McDermottPlus Check-Up: January 15, 2021 - McDermott+Consulting

McDermottPlus Check-Up: January 15, 2021

This Week’s Dose

The House impeached President Donald Trump for a second time following last week’s attack on the Capitol. The Trump Administration issued new policies related to vaccine distribution, state Medicaid waivers, review of drugs and medical devices, and Medicare coverage of innovative technology. President-elect Joe Biden outlined a coronavirus (COVID-19) relief and stimulus plan.


Biden Unveiled COVID-19 Relief Plan. The $1.9 trillion COVID-19 relief and stimulus package, entitled the American Rescue Plan, includes $20 billion for a national vaccination program, $50 billion for testing expansion, and funding to support 100,000 new public health jobs, along with other healthcare-focused provisions related to preparedness and protecting workers and vulnerable communities, and proposals aimed at economic recovery and reopening schools. The plan does not include policies specific to provider relief, such as additional funding for the Provider Relief Fund or expansion of the Medicare Accelerated and Advance Payment Program, though those items could still be included in eventual legislation. Though the plan includes many bipartisan proposals, it also includes some provisions, such as increased minimum wage and funding for state and local governments, that Republicans are likely to oppose. Not surprisingly, it also does not include proposals generally championed by Republicans, like liability protections. How Republican leadership responds to Biden’s plan will be critical to predicting success. If soon-to-be Senate Minority Leader Mitch McConnell (R-KY) signals that he is open to negotiation, Congress could pass another significant COVID-19 relief package in a matter of weeks. If Republicans greet this proposal with staunch opposition, the tense political environment on Capitol Hill may only get worse. Another factor to consider is the possible impeachment trial. The Senate will reconvene on January 19 and likely take up the article of impeachment passed this week by the House. The time dedicated to a trial could slow progress on legislative priorities, including COVID-19 relief, not to mention strain the bipartisanship needed to pass a broad relief package.


Trump Administration Moved to Speed COVID-19 Vaccine Rollout. Administration officials announced this week that states should begin vaccinating everyone over 65 and those with underlying health conditions, in addition to frontline healthcare workers, who had been prioritized in original federal guidance. The expanded eligibility is a change from previous guidance from the Centers for Disease Control and Prevention, which had recommended that essential workers and those over 75 be next in line. It could pose additional logistical challenges for states already struggling to vaccinate all those who are eligible (note that the federal guidance is nonbinding, and the ultimate decision of who is eligible for vaccination remains up to the states). In addition, the Administration announced that beginning in two weeks, vaccines will be distributed to states based on each state’s population of people over 65, and the state’s pace of vaccine administration (up to this point, vaccines have been distributed based on states’ total adult populations). The Administration will also begin distributing vaccines that had been held in reserve for the second dose, a policy change that President-elect Biden has also called for. The announcements come amid rising criticism of the slow vaccine rollout, a challenge that is likely to continue as the Biden Administration assumes office. President-elect Bide is expected to announce additional details of his proposed national vaccination program today (January 15), which is likely to go beyond what the Trump Administration has done.

CMS Issued Plan to Slow Repeal of Medicaid Waivers. The Centers for Medicare and Medicaid Services (CMS) is asking states to sign on to a plan that would create a nine-month review and appeal process in those states if CMS seeks to change or repeal state Medicaid waivers in the future. Many Republican-led states have sought waivers in the last few years to implement controversial changes to their Medicaid programs, such as establishing work requirements, which the incoming Biden Administration opposes and is expected to reverse. Last week, CMS approved Tennessee’s waiver to restructure Medicaid financing from an open-ended funding system to a block grant model, a policy many Republicans have championed for years as giving states needed flexibility, but which Democrats have argued would limit access to benefits. The policy will likely face legal challenges, and the Biden Administration could also roll back the change, though that effort could be slowed if Tennessee adopts the appeals process established by CMS.

HHS Issued Policies on FDA Review of Drugs and Medical Devices. Two policies released by the US Department of Health and Human Services (HHS) this week make changes to the Food and Drug Administration’s (FDA) review processes for drugs and medical devices. The first policy requires FDA to publish an annual report on how long it takes to review drugs and identify how many applications take longer than 180 days to review. The second policy permanently exempts a range of medical devices from premarket review, which the Department implemented on a temporary basis during the COVID-19 Public Health Emergency (PHE). The move has raised some concerns within FDA that HHS is rushing through policies that weaken the agency’s review power in the final days of the Trump Administration. It is possible that the incoming Biden Administration will reverse the changes.

CMS Finalized Rule on Medicare Coverage of Innovative Technology and Definition of Medical Necessity. The final rule includes two regulatory changes intended to expedite and clarify Medicare coverage of innovative technology. First, the rule codifies the definition of “reasonable and necessary” as safe and effective, not experimental or investigational, and appropriate for Medicare patients. For services that do not meet this third criterion, CMS will consider coverage to the extent the items or services are covered by most commercial insurers. Second, the rule creates a new Medicare Coverage of Innovative Technology pathway—a voluntary, opt-in pathway for Medicare coverage of medical devices (including some diagnostic tests) that are included in the FDA’s current Breakthrough Device Program. Devices that have received marketing authorization under the Breakthrough Device Program within the two-year period prior to the effective date of the rule will be eligible to receive coverage for four years under Medicare. Coverage will start on the date requested by the manufacturer in an email to CMS, provided it is on or after the date of FDA marketing authorization. The final rule is effective March 15, 2021.

Quick Hits

  • A group of Senate Democrats sent a letter to HHS calling on the Administration to provide states with new resources and guidance to support the vaccine rollout.
  • House Ways and Means Committee Chairman Richard Neal (D-MA) introduced a legislative framework for how the Committee will address social factors contributing to health and economic inequity during the 117th Congress.
  • HHS issued updated guidance for hospital COVID-19 data reporting, seeking additional data on COVID-19 vaccine administration.
  • HHS updated reporting requirements for the Provider Relief Fund.
  • HHS released the Affordable Care Act Benefit and Payment Parameters final rule for 2022, including a provision allowing states to turn their individual insurance markets over to private agents and brokers. The incoming Biden Administration is expected to reverse the change.
  • CMS finalized the Interoperability and Prior Authorization rule, which requires covered payers to implement application programing interfaces aimed at giving providers better access to data and streamlining the prior authorization process.
  • CMS finalized the Contract Year 2022 Medicare Advantage and Part D rule, which includes a requirement that Part D plans offer a real-time benefit comparison tool starting January 1, 2023.
  • CMS launched a new web-based platform to help standardize Section 1135 waiver requests and other PHE-related inquiries the agency receives. The new tool is available from the CMS Waivers and Flexibilities webpage.
  • CMS released an updated Frequently Asked Questions document on the Community Health Access and Rural Transformation Model.
  • CMS Issued a Request for Application for the Geographic Direct Contracting Model. CMS will accept applications from March 1 to April 2, 2021, via an online portal
  • CMS published a look back at the agency’s accomplishments from 2017 to 2020.
  • The New England Journal of Medicine published a 10-year review of the Center for Medicare and Medicaid Innovation (CMMI), and CMMI Director Brad Smith published a year in review blog for 2020.
  • CMMI released partial results for Performance Year 4 of the Next Generation ACO Model.
  • The Medicare Payment Advisory Commission held its January public meeting.

M+ Resources

  • Our consultants discuss the impeachment process, what to expect from Congress in the coming weeks, and what impeachment could mean for policymaking going forward on this week’s episode of the Health Policy Breakroom.
  • This chart serves as a tool to track key personnel changes that are relevant to health policy on Capitol Hill: House and Senate leadership and membership of the healthcare committees of jurisdiction.

Next Week’s Diagnosis

President-elect Biden will be inaugurated. The Senate reconvenes on January 19 and could begin the impeachment trial of President Trump, potentially slowing the confirmation process for President-elect Biden’s nominees.


For more information, contact Mara McDermottKristen O’BrienRachel Stauffer, Katie Waldo or Emma Zimmerman.

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