McDermottPlus Check-Up: July 17, 2020 - McDermott+Consulting

McDermottPlus Check-Up: July 17, 2020

This Week’s Dose

The House Appropriations Committee advanced a fiscal year (FY) 2021 spending proposal for the Department of Health and Human Services (HHS), and the Administration revised guidance for hospital data submission.


House Appropriations Committee Advanced HHS Funding Bill and Issued Report with Implications for Private Equity-Backed Healthcare Interests. The FY 2021 appropriations bill would provide $96.4 billion for HHS, an increase of $1.5 billion above the FY 2020 enacted level and $11.1 billion above the President’s budget request. The bill—which was approved on a party line vote of 30 to 22—is expected to pass the House by the end of the month. In addition, the Committee released its customary report to accompany the bill. Committee reports are merely explanatory documents and are not enacted into law. They are nonetheless expressions of congressional intent and are indicative of where House Democrats may try to push oversight of provider relief in the future. The report includes language that would require entities receiving Medicare Accelerated and Advanced Payments Program (AAP) funding to report if they are owned and/or controlled by a private equity sponsor. It would also direct the Secretary of HHS to consider requiring that these entities do not furlough staff or implement cuts to pay or benefits as a condition of receiving AAP funds. While not technically binding on the Secretary, executive branch agencies seriously evaluate and often respect expressions of congressional intent and interest. It is conceivable that HHS, especially in a Biden Administration, could embrace these directives. Concerns about who should receive COVID-19 relief funds have bubbled up across the industry and in the press. This language also reflects long-simmering concern among some lawmakers about the role of private equity in healthcare. Expect this debate to continue to play out as lawmakers debate the next stimulus package.

Ways and Means Released a Summary of Rural Healthcare RFI Responses. The House Ways and Means Committee Rural and Underserved Communities Healthcare Task Force released a summary of responses from a November 2019 Request for Information (RFI) seeking feedback on priority topics that affect the health status and outcomes of rural communities. The Committee’s analysis of the feedback received found a “bleak picture” of the current status of healthcare in rural and underserved communities with significant healthcare and non-healthcare barriers limiting access and quality of care. Based on responses to the RFI, the Task Force indicated it will focus on addressing direct social determinants of health, enacting payment system reforms, strengthening technology and infrastructure, and reinforcing the workforce moving forward. Additionally, the Task Force submitted a letter to the Medicare Payment Advisory Commission requesting it update its 2012 report entitled “Serving Rural Medicare Beneficiaries.” The requested updates include incorporating medically underserved areas as a distinct geographic category; including dually eligible Medicare beneficiaries and beneficiaries with multiple chronic conditions; and examining factors and trends that may have impacted these communities since the 2012 report, such as expanded use of telemedicine and provider consolidation. The Task Force is moving toward developing bipartisan policy proposals to address the issues they identified in their report. Stakeholders are encouraged to continue to engage with the Task Force on priorities and potential solutions. Congressional committees, including the Ways and Means Committee, have bemoaned the declining state of the rural health infrastructure and promised action, but little legislation seeking to buttress rural healthcare has advanced in recent years.


Administration Issued Guidance Asking Hospitals to Submit COVID-19 Data Directly to HHS. The new guidance modifies previous instructions from the Administration for hospitals to submit daily data on COVID-19 cases to the Centers for Disease Control and Prevention (CDC), requiring instead that hospitals submit their data directly to HHS. The types of information requested, including testing data, bed capacity and supply status, have not changed. According to the Administration, the purpose of the change is to streamline the data collection process. However, the move comes amid concerns from some public health officials that the Administration is seeking to limit the role of the CDC for political purposes. The new guidance took effect on July 15, 2020.


Arkansas and DOJ Asked Supreme Court to Restore Medicaid Work Requirements. The state of Arkansas and the Department of Justice (DOJ) each filed petitions asking the US Supreme Court to reverse a February federal appeals court decision voiding Arkansas’ Medicaid work requirement. The lower court ruled that a requirement that beneficiaries participate in work, education or similar activities to qualify for Medicaid benefits violates the intent of the program. In their petitions, Arkansas and DOJ argue that the appeals court misinterpreted the intent of the Medicaid program, that the Centers for Medicare and Medicaid Services (CMS) has broad authority to approve Medicaid waivers, and that these waivers promote beneficiaries’ health and independence. The controversial policy has faced court defeats in Kentucky, New Hampshire, Michigan and Arkansas. Due to ongoing litigation, Arizona and Indiana suspended implementation of their requirements. Ohio, Wisconsin and South Carolina have received approval for work requirement waivers from CMS but have not yet implemented their programs. In April, Utah became the last state to put its work requirements on hold, citing the public health risks related to COVID-19 and the pandemic’s impact on the state’s economy. Currently, nine states have work requirement waivers pending CMS approval.


Utah Submitted Waiver to Expand Medicaid Access for Justice-Involved Individuals. The Section 1115 waiver application would amend Utah’s current Medicaid waiver to provide Medicaid coverage for qualified justice-involved individuals during the 30-day period immediately following their release from incarceration. The state intends to implement the waiver effective July 1, 2021, through the end of the current waiver approval period, which is June 30, 2022. Current statute prohibits Medicaid coverage for those incarcerated in a jail or prison. CMS will accept public comments on the proposal through August 12, 2020.

Quick Hits

  • The House Energy and Commerce Committee held a markup of 30 bills focused on a range of issues from COVID-19 to IT infrastructure. All 30 bills were reported favorably to the full House with bipartisan support.
  • Representatives Mike Thompson (D-CA), Peter Welch (D-VT), Bill Johnson (R-OH), David Schweikert (R-AZ) and Doris Matsui (D-CA) introduced the Protecting Access to Post-Covid-19 Telehealth Act, which would address significant existing limitations on the permanent expansion of telehealth.
  • Senate Democrats released a white paper outlining a process for developing and distributing a safe, effective and accessible COVID-19 vaccine.
  • Senator Elizabeth Warren (D-MA) and Representative Ayanna Pressley (D-MA) sent a letter requesting information from HHS on the Administration’s efforts to address racial health disparities exacerbated by the COVID-19 pandemic.
  • CMS Administrator Seema Verma published a blog post on the impact of expanded telehealth services during COVID-19.
  • HHS and the internal revenue service published a proposed rule offering grandfathered group health plans greater flexibility to amend cost-sharing requirements.
  • The Substance Abuse and Mental Health Services Administration published a final rule making changes to the agency’s regulations governing the confidentiality of substance use disorder patient records.
  • CDC released a series of updated toolkits providing guidance on reopening for various individuals and groups.
  • The Government Accountability Office published a report that discusses supplemental payments and the types of financing arrangements used by states to finance their share of the Medicaid program.

M+ Resources

  • Last week, HHS announced it is allocating additional targeted funding through the Provider Relief Fund, including approximately $3 billion to “safety net” hospitals and $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas; along with a funding application process for dentists. More information on these latest funding distributions is available here.
  • The Trump Administration launched the American Kidney Initiative on July 10, 2019, when President Trump signed an Executive Order pledging transformation and innovation to improve care for kidney patients and reduce healthcare costs. Our report reviews the actions of the past year and forecasts the work still to come.
  • Our consultants discuss the expansion of telehealth services and flexibilities that has occurred during the COVID-19 pandemic on the latest episode of the Health Policy Breakroom.
  • Find all our analysis related to COVID-19 on our COVID-19 Resource Center.

Next Week’s Diagnosis

The Senate returns from recess to continue negotiations on annual appropriations and another COVID-19 relief bill. The House Energy and Commerce Committee will hold a hearing on ongoing vaccine development efforts, and the Senate Aging Committee will hold a hearing on racial health disparities among seniors.


For more information, contact Mara McDermott, Rachel Stauffer, Katie Waldo and Emma Zimmerman.

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