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In the Lede

The House and Senate passed a continuing resolution (CR) to fund government operations through February 18. While a group of conservative Republican Senators had threatened to hold up the CR because of concerns with the President's vaccine mandate, they accepted a Senate floor vote on an amendment – that failed 48-50 – to bar funding to implement private sector vaccine mandate as well as requirements for federal employees, federal contractors, health care workers and the military. The CR did not include fixes to Medicare spending cuts starting in January, including a four percent reduction to Medicare reimbursements, a separate two percent sequestration cut, and  reductions to reimbursements for physicians and clinical laboratory services. A temporary 3.75 percent increase to doctors' pay through the annual physician fee schedule is also scheduled to end in January. House Appropriations Committee Chair Rosa DeLauro (D-CT) said during a House Rules Committee hearing that lawmakers are working on "comprehensive bipartisan solution by the end of the year" for all of the outstanding health care provider issues. 

The President announced new executive actions to combat COVID-19 as the United States heads into the winter months and with the emergence of the new Omicron variant. The President announced:

  • New steps to ensure that the nearly 100 million eligible Americans who have not yet received their booster, get one as soon as possible, including expansion of pharmacy availability for booster shots through December, and a new public education campaign to encourage adults to get boosters, with a focus on seniors through the AARP and the Center for Medicare and Medicaid Services (CMS).
  • New actions to get more kids ages five and older vaccinated and to keep our schools open, including launching hundreds of family vaccination clinics across the country, requiring Medicaid to pay healthcare providers to talk to families about getting their kids vaccinated, releasing findings from the Centers for Disease Control and Prevention (CDC) on quarantine and testing policies in schools, issuing a new “Safe School Checklist” to give schools a clear game plan for how to get as many of their staff and students vaccinated as soon as possible, and providing every resource to the Food and Drug Administration (FDA) to support timely review of applications for vaccines for individuals under the age of five.
  • New steps to ensure Americans have access to free at-home testing, including providing health plan coverage of no-cost rapid, over-the-counter (OTC) COVID-19 tests and expanding community distribution of free at-home tests through neighborhood sites such as health centers and rural clinics.
  • Additional steps to strengthen the safety of international travel, including strengthening global pre-departure testing protocols and extending the requirement to wear a mask on airplanes, rail travel, and public transportation.
  • Additional progress in protecting workers and keeping the economy growing and businesses open by calling on businesses to move forward with vaccination or testing programs.
  • New actions to help states battle any potential COVID-19 outbreaks this winter, including of the Omicron variant, including making 60+ Winter COVID-19 emergency response team deployments available to states and strengthening the national volunteer emergency medical response corps to support communities in need.
  • Ensuring that if and when any new COVID-19 treatment pills have been found to meet FDA’s scientific standards, they are equitably accessible to all Americans by securing enough supply and ensuring pills are widely available in the hardest-hit, highest-risk communities.
  • Continued commitment to global vaccination efforts, including donating 1.2 billion doses to the world, accelerating the delivery of more vaccines to countries in need by pledging to deliver 200 million more doses in the next 100 days, taking steps to ramp up manufacturing here and abroad, and working with country partners to help their population get vaccinated.
  • Steps to accelerate the development and deployment of new vaccines and boosters if needed for the Omicron variant. 

The Centers for Medicare and Medicaid Services (CMS) issued a memo indicating that it has suspended activities related to the implementation and enforcement of its November 4 interim final rule (IFR) which requires staff working in Medicare or Medicaid-certified providers to have the shots necessary to be fully vaccinated against COVID-19 by January 4, 2022, and to receive their first shot prior to December 6, 2021. On November 29 and November 30, 2021, the United States District Court for the Eastern District of Missouri and United States District Court for the Western District of Louisiana issued preliminary injunctions against the implementation and enforcement of the IFR against Medicare and Medicaid-certified providers and suppliers. CMS has appealed both of these decisions, and has filed motions for stays of these orders. CMS indicated that it remains confident in its authority to protect the health and safety of patients in facilities certified by the Medicare and Medicaid programs.

On the Hill

The Congressional Budget Office (CBO) released a presentation on potential effects to drug manufacturers, Medicare beneficiaries, Part D plans, and the Federal Government under proposed redesigns of the Part D prescription drug benefit. According to the CBO presentation, proposals to revamp the Part D benefit would generally make these changes:

  • Eliminate the coverage gap, extending the initial coverage phase to the catastrophic threshold.
  • Significantly increase plans’ liability for spending that exceeds the initial coverage limit (that is, spending that occurs in the coverage gap and in the catastrophic phase of the current-law benefit).
  • Cap beneficiaries’ out-of-pocket costs at a fixed dollar amount.
  • Shift some or all of the discount that manufacturers are obliged to provide from the coverage gap to the catastrophic phase (or, possibly, the initial coverage phase).

Capping enrollees’ out-of-pocket costs would push up federal spending by shifting spending from enrollees to plans, according to CBO. The federal subsidy covers 74.5 percent of plans’ expected spending, so an increase in those costs translates into higher federal spending. A cap also would increase prescription drug utilization by enrollees and thus raise the government’s costs for the Part D program. That rise in spending would be partially offset by reduced Medicare spending on other healthcare services, such as hospital care and physicians’ services. Extending the required manufacturer discount on brand-name drugs to other phases could either increase or decrease federal spending depending on how those changes affected total discounts as a share of that spending. If manufacturer discounts rose, then federal spending would tend to decline; conversely, if discounts fell, then federal spending would tend to rise because the government subsidizes the costs paid by plans but not the discounts extended by manufacturers. In 2020, about 47 million Medicare beneficiaries (or 75 percent) were enrolled in Part D. Roughly 13 million of them receive a low-income subsidy that pays most or all of their premium and cost-sharing requirements; as a result, those enrollees face only limited costs. The base Part D premium is about $33 per month. Part D plans receive a fixed payment per enrollee from the federal government and bear financial risk for part of enrollees’ drug costs, so plan administrators have an incentive to control costs by managing drug utilization and negotiating lower prices. When enrollees reach a high level of spending known as the catastrophic threshold, the federal government reimburses plans for 80 percent of spending above that limit, which reduces plans’ incentives to control costs.

CBO also released a presentation on the "Economic Effects of Expanding Home- and Community-Based Services in Medicaid", finding that if policies of the House-version of the Build Better Act (H.R. 5376) were enacted, the number of workers providing those services would grow, and their earnings would increase. Some people who are currently providing home and community-based services (HCBS) to family members would be paid for that work, and some would return to their primary occupations, according to CBO. However, in anticipation of lower costs for such services in the future, some people would save less money for future long-term services and supports (LTSS) needs and increase their spending on other goods and services. Under H.R. 5376, HCBS would be available to Medicaid beneficiaries living in participating states who have income and assets lower than their state’s requirements for Medicaid and meet their state's functional eligibility criteria for Medicaid HCBS. CBO has estimated that new federal spending for HCBS provided through Medicaid would increase federal deficits by $150 billion from 2022 to 2031.

At the Agencies 

The Department of Health and Human Services (HHS) released a report to show that increases in the use of telehealth helped maintain some healthcare access during the COVID-19 pandemic, with specialists like behavioral health providers seeing the highest telehealth utilization relative to other providers. The report analyzed Medicare fee for service (FFS) data in 2019 and 2020, which highlighted that telehealth services were accessed more in urban areas than rural communities, and Black Medicare beneficiaries were less likely than White beneficiaries to utilize telehealth. Other findings from the report:

  • The share of Medicare visits conducted through telehealth in 2020 increased 63-fold, from approximately 840,000 in 2019 to 52.7 million.
  • States with the highest use of telehealth in 2020 included Massachusetts, Vermont, Rhode Island, New Hampshire and Connecticut, while states with the lowest use of telehealth in 2020 included Tennessee, Nebraska, Kansas, North Dakota and Wyoming.
  • While overall healthcare visits for Medicare beneficiaries declined in 2020 as compared to 2019, telehealth was particularly helpful in offsetting potential foregone behavioral healthcare. In 2020, telehealth visits comprised a third of total visits to behavioral health specialists, compared to 8 percent of visits to primary care providers and 3 percent of visits to other specialists.  

To help beneficiaries maintain some access to care amid stay-at-home orders to reduce COVID-19 related exposure, CMS used emergency waiver authorities enacted by Congress, as well as existing regulatory authorities to implement policies expanding access to telehealth services during the pandemic. These included waiving several statutory limitations such as geographic restrictions and allowing beneficiaries to receive telehealth in their home. Outside of the public health emergency (PHE), Medicare is generally restricted to payment for telehealth services in certain, mostly rural areas, and when beneficiaries leave their home and go to a clinic, hospital, or other type of medical facility for the service. Additionally, in response to the pandemic, the HHS Office for Civil Rights relaxed enforcement of Health Insurance Portability and Accountability Act (HIPAA) of 1996 privacy requirements for videoconferencing. To help protect access to care as informed by data, CMS recently announced that for the first time outside of the COVID-19 PHE, Medicare will pay for mental health visits furnished by Rural Health Clinics and Federally Qualified Health Centers via interactive video-based telehealth, including audio-only telephone calls. Additionally, CMS is permanently eliminating geographic barriers and allowing patients in their homes to access telehealth services for diagnosis, evaluation, and treatment of mental health disorders, including via audio-only communications technology. While utilization of telehealth services increased and improved access to services for many beneficiaries, CMS acknowledged that more research is needed to understand the impact on quality of care and why certain beneficiaries used less telehealth than others. 

The Centers for Medicare & Medicaid Services (CMS) issued a Request for Information (RFI) to solicit stakeholder and public feedback that will be used to inform potential changes and future rulemaking to improve the organ transplantation system and seek to enhance the quality of life of those living with organ failure, which includes 106,000 people who are waiting to receive a life-saving or life-enhancing organ transplant. CMS is focused on identifying potential system-wide improvements that would increase organ donations, improve transplants, enhance the quality of care in dialysis facilities, increase access to dialysis services, and advance equity in organ donation and transplantation. Critical to these system-wide improvements is the close, collaborative relationship among Organ Procurement Organizations (OPOs), donor hospitals, transplant programs, and End-Stage Renal Disease (ESRD) facilities to ensure that organs are successfully recovered and transplanted.  Despite the higher risks associated with kidney disease among minorities, data shows that Black and Latino patients on dialysis are less likely to be placed on the transplant waitlist and have a lower likelihood of transplantation. Because of inequities, CMS’ RFI asks the public for specific ideas on advancing equity within the organ transplantation system, particularly on potential changes to the health and safety standards for transplant programs, ESRD facilities, and OPO operations. The RFI seeks feedback from those on organ transplant waitlists, transplant recipients, their families, living donors and those who sign up to be posthumous donors, families of donors, chronic kidney disease and ESRD patients. The feedback will help inform future regulatory requirements that transplant programs, OPOs, and ESRD providers and suppliers would need to meet to participate in the Medicare and Medicaid programs. Comments must be submitted by February 1, 2022.

The Health Resources and Services Administration (HRSA) announced the distribution of  $7.5 billion in American Rescue Plan (ARP) Rural payments to providers and suppliers who serve rural Medicaid, Children's Health Insurance Program (CHIP), and Medicare beneficiaries. The average payment being announced is approximately $170,700, with payments ranging from $500 to approximately $43 million. More than 40,000 providers in all 50 states, Washington, D.C., and six territories will receive ARP Rural payments. Rural providers play an integral role in the Administration’s focus on addressing health equity. Research has found that 47 percent of rural providers were operating in the red pre-pandemic, and this Administration has heard from providers on the ground that the pandemic worsened this reality. To help mitigate some of these pandemic-related financial losses, providers were invited to begin applying for this ARP Rural relief funding starting September 29, 2021 and asked to complete their applications by November 3, 2021. In just three weeks, HRSA processed nearly 96 percent of the more than 55,000 ARP Rural applications submitted. Many ARP Rural payment recipients will also be eligible for additional funding through the $17 billion Provider Relief Fund (PRF) Phase 4 opportunity that was also made available during the same time period. Providers could apply for both opportunities through a single application. To streamline the application and payment process as much as possible, ARP Rural payments are based on Medicare, Medicaid, and CHIP claims for services to rural beneficiaries from January 1, 2019 through September 30, 2020, which was chosen as it represents the most recent comprehensive data available to HHS and takes into account both pre-pandemic and pandemic operations. To provide equitable relief to these providers, ARP Rural payment calculations were generally based on Medicare reimbursement rates, regardless of whether the service was provided to a Medicare, Medicaid, or CHIP patient. Every eligible provider that serves at least one rural Medicare, Medicaid, or CHIP beneficiary will receive funding.

In the News

Wall Street Journal:  Some Hospitals Prepare to Lose Staff Over Covid-19 Vaccination Mandate

New York Times:  Biden’s winter Covid plan includes insurance reimbursement for at-home tests.;  Democrats’ Bill Would Go Far Toward ‘Patching the Holes’ in Health Coverage