This Week’s Dose

Congress completed action on its final “must pass” pieces of legislation in 2021, including a bill to raise the debt limit and the National Defense Authorization Act.  Negotiations continued on the Build Back Better (BBB) Act.  Senate Democrats continued to press for resolution before the end of the year, though by week’s end President Biden and Senate leaders acknowledged that the Senate would not take up the bill before January 2022.

Congress

Senate Committees Release BBB Text, as Negotiations and Meetings with Parliamentarian and Continue. This week, Congress completed action on its final “must pass” items of the year, including raising the debt limit and finalizing the annual defense authorization bill. At the same time, all eyes remained on the Senate to see whether Democrats would act on the Build Back Better (BBB) Act before the end of the year.

Since the House approved its version of BBB on November 19, Senate Democrats have been working with the Senate Parliamentarian on issues related to the so-called “Byrd Rule,” which dictates what types of provisions can advance in legislation considered under the budget reconciliation process.  In addition, negotiations have been ongoing among the President, Democratic leaders and Senator Joe Manchin (D-WV) regarding his concerns with the size and scope of the legislation as well as particular provisions.

On December 11, key Senate committees unveiled their draft BBB texts, including the Finance Committee and Health, Education, Labor and Pensions (HELP) Committee (drafts found here and here, respectively). When compared with the House-passed bill there were notable health-related changes in the Finance and HELP drafts.  Some highlights of health care changes include, but are not limited to: 

• Removing the House bill’s 12.5% cut to disproportionate share hospital (DSH) payments to hospitals in non-Medicaid expansion states.

• Eliminating regulatory requirements related to skilled nursing facility (SNF) staff-to-patient ratios that were included in the House bill. 

• On Home and Community Based Services (HCBS) in Medicaid, removing many of the cited limitations for the use of funds and changes improvement plan requirements to be defined by the Secretary of Health and Human Services (HHS) and adding an additional $3 million in funds to the House’s already allocated $22 million, for purposes of developing HCBS quality measures.

• Changing the permanent expansion of the Money Follows the Person demonstration to begin in 2022, rather than 2023 as passed by the House.

• Regarding Medicaid postpartum coverage, removing several of the House-passed version’s state reporting requirements.

• Protecting low income people who gain coverage in 2025 (and didn’t have other coverage for their health expenses) by requiring qualified health plans to cover up to three months of services prior to enrollment and requiring HHS to reimburse plans for those costs.

• Notable drug pricing provisions include the following: Regarding Medicare drug price negotiation, the Senate Finance committee text clarifies how the maximum fair price for a prescription drug covered by Medicare Part B or D will be determined, with additional specifications for the maximum fair price calculation of insulin products. The updated text also makes modifications to the timeline and baseline to determine how the inflation-based rebates for prescription drugs under Part B and D will be calculated. Finally, it specifies that generic prescription drugs could be exempted from inflation-based rebates if they experience supply chain disruptions or create access issues.

It is important to note that the draft Senate text is subject to further changes before a BBB package reaches the Senate floor, given the aforementioned negotiations with Senator Manchin—or any other Democratic senators who raise concerns with particular provisions—along with forthcoming rulings from the Parliamentarian.

Negotiations are ongoing, though President Biden and Democratic leaders acknowledged on the evening of December 16 that the Senate would not act on BBB before the end of the year, following a ruling from the Parliamentarian that an immigration proposal in the package would violate the Byrd Rule. The Senate is scheduled to return to session on January 3, 2022, with the House not returning until January 10.

Administration

Updates on Challenges to Biden Administration’s Vaccine Mandates.  On December 15, two federal courts issued orders that, together, significantly impact the Biden Administration’s authority to implement and enforce the COVID-19 vaccine mandate issued by the Centers for Medicare and Medicaid (CMS).

The first order, issued by the U.S. Court of Appeals for the Fifth Circuit, has the effect of allowing the federal government to proceed with its efforts to implement the COVID-19 vaccine mandate issued by CMS in over two dozen states.  The second order, issued by a federal court in Texas, bars the federal government from implementing the CMS vaccine mandate in the state of Texas. The combined effect of yesterday’s orders, as well as recent actions by other federal courts, is that the Biden Administration is currently authorized to implement the CMS vaccine mandate in 25 states, but precluded from doing so in 25 states, creating a patchwork approach to the mandate.

It remains unclear how CMS will move forward with the mandate, especially given the original first compliance date of December 6.  For more information, please see this Insight piece.

HHS Releases $9 Billion in Provider Relief Fund Payments.  On December 14, HHS announced the distribution of approximately $9 billion in Provider Relief Fund (PRF) Phase 4 payments to health care providers who have experienced revenue losses and expenses related to the COVID-19 pandemic.

According to the agency’s press release, the average payment for small providers is $58,000, for medium providers is $289,000, and for large providers is $1.7 million.  The Phase 4 payments—which are distributed through HHS’ Health Resources and Services Administration (HRSA)—were scheduled to begin on December 16 for more than 69,000 providers across all 50 states, Washington, DC, and eight territories (a state-by-state breakdown can be found here).

The remaining Phase 4 applications are being reviewed by HRSA and those payments will be made in 2022.

President Biden Issues Executive Order on Reducing Administrative Burden and Improving Customer Experience.  On December 13, the President issued an Executive Order (EO) instructing federal agencies to take actions in six major categories to reduce administrative burden and improve the customer experience for organizations and the public.

Quick Hits

• The Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing to consider the nomination of Dr. Robert Califf to be FDA Commissioner.

• The House Select Subcommittee on the Coronavirus Crisis held a hearing to examine the need to accelerate global COVID-19 vaccination efforts.

• The Fall 2021 Unified Agenda—which details pending and forthcoming regulatory actions that federal agencies plan to issue in the near and long term—was released by the Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget (OMB).

• CMS announced the availability of new Research Identifiable Files (RIFs) that contain data from the Next Generation ACO (NGACO) Model for Performance Year 4.

• House and Senate calendars for 2022 (House, Senate).