Summary
Congressional Democrats return with the same to-do list but with a more tenuous political landscape. Following Sen. Joe Manchin’s (D-WV) announcement that he will not support the Build Back Better Act (BBBA) as currently proposed, Democrats will work to revise the package to a more pared down version that may possibly exclude some of its more contentious elements. As another major priority, Congress will also continue working to pass a spending package for fiscal year (FY) 2022. However, the pressure to pass both vehicles will continue to mount as the mid-term elections grow nearer and legislators seek major wins to secure their positions.
The rise in COVID-19 surges in the wake of the Omicron variant will also add pressure on Congress to act, especially in light of the pandemic preparedness and public health infrastructure funding included in the BBBA (e.g., $1.3 billion for the Office of the Assistant Secretary for Preparedness and Response to support surge capacity, expand vaccine productions capacity, mitigate supply chain risks, etc.).
- BBBA, January 2022 – Senate Majority Leader Chuck Schumer (D-NY) aims to hold a vote on “a revised version of the House-passed Build Back Better Act” this month. Though Schumer said the vote would be “very early in the new year,” negotiations over a scaled-back version of the $1.75 trillion social spending package that Sen. Manchin would support could take weeks or months. We anticipate that the revised BBBA will retain at least some of the major health-focused provisions, such as extending the temporary increase in ACA Marketplace premium tax credits (which expire at the end of 2022). Manchin has previously expressed opposition to provisions addressing the Medicaid expansion coverage gap and expanding Medicare benefits. As for drug pricing – another Democratic priority – Sen. Bill Cassidy (R-LA) has commented that he anticipates Republicans may be willing to support the Senate Finance Committee’s recent language on inflation rebates as that was originally advanced by Sens. Wyden (D-OR) and Grassley (R-IA) in the 116th
- FY 2022 Appropriations, February 18, 2022 – The continuing resolution (L. 117-70) expires February 18, 2022. While the return of earmarks, formally known as “Community Project Funding,” motivates both parties to pass FY 2022 appropriations, whether top appropriators will be able to reach a deal remains to be seen.
Regulatory Updates
The Centers for Medicare & Medicaid Services (CMS) released three major regulations during the final two weeks of 2021. In brief, these regulations included:
- The proposed rule for the 2023 Notice of Benefit and Payment Parameters – Among a number of proposed changes, this proposed rule would require all issuers in the Federally-facilitated Marketplace and State-based Marketplaces on the Federal Platform to offer standardized plan options for every product network type, metal type, and plan classification, as well as in every service area where the issuer will offer Marketplace plans. The rule would also enhance access to providers through re-instating network adequacy reviews and requiring issuers to include 35 percent of available essential community providers (ECPs) in their networks. Last, the rule would prohibit issuers from discriminating on the basis of sexual orientation and gender identity.
- The final rule for the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) payments for 2022 – The final rule includes a permanent payment increase of at least 5 percent pay increase for DME in 2022. Specifically, former competitive bidding areas (CBAs) will see a 5 percent payment increase, while items in non-CBAs will receive increases from 5.1-5.4 percent. In addition, CMS will continue paying suppliers a 50/50 blended payment rate of adjusted and unadjusted fee schedule rates for furnishing items and services in rural and non-contiguous areas once the public health emergency ends. Last, CMS did not finalize the previously proposed categories of supplies and accessories and fee schedule amounts for three types of continuous glucose monitoring (CGM) systems, though the final rule did classify adjunctive CGMs under the Medicare Part B benefit for DME. CMS added it does not believe at this time that it is necessary to further stratify the types of CGMs beyond the two categories of non-adjunctive and adjunctive CGMs.
- The final rule to rescind the Most Favored Nation (MFN) model – This rule finalized the August 2021 proposed rule to rescind the rule, citing concern for implementing the MFN model during the COVID-19 pandemic. Additional comments in the final rule also urged against the implementation of any model that would test international or domestic reference pricing now or in the future and raised concerns about access to Part B drugs. Of note, the final rule references the September 2021 Department of Health and Human Services (HHS) Comprehensive Plan for Addressing High Drug Prices (WHG summary) and details that the agency is exploring models that could reduce Part B drug prices, including value-based payments that link the payment to the clinical value provided to the patient.
Additional regulatory actions taken during the holiday season include implementing a new Medicaid option to support community-based mobile crisis intervention services (pursuant to the American Rescue Plan) and rescinding the Georgia Medicaid work requirements.
Looking ahead, the Biden-Harris Administration is expected to issue a slate of new regulations that span a range of health care policy priority areas, including pharmaceutical regulations, Medicaid eligibility, health IT and interoperability, and care coordination and preventive care, among others (WHG summary of the Fall 2021 Unified Regulatory Agenda).
Key anticipated rulemaking in the first quarter of 2022 include:
- Care Coordination, January 2022 – Pursuant to the CARE Act, the Office for Civil Rights (OCR) is slated to issue a proposed rule to better harmonize the 42 CFR part 2 (part 2) confidentiality requirements with certain permissions and requirements of the HIPAA Rules and the HITECH Act.
- Interoperability, February 2022 – CMS is expected to issue a proposed rule that would place new requirements on Medicare Advantage plans, Medicaid managed care plans, CHIP managed care entities, Medicaid and CHIP fee-for-service entities, and Qualified Health Plans to improve electronic exchange of health care data and implement electronic prior authorization programs. As a reminder, the Trump Administration proposed a similar regulation in 2020 that did not include MA and was ultimately withdrawn.
- Commercial Insurance, February 2022 – CMS is planning to propose amendments to the final rules regarding religious and moral exemptions and accommodations regarding coverage of certain preventive services under the Affordable Care Act.