McDermottPlus Check-Up: February 4, 2022 - McDermott+Consulting

McDermottPlus Check-Up: February 4, 2022

This Week’s Dose

Congress held several hearings this week addressing weighty topics like mental health, support for those with disabilities and chronic conditions, and the future of Medicare financing. Additionally, Senator Ben Ray Lujan (D-NM) suffered a stroke and is likely out for 4-6 weeks. In a 50-50 Senate, that missing vote may matter and impact the legislative schedule. On the regulatory front, the Centers for Medicare and Medicaid Services (CMS) proposed a significant rate increase for the Medicare Advantage (MA) program, and also announced that Medicare would cover up to eight at-home COVID tests per month.


Congress Holds Multiple Hearings on Mental Health. The Senate Health Education Labor and Pensions (HELP) Committee held a hearing on February 1, 2022 entitled, “Mental Health and Substance Use Disorders: Responding to the Growing Crisis”. The hearing emphasized the importance of addressing mental health workforce challenges, the need to provide targeted resources to K-12 schools, and disparities in mental health treatment for disadvantaged populations. On the following day, the House Ways and Means Committee held a hearing on “America’s Mental Health Crisis” that focused on potential ways for Congress to expand, reauthorize, and improve federal programs that address mental health and substance use disorders.

As noted during both hearings, the pandemic has only exacerbated the nation’s mental health crisis with fear and anxiety around COVID-19, burnout, and a lack of access to treatment. According to the recent Mental Health Parity and Addiction Equity Act report to Congress from the Departments of Labor, Treasury, and CMS, access to coverage for mental health and substance abuse treatment is still falling short of expectations.

In both hearings, there was a consensus among witnesses that prior authorization serves as a barrier to care for those suffering from mental health and substance use disorder treatment and that telehealth can be a beneficial modality for treatment.

Senate Finance Subcommittee Discusses the Future of Medicare Financing. This week, the Senate Finance Committee Subcommittee on Fiscal Responsibility and Economic Growth held a hearing entitled, “The Hospital Insurance Trust Fund and the Future of Medicare Financing“. The hearing examined the contributing factors tied to depletion of the Hospital Insurance Trust Fund and the Medicare program and discussed potential ways to reduce Medicare spending.

During the hearing, some witnesses expressed concerns with the MA program and the high price of drugs, while others encouraged the continued development of innovative payment models. Democratic subcommittee members, led by Chairwoman Elizabeth Warren (D-MA), were particularly critical of pharmaceutical company practices, payment methodology for MA plans and the Direct Contracting model, calling upon the Biden Administration to end the model immediately. Republican subcommittee members, including Ranking Member Bill Cassidy, MD (R-LA), noted concerns that the projected Medicare Trust Fund insolvency in 2026 is not being taken seriously and probed witnesses on their suggested reforms. If there is a change in congressional control next year, expect this topic to receive much more focus.

Appropriations Negotiations Move Forward Slowly. This week, representatives from the “Four Corners” or the Chair and Ranking Member of both the House and Senate Appropriations Committees met to further negotiate a government funding plan before the February 18 expiration of the current continuing resolution (CR). Senate Republicans provided Democrats with a new offer for consideration, creating hope for a breakthrough for lawmakers who have struggled to reach agreement on a top-line spending number and other controversial policies. At this point, expectations are that a short-term CR will be necessary as this slow process continues.


CMS Releases Medicare Advantage Advance Rate Notice. On February 2, 2022, CMS released the Advance Notice of Methodological Changes for Calendar Year 2023 for Medicare Advantage Capitation Rates and Part C and Part D payment policies. CMS will accept comments on these proposals until March 4, 2022 and the final rate announcement is expected by April 4, 2022. A fact sheet on the notice can be seen here.

The Biden Administration is proposing a very favorable update of 7.98% to MA rates for 2023. We believe an apples-to-apples comparison to last year’s rate announcement is a 4.48% update (as compared to the 2022 proposed update of 2.82% and final update of 4.08%) because the 3.5% MA risk score trend line item has not been included consistently in prior tables. Still, this is seen as a significant rate increase.

This proposal from the Biden Administration comes in contrast to recent sentiment from some Senate Democrats, who, as mentioned above, criticized the MA program during a Senate Finance Subcommittee hearing on the Hospital Insurance Fund and Future of Medicare Financing.

On the House side, activity around MA continued with a group of over 340 members of the House of Representatives (nearly 80% of the chamber) sending a letter to CMS urging the agency to maintain stability within the MA program stating that it provides affordable, high-quality health coverage.

Medicare Will Cover At-Home COVID-19 Tests. This week, the Biden Administration announced, that in an effort to expand American’s access to free COVID-19 testing, Medicare will begin covering at-home COVID-19 tests with no cost sharing for beneficiaries. When the Administration announced in January that commercial payers must reimburse their enrollees for up to eight COVID tests per month, the Medicare program was noticeably absent from that requirement. Congress immediately responded, urging the Administration to close that gap. The coverage is set to begin this spring, with Medicare beneficiaries eligible for up to eight over the counter at-home COVID-19 tests per month at no cost.

President Biden Renewed His Signature Cancer Moonshot Initiative. In a speech this week, President Joe Biden set forth new goals for the Cancer Moonshot initiative, which he originally launched in 2016 as Vice President. The mission has been one that is close to the President’s heart, following the loss of his son, Beau, to brain cancer in 2015.

The announcement included two main goals: 1) reducing the current age-adjusted death rate from cancer by at least 50 percent, over the next 25 years and 2) improving the experience of people living with and surviving cancer, and their families. According to the White House fact sheet on the initiative, these goals will be achieved through a number of efforts related to earlier diagnoses, increased prevention efforts, addressing inequities, targeting the right treatments to the right patients, speeding progress against the most deadly and rare cancers, including childhood cancers, and supporting patients, caregivers and survivors.

The original Moonshot initiative was funded by a $1.8 billion investment as part of the 21st Century Cures Act of 2016, which provided seven years of new funding for cancer research. Key lawmakers on the House Energy and Commerce Committee are working on a bipartisan Cures 2.0 effort, though its path to enactment is not yet clear. The Cures 2.0 bill also includes provisions to establish a related priority of the President’s—the Advanced Research Projects Agency for Health (ARPA-H), whose goal is to improve the U.S. government’s capabilities to speed research. What is unknown is how the dynamic of these two similar initiatives will play out. The House Committee on Energy and Commerce is holding a hearing on ARPA-H next week.

Quick Hits

  • The House Energy and Commerce Subcommittee on Consumer Protection and Commerce held a hearing entitled, “Pandemic Profiteers: Legislation to Stop Corporate Price Gouging“. During the Subcommittee hearing, Members examined issues associated with price gouging as a result of the COVID-19 pandemic, primarily focusing on COVID-19 tests and masks.
  • The House Energy and Commerce Committee held a full committee hearing on the PDUFA, GDUFA, and BsUFA reauthorization process. The hearing featured several Food and Drug Administration officials and focused on the path forward for the reauthorization of the agreements.
  • The Department of Health and Human Services (HHS) announced $19.2 million in funding to expand training primary care residents in rural and underserved communities. Per the HHS press release, awardees will use this funding to train residents who provide primary care services to “diverse populations and communities, particularly in undeserved and rural areas”.
  • The Office of the National Coordinator for Health Information Technology (ONC) held its Annual Meeting highlighting educational sessions on information sharing and interoperability.
  • The Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), distributed an additional $2 billion in Provider Relief Fund payments at the end of January. These payments to more than 7,600 providers across the country follow nearly $9 billion in funding that was already released by HHS in December 2021.

Next Week’s Diagnosis

House and Senate appropriators will continue the race against the clock to find a bipartisan agreement on government funding before the February 18 expiration of the current Continuing Resolution (CR).


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

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