Jeffrey J. Kimbell, Eric P. Juhl, JD and David C. Rudloff, Jeffrey J. Kimbell & Associates Inc.11.04.20
The legislative year is nearly coming to a close as Washington survives yet another tumultuous election cycle. A priority for Congress is passing additional funding for COVID-19 relief to aid businesses, the healthcare industry, and individuals in dealing with the impact of the pandemic. Furthermore, recent regulatory developments highlight approvals by the Centers for Medicare and Medicaid Services (CMS) for New Technology Add-On Payments (NTAP) for Breakthrough Devices.
State of Additional COVID-19 Relief
Since the start of the COVID-19 public health emergency (PHE), Congress has passed four pieces of legislation to provide relief to businesses, healthcare providers, and individuals impacted by the pandemic.
On March 6, President Trump signed into law H.R. 6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act (PL: 116-123), Congress’s first legislative action on the coronavirus. On March 18, President Trump signed into law H.R. 6201, the Families First Coronavirus Response Act (PL: 116-127), Congress’s second round of supplemental funding to fight the coronavirus outbreak. And on March 27, President Trump signed into law H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PL: 116-136). The $2 trillion CARES Act provides financial support to individuals and businesses affected by the virus, hospitals and healthcare workers, and local communities, as well as funding to develop vaccines and treatments. The fourth piece of legislation, H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act (PL: 116-139), was signed into law on April 24. The $484 billion bill provides supplemental funding to several programs established under the CARES Act.
The bill increases federal funding to small businesses impacted by COVID-19, providers, and hospitals; it also includes funding to assist state and local governments’ testing capabilities. Specifically, the bill allocates $75 billion to hospitals and healthcare providers to support COVID-19 treatment costs and lost revenues. This funding is in addition to the $100 billion issued to providers under the CARES Act.
Since passage of the Paycheck Protection Program and Health Care Enhancement Act in April, House Democrats, Senate Republicans, and the White House have engaged in a number of discussions on further COVID-19 relief. Several pieces of legislation have been proposed; however, House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Mitch McConnell (R-KY), and Treasury Secretary Steven Mnuchin have been unable to reach an agreement over the course of nearly six months.
On May 15, the House passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, in a 208-199 vote, mostly on party lines. The package, which totals over $3 trillion, is House Democrats’ additional legislative proposal to combat the COVID-19 crisis. The package includes funding for state and local governments, healthcare providers, payments to individuals, and further assistance to families in need. Specifically, the bill includes an additional $100 billion for healthcare providers to cover COVID-19- related expenses and lost revenue. McConnell has since refused to take up the bill in the Senate, instead offering his own substantially smaller COVID-19 relief package, the HEALS Act.
On July 27, Senate Republicans introduced the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, a $1 trillion legislative package to provide relief to businesses, workers, healthcare providers, and individuals impacted by the COVID-19 pandemic. The package, which serves as Senate Republicans starting point in negotiations for additional COVID-19 relief, contains liability protections for businesses and employers, a second round of $1,200 payments to individuals earning up to $75,000 and $2,400 for couples earning up to $150,000, and extends enhanced unemployment benefits contained in the CARES Act, while lowering the $600 per week to $200 per week. The bill also provides the U.S. Department of Health and Human Services with $118.4 billion, including $51 billion for COVID-19 testing and vaccine development, and allocates an additional $25 billion to the Provider Relief Fund. Under the bill, providers would have until Jan. 1, 2021, to pay back Medicare Accelerated and Advance payment loans. Further, the bill extends Medicare telehealth waivers through either the length of the public health emergency or Dec. 31, 2021, and provides an additional $190 billion to the Paycheck Protection Program (PPP), allowing entities with less than 300 employees to take out a second PPP loan.
On Sept. 8, McConnell unveiled a narrower $500 billion COVID-19 relief package. The bill includes $300 billion to bolster weekly unemployment benefits through Dec. 27, and includes another round of loans under the PPP for small businesses. The bill also includes $16 billion for COVID-19 testing and $31 billion for the development of therapeutics and vaccines. Among the larger items not addressed in the bill are assistance to state and local authorities and additional funding for the Provider Relief Fund. On Sept. 10, the bill failed to advance the Senate in a 52-47 vote, needing 60 votes to clear procedural hurdles.
On Sept. 15, the House Problem Solvers Caucus, a bipartisan group of moderate lawmakers from purple districts, unveiled a $1.52 trillion COVID-19 relief package in an effort to reach a compromise between Democrats and the White House. The package includes $500 billion to state and local governments, $450 per week in enhanced unemployment benefits, stimulus checks to individuals, and an extension of PPP loans for small businesses. The bill also extends liability protections for businesses and employers, and includes $30 billion to support healthcare providers and $45 billion in forgiveness of Medicare loans to providers. Notably, Pelosi did not offer support for the package, stating her intent to hold out for something with a much larger price tag. President Donald Trump had signaled openness to the Problem Solvers proposal, calling on Senate Republicans to support a larger sized package.
On Oct. 1, the House passed H.R. 925, the Heroes Act, on a 214-207 vote. The $2.2 trillion bill, which is a smaller version of the HEROES Act, includes another round of $1,200 stimulus checks to individuals, $600 per week in enhanced unemployment benefits, $436 billion to state and local governments, and allows the hardest hit small businesses to apply for additional PPP loans. The bill also includes $75 billion for coronavirus testing and contact tracing and provides $20 billion to the Biomedical Advanced Research and Development Authority (BARDA) for the development and procurement of vaccines and therapeutics. McConnell has since indicated he would not take up the bill in the Senate.
As of the time of writing, Congress is still working on the details of an additional COVID-19 relief package, as negotiations between the House, Senate, and White House continue. These efforts have been sidelined by campaigning and the political dynamics surrounding the elections on Nov. 3, in addition to commentary from the president. On Oct. 6, President Trump abruptly directed his representatives in the White House to stop negotiating with House Democrats on an additional COVID-19 relief package until after the election, during the lame-duck session. However, in an about-face on Oct. 8, the President called on Congress to pass a large COVID-19 relief package. Before the election, Senate Republicans plan to examine another relief package, however, as of this writing, a clear path to its passage is unclear.
Members of both parties agree more needs to be done, but there are substantial differences on the timing and substance of such legislative action. There is now the expectation that Congress will examine additional COVID-19 relief during the lame-duck session, which lasts from Nov. 3 to the start of the new Congress on Jan. 3, 2021.
Regulatory Updates
This summer, CMS devoted much of its energy to drafting and releasing a number of proposed rules related to the Medicare program, including payment rules for both the inpatient and outpatient settings, the Medicare physician fee schedule proposed rule, and the Medicare Coverage of Innovative Technology proposed rule designed to provide faster access to new, innovative medical devices that have been designated as “breakthrough” by the U.S. Food and Drug Administration (FDA) and have also received market authorization. Now is the time to start watching for the release of the final versions of these rules.
The first of these final rules was issued on Sept. 2 with the release of the “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Final Policy Changes and Fiscal Year 2021 Rates” (IPPS) Final rule, which updates the national standardized amount for inpatient hospital operating costs for FY 2021. Among other provisions, the 2021 IPPS approved 13 technologies that applied for new technology add-on payments for FY 2021, including two technologies under the alternative pathway for new medical devices that are part of the FDA Breakthrough Devices Program (BDP).
The BDP was established in 2016 and is a voluntary program for certain medical devices that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions. Per the FDA, the goal of the BDP is to “provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo marketing authorization, consistent with the Agency’s mission to protect and promote public health.”
To obtain a breakthrough device designation, the device must meet a set of multipronged criteria. First, the device must provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating disease or conditions. Second, a device must either represent a breakthrough technology, have no approved or cleared alternatives, offer significant advantages over existing approved or cleared alternatives, or be determined that its availability is in the best interest of patients. To date, the FDA has granted nearly 300 breakthrough device designations.
FY 2021 is the first year for which CMS received applications under the alternative new technology add-on payment model for breakthrough devices—a process CMS finalized in the FY 2020 IPPS rule. In creating the pathway, CMS stated, “[t]his will provide additional Medicare payment for these technologies while real-world evidence is emerging, giving Medicare beneficiaries timely access to the latest innovations in treatment.” It will be interesting to see how many additional devices take advantage of this new pathway in years to come.
Jeffrey J. Kimbell, president and founder of Jeffrey J. Kimbell & Associates Inc., represents 45 clients in the life sciences community seeking legislative and policy remedies in Washington. Founded in 1998, the firm provides strategic solutions to clients seeking creation, modification, or proper implementation of public law.
Eric P. Juhl is a senior director of health policy and reimbursement strategy at Jeffrey J. Kimbell & Associates Inc.
David C. Rudloff is a senior manager of government affairs at Jeffrey J. Kimbell & Associates Inc.
State of Additional COVID-19 Relief
Since the start of the COVID-19 public health emergency (PHE), Congress has passed four pieces of legislation to provide relief to businesses, healthcare providers, and individuals impacted by the pandemic.
On March 6, President Trump signed into law H.R. 6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act (PL: 116-123), Congress’s first legislative action on the coronavirus. On March 18, President Trump signed into law H.R. 6201, the Families First Coronavirus Response Act (PL: 116-127), Congress’s second round of supplemental funding to fight the coronavirus outbreak. And on March 27, President Trump signed into law H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PL: 116-136). The $2 trillion CARES Act provides financial support to individuals and businesses affected by the virus, hospitals and healthcare workers, and local communities, as well as funding to develop vaccines and treatments. The fourth piece of legislation, H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act (PL: 116-139), was signed into law on April 24. The $484 billion bill provides supplemental funding to several programs established under the CARES Act.
The bill increases federal funding to small businesses impacted by COVID-19, providers, and hospitals; it also includes funding to assist state and local governments’ testing capabilities. Specifically, the bill allocates $75 billion to hospitals and healthcare providers to support COVID-19 treatment costs and lost revenues. This funding is in addition to the $100 billion issued to providers under the CARES Act.
Since passage of the Paycheck Protection Program and Health Care Enhancement Act in April, House Democrats, Senate Republicans, and the White House have engaged in a number of discussions on further COVID-19 relief. Several pieces of legislation have been proposed; however, House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Mitch McConnell (R-KY), and Treasury Secretary Steven Mnuchin have been unable to reach an agreement over the course of nearly six months.
On May 15, the House passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, in a 208-199 vote, mostly on party lines. The package, which totals over $3 trillion, is House Democrats’ additional legislative proposal to combat the COVID-19 crisis. The package includes funding for state and local governments, healthcare providers, payments to individuals, and further assistance to families in need. Specifically, the bill includes an additional $100 billion for healthcare providers to cover COVID-19- related expenses and lost revenue. McConnell has since refused to take up the bill in the Senate, instead offering his own substantially smaller COVID-19 relief package, the HEALS Act.
On July 27, Senate Republicans introduced the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, a $1 trillion legislative package to provide relief to businesses, workers, healthcare providers, and individuals impacted by the COVID-19 pandemic. The package, which serves as Senate Republicans starting point in negotiations for additional COVID-19 relief, contains liability protections for businesses and employers, a second round of $1,200 payments to individuals earning up to $75,000 and $2,400 for couples earning up to $150,000, and extends enhanced unemployment benefits contained in the CARES Act, while lowering the $600 per week to $200 per week. The bill also provides the U.S. Department of Health and Human Services with $118.4 billion, including $51 billion for COVID-19 testing and vaccine development, and allocates an additional $25 billion to the Provider Relief Fund. Under the bill, providers would have until Jan. 1, 2021, to pay back Medicare Accelerated and Advance payment loans. Further, the bill extends Medicare telehealth waivers through either the length of the public health emergency or Dec. 31, 2021, and provides an additional $190 billion to the Paycheck Protection Program (PPP), allowing entities with less than 300 employees to take out a second PPP loan.
On Sept. 8, McConnell unveiled a narrower $500 billion COVID-19 relief package. The bill includes $300 billion to bolster weekly unemployment benefits through Dec. 27, and includes another round of loans under the PPP for small businesses. The bill also includes $16 billion for COVID-19 testing and $31 billion for the development of therapeutics and vaccines. Among the larger items not addressed in the bill are assistance to state and local authorities and additional funding for the Provider Relief Fund. On Sept. 10, the bill failed to advance the Senate in a 52-47 vote, needing 60 votes to clear procedural hurdles.
On Sept. 15, the House Problem Solvers Caucus, a bipartisan group of moderate lawmakers from purple districts, unveiled a $1.52 trillion COVID-19 relief package in an effort to reach a compromise between Democrats and the White House. The package includes $500 billion to state and local governments, $450 per week in enhanced unemployment benefits, stimulus checks to individuals, and an extension of PPP loans for small businesses. The bill also extends liability protections for businesses and employers, and includes $30 billion to support healthcare providers and $45 billion in forgiveness of Medicare loans to providers. Notably, Pelosi did not offer support for the package, stating her intent to hold out for something with a much larger price tag. President Donald Trump had signaled openness to the Problem Solvers proposal, calling on Senate Republicans to support a larger sized package.
On Oct. 1, the House passed H.R. 925, the Heroes Act, on a 214-207 vote. The $2.2 trillion bill, which is a smaller version of the HEROES Act, includes another round of $1,200 stimulus checks to individuals, $600 per week in enhanced unemployment benefits, $436 billion to state and local governments, and allows the hardest hit small businesses to apply for additional PPP loans. The bill also includes $75 billion for coronavirus testing and contact tracing and provides $20 billion to the Biomedical Advanced Research and Development Authority (BARDA) for the development and procurement of vaccines and therapeutics. McConnell has since indicated he would not take up the bill in the Senate.
As of the time of writing, Congress is still working on the details of an additional COVID-19 relief package, as negotiations between the House, Senate, and White House continue. These efforts have been sidelined by campaigning and the political dynamics surrounding the elections on Nov. 3, in addition to commentary from the president. On Oct. 6, President Trump abruptly directed his representatives in the White House to stop negotiating with House Democrats on an additional COVID-19 relief package until after the election, during the lame-duck session. However, in an about-face on Oct. 8, the President called on Congress to pass a large COVID-19 relief package. Before the election, Senate Republicans plan to examine another relief package, however, as of this writing, a clear path to its passage is unclear.
Members of both parties agree more needs to be done, but there are substantial differences on the timing and substance of such legislative action. There is now the expectation that Congress will examine additional COVID-19 relief during the lame-duck session, which lasts from Nov. 3 to the start of the new Congress on Jan. 3, 2021.
Regulatory Updates
This summer, CMS devoted much of its energy to drafting and releasing a number of proposed rules related to the Medicare program, including payment rules for both the inpatient and outpatient settings, the Medicare physician fee schedule proposed rule, and the Medicare Coverage of Innovative Technology proposed rule designed to provide faster access to new, innovative medical devices that have been designated as “breakthrough” by the U.S. Food and Drug Administration (FDA) and have also received market authorization. Now is the time to start watching for the release of the final versions of these rules.
The first of these final rules was issued on Sept. 2 with the release of the “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Final Policy Changes and Fiscal Year 2021 Rates” (IPPS) Final rule, which updates the national standardized amount for inpatient hospital operating costs for FY 2021. Among other provisions, the 2021 IPPS approved 13 technologies that applied for new technology add-on payments for FY 2021, including two technologies under the alternative pathway for new medical devices that are part of the FDA Breakthrough Devices Program (BDP).
The BDP was established in 2016 and is a voluntary program for certain medical devices that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions. Per the FDA, the goal of the BDP is to “provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo marketing authorization, consistent with the Agency’s mission to protect and promote public health.”
To obtain a breakthrough device designation, the device must meet a set of multipronged criteria. First, the device must provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating disease or conditions. Second, a device must either represent a breakthrough technology, have no approved or cleared alternatives, offer significant advantages over existing approved or cleared alternatives, or be determined that its availability is in the best interest of patients. To date, the FDA has granted nearly 300 breakthrough device designations.
FY 2021 is the first year for which CMS received applications under the alternative new technology add-on payment model for breakthrough devices—a process CMS finalized in the FY 2020 IPPS rule. In creating the pathway, CMS stated, “[t]his will provide additional Medicare payment for these technologies while real-world evidence is emerging, giving Medicare beneficiaries timely access to the latest innovations in treatment.” It will be interesting to see how many additional devices take advantage of this new pathway in years to come.
Jeffrey J. Kimbell, president and founder of Jeffrey J. Kimbell & Associates Inc., represents 45 clients in the life sciences community seeking legislative and policy remedies in Washington. Founded in 1998, the firm provides strategic solutions to clients seeking creation, modification, or proper implementation of public law.
Eric P. Juhl is a senior director of health policy and reimbursement strategy at Jeffrey J. Kimbell & Associates Inc.
David C. Rudloff is a senior manager of government affairs at Jeffrey J. Kimbell & Associates Inc.
