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Many Last-Minute Health Rules Subject to Biden 60-Day Pause (3)

Jan. 21, 2021, 10:01 AMUpdated: Jan. 22, 2021, 5:16 PM

From insulin to life-saving medical devices to last-ditch efforts to protect premature infants (including those from “live birth” abortions), multiple rules posted by the Health and Human Services Department in the final days of Donald Trump’s presidency are subject to a 60-day pause.

The halt on Trump-era rulemaking includes two controversial rules designed to curb high drug prices—one that changes the way pharmacy liaisons and drugmakers can pay each other and another that ties Medicare rates for expensive drugs to the prices paid in other countries.

A Wednesday memo circulated by White House Chief of Staff Ronald Klain said all rules, guidances, or other agency actions that didn’t take effect prior to noon that day—the official handover time from Trump to President Joe Biden—will be subject to review by the new administration before they can take effect. If the previous administration’s actions raise questions of “fact, law, or policy,” the designated officials now leading the agencies can further delay effective dates and consult with the Office of Management and Budget about other actions. The agencies can also open comment periods on those actions.

If there are no such questions, no further action is needed. The rule, proposal, or guidance can be considered active and effective, the memo said.

A regulatory pause is a common tradition among incoming presidents to ensure that the unfinished policies from the prior administration align with the new one. In many cases, there are no substantial disagreements among the two administrations and the policies can continue on their normal path. But the pause gives incoming officials a chance to weed out the actions that go against the current president’s stance.

The HHS issued a slew of rules and other announcements in the weeks leading up to Biden’s inauguration, including a substantial change to a Medicare payment model for expensive prescription drugs as late as Jan. 19.

Here are the health-related actions by HHS and other agencies affected by the pause.

Drugs and Devices

Medicare Prescription Formularies: A Jan. 19 request for applications in a voluntary Medicare prescription drug payment model would allow participating Part D plans to include on their approved payment lists only one drug per class instead of the current requirement of two.

Medicare Drug E-Approval Rule: A final rule issued Dec. 29 requires that certain prescription drugs for Medicare recipients undergo a new electronic authorization process. The process would allow doctors and clinicians to see that a drug is subject to prior authorization while they’re writing a prescription.

Devices Get Medicare Cash: A final rule issued Jan. 12 allows medical device companies to get faster Medicare payments for their life-saving products. The regulation allows Medicare to start paying for certain devices right after they get a green light from the Food and Drug Administration. It will cut down the roughly nine to 12 months it usually takes for a new device to get Medicare reimbursement.

Direct Insulin, Epinephrine Discounts: A final rule issued Dec. 22 says certain health centers must pass discounts they get on insulin and epinephrine directly to their patients. The rule applies to some federally funded health centers and is meant to cut costs for low-income patients who struggle to afford their medications. Those centers risk losing federal grants if they don’t comply. The Biden administration Thursday delayed the rule’s effective date until March 22.

‘Best Price’ Medicaid Contracts: Final rule issued Dec. 21 means drug companies should have an easier time entering into contracts with state Medicaid agencies that refer to the “value” of a drug. The change from the Centers for Medicare & Medicaid Services is intended to encourage contracts where states can get a partial refund on a drug if it doesn’t work. Those sorts of contracts can save states money on expensive products.

Faster Drug Coverage Decisions: Under a proposal issued Dec. 10, Medicare patients could get their medications faster. The aim is to make insurers’ prior authorization process for prescriptions more transparent and efficient.

Pharmacy Benefit Manager Rebates: A final rule issued Nov. 20 changes drugmakers’ rebates to pharmacy middlemen such that they can’t fluctuate based on the price of the drug. With fixed payment arrangements, these pharmacy liaisons can expect less money.

Foreign Drug Prices: An interim final rule issued Nov. 20 ties federal reimbursement for drugs administered in doctors’ offices to lower prices paid in other countries. Drugs administered by doctors, often for serious illnesses like cancer, are usually expensive. HHS officials under Trump talked about the controversial policy for at least a year, creating much protest from the pharmaceutical industry, before finally publishing the rule.

Civil Rights/Enforcement

Newborns With Disabilities: A proposed rule issued Jan. 15 by the Department of Health and Human Services aims to boost protections against disability discrimination for extremely premature infants, including those from “live-birth” abortions. It would establish that agency regulations “protect patients, including infants born alive whose parents or guardians consent to treatment, from disability discrimination under Section 504 of the Rehabilitation Act,” according to the HHS.

Faith-Based Groups: A final rule issued Dec. 14 allows faith-based organizations to be treated the same as secular organizations in federal programs. The rule clarifies that such groups don’t lose their legal protections just because they participate in federal programs and activities.

Civil Enforcement: A final rule issued Jan. 12 stops the HHS from using standards solely from guidance documents when taking civil enforcement actions.

Fetal Tissue: A proposed rule issued Jan. 11 would require researchers who want to use fetal tissue to first get the consent of the pregnant donor. The informed consent must state the pregnant donor didn’t get paid to donate under the proposal.

Health Privacy, Records Access: Under a proposal issued Dec. 10, health-care providers would have fewer barriers to share patient’s health information and give patients access to their own records. Patients would be better informed about their right to their own records under the rule. It would cut providers’ response time for record requests from 30 days to 15 days with a 15-day extension possible.

Health Programs

Medicare Advantage: A Jan. 15 rate announcement by the CMS gives Medicare Advantage plans a nearly 4.1% revenue increase in 2022. The Centers for Medicare & Medicaid Services originally proposed a 2.8% increase for the private health plans that provide program benefits for roughly 27 million beneficiaries.

Physician Fee Schedule: A final rule issued Dec. 1 by the CMS boosts Medicare payments in 2021 for primary care doctors and specialists who rely on office and outpatient visits to evaluate and manage their patients. But physicians with fewer office billings were due to see program reimbursements fall significantly. They got relief for some of those cuts with the help of Congress. That rule is in effect as of Jan. 1, and payments are being made to physicians and hospitals based on it. The CMS under President Donald Trump used its authority to shorten the time frame between the publication and effective date of the rule by 30 days, citing the Covid-19 pandemic. The Biden CMS hasn’t responded to Bloomberg Law’s question about whether this rule falls under the pause.

Organ Donation: A final rule issued Nov. 20 by the CMS is aimed at making more human organs available for transplant by requiring procurement organizations to be more transparent. The rule enacts tougher quality requirements for procurement organizations to receive payment from Medicare and Medicaid.

Risk Adjustment Rule: A final rule issued Nov. 24 aims to ensure that health insurers are paid when covering the sickest patients. The rule changes the methodology for the HHS’s risk adjustment data validation program, which seeks to reduce incentives for insurers to avoid high-risk people.

Outpatient Surgical Care Rule: A final rule issued Dec. 2 gives hospitals and ambulatory surgical centers more flexibility to determine the most appropriate site of care for procedures. The Medicare agency plans to phase out, over a three-year period, its list of 1,700 procedures for which Medicare will only pay if they’re done in an inpatient setting.

Pre-Obamacare Health Plan Rule A joint final rule with HHS, the Internal Revenue Service, and the Labor Department issued Dec. 11 makes it easier for employers and insurers to continue offering health plans that were in existence before Obamacare took effect. The rule provides more flexibility to make changes to cost-sharing requirements for enrollees in group plans offered by employers.

Health Reimbursement Plan Rule: A final IRS rule issued Jan. 13 clarifies employers’ responsibilities under the Affordable Care Act when they offer employees help to buy Obamacare plans. The rule says employees enrolled in Obamacare through a health reimbursement arrangement can’t seek premium tax credits that generally help lower-income people afford plans.

Obamacare Exchange Rule A final rule issued Jan. 14 lets states largely bypass the federal Obamacare exchange, HealthCare.gov. The rule enables web brokers and insurers to directly enroll people in health plans. Critics say the rule could result in lower enrollment in Affordable Care Act plans.

Patient Profile Rule: A final rule issued Jan. 15 requires Obamacare, Medicaid, and children’s health plans to bundle all patient information into a package for other doctors to use. The rule also requires that patients have access to their profile.

—With assistance from Brent Bierman, Alexis Kramer, Karl Hardy

(Updates Jan. 21 article with the effective date of a Medicare payment rule in the 22nd paragraph. A previous version of this story corrected the seventh paragraph to clarify affected drug classes.)

To contact the reporter on this story: Fawn Johnson in Washington at fjohnson@bloombergindustry.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

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