Breaking News

HHS’ multibillion-dollar war with hospitals, science spending fights, and the lowdown on new PAYGO

June 1, 2023
Reporter, D.C. Diagnosis Writer

Happy Thursday, D.C. Diagnosis readers! For everyone who tracks live votes in Congress, yesterday was a very exciting day to peek into the future of what's possible. Pass along news tips as usual to rachel.cohrs@statnews.com.

coverage

CMS sticks with Alzheimer's registry plans

Despite pressure from Congress and advocates, CMS isn't changing its coverage plan for new Alzheimer's drugs anytime soon. Medicare this morning issued a statement about the registries it requires for patients who want to take Biogen's Aduhelm, approved in 2021, and a potential similar therapy on the horizon, Eisai's Leqembi, which the FDA could broadly approve as soon as this month, my colleague Sarah Owermohle writes.

While many lawmakers have pushed CMS to do away with the registry requirement the agency has held fast in its decision to stick with registries to build real-world evidence for the new treatments. Senate Finance Chair Ron Wyden (D-Ore.) last month urged the agency to at least clarify how people could register for the drug, especially amid concerns that rural and lower-income people could miss out.

CMS looked to defend itself in today's statement, writing that "Registries are common tools in clinical settings that have successfully gathered information on patient outcomes for decades." However it offered few details on upcoming plans, especially with Leqembi on the horizon: "CMS is working with multiple organizations that are getting ready to open their own registries. More information will be released as they come on line."


DEBT DEAL DRAMA

Advocates warn of 'fierce' science spending battles

The debt ceiling deal hammered out by the White House and congressional leadership this weekend would freeze non-defense and veterans' health spending at 2023 levels for next year and allow only a 1% bump in 2025 — –meaning health agencies could be vying for a sparse set of spending bumps next year, researchers and advocates warn in a new story from my D.C. Diagnosis co-author Sarah Owermohle

Most are worried about dents to the NIH budget, which has steadily grown with bipartisan support over the last three decades but faces new scrutiny under GOP House control. Plus, President Biden is asking for billions more for new programs under the Advanced Research Projects Agency for Health and his relaunched Cancer Moonshot mission.

That could mean flat funding in 2024 and 2025, even as the White House strives to hit Biden promises to curb cancer deaths, reverse children's mental health care trends and mobilize Alzheimer's disease research. "The competition for funding will be particularly fierce. For NIH as well as for every other agency funded in this category," said one lobbyist familiar with the debt ceiling discussions. Read more here


REGULATIONS

Are new PAYGO rules toothless?

Republicans have tried to sell a new provision in the debt ceiling deal as a check on the Biden administration's spending power, but budget experts and former HHS officials told STAT that it likely won't affect health care policy all that much. 

The deal includes a provision that would force federal agencies to find ways to offset the cost of any new regulations they create related to programs that cost more than $1 billion. But there are big loopholes, and the policy expires after 2024.

I also examine a case study in my new story out today. It details how HHS managed to issue one of the most expensive regulations ever (the rebate rule!), despite the Trump administration similarly requiring offsets via executive order. 


340B

HHS' multibillion-dollar war with hospitals

A long-simmering fight between HHS and hospitals over payment for drugs in Medicare will soon come to a head, and it could get ugly. 

An eagle-eyed source spotted that HHS sent a rule to the White House Office of Management and Budget on Friday (the Friday before a long weekend, no less) that appears to outline its plan to fix certain payments for hospitals, after the Supreme Court ruled a Trump-era slash to payments to hospitals for drugs administered under the 340B program was illegal. 

Medicare estimated that the impact of the Trump-era policy was roughly $2 billion per year — and the policy was in effect for five years. The fix could also pit hospitals against each other, as for-profit hospitals aren't eligible for the 340B program, and could see their payments reduced or recouped in order to make the 340B hospitals whole. Prepare for a whole lot of bellyaching no matter how things shake out, and possibly more lawsuits. 



ADVOCACY

Cynthia Fisher's lobbying the White House on hospital payments

Last week I wrote about how a cadre of billionaires is taking on the hospital industry — and one of them has a new vehicle she's targeting to advance pricing transparency policy.

Cynthia Fisher, who founded the groups Power to the Patients and Patients Rights Advocates to push for transparency in health care pricing, appears to be working on getting some tweaks into an outpatient payment rule. Her groups have meetings on the calendar with the Office of Management and Budget on May 24 and on June 8, according to regulatory disclosures.

The groups are pushing changes to the hospital price transparency regulations, including banning hospitals from entering "N/A" in price disclosure fields, expanding the rule to apply to ambulatory surgical centers, and requiring them to disclose facility fee charges.


OVERSIGHT

House Republicans single out scientist

In a highly unusual step, House Energy & Commerce Republicans are asking a single career scientist who has worked for the National Institute of Allergy and Infectious Diseases for more than four decades to sit for a videotaped interview about his work.

The topic has to do with controversy over whether pathogen-altering work known as gain-of-function research is safe and worthwhile, and what happened to research that the scientist was planning about mpox severity. 

The GOP lawmakers asked for the scientist to sit for an interview by the end of June, and gave HHS 48 hours to respond. Read Sarah's full story here


IN THE STATES

Facility fee frenzy

Colorado on Tuesday became the second state this year to pass a law restricting hospitals' ability to charge facility fees for care provided outside of a hospital setting. The new law requires health care providers to notify patients of facility fees at the time appointments are made, bans facility fees on patients seeking preventative care, and mandates a study about the impact of the fees on patients. 

It comes just weeks after the Indiana governor signed a law in early May preventing the five largest nonprofit hospital systems in the state from adding hospital facility fee charges for outpatient services provided away from a hospital. 

States including Connecticut, Maine, Massachusetts, and Texas considered their own legislation, according to the National Academy of State Health Policy. Most state legislative sessions will be over by the end of next week. 


More around STAT
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What we're reading

  • CVS warns PBM reforms 'could lead to higher costs,' STAT
  • Companies won't share COVID-19 shots, stalling future vaccine research, Science
  • First Opinion: Ezekiel Emanuel explains why cancer patients shouldn't pay out-of-pocket costs, STAT
  • Site-neutral push crashes into hospitals, Axios

Thanks for reading! More next week,


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