House Democrats Condemn Rule Changing Federal Grant Regulations

Agroup of House Democrats have issued a statement condemning a recent proposal from the U.S. Department of Health and Human Services (HHS) that they argue would make it easier for health care providers to deny services to patients based on their religious beliefs. House Oversight and Reform Committee Chair Carolyn Maloney (D-N.Y.), House Energy and Commerce Committee Chair Frank Pallone (D-N.J.), House Ways and Means Committee Chair Richard Neal (D-Mass.), and House Education and Labor Committee Chair Bobby Scott (D-Va.) state that the rule would expand discrimination against LGBTQ+ people, religious minorities, and women in federal grant programs. They call on the rule to be rescinded immediately.

Trump Recission Request Includes Cuts to Global Health

President Trump has sent Congress $27.4 billion in recission requests to consider before he leaves office. The proposed cuts are largely symbolic, as there is no chance the Democratic-controlled Congress will choose to act upon them. Among other items, the President proposes a $4 billion cut for GAVI, a public-private partnership that promotes vaccination efforts in low-income countries, a more than $2 billion cut to AIDS relief, a $12.3 million cut to research on firearm mortality and injury prevention, and a $13 million cut for the National Institutes of Health (NIH).

Collins to Continue to Lead NIH Under Biden Administration

Dr. Francis Collins will continue in his role as Director of the National Institutes of Health (NIH) under the Biden administration. Collins was first nominated to the position under President Barack Obama in 2009. The announcement makes Collins one of the few NIH directors to serve under three presidents, and the third-longest director of all time. Collins is a physician-geneticist who was selected to lead the Human Genome Research Institute in 1993.

Woodcock and Sharfstein Under Consideration for Top Spot at FDA

Janet Woodcock is under consideration by the Biden administration to become Commissioner of Food and Drugs. Woodcock has been at the Food and Drug Administration (FDA) since 1986 and recently served as the head of the Center for Drug Evaluation and Research (CDER). Former FDA Principal Deputy Commissioner Joshua Sharfstein is also under consideration for the post. Sharfstein worked at the FDA under President Barack Obama and is currently Vice Dean for Public Health Practice and Community Engagement at Johns Hopkins University’s Bloomberg School of Public Health. Dr. Woodcock is expected to replace the current FDA Commissioner Stephen Hahn and become acting commissioner following Joe Biden’s inauguration.

President Signs CHIRA Into Law

President Trump has signed into law the Competitive Health Insurance Reform Act (CHIRA), Public Law No: 116-327,which repeals the exemption from U.S. antitrust laws for health insurance companies. The McCarran-Ferguson Act of 1945 exempts the business of insurance from the federal antitrust laws intended to protect and promote fair competition. CHIRA will give the Department of Justice (DOJ) and the Federal Trade Commission (FTC) the authority to apply federal antitrust laws to anticompetitive behavior by health insurance companies, while continuing to allow for data sharing among health insurers within certain limits. The law will not affect or interfere with the authority of each state to regulate the business of insurance.

Updates to Provider Relief Fund Reporting Portal Process

The Provider Relief Fund (PRF) is a program run by the U.S. Department of Health and Human Services (HHS) that provides funds to certain providers to offset revenue losses and increased expenses due to the COVID pandemic. HHS has distributed funds primarily through Targeted (for specific entities) and General Distribution (through three different Phases of funding). If a provider received more than $10,000 in aggregate from the PRF in 2020, then to avoid recoupment of those funds for most of the General and Targeted distributions, a provider must submit key data to HHS through the Reporting Portal. Previously, HHS had announced that this portal would be available as of January 15, 2021. On January 15, HHS updated its website to revise information on the reporting elements, and clarify that the portal is open but only for registration. Given the lack of full functionality to the Reporting Portal, the initial reporting deadline was removed (i.e., February 15 deadline for the first report). According to a new FAQ, HHS will announce the window for submitting the first report. Recipients with funds unexpended after December 31, 2020 have six more months from January 1 – June 30, 2021 to use remaining funds, and then must submit a second and final report no later than July 31, 2021.

With respect to the reporting elements, per the language in the Consolidated Appropriations Act, 2021, HHS is allowing entities to use one of three methods for reporting revenue loss: (1) difference between 2019 and 2020 actual patient care revenue; (2) difference between 2020 budgeted and 2020 actual patient care revenue, provided that the budget was established prior to March 27, 2020 and provided that additional documentation is submitted; and (3) any reasonable method for calculating lost revenue provided that additional information is submitted and recognizing that this option will trigger an increased likelihood of an audit, along with additional timelines if HHS determines that the methodology is not reasonable. Further, if recipients did not expend PRF funds in full by the end of calendar year 2020, then the calculation related to revenue losses are different from 2020 and are not to exceed the difference between: (1) 2019 Quarter 1 to Quarter 2, and 2021 Quarter 1 to Quarter 2 actual revenue; or (2) 2020 Quarter 1 to Quarter 2 budgeted revenue, and 2021 Quarter 1 to Quarter 2 actual revenue. In addition, the document updates information related to reporting responsibility of parent organizations and their subsidiaries.

With respect to the new Reporting Portal, HHS has issued a series of FAQs and a Registration User Guide. According to those documents, registration should take approximately 20 minutes and must be completed within one session.

As a reminder, PRF Reporting Entities that expended $750,000 or more in aggregated federal financial assistance during their fiscal year (including PRF payments and other federal financial assistance) are subject to Single Audit requirements,as set forth in the regulations at 45 CFR 75.501. Reporting Entities must indicate if they are subject to Single Audit requirements during the current fiscal year, and if yes, whether the auditors selected PRF payments to be within the scope of the Single Audit (if known at the time the Reporting Entity submits report).

Democrats Expected to Use CRA to Overturn Trump Midnight Rules

The Congressional Review Act (CRA) provides Congress with a powerful tool to strike regulations finalized under President Trump toward the end of his administration. Certain rules that are finalized within 60 legislative days of the end of a Congressional session can be nullified legislatively during the first 75 legislative days of the new Congress. The CRA requires both houses of Congress to pass a joint resolution of disapproval – requiring a simple majority vote. The resolution would then be sent to the President for signature. If the President signs the disapproval resolution, the entire rule will no longer have effect, would be treated as though it had never been in effect, and the issuing agency would be prohibited from issuing a rule that is “substantially the same” as the nullified rule. Disapproval resolutions are considered under normal procedures in the House; once a disapproval resolution is introduced in the Senate, committees have 20 calendar days to act. After that period, a petition signed by 30 senators can force a committee to discharge the resolution to the full Senate for a vote.

After the 2016 election, Republicans used the CRA to overturn 16 rules that had been issued under President Obama. Prior to that point, only one rule had been overturned using the 1996 law. Estimates indicate that there are as many as 1,313 rules published in the Federal Register as of January 6 that could qualify to be overturned through the use of the CRA. Notable examples of health-related regulations that may be under consideration for repeal by Democrats during the 117th Congress include:

  • Securing Updated and Necessary Statutory Evaluations Timely (SUNSET). This rule requires an assessment of U.S. Department of Health and Human Services (HHS) regulations every 10 years to determine whether they are subject to review under the Regulatory Flexibility Act (RFA), which requires regular review of significant regulations. If a given regulation is subject to the RFA, the Department must review the regulation every ten years to determine whether the regulation is still needed and whether it is having the appropriate impacts. Regulations will expire if the Department does not assess and, if required, review them in a timely manner.
  • Transparency and Fairness in Civil Administrative Enforcement Actions. This rule would restrict HHS from using standards established by guidance documents from taking civil enforcement actions. HHS would be subject to certain procedural requirements for civil enforcement actions, including only apply publicly stated standards. The regulation was finalized without undergoing a proposed rule or notice and comment period, which could make it more likely to be challenged in court.
  • Updates to State Innovation Waiver (Section 1332 Waiver) Implementing Regulations. The rule would allow health insurers and health insurance brokers to directly enroll people in health plans, essentially permitting states to bypass the federal Affordable Care Act (ACA) exchange. Georgia has already been granted a waiver by the Centers for Medicare and Medicaid Services (CMS) to bypass the federal HealthCare.gov exchange beginning in 2023; this rule would allow other states to do the same starting in 2022. The final rule also codifies guidance published in 2018 that permits states to use ACA subsidies for short-term limited-duration health plans that do not have to comply with the ACA’s coverage requirements.
Hart Health Strategies Inc. has created a primer with additional information on options for addressing concerns with a final rule, which can be found as an addendum to this newsletter.

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