McDermottPlus Check-Up: September 18, 2020 - McDermott+Consulting

McDermottPlus Check-Up: September 18, 2020

This Week’s Dose

A bipartisan group of House lawmakers released a framework for coronavirus (COVID-19) relief legislation, and the Administration released a vaccine distribution plan.


House Members Continue Working on COVID-19 Relief Package. The bipartisan House Problem Solvers Caucus released a framework for further COVID-19 relief and economic stimulus efforts, which they hope will inspire negotiators to return to the table. The proposal, which is light on specific details, outlines between $1.5 and $2 trillion in relief funds, including $25 billion for testing and contact tracing, $30 billion for healthcare provider support including telehealth expansion, and $45 billion in forgiveness of Medicare Accelerated and Advance Payment (AAP) loans to providers. It is unlikely this proposal on its own will break the ongoing stalemate between the White House and congressional Democrats on COVID-19 relief, but it illustrates where there might be bipartisan consensus around contentious issues, like AAP relief. House Speaker Nancy Pelosi (D-CA) has reportedly told her caucus that they will stay in session until a deal is reached, though there have yet to be any signs of an imminent compromise.


HHS Released COVID-19 Vaccine Distribution Strategy. The US Department of Health and Human Services (HHS) issued a report to Congress and an Interim Playbook for Jurisdiction Operations, detailing the Administration’s strategy for distributing a COVID-19 vaccine once it becomes available. The plan includes an information campaign led by HHS, developing a vaccine distribution infrastructure and distributing approximately six million kits needed to administer a vaccine. States and localities must submit vaccine distribution plans to the Centers for Disease Control and Prevention by October 16, 2020, in order to be ready for a vaccine as early as November, though public health experts continue to estimate that a vaccine may not be widely available until sometime next year.

President Trump Signed Executive Order on Drug Pricing. The Executive Order (EO) on Lowering Drug Prices by Putting America First would ensure that Medicare pays the same price as other countries for Part B and Part D drugs. The EO directs the Secretary of HHS to take appropriate steps to implement payment-model demonstrations pursuant to which Medicare would pay no more than the “most-favored-nation price” for certain Part B and Part D prescriptions and biological products. The “most-favored-nation price” is defined as the lowest price, adjusted for volume and differences in national gross domestic product (GDP), for a pharmaceutical product that the drug manufacturer sells in a member country of the Organisation for Economic Co-operation and Development that has a comparable per capita GDP. Notably, the Executive Order alone does not establish the payment models; rather, it directs the Secretary to “take appropriate steps,” “to the extent consistent with law,” to develop and implement rulemaking to test the models. It is unlikely that the Administration will have time to issue rules implementing the EO ahead of the election. It also is unclear whether HHS has the authority to take some of the prescribed steps. The EO likely is intended to be a messaging tool for the President on the campaign trail. Additional analysis of the EO is available here.

CMS Withdrew MFAR Proposed Rule. Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma issued a statement on Twitter announcing the agency has withdrawn the proposed Medicaid Fiscal Accountability Rule (MFAR). This rule was initially proposed in November 2019, and immediately caused a backlash from states and hospitals that rely on federal match programs to support state Medicaid payments. As proposed, MFAR would have made significant changes to the structure and definition of Medicaid supplemental payments and was expected to cause substantial disruption in Medicaid programs across the country. Administrator Verma said the agency withdrew the proposed rule due to concerns raised by states and providers. The proposed rule received significant pushback from hospitals and other stakeholders.

Quick Hits

  • The Senate Appropriations Committee held a hearing on HHS’ COVID-19 response efforts.
  • Democratic leadership of the House Energy and Commerce Committee called for a briefing with HHS Secretary Alex Azar following reports that political appointees in the Administration are interfering with COVID-19-related public health information. The House Select Subcommittee on the Coronavirus Crisis also opened an investigation into the issue, and Senate Minority Leader Chuck Schumer (D-NY) called on Secretary Azar to resign over the allegations.
  • Bipartisan groups of more than 240 House members and 28 Senators sent letters to HHS urging the agency to stop recent actions by pharmaceutical manufacturers to restrict the 340B program. A group of 22 Democratic Senators also sent a letter to pharmaceutical manufacturers demanding that they stop the behavior.
  • CMS issued Part I of the 2022 Medicare Advantage Advance Notice this week, earlier than in past practice, to accommodate a potential early publication of the calendar year 2022 Rate Announcement (in mid-January, three months earlier than the statute requires).
  • CMS issued a Notice of Funding Opportunity for the Community Health Access and Rural Transformation Model Community Transformation Track.
  • CMS and the Innovation Center released a series of financial methodology papers related to Direct Contracting, which are available on the model website. CMS will hold a webinar on the financial methodology on September 18, 2020, at 12:00 PM EDT, and a question and answer session on September 21, 2020, at 1:00 PM EDT.
  • CMS and the Innovation Center finalized two new models. The Radiation Oncology Model provides bundled payments for 90-day episodes of radiotherapy covering 16 different types of cancer, and the End-Stage Renal Disease (ESRD) Treatment Choices Model gives ESRD facilities payment adjustments to incentivize home-based dialysis treatment and higher rates of kidney transplants.
  • CMS issued a letter to State Medicaid Directors highlighting current opportunities to advance value-based care for Medicaid populations.

M+ Resources

  • Our consultants break down the Inpatient Prospective Payment System final rule on this week’s episode of the Health Policy Breakroom. A summary of the rule is available here.
  • How could a Democratic win in the 2020 election change the health policy landscape? We offer some key considerations here.
  • Find all McDermottPlus analysis related to COVID-19 on our COVID-19 Resource Center.

Next Week’s Diagnosis

Lawmakers continue negotiations on government funding with less than two weeks to go before the end of the fiscal year. The Senate Health, Education, Labor and Pensions Committee will hold a hearing on the government’s COVID-19 response, and the House Energy and Commerce Health Subcommittee will hold a hearing on the Affordable Care Act and the pandemic.


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

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