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In the Lede

The President released a six-pronged, national strategy plan aimed at combatting COVID-19 by implementing vaccination requirements, while also keeping schools open and safe, and protecting the economy from lockdowns and damage. The plan aims to reduce the number of unvaccinated Americans by using regulatory powers and other actions to substantially increase the number of Americans covered by vaccination requirements. Specifically:

  • The Department of Labor’s Occupational Safety and Health Administration (OSHA) is developing a rule that will require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work.
  • An Executive Order will require all federal executive branch workers to be vaccinated, while another Executive Order directing that this standard be extended to employees of contractors that do business with the federal government. 
  • The Centers for Medicare & Medicaid Services (CMS) is taking action to require COVID-19 vaccinations for workers in most healthcare settings that receive Medicare or Medicaid reimbursement, including but not limited to hospitals, dialysis facilities, ambulatory surgical settings, and home health agencies. These requirements will apply to approximately 50,000 providers and cover a majority of healthcare workers across the country.
  • The plan calls on entertainment venues like sports arenas, large concert halls, and other venues where large groups of people gather to require that their patrons be vaccinated or show a negative test for entry.
  • OSHA is developing a rule that will require employers with more than 100 employees to provide paid time off for the time it takes for workers to get vaccinated or to recover if they are under the weather post-vaccination. 

For those already vaccinated, the Administration is preparing for boosters to start as early as the week of September 20, subject to authorization or approval by the Food and Drug Administration (FDA) and a recommendation from the Centers for Disease Control and Prevention's (CDC) independent Advisory Committee on Immunization Practices (ACIP). Getting a booster will be easy. Booster shots will be free, and widely available across 80,000 locations – from pharmacies to doctors’ offices and health centers. Individuals will be able to find a vaccination site at Vaccines.gov, including what vaccines are available at each site and, for many sites, what appointments are open. A toll-free number, 1-800-232-0233, will also be available in over 150 languages.

Health and Human Services (HHS) Secretary Xavier Becerra released a Drug Pricing Plan aimed at addressing high prescription drug prices, which includes calling for legislation that would allow the HHS Secretary to negotiate Medicare Part B and Part D drug prices directly with pharmaceutical companies and make those prices available to other purchasers. Based on three guiding principles – making drug prices more affordable and equitable for everyone, improving and promoting competition throughout the drug industry, and fostering scientific innovation – the plan calls for the following legislative action:

  • Negotiating drug prices in Medicare Parts B and D, with those negotiated prices also available to commercial plans (including the Marketplace) and employers who want to participate. 
  • Reforming Medicare Part D, including capping catastrophic spending to protect beneficiaries from unaffordable out-of-pocket costs.
  • Passing legislation to slow price increases over time on existing drugs.
  • Passing legislation to speed the entry of biosimilar and generic drugs, including shortening the period of exclusivity, and policies in Medicare Part B to increase the prescribing of biosimilars by clinicians.
  • Prohibiting “pay-for-delay” agreements and other anti-competitive practices by drug manufacturers.
  • Investing in basic and translational research to foster innovation, including President Biden’s proposal to create the Advanced Research Projects Agency for Health (ARPA-H).

The plan also outlines several action HHS can use to promote competition and reduce drug prices, including:

  • Testing models using value-based payments in Medicare Part B, in which payment for drugs is directly linked to the clinical value they provide patients.
  • Testing models providing additional cost-sharing support to Medicare Part D Low Income Subsidy Beneficiaries for using biosimilars and generics.
  • Testing total cost of care models in Medicare to determine whether they produce changes in drug utilization, reductions in total spending, and improvements in patient outcomes.
  • Data collection from insurers and Pharmacy Benefit Managers (PBMs) to improve transparency about prices, rebates, and out-of-pocket spending on prescription medications.
  • Continuing to implement the Food and Drug Administration’s Biosimilars Action Plan and Drug Competition Action Plan, and clarifying the approval framework for generic drugs to encourage a more transparent and efficient process.
  • Working with states and Indian Tribes to develop drug importation programs that reduce costs to consumers without increasing risks to safety.

The Drug Pricing Plan is part of a broader initiative stemming from the President's Executive Order on Promoting Competition in the American Economy, while also specifically responding to the request in President's Executive Order for “a plan to continue the effort to combat excessive pricing of prescription drugs and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the Federal Government for such drugs, and to address the recurrent problem of price gouging.” 

On the Hill

House Energy and Commerce Committee released legislative text as part of the committee's budget reconciliation instructions, which includes recommendations aimed at lowering the cost of prescription drug prices by including provisions of the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3). Among other provisions relating to the environment and energy, the committee's legislative recommendations – as part of the Democrat's $3.5 trillion reconciliation, domestic agenda package – also includes other healthcare proposals to strengthen the Affordable Care ActMedicaid and the Children's Health Insurance Program (CHIP), and Medicare. The drug pricing proposal would:

  • Require the Secretary of Health and Human Services (HHS) to annually negotiate with drug manufacturers for the highest priced and most commonly used prescription drugs, including insulin.
  • Require drug manufacturers who increase their prices faster than inflation to pay back that excess amount to the federal government.
  • Cap out-of-pocket costs for Medicare Part D beneficiaries for the first time at $2,000 each year.
  • Revamp Part D’s financing structure that would shift more financial liability from Medicare to drug manufacturers.
  • Block the implementation of a Trump Administration regulation, known as the "rebate rule", that would have required pharmacy benefit managers to pass drug manufacturer rebates through to patients at the pharmacy counter – but that has been projected to raise premiums. 

To strengthen the Affordable Care Act, the committee proposal would  permanently expand Medicaid eligibility to individuals who previously fell within the healthcare law's coverage gap because they live in states that have not expanded coverage. Specifically:

  • Beginning in 2022 through 2024, the legislation would expand the ACA’s premium tax credits to below 100 percent of the federal poverty line (FPL) and provides enhanced cost-sharing assistance.
  • Then, beginning in 2025, the legislation would establish a federal Medicaid program in the remaining non-expansion states by directing the HHS Secretary to contract with third party entities to operate a federal Medicaid program in non-expansion states that closely mirrors the benefit package and beneficiary protections of the Medicaid expansion under the ACA. 
  • The bill would provide $10 billion for states to set up a reinsurance program to directly lower premiums, out-of-pocket costs, and deductibles for their state residents.

The bill would fund and permanently extend the Children’s Health Insurance Program (CHIP), which currently provide coverage to 9.6 million children. The bill would require states to keep children enrolled in the program for 12-month periods. The bill would invest $190 billion – less than the $400 billion requested by the President – to expand access to home and community-based services and care for seniors and people with disabilities, while also strengthening the direct care workforce by improving provider payment rates and giving states the resources to improve their care infrastructure. The legislation would also make permanent the Money Follows the Person and the spousal impoverishment program. The bill would allow pregnant women on Medicaid to keep their coverage for one year postpartum, while also making public health investments to reduce inequities in maternal health outcomes and strengthen the maternal health workforce. Similar to the House Ways and Means reconciliation package, the bill would also expand Medicare coverage to include dentalvision, and hearing benefits.  Finally, the package includes $3 billion to establish the Advanced Research Projects Agency for Health, $35 billion for public health infrastructure and workforce programs, and $15 billion as requested by the Administration for pandemic preparedness. The Energy and Commerce will markup its reconciliation legislative proposal on Monday, September 13.

House Ways and Means Committee unveiled and began marking up legislative proposals, as part of the committee's jurisdiction under the budget reconciliation instructions, that would, among other provisions, expand Medicare coverage to add dentalvision, and hearing benefits, while also implementing reforms to nursing homes to improve elder care. Specifically, the committee's proposal would:​

  • Create coverage for vision services under Medicare Part B beginning October 1, 2022, which would include routine eye examinations to determine the refractive state of the eye and contact lens fitting services by an ophthalmologist or optometrist legally authorized to perform such examinations, procedures, and fitting services under state law. 
  • Allow qualified audiologists to deliver aural rehabilitation and treatment services beginning on October 1, 2023, while also providing coverage of hearing aids as a prosthetic device under Medicare Part B for individuals with severe or profound hearing loss in one or both ears once every five years if furnished through a written order by a physician or qualified audiologist.

Coverage for dental and oral health services under Medicare Part B would not begin until January 1, 2028, Medicare would provide coverage for preventive and screening services (furnished by a dentist or oral health professional) as well as basic and major dental treatments, such as dental cleanings twice annually, oral exams, X-rays, dentures, fluoride treatments and other dental treatments designated by the Secretary of Health and Human Services. Provisions aimed at protecting the elderly and people with disabilities in nursing homes include:

  • Funding elder justice programs that increase support for state and local Adult Protective Services offices and long-term care ombudsman programs to better prevent elder abuse, neglect, and exploitation.
  • Addressing the staffing shortages in long-term care facilities by providing funds for recruitment and retention, including wage subsidies, access to child care, tuition reimbursement, and student loan replacement.
  • Improving the accuracy and reliability of the data collected in these facilities to increase transparency for patients and their families, and strengthen the federal understanding of care quality and reimbursement, and study and update staffing.

The Ways and means Committee will continue its markup of its reconciliation package today.  

Democratic leadership has set a September 15 deadline for House committees to mark up their recommendations for the $3.5 trillion package that Democrats hope to pass as soon as this month. 

At the Agencies

The Government Accountability Office (GAO) issued a report describing temporary changes to Medicaid home- and community-based services (HCBS) programs in response to the COVID-19 pandemic, including reviewing several states' experience in making those changes; and examining the Centers for Medicare and Medicaid Services' (CMS) monitoring and evaluation of the effects of those changes. To maintain access to services and prevent disease spread, all states received approval for temporary changes to their HCBS programs from CMS. The changes enabled selected states to limit in-person contact to reduce the spread of the disease, but also led to new challenges to ensuring beneficiary health and welfare. Examples of changes to states' HCBS included:

  • Modified service planning that were conducted over the phone instead of in-person.
  • Increased payments to providers for hazard pay.
  • Delayed or suspended provider requirements, including background checks.
  • Allowed service provision in new settings, including outside provider facilities.

CMS focused on supporting states' implementation of temporary changes and conducted limited oversight of the effects of the changes. CMS's Pandemic Plan establishes the need for monitoring to make mid-course corrections and conducting evaluations after the pandemic to inform future emergency response. GAO made two recommendations for CMS to (1) develop procedures to monitor temporary changes to HCBS programs during public health emergencies; and (2) evaluate the temporary changes after the COVID-19 emergency and address opportunities for improvement. 

In the News

Wall Street Journal: Biden Administration Unveils Plan to Cut Prescription-Drug Prices

New York Times: Biden Administration Goes Bigger on Cutting Drug Prices

The Hill: House Democrats unveil proposals on drug prices, Medicaid expansion