McDermottPlus Check-Up: March 11, 2022 - McDermott+Consulting

McDermottPlus Check-Up: March 11, 2022

This Week’s Dose

After months of negotiations in both chambers, Congress passed the omnibus spending bill for fiscal year 2022; however, COVID aid was stripped from the bill, leaving open future action by lawmakers.


Government funding for fiscal year 2022 passed. With a House vote of (260-171) followed by the Senate vote of (68-31), Congress passed the $1.5 trillion omnibus spending bill (H.R. 2741) to fund the government through September 30. The legislation also includes $13.6 billion to support Ukraine, as well as a number of health policy provisions.

Passage of the bill was no simple task. House Democrats had to remove $15.6 billion for COVID funding after negotiators had agreed that $7 billion of unused states and local government COVID aid would be used as a pay-for for the new relief funding. This drew scrutiny from those members whose states would lose funding, and, with no time left to renegotiate a new pay-for, the COVID relief provision was dropped from the bill The House hopes to pass a standalone COVID-19 aid bill next week.

Overall, HHS will receive a total of $108.3 billion (summary here) along with some highlights below with most areas seeing an increase in funding over their FY 2021 levels:

  • Advanced Research Projects Agency for Health (ARPA-H): $1 billion to establish ARPA-H within the HHS Office of the Secretary, or the option to transfer it to another HHS agency, including NIH, to accelerate scientific breakthroughs for diseases such as ALS, Alzheimer’s, diabetes and cancer. These funds show a commitment by Congress, but lawmakers must act on separate legislation to authorize ARPA-H in order to expend the funds.
  • National Institutes of Health (NIH): $45 billion, an increase of $2.25 billion, that will allocate funding to the National Cancer Institute ($6.9 billion), opioids research ($50 million) and health disparities research ($50 million).
  • Centers for Disease Control and Prevention (CDC): $8.5 billion, an increase of $582 million, with an emphasis on the public health infrastructure.
  • Substance Abuse and Mental Health Services Administration (SAMHSA): $6.5 billion, an increase of $530 million, to address the mental health crisis.
  • Health Resources and Services Administration (HRSA): $8.9 billion, an increase of $1.4 billion, that includes $1 billion for programs to improve maternal and child health.
  • Centers for Medicare and Medicaid Services (CMS): $4 billion, an increase of $50 million.
  • Office of the National Coordinator (ONC): $64 million, a $2 million increase from FY 2021, but $23 million less than the President’s Budget request.

Key healthcare policy provisions included in the omnibus package are outlined below:

  • Extending Telehealth Flexibilities post-PHE. The bill extends existing telehealth flexibilities for 151 days beyond the end of the PHE—approximately five months. These flexibilities include:
    • Waiving geographic and originating site restrictions;
    • Expanding the list of eligible practitioners;
    • Allowing audio-only telecommunications; and
    • Permitting telehealth as a face-to-face encounter prior to recertification of a patient’s eligibility for hospice care

Additionally, a CARES Act flexibility that allows first-dollar coverage for certain telehealth services for those with health savings account (HSA)-eligible high deductible health plans (HDHPs) that expired on December 31, 2021 would be reinstated for the period of March 31, 2022 through December 31, 2022.

  • Protecting Hospitals’ 340B Eligibility during the COVID-19 Public Health Emergency. During the COVID-19 pandemic some hospitals had changes in the disproportionate share adjustment percentages, and as a result either lost or are in jeopardy of losing 340B eligibility. This provision would help address those specific hospitals.
  • Improving Maternal Health. Grants for improving and implementing maternal health best practices, including funding to medical and health professional schools to train health care providers; a new five-year grant program to integrate services for pregnant and post-partum women; and a program to improve maternal vaccine awareness.
  • Increasing Medicaid Funding for Puerto Rico and the Territories. The bill extends the enhanced Medicaid FMAP funding for Puerto Rico and territories until December 31, 2022.

Importantly, the final bill does not address looming Medicare sequestration cuts. Absent Congressional action, the cuts will be transitioned in this year at 1% beginning in April and 2% beginning in July. Requests to add funds to the Provider Relief Fund to help hospitals overcome workforce shortages were also left out of the final package.

Bill to Extend Hospital-at-Home Waiver Introduced. The Hospitalization Inpatient Services Modernization Act (Senate and House versions) would extend the Acute Hospital Care at Home (AHCAH) waiver program for two years after the end of the PHE. Senators Tom Carper (D-DE) and Tim Scott (R-SC), alongside Representatives Earl Blumenauer (D-OR) and Brad Wenstrup (R-OH), sponsored the legislation. The legislation also requires that CMS issue regulations to establish health and safety requirements for the AHCAH Programs within a year of enactment and requires HHS to conduct research on the waiver with the hope that CMS will establish a permanent program. The waiver has become a widely used program during the pandemic to help with bed shortages and permitting patients to obtain care from their homes, with 92 health systems and 203 hospitals across 34 states participating. On the same day of the bill’s introduction, on March 10, more than 110 organizations submitted a letter to Congressional leadership supporting the legislation.


Biden Launches Test-to-Treat Initiative. The Biden Administration officially launched on March 8 the “Test-to-Treat” initiative that was announced as key piece of the national COVID preparedness plan during the State of the Union address. Participating pharmacies and Federally Qualified Community Health Centers (FHQCs) can test patients for COVID-19 and then treat positive individuals with antiviral medication. The pharmacies participating in the initiative will receive Pfizer’s Paxlovid and Merck’s molnupiravir by directly ordering from the federal government.

Quick Hits

  • House Energy and Commerce Committee leaders in a bipartisan letter to SAMHSA, on March 8, requested information regarding Biden Administration’s efforts to address the mental health crisis in the U.S., specifically as it relates to the impacts of the COVID-19 pandemic.
  • On March 8, the FDA and medical device industry struck a five-year User Fee deal, Medicare Device User Fee Amendment 2023 (MDUFA V) with $1.9 billion in base user fees for fiscal years 2023 to 2027. This amount almost double what is collected under the current agreement. This means that all give User Fund Agreements are in hand for Congress to move forward to meet the September 30 deadline.
  • Senate Majority Leader Chuck Schumer (D-NY) sent a Dear Colleague letter on March 7, that announced that the Senate Finance Committee will kick off next week with a hearing, entitled “Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare.” Other Committee hearings to address drug prices are also expected this month and next.
  • House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) unveiled the Accelerated Approval Integrity Act (H.R. 6963), on March 7, to reform the FDA’s accelerated approval pathway. The legislation would also require manufacturers to enter in a post-market study agreement with the FDA before being granted accelerated approval, as well as require the FDA to provide more frequent updates regarding the study’s progress.
  • The Senate HELP committee announced a full Committee hearing for March 15 on the Prepare for and Respond to Existing Viruses, Emerging New Threats, and Pandemics Act (PREVENT Pandemics Act), bipartisan legislation, to strengthen the nation’s public health system and medical preparedness for pandemic response.

Next Week’s Diagnosis

The House intends to consider the COVID relief legislation that was scuttled this week, sending it to the Senate for its consideration.


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

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