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 Biden Administration announced its intention to end the COVID-19 PHE on May 11 and CMS issued both the RADV final rule and the CY 2024 Medicare Advantage and Part D Advance Notice. Read more about these actions and other news below.
I. Regulations, Notices & Guidance
- On January 30, 2023, the Food and Drug Administration (FDA) issued a final order entitled, Medical Devices; Cardiovascular Devices; Classification of the Software for Optical Camera-Based Measurement of Pulse Rate, Heart Rate, Breathing Rate, and/or Respiratory Rate. FDA is classifying the software for optical camera-based measurement of pulse rate, heart rate, breathing rate, and/or respiratory rate into class II (special controls). The special controls that apply to the device type are identified in this order and will be part of the codified language for the software for optical camera-based measurement of pulse rate, heart rate, breathing rate, and/or respiratory rate’s classification. FDA is taking this action because it has determined that classifying the device into class II (special controls) will provide a reasonable assurance of safety and effectiveness of the device. FDA believes this action will also enhance patients’ access to beneficial innovative devices.
- On January 30, 2023, FDA issued final guidance entitled, Surveying, Leveling, and Alignment Laser Products. This guidance is intended for manufacturers of laser products and outlines FDA’s approach regarding the applicability of FDA’s performance standard regulations to surveying, leveling, and alignment (SLA) laser products. The guidance represents the current thinking of FDA on SLA laser products.
- On January 30, 2023, the Department of Health and Human Services (HHS) issued a proposed rule entitled, Coverage of Certain Preventive Services Under the Affordable Care Act. These proposed rules would amend regulations regarding coverage of certain preventive services under the Patient Protection and Affordable Care Act (ACA), which requires non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage to cover certain contraceptive services without cost sharing. Current regulations include exemptions and optional accommodations for entities and individuals with religious or moral objections to coverage of contraceptive services. These rules propose to rescind the moral exemption rule. These proposed rules also would establish a new individual contraceptive arrangement that individuals enrolled in plans or coverage sponsored, arranged, or provided by objecting entities may use to obtain contraceptive services at no cost directly from a provider or facility that furnishes contraceptive services. Contraceptive services would be available through the proposed individual contraceptive arrangement without any involvement on the part of an objecting entity. Under these proposed rules, a provider or facility that furnishes contraceptive services in accordance with the individual contraceptive arrangement for eligible individuals would be able to be reimbursed for its costs by entering into an arrangement with an issuer on a Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs), which in turn may seek a user fee adjustment from the federal government.
- On January 30, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a final rule entitled, Medicare and Medicaid Programs; Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program of All-inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020 and 2021. This final rule announces certain policies to improve program integrity and payment accuracy in the Medicare Advantage (MA) program. The purpose of this final rule is to outline CMS’ audit methodology and related policies for the contract-level MA Risk Adjustment Data Validation (RADV) program. Specifically, this final rule codifies in regulation that, as part of the RADV audit methodology, CMS will extrapolate RADV audit findings beginning with payment year (PY) 2018 and will not extrapolate RADV audit findings for PYs 2011 through 2017. CMS is also finalizing a policy whereby CMS will not apply an adjustment factor (known as a Fee-For-Service (FFS) Adjuster) in RADV audits. CMS is also codifying in regulation the requirement that MA organizations (MAOs) remit improper payments identified during RADV audits in a manner specified by CMS.
- On January 31, 2023, FDA issued draft guidance entitled, M13A Bioequivalence for Immediate-Release Solid Oral Dosage Forms; International Council for Harmonisation; Draft Guidance for Industry; Availability. The draft guidance was prepared under the auspices of the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). The draft guidance describes the scientific and technical aspects of study design and data analysis to support bioequivalence (BE) assessment for orally administered immediate-release solid oral dosage forms, such as tablets, capsules, and granules/powders for oral suspension. The draft guidance is intended to provide globally harmonized scientific recommendations for conducting BE studies during both development and post-approval phases for these products.
- On January 31, 2023, FDA issued draft guidance entitled, Considerations for the Design and Conduct of Externally Controlled Trials for Drug and Biological Products; Draft Guidance for Industry; Availability. FDA is issuing this draft guidance as part of a series of guidance documents under its Real-World Evidence (RWE) Program and to satisfy, in part, a mandate under the Federal Food, Drug, and Cosmetic Act (FD&C Act) to issue guidance about the use of RWE in regulatory decision-making. This draft guidance includes recommendations to sponsors and investigators considering the use of externally controlled trials to provide evidence of the safety and effectiveness of a drug product. The draft guidance also describes considerations related to communicating with FDA and ensuring FDA access to data from an externally controlled trial.
- On January 31, 2023, FDA issued a final order entitled, Medical Devices; Hematology and Pathology Devices; Classification of the Software Algorithm Device to Assist Users in Digital Pathology. FDA is classifying the software algorithm device to assist users in digital pathology into class II (special controls). The special controls that apply to the device type are identified in this order and will be part of the codified language for the software algorithm device to assist users in digital pathology’s classification. FDA is taking this action because it has determined that classifying the device into class II (special controls) will provide a reasonable assurance of safety and effectiveness of the device. FDA believes this action will also enhance patients’ access to beneficial innovative devices.
- February 28-March 1, 2023: FDA announced a public meeting of the Vaccines and Related Biological Products Advisory Committee (VRBPAC). The general function of the committee is to provide advice and recommendations to FDA on regulatory issues. The committee will meet in open session to discuss and make recommendations on the safety and effectiveness of ABRYSVO (Respiratory Syncytial Virus Vaccine), manufactured by Pfizer Inc., with a requested indication, in Biologics License Application (BLA) 125769 (STN 125769/0), for active immunization for the prevention of acute respiratory disease and lower respiratory tract disease (LRTD) caused by respiratory syncytial virus in adults 60 years of age and older. The committee will also meet to discuss and make recommendations on the safety and effectiveness of AREXVY (Respiratory Syncytial Virus Vaccine, Recombinant, Adjuvanted), manufactured by GSK, with a requested indication, in BLA 125775 (STN 125775/0), for active immunization for the prevention of LRTD caused by respiratory syncytial virus RSV-A and RSV-B subtypes in adults 60 years of age and older.
- March 28-29, 2023: FDA announced a public workshop entitled, Understanding Priorities for the Development of Digital Health Technologies To Support Clinical Trials for Drug Development and Review. The workshop will be convened by the Duke-Robert J. Margolis, MD Center for Health Policy and supported by a cooperative agreement between FDA and Duke-Margolis. The purpose of the public workshop is to understand the priorities for the development of Digital Health Technologies (DHTs) to support clinical drug trials, including accessibility, diversity, and clinical outcome measures using DHTs.
- April 4-5, 2023: FDA announced a public meeting of the Science Advisory Board (SAB) to the National Center for Toxicological Research (NCTR). On April 4, 2023, the SAB Chair will welcome the participants, and the NCTR Director will provide a Center-wide update on scientific initiatives and accomplishments during the past year. On April 5, 2023, there will be updates from the NCTR Research Divisions and a public comment session. Following an open discussion of the information presented, the open session of the meeting will close so SAB members can discuss personnel issues at NCTR.
- May 11-12, 2023: FDA announced a public workshop entitled, FY 2023 Generic Drug Science and Research Initiatives Workshop. The purpose of the public workshop is to provide an overview of the status of science and research initiatives for generic drugs and an opportunity for public input on these initiatives. FDA is seeking this input from a variety of stakeholders--industry, academia, patient advocates, professional societies, and other interested parties--as it fulfills its commitment under the Generic Drug User Fee Amendments of 2022 (GDUFA III) to develop an annual list of science and research initiatives specific to generic drugs.
II. Hearings & Markups
- On February 1, 2023, the House Committee on Oversight and Accountability held a hearing entitled, Federal Pandemic Spending: A Prescription for Waste, Fraud and Abuse. Witnesses present included: David Smith, Assistant Director, Office of Investigations, United States Secret Service (USSS); Michael Horowitz, Chair, Pandemic Response Accountability Committee (PRAC) Inspector General, Department of Justice (DOJ); and Gene Dodaro, Comptroller General, Government Accountability Office (GAO).
- On February 1, 2023, the House Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, Lives Worth Living: Addressing the Fentanyl Crisis, Protecting Critical Lifelines, and Combatting Discrimination Against Those with Disabilities. Witnesses present included: Kemp Chester, Senior Advisor, Office of National Drug Control Policy (ONDCP); Dr. Neeraj Gandotra, Chief Medical Officer, Substance Abuse and Mental Health Services Administration (SAMHSA); Jon DeLena, Associate Administrator, Business Operations, Drug Enforcement Administration (DEA); Kandi Pickard, President and CEO, National Down Syndrome Society (NDSS); Frederick Isasi, Executive Director, Families USA; Molly Cain, Parent Advocate; Dr. Stephen Loyd, MD, Chief Medical Officer, Cedar Recovery; and Dr. Timothy Westlake, MD, Emergency Medicine Physician.
- On February 1, 2023, the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled, Challenges and Opportunities to Investigating the Origins of Pandemics and Other Biological Events. Witnesses present included: Dr. Karen Howard, Acting Chief Scientist, Director of Science and Technology Assessment Science, Technology Assessment, and Analytics (STAA), GAO; Dr. Tom Inglesby, Director, Center for Health Security, Johns Hopkins Bloomberg School of Public Health; Dr. Asha George, Executive Director, Bipartisan Commission on Biodefense; Dr. Gerald Parker, Associate Dean, College of Veterinary Medicine & Biomedical Services, Texas A&M University; and Dr. Michael Imperiale, Arthur F. Thurnau Professor, University of Michigan Medical School.
III. Reports, Studies & Analyses
- On January 31, 2023, the HHS Office of Inspector General (OIG) published a report entitled, Early Challenges Highlight Areas for Improvement in COVID-19 Vaccination Programs. This report examines the Centers for Disease Control and Prevention (CDC) COVID-19 vaccination program and the challenges faced by program funding recipients. OIG found that state and local immunization programs distributing COVID-19 vaccines faced numerous challenges including: (1) achieving logistical efficiency, (2) obtaining complete vaccine data from providers, (3) combating vaccine hesitancy with public health messaging, and (4) overseeing vaccine providers. OIG recommended that CDC update its plans for mass vaccination programs with strategies that address awardee-reported logistical challenges and that CDC strengthen reporting of vaccine allocation and administration data. OIG also recommended that CDC clarify roles and responsibilities within HHS for vaccine public health messaging during a pandemic and work with awardees to enhance current and future capabilities for provider training and oversight.
- On January 31, 2023, the Kaiser Family Foundation (KFF) published a report entitled, What Happens When COVID-19 Emergency Declarations End? Implications for Coverage, Costs, and Access. The report overviews the major health-related COVID-19 federal emergency declarations that have been issued, and summarizes the flexibilities triggered in some of the following areas: (1) Medicaid coverage and federal match rates; (2) telehealth; (3) Medicare payment and coverage flexibilities; and (4) coverage, costs, and payment for COVID-19 testing, treatments, and vaccines. Among its highlights, the report includes tables that describe specific flexibilities and waivers, as well as the expiration date of each flexibility and waiver.
- On January 31, 2023, HHS OIG published a report entitled, Challenges With Vaccination Data Hinder State and Local Immunization Program Efforts To Combat COVID-19. This report examines the challenges that state and local immunization programs faced in accessing complete and accurate individual-level vaccination data from all providers. OIG found that many state and local immunization programs reported having incomplete individual-level data for the more than 250 million COVID-19 vaccine doses administered by federal agencies and retail pharmacies that received vaccines directly from CDC. OIG stressed that these state and local programs rely on individual-level data in their immunization databases to manage vaccination campaigns. OIG recommended that CDC: (1) work with state and local immunization programs, and retail pharmacy partners, to mitigate reported data gaps and timeliness challenges; and (2) provide educational outreach to ensure that state and local immunization programs are aware of existing tools to address vaccination campaign needs.
- On January 31, 2023, GAO published a report entitled, Medicare Advantage: Plans Generally Offered Some Supplemental Benefits, but CMS Has Limited Data on Utilization. This report describes the supplemental benefits offered by MA plans in 2022 and examines the information that CMS has on enrollees’ use of supplemental benefits and their effects on enrollees’ health and function. GAO found that CMS guidance on encounter data does not specifically mention the submission of such data for supplemental benefits, although it says plans must submit encounter data for each benefit provided to an enrollee. GAO also heard from CMS and two MA organizations that there are challenges collecting and submitting encounter data for certain supplemental benefits. GAO recommended that CMS: (1) clarify guidance on the extent to which encounter data submissions must include data on the utilization of supplemental benefits; and (2) address circumstances where submitting encounter data for supplemental benefits is challenging for MA plans, such as when a given benefit lacks an applicable procedure code.
- On February 1, 2023, GAO published a report entitled, Emergency Relief Funds: Significant Improvements Are Needed to Address Fraud and Improper Payments. As of November 30, 2022, the government had obligated $4.4 trillion and expended $4.1 trillion, or 97 percent and 89 percent, respectively, of the $4.6 trillion provided through six COVID-19 relief laws. GAO’s report, which was delivered as testimony to the House Committee on Oversight and Accountability summarizes: (1) fraud, improper payments, and accountability deficiencies in COVID-19 relief programs; (2) shortcomings in agencies’ fraud risk management practices and internal controls; and (3) the status of recommended actions to improve these practices in the future. GAO found that from March 2020 through January 13, 2023, at least 1,044 individuals pleaded guilty to or were convicted at trial of federal charges of defrauding COVID-19 relief programs. Programs that experienced fraud include the Small Business Administration’s (SBA) Paycheck Protection Program (PPP); the COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) program; Department of Labor (DOL) Unemployment Insurance (UI) programs; and economic impact payments issued by the Department of the Treasury and the Internal Revenue Service (IRS). Further, GAO reported that the extent of fraud associated with PPP, COVID-19 EIDL, UI, and other COVID-19 relief programs has not yet been fully determined. GAO made a number of recommendations to Congress, including to: (1) enforce more stringent improper payment reporting for new federal programs; (2) establish a data analytics center of excellence to help identify fraud and abuse; and (3) implement internal control plans across federal agencies to prepare for future emergency funding.
- On February 2, 2023, GAO published a report entitled, Public Health Preparedness: HHS Should Plan for Medical Countermeasure Development and Manufacturing Risks. This report examines: (1) how HHS used Centers for Innovation in Advanced Development and Manufacturing (CIADM) program funds prior to, and during, the COVID-19 pandemic; (2) the challenges that affected the CIADM program’s effectiveness in developing and manufacturing countermeasures; and (3) how HHS plans to use its new program model to address the challenges of the CIADM program. GAO found that prior to the COVID-19 pandemic, HHS funded three CIADM sites to produce small batches of drug substances for other manufacturers, although those sites struggled when tasked with producing larger batches. As a result of the challenges, HHS decided to replace the CIADM program with a new program called the National Biopharmaceutical Manufacturing Partnership (BioMaP). GAO recommended that HHS incorporate into the development of its new program model an approach to systematically assess, and respond to, known challenges and risks associated with advanced development and manufacturing of medical countermeasures.
IV. Other Health Policy News
- On January 30, 2023, as the House began debate on H.R. 382, Pandemic is Over Act (introduced by Rep. Brett Guthrie (R-KY)) and H.J. Res. 7, A Joint Resolution Relating to a National Emergency Declared by the President on March 13, 2020 (introduced by Rep. Paul Gosar (R-AZ)), the Biden Administration announced its intention to end the COVID-19 public health emergency (PHE) on May 11, 2023. In its statement, the Biden Administration argued that ending the PHE abruptly, as H.R. 382 would do upon enactment, would throw the health care system into chaos and uncertainty. The Administration cited the sheer number of special rules and flexibilities that were granted to providers and health systems during the PHE, arguing that stakeholders need a longer timeline to prepare for the end of these rules and flexibilities. More information on this announcement can be found here.
- On February 1, 2023, CMS released the Calendar Year (CY) 2024 Advance Notice for the MA and Medicare Part D programs. The Advance Notice proposes updates to MA payment growth rates and changes to the payment methodologies for the MA and Part D programs. Specifically, CMS proposed a 2.09 percent effective growth rate, which reflects the current estimate of the growth in benchmarks used to determine payment for MA plans. The effective growth rate, along with additional factors such as the change in star ratings, MA coding pattern adjustment, risk model revision and normalization, and MA risk score trend, lead CMS to project a 1.03 percent average increase in revenue for MA and Part D plan providers. Last year, the expected average increase in revenue include in the 2023 Advance Notice was 7.98 percent. Additionally, CMS is proposing a revised MA risk adjustment model, which would use the International Classification of Diseases (ICD)-10 classification system, rather than the currently used ICD-9 classification system. CMS stated that the updated risk adjustment model would reflect more current costs associated with various diseases, conditions, and demographic characteristics, as well as include revisions aimed at reducing the sensitivity of the model to coding variation. The Advance Notice also describes Medicare Part D benefit-related updates enacted by the Inflation Reduction Act (IRA). For example, beginning in CY 2024, cost-sharing for Part D drugs will be eliminated for beneficiaries in the catastrophic phase of coverage. Also, for 2024, the Low-Income Subsidy program (LIS) under Part D will be enhanced so that beneficiaries who earn between 135 and 150 percent of the federal poverty level (FPL) and meet statutory requirements will receive full LIS subsidies that were previously only available to individuals earning less than 135 percent of the FPL. Comments on the Advance Notice must be submitted by Friday, March 3, 2023. More on this announcement can be found here.
- On February 2, 2023, to mark the first anniversary of the Biden Administration’s launch of the Cancer Moonshot program, the Health Resources and Services Administration (HRSA) awarded nearly $11 million to 22 HRSA-funded health centers to enhance access to cancer screenings and early detection services for underserved populations. The $11 million in 2023 doubles HRSA’s investment in the Accelerating Cancer Screening Program from $5 million in 2022. The program leverages outreach specialists and patient navigators to conduct patient outreach in underserved communities served by health centers to promote early detection of cancer, connect patients to screening services, and provide hands-on assistance with accessing high quality cancer care and treatment. More information on this funding announcement can be found here.
- On February 2, 2023, the Administration for Children and Families (ACF) announced the launch of the National Early Care and Education Workforce Center (the ECE Workforce Center). In its announcement, HHS noted that as of early 2020, the childcare sector has lost almost 80,000 jobs, or about 7.5 percent of its workforce, due to the COVID-19 pandemic. ACF invested $30 million in the ECE Workforce Center to support research and technical assistance for states, communities, territories, and Tribal Nations to improve the recruitment and retention of a diverse and qualified workforce across early care and education programs. The ECE Workforce Center's research and technical assistance activities are designed to: (1) build a career pipeline for the early care and education workforce, including support for pursuing credentials and degrees while maintaining the strong diversity of the early childhood sector; and (2) identify and implement sustainable approaches to increase compensation and benefits. More information on this announcement can be found here.
- On February 2, 2023, HHS released a health care snapshot highlighting the Agency’s key accomplishments from 2022. HHS identified key areas of focus in the past year including tackling the COVID-19 pandemic, reducing health care costs, expanding access to care, strengthening behavioral health care, and reducing health disparities. Additionally, HHS highlighted its work to improve nutrition and encourage healthy choices, as well as its investment in the health care workforce. HHS also noted its efforts to support health innovation through the establishment of the Advanced Research Projects Agency for Health (ARPA-H). For 2023, HHS shared that a key priority is to expand access to health care by implementing provisions from the IRA. More information on this release can be found here.