Welcome to another round of PYA Washington Updates. We’re glad to be back after a two-week hiatus!
Government Shutdown?
The current federal fiscal year ends September 30, as does all current discretionary funding for all federal agencies. Once again, we face a partial government shutdown. (Shutdowns are always partial because the end of the fiscal year does not impact mandatory spending programs, like Social Security, Medicare, and Medicaid.) Because Congress is not likely to complete work on the standard 12 annual regular appropriations bills by the end of the month, the focus now is on a stopgap measure, i.e., continuation of current funding levels for a limited period of time.
There is much debate regarding the end date for the stopgap measure, whether funding for any existing programs will be cut as part of the measure, and what concessions Democrats will try to extract in exchange for the votes needed to pass the measure in the Senate. Right now, Democrats are focused on extending the ACA Marketplace premium tax credits set to expire at the end of the year. And, of course, we are also watching whether the Medicare telehealth coverage waivers now set to expire on September 30 will be extended, along with the Medicare Dependent Hospital program and the adjusted thresholds for the Low Volume Hospital Program.
While we’re on the subject of Congress, a bipartisan group of 163 lawmakers sent a letter dated September 8 urging the Department of Health and Human Services to cancel the 340B drug rebate pilot program or at least specify how it intends to shield hospitals and the federal government from additional administrative costs and burdens.
COVID Vaccine
In late August, the Food and Drug Administration (FDA) announced the COVID vaccine would be limited to (1) those aged 65 or older, and (2) those 6 months or older and have at least one high-risk health condition. The FDA has identified 21 such conditions, ranging from cancer to being overweight. Under this directive, people who do not meet the age or diagnostic requirements for a COVID vaccine will need to consult with their physician and get a prescription for the vaccine. Now, one will need to contact their health insurance provider to determine whether the vaccine will be covered in their specific circumstances.
The American Academy of Family Physicians and other professional societies have responded to the FDA’s action by publishing their own recommendations, favoring broader availability of the COVID vaccine. Frustrated by the Administration’s actions relating to vaccines, Oregon, Washington, California, and Hawaii announced last week the formation of the West Coast Health Alliance to coordinate their vaccine recommendations. States in the Northeast are now exploring the creation of public health collaboration. And many states (including Virginia, New Jersey, California, Minnesota, Pennsylvania, Colorado, Massachusetts, and Connecticut) have taken action to permit pharmacists to administer the COVID vaccine without an individual prescription.
Executive Action on Drug Advertising
Before 1997, drug advertisements were effectively limited to print media, due to the requirement that ads naming a specific illness include a litany of information about possible side effects. But the FDA changed those rules, citing First Amendment concerns, allowing drug manufacturers to briefly summarize a product’s risks in TV ads. On Tuesday, the administration announced plans to return “to the status quo policy pre-1997,” explaining that drug companies would no longer be allowed to simply “recite a vague ‘major-risk statement’ and then point viewers to a website, toll-free number, or print insert for more complete information.” Instead, they would be required to provide detailed safety information in the ad itself.
Medicare Shared Savings Program – 2024 Results
According to a CMS fact sheet, “Out of 476 ACOs, 75% of ACOs, representing 80% of the 10.3 million assigned beneficiaries, are earning performance payments totaling $4.1 billion, and Medicare saved $2.4 billion relative to benchmarks. PY 2024 had the highest share of ACOs receiving performance payments and the highest amount of savings for ACOs and Medicare since the inception of the Shared Savings Program.”
More Mandatory Alternative Payment Models In the Works?
Last week, the Trump administration published its Unified Agenda, which includes a preview of regulations it intends to release in the coming year. The list includes two proposed rules with the generic title “Center for Medicare & Medicaid Innovation Payment Models,” with anticipated release dates of October and November 2025. While the Innovation Center does not have to go through the rulemaking process when it launches voluntary APMs, it is required to do so when it mandates participation. Stay tuned.
CMS Guidance on State-Directed Payments (SDPs)
As you will recall, OBBBA requires that all SDPs submitted after July 4 will be limited to the Medicare rate in Medicaid expansion states and 110% of Medicare in non-expansion states. SDPs for which a completed preprint (i.e., an application) was filed before July 4 can continue to be paid at a higher rate until 2028, at which time a multi-year phase-down will begin until all SDPs reach the Medicare-based limits. On Tuesday, CMS released a letter detailing how it intends to implement OBBBA’s directives regarding SDPs pending publication of a final rule. State Medicaid programs should now be able to determine the fate of their requested SDPs, with CMS promising to provide preliminary feedback via standard adjudication letters as to whether a requested SDP is eligible for the higher rate until 2028.
MAHA Strategy
Earlier this week, the Make America Healthy Again Commission released its Make Our Children Healthy Again Strategy, a 20-page report the Department of Health and Human Services described as a “sweeping plan” to “reverse the failed policies that fueled America’s childhood chronic disease epidemic.” The document provides very brief descriptions of more than 120 initiatives that the administration intends to pursue to address the four drivers of the rise in childhood chronic disease identified in its initial report: poor diet, chemical exposure, lack of physical activity and chronic stress, and overmedicalization. No details are provided regarding how the administration intends to pursue these initiatives.
PYA Webinars – Washington Updates
On October 1 — the first day of the new federal fiscal year — PYA will present a webinar on the latest healthcare-related developments in Washington. It’s anyone’s guess where things will be in 19 days, but we’re sure there will be plenty to talk about! Registration information will be available soon.
Please do not hesitate to contact us if you have any questions regarding these latest developments. You can also continue to check PYA’s website for updates.
