McDermottPlus Check-Up: July 29, 2022 - McDermott+Consulting

McDermottPlus Check-Up: July 29, 2022

This Week’s Dose

It was a busy week for both the House and Senate as numerous legislative priorities made progress toward completion. In the Senate, Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) announced a surprise agreement on a reconciliation bill that would extend beyond prescription drug pricing reform and an extension of Affordable Care Act (ACA) Advance Premium Tax Credits (APTCs) to include tax and climate provisions. The Senate has one more week on the schedule to move this package across the finish line before the August recess, and Speaker of the House Nancy Pelosi (D-CA) noted that she will call House members back to Washington, DC, to vote on the final bill if necessary. The House passed a three-year telehealth extension with overwhelming bipartisan support and saw a bipartisan bill on prior authorization advance unanimously out of the Ways and Means Committee. House lawmakers also passed the slimmed down version of the earlier China competitive bill, now called CHIPS, following Senate passage by 64–33 on July 27. The House passed the legislation on a 243–187 vote, with strong bipartisan support—despite a last-minute push by House GOP leaders to whip against the bill.


Manchin Agrees to Expanded Reconciliation Deal. This week, Senate Majority Leader Schumer and Senator Manchin announced a surprise agreement to move forward with an expanded reconciliation bill titled the Inflation Reduction Act (summary here). The tentative deal includes drug pricing, climate and tax provisions, and expands upon a previous “healthcare-only” version of the reconciliation package that focused solely on drug pricing and a two-year extension of the APTCs. The deal would raise an estimated $739 billion, with revenues going toward climate and healthcare initiatives, as well as reducing the federal deficit.

Leader Schumer and Senator Manchin released a joint statement outlining the agreement, which contains two key healthcare policy items: allowing Medicare to negotiate prescription drug prices and a three-year extension of APTCs. The three-year extension is one year longer than had been widely expected and reported in the previous version of the bill. The Biden-Harris Administration has also announced support for the bill. The package must go before the Senate Parliamentarian for Byrd Rule challenges before it can go to the Senate floor. It is expected to garner the Democratic support necessary to pass both the House and the Senate, and will move quickly from this point. The caveat to this is the impact of COVID-19. Several senators are already out, and Senator Dick Durbin (D-IL) announced July 28 that he has COVID-19 as well.

House Passes Telehealth Extension Through 2024. This week, the House approved the Advancing Telehealth Beyond COVID-19 Act (H.R. 4040) by a wide bipartisan margin of 416–12. This bill would extend Medicare telehealth flexibilities through the end of 2024, including geographic and originating site flexibilities, expanded eligible practitioners, reimbursement for federally qualified health centers and rural health clinics, delay of the in-person telemental health requirement, continued use of audio-only telehealth and flexibility to use telehealth to satisfy Medicare face-to-face requirements.

Immediate Senate action on H.R. 4040 is not likely, as the Senate is working on other priorities heading into the August recess. In addition, given the limited number of legislative days on the calendar before the midterm elections, additional action on telehealth extensions is more likely to occur during Congress’s lame duck session at the end of the year. These same provisions were extended for 151 days beyond the end of the public health emergency (PHE) through the enactment of the Consolidated Appropriations Act of 2022, making it less urgent for Congress to act on an extension before the end of the year—although this bill has significantly increased chances of Congress doing so.

Senate Releases FY 2023 Appropriations Bills. On July 28, the Senate Appropriations Committee released 12 spending bills detailing proposed government funding levels for FY 2023. The bills propose an increase of more than 10% in non-defense spending and a boost of almost 9% in defense funding. It is not expected that a markup for any of the subcommittees would occur before August, and potentially not even until September. Ranking Member Richard Shelby (R-AL) does not plan to support any of the bills as noted in his recent statement. The partisan divide in Congress makes it likely that the FY 2023 appropriations process will be completed through an omnibus bill.

House Holds Committee Markup on Prior Authorization Bill. The House Ways & Means Committee held a markup of the Improving Seniors’ Timely Access to Care Act of 2022 (H.R. 8487). The bill passed unanimously by voice vote and will advance to the House floor, where it is expected to pass given its broad bipartisan support. The legislation seeks to streamline the Medicare Advantage prior authorization process by establishing an electronic prior authorization program, requiring reporting of prior authorization plan data, and implementing timelines for turnaround on prior authorization requests. Several members of the committee spoke in favor of the bill, stating that it will expedite the prior authorization process and help seniors access necessary care in a timely manner. No members of the committee spoke in opposition.


CMS Finalizes Hospice, Inpatient Psychiatric & Inpatient Rehabilitation Facility Payment Rules. On July 27, the Centers for Medicare & Medicaid Services (CMS) finalized three fiscal payment rules for hospice, inpatient psychiatric care and inpatient rehabilitation facilities (IRFs). The finalized payment rules included higher pay rates than previously proposed of 3.8% for hospice facilities, 2.5% for inpatient psychiatric facilities, and 3.2% for IRFs as compared to this year. CMS noted that the updated rates are intended to reflect the price proxies underlying the market basket, including more recent historical data and revised outlook regarding expected price inflation for FY 2023.

In addition to the payment updates, each final rule codified various changes to quality reporting programs. Specific to IRFs, the rule finalized the move to all-payer patient assessment data beginning with FY 2026.

CMS Releases Maternity Care Action Plan. On July 26, CMS released its Maternity Care Action Plan. This action plan builds on the White House Blueprint for Addressing the Maternal Health Crisis, which was released in June, and contributes to a growing body of work focused on reducing maternal mortality and morbidity rates, decreasing disparities in maternal health outcomes, and improving the overall experience of pregnancy, birth and postpartum for people across the country.

While this plan does not create any new initiatives, it does assemble the opportunities the Biden-Harris Administration has created that support improving maternal health within five areas of focus: coverage and access to care, data, quality of care, workforce and social supports.

As part of this announcement, CMS is encouraging healthcare industry leaders to share their plans for committing to increasing health equity and maternal health. The action plan comes on the heels of the US Department of Health and Human Services (HHS) approving a 12-month extension of postpartum coverage for the Connecticut, Massachusetts and Kansas Medicaid programs, expanding the number of states that have adopted this benefit to 23 (including the District of Columbia).

CMS and MACPAC Hold Webinars on Unwinding Medicaid PHE. On July 27, both CMS and the Medicaid and CHIP Access and Payment Commission (MACPAC) held events regarding unwinding of the PHE and its impact on Medicaid. Currently, states are eligible to receive an enhanced federal match for maintaining Medicaid coverage during the PHE. However, as the PHE will eventually end, states need to prepare to conduct eligibility and redetermination reviews.

The CMS webinar focused on children’s coverage, reminding viewers that almost seven million children and teens could lose coverage following the end of the PHE. The MACPAC public event focused on three specific areas:

  • Transparency and certainty regarding the date that unwinding activities will commence
  • Decoupling the continuous coverage requirement and enhanced federal match from other PHE authorities
  • Financial and operational implications stemming from the end of the enhanced match.

MACPAC noted that it will continue to monitor publicly available plans and collaborate with states and beneficiary advocates. The September MACPAC meeting will also include a session on the unwinding of the Medicaid PHE.

HHS Announces Proposed Rule to Strengthen Nondiscrimination in Healthcare. On July 26, the HHS Office of Civil Rights held a briefing outlining key provisions of the announced proposed rule implementing Section 1557 of the ACA, which prohibits discrimination on the basis of race, color, national origin, sex, age or disability in certain health programs or activities. The proposed rule is intended to strengthen and reinstate protections from discrimination in health programs and activities, consistent with the statutory text of Section 1557, congressional intent, legal precedent, and the Biden-Harris Administration’s priority of advancing equity and civil rights and protecting Americans’ access to healthcare. During the briefing, HHS solicited comments on the proposed rule, specifically emphasizing the provisions relating to gender affirming care, language assistance services and auxiliary aides, and pregnancy-related conditions. Public comments on the proposed rule are due 60 days after publication.

Quick Hits

  • The Centers for Disease Control and Prevention announced plans to make monkeypox a nationally notifiable condition, thereby directing states to share surveillance data and case rates. The new designation is set to take effect August 1. The Biden-Harris Administration is still considering whether to declare monkeypox a PHE.
  • CMS launched an updated Nursing Home Five-Star Quality Rating System, which will integrate the data that nursing homes report on their weekend staffing rates and annual turnover among nurses and administrators. The updated Star Ratings are being launched with the goal of increasing transparency and improving the quality of nursing home care.
  • HHS, along with the US Departments of Treasury and Labor, announced that the agencies will send new guidance to healthcare insurers, reiterating that current federal law requires the coverage of all US Food and Drug Administration approved methods of birth control with no copays. The guidance also noted that if insurers do not comply, the agencies would increase compliance.
  • CMS released a request for information (RFI) regarding the Medicare Advantage program. The RFI seeks feedback on ways to strengthen Medicare Advantage in ways that align with the Administration’s vision for Medicare and the CMS Strategic Pillars. The RFI specifically requests feedback on advancing health equity, expanding access to coverage and care, driving innovation to promote person-centered care, supporting affordability and sustainability, and engaging partners. RFI comments are due 30 days following publication in the Federal Register.
  • The Administration announced two new actions to address the youth mental health crisis: encouraging governors to invest more in school-based mental health services, and distributing almost $300 million to help schools hire more school-based mental health professionals.

Next Week’s Diagnosis

We expect next week to be focused on Senate passage of the Inflation Reduction Act. The House begins its August recess, but Members will be on call to return to vote on the Inflation Reduction Act if Senate passage occurs. On the regulatory front, we are watching for release of the final Inpatient Prospective Payment System rule as well as a final rule implementing the No Surprises Act.


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

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