McDermottPlus Check-Up: February 2, 2024 - McDermott+Consulting

McDermottPlus Check-Up: February 2, 2024


  • House Hearing Examines Healthcare Costs: The House Energy and Commerce Health Subcommittee held a hearing to discuss US healthcare costs.
  • CMS Releases MA and Part D Advance Notice: The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2025 Medicare Advantage (MA) and Part D Advance Notice.
  • CMS Makes First Offer for Drug Price Negotiation Program: CMS sent initial offers to participating drug companies for the first 10 prescription drugs selected for negotiation.
  • SAMHSA Releases Opioid Use Disorder Treatment Final Rule: The Substance Abuse and Mental Health Services Administration (SAMHSA) issued a rule to permanently extend telehealth flexibilities for treatment for opioid use disorder.


House Energy and Commerce Committee Holds Hearing on Healthcare Costs. The hearing included discussion on what factors are causing cost increases for individuals, for the healthcare sector, and for federal health programs such as Medicare and Medicaid. Members urged the Senate to pass H.R. 5378, the Lower Costs, More Transparency Act. Members expressed frustration with physician payment cuts to the Medicare physician fee schedule. Witnesses and members highlighted the importance of transparency for employers and consumers when purchasing healthcare. Members expressed concern about the high costs of MA plans compared to traditional Medicare fee-for-service. Additionally, members and witnesses expressed support for site-neutral payment policies.

Senators Send Bipartisan MA Letter to CMS. The letter was led by Senators Cortez Masto (D-NV), Scott (R-SC), Peters (D-MI) and Capito (R-WV) along with a bipartisan group of 57 other senators. The letter noted appreciation for CMS’s commitment to ensuring that the MA program meets the healthcare needs of all beneficiaries while also improving the quality and long-term stability of the Medicare program. The senators requested that CMS ensure payment and policy stability for the MA program. However, the letter also called out the need for CMS to continue working to ensure beneficiaries receive clear and timely information about the cost and quality of their coverage options, ensure accurate provider directories, combat predatory and deceptive marketing practices, and increase transparency and help consumers better assess value. Read the press release here.


CMS Releases MA and Part D Advance Notice. In the Advance Notice, CMS estimates that the proposed policy changes will result in a 3.7% increase in MA payments in 2025. This is an increase of more than $16 billion in expected MA payments for next year. CMS proposes to proceed with the phase-in of the Part C Risk Adjustment Model by blending 67% of the risk score calculated using the updated 2024 MA risk adjustment model with 33% of the risk score calculated using the 2020 MA risk adjustment model. This blended MA risk score trend for CY 2025 is 3.86%.

CMS also proposes policies to help provide “stability” for the MA program in Puerto Rico, including basing the MA county rates in Puerto Rico on the costs of beneficiaries who are in traditional Medicare (i.e., have both Parts A and B). CMS proposes updates to the Part D risk adjustment model as required by the Inflation Reduction Act (IRA). CMS also proposes updates to the normalization methodology to reflect differences between MA prescription drug plan and stand-alone prescription drug plan risk score trends. CMS proposes measure specification updates and the list of measures included in the Part C and D Improvement measures and Categorical Adjustment Index for the 2025 Star Ratings. CMS also proposes a list of disasters that are eligible for Extreme and Uncontrollable Circumstances Policy. Finally, CMS seeks input on major measure specification updates and on new measure concepts that support CMS’s “Universal Foundation” of quality measures, a subset of measures that are aligned across programs.

Comments on the rule are due by March 1, and the final notice will be published on or before April 1. Read the CMS press release here and fact sheet here.

CMS Makes First Offer for Drug Price Negotiation Program. On February 1, CMS sent initial offers to the participating drug companies for the 10 prescription drugs selected for negotiation in the first cycle of the Medicare Drug Price Negotiation Program. Negotiations will continue over the next several months and will conclude by August 1. If the participating drug company and Medicare agree upon a maximum fair price, the new drug price will take effect in Medicare beginning in 2026.

In related news, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) released several reports comparing the cost of prescription drugs in the United States and the cost of drugs in other Organisation for Economic Co-operation and Development countries. The reports found that in 2022, US prices across all drugs (brands and generics) were almost 2.78 times as high as prices in the comparison countries. Also, US prices for brand drugs were at least 3.22 times as high as prices in the comparison countries, even after adjustments for estimated US rebates.

ASPE also released new research detailing how the IRA expanded the financial protection available through the Low-Income Subsidy (LIS) Program, also known as Extra Help, for Medicare beneficiaries enrolled in prescription drug coverage. The research found that the IRA’s expanded financial assistance in Medicare’s LIS Program would have benefited almost 461,000 partial LIS enrollees had the provision been in effect in 2020. An additional 2.9 million Part D enrollees who were eligible but not enrolled in LIS could also have benefited.

SAMHSA Releases Opioid Use Disorder Treatment Final Rule. The Medications for Treatment of Opioid Use Disorder Final Rule finalizes policies around the treatment of opioid use disorder that were originally proposed in December 2022. The final rule permanently extends the waivers available for opioid treatment programs (OTPs) during the COVID-19 public health emergency, including waivers allowing OTPs to provide unsupervised doses of methadone to patients and use to telehealth when initiating buprenorphine.

The rule effectuates the removal of the “X-waiver” requirement, which was eliminated by the Consolidated Appropriations Act, 2023. The X-waiver had required qualifying practitioners seeking to dispense or prescribe schedule III, IV or V controlled substances approved by the US Food and Drug Administration (FDA) for use in “maintenance and detoxification treatment” to seek a waiver through the US Drug Enforcement Administration (DEA). The final rule removes in its entirety subpart F of Part 8 of Title 42 of the Code of Federal Regulations (42 CFR part 8) in addition to language throughout 42 CFR part 8 that specifically references or implicates the waiver process.

This rule does not impact providers who work outside of OTPs (such as community physicians and hospitals). The DEA regulates non-OTP providers. A final rule by DEA to regulate non-OTP provider prescription of buprenorphine via telehealth to patients with opioid use disorder is still pending.

Administration Announces Actions to Increase Access to Sickle Cell Disease Treatments. The US Department of Health and Human Services (HHS) announced that sickle cell disease will be the first focus of the Cell and Gene Therapy (CGT) Access Model, which was initially announced in February 2023. The model is designed to improve health outcomes, increase access to cell and gene therapies, and lower healthcare costs for some of the nation’s most vulnerable populations.

The CGT Access Model is led by the CMS Innovation Center. It is a voluntary model for states and manufacturers that will operate through Medicaid to expand access to gene therapies for the treatment of sickle cell disease. This model will begin in 2025 and may be expanded to other types of CGTs in the future. Learn more by visiting the model page and this fact sheet.


  • CMS Holds Webinar on AHEAD Model. CMS held office hours for the States Advancing All-Payer Health Equity and Development (AHEAD) Notice of Funding Opportunity. A recording and transcript of the call will be posted here in about two weeks. CMS highlighted the Hospital Global Budget factsheet and the AHEAD Model’s Primary Care Investment Methodology factsheet. CMS announced that a Hospital Global Budget webinar will be held on February 14 at 3 pm EST. Register for the webinar here.
  • White House Releases Update on Implementation of AI Executive Order. The statement included limited information on formation of the HHS Artificial Intelligence (AI) Task Force, as well as other non-healthcare-specific steps agencies have taken since the issuance of the executive order. It has been reported that the task force is being chaired by Micky Tripathi, the current national coordinator for health IT, and Syed Mohiuddin, a counselor to the HHS deputy secretary.
  • FDA Holds Webinar in Recognition of World Cancer Day. FDA’s Oncology Center of Excellence hosted the webinar in conjunction with the European Medicines Agency (EMA). The webinar provided an overview of regulatory programs that expedite access to cancer therapies for patients, including FDA’s Breakthrough Therapy designation and Accelerated Approval, as well as the EMA’s Prime and Conditional Approval. FDA plans to post the archived webcast here.
  • Administration Announces Actions to Slow Syphilis Epidemic. HHS discussed the establishment of the National Syphilis and Congenital Syphilis Syndemic Federal Task Force to respond to the US syphilis and congenital syphilis epidemic and its impact on pregnant people and babies. The actions of the task force leverage federal resources to reduce rates, promote health equity, engage affected communities and direct resources to support those most impacted. Read more at this HHS press release.


The House and Senate are scheduled to be in session next week, with the House potentially considering H.R. 485, the Protecting Care for All Patients Act, which would prohibit all federal health programs from using quality-adjusted life years and similar measures in coverage and payment decisions. Healthcare activity will occur at the committee level, including a House Ways and Means Committee hearing on drug shortages and a Senate Health, Education, Labor & Pensions Committee hearing with pharmaceutical CEOs regarding drug prices.

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

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