Healthcare Roundup: March 7,2023
In the Lede
As part of the the FY 2024 Budget Request scheduled for release later this week, the President previewed his proposal to extend the solvency Medicare’s Hospital Insurance (HI) Trust Fund by at least 25 years. While the most recent Medicare Trustees Report projected that the HI Trust Fund would be insolvent in 2028, the President’s Budget is aimed at extending solvency at least into the 2050s. Specifically, the Budget calls for:
• Increasing the Medicare tax rate on income above $400,000. The Budget proposes to increase the Medicare tax rate on earned and unearned income above $400,000 from 3.8 percent to 5 percent;
• Closing loopholes in existing Medicare taxes and dedicating the Medicare net investment income tax to the HI Trust Fund. High-income people are supposed to pay a 3.8 percent Medicare tax on all of their income, but the White House charged that some high-paid professionals and other wealthy business owners have shielded some of their income from tax by claiming it is neither earned income nor investment income. The Budget would ensure that Medicare taxes apply to incomes over $400,000 per year, without loopholes.
• Crediting savings from prescription drug reforms to the HI Trust Fund. Building on the Inflation Reduction Act (IRA), which gave Medicare the authority to negotiate prices for high-cost drugs, the Budget would allow Medicare to negotiate prices for more drugs and bring drugs into negotiation sooner after they launch. The proposal would also strengthen the IRA requirement that drug companies pay rebates to Medicare when they increase prices faster than inflation by extending this rule to commercial health insurance. The Budget would credit the savings from these additional prescription drug reforms, amounting to $200 billion over 10 years, to the HI Trust Fund.
The White House touted that the President's budget proposal would extend the Medicare, while also lowering the costs for Medicare beneficiaries by:
• Reducing out-of-pocket costs for drugs subject to negotiation;
• Capping Part D cost sharing at $2 for generic drugs for chronic conditions;
• Eliminating cost-sharing for three mental health or other behavioral health visits per year and requiring parity between physical health and mental health coverage in Medicare. It also requires coverage and payment for new types of Medicare providers, such as peer support workers and certified addiction counselors, and evidence-based digital applications and platforms that facilitate delivery of mental health services, while removing unnecessary limitations on beneficiary access to psychiatric hospitals.
The President's FY 2024 Budget Request will be released on Thursday, followed by specific details, summaries and appropriations language next Monday.
On the Hill
Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Bernie Sanders (I-VT) and Ranking Member Bill Cassidy, M.D. (R-LA) requested input from health care providers and stakeholders on the root causes of the current health care workforce shortage and potential ways to address it. Using the input they receive, the senators hope to identify bipartisan solutions that can be included in future legislation. On February 16, the HELP Committee held a hearing entitled “Examining Health Care Workforce Shortages: Where Do We Go From Here?” In his opening statement, Cassidy emphasized the importance of increasing educational opportunities for health care providers and other possible solutions that could help address the workforce shortage issue.
Ahead of a hearing held last week on community health centers (CHCs), Ranking Member Bill Cassidy, M.D. (R-LA) requested that the Government Accountability Office (GAO) provide updated information on the Community Health Center Fund (CHCF). Specifically, Cassidy asked for information on the various revenue streams of CHCs to understand how the program is currently operating. Cassidy also requested the GAO to provide an overview on federal funding for CHCs during the COVID-19 pandemic, including COVID-19 related legislation and the American Rescue Plan Act. GAO’s most recent review from 2019 indicates that revenue for CHCs has doubled between 2010 and 2017 with Medicaid, Medicare and private payments making up a larger percentage of that total.
Senate Finance Committee Republicans, led by Ranking Member Mike Crapo (R-ID), sent a letter to HHS Secretary Xavier Becerra and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks La-Sure calling on senior government health officials to eliminate the use of quality-adjusted life years (QALYs) or other similar metrics in federal health programs, including the new drug price-negotiation program under the Inflation Reduction Act (IRA). The Senators cited a 2019 report from the National Council on Disability that raised concerns that QALYs place a lower value on treatments which extend the lives of people with chronic rare diseases, as well as older Americans and individuals with disabilities. The Senators requested for the agencies to provide specific steps and plans they have taken, or intend to take, in order to prohibit discriminatory metrics, as well as information on avenues for direct patient and caregiver engagement in the IRA’s price-negotiation process.
House Energy and Commerce Health Subcommittee will markup on Wednesday, March 8, five healthcare-related legislation, including the Protecting Health Care for All Patients Act of 2023, legislation sponsored by Chair Cathy McMorris Rodgers (R-WA) that would prohibit all federal health care programs and federally-funded state health care programs (e.g., Medicaid) from using prices that are based on quality-adjusted life years (QALYs) to determine relevant thresholds for coverage, reimbursements, or incentive programs. The committee will also mark up legislation aimed at addressing mental health crisis and keeping dangerous substances out of communities, including:
• the Block, Report, And Suspend Suspicious Shipments Act (H.R. 501), which would require drug manufacturers, distributors, and other DEA registrants to practice due diligence when discovering suspicious orders of controlled substances;
• the 9-8-8 Lifeline Cybersecurity Responsibility Act (H.R. 498), which would require internal coordination within Department of Health and Human Services (HHS) to protect the 9-8-8 lifeline from cybersecurity incidents;
• the HALT Fentanyl Act (H.R. 467), which would place fentanyl-related substances (FRS) permanently into Schedule I of the Controlled Substances Act;
• the Securing the Border for Public Health Act of 2023 (H.R. 801), which would amend the Public Health Service Act to expand Title 42 (42 U.S.C 265) authority and allow the HHS Secretary, after consultation with the Attorney General, to suspend persons and imports related to certain controlled substances from certain designated foreign countries into the United States.
Led by Reps. Kathy Manning (D-NC), Brian Fitzpatrick (R-PA) and Doris Matsui (D-CA), a group of 28 lawmakers sent a letter urging the Department of Labor to issue guidance to support insurers and facilitate health plans that maintain access to telehealth appointments for mental health and substance use disorder (MH/SUD), in compliance with federal parity law. Noting that the Labor Department's Employee Benefits Security Administration (EBSA) has primary enforcement jurisdiction for approximately 2 million health plans covering 136 million Americans, the lawmakers said that "ensuring telehealth as a service modality for the delivery of MH/SUD treatment is critical." The letter raised concerns that certain telehealth services for behavioral health conditions are being curtailed, including situations in which plans are covering in-person and virtual care for medical nutrition therapy (MNT) services for individuals with diabetes, but only covering in-person care for MNT services for individuals with eating disorders. The letter called for the EBSA to issue guidance to support insurers and facilitate health plans that maintain access to telehealth and comply with federal parity law.
Sen. Maggie Hassan (D-NH) and Mike Braun (R-IN) reintroduced the Prescription Drug Competition Act, legislation aimed at closing a loophole that pharmaceutical companies use to block competition from alternative generic drugs. The Food and Drug Administration (FDA) often requires that drug manufacturers have a Risk Evaluation and Mitigation Strategy (REMS) program for potentially dangerous medications – for instance, requiring training for doctors to prescribe the drug. Some pharmaceutical companies patent their REMS program as a way to delay or block alternate versions of the medication from entering the market. The legislation would enable FDA to immediately approve drugs – instead of the normal 30-month approval stay – if the only barrier to approval is a REMS patent. In addition, the bill would prevent pharmaceutical companies from abusing the patent and court system by ensuring that if a drug company sues to stop a generic over a REMS patent, the lawsuit may go on, but it cannot stop the sale of the generic drug.
Sen. Ben Cardin (D-MD) and Rep. Nanette Barragán (CA-44) reintroduced legislation, the Medicaid Dental Benefit Act, that would extend comprehensive dental health benefits to all adults who rely on Medicaid, replacing the current state-by-state system and providing mandatory dental coverage to adults on Medicaid. According to the lawmakers, while most states provide at least emergency dental services for adults, less than half of the states provide comprehensive dental care. The Medicaid Dental Benefit Act would require state Medicaid programs to provide mandatory adult dental and oral health services. At a minimum, this bill would require state Medicaid programs provide coverage to prevent and treat disease, promote oral health, restore oral structures to health and function, reduce pain, and treat emergency conditions. This coverage would include:
• routine diagnostic and preventive care including but not limited to dental cleanings, exams, prophylaxis, fluoride treatments, X-rays, and other necessary services;
• basic dental services such as fillings and extractions and major dental services such as root canals, crowns, restorations, and both complete and partial dentures including adjustments, repairs, and relines;
• emergency dental care;
• Temporomandibular (TMD) and orofacial pain disorder treatment;
• other necessary services related to dental and oral health (as defined by the U.S. Secretary of Health and Human Services.)
Sens. John Thune (R-S.D.) and Tom Carper (D-Del.) reintroduced the Chronic Disease Management Act, legislation that would ensure high-deductible health plans (HDHPs) that are used with health savings accounts (HSAs) can cover care related to chronic disease management prior to a beneficiary reaching their plan deductible. The bill would also help address the impacts of chronic diseases by allowing patients that are enrolled in HDHPs greater flexibility in accessing the care they need. The Senators noted that in July 2019, the Internal Revenue Service (IRS) issued a notice expanding its interpretation of what constitutes preventive care to include certain items and services that are prescribed to someone with certain chronic conditions. Those items or services can be considered preventive when they are prescribed to an individual with certain chronic conditions and if they are low-cost and prevent the worsening of a chronic condition or the development of a secondary condition.
Meanwhile, Sens. Tim Scott (R-SC), Bill Cassidy, M.D. (R-LA), Jeanne Shaheen (D-NH), and Mark Kelly (D-AZ) introduced the Primary Care Enhancement Act, that would allow health savings accounts (HSAs) to be used to pay for direct primary care (DPC), enabling patients to rely less on specialists and hospital referrals. The bill would clarify the tax code so that a DPC agreement does not make a patient ineligible to contribute to a HSA and that pre-tax HSA funds may be used to pay DPC fees.
In the News
Wall Street Journal: Biden’s Plan to Avert Medicare Funding Crisis Includes Tax Hikes on High Earners
New York Times: Could the Next Blockbuster Drug Be Lab-Rat Free?;Biden Budget Will Propose Tax Increase to Bolster Medicare; Using A.I. to Detect Breast Cancer That Doctors Miss
Kaiser Health News:Biden Administration Urged to Take More Aggressive Steps to Relieve Medical Debt