McDermottPlus Check-Up: October 14, 2022 - McDermott+Consulting

McDermottPlus Check-Up: October 14, 2022


Because Congress is in recess until after the midterm elections, this weekly Check-Up is light on congressional news, but we continue with notable updates in the healthcare space on the congressional, regulatory and judicial fronts.


Senate Republicans Introduce Medicare Price Negotiation Repeal Bill. Senators Lankford (R-OK), Lee (R-UT), Lummis (R-WY) and Rubio (R-FL) recently introduced the Protecting Drug Innovation Act (S. 4953). This bill would repeal the Medicare drug pricing negotiation provisions recently enacted as part of the Inflation Reduction Act (IRA). The IRA established the Medicare drug price negotiation program, which directs the US Department of Health and Human Services (HHS) Secretary to negotiate the “maximum fair prices” for selected drugs beginning with plan year 2026. Ten drugs or vaccines will be selected in 2026, an additional 15 in 2027 and 2028 each, and an additional 20 in 2029 and subsequent years.

The introduction of this bill may signal Republican health policy priorities should they win back control of Congress in the midterm elections. That said, even if legislation repealing Medicare prescription drug negotiation were to advance through both the Senate and House in the 118th Congress, such legislation would almost certainly face President Biden’s veto pen.


President Biden’s Executive Order on Drug Pricing. On October 14, the White House released an executive order that directs the HHS Secretary to identify and launch Center for Medicare & Medicaid Innovation (CMMI) models to lower drug prices. The HHS Secretary must submit a report to the assistant to the president for domestic policy within 90 days with potential CMMI models to test policies that seek to lower drug prices and promote access to innovative therapies for Medicaid and Medicare beneficiaries. The HHS Secretary is expected to test models after submitting the report.

COVID-19 Public Health Emergency Extended. On October 13, HHS Secretary Xavier Becerra extended the COVID-19 public health emergency (PHE) for an additional 90 days, until mid-January 2023. The HHS Secretary has maintained a commitment to provide 60-days’ advance notice if the agency plans to end the PHE. With this renewal, we will hit that 60-day deadline the week after the election. Given the uncertainties around additional variants heading into winter, as well as the need for ample time for the Administration and Congress to address regulatory and legislative policies tied to the PHE, the PHE may be extended beyond January 2023—although this is not as certain as previous renewals.

Final Rule Released to Fix Family Glitch. On October 11, the US Department of the Treasury issued a final rule to strengthen the Affordable Care Act (ACA) by fixing the so-called family glitch—a shortcoming of ACA implementation that measured affordability of employer-sponsored coverage for a family solely by the cost of the employee’s coverage, rather than the cost of family coverage.

As a result of the family glitch, low- and moderate-income families have had to either pay for expensive employer health plans or forgo coverage altogether if they are not eligible for reduced price premiums through ACA plans. The final rule corrects the glitch that has prevented families from qualifying for ACA subsidies when one member of the family receives employer-sponsored coverage that was considered affordable, even when the cost of family coverage was unaffordable.

HHS Secretary Becerra stated that this final rule “resolves a flaw in prior ACA regulations to bring more affordable coverage to about one million Americans. Our goal is simple: leave no one behind and give everyone the peace of mind that comes with health insurance.”

Medicare 340B Payment Cut Ending for 2022. On October 13, the Centers for Medicare & Medicaid Services (CMS) announced that it will end the almost 30% Medicare outpatient drug payment cut for 340B hospitals for the remainder of CY 2022. This announcement follows the unanimous Supreme Court of the United States decision on the drug payment cuts that were included in the 2018 Outpatient Prospective Payment System (OPPS) Final Rule. CMS did not specify whether it will apply OPPS budget-neutrality requirements to the revised payment. However, CMS noted in the 2023 OPPS proposed rule that if the agency was to restore the full 340B drug payment rates for 2023, it would need to offset those increases with corresponding reductions for other Medicare outpatient services to meet OPPS budget-neutrality requirements. The 2023 OPPS final rule awaits publication and could be released towards the end of October or early November.


  • A new report on 2021 COVID-19 vaccinations from HHS’s Office of the Assistant Secretary for Planning and Evaluation demonstrates that vaccinations are linked to more than 650,000 fewer COVID-19 hospitalizations and more than 300,000 fewer deaths among seniors and others enrolled in Medicare. HHS’s release of the report encouraged Americans to get an updated COVID-19 booster this fall.
  • The US Food and Drug Administration authorized the use of the Moderna and Pfizer-BioNTech COVID-19 bivalent vaccines as a single booster dose in younger age groups.
  • CMS officials published an article in the Journal of the American Medical Association outlining CMS’s vision for Medicare coverage for new and emerging technologies.
  • The US Department of Agriculture Rural Development announced $110 million in grants to improve healthcare facilities in rural towns. These grants will help 208 rural healthcare organizations expand critical services for almost five million people in 43 states and Guam. Funding for this program was provided through the American Rescue Plan.
  • The Supreme Court declined to hear the case Missouri v. Biden, which challenges the CMS vaccine mandate for most workers in federally funded healthcare facilities. This case was brought by 10 states claiming the mandate is an overreach of the federal government’s power and violates federal administrative law.
  • The Office of Management and Budget received a proposed rule focusing on improving interoperability of healthcare data and establishing processes for prior authorization within Medicare, Medicaid and the Marketplace.


Congress remains in recess until after the midterm elections on November 8. Regulatory developments are expected in the coming weeks, including the release of final payment rules for physicians and hospital outpatient services.


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

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