Weekly Health Care Policy Update – March 19, 2021

March 26, 2021

In this update: 

  • Biden Administration Announces Updates on Combatting COVID-19
  • Senate Confirms Xavier Becerra to Lead HHS
  • CMS Increases Medicare Payment, Updates Medicaid Toolkit for COVID-19 Vaccine Adminsitration
  • CMS Delays Medicare Breakthrough Device Coverage Rule
  • CMS Releases ET3 Model Medical Triage Line Funding Opportunity
  • CMMI Retracts Components of Part D Modernization Model RFA
  • MedPAC Recommends Extension of Emergency Telehealth Payment Policy
  • Congressional Hearings
  • Governor Cuomo Issues Executive Order 202.97
  • New York State Legislature Releases One-House Budget Proposals
  • DFS Issues Guidance on Prompt Payment of Health Insurance Claims
  • DFS Announces Actions to Promote Diversity, Equity, and Inclusion in the Insurance Industry

Administration Updates

Biden Administration Announces Updates on Combatting COVID-19
The Biden Administration announced that it expects to reach the goal of administering 100 million COVID-19 vaccinations to Americans today (March 19th). The Administration has also announced other updates on combatting the COVID-19 pandemic: 

  • The Administration is investing $150 million to increase access to COVID-19 monoclonal antibody therapeutic treatment for patients in vulnerable communities. The focus will be on communities outlined within the CDC Social Vulnerability Index and those that have particularly high levels of COVID-19.
  • The Administration announced its plans to invest more than $12 billion to expand COVID-19 testing. From the American Rescue Plan, the Department of Health and Human Services (HHS) will invest $2.5 billion to address COVID-19 related health disparities amongst high-risk and underserved populations, and $10 billion to states to support COVID-19 screening testing to help schools open.
  • HHS has issued a Secretarial Directive (available here) directing and requiring all COVID-19 vaccination providers to, as of May 1st, end the “priority groups” system and make available and administer COVID-19 vaccines to all persons eligible under the Emergency Use Authorization (EUA).
  • The Administration has announced an increase of the supply of Pfizer and Moderna vaccines to 20 million doses per week. Johnson and Johnson’s vaccine is also expected to increase its supply soon, with the result that the administration expects to have 100 million doses by the end of May. Combined with the Pfizer and Moderna vaccines, this would be sufficient to vaccinate all American adults.

Senate Confirms Xavier Becerra to Lead HHS
On March 18th, the Senate confirmed Xavier Becerra by a vote of 50-49 to lead the Department of Health and Human Services (HHS). The Senate voted primarily along party lines. The only Republican who voted in favor of confirmation was Senator Susan Collins (R-ME).

Legislative Updates

House Passes the PPP Extension Act of 2021
On March 16th, the House of Representatives passed the Paycheck Protection Program (PPP) Act of 2021, which would extend the loan application period for the PPP program, which was originally set to expire on March 31st, through May 31st. Furthermore, the SBA would continue to process existing applications through June 30th.

The PPP provides up to two rounds (or “draws”) of forgivable loans to small businesses and nonprofits to help keep their workforce employed during the COVID-19 pandemic. The American Rescue Plan (ARP) expanded PPP eligibility to include additional and larger nonprofits as well as other organizations. The Senate is expected to vote on the Act next week. SPG will also distribute a primer for clients who may still benefit from PPP, including due to changes to eligibility standards in the ARP next week.

The full text of the PPP Act of 2021 is available here.

House Considers Bill to Extend Medicare Sequestration Moratorium
Today (March 19th), the House of Representatives is considering H.R. 1868, a bill which would delay the reinstatement of Medicare sequestration (across-the-board budget cuts of 2%) for an additional nine months (through December 31st). The bill is expected to pass the House, but the Senate is expected to consider a separate bill on the same topic rather than take up this bill. It is unclear whether the Senate’s version will be passed before the current expiration of the suspension on March 31st, and if so, whether the cut might be suspended retroactively.

Regulatory Updates

CMS Increases Medicare Payment, Updates Medicaid Toolkit for COVID-19 Vaccine
On March 15th, the Centers for Medicare & Medicaid Services (CMS) announced that Medicare will increase the payment rate for the administration of the COVID-19 vaccine. Effective immediately, the Medicare national average payment rate will be increased to for $40 per dose. As a result, reimbursement for single-dose vaccines will rise from about $28 to $40, while reimbursement for two-dose vaccines will rise from approximately $45 to $80. A provider’s specific rate will be further adjusted by provider type and geography. These rates will also apply to Medicare Advantage enrollees, since traditional Medicare is reimbursing providers directly on their behalf.

CMS also updated the COVID-19 Vaccine Toolkit for Medicaid, the Children’s Health Insurance Program (CHIP), and the Basic Health Plan (BHP). Per the ARP, states will now receive a 100% Federal Medical Assistance Percentage (FMAP) for vaccination administration, which CMS intends to provide additional guidance on. For now, the updated toolkit notes that states have the option of paying the now-increased Medicare rate, and that they may need to submit a new or update a pending or approved State Plan Amendment (SPA) accordingly. States may also submit a SPA with their own rate setting methodology, which CMS will consider on an expedited basis.

The CMS announcement can be found here. Specific details on Part B coding and reimbursement for COVID-19 treatments including vaccines can be found here. The updated Medicaid toolkit is available here.

CMS Delays Medicare Breakthrough Device Coverage Rule
On March 17th, CMS announced that it will delay the start date of the rule titled “Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary’” to May 15, 2021. This final rule, promulgated by the Trump Administration, is aimed at providing national Medicare coverage for breakthrough devices for a period of four years. CMS is concerned about the potentially large volume of “breakthrough devices” and is seeking public comment for 30 days regarding this issue as well as operational issues, a potential lack of clarity on the “reasonable and necessary” definition, and the adequacy of the rulemaking process.

The Federal Register notice and full request for comment is available here.

CMS Releases ET3 Model Medical Triage Line Funding Opportunity
On March 12th, CMS released the Notice of Funding Opportunity (NOFO) for the triage intervention component of the Emergency Triage, Treat, and Transport (ET3) Model. Through this opportunity, CMS will award up to 40 agreements for recipients to implement a new or expand upon an existing medical triage line which is integrated with the 911 system in their area. The triage line will, if appropriate, refer individuals calling 911 to community resources or divert them from ambulance or emergency services. The core functions include: 

  • Assessing caller concerns based on predetermined protocols;
  • Providing care recommendations to callers based on protocol-driven assessment;
  • Returning callers to 911 via warm handoff based on predetermined protocols;
  • Providing callers with contact information for relevant community resources;
  • Recommending that callers contact their regular source of care, if appropriate.

The NOFO is open to state and local governments or other entities who operate a 911 line, or Public Safety Answering Points (PSAP), and are located in the geographical areas where the selected participants of the ET3 model operate. The intervention will be tested for a two-year period. Applications are due May 11th, 2021.

The full NOFO document is available here and on Grants.gov, where applicants may apply, here.

CMMI Retracts Components of Part D Payment Modernization Model RFA
On March 16th, the CMS Innovation Center (CMMI) announced updates to the calendar year (CY) 2022 Request for Applications (RFA) for the Part D Payment Modernization (PDM) Model. Under the PDM, plans participating in Medicare Part D take increased risk for CMS’s federal reinsurance subsidy of 80 percent in the catastrophic phase in return for performance-based gains or losses. CMMI is retracting the two components of the PDM Model that were newly announced for CY 2022 by the Trump Administration: 

  • Part D Formulary Flexibilities, which included: 
    • Waiving the mandatory requirement for participating Part D plans to cover all drugs in five of six protected classes (anticonvulsants, immunosuppressants, antidepressants, antipsychotics, and antineoplastics); and
    • Allowing participating plans to cover only one drug per class in their formulary instead of two.
  • Removal of the PDM’s 10% downside risk for CY 2022, which was intended to incentivize participation.

More information is available here. The RFA is available here, and the application portal will open by March 23rd.

Other Updates

MedPAC Recommends Extension of Emergency Telehealth Payment Policy
On March 15th, the Medicare Payment Advisory Commission (MedPAC) issued its March report outlining its recommendations on Medicare payment policy. The report includes a series of telehealth-related recommendations, including a temporary extension of the COVID-19 emergency telehealth policies for one to two years after the end of the COVID-19 public health emergency (PHE). During this period, MedPAC recommends that Medicare should continue: 

  • Covering selected telehealth services not covered before the PHE;
  • Covering certain services provided on an audio-only basis; and
  • Paying for services provided regardless of the beneficiary’s location.

However, MedPAC would recommend returning to pre-PHE policy in other areas, such as: 

  • Paying for telehealth services at the facility rate only (instead of paying at the same rate that would be paid if the service were furnished in person);
  • Prohibiting providers from reducing or waiving cost sharing for telehealth services.

MedPAC further recommended certain new safeguards, such as: 

  • Applying additional scrutiny to clinicians who are outliers in terms of volume of telehealth services;
  • Requiring clinicians to provide a face-to face visit before they order high-cost durable medical equipment (DME) or high-cost clinical lab tests;
  • Prohibiting “incident to” billing for telehealth services provided by any clinician who can bill Medicare directly.

The full MedPAC report is available here.

Congressional Hearings

Tuesday, March 23rd:

  • At 10am, the House Appropriations Subcommittee on Departments of Labor, Health and Human Services, Education, and Related Agencies, will hold a hearing on “Addressing the Maternal Health Crisis.” More information is available here.
  • At 10am, the Senate Health, Education, Labor, and Pensions (HELP) Committee Primary Health and Retirement Security Subcommittee, will hold a hearing to examine why the U.S. pays the highest prices in the world for prescription drugs. More information is available here.
  • At 11am, the House Energy and Commerce Subcommittee on Health, will hold a legislative hearing on “Building on the ACA: Legislation to Expand Health Coverage and Lower Costs.” More information is available here.

Wednesday, March 24th:

  • At 3pm, the Senate Veterans’ Affairs Committee will hold a hearing to examine veterans’ mental health and implementation of the Hannon Act, focusing on coping during COVID-19. More information is available here.

Thursday, March 25th:

  • At 10am, the Senate Committee on Health, Education, Labor and Pensions (HELP), will hold a hearing on “Examining Our COVID-19 Response: Improving Health Equity and Outcomes by Addressing Health Disparities.” More information is available here.

New York State Updates

Governor Cuomo Issues Executive Order 202.97On March 17th, Governor Cuomo signed Executive Order 202.97 (available here), which extends all disaster emergency provisions outlined in Executive Order 202 and its successors that have not been otherwise superseded, modified, or expired through April 16th. As previously announced, the Order also modifies prior directives requiring vaccine providers to prioritize certain individuals as follows: 

  • Effective March 10th, pharmacies must prioritize: 
    • Individuals age 60 and older; and
    • Teachers, substitute teachers, or student teachers at public or non-public P-12 schools.
  • Effective March 17th, all providers other than pharmacies are permitted to vaccinate any eligible individual.

Updated Department of Health (DOH) guidance (available here) provides additional detail, including that while pharmacies must prioritize the above groups, they are now authorized to vaccinate individuals with comorbidities or underlying conditions. Additionally, all providers must make efforts to vaccinate the most vulnerable New Yorkers, including those with comorbidities or underlying conditions and individuals over age 60.

New York State Legislature Releases One-House Budget Proposals
Last weekend, the New York State Legislature released their budget proposals in response to Governor Cuomo’s proposed Executive Budget for Fiscal Year 2022. Negotiations between the Legislature and the Governor to reconcile their respective budget proposals are expected over the next several weeks before the State Fiscal Year begins on April 1st. As previously reported by SPG (here), the recent passage of the federal American Rescue Plan provides significant coronavirus relief funding to states and localities, including $12.57 billion for the New York State government. This funding will likely have a considerable impact on budget negotiations, as it was not incorporated into the original Executive Budget Financial Plan.

Notably, both the Assembly and Senate bills reject the Executive Budget’s proposed Medicaid cuts, including an additional 1 percent across-the-board cut, and other funding reductions for safety net providers. The Assembly and Senate also propose to provide additional funding for mainstream and Managed Long Term Care (MLTC) plans to help partially restore COVID-19-related rate cuts that were implemented on February 1st. Both houses also reject the Governor’s proposal to extend the Medicaid Global cap, which would prevent the Governor from unilaterally making mid-year changes to the Medicaid budget. The Senate proposed to repeal the planned carve-out of the Medicaid pharmacy benefit to fee-for-service, while the Assembly proposed to delay the carve-out for 340B providers and HIV special needs plans. Both Houses proposed modifications to the Governor’s telehealth reform proposals, with the Senate including language that would require reimbursement parity for telehealth services.

The one-house bills may be accessed at the links below: 

DFS Issues Guidance on Prompt Payment of Health Insurance Claims
On March 10th, the New York State Department of Financial Services (DFS) sent a circular letter (available here) to regulated insurance plans that provides guidelines on the following new requirements: 

  • Insurers must not deny a payment for medically necessary services based on a hospital’s noncompliance with an insurer’s administrative requirements;
  • Insurers must make a determination on a preauthorization request for inpatient rehabilitation services following an inpatient hospital admission within one business day from the receipt of necessary information;
  • Insurers must make a determination with regard to a non-expedited appeal of an adverse determination within 30 calendar days of receipt of the necessary information to conduct the appeal;
  • Insurers must not deny a preauthorized service on retrospective review using different standards than used for the preauthorization review; and
  • Insurers must pay claims, submitted through the internet or electronically, within 30 days of receipt when the insurer’s obligation to pay the claim is reasonably clear. If additional information is needed, payment must be made within 15 days of a determination that payment is due. 

These requirements apply to services performed on or after January 1, 2021. The DFS press release is available here. Questions may be sent to health@dfs.ny.gov.

DFS Announces Actions to Promote Diversity, Equity, and Inclusion in the Insurance Industry
On March 16th, DFS sent a circular letter (available here) to regulated insurance plans outlining expectations that insurers make the diversity of their boards and senior management a business priority and key element of their corporate governance. DFS advises insurance plans to treat diversity like other strategic priorities for their business, including by: 

  • Communicating the importance of diversity to all stakeholders;
  • Explaining how diversity will be achieved; and
  • Setting goals and measuring progress.

DFS will begin including questions related to an insurer’s diversity-related efforts during its examination process starting in 2022. Starting this summer, DFS plans to collect and publish data from insurers with more than $100 million in annual New York premiums related to the gender, racial, and ethnic composition of their boards and management. DFS will organize a webinar focused on diversity, equity, and inclusion best practices that will address specific issues that may arise during such efforts.

The DFS press release is available here. Questions may be sent to insuranceDEI@dfs.ny.gov.

This Week’s SPG Updates

Please find below links to updated SPG resource documents and all other updates distributed by SPG this week.