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McDermottPlus Check-Up: June 18, 2020
Thursday, June 18, 2020

This Week’s Dose: The Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing to discuss possible extensions of temporary telehealth flexibilities, and the Department of Health and Human Services (HHS) finalized a rule rolling back non-discrimination protections under the Affordable Care Act (ACA).


  • Lawmakers Push to Make Some Telehealth Changes Permanent. Senate HELP Committee Chairman Lamar Alexander (R-TN) called for the Centers for Medicare and Medicaid Services (CMS) to permanently lift restrictions that limit the use of telehealth to rural areas during a Committee hearing this week. The so-called “originating-site” rule requires beneficiaries receiving telehealth services to be at a qualifying originating site such as a practitioner office or hospital. This requirement was waived, along with several other legislative and regulatory rules surrounding telehealth, during the COVID-19 public health emergency to increase access to healthcare services as states prohibited non-emergency in-person care. Stakeholders have widely praised these flexibilities and have called on Congress to make some of the changes permanent past the end of the public health emergency (currently in effect through July 25, 2020). While Alexander specifically identified the waiver of originating site requirements as a permanent change for Congress to consider, several members of the HELP Committee expressed support for advancing other permanent changes in the next COVID-19 relief bill. In addition, a group of 30 bipartisan Senators sent a letter calling for several of the telehealth service expansions to be made permanent, including the waiver of originating site requirements and allowing patients’ eligibility for hospice care to be certified remotely. Stakeholders should continue to evaluate and weigh-in with the Administration and congressional leaders on extending these flexibilities beyond the end of the public health emergency.


  • HHS Finalized Rollback of Non-Discrimination Protections. The final rule from HHS eliminates certain non-discrimination protections under Section 1557 of the ACA. The ACA established broad civil rights protections in healthcare, barring discrimination based on race, color, national origin, sex, age or disability. The Obama Administration interpreted the prohibition on sex discrimination to include discrimination on the basis of gender identity and pregnancy status. Though the rule implementing this interpretation was blocked by a federal district court in 2019, the final rule released this week formally repeals those protections. In addition, the final rule removes requirements under the ACA that healthcare providers send documentation to patients and customers in over 15 languages. However, a landmark decision from the Supreme Court this week has called the discrimination protection aspects of the rule rule into question. The 6-3 ruling prohibits employers from discriminating against people based on sexual orientation or gender identity. While these actions are based on separate statutes, the Court’s ruling indicates that they may adopt a similar interpretation, should the new final rule be challenged in federal court. Advocacy and stakeholder groups have already pledged to challenge the HHS rule in court. More on the rule is available here.

  • CMS Issued Proposed Rule Aimed at Increasing Value-Based Purchasing in Medicaid. The proposed rule, Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements, eases some prescription drug pricing requirements in the Medicaid program. Under the Medicaid Drug Rebate Program (MDRP), drug manufacturers are required to report quarterly to CMS the average manufacturer price and the best price that is available on the commercial market. The Medicaid “best price” rule requires drug manufacturers to extend the lowest price for a drug they negotiate with any other buyer to all states in the Medicaid program. The proposed rule would modify the MDRP requirements to allow manufacturers to report multiple best prices based on measurable, clinical outcomes. CMS believes that this will encourage states and manufacturers to enter into value-based arrangements. Currently, five states (Colorado, Louisiana, Michigan, Oklahoma and Washington) have prescription drug value-based arrangements in their Medicaid programs. Other changes made by the rule would implement new opioid-related DUR standards to bring them in line with requirements under Section 1004 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act. The comment period will be open 30 days after the rule is officially published.


  • Federal Appeals Court Blocked Drug Price Transparency Rule. A federal appeals court ruled that the Administration cannot require drug companies to include the list prices of drugs in television advertisements. HHS finalized the rule in May 2019, but the rule was struck down by a federal district court in July 2019. The appeals court affirmed the lower court ruling that HHS overstepped its authority, noting that including list prices for drugs also could be misleading for consumers since few patients actually pay the list price for medication. The rule is one step the Administration has taken in an attempt to lower healthcare costs, though few policies have been enacted. In July 2019, President Trump issued an Executive Order directing HHS to propose rules requiring hospitals to publicize their negotiated charges, which the Department did last November. This rule has also been challenged in court.


  • Proposed Expansion of Main Street Lending Program Includes Hospitals. The Federal Reserve Board released a proposal to expand the Main Street Lending Program to nonprofit organizations, including hospitals. Terms under the proposed Main Street nonprofit loans, including the interest rate, deferral of principal and interest payments, and a five-year term, are the same as for Main Street business loans. The minimum loan size is $250,000 while the maximum loan size is $300 million. Feedback may be submitted via email here until June 22. Under the proposal, eligible organizations must be a tax-exempt organization under section 501(c)(3) or 501(c)(19) of the Internal Revenue Code. Borrowers must also meet the following requirements: have a minimum of 50 and maximum of 15,000 employees; financial thresholds based on operating performance, liquidity, and ability to repay the debt; an operational history of at least five years; and a limit on endowments of no more than $3 billion. Find more information on the Main Street Lending Program and other financial relief opportunities available to healthcare providers here.


  • The House Energy and Commerce Health Subcommittee held a hearing on racial disparities in the healthcare system.

  • The House Select Subcommittee on the Coronavirus Crisis opened an investigation into CMS’ response to and prevention of COVID-19 outbreaks in nursing homes.

  • Democratic leadership of the House and Senate health committees sent a letter chastising the Administration for failing to respond to oversight requests on the White House’s decision not to open a special enrollment period for the federal exchange.

  • Senators Roger Wicker (R-MS) and Chris Coons (D-DE) introduced the Cultivating Opportunity and Response to the Pandemic through Service Act to expand national service programs to help respond to and recover from COVID-19, which the Senators hope to include in the next COVID-19 relief bill.

  • The Food and Drug Administration (FDA) revoked its emergency use authorization for the drugs chloroquine and hydroxychloroquine to treat COVID-19.

  • The Medicare Payment Advisory Commission and the Medicaid and CHIP Payment and Access Commission released their June 2020 reports to Congress.

  • HHS will host two informational webinars on applying for the Medicaid distribution from the Provider Relief Fund at 2 PM ET on June 23 and June 25.


The House Energy and Commerce Committee will hold a hearing on the Administration’s response to COVID-19. National Institute of Allergy and Infectious Diseases Director Anthony Fauci, Centers for Disease Control and Prevention Director Robert Redfield, FDA Commissioner Stephen Hahn and Assistant Secretary for Health Brett Giroir are expected to testify. The Senate HELP and House Education and Labor committees will also hold hearings on preparing for the next pandemic and racial inequalities in healthcare and education.

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