Health Care Week in Review: CMS Releases Updates on Center for Medicare and Medicaid Innovation Center (CMMI) Initiatives to Reduce Drug Prices, Senator Bernie Sanders Calls for Increased Nonprofit Hospital Oversight in Senate HELP Committee Report

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, CMS provided an update on three CMMI models aimed at reducing Medicare drug prices and Sen. HELP Committee Chair Sanders (I-VT) released a report recommending Congress and the IRS address nonprofit hospitals’ charity care practices. Read more about these actions and other news below.

I. Regulations, Notices & Guidance 

• On October 10, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a rule entitled, Medicare Program: Medicare Secondary Payer and Certain Civil Money Penalties. This final rule will specify how and when CMS must calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations by failing to register and report as required by MSP reporting requirements. This final rule will also establish CMP amounts and circumstances under which CMPs will and will not be imposed.
• On October 11, 2023, the Department of Health and Human Services (HHS) issued a rule entitled, Mandatory Guidelines for Federal Workplace Drug Testing Programs. This rule contains revisions by HHS to the Mandatory Guidelines for Federal Workplace Drug Testing Programs using Oral Fluid (OFMG) which was published in the Federal Register on October 25, 2019.
• On October 11, 2023, the Food and Drug Administration (FDA) issued a notice entitled, Drug Products not Withdrawn from Sale for Reasons of Safety or Effectiveness: Mekinist (Trametinib Dimethyl Sulfoxide) Tablets, 1 Milligram. FDA has determined that Mekinist (trametinib dimethyl sulfoxide) tablets, 1 milligram (mg), was not withdrawn from sale for reasons of safety or effectiveness. This determination allows FDA to approve abbreviated new drug applications (ANDAs) for trametinib dimethyl sulfoxide tablets, 1 mg, if all other legal and regulatory requirements are met.
• On October 11, 2023, FDA issued a notice entitled, Drug Products not Withdrawn from Sale for Reasons of Safety or Effectiveness: Cytoxan (Cyclophosphamide) for Injection (Sterile Dry Powder Excipient-Free Formulation), 500 Milligrams/Vial, 1 Gram/Vial, and 2 Grams/Vial, and Cytoxan (Cyclophosphamide) for Injection (Sterile Dry Powder with Sodium Chloride Formulation), 500 Milligrams/Vial, 1 Gram/Vial, and 2 Grams/Vial. FDA has determined that the sterile dry powder excipient-free formulation of Cytoxan (cyclophosphamide) for injection, 500 milligrams (mg)/vial, 1 gram (g)/vial, and 2 g/vial, and the sterile dry powder with sodium chloride formulation of Cytoxan (cyclophosphamide) for Injection, 500 mg/vial, 1 g/vial, and 2 g/vial, were not withdrawn from sale for reasons of safety or effectiveness. This determination means FDA will not begin procedures to withdraw approval of ANDAs that refer to the sterile dry powder excipient-free formulation or the sterile dry powder with sodium chloride formulation of these drug products, and it will allow FDA to continue to approve ANDAs that refer to these formulations of Cytoxan as long as they meet relevant legal and regulatory requirements.
• On October 11, 2023, the Agency for Healthcare Research and Quality (AHRQ) issued a notice entitled, Supplemental Evidence and Data Request: Documentation Burden. AHRQ is seeking scientific information submissions from the public to inform AHRQ’s review on Documentation Burden, which is currently being conducted by the AHRQ’s Evidence-based Practice Centers (EPC) Program. Access to published and unpublished pertinent scientific information will improve the quality of this review.
• On October 12, 2023, the Administration for Strategic Response (ASPR) issued a guidance entitled, Screening Framework Guidance for Providers and Users of Synthetic Nucleic Acids. ASPR is issuing screening framework guidance which sets forth baseline standards for the gene and genome synthesis industry as well as best practices for all entities involved in the provision, use, and transfer of synthetic nucleic acids regarding screening orders, recipients, and maintaining records. In addition, this guidance seeks to encourage best practices to address biosecurity concerns associated with the potential misuse of synthetic nucleic acids in order to bypass existing regulatory controls and commit unlawful acts.
• On October 12, 2023, FDA issued guidance entitled, Quality Considerations for Topical Ophthalmic Drug Products. This draft guidance discusses certain quality considerations for ophthalmic drug products (i.e., solutions, suspensions, emulsions, gels, ointments, and creams) intended for topical delivery in and around the eye. Specifically, this draft guidance discusses approaches to evaluating visible particulate matter, extractables and leachables, and impurities and degradation products; use of in vitro drug release/dissolution testing as an optional quality control strategy for certain ophthalmic dosage forms; recommendations for design and delivery and dispensing features of container closure systems; and recommendations for stability studies. The draft guidance applies to ophthalmic drug products approved under new drug applications (NDAs), ANDAs, and biologics license applications (BLAs), as well as to over-the-counter (OTC) monograph drugs.
• On October 12, 2023, CMS issued a notice entitled, Medicare Program; CY 2024 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts. This notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2024 under Medicare's Hospital Insurance (Part A) program. The Medicare statute specifies the formulas used to determine these amounts. For CY 2024, the inpatient hospital deductible will be $1,632. The daily coinsurance amounts for CY 2024 will be as follows: $408 for the 61st through 90th day of hospitalization in a benefit period; $816 for lifetime reserve days; and $204 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.
• On October 12, 2023, CMS issued a notice entitled, Medicare Program; CY 2024 Part A Premiums for the Uninsured Aged and for Certain Disabled Individuals Who Have Exhausted Other Entitlement. This notice announces the monthly premium for uninsured enrollees under the Medicare Hospital Insurance (Part A) program in CY 2024. This premium is paid by enrollees aged 65 and over who are not otherwise eligible for benefits under Part A and by certain individuals with disabilities who have exhausted other entitlements. The monthly Part A premium for the 12 months beginning January 1, 2024 for these individuals will be $505. The premium for certain other individuals as described in this notice will be $278.
• On October 12, 2023, CMS issued a notice entitled, Medicare Program; Medicare Part B Monthly Actuarial Rates, Premium Rates, and Annual Deductible Beginning January 1, 2024. This notice announces the monthly actuarial rates for aged (age 65 and over) and disabled (under age 65) beneficiaries enrolled in Part B of the Medicare Supplementary Medical Insurance (SMI) program beginning January 1, 2024. In addition, this notice announces the monthly premium for aged and disabled beneficiaries, the deductible for 2024, and the income related monthly adjustment amounts to be paid by beneficiaries with modified adjusted gross income above certain threshold amounts.

Event Notices

• October 17 and 18, 2023: The Centers for Disease Control and Prevention (CDC) announced that it will hold public information sessions entitled, World Trade Center Health Program; Notices of Funding Opportunities Public Information Sessions. These sessions will provide information on current research funding opportunities published by the World Trade Center (WTC) Health Program and will provide information to members of the public who may be interested in submitting applications for funding.
• October 18, 2023: HHS announced that the Secretary’s Advisory Committee on Health Research Protections will hold a virtual meeting open to the public.
• October 18, 2023: The National Institutes of Health (NIH) announced a meeting of the Advisory Committee on Research on Women’s Health. This is a virtual meeting open to the public.
• October 25, 2023: AHRQ announced a meeting entitled, Meeting for Software Developers on the Common Formats for Patient Safety Data Collection. This is a virtual meeting open to the public.
• October 25 and October 26, 2023: HHS announced a meeting of the President’s Advisory Commission on Asian Americans, Native Hawaiians, and Pacific Islanders. This is a hybrid meeting that is open to the public.
• October 25, October 26, and October 27, 2023: CDC announced it will hold a meeting of the Advisory Committee on Immunization Practices. This meeting is open to the public and time will be available for public comment.
• October 26, 2023: NIH announced a meeting of the Office of AIDS Research Advisory Council that will focus on focus on HIV and health disparities, guest speakers and a discussion panel. This is a virtual meeting open to the public.
• October 26, 2023: HHS announced a meeting of the President’s Council on Sports, Fitness, and Nutrition. This is a virtual meeting open to the public.
• October 31, 2023: NIH announced a meeting of the National Advisory Child Health and Human Development Council Stillbirth Working Group. This is a virtual meeting open to the public.
• October 31 and November 1, 2023: CMS announced a meeting of the Ground Ambulance and Patient Billing (GAPB) Advisory Committee. The committee will make recommendations with respect to the disclosure of charges and fees for ground ambulance services and insurance coverage, consumer protection and enforcement authorities of the Department of Labor (DOL), HHS, and the Treasury, and relevant States, and the prevention of balance billing to consumers. This is a virtual meeting that is open to the public.
• November 2 and 3, 2023: CDC announced a meeting of the Healthcare Infection Control Practices Advisory Committee. This is a virtual meeting open to the public.
• November 2 and 3, 2023: The Health Research and Services Administration (HRSA) announced a meeting of the Advisory Committee on Heritable Disorders in Newborns and Children. This is a virtual meeting open to the public.
• November 7, 2023: FDA announced a meeting of the Radiological Devices Panel of the Medical Devices Advisory Committee. This is a virtual meeting open to the public.
• November 13 and 14, 2023: ASPR announced its Biomedical Advanced Research and Development Authority (BARDA) Industry Day 2023. BARDA annually hosts a two-day conference with industry and government partners to share BARDA’s goals and objectives, increase awareness of U.S. government medical countermeasure (MCM) priorities, and facilitate collaboration between public and private sectors within the health security space. This year, BARDA plans to discuss implementation efforts for the 2022-2026 Strategic Plan. This is a hybrid event open to the public.
• November 14, 2023: CDC announced a meeting of the Advisory Committee to the Director, CDC. This is a hybrid meeting that is open to the public. There will be an opportunity for public comment.
• November 16, 2023: NIH announced that the Diabetes Mellitus Interagency Coordinating Committee will hold a public online meeting entitled, The Application of Digital Health Technology to Type 2 Diabetes Management: Current Status, Research Gaps, and Opportunities.
• November 16, 2023: FDA announced a meeting of the Oncologic Drugs Advisory Committee. This is a virtual meeting that will be open to the public and the agency is establishing a docket for public comment on this document.
• November 17, 2023: NIH announced a meeting of the National Advisory Child Health and Human Development Council Task Force on Research Specific to Pregnant Women and Lactating Women (PRGLAC) Implementation Working Group. This is a virtual meeting open to the public.
• November 29, 2023: NIH announced the National Cancer Institute will hold a meeting of their Frederick National Laboratory Advisory Committee. This is a virtual meeting open to the public.
• November 30, 2023: FDA announced it will hold a public workshop entitled, Advancing the Development of Pediatric Therapeutics on Drug Dosing in Pediatric Patients with Renal Impairment. The workshop will discuss the current landscape of drug dosing in pediatric patients with renal impairment, discuss the gaps in knowledge, and consider innovative approaches to improve the current paradigm for dosing in pediatric patients with renal impairment.
• December 4 and 5, 2023: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health and Human Development. The meeting will be videocast and is open to the public.
• December 5 and 6, 2023: HRSA announced a meeting of the Advisory Committee on Infant and Maternal Mortality (ACIMM). This is a hybrid meeting open to the public.
• December 6, 2023: the Substance Abuse and Mental Health Services Administration (SAMHSA) announced a meeting of the Interdepartmental Substance Use Disorders Coordinating Committee (ISUDCC). The meeting will include reports from the ISUDCC Working Groups, and discussion of the ISUDCC’s recommendations to HHS on how the federal government can further integrate and coordinate harm reduction approaches and strategies across the continuum of prevention, treatment, and recovery policies, programs, and practices. This is a virtual meeting open to the public.
• December 7, 2023: NIH announced the National Heart, Lung, and Blood Institute will hold a meeting of the Sleep Disorders Advisory Board. This is a virtual public meeting that requires registration to attend.
• December 7, 2023: NIH announced the National Heart, Lung, and Blood Institute will hold a meeting to update their Advisory Board and public stakeholders on research agendas across NIH for fiscal year (FY) 2024. This is a virtual public meeting that requires registration to attend.
• December 12 and 13, 2023: CDC announced a meeting of the Advisory Council for the Elimination of Tuberculosis (ACET). This is a virtual meeting open to the public.
• December 13 and December 14, 2023: HHS announced it will hold a virtual public town hall meeting to discuss FY 2025 applications for add-on payments for new medical services and technologies under the hospital inpatient prospective payment system (IPPS).
• January 29, 2024: NIH announced the National Heart, Lung, and Blood Institute Sickle Cell Disease Advisory Committee will hold a virtual meeting open to the public.

II. Reports, Studies & Analyses

• October 10, 2023, the American Hospital Association (AHA) released a report entitled, Tax-exempt Hospitals Provided Nearly $130 Billion in Total Benefits to their Communities. The report, conducted in conjunction with Ernst & Young LLP, shows that tax-exempt hospitals provided more than $130 billion in charity care and related benefits to their community in 2020. The report found that nearly seven percent‒approximately $57 billion dollars‒of nonprofit hospitals’ total expenses was for financial assistance to patients in need, including absorbing underpayments from Medicaid. In addition to financial assistance, the report found hospital and health systems’ provided community benefit services and programs to address social determinants of health (SDOH) including facilitating access to housing, healthy food, education, and transportation to address community health and well-being.
• On October 11, 2023, the Office of the Inspector General (OIG) released a report entitled, Medicare Could Save Millions if It Implements an Expanded Hospital Transfer Payment Policy for Discharges to Post-acute Care (PAC). OIG conducted data analysis following a 2022 report from the Trustees of the Part A Hospital Insurance Trust Fund that indicated significant cost savings could be realized in the Medicare program if CMS expanded the hospital transfer policy for discharges to PAC to include all Medicare Severity Diagnosis-Related Groups (MS-DRGs). The report found that expanding hospital transfer policies to include MS-DRGs would result in significant cost savings to Medicare and transfer payments would exceed hospital costs to provide care for most of the claims submitted by hospital to Medicare. According to the report, adding MS-DRGs or expanding hospital transfer policies to include MS-DRGs could have resulted in a Medicare program savings of $694 million dollars from 2017 to 2019.
• On October 13, 2023, CMS released a report entitled, Evaluation of Phase II of the Medicare Advantage Value-Based Insurance Design Model Test: First Three Years of Implementation (2020–2022). CMS conducted an evaluation of Phase II of the Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model over its first three years of implementation. The report found that from 2021-2022, the number of participating plans increased from 370 to 859, and found that compared to nonparticipants, participating plans were more likely to be dual-eligibility special needs plans (D-SNPs) and had a larger share of non-White enrollees. Further, relative to nonparticipating insurers, participating insurers in VBID models were more likely to be in poorer areas and areas with large participation in MA plans in 2022. According to the report, a greater share of VBID plans have evolved to include interventions targeting beneficiaries based on socio-economic status (SES), including VBID-enabled supplemental benefits and Medicare Part D cost sharing reductions. Additionally, the report found VBID is associated with increases in beneficiary drug adherence and Star Ratings, while also being associated with higher risk scores, more inpatient stays, and increased premiums.

III. Other Health Policy News

• On October 10, 2023, Senator Bernie Sanders (I-VT), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, announced a report on whether major nonprofit hospital systems are providing sufficient charity care to their communities. The report focused on executive compensation packages, charity care, and the value of the tax exemption for 16 hospital systems. According to the report, the nonprofit hospital systems are providing less charity care than in recent years despite rising need for this type of care. Further, the report states that the hospital systems are using the tax breaks to increase hospital profits and chief executive officer (CEO) salaries instead of providing more charity care. Of the 16 hospital systems examined in the report, Chairman Sanders’ staff found that 12 of the 16 hospital systems spent less than two percent of their total revenue on charity care, and half of the 16 hospital systems spent less than one percent of their total revenue on charity care. The report concluded by calling on Congress and the Internal Revenue Service (IRS) to set stricter requirements for nonprofit hospital systems with tax-exempt status to ensure accountability for providing adequate charity care. Chairman Sanders stated that the HELP Committee plans to hold a hearing on the report. The report is available here.
• On October 11, 2023, the Co-Chairs of the GOP Doctors Caucus, Representatives Greg Murphy (R-NC-3), Michael Burgess (R-TX-26), and Brad Wenstrup (R-OH-2) released a discussion draft of legislation intended to update the Medicare Physician Fee Schedule (PFS). The Doctors Caucus stated the goal of the proposed changes is to accurately account for the costs of services rendered by physicians, reconcile price adjustments, require timely updates, and provide an efficient payment system for providers. Proposals in the discussion draft include (1) changing the threshold for applying budget neutrality from $20 million to $53 million; (2) implementing budget neutrality corrections for overestimates and underestimates in utilization; (3) requiring timely updates to prices and rates for direct cost inputs for relative value units (RVUs); and (4) establishing limitations on year-to-year conversion factor variances to no greater than 2.5 percent per year in order to provide stability for the PFS by removing large changes to conversion factor calculations. The discussion draft text is available here.
• On October 11, 2023, FDA announced the formation of the Digital Health Advisory Committee to aid the agency in regulating the development and use of digital health technologies (DHTs), including artificial intelligence and machine learning. The advisory committee will provide advice on scientific and technical issues including AI, digital therapeutics, wearables, and remote patient monitoring. The committee will consist of nine voting members and the chair, who possess technical and scientific expertise from a diverse array of backgrounds to improve FDA’s understanding of the benefits, risks, and clinical outcomes associated with DHTs. The committee is expected to be fully operational in 2024. A press release with more information is available here.
• On October 11, 2023, CMS released a one-year update on efforts by the Center for Medicare and Medicaid Innovation (CMMI) to comply with President Biden’s Executive Order entitled, Lowering Prescription Drug Costs for Americans, which was issued in October 2022. The executive order was issued to complement provisions included in the Inflation Reduction Act of 2022 (IRA) intended to lower prescription drug costs. In October 2022, the HHS Secretary released a report entitled, A Report in Response to the Executive Order on Lowering Prescription Drug Costs for Americans outlining three new models aimed at improving prescription drug affordability for Medicare and Medicaid enrollees. These models are entitled: the $2 Drug List Model; the Cell and Gene Therapy Access Model; and the Accelerating Clinical Evidence Model. In the year since the release of the HHS report, CMMI has further developed all three models, specifically focusing on the following areas: (1) targeting analyses to validate feasibility and effectiveness of the models; (2) soliciting input from both internal and external parties; and, (3) identifying operation timelines for the selected models. Specifically, CMMI is gathering input from state Medicaid agencies, FDA, patient groups, providers, and manufacturers. In addition, the Cell and Gene Therapy Access Model is aiming for launch dates throughout 2025. Timing of the launch of the other models has not yet been released. The CMS update on the CMMI models is available here.
• On October 12, 2023, Representative Abigail Spanberger (D-VA) released a letter to the Drug Enforcement Agency (DEA) and FDA urging the agencies to provide answers regarding their work to end ongoing shortages of medications used to treat attention deficit hyperactivity disorder (ADHD), including Adderall.  One year ago, FDA declared a shortage of ingredients used to manufacture Adderall and the drug has been in a shortage since. In their letter, Representative Spanberger along with 14 of her colleagues urged FDA and DEA to share more information on steps they are taking to mitigate the shortage of ADHD medications and called on the agencies to work with manufacturers to address future shortages. The letter from Representative Spanberger is available here.
• On October 13, 2023, HHS announced the selection of initial vaccine candidates and funding for Project NextGen‒an initiative to advance next generation vaccine and therapeutics platforms to combat the COVID-19 virus. Administered through ASPR, the $500 million in grants will fund planning for Phase 2b clinical trials and technologies to advance vaccine development. The funds will support preparation for clinical trials, bolster production capacity, and support investments in technology to shorten development times and increase testing efficiency. A press release with more information is available here.

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