Weekly Health Care Policy Update – February 26, 2021

March 5, 2021

In this update: 

  • President Biden Issues Executive Order on America’s Supply Chains
  • Biden Administration Extends COVID-19 National Emergency Declaration
  • President Biden’s $1.9 Trillion Pandemic Aid Plan Approved for Floor Vote
  • Johnson & Johnson COVID-19 Vaccine Under Consideration by FDA, CDC
  • HHS Issues Formal Enforcement Discretion for COVID-19 Vaccine Scheduling Apps
  • OIG Issues Report on Increasingly Expensive Inpatient Stays and Updates Work Plan
  • Governor Cuomo Releases 30-Day Amendments to the FY 2022 Executive Budget
  • DFS Requires Insurers to Cover Infertility Services Regardless of Sexual Orientation or Gender Identity

Administration Updates

President Biden Issues Executive Order on America’s Supply Chains
On February 24th, President Biden issued an executive order aimed at ensuring resilient supply chains for critical goods, products, and services. Among other (non-health-related) items, the order directs the Secretary of Health and Human Services (HHS) to identify risks in the supply chain for pharmaceuticals and active pharmaceutical ingredients. HHS will also issue a report on supply chains for the public health and biological preparedness industrial base, identifying critical goods, capabilities, and risks. This work is intended to complement previously-ordered work on securing supply chains for personal protective equipment (PPE) and other items for combatting COVID-19 in the President’s January 21st executive orders.
 
The executive order is available here.
 
Biden Administration Extends COVID-19 National Emergency Declaration
On February 24th, President Biden announced the continuation of the declaration under the National Emergencies Act concerning the COVID-19 pandemic. This emergency was initially declared on March 13, 2020, retroactive to March 1, 2020. The President will continue the declaration in effect beyond March 1, 2021. This declaration is separate from the determination of a public health emergency (PHE) by the HHS Secretary under the Public Health Service Act.
 
The Biden Administration’s official notice can be found here.

Legislative Updates

President Biden’s $1.9 Trillion Pandemic Aid Plan Approved for Floor Vote
On February 22nd, the House Budget Committee approved the American Rescue Plan Act, the Democrats’ proposed COVID-19 budget reconciliation bill, in a 19-16 vote along party lines. A full floor vote and approval is expected today. Once approved by the House, the bill will head to the Senate for further negotiations during the next two weeks. Congressional leadership plans to have the bill on President Biden’s desk for signature before the expiration of unemployment benefits on March 14th.

Regulatory Updates

Johnson & Johnson COVID-19 Vaccine Under Consideration by FDA, CDC
Today (February 26th), the Food and Drug Administration’s Vaccines and Related Biological Products Advisory Committee will hold a meeting to consider the Emergency Use Application (EUA) submitted by Johnson & Johnson for their single-shot Janssen COVID-19 vaccine. The FDA released a briefing document on February 24th containing the manufacturer’s data in support of the effectiveness of the vaccine, which they found to be about 66% effective in preventing moderate to severe complications. If approved, Johnson & Johnson has committed to providing about 4 million doses of the vaccine immediately and 100 million doses in the first half of 2021.

The Centers for Disease Control and Prevention (CDC) will also hold a meeting of the Advisory Committee on Immunization Practices (ACIP) on February 28th and March 1st to discuss a potential recommendation for the Janssen vaccine.

The FDA’s briefing document highlighting the effectiveness and its correlating data can be found here. The ACIP announcement is here.

HHS Issues Formal Enforcement Discretion for COVID-19 Vaccine Scheduling Apps
On February 24th, the Department of Health and Human Services (HHS) Office of Civil Rights (OCR) officially published a notification of enforcement discretion in the Federal Register regarding sanctions for non-compliance with HIPAA Privacy, Security, and Breach Notification Rules related to the good faith use of online or web-based scheduling applications for the purpose of scheduling individual appointments for COVID-19 vaccinations. The enforcement discretion was initially announced in January, with retroactive effect beginning December 11, 2020. Like other related notifications of enforcement discretion by OCR, including its March 2020 policy noncompliance with HIPAA requirements during the good faith provision of telehealth services, this will remain in effect until the end of the COVID-19 PHE or until further notice.

More information on the enforcement discretion is available here.

OIG Issues Report on Increasingly Expensive Inpatient Stays and Updates Work Plan
On February 24th, the HHS Office of Inspector General (OIG) issued a report finding that hospitals are increasingly billing Medicare for inpatient stays at the highest severity level. The number of stays billed to Part A at the highest severity level increased by almost 20 percent over the study period, from federal fiscal year (FY) 2014 to FY 2019. Such stays eventually accounted for nearly half of all Medicare spending on inpatient services.

OIG has also announced further plans for upcoming COVID-19-related audits, including reports on: 

  • Awardee challenges in the COVID-19 vaccination program;
  • Part B laboratory services during the COVID-19 pandemic;
  • The use of telehealth to provide behavioral health services in Medicaid managed care;
  • The use of telehealth to provide home health services during the COVID-19 pandemic; and
  • The use of telehealth to provide Medicare Part B services. This audit will be conducted in two phases: (1) evaluation and management (E&M) services, psychotherapy, opioid use disorder services, end-stage renal disease, and (2) remote patient monitoring, virtual check-ins, originating and distant site locations, and other services.

The full report on Medicare Part A billing is available here. The OIG Work Plan is available here.

Congressional Hearings

Tuesday, March 2nd: 

  • At 10:30am, the House Energy and Commerce Committee will hold a hearing on “The Future of Telehealth: How COVID-19 Is Changing the Delivery of Virtual Care.” More information is available here.

New York State Updates

Governor Cuomo Releases 30-Day Amendments to the FY 2022 Executive Budget
On February 18th, Governor Cuomo announced his 30-day amendments for the FY 2022 New York State Executive Budget. During the next month, the State Assembly and Senate will each release proposed amended versions of the FY 2022 appropriation bills and legislation. The Governor and the Legislature will aim to reach a three-way agreement on these bills prior to the budget deadline of April 1st.
 
The Division of the Budget (DOB) also updated the Executive Budget Financial Plan, which summarizes multi-year forecasts of the State’s receipts and disbursements, to reflect revised forecast projections, including:

  • Increased Personal Income Tax (PIT) receipts, estimated at $1.5 billion in each year of the Financial Plan (FY 2021 through FY 2025);
  • Increased Medicaid enrollment attributable to COVID-19, which is expected to increase the State share of Medicaid costs by $0.924 billion in FY 2022.

If adopted as proposed, DOB estimates that the General Fund will have cash-basis surpluses of $1.6 billion in FY 2021 and $0.676 billion in FY 2022, which would be used to offset budget gaps in later years. As a result, the proposed 30-day amendments have no net impact on the original multi-year General Fund estimates.

As before, the Executive Budget Financial Plan is based primarily off a “worst-case” scenario under which the federal government provides $6 billion in federal aid for FY 2021 and FY 2022. While the Governor has called for reimbursement of the full estimated $15 billion of the budget shortfall, the current federal American Rescue Plan legislation is estimated to provide unrestricted aid to the State government of approximately $12.7 billion.

New health-related provisions introduced in the amendments are summarized below. The 30-day amendments to the budget legislation are available here. The updated Executive Budget Financial Plan is available here. A transcript of the Governor’s press conference on the updated Financial Plan is available here. 

COVID-19 Relief

  • Establish and appropriate $3 billion for a COVID-19 Extraordinary Relief Fund, to be funded by appropriated funds (possibly including federal aid) as well as any new tax revenues (derived from new taxes, tax increases, or  reductions/eliminations of tax deductions or credit) enacted during FY 2022. This fund would be used to support localities, not-for-profit or for-profit corporate entities, and/or public benefit corporations that have incurred urgent expenses related to resolving hardships of the COVID-19 public health emergency.
  • Establish an emergency rental assistance fund for local government allocations. The fund would receive funds allocated to local governments in the 2020 year-end Consolidated Appropriations Act, and would pay out rental assistance to residents of those local governments.
  • Amend labor laws to prohibit the inclusion of claims for unemployment insurance arising from the closure of an employer due to COVID-19 as part of the employer’s experience rating charges.

Nursing Home Reforms

  • Require that nursing homes spend at least 70% of revenue on direct resident care (excluding capitation depreciation and expenses such as rent and leases, fiscal services, and administrative services), and at least 40% of revenue on resident-facing staff. 
    • If the nursing home contracts out resident-facing staff, 15% of these costs will be deducted from the calculation of the nursing home’s spend on direct resident care and resident-facing staff).
  • Set a nursing home profit cap of 5% and require nursing homes to return or expend any excess revenue beyond the cap in a manner to be decided by the Department of Health (DOH). DOH may deduct funds from Medicaid payments to enforce this provision.
  • Set salary caps for executive and managerial positions that do not involve direct resident care, based upon the facility’s number of patient beds, up to a maximum of $250,000 annually.
  • Limit the total salaries expended on executive and managerial positions to 15% of a nursing home’s expenses.
  • Increase transparency by requiring companies to disclose the following information on a publicly available website: 
    • Annual maximum rates to be charged for facilities and services;
    • Ownership information; and
    • All contracts for provision of goods or services for which any portion of Medicaid or Medicare funds are used by the facility.
  • Require that applications filed for the establishment of a nursing home include information on staffing sources and staff skill mix.
  • Require a nursing home that is found to have operational deficiencies in two consecutive DOH inspections to contract with an independent quality monitor.
  • Streamline the process for DOH to appoint an emergency receiver if it is determined that a nursing home operator poses an imminent threat to patient and public safety.
  • Impose civil monetary penalties of up to $25,000 on nursing home operators who commit violations that result in harm to patients.

Other Health and Mental Hygiene Legislation 

  • Clarify that qualifying health care costs reimbursed by the Medical Indemnity Fund includes nursing home custodial care and prohibits the guardian/parent of a fund enrollee from being approved as a provider of qualifying health care costs reimbursable by the fund.
  • Clarify membership requirements of the Developmental Disabilities Planning Council, including a provision that at least 60% of the appointed members must be developmentally disabled individuals or their immediate relatives or guardians.

New Appropriations

The 30-day amendments add language and appropriation authority to accommodate additional federal stimulus funds to address the COVID-19 public health emergency, for the following state operations and localities:  

  • Appropriate up to $45 billion in Special Federal Emergency Appropriations solely for transfer by the Governor to funds established to account for revenues from the federal government, and which may be used to recover from public health emergencies. Funds may be used for a wide variety of purposes, including education, testing and tracing, vaccination, rental assistance, and other assistance including to local governments.
  • Appropriate $104,586,000 for the Family and Children’s Services Program under the Office of Children and Family Services (OCFS), of which $23 million is reserved for the expenditure of additional federal funding. 
  • Appropriate $700 million from additional federal funding, that may be transferred to any other appropriation within OCFS and/or the Office of Temporary and Disability Assistance, for the purpose of paying local social services’ districts costs of childcare and family and children’s services.

Other

  • Amend the proposed Cannabis Taxation and Regulation Act to: 
    • Allocate the proposed $100 million Social Equity Fund for grants to community-based nonprofit organizations and approved local government entities. The Fund will award grants for job placement, adult education, mental health and substance use disorder treatment, housing, nutrition services, child care services, and other social services, aimed at communities disproportionately affected by past federal and state drug policies;
    • Allow for a delivery services permit; and
    • Amend felony provisions pertaining to criminal sales.

DFS Requires Insurers to Cover Infertility Services Regardless of Sexual Orientation or Gender Identity 
On February 23rd, Governor Cuomo announced new guidance (available here) issued by the Department of Financial Services (DFS) to DFS-regulated insurance plans requiring coverage of fertility services for all New Yorkers regardless of sexual orientation or gender identity. DFS notes that some insurance plans were denying coverage for individuals who are unable to conceive without basic infertility treatment due to their sexual orientation or gender identity.

Therefore, effective immediately, regulated health insurance plans must cover services for the diagnosis and treatment of infertility (e.g., intrauterine insemination procedures) for consumers covered under individual, small group, and large group health insurance policies and contracts who are unable to conceive due to their sexual orientation or gender identity. Insurance plans that cover in-vitro fertilization (IVF) procedures may consider whether basic infertility treatments are medically appropriate for the individual to attempt prior to covering IVF.

The Governor’s press release is available here. The DFS press release is available here.