Medicaid and CHIP Payment and Access Commission (MACPAC) issued its June Report to Congress. The four chapters included in the report were: (1) Countercyclical Medicaid Disproportionate Share Hospital Allotments; (2) Integrating Care for Dually Eligible Beneficiaries: Different Delivery Mechanisms Provide Varying Levels of Integration; (3) Access to Medicaid Coverage and Care for Adults Leaving Incarceration; and (4) Access to Home-and Community-Based Services. Specifically, Chapter 2 focused on the delivery system mechanisms available for implementing integrated care for dually-eligible beneficiaries. Additionally, the report highlighted ways to expand and increase access to home-and-community-based services (HCBS).

IV. Other Health Policy News

• On June 12, 2023, the Kidney Innovation Accelerator (KidneyX), a public private partnership between HHS and the American Society of Nephrology (ASN) announced the eight winners of the Artificial Kidney Prize Phase 2. Competitors worked to develop a prototype bioartificial kidneys or a new tool or component that can help enable the development of bioartificial kidneys. Developing bioartificial kidneys has historically been difficult to do because of the overall complexity of the organ, which is made up of many different cell types and performs several important functions. Through this prize competition, KidneyX sought innovative ways to address kidney disease, for which the best currently available treatment is a kidney transplant; however, the supply of kidneys only addresses a small fraction of the need. With over 37 million Americans and 850 million people worldwide living with kidney disease, innovation to address this illness is urgent. The eight winners included doctors, scientists, and engineers of the regenerative medicine, cellular engineering, tissue engineering, systems biology and synthetic biology specialties. More information on this announcement can be found here.
• On June 12, 2023, the Biden-Harris Administration announced new tools designed to lower prescription drug costs for low-income people with Medicare through the Extra Help program, which provides eligible seniors and disabled people with help paying for their Medicare Part D premiums and cost-sharing. Specifically, the IRA expanded eligibility for subsidies provided under the Extra Help program, to individuals with limited resources and incomes up to 150 percent of the federal poverty level (FPL) beginning January 1, 2024. HHS, the Administration for Community Living (ACL) and the Centers for Medicare & Medicaid Services (CMS), are working to expand outreach to eligible seniors and people with disabilities to improve enrollment in the Extra Help program. For example, CMS is making available an outreach tool kit and releasing national data on people with Medicare Part D prescription drug coverage who currently benefit from Extra Help. The expansion of the Extra Help program provides an important opportunity to those who could benefit from the program’s lower cost premiums, deductibles, and copayments—now and when the program expands in 2024. More information on this announcement can be found here.
• On June 12, 2023, HHS announced new flexibilities aimed at keeping beneficiaries covered as states resume Medicaid and CHIP renewals following the end of the COVID-19 PHE. During the PHE, individuals were not required to resubmit eligibility documentation for Medicaid and CHIP. However, following the end of the PHE, states have begun a “redetermination” process to reassess eligibility. HHS provided for these expanded flexibilities given the agency’s concern with the number of people who are at risk or are losing coverage during the redetermination process. Some of the new flexibilities announced include: (1) allowing managed care plans to either assist with Medicaid renewal applications or complete renewal applications on behalf of beneficiaries, (2) allowing states to delay administrative termination of beneficiaries who do not complete renewals on time, and (3) allowing pharmacies and community-based organizations (CBOs) to reinstate coverage for certain individuals disenrolled from Medicaid and CHIP for procedural reasons. More information on this announcement can be found here.
• On June 13, 2023, HHS and CMS announced New York’s extension of comprehensive coverage through Medicaid and CHIP for 12 months postpartum. New York is the 35th state, along with the District of Columbia (D.C.), to offer this postpartum coverage extension from the current mandatory 60-day period to 12 months. As a result, an additional 26,000 people in New York and an estimated 509,000 people in total will remain eligible for Medicaid and CHIP for a year after pregnancy. These efforts to extend Medicaid and CHIP postpartum coverage is part of ongoing efforts through HHS and the Biden Administration to address disparities in maternal health outcomes. More information on this announcement can be found here.
• On June 14, 2023, HHS, through the Health Resources and Services Administration (HRSA), announced nearly $9 million in grant funding to 20 grantees to help them strengthen and expand the mental health and substance use workforce in underserved and rural communities. The grants can be used to train health care providers to care for individuals in need of mental health services through the Integrated Substance Use Disorder Training Program (ISTP). This program will help community-based programs upskill their workforce and increase the number of mental health and substance use disorder (SUD) providers available (including nurse practitioners and physician assistants) trained to provide mental health and SUD treatment, including opioid use disorder (OUD) services. More information on this announcement can be found here.
• On June 15, 2023, ACL announced that it is seeking input on its proposed updates to the regulations for its Older Americans Act (OAA) programs. ACL notes that the proposed rule aims to align regulations to current statute, which has evolved since the current OAA regulations were first established, and to reflect the needs of older adults today. The population of older adults has nearly doubled, older adults are living longer than ever before, and health care providers are incorporating an increased understanding about social determinants of health (SDOH) into their care practices. As such, the proposed rule will clarify requirements across many programs, including new ones authorized by the OAA since the last update of the rule; will address increased requirements and flexibilities for providers serving older adults during emergencies; will take steps to better support older adults to stay in their homes; and more. More information on this announcement can be found here.
• On June 16, 2023, the Department of Education (ED) and HHS took additional steps to advance the investments and efforts set forth by the Bipartisan Safer Communities Act (BSCA). BSCA takes action to prevent and respond to gun violence in communities and to make sure children in schools have access to mental health services. ED and HHS are working together on BSCA implementation in response to the increasing amount of challenges youth are facing in their schools and in their communities, such as increased loneliness and gun violence. For example, both Departments have provided funding and established programs that would make available resources to help communities expand school-based mental health services, make schools more welcoming and safe environments, establish afterschool programs, and train school personnel and law enforcement to care for children and communities following incidents of gun violence. More information on this announcement can be found here.

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