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Update: President Issues a Series of Executive Orders on Healthcare

It’s no secret that we’re inundated with information on updates and developments coming out of Washington.

Sifting through the information is often difficult, not to mention, understand and translate what it means for customers and employers and what, if any, actions or next steps they might instigate. Such are the series of Executive Orders released over the past few months from the President.

It’s important to understand what an Executive Order is and can do. The President’s Executive Order privilege, as authorized by the Constitution, allows the President to issue federal directives to the agencies that are governed by the Executive Branch, e.g., Treasury, Department of Health and Human Services (HHS), Department of Labor (DOL), etc. or provide an interpretation of policy. It does not have force of law but directs agencies on how to carry out or enforce the current law or manage resources. These Executive orders often result in new or revised regulations from the affected agency(ies).

Since taking office, the President has set his sights on improving health care and health care outcomes for Americans. Here is the latest in the series of Executive Orders to emerge, the first of which enforce and renew the HHS’ 2018 Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs:

Executive Order on Access to Affordable Life-saving Medications (7/24/20) Click here to read >>

  • Policy Interpretation:

    “It is the policy of the United States to enable Americans without access to affordable insulin and injectable epinephrine through commercial insurance or Federal programs, such as Medicare and Medicaid, to purchase these pharmaceuticals from an FQHC (Federally Qualified Health Centers) at a price that aligns with the cost at which the FQHC acquired the medication.”

  • Agency Directive:

    Instructs the Secretary of HHS to take action to ensure that future grants are available to assist those with a high cost sharing requirement for insulin or epinephrine, have a high unmet deductible, or are uninsured

Executive Order on Increasing Drug Importation to Lower Prices for American Patients (7/24/20) Click here to read >>

  • Purpose:

    To lower the high cost Americans pay, per capita, on pharmaceutical drugs and bring them in line with what residents of other developed countries pay for the exact same drugs

  • Agency Directive:

    Instructs the Secretary of HHS to take action to ensure that future grants are available to assist those with a high cost sharing requirement for insulin or epinephrine, have a high unmet deductible, or are uninsured

    • Providing certain waivers to the prohibition of importation of prescription drugs if it presents no additional risk to public safety;
    • Authorizing the re-importation of insulin products if HHS findings show it is required for emergency medical care; and
    • Completing the rulemaking of the proposed rule allowing importation of certain drugs from Canada.

Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen (7/24/20) Click here to read >>

  • Purpose:

    To direct pharmaceutical discounts and rebates to the consumer at the pharmacy counter rather than allowing insurance payers, middlemen, and manufacturers to keep all the savings.

  • Policy Interpretation:

    “It is the policy of the United States that discounts offered on prescription drugs should be passed on to patients.”

  • Agency Directive:

    Instructs the Secretary of HHS to complete the rulemaking process he commenced seeking to:

    • limit safe harbor protections under the anti-kickback statute that allow price reductions prior to the point-of-sale or other remuneration that drug manufacturers provide to health plan sponsors, pharmacies, or PBMs in operating the Medicare Part D program; and
    • establish new safe harbors that would permit health plan sponsors, pharmacies, and PBMs to apply discounts at the patient’s point-of-sale in order to lower the patient’s out-of-pocket costs, and that would permit the use of certain bona fide PBM service fees.

Executive Order on Improving Rural Health and Telehealth Access (8/3/20) Click here to read >>

  • Purpose:

    To improve access to care for some 57 million Americans living in rural communities experiencing challenges when seeking care due to shortages of healthcare workers, limited transportation opportunities, and lack of technology and care-delivery innovations.

  • Agency Directive:

    • Instructs the Secretary of HHS to announce, within 30 days of this order, a new model to “test innovative payment mechanisms to ensure rural healthcare providers are providing the necessary level and quality of care.”
    • Instructs the Secretary of Agriculture to develop and implement a strategy, within 30 days of this order, to improve the physical and communication infrastructure available in rural communities.
    • Requires the Secretary to provide a report to the President, within 30 days of this order, that addresses upcoming policy initiatives to eliminate regulatory burdens limiting availability of clinical professionals, drive improved health outcomes, reduce maternal mortality and morbidity, and improve mental health.
    • Secretary shall review, within 60 days of this order, temporary measures put in place during the public health emergency that allow for (1) expanded use of telemedicine services for Medicare beneficiaries and (2) flexibilities for Medicare providers in rural communities regarding services, reporting, staffing, and supervision and propose a regulation on whether the extend these measures beyond the public health emergency.

Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States (8/6/20) Click here to read >>

  • Policy Interpretation:

    “The United States must protect our citizens, critical infrastructure, military forces, and economy against outbreaks of emerging infectious diseases and chemical, biological, radiological, and nuclear (CBRN) threats. To achieve this, the United States must have a strong Public Health Industrial Base with resilient domestic supply chains for Essential Medicines, Medical Countermeasures, and Critical Inputs deemed necessary for the United States.”

    ‘It is, therefore, the policy of the United States to:

    (a) accelerate the development of cost-effective and efficient domestic production of Essential Medicines and Medical Countermeasures and have adequate redundancy built into the domestic supply chain for Essential Medicines, Medical Countermeasures, and Critical Inputs;

    (b) ensure long-term demand for Essential Medicines, Medical Countermeasures, and Critical Inputs that are produced in the United States;

    (c) create, maintain, and maximize domestic production capabilities for Critical Inputs, Finished Drug Products, and Finished Devices that are essential to protect public safety and human health and to provide for the national defense; and

    (d) combat the trafficking of counterfeit Essential Medicines, Medical Countermeasures, and Critical Inputs over e-commerce platforms and from third-party online sellers involved in the government procurement process.”

  • Agency Directive:

    Agencies shall, in consultation with the Commissioner of Food and Drugs (FDA Commissioner) conduct procurement of only US-produced Essential Medicines, Medical Countermeasures, and Critical Inputs and divide those procurements among two or more US manufacturers based on the initial list of items identified, within 30 days of the order, by the FDA Commissioner.

    • Within 60 days after the FDA Commissioner establishes the initial list, the Secretary of Defense will restrict procurement to domestic sources and reject offers from Qualifying countries where considered necessary for national defense reasons
    • Within 90 days of this order, the Director of the Office of Management and Budget (OMB) in collaboration with agency heads will take the necessary steps to establish protocols, best practices, and compliance for these procurements and provide a report to the President
    • Within 90 days of this order, each agency head will develop and implement procurement strategies.
    • Within 180 days of this order, the Secretary of HHS, FDA Commissioner, and Director of OMB will take necessary and appropriate action to identify vulnerabilities in the supply chain for Essential Medicines, Medical Countermeasures, and Critical Inputs

Executive Order on Lowering Drug Prices by Putting Americans First (9/13/20) Click here to read >>

  • Purpose:

    To bring parity to the prescription drug prices paid by the Federal Government and Americans on Medicare to that of other developed countries in the world.

  • Policy Interpretation:

    "It is the policy of the United States that the Medicare program should not pay more for costly Part B or Part D prescription drugs or biological products than the most-favored-nation price."

  • Agency Directive:

    Instructs the Secretary of HHS to immediately take appropriate steps to:

    • Test a payment model pursuant to which Medicare would pay, for certain high-cost prescription drugs and biological products covered by Medicare Part B, no more than the most-favored-nation price; and
    • develop and implement a rulemaking plan, selecting for testing, a payment model pursuant to which Medicare would pay, for Part D prescription drugs or biological products where insufficient competition exists and seniors are faced with prices above those in Organisation for Economic Co-operation and Development (OECD) member countries that have a comparable per-capita gross domestic product to the United States, after adjusting for volume and differences in national gross domestic product, no more than the most-favored-nation price, to the extent feasible.
    • In both cases, The model would test whether, for patients who require pharmaceutical treatment, paying no more than the most-favorednation price would mitigate poor clinical outcomes and increased expenditures associated with high drug costs.

Memorandum on Continued Student Loan Payment Relief During the COVID-19 Pandemic (8/3/20) Click here to read >>

  • Policy Interpretation:

    On March 20, 2020, in response to the Public Emergency, the Administration took action to provide immediate relief to student loan borrowers by both suspending loan payments and temporarily setting interest rates to 0 percent. This action was codified by the CARES Act extending this action until September 30, 2020. “It Is, therefore, appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID-19 pandemic has subsided.”

  • Agency Directive:

    Instructs the Secretary of Education to provide deferment and waiver of interest through December 31, 2020.

Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster (8/8/20) Click here to read >>

  • Policy Interpretation:

    To confirm the continuance of the emergency declaration and extend the actions taken to alleviate hardships on American workers. “This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most.”

  • Agency Directive:

    Directs the Secretary of the Treasury to defer the withholding, deposit, and payment of the OASD (Old-age, survivors, and disability insurance, i.e., Social Security) tax on wages/compensation during the period of September 1, 2020, and December 31, 2020.

    • This deferral is available on employees whose gross wages in a bi-weekly pay period are generally less than $4,000 and will not incur any penalties, interest or additional amounts and be detailed in forthcoming guidance from the Secretary.
    • The Secretary will also pursue methods, including legislation, to eliminate the tax to avoid subsequent payment of the deferred amounts.

Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019 (8/8/20) Click here to read >>

  • Policy Interpretation:

    The rise of unemployment and need for assistance due to the measures necessary to protect the public during the pandemic emergency continues. The CARES Act included $150 billion appropriated to State and local governments through the Coronavirus Relief Fund (CRF) to cover COVID-19 emergency-related costs. To date, more than $80 billion is still available plus an additional $70 billion in the Department of Homeland Security’s Disaster Relief Fund (DRF). “I am hereby directing the Federal Emergency Management Agency (FEMA) to assist in providing benefits from the DRF, and am calling upon the States to use their CRF allocation, to bring continued financial relief to Americans who are suffering from unemployment due to the COVID-19 outbreak.”

  • Agency Directive:

    Reallocation of $44 billion of total Defense Relief Funds (DRF) to the States to continue lost wage assistance, e.g., unemployment, at the statutorily mandated 75% Federal cost share and at least $25 billion of total DRF balances to support ongoing and future disaster response and recovery efforts. (State CRF funds used may be applied to the State’s cost share requirement.) The intent is to ensure eligible workers receive funds for unemployment weeks ending no later than December 27, 2020.

    • Governors must request a grant from the Federal Emergency Management Agency (FEMA) Administrator, acting on behalf of the Secretary of Homeland Security, and deliver assistance for lost wages in conjunction with the State’s unemployment insurance system.
    • The assistance program “authorizes the Governor to provide a $400 payment per week, which shall reflect a $300 Federal contribution, to eligible claimants from the week of unemployment ending August 1, 2020,” and will be available until the balance of the DRF reaches $25 billion or for weeks of unemployment ending on or before December 6, 2020, whichever occurs first.

Next Steps

The Departments will seek to address these Executive Orders and Memorandums within the scope of the law and their agency authority. These regulatory timelines are typically shorter than drafting and voting in a new law. Hopefully, they will give some breathing space to lawmakers as they try to agree on the next CARES package.

Separate action by lawmakers, perhaps later this month or more likely in September, may provide additional funding, broader scope, or reinforcement of these actions. In the interim, we will continue to monitor developments and what that may mean to each of our clients, their employees and their benefit plans.

Stay tuned for more and be sure to visit OneDigital’s Compliance Confidence blog so you don't miss an update.

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