Weekly Health Care Policy Update - May 28, 2021

In this update:

Biden Administration Announces Updates on COVID-19 Response
HHS Announces Additional Biden Administration Staff Appointments
White House and Republicans Continue Negotiations on Infrastructure
Senate Confirms Chiquita Brooks-LaSure to Head CMS
Congressional Leaders Seek Public Option Ideas
CMS Affirms that Next Generation ACO Model Will End in December 2021
HHS Hosts Fourth Meeting of COVID-19 Health Equity Task Force
HHS OIG Finds MA Overpayments to Anthem Related to Risk Adjustment
CMS Proposes to Delay Changes to Medicaid Drug Rebate “Best Price” Definition
Moderna Reveals High Efficacy for Vaccine in Adolescents
Lown Institute Hospitals Index Releases Racial Inclusivity Ranking
Urban Institute Research Shows Premiums Fall with More Plans
PhRMA Sues HHS Over Drug Rebate Rule
Judge Orders CMS to Recalculate Some DGME Payments
Congressional Recess
Governor Cuomo Extends Disaster Emergency and Related Directives
DFS Announces Consumer Protection Initiatives for Mental Health and Substance Use Disorder Parity
DOH Provides Update Regarding 2021 MLTC VBP Quality Measure Sets
Updated Guidance Documents

Administration Updates

Biden Administration Announces Updates on COVID-19 Response
This week, the Biden Administration announced new updates on the COVID-19 response:

On May 17^th, the Advisory Committee on Immunization Practices (ACIP) COVID-19 Vaccine Safety Technical (VaST) Work Group met to review post-authorization COVID-19 vaccine safety data. The session included a presentation on a small number of cases of myocarditis following mRNA vaccines. The cases occurred predominantly in adolescents and young adults, more often in males than females, more often following dose 2 than dose 1, and typically within four days after vaccination. The rates of myocarditis reports in the window following COVID-19 vaccination are not different from expected baseline rates. The Centers for Disease Control and Prevention (CDC) is investigating these reports and encourages providers to be alert for symptoms, but continues to recommend COVID-19 vaccination for everyone 12 and older.
On May 24^th, the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS) posted an update to its Frequently Asked Questions(FAQ) document on enforcement of the Anti-Kickback Statute (AKS) and related regulations during the COVID-19 emergency. The new question concerns providing beneficiaries with inducements to receive a COVID-19 vaccination. OIG suggests that, although providing rewards or incentives to vaccine recipients would typically implicate the AKS and other regulations, it will not bring enforcement actions against entities if they follow a set of six safeguards, which include that the reward is not tied to any other agreement, not conditioned on past or future use of other items, and not taking into account the insurance coverage of the patient (unless the incentive is offered by a plan to its own enrollees).
On May 25^th, HHS announced the dedication of $4.8 billion in American Rescue Plan funding to the COVID-19 Uninsured Program. This program, run by the Health Resources and Services Administration, provides reimbursement to health care providers for COVID-19 testing, treatment, and vaccination for the uninsured. The new funds are dedicated specifically to COVID-19 testing. Since its inception, the program has reimbursed providers nearly $4 billion for testing, $2.5 billion for treatment, and $85 million for vaccinations.

HHS Announces Additional Biden Administration Staff Appointments
On May 25^th, HHS announced a further set of staff appointments within the Department. The list includes five counselors in the Office of the Secretary:

Dr. Steve Cha, Counselor to the Secretary, AHRQ/FDA/NIH
Melanie Fontes Rainer, Counselor to the Secretary, ACA/Marketplaces/OCR/CMMI
Steven Lopez, Counselor to the Secretary, Equity/OASH/HRSA/IHS
Josie Villanueva Prescott, Counselor to the Secretary, ACF/ACL
Dr. Mary Wakefield, Counselor to the Secretary

The announcement, including a full list of appointments, is available here.

Congressional Updates

White House and Republicans Continue Negotiations on Infrastructure
On May 21^st, the White House released a revised $1.7 trillion infrastructure proposal as a response to the group of Republican lawmakers with whom he has been negotiating a bipartisan agreement. The new proposal reduces the overall size of the American Jobs Plan (AJP) by $550 billion, although the White House memo continues to state that the AJP’s investments in care infrastructure, which included a $400 billion allocation to home and community-based services (HCBS), must be included.

On May 26^th, Senate Republicans offered a counterproposal which includes a total of $928 billion in spending, although only $257 billion would represent an increase over baseline spending. The Republican proposal would focus only on physical infrastructure, including broadband. A number of Senate Democrats rejected the new proposal as inadequate. The parties also remain far apart on how the proposals would be paid for. Democrats have proposed new revenue raisers, including an increase in the corporate tax, while Republicans propose to use previously-authorized COVID-19 relief funds.

Senate Confirms Chiquita Brooks-LaSure to Head CMS
On May 25^th, the Senate confirmed Chiquita Brooks-LaSure to lead CMS by a vote of 55 to 44. Brooks-LaSure was subsequently sworn in on May 27^th. Five Republicans joined all Democrats in support of her confirmation. Brooks-LaSure previously served as a senior CMS official under the Obama Administration, in the White House budget office, and most recently, as a managing director at Manatt. Her confirmation was previously delayed due to objections from Senator John Cornyn (R-TX) regarding CMS’s revocation of Texas’s Medicaid waiver.

HHS’s press announcement on Brooks-LaSure’s swearing in is available here.

Congressional Leaders Seek Public Option Ideas
On May 26^th, Senate Health, Education, Labor and Pensions Committee Chair Patty Murray (D-WA) and House Energy and Commerce Committee Chair Frank Pallone (D-NJ) issued a letter requesting feedback on design considerations for a federally-administered public option. The letter asks eight questions on topics including eligibility, access, pricing and reimbursement, benefit structure, premium assistance, the role of States, interaction with other government payers, and addressing broader delivery system reform. Responses are due July 31^st.

The text of the letter is available here.

Regulatory Updates

CMS Affirms that Next Generation ACO Model Will End in December 2021
On May 21^st, the Centers for Medicare and Medicaid Services (CMS) informed participants in the Next Generation Accountable Care Organization (Next Gen) model that the model will expire as currently scheduled at the end of 2021. The American Hospital Association, the National Association of Accountable Care Organizations, and others had lobbied CMS for an extension through 2022, arguing that Next Gen provided an important bridge between the Medicare Shared Savings Program Enhanced Model and full capitation under Direct Contracting. Instead, CMS will allow Next Gen participants to apply for the standard track of the Global and Professional Direct Contracting (GPDC) model, which will allow Next Gen participants to remain in a full-risk model and offer some new flexibility.

HHS Hosts Fourth Meeting of COVID-19 Health Equity Task Force
Today (May 28^th), HHS is hosting the fourth meeting of the COVID-19 Health Equity Task Force. This meeting will specifically cover COVID-19-related discrimination, xenophobia, and health inequities. Task Force members will vote on interim recommendations related to these topics.

The meeting may be watched by livestream here starting at 2pm.

HHS OIG Finds MA Overpayments to Anthem Related to Risk Adjustment
On May 24^th, the HHS OIG released an audit report finding that Anthem’s Medicare Advantage (MA) plans had included diagnosis codes not supported in the medical records in their risk adjustment submissions, resulting in $3.47 million in overpayments in 2015 and 2016. OIG examined 203 enrollee-years with diagnosis codes from a set of seven high-risk categories (acute stroke, acute heart attack, acute stroke and heart attack combined, embolism, vascular claudication, major depressive disorder, and potentially mis-keyed diagnosis codes), and found that 123 of them (61%) did not have adequate documentation. documentation. In most cases, OIG found that medical records supported a less severe related diagnosis, while in others, there was no supporting documentation. Anthem did not concur with the findings.

The report is available here.

CMS Proposes to Delay Changes to Medicaid Drug Rebate “Best Price” Definition
On May 26^th, CMS proposed a rule to delay changes to the Medicaid Drug Rebate Program’s definition of “best price” for six months, from January 1, 2022 to July 1, 2022. In December 2020, under the Trump Administration, CMS finalized changes to the Medicaid best price definition to help facilitate value-based payment (VBP) arrangements between prescription drug manufacturers and state Medicaid programs. As a result, drug manufacturers would be able to offer prices that are tied to patient outcomes without affecting the overall “best price” framework, in effect allowing them to report multiple “best prices” if offered under VBP arrangements. CMS still intends to implement the rule and expects to issue additional guidance on operational and policy aspects of the new VBP program, including specifications on beneficiary protections.

The proposed rule can be found here. Comments are due by June 28^th.

Other Updates

Moderna Reveals High Efficacy for Vaccine in Adolescents
On May 25^th, Moderna reported promising results in the trial of its COVID-19 vaccine in adolescents aged 12 to 17. There were no cases of symptomatic COVID-19 in fully-vaccinated participants in the trial, matching the 100% efficacy rate achieved by Pfizer in its trial for children aged 12 to 15. Moderna also reported a 93% efficacy rate with a single dose of its vaccine against symptomatic disease. Side effects were consistent with what had been reported in adults. Moderna plans to apply to the Food and Drug Administration in June for authorization to use the vaccine in adolescents.

Lown Institute Hospitals Index Releases Racial Inclusivity Ranking
On May 25^th, the Lown Institute Hospitals Index, a project aiming to evaluate a wider range of aspects of hospital performance, released its first Racial Inclusivity rankings for over 3,200 U.S. hospitals. These rankings intend to assess whether hospitals provide effective access to people of color who live in their service areas. As such, it measures whether the demographics of a hospital’s Medicare patients match the demographics of the hospital’s surrounding communities. In New York, the highest-ranking hospitals were from the H+H system, including Metropolitan Hospital Center, Harlem Hospital Center, and Lincoln Medical Center. The Lown Index also separately grades hospitals on factors such as civic leadership, value of care, and patient outcomes.

The Lown Index website is available here.

Urban Institute Research Shows Premiums Fall with More Plans
On May 24^th, the Urban Institute released a report on premiums in the Affordable Care Act’s (ACA) individual marketplaces in 2021. National average benchmarks premiums fell for the third straight year in 2021, even as premiums increased in the employer-sponsored market during the same period. However, the report found that a key variable determining premiums was the number of participating insurers. In markets with only one or two participating insurance companies, benchmarks were $148 and $114 per month higher, respectively, than in markets with five or more insurance companies participating. Additionally, Medicaid expansion and the presence of a Medicaid insurer were associated with lower premiums. The report also examines changes in participation by specific issuers, finding that the makeup of large insurers has changed and that new entrants have significantly increased their participation.

The report is available here.

PhRMA Sues HHS Over Drug Rebate Rule
On May 21^st, the Pharmaceutical Research and Manufacturers of American (PhRMA) filed a lawsuit in district court over a Centers for Medicare & Medicaid Services (CMS) rule that requires them to include discounts offered to patients when calculating the “best price” for drugs in Medicaid’s drug rebate program. PhRMA’s lawsuit argues that patients have never been on the list of best price-eligible purchasers and CMS had no authority to change the rule.

As described above, the December 2020 rule was intended to ease the regulatory pathway for value-based arrangements between private insurers, state Medicaid programs, and drug manufacturers, and CMS has proposed to delay application of the “best price” calculation changes by six months, to July 1, 2022.

Judge Orders CMS to Recalculate Some DGME Payments
In a May 17^th ruling, U.S. District Court Judge Timothy Kelly ordered CMS to recalculate direct graduate medical education (DGME) payments owed to 50 plaintiff hospitals dating back to 2005. DGME payments are based in part on the number of full-time equivalent residents and fellows trained by hospitals, up to a cap. The hospitals’ suit challenged CMS’s revisions to the DGME payment formula that adjusted a hospital’s FTE count downward if it exceeded that cap. While the ruling merely directs CMS to adjust payments made to the 50 plaintiff hospitals, and not to revise the formula, it paves the way for other hospitals not involved in the lawsuit to challenge their own DGME payments. CMS has not yet commented on whether it will appeal the decision.

The full text of the decision is available here.

Congressional Recess

The House and Senate will be in recess until June 7^th.

New York State Updates

Governor Cuomo Extends Disaster Emergency and Related Directives
On May 25^th, Governor Cuomo signed Executive Order 202.109 (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 June 24^th.

DFS Announces Consumer Protection Initiatives for Mental Health and Substance Use Disorder Parity
On May 25^th, the New York State Department of Financial Services (DFS) announced the implementation of “Mental Health Matters,” a series of initiatives aimed at ensuring that New York consumers who seek mental health and substance use disorder services are not discriminated against when seeking coverage under their health insurance plan. Federal and New York State law require that insurance plans ensure parity between their coverage of mental health or substance use disorder and physical illness. In October 2020, DFS issued regulations (here) requiring insurance plans to establish parity compliance programs by the end of 2021.

The new consumer protection initiatives add to those regulations to include:

A new regulation to protect consumers from provider directory misinformation that will require insurance plans to hold consumers harmless when the provider directory incorrectly lists a provider as participating in an insurer’s network;
An up-front review of cost-sharing before policies are sold to New Yorkers to ensure that consumers are not charged higher copayments or coinsurance for mental health and substance use disorder benefits than for medical benefits; and
A comprehensive review of insurance plans for parity compliance.

The DFS press release is available here. DFS expects full adherence to these consumer protections and will hold insurers accountable for any parity violations. Questions may be sent to consumers@dfs.ny.gov.

DOH Provides Update Regarding 2021 MLTC VBP Quality Measure Sets
On May 26^th, the New York State Department of Health (DOH) announced an update to the 2021 Managed Long Term Care (MLTC) Value Based Payment (VBP) Quality Measure Sets (available here). Due to COVID-19 and DOH’s continued suspension of Community Health Assessments for reassessment of MLTC enrollees during the current public health emergency, the calculation of the MLTC VBP Category 1 measures, except for the Potentially Avoidable Hospitalization (PAH) measure, will likely not be possible for 2021. As a result, both plans and providers should prepare plans on how to evaluate VBP contracts should only PAH be available.

Questions may be sent to vbp@health.ny.gov.

Updated Guidance Documents
Recently updated or released New York State and City COVID-19 guidance documents are listed below.