McDermott+ Consulting is pleased to provide the McDermottPlus Check-Up, your regular update on health care policy from Washington, DC.

This Week’s Dose

The President’s coronavirus (COVID-19) diagnosis continued to dominate the news this week as several other White House officials and members of Congress tested positive. The Centers for Medicare and Medicaid Services (CMS) issued new data compliance guidance for hospitals. 

Congress

Senate Republicans Remain Focused on Supreme Court Nomination as President and Others Test Positive for COVID-19. 

President Trump and several Republican senators and Administration officials have tested positive for COVID-19. Many of them were at the White House ceremony on September 26 announcing the US Supreme Court nomination of federal judge Amy Coney Barret. Despite three Republican senators being among those who tested positive, Senate Majority Leader Mitch McConnell (R-KY) said the Judiciary Committee will commence with consideration of Barrett’s nomination the week of October 12 as scheduled, but that he will delay the full Senate’s return to Washington until the week of October 19. Senate Republicans aim to have Coney Barrett confirmed before the election, though Democrats have called for a delay given the proximity of the election and the current and potential spread of the virus in Congress. The US House of Representatives instituted proxy voting early in the pandemic, but the Senate did not, which means senators must be physically present to cast votes. The timing of the confirmation is particularly important for healthcare stakeholders because the Court will hear oral arguments in a case challenging the Affordable Care Act on November 10, just days after the election. If Judge Coney Barrett is not confirmed and sworn in by November 10, she likely would not participate in the decision.

Administration

CMS Issued New Hospital Data Reporting Requirements. 

The new guidance requires hospitals to comply with data reporting requirements announced by CMS in August or risk being terminated from the Medicare and Medicaid programs. Hospitals are required to submit certain COVID-19 information on a daily basis, and weekly reports on the status of critical supplies. The new guidance expands the required data elements to include influenza hospitalizations and deaths. CMS began notifying noncompliant hospitals beginning October 2, 2020, and will send a second notice, if necessary, three weeks later. If a hospital fails to meet the requirements six weeks after the initial notification, it will receive the first in a series of enforcement letters. A hospital will receive a second enforcement letter, if necessary, one week later. If the hospital is still unable to demonstrate compliance, it will receive a final enforcement letter and will be terminated from participation in Medicare and Medicaid in 30 days, though providers will have an opportunity to appeal the termination. For noncompliance identified after November 13, 2020, CMS will proceed directly to enforcement action. Stakeholders have expressed on-going concern regarding the increased reporting burden and CMS action to terminate participation from Medicare and Medicaid for failing to meet these requirements.

Courts

US Supreme Court Heard Oral Arguments in Pharmacy Benefit Manager (PBM) Case. 

The case concerns whether states have the authority to regulate PBMs. At issue is an Arkansas law that requires PBMs to reimburse pharmacies at the wholesale price for a drug and lets pharmacies challenge PBM reimbursement rates. Arkansas contends that the law supports community pharmacies, which in turn lowers drug costs. The PBMs argue that the Employee Retirement Income Security Act, which preempts most state regulation of commercial insurance, protects them from such requirements. A federal appeals court previously sided with the PBMs on the issue. If the Supreme Court upholds the lower court’s ruling, it could have implications for over 40 states that have similar regulations of PBMs in place. A ruling is expected next year.

Quick Hits

• President Trump abruptly announced that he is ending COVID-19 relief talks with Democrats until after the election, but suggested that he would sign legislation authorizing a second round of stimulus checks for individuals and funding for the airline industry and small businesses. Negotiations remain fluid.

• President Trump issued an executive order establishing a multi-agency working group to address mental health issues resulting from COVID-19. More information is available here.

• CMS announced amended terms for payments issued under the Accelerated and Advance Payment Program that reflect the changes included in the recently enacted Continuing Resolution legislation. Loan recipients who are experiencing financial hardship may request an Extended Repayment Schedule, and providers may also use funds received through the Provider Relief Fund (PRF) to repay the loan. More information is available in the CMS fact sheet and frequently asked questions.

• CMS released the third evaluation report for the Next Generation Accountable Care Organization Model comparing participation and Medicare payments for the model across the first three performance years (2016-2018).

• CMS released Star Ratings for 2021 Medicare Advantage (MA) and Part D Prescription Drug Plans, which show that 77% of beneficiaries who enroll in MA plans with drug coverage will be in plans with four or more stars in 2021. Performance is down slightly from 2020, when approximately 81% of MA enrollees with prescription drug coverage were in plans with four or more stars.

• The Food and Drug Administration (FDA) issued strict new guidelines for vaccine developers, which make it unlikely a vaccine could be approved before Election Day.

• FDA posted a new webpage that will highlight vaccine information as it becomes available.

• The Department of Health and Human Services will host a webinar on the Phase 3 General Distribution of the PRF on October 15, 2020, at 3PM EST.