McDermottPlus Check-Up: August 5, 2022 - McDermott+Consulting

McDermottPlus Check-Up: August 5, 2022

This Week’s Dose

The House was in recess this week while in the Senate, negotiations continued largely behind the scenes on the Inflation Reduction Act—the reconciliation agreement reached last week between Senate Majority Leader Schumer (D-NY) and Senator Manchin (D-WV) that includes prescription drug pricing reform, an extension of Affordable Care Act advance premium tax credits (APTCs), and tax and climate provisions. After Senator Sinema negotiated some changes and signed off on the package on August 4, the Inflation Reduction Act is headed for the Senate floor this weekend. The Centers for Medicare & Medicaid Services (CMS) also finalized the 2023 payment update for inpatient hospitals, and the monkeypox outbreak was elevated to a national public health emergency (PHE).


Senate Work Continues on Expanded Reconciliation Deal, Heading Toward Weekend Votes. Following last week’s announcement from Majority Leader Schumer and Senator Manchin of an expanded budget reconciliation bill—the Inflation Reduction Act (summary here), which includes drug pricing, climate and tax provisions—work continued behind the scenes to clear the legislation with the Senate parliamentarian and ensure that Democrats have the 50 votes needed (unanimity among all Senate Democrats) to advance the bill under the budget reconciliation rules, which allow such legislation to advance by a simple majority rather than the 60-vote threshold typically needed in the Senate to overcome the threat of a filibuster.

As previously reported, the Inflation Reduction Act expands upon the most recent version of a “healthcare-only” reconciliation package that focused solely on drug pricing and a two-year extension of the APTCs. The new agreement would raise more than $739 billion, with revenues going toward climate and healthcare initiatives, as well as reducing the federal deficit. The key healthcare policy items included in the new agreement are 1) empowering Medicare to negotiate prescription drug prices, capping seniors’ out-of-pocket costs on prescription drugs and purportedly a provision to specifically reduce out-of-pocket costs for insulin, and 2) a three-year extension of the APTCs (one year longer than had been widely expected and reported in the previous version of the bill).

The parliamentarian’s review continues, and reports indicate that it could result in some changes to the prescription drug and energy provisions before the bill is finalized.

On August 4, Senator Schumer announced that the Senate will return to session Saturday, August 6, at noon to begin consideration of the legislation. The first vote that afternoon will be a procedural one to begin debate, with 20 hours of debate time split between the two parties. This process is referred to as “vote-a-rama” because unlimited amendments are permitted. Democrats are expected to yield back most of their time, but Republicans are expected to fully utilize their allotment by forcing Democrats to take tough votes.

Also on August 4, Senator Sinema announced her support of the bill after changes she negotiated to the tax provisions and insertion of a drought relief measure important to Arizona were incorporated. None of her changes involved the healthcare provisions. Final language is expected to become available on Saturday, August 6.

Senate consideration is likely to last through the weekend, potentially into early next week, as the last order of legislative business before the upper chamber breaks for August recess. Once Senate consideration is complete, the House—already in recess—will be called back into session to vote on the Inflation Reduction Act. House Speaker Pelosi (D-CA) has indicated she will provide 24 hours’ notice to lawmakers before scheduling the vote.

House Ways and Means Committee Expands Climate RFI. On July 28, House Ways and Means Committee Chairman Richard Neal (D-MA) announced the expansion of the committee’s request for information (RFI) on climate issues. The RFI was issued to help the committee understand the healthcare sector’s role in the climate crisis. Letters seeking input were sent in March to healthcare organizations that have positioned themselves as “early adopters” of efforts to address climate-related issues, and in April additional letters were sent to two national dialysis companies and 10 associations with facility-based health providers.

The July 28 expansion of the RFI solicited input from three group purchasing organizations (GPOs): HealthTrust; Premier, Inc.; and Vizient, Inc. In its announcement of the RFI’s expansion, the committee noted that GPOs, as intermediaries between providers and medical suppliers, are uniquely positioned to leverage purchasing power and move the healthcare industry toward more sustainable and socially responsible practices. The committee also noted that the healthcare supply chain accounts for up to three-quarters of the sector’s carbon emissions, and that by further engaging with GPOs—who have already begun this work—and encouraging collaboration, critical change is possible.


CMS Finalizes Hospital Inpatient Prospective Payment System Rule. On August 1, CMS issued the fiscal year (FY) 2023 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) Prospective Payment System final rule.

In a welcome policy change, the payment update for IPPS hospitals that meet quality reporting and electronic health record meaningful use requirements is 4.3% (compared to 3.2% in the proposed rule). While this is a positive update, hospital stakeholders continue to highlight the need for additional payment relief as ongoing COVID-19 impacts, labor costs and inflation continue to impact operations.

The rule also finalizes changes to graduate medical education policies, including increasing flexibility to rural hospitals that participate in a rural track program. The final rule also establishes a “birthing-friendly” hospital designation to be publicly reported on a CMS website. CMS will initially give this designation to hospitals that report “yes” to the Maternal Morbidity Structural Measure finalized in the FY 2022 IPPS rule for adoption in the Hospital Inpatient Quality Reporting Program.

A more detailed summary of the final rule was prepared by McDermottPlus and can be found here. CMS fact sheets can be found here and here. The final rule is scheduled to be published in the Federal Register on August 10, and the provisions are generally effective October 1.

Monkeypox Declared a National Public Health Emergency. On August 4, the Biden Administration declared monkeypox a PHE, a step that will allow the federal government to work with more agility to combat the spreading outbreak, including via expedited vaccine distribution and expanded testing.

The PHE declaration follows the recent appointment of federal officials to head up the monkeypox response team, including Robert Fenton of the Federal Emergency Management Agency as White House national monkeypox response coordinator, and Dr. Demetre Daskalakis of the Centers for Disease Control and Prevention as White House national monkeypox response deputy coordinator.

The Administration also began holding what will be a recurring weekly briefing with congressional staff on August 4. A press release from the US Department of Health and Human Services (HHS) on the PHE declaration can be found here.

Issue Focus – Reproductive Healthcare

In the first state ballot initiative vote since the Supreme Court of the United States overturned Roe v. Wade, Kansans voted on August 2 to reject an amendment that would have removed abortion protections from the state’s constitution. The initiative was rejected by an almost 20-point margin, and it drove high voter turnout as well. The vote brought optimism to abortion rights supporters as they look toward other state ballot initiatives. It remains to be seen what the impact will be in the midterm elections.

On Capitol Hill, lawmakers continue to react to the recent Supreme Court ruling. On August 1, Senators Kaine (D-VA), Murkowski (R-AK), Sinema (D-AZ) and Collins (R-ME) introduced the bipartisan Reproductive Freedom For All Act—legislation that would codify Roe v. Wade to protect reproductive rights and contraception access. The same day, Senate Health, Education, Labor and Pensions Committee Chair Murray (D-WA) issued a report on the impacts of a post-Roe America and the state of abortion policy following the Supreme Court’s ruling.

The Biden Administration continues to take steps related to reproductive healthcare as well. On August 3, President Biden signed an executive order focused on securing access to reproductive services and the ability for people to travel across state lines for such purposes. The same day, President Biden and Vice President Harris attended the first meeting of their Administration’s Interagency Task Force on Reproductive Healthcare Access (remarks can be found here).

As we head into the midterm election season, fallout from the Dobbs decision and legislative and regulatory actions in response to the ruling will continue to make headlines and garner attention in the healthcare policy and electoral landscape.

Quick Hits

  • The Biden Administration announced a federal monkeypox response team on August 2, as New York, Illinois and California declared states of emergency in response to the uptick in cases. On August 4, the Administration declared monkeypox a public health emergency, a step intended to expedite vaccine distribution and expand testing, as the disease continues to spread.
  • CMS issued new guidance to state Medicaid directors on the implementation of the Advancing Care for Exceptional Kids Act, which authorizes states to cover an optional health home state plan benefit for Medicaid-eligible children with medically complex conditions.
  • The HHS assistant secretary for planning and evaluation issued a report on the national uninsured rate, which reached an all-time low of 8% in early 2022.

Next Week’s Diagnosis

Senate consideration of the Inflation Reduction Act will continue through this weekend and possibly into next week. On the regulatory front, stakeholders are preparing comments on several proposed payment rules that have deadlines in early September and continue to await a final rule on surprise billing. The House remains subject to the call of the speaker to return to Washington to vote on the Inflation Reduction Act if the Senate passes it.


For more information, contact Debra CurtisKristen O’Brien or Erica Stocker.

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