McDermottPlus Check-Up: April 1, 2022 - McDermott+Consulting

McDermottPlus Check-Up: April 1, 2022

This Week’s Dose

President Biden unveiled his budget proposal for FY 2023, setting off a series of hearings on the Administration’s health priorities across key committees; negotiations continue for COVID funds that the Administration says are vitally needed; and the House passed legislation capping insulin prices.


COVID-19 Relief Debate Continues. The pressure to pass additional COVID-relief funding is mounting as the Centers for Disease Control and Prevention (CDC) announced on March 29 that people over 50 and immunocompromised adults are advised to get a fourth COVID vaccine dose. While the Biden Administration has indicated that they have enough vaccines on hand for this round of boosters, and they claim to not have adequate funds if officials recommend boosters for more age categories. Negotiations are ongoing in the Senate, but they are coalescing around a smaller $10 billion package, which is less than the $15.6 billion proposed but withdrawn in the House last month, and less than half of the $22.5 billion requested by the Administration. The details for how funds will be allocated are still unclear, but it appears that the uninsured fund will not receive additional dollars and there will be little to no funding for the global vaccine efforts.

Lawmakers Target Insulin Prices. On March 31, the House passed the Affordable Insulin Act Now Act (H.R. 6833) to cap what Medicare beneficiaries pay for insulin at $35 per month, with a dozen Republicans joining Democrats to pass the bill by a vote of 232-193.The Senate is working toward consideration of a broader bill in insulin pricing that, in addition to capping beneficiary costs, would restrict rebates available to pharmaceutical companies to control prices. As drafted, the House bill would not reduce what Medicare pays pharmaceutical companies for insulin–the federal government pays for the cost of capping beneficiary out-of-pocket expenses. According to the Congressional Budget Office, the legislation costs the federal government $20.4 billion which the House bill pays for through an additional one-year delay in the Trump Administration’s ban on Medicare Part D rebates.


The President’s FY 2023 Budget would Invest in Pandemic Preparedness and Mental Health. President Biden released his FY 2023 budget request on March 28. The budget proposes $5.8 trillion in mandatory and discretionary, and includes an increase of approximately 27% for the Department of Health and Human Services (HHS) budget seeing.

The budget highlights key policy priorities and funding goals for the Administration but is largely aspirational as it is Congress, not the Administration that controls the budgeting process. With Democrats in charge of the House and Senate, it is likely that some of the President’s priorities will be reflected in the legislative budget process.

The President requested $81.7 billion over five years to boost COVID-19 response and future pandemic preparedness, $20.8 billion in discretionary funding for behavioral health efforts, and funding to drive health equity initiatives across agencies. Additionally, the HHS budgetary request emphasizes mental health and health equity across the agency, key measures to note include a request for $697 million to invest in the new 988 Nationwide Mental Health Crisis and Suicide Prevention number, set to launch this summer; $3.5 billion to improve Medicare mental health coverage; and $10.4 billion to address the opioid epidemic. The President also continues to push two signature programs, requesting $5 billion for the Advanced Research Projects Agency for Health (ARPA-H) and $92 million for the Cancer Moonshot Initiative.

Healthcare providers’ push for additional financial support for the Provider Relief Fund was not addressed. To address some of the concerns with Medicare reimbursement under the physician fee schedule, the budget includes a proposal for CMS to increase the conversion factor with an inflationary update one year earlier than currently allowed (2025 v 2026) so that Advanced APM participants would receive 0.75% update and non-participants a 0.25% update. It does this instead of extending the APM 5% bonus, a proposal that many in the ACO community have been urging.

The President’s budget request comes quickly on the heels of the FY2022 Omnibus Appropriations bill, just signed into weeks before. Hearings on the President’s Budget will be ongoing in congressional committees over the next couple of weeks. And, the House and Senate Appropriations Committees have begun work on the FY2023 budget, which will continue through at least the next few months.

HHS announces Home and Community Based Services (HCBS) Funding: On March 31, HHS announced $110 million in additional funding for 20 states not yet participating in the Money Follows the Person (MFP) program. These funds support people who choose to transition out of institutions and back to their homes and communities. States not yet participating will be eligible for up to $5 million in planning grants to join the program. For states already participating in MFP, CMS also announced that the agency is increasing the reimbursement rate for MFP “supplemental services.” These services will now be 100% federally funded with no state share. Further, CMS is expanding the definition of supplemental services to include additional services that can support an individual’s transition from an institution to the community, including short-term housing and food assistance.

COVID.GOV Launches: The Biden Administration on March 30 launched a new website to help the public locate vaccines, tests, treatments and masks, and have access to the latest COVID-19 updates. It also includes a locator for the new Test-to-Treat program that allows people to get tested and receive appropriate treatment, if needed, at that same location. An Administration fact sheet further describes the new site.

IRF Proposed Rule Released. On March 31, CMS released the Fiscal Year (FY) 2023 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) proposed rule (a Fact Sheet is also available here). In all, CMS estimates that the rule will increase IRF payments in FY 2023 by 2.0% relative to FY 2022. With respect to the IRF Quality Reporting Program, CMS does not propose any new measures for implementation in FY 2023. However, and as anticipated, CMS is maintaining its effective date of October 1, 2022, for the new more detailed patient assessment data collected for each IRF discharge—known as the IRF Patient Assessment Instrument or IRF-PAI version 4.0. The rule also continued to request input on how to address health equity by seeking additional feedback from stakeholders.

Quick Hits

  • The House Committee on Oversight and Reform held a hearing on March 29, entitled “Examining Pathways to Universal Health Coverage,” where the Committee discussed the need for reforms to expand affordable health care in order to move closer to universal coverage.
  • The House Energy & Commerce Subcommittee on Health held a hearing on March 30, entitled “FDA User Fee Reauthorization: Ensuring Safe and Effective Medical Devices.”
  • The House Select Subcommittee on the Coronavirus Crisis held a hearing on March 30, entitled “Moving Beyond the Coronavirus Crisis: The Biden Administration’s Progress in Combating the Pandemic and Plan for the Next Phase.”
  • The Senate Finance Committee held a hearing on March 30, entitled “Behavioral Health Care When Americans Need it: Ensuring Parity and Care Integration,” where the Committee examined barriers to accessing behavioral health care and policy solution to make care more accessible. The Government Accountability Office (GAO) testified and released a new report: Mental Health Care: Access Challenges for Covered Consumers and Relevant Federal Efforts in conjunction with that testimony.
  • The Senate Finance Committee on March 29 released a jointly authored report by majority and minority staff, documenting the barriers that exist and prevent access to mental health care and designating five co-chairs to address workforce, care integration, parity, telehealth, and youth.
  • The House Committee on Appropriations held a hearing on March 31, where the Committee herd from the Department of Health and Human Services Secretary Xavier Becerra regarding the agency’s FY 2023 discretionary funding request.
  • The House Energy & Commerce Health Subcommittee announced that it will hold a hearing on legislation to address the mental health crisis, entitled “Communities in Need: Legislation to Support Mental Health and Well-being,” on Tuesday, April 5.

Next Week’s Diagnosis

The House and Senate will both be in session. COVID-relief funding is expected to be considered. The full Senate will also focus on the nomination of Judge Ketanji Brown Jackson to the Supreme Court, with the Senate Judiciary Committee planning to vote on Monday and Floor consideration later that week. A two-week Easter break follows.


For more information, contact Debra Curtis, Madeline Hodge, Rachel Kosh, Kristen O’Brien or Erica Stocker.

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