Washington Watch for June 2021

White House Releases Complete FY22 Budget
President Joe Biden released his first full budget request on Friday. The fiscal year (FY) 2022 budget would increase federal spending to $6 trillion in the coming year, with annual deficits of approximately $1.3 trillion over the next decade. The proposal predicts that the economy will grow at an annual rate of just under 3% for the next decade. The budget request includes a 16.5% increase in nondefense spending and an increase of 1.6% for defense spending. The overall budget can be found here and the U.S. Department of Health and Human Services’ (HHS) Budget in Brief can be found here.

Schumer Previews June Work Agenda
Senate Majority Leader Chuck Schumer (D-N.Y.) outlined his agenda for the coming month in a Dear Colleague letter last week. When the Senate reconvenes on June 7, Democrats will seek to pass the Paycheck Fairness Act (H.R. 7) and to begin confirmation of President Joe Biden’s judicial nominees. The chamber may also consider gun safety and LGBTQ equality legislation and vote on the For the People Act (S. 1). Schumer notes that committees will also continue their work on the administration’s Build Back Better economic agenda during the June work period.

Senate Confirms CMS, OSTP Leaders
The Senate voted last week on the confirmation of Chiquita Brooks-LaSure to serve as Administrator of the Centers for Medicare and Medicaid Services (CMS). The Senate also confirmed Eric Lander to lead the White House Office of Science and Technology Policy (OSTP) by voice vote last week. President Joe Biden elevated the OSTP to Cabinet level, making Lander the final member of the President’s Cabinet to be confirmed.

Burr Releases Policy Brief on CDC Pandemic Response
Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Richard Burr (R-N.C.) released a new policy brief last week on the Centers for Disease Control and Prevention’s (CDC) pandemic response and making recommendations for agency reform. Modernizing CDC: Ensuring a Strategic Approach and Improving Accountability is the first in a series of briefs on the federal government’s pandemic preparedness, response, and recovery efforts.

Sanders to Introduce Health Care Workforce Legislation
Senator Bernie Sanders (I-Vt.) has introduced legislation to address the nation’s health care workforce shortages. The Addressing the Shortage of Doctors Act will add 14,000 Medicare funded graduate medical education (GME) slots over the course of 7 years, reserving half of the new slots for training primary care physicians. It would also increase funding for the National Health Service Corps (NHSC) by $1 billion per year for 10 years and permanently authorize the Teaching Health Center GME program.

No Surprises Act Authors Comment on Congressional Intent
Senators Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) and Representatives Larry Bucshon (R-Ind.) and Raul Ruiz (D-Calif.) have written to the Biden administration to clarify the congressional intent as the U.S. Department of Health and Human Services (HHS) works to implement the No Surprises Act. The bill, which was enacted last year, aims to end the practice of surprise medical billing.

The law tasks HHS with establishing an independent dispute resolution (IDR) process by Jan. 1, 2022 to settle payment disputes between health care providers and insurance companies. The legislation says that arbitrators shall consider the qualifying payment amount (QPA) in addition to several other factors, including providers’ level of training, quality and patient outcomes, market share for providers and payers, patient acuity, teaching status, and prior contracted rates.

While some stakeholders are arguing that Congress intended the QPA to be the primary consideration, the lawmakers assert that Congress intended equal weight to be given to all six factors outlined in the bill. “The law’s arbitration framework is designed to ensure that neither payors nor providers have a financial incentive to remain out of network as a tool to establish leverage for contract negotiations,” the lawmakers say. “To achieve this balance, we wrote this law with the intent that arbiters give each arbitration factor equal weight and consideration.” They ask the administration to “refrain from issuing guidance or taking other action that would give preference to one factor over the other as it works to promulgate rules for the No Surprises Act.”

HHS Encouraged to Provide PRF Flexibility
A bipartisan group of nearly 80 members of the House of Representatives has written to the U.S. Department of Health and Human Services (HHS) calling for increased flexibility and additional time for health care providers to use the financial assistance they have received from the Provider Relief Fund (PRF). The PRF was authorized by Congress in response to the COVID 19 pandemic to support health care providers in covering expenses and lost revenue resulting from the coronavirus. Providers currently have until June 30 to spend any unused funds. “Providers are still delivering complex care for patients with COVID-19 and coping with higher procurement costs for personal protective equipment (PPE),” the members wrote. “Providing much-needed flexibility, such as allowing providers to use a partial lookback window to calculate lost revenues when non-emergent and non-essential procedures were shuttered and, in particular, extending the deadline to use the PRF funds to June 30, 2022 would give these providers the ability to put more of their PRF award toward fighting COVID-19.”

Lawmakers Express Support for Bolstering MA Program
A bipartisan group of 70 members of the House of Representatives has sent a letter to the U.S. Department of Health and Human Services (HHS) expressing their support for the Medicare Advantage (MA) program and encouraging Secretary Xavier Beccera to protect and strengthen it. “Collectively, we represent districts where the majority – over 50 percent, and in some cases over 60 percent – of seniors chose to enroll in MA,” the lawmakers write. “MA is delivering high-quality, affordable coverage, and is uniquely positioned to ensure seniors receive the care and support they need during the pandemic and beyond while improving health outcomes and advancing health equity for over 26 million beneficiaries.”

Pelosi Faces Democratic Opposition to H.R. 3 Drug Pricing Bill
A group of 10 moderate Democrats in the House of Representatives have sent a letter to Speaker Nancy Pelosi (D-Calif.) stating their opposition to the party’s signature drug pricing legislation. Amongst other provisions, H.R. 3 would permit the Medicare program to negotiate the price of certain drugs. The letter urges leadership to instead advance drug pricing reforms that would “preserve our invaluable innovation ecosystem” such as capping Medicare beneficiaries’ out-of- pocket drug costs. Eight of the 10 signatories voted for the Lower Drug Costs Now Act during the 116th Congress, when it had no chance of becoming law under President Donald Trump and the Republican-controlled Senate. Some Democrats had hoped to move H.R. 3 along with the President’s infrastructure package that is expected to be passed along party lines later this year.

Biden Delivers First Address to Congress, Unveils American Families Plan
In his first address to a joint session of Congress, President Joe Biden struck a positive tone in outlining a vision for the nation’s recovery from the COVID-19 pandemic. While health care issues were not a focus of the speech, the President encouraged Americans to get vaccinated and stated that the U.S. “will become an arsenal of vaccines for other countries” as the nation’s own vaccine supply grows to meet domestic demand. The President discussed drug pricing, expressing support for direct negotiation in the Medicare program and urging Congress to act to cut drug prices this year. He suggested that savings could be put toward strengthening the Affordable Care Act (ACA) without spending additional taxpayer money.

CMS Proposed Payment Rule Includes Added GME Slots
The Centers for Medicare and Medicaid Services (CMS) released its fiscal year (FY) 2022 hospital inpatient prospective payment system proposed rule last week. The regulation would provide acute-care hospitals with a 2.8% increase in Medicare reimbursements and long-term care hospitals with a 1.4% bump. The rule would also implement the distribution of 1,000 more residency slots to qualifying hospitals in rural and underserved areas over the next five years – a provision enacted as part of the Consolidated Appropriations Act, 2021. CMS estimates that these additional graduate medical education (GME) slots will cost approximately $300 million a year.

GAO Releases New Report on Drug Pricing
The Government Accountability Office (GAO) has released a new report finding that retail drug prices are two to four times higher in the U.S. on average than drug prices in Australia, Canada, and France. GAO’s analysis examines 20 selected brand-name prescription drugs. The agency notes that while rebates and confidential discounts offered on some drugs were taken into account for U.S. prices, the publicly available prices for the comparison countries do not reflect such discounts.