Weekly Health Care Policy Update – May 30, 2023

June 6, 2023

In this update: 

  • Legislative Updates
    • Biden and McCarthy Announce Debt Limit Deal
  • Federal Agencies
    • HHS Proposes Rule on the Medicaid Drug Rebate Program
    • CMMI Releases Three Reports on Medicare-Medicaid Demonstrations, Showing Consumer Satisfaction but Increased Costs
    • CMMI Releases Data on ACO REACH and Other Advanced ACO Initiatives
    • HHS Launches Kids Online Health and Safety Taskforce
    • CMS Updates Telehealth FAQ on Hospital Billing of Rehabilitative Services
  • Other Updates
    • CEO of AHIP to Depart
    • United Health Foundation Publishes America’s Health Rankings 2023 Senior Report
  • New York State Updates
    • DOH Ends Enforcement of State Vaccine Mandate for Healthcare Personnel; Updated SPG Tracker
    • DFS Proposes Licensure and Reporting Requirements for Pharmacy Benefit Managers
  • Funding Opportunities
    • OMH Releases RFA for Round 2 of Community Mental Health Loan Repayment Program
    • RWJ Foundation Issues CFP for Projects Addressing Structural Barriers to Economic Inclusion

Legislative Update

Biden and McCarthy Announce Debt Limit Deal
On May 27th, President Biden and Speaker of the House Kevin McCarthy (R-CA) confirmed that they had reached an “agreement in principle” on a deal to raise the federal debt limit. Legislative text of the bill (H.R. 3746) was published on Sunday and is expected to be voted on by the House in the middle of this week.
 
According to reports, the major health care-related provision is the clawback of $30 billion of unspent Covid-19 relief and response funding, which includes funding for Covid-19 testing, vaccine distribution, and mental health awareness and education programs. However, $5 billion for the Project Next Gen initiative announced last week would remain, as would funding for Covid-19 vaccinations and treatments for the uninsured. Notably, the bill does not contain changes to Medicare or Medicaid policy.
 
There remains some uncertainty about the deal’s prospects and timeline. McCarthy said that House members would have at least 72 hours to review the bill, which would mean a vote would occur no earlier than the night of May 31st. If approved, the bill would then move to the Senate. Treasury Secretary Janet Yellen has stated that the limit would be breached on June 5th if a deal is not reached. If the limit is breached, the potential consequences could include a cutoff of federal premium subsidy payments to health plans for individuals enrolled in Affordable Care Act (ACA) plans, and, in the first week of June alone, a delay of nearly $50 billion in Medicare and $22 billion in Medicaid payments to states.

Federal Agencies

HHS Proposes Rule on the Medicaid Drug Rebate Program 
On May 23rd, the Department of Health and Human Services (HHS) published a proposed rule implementing pieces of the Medicaid Drug Rebate Program (MDRP), including several new transparency provisions. The Medicaid Drug Rebate Program is a requirement for states offering an optional prescription drug benefit in their Medicaid package that dictates the process by which manufacturers pay rebates to states. Key provisions in the proposed rule include: 

  • Misclassified Drugs: Under the new rule, CMS would: 
    • Define the situations in which a drug would be considered “misclassified”;
    • Develop a process and timeline to notify the manufacturer that the agency has determined that a misclassification of a covered outpatient drug has occurred;
    • Codify a manufacturer’s obligation to pay unpaid rebate amounts; and
    • Describe the range of actions that CMS may take against a manufacturer that does not correct the misclassification after being notified (agency correcting the misclassification, suspension of the drug and/or its manufacturer from the MDRP, exclusion of the misclassified drug from Medicaid payment, and imposition of civil monetary penalties).
  • Drug Rebate Program Definitions: CMS proposes to clarify rules around the required state rebates for Medicaid drugs, including new definitions of “best price”, “manufacturer”, and “market date.”
  • CMS Survey for High-Cost Drugs: CMS proposes a process to annually identify and survey a small number of high-cost CODs that have not participated in CMS drug pricing programs or negotiated significant supplemental rebates with most state Medicaid programs. CMS estimates that about 3 to 10 drugs per year might be surveyed.
  • PBM Transparency and Medicaid Card Requirement: CMS proposes to require pharmacy benefit managers (PBMs) to be transparent about “spread pricing” with Medicaid managed care plans. Specifically, PBMs will need to report the cost of the COD and dispensing fee separately from any other fees charged to the plan by the PBM. CMS also proposes that all plans must ensure that beneficiaries’ Medicaid cards include Medicaid-specific information to help ensure the appropriate scope of benefits are delivered and avoid duplicate discounts under the 340B Drug Discount Program.

The proposed rule is available here. A fact sheet on the proposed rule is available here.
Comments will be accepted until July 25th.

CMMI Releases Three Reports on Medicare-Medicaid Demonstrations Showing Consumer Satisfaction but Increased Costs
On May 26th, the Center for Medicare and Medicaid Innovation (CMMI) released reports on the three Financial Alignment Initiatives (FAI) for Medicare-Medicaid enrollees which took place in California, Illinois, and Massachusetts. FAIs were authorized under Section 3021 of the ACA with the aim of testing delivery models for dual eligibles that aligned financing across Medicare and Medicaid. Most such models involved piloting a model in which a single managed care plan, a Medicare-Medicaid Plan (MMP), would integrate both funding streams. In New York, the MMP demonstration was known as the Fully Integrated Duals Advantage (FIDA) program and ran from 2015 through 2019, but faced significant difficulties with consumers opting out.

In the latest reports, CMMI found that overall, while consumer satisfaction seemed to rise under the programs, costs rose as well. Highlights from the reports include: 

  • California: Most beneficiaries rated the plans highly on the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey. The demonstration yielded a cumulative increase in Medicare Parts A and B costs and Medicaid total cost of care, and with increases in each of the 5 demonstration years, relative to the comparison group.
  • Illinois: Medicare cost, service utilization, and quality of care analyses showed mixed and unfavorable results. CAHPS ratings of MMPs improved between 2019 and 2021 despite the pandemic.
  • Massachusetts: CAHPS ratings of the MMPs remained high. Analyses showed increases in Medicare and Medicaid costs and mixed results on service utilization and quality of care measures.

The full reports are available here.

CMMI Releases Data on ACO REACH and Other Advanced ACO Initiatives
On May 25th, CMMI announced the publication of new datasets from the ACO REACH, Global and Professional Direct Contracting (GPDC), and Pioneer Accountable Care Organization (ACO) models. For ACO REACH, though model participants were previously announced, the data will now mirror what the Medicare Shared Savings Program (MSSP) releases about its participants. For GPDC, CMMI is releasing detailed public use files (PUFs) for the first time, including detailed data for the 2021 performance year on ACO financial and quality performance, ACO and participating provider characteristics, the eligible population of beneficiaries, and the aligned population of beneficiaries. For Pioneer, CMS is releasing PUFs and Research Identifiable Files (RIFs) for the 2015-2016 performance years, including financial and quality performance, ACO and participating provider characteristics, the eligible population of beneficiaries, and the aligned population of beneficiaries.

The new datasets are available on CMS’s data website here. SPG is working on new analyses of this data. Please contact us if you would like to discuss.

HHS Launches Kids Online Health and Safety Taskforce
On May 23rd, HHS, along with the Department of Commerce, announced that it will launch a Kids Online Health and Safety interagency task force focused on “mitigating the adverse health effects of online platforms on minors.” The task force, made up of representatives from across the federal government, will: 

  • Recommend measures to mitigate harms of social media;
  • Develop a research agenda on online harms and health benefits to minors; and
  • Recommend best practices for transparency reports and audits related to online harms.

The taskforce is expected to release voluntary guidance, policy recommendations, and a toolkit by Spring 2024. A White House fact sheet is available here.

CMS Updates Telehealth FAQ on Hospital Billing of Rehabilitative Services
On May 19th, CMS released an updated FAQ on telehealth policies after the end of the Covid-19 Public Health Emergency (PHE), which occurred on May 11th. Much of the information in the FAQ has previously been published, but CMS issued clarifications on whether hospitals may bill for certain rehabilitative and ancillary services when provided by telehealth to patients in their homes, including: 

  • Outpatient physical therapy (PT);
  • Occupational therapy (OT);
  • Speech language pathology (SLP) services;
  • iabetes self-management training (DSMT); and
  • Medical nutrition therapy (MNT).

CMS noted that although most such practitioners remain on the list of distant site practitioners, some staff providing DSMT may not be. As such, CMS will exercise enforcement discretion with regards to the telehealth practitioner status of otherwise-qualified DSMT staff through 2023. As such, providers of PT, OT, SLP, DSMT, and MNT should continue billing for these services when provided remotely “in the same way they have been during the PHE.”

Other facilities, such as rehabilitation agencies and outpatient rehabilitation facilities, should also follow this guidance. Telehealth is not separately billable for either home health agencies (HHAs), skilled nursing facilities (SNFs) or inpatient rehabilitation facilities (IRFs) because such providers are paid through bundles. However, HHAs are required to report the use of telehealth technology in providing home health services on home health payment claims beginning July 1st.

The full FAQ is available here.

Other Updates

CEO of AHIP to Depart 
On May 25th, Matt Eyles, the CEO of America’s Health Insurance Plans (AHIP), announced that he would leave the organization on October 2nd. Eyles has spent eight years at AHIP, including five as CEO, after replacing former acting CMS adminstrator Marilyn Tavenner. An executive committee of the AHIP board will begin a national search for his replacement.

United Health Foundation Publishes America’s Health Rankings 2023 Senior Report 
On May 16th, the United Health Foundation, a not-for-profit established by UnitedHealth, published “America’s Health Rankings 2023 Senior Report,” its 11th annual report reviewing “the past decade of data to provide a comprehensive look at the health and well-being of older Americans, ages 65 and older.” Overall, the report identifies the following significant challenges: 

  • The early death rate increased 4% between 2020 and 2021.
  • The drug death rate among adults ages 65 and older increased 43% between 2016-2018 and 2019-2021.
  • The opioid death rate grew 108% among adults ages 65 and older since 2014- 2016.
  • Physical inactivity among adults ages 65 and older in fair or better health increased 6% between 2018 and 2021.

Among the most positive developments, the report highlights: 

  • Food insecurity among older adults decreased 6% between 2019 and 2020.
  • High-speed internet access among households with older adults increased 7% between 2019 and 2021.

Based on 52 measures across social and economic factors, physical environment, clinical care, behaviors, and health outcomes, the report identifies the healthiest states for older adults as Utah, New Hampshire, Colorado, Minnesota, and Vermont. The report identifies the least healthy states as Louisiana, Kentucky, West Virginia, and Oklahoma.

The full report is available here.

New York State Updates

DOH Ends Enforcement of State Vaccine Mandate for Healthcare Personnel; Updated SPG Tracker
On May 24th, the New York State (NYS) Department of Health (DOH) issued a Dear Administrator Letter (DAL) that recommends a repeal of the COVID-19 vaccine mandate for health care personnel at DOH-covered facilities, including hospitals, nursing homes, and long-term care facilities. The mandate’s regulations, which are available here, have been in effect since August 2021.

While the repeal of the mandate is contingent on final approval from the Public Health and Health Planning Council (PHHPC), the letter indicates that effective immediately, DOH will no longer enforce the mandate and will not cite providers for failing to comply with its vaccination requirements. However, DOH may continue to seek sanctions against providers for previously cited violations that occurred prior to May 24th.

Going forward, covered facilities should individually consider how to implement their own internal policies regarding COVID-19 vaccinations. These facilities are: 

  • Article 28 hospitals, nursing homes, and diagnostic and treatment centers;
  • Article 36 (Public Health Law) home care providers;
  • Article 40 (Public Health Law) hospices; and
  • Article 7 (Social Services Law) adult care facilities.

Federal vaccination requirements for CMS-certified healthcare facilities are currently still in effect, although a May 1st announcement from the Biden Administration (available here) indicates that HHS has begun the process to end these requirements as well.

The DAL is available here. Questions can be addressed to hospinfo@health.ny.gov, covidnursinghomeinfo@health.ny.gov, covidadultcareinfo@health.ny.gov, or covidhomecareinfo@health.ny.gov based on the covered entity type.

SPG’s updated tracker of Covid-19 related regulatory waivers and requirements, including vaccination mandates, is available here. With the end of the PHE, we are planning to cease regular updates to this document in the future, but please feel free to reach out to us if you have questions around remaining Covid-19 flexibilities.

DFS Proposes Licensure and Reporting Requirements for Pharmacy Benefit Managers
On May 24th, the NYS Department of Financial Services (DFS) issued proposed rules that establish licensing and reporting requirements for PBMs operating in New York. Specifically, the proposed rules outline: 

  • Filings and application fees for PBMs to be issued a license;
  • Requirements for licensed and registered PBMs to pay assessments to DFS for its operating expenses;
  • Establishment of special assessments for specific investigations of individual PBMs;
  • Penalties imposed on PBMs that fail to submit their reported number of claims by January 15th annually;
  • Requirements that PBMs comply with cybersecurity regulations; and
  • Reporting and record-keeping requirements.

The complete text of the proposed rules is available here. The notice of proposed rule-making is available here. Comments may be submitted to Kristina Magne at kristina.magne@dfs.ny.gov by July 23rd.

Funding Opportunities

OMH Releases RFA for Round 2 of Community Mental Health Loan Repayment Program 
On May 25th, OMH announced a Request for Applications (RFA) for a second round of the OMH Community Mental Health Loan Repayment Program (OMH CMHLRP) to support licensed community mental health programs with the recruitment and retention of psychiatrists and psychiatric nurse practitioners (PNPs).

As with the first round, OMH will disburse State Aid grants for loan repayments for eligible existing or newly hired staff as follows: 

  • Up to $120,000 in loan repayment over a three-year period for psychiatrists;
  • Up to $30,000 in loan repayment over a three-year period for PNPs; and
  • Up to $30,000 in loan repayment over a three-year period for psychiatric physician assistants (PAs), a staff type that was not previously eligible in the first round.

The following providers may apply on behalf of eligible staff: 

  • Inpatient/CPEP: Article 28 hospital inpatient psychiatric units, Article 31 freestanding inpatient hospital programs, and Comprehensive Psychiatric Emergency Programs (CPEPs).
  • Outpatient: Article 31 outpatient programs, including Assertive Community Treatment (ACT) teams, Continuing Day Treatment (CDT), Children’s Day Treatment, Partial Hospitalization (PH), Personalized Recovery Oriented Services (PROS), and Mental Health Outpatient Treatment and Rehabilitative Services (MHOTRS) clinics.

Following Round 1 of the OMH CMHLRP, which awarded $3.4M annually, there remains a total of $5.6 million annually to fund additional awards for Fiscal Year (FY) 2023-24. OMH expects to make at least 235 awards (107 psychiatrists/128 psychiatric NPs and PAs) through this round. Applications will be accepted on a first-come, first serve basis until funds are exhausted. If all awards have not been made by December 31st, awards may be allocated to any other region/applicant with a waitlist.

The RFA is available here. Questions and applications should be submitted electronically to OMH.CMHLRP@omh.ny.gov. SPG’s summary of the first round of the OMH CMHLRP is available here.

RWJ Foundation Issues CFP for Projects Addressing Structural Barriers to Economic Inclusion 
On May 25th, the Robert Wood Johnson Foundation (RWJF) issued a Call for Proposals (CFP) for projects that advance innovative models and approaches that address structural barriers to families’ economic inclusion and promote child and family health. This CFP’s focus is not on programs and interventions that address individual behavior for families nor on basic safety net issues. Rather, it intends to support projects that transform the experience of families to enable their full participation in the economy and related social systems.

Preference will be given to applicants that are either public entities or not-for-profit 501(c)(3) organizations and that are not private foundations or Type III supporting organizations. Additionally, applicants must meet the following requirements: 

  • Have the organizational infrastructure and experience to fulfill the proposed project;
  • Demonstrate organizational commitment to equity and addressing structural racism;
  • Propose a project that demonstrates a clear benefit to families with children; and
  • Does not provide significant services to clients whose interests conflict with RWJF foundations, including those that promote tobacco, firearms, irresponsible use of alcohol products, or food of minimal nutritional value.

RWJF will award up to 10 grants, each ranging between $250,000-$750,000 in funding, for a project period of between 12-24 months.

The CFP is available here. An FAQ is available here. Proposals must be submitted through the RWJF online system by June 21st. Questions can be submitted to cfphcf@rwjf.org.