Weekly Health Care Policy Update – September 11, 2023

September 18, 2023

In this update: 

  • Legislative Updates
    • Senator Cassidy Releases AI White Paper and Request for Feedback
    • House Ways and Means Committee Requests Input on Rural Health Policy
    • House Leaders Introduce Lower Costs, More Transparency Act
  • Federal Agencies
    • CMS Announces AHEAD Model; Registration for September 18th Webinar Open
    • CMS Issues Proposed Rule on Nurse Staffing Requirements
    • CMS Sends Letter to State Medicaid Directors on Disenrollments
    • HHS Announces First Ten Drugs Subject to Price Negotiations
    • HRSA Awards $81 Million in Health Center Bridge Funding
  • Other Updates
    • KFF Publishes Report on Medicaid Unwinding
    • Humana Sues CMS Over MA Audits
    • OIG Publishes Report on Nursing Homes’ Challenges with Natural Disasters and Other Emergencies
    • District Court Upholds New Challenge to the No Surprises Act 
    • NCQA Updates HEDIS for Health Equity and Personalized Medicine
  • New York State Updates
    • DOH Releases Preliminary Draft of Master Plan on Aging
    • DOH to Hold Webinar on Health Equity Impact Assessments
    • OMH Issues Proposed Rule for Use of Telehealth in Crisis Stabilization Centers
    • OCFS Issues Proposed Rule for Increases in Preventive Housing Subsidy
    • DFS Approves 2024 Premium Rate Increases for Commercial Health Insurers
  • Funding Opportunities
    • OTDA Issues RFP for Refugee Support Services Program

Legislative Updates

Senator Cassidy Releases AI White Paper and Request for Feedback
On September 6th, Senator Bill Cassidy (R-LA), the ranking member on the Senate Health, Education, Labor, and Pensions (HELP) Committee, released a white paper on the use of artificial intelligence in areas of the HELP Committee’s jurisdiction. On health care, the paper focuses on AI’s potential to: 

  • Assist with research and development of new medicines and with the Food and Drug Administration’s (FDA) regulatory review process for such medicines;
  • Detect, diagnose, and treat disease;
  • Provide clinical decision support to patients and providers; and
  • Address health care administration and coverage.

The paper ends with a list of questions on how the government should approach the use of AI in health care and other areas, including the role of FDA in AI regulation.

The paper is available here. Interested stakeholders should reply by email to HELPGOP_AIComments@help.senate.gov by September 22nd.

House Ways and Means Committee Requests Input on Rural Health Policy
On September 7th, House Ways and Means Committee Chair Jason Smith (R-MO) released a Request for Information (RFI) for stakeholder input on ways to improve health care in rural and underserved areas. The RFI specifically asks for comment on topics including: 

  • Geographic payment differences, including a review of Medicare policies on geographic differences, such as the area wage index and geographic practice cost index.
  • Sustainable provider and facility financing, including streamlining the current framework of Medicare’s rural designations (such as Critical Access Hospitals). It also could include “regulatory or financing changes” needed to ensure rural areas maintain adequate inpatient and specialty services.
  • Aligning sites of service, including policies on site-neutral care and Medicare reimbursement disparities between geographies.
  • Health care workforce, including policies to develop new providers and specialties in shortage areas and reduce the need for paperwork.
  • Innovative models and technology, including policies that improve access to care in rural areas.

The RFI is available here. Responses may be submitted to WMAccessRFI@mail.house.gov by October 5th.

House Leaders Introduce Lower Costs, More Transparency Act
On September 8th, House leadership from the Energy and Commerce (E&C), Ways and Means (W&M) and Education and Workforce Committees introduced the Lower Costs, More Transparency Act, a bipartisan legislative package that includes provisions from a variety of previously introduced health care reform bills. The Act would: 

  • Increase transparency of hospital prices, clinical diagnostic laboratory test prices, imaging prices, ambulatory surgical center prices, health coverage prices, and pharmacy benefit manager (PBM) practices;
  • Establish parity in Medicare payments for hospital outpatient department services furnished off-campus;
  • Prohibit spread pricing in Medicaid;
  • Reauthorize Community Health Centers, the Teaching Health Center GME program, National Health Service Corps; and the Special Diabetes Program;
  • Delay Disproportionate Share Hospital (DSH) reductions under Medicaid; and
  • Increase plan fiduciary access to health data and require hidden fee disclosures.

A press release is available here. The text of the Act is available here, and a section-by-section summary is here.

Federal Agencies

CMS Announces AHEAD Model; Registration for September 18th Webinar Open 
On September 5th, the Centers for Medicare and Medicaid Services (CMS) announced the new States Advancing All-Payer Health Equity Approaches and Development Model (AHEAD Model), which will offer states the opportunity to take responsibility for all-payer total cost of care on a geographic basis. Under the AHEAD Model, up to eight states will identify a region (or the whole state) where they will take on responsibility for reducing the total cost of care, both in Medicare and on an all-payer (Medicare, Medicaid, and private) basis. To achieve this, the states will implement significant delivery system reforms that include: 

  • Hospital global budgets for inpatient and outpatient services;
  • An advanced primary care model (Primary Care AHEAD); and
  • Cooperative agreement funding of $12 million to help the selected states plan and implement these models.

States would begin participating in 2026 or 2027, with the model scheduled to end in 2034. More details are expected to be released in the fall. SPG’s full summary of the information released so far is available here.

CMS is holding a webinar to provide an overview of AHEAD on September 18th at 3pm. Registration is available here.

CMS Issues Proposed Rule on Nurse Staffing Requirements 
On September 1st, CMS issued a new proposed rule which would establish nurse staffing and transparency requirements for Medicare and Medicaid-certified long-term care (LTC) facilities. The proposed rule includes three key components: 

  • Minimum staffing standards;
  • A 24/7 on-site nurse; and
  • Changes to facility assessment processes.

Minimum Staffing Standards
The proposed rule includes minimum nurse staffing standards of 0.55 hours per resident day (HPRD) for Registered Nurses (RNs) and 2.45 HPRD for Nurse Aides (NAs). CMS notes that these levels are a minimum, and facilities should generally expect to have staff above these levels to address the specific needs of their resident population, based on the facility assessment and resident acuity levels.

CMS is seeking comment on an alternative total nurse staffing standard of 3.48 HPRD, as well as the benefits and tradeoffs of different standards, evidence, or methodologies states use to establish minimum staffing standards.

On-Site Requirement
The proposed rule includes a requirement to have an RN onsite 24 hours a day, seven days a week. CMS is seeking comment on the feasibility of this proposed requirement as well as possible alternatives to this proposal.

Facility Assessment Requirement
The proposed rule includes several updates to the facility assessment, including: 

  • Clarifying that facilities must use evidence-based methods when care planning for their residents, including consideration for those residents with behavioral health needs;
  • Requiring that facilities use the facility assessment to assess the specific needs of each resident in the facility and to adjust as necessary based on any significant changes in the resident population;
  • Requiring that facilities include the input of facility staff, including, but not limited to, nursing home leadership, management, direct care staff (i.e., nurse staff), representatives of direct care staff, and staff who provide other services; and
  • Requiring facilities to develop a staffing plan to maximize recruitment and retention.

Exemptions and Regulatory Flexibility
The proposed rule includes a staggered implementation approach and possible hardship exemptions for select facilities. LTC facilities may qualify for a temporary hardship exemption from the minimum nurse staffing HPRD standards only if they meet the following criteria: 

  • Workforce unavailability based on their location, as evidenced by either a medium (that is, 20 percent below the national average) or low (that is, 40 percent below national average) provider-to-population ratio for the nursing workforce, as calculated by CMS, by using the Bureau of Labor Statistics and Census Bureau data, or the facility is located at least 20 miles away from another LTC facility (as determined by CMS);
  • Good faith efforts to hire and retain staff through the development and implementation of a recruitment and retention plan; by documenting job postings, and job vacancies, including the number and duration of vacancies, job offers made, and competitive wage offerings; and
  • A financial commitment to staffing by documenting the total annual amount spent on direct care staff.

Facilities would not be eligible for an exemption if: 

  • They have failed to submit their data to the Payroll-Based Journal System;
  • They have been identified as a special focus facility (SFF); and
  • They have been identified within the preceding 12 months as having widespread insufficient staffing with resultant resident actual harm or a pattern of insufficient staffing with resultant resident actual harm or have been cited at the immediate jeopardy level of severity with respect to insufficient staffing as determined by CMS.

The proposed rule would allow for implementation in three phases over a three-year period for all non-rural facilities: 

  • Phase 1 would require facilities located in urban areas to comply with the facility assessment requirements 60 days after the publication date of the final rule.
  • Phase 2 would require facilities located in urban areas to comply with the requirement for an RN onsite on a 24/7 basis by two years after the publication date of the final rule.
  • Phase 3 would require facilities located in urban areas to comply with the minimum staffing requirements of 0.55 and 2.45 hours per resident day for RNs and NAs, respectively, three years after the publication date of the final rule.

The proposed rule can be found here. A fact sheet can be found here. Comments will be accepted until November 6th.

CMS Sends Letter to State Medicaid Directors on Disenrollments
On August 30th, CMS sent a letter to all State Medicaid Directors requiring them to assess their eligibility systems and determine if issues exist that may cause people, especially children, to be disenrolled in Medicaid or the Children’s Health Insurance Program (CHIP) even if they are still eligible for coverage. The letter further requires states to take immediate action to correct any eligibility systems issues discovered and reinstate coverage.

CMS notes that eligibility systems in some states may be programmed to conduct automatic renewals at the family level, rather than the individual level, even though individuals in a family may have different eligibility requirements for Medicaid and/or CHIP. The letter directs Medicaid programs to take immediate steps if they find this issue in their eligibility system.

CMS’ letter to State Medicaid Directors is available here.

HHS Announces First Ten Drugs Subject to Price Negotiations
On August 29th, the Department of Health and Human Services (HHS) announced the first 10 drugs to be included in the Medicare Drug Price Negotiation Program: 

  • Eliquis (blood clots, Bristol Myers Squibb)
  • Jardiance (diabetes, Boehringer Ingelheim/Eli Lilly)
  • Xarelto (blood clots, Johnson & Johnson)
  • Januvia (diabetes, Merck)
  • Farxiga (diabetes, AstraZeneca)
  • Entresto (heart failure, Novartis)
  • Enbrel (arthritis and psoriasis, Amgen)
  • Imbruvica (blood cancers, Johnson & Johnson/AbbVie)
  • Stelara (psoriasis and Crohn’s disease, Johnson & Johnson)
  • Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill (diabetes, Novo Nordisk)

Together, these drugs accounted for more than $50 billion in Medicare prescription drug costs during the twelve months ending May 31st.

Drug manufacturers have until October 1st to sign agreements for participation in the Negotiation Program. Manufacturers that choose not to participate will face substantial taxes. The negotiation period will commence February 1, 2024, when CMS will send initial offers of a maximum fair price to each drug company. Negotiated prices are planned to take effect January 1, 2026. However, delays to this timeline are likely, as the negotiation program is the subject of several ongoing legal challenges. In addition, the extent to which any negotiated savings will be passed onto Medicare beneficiaries and other consumers remains unknown.

The HHS press release is available here and a press release from CMS is available here. HHS also released a fact sheet, available here, and CMS released a separate fact sheet here. An implementation timeline is available here.  

HRSA Awards $81 Million in Health Center Bridge Funding
On September 5th, the Health Resources and Services Administration (HRSA) announced awards in the Bridge Access Program for Covid-19 Vaccines and Treatments Program. The program is an effort by HRSA to maintain broad access to Covid-19 vaccines for millions of uninsured individuals following the end of federally-subsidized access. This program creates a $1.1 billion public-private partnership to deliver vaccines and treatments at local pharmacies, through existing community public health infrastructure, and at local health centers.

HRSA awarded $81.1 million in one-time Bridge funding to both health center program award recipients and health center program look-alikes that received American Rescue Plan awards. Each award included $10,029 plus $11.53 per uninsured patient reported in 2022. Funds can be used for Covid-19 testing, vaccination, and treatment. In New York, $3.8 million was awarded to 69 health centers.

More information on the program is available here.

Other Updates

KFF Publishes Report on Medicaid Unwinding 
On September 5th, the Kaiser Family Foundation (KFF) released new data from their Medicaid Enrollment and Unwinding Tracker. Based on the most recent available data from 48 states and the District of Columbia, KFF found that at least 5,677,000 Medicaid enrollees have been disenrolled through the ongoing redeterminations process. This represented 37% of enrollees who underwent a renewal process across all reporting states.

KFF notes that there is a wide variation in disenrollment rates by state, ranging from 72% of redeterminations in Texas to 9% in Michigan. Across all states with available data, 73% of disenrolled beneficiaries had their coverage terminated for procedural reasons rather than based on eligibility. New York had one of the lowest rates of procedural disenrollments, at 53%. However, it also had a relatively low rate of ex parte (automatic) renewals of Medicaid coverage, at 37% (compared to the national average of 53%).

The KFF Tracker can be found here.

Humana Sues CMS Over MA Audits
On September 1st, Humana filed a suit against CMS over plans to audit Medicare Advantage (MA) payments. The suit, filed in a Texas federal court, argues that that the final rule published by CMS earlier this year that requires repayment of extrapolated (rather than confirmed) savings from Risk Adjustment Data Validation (RADV) audits, starting from the 2018 program year, is “arbitrary and capricious.” CMS projects that the rule would claw back about $4.7 billion over the 10-year window from 2023 to 2032. SPG summarized this rule in its January 31st update here.

Overpayment in the MA program has been a topic of increased scrutiny in 2023, with a particular focus on practices that maximize risk adjustment. Humana is the second largest provider of MA plans nationally and refocused its business entirely on government plans earlier this year. In the suit, Humana contends that the CMS rule should be struck down because it violates actuarial rules, applies the rule retroactively, and will alter the MA program too drastically “without a reasoned explanation.”

The full text of the complaint can be found here.

OIG Publishes Report on Nursing Homes’ Challenges with Natural Disasters and Other Emergencies
On September 1st, the HHS Office of the Inspector General (OIG) released a report on “wide-ranging challenges” that nursing homes face in preparing for natural hazards and public health emergencies. This report’s release comes in the context of ongoing negotiations between the U.S. House of Representatives and Senate over the scope of the reauthorization of the Pandemics and All-Hazards Preparedness Act (PAHPA).

OIG details a randomized study of 168 nursing homes in geographic areas with very high or relatively high risk for natural hazards, as determined by the Federal Emergency Management Agency (FEMA). Respondents rated how challenging each of 49 preparedness activities were for their facility. The study found that an estimated 77% of nursing homes in areas with elevated risk for natural hazards have challenges with preparedness activities, most notably ensuring adequate staffing during emergencies and transportation during evacuations.

More information on the report is available here.

District Court Upholds New Challenge to the No Surprises Act
On August 25th, Judge Jeremy Kernodle, a federal district court judge in Texas, issued a ruling in favor of another challenge by the Texas Medical Association to the No Surprises Act. In this suit, the plaintiffs argued that the rule’s definition of the “qualifying payment amount,” one of the major standards for determining an out-of-network payment, uses a flawed methodology to calculate the median rate insurers pay for a service.

Kernodle’s ruling vacates parts of the final rule—in particular, the inclusion of so-called “ghost rates,” referring to contracted rates for specialized services that are rarely provided, in the qualified payment amount methodology. This case marks Kernodle’s fourth ruling in favor of challenges to the No Surprises Act brought by the Texas Medical Association.

CMS has, once again, paused the independent dispute resolution process, which has been largely inactive since August 7th, due to a separate ruling against the law. Providers and insurers continue to await further guidance from the government regarding how to process disputes amid the ongoing legal challenges.

Kernodle’s opinion is available here.

NCQA Updates HEDIS for Health Equity and Personalized Medicine
On August 29th, the National Committee for Quality Assurance (NCQA) announced it is making updates the Health Effectiveness Data and Information Set (HEDIS) performance measures to promote health equity. Specifically, NCQA plans to revise HEDIS to: 

  • Remove measure language that uses gender to determine screening eligibility, encouraging providers to collect more granular data where possible (e.g., sexual orientation, gender identity, sex assigned at birth, pronouns, etc.).
  • Expand race and ethnicity stratifications for eight new measures, including: 
    • Post-hospitalization mental health care;
    • Cervical cancer testing;
    • Prenatal and postpartum depression screenings;
    • Childhood and prenatal immunizations; and
    • Kidney health and eye exams for diabetes patients.

New York State Updates

DOH Releases Preliminary Draft of Master Plan on Aging
On August 28th, the New York State Department of Health (DOH) and other agencies released a preliminary progress report on the development of the Master Plan for Aging (MPA). Governor Hochul issued Executive Order 23 in November 2022, establishing a task force to create a Master Plan for Aging whose mandate is “to put forward a comprehensive set of recommended policies and programs that will ensure all New Yorkers can age with dignity and independence.”

The report outlines progress on the MPA to date. The Plan’s Stakeholder Committee has established eight subcommittees in the following areas: 

  • Long-Term Services and Supports;
  • Home and Community Based Services;
  • Formal Caregivers;
  • Informal Caregivers;
  • Health and Wellness;
  • Housing, Community Development, and Transportation;
  • Economic Security; and
  • Safety, Security, and Technology.

Within these subcommittees, an array of 32 subject-specific workgroups has been formed to develop proposals and recommendations for consideration in the MPA. The timeline for the full release of the MPA is as follows: 

  • January 2024: Interim report released.
  • July 2024: Final Stakeholder Committee report released.
  • January 2025: Final MPA released.

The preliminary report is available here.

DOH to Hold Webinar on Health Equity Impact Assessments 
On September 14th, DOH will hold an informational webinar on new Health Equity Impact Assessment (HEIA) requirements for Certificate of Need (CON) applications filed by Article 28 health care facilities to conduct major construction and other capital projects. The State’s final HEIA regulations are available here (SPG’s summary is available here.)

Registration for the webinar is available here. The webinar will be held at 1pm. Questions should be submitted to HEIA@health.ny.gov at least two business days in advance of the scheduled webinar date.

OMH Issues Proposed Rule for Use of Telehealth in Crisis Stabilization Centers 
On September 6th, the New York State Office of Mental Health (OMH) issued a proposed rule in the State Register (available here) to establish regulations for the use of telehealth services in Crisis Stabilization Centers, which are jointly certified by OMH and the Office of Addiction Services and Supports (OASAS).

Crisis Stabilization Centers must obtain prior written authorization from OMH and OASAS before implementing such services. The regulations outline general standards for the delivery of services via telehealth and requirements for programs to develop policies and procedures to be submitted for designation approval.

Comments may be submitted to Sara Paupini at regs@omh.ny.gov by November 5th.  

OCFS Issues Proposed Rule for Increases in Preventive Housing Subsidy 
On September 6th, the New York State Office of Children and Family Services (OCFS) issued a proposed rule in the State Register (available here) to increase the preventive services housing subsidy for children/youth aging out of foster care and living independently from $300 to $725 a month, pursuant to legislation passed in the State Fiscal Year 2023-2024 Budget. Rent subsidies may not be provided for a period of more than three years and must be made in addition to any other payments or benefits received by the family.
Comments may be submitted to Stephanie Deyoe at regcomments@ocfs.ny.gov by November 5th.

DFS Approves 2024 Premium Rate Increases for Commercial Health Insurers 
On August 31st, the New York State Department of Financial Services (DFS) announced the approval of commercial health insurers’ premium rate increases for 2024, as follows: 

  • In the individual market, DFS approved an average increase of 12.4%. Insurers had requested an average rate increase of 22.1%.
  • In the small group market, DFS approved an average increase of 7.4%. Insurers had requested an average rate increase of 15.3%.

These rate actions resulted in insurer profit provisions being held to 1.0%. Approximately 248,000 New Yorkers are currently enrolled in individual commercial plans, and 800,000 New Yorkers are enrolled in small group plans.

DFS’s press release is available here. Additional information on requested and approved rates for specific plans is available here.

Funding Opportunities

OTDA Issues RFP for Refugee Support Services Program
On September 5th, the New York State Office of Temporary and Disability Assistance (OTDA) issued a Request for Proposals (RFP) for the Refugee Support Services Program (RSSP). Awarded applicants will provide employment services (including job development, employment preparation, job search and placement, and job retention) and transitional support services to assist refugees and their families in obtaining jobs and achieving self-sufficiency within one year of their program enrollment.

Eligible applicants must be located in New York State, including: 

  • Non-governmental organizations;
  • Not-for-profit corporations, including charitable organizations;
  • Faith-based organizations;
  • Education institutions; and
  • Tribal organizations.

Eligible RSSP program participants must be refugees/asylees that meet one of the 14 eligible immigration status categories, which are detailed in the RFP. All program participants must apply for services and complete a Family Self-Sufficiency Plan (FSSP). To receive employment services, RSSP participants must be at least 16 years of age and cannot be full-time students in elementary or secondary school (unless employment services are for part-time or temporary employment). Eligible participants of any age may receive transitional supports, regardless of school enrollment status.

Through this funding opportunity, OTDA anticipates distributing a total of approximately $76 million in funding for 63-month contracts, to be divided into five budget periods. For the first budget period (January 1, 2024 to December 31, 2024), a total of $20 million will be available for applicants in the three regions of New York State (New York City, Metro Region, and Rest of State), with NYC receiving $3.8 million, the Metro Region receiving $600,000, and the Rest of State receiving $15.6 million. OTDA intends to fund more than one applicant in NYC and may potentially fund more than one applicant in the Metro region and in each Rest of State county.

The program’s reimbursement structure will use a combination of expenditure-based and performance-based reimbursement. Applicants have the flexibility to shape the budget and reimbursement structure to best meet their needs in operating RSSP, with the following requirements: 

  • Expenditure-Based Reimbursement: Up to 60% of program costs may be reimbursed for approved expenditures associated with the delivery of program services (e.g., salary, fringe, administrative costs, equipment, travel, property, utilities, and operating expenses).
  • Performance-Based Reimbursement: Applicants’ reimbursement structure must consist of a minimum of 40% performance-based reimbursement. Applicants will earn the performance-based portion of the awards after participants achieve the five Outcomes described below. Applicants may elect to utilize 100% performance-based reimbursement.

As part of the performance-based reimbursement component, OTDA will reimburse awardees per outcome achieved by participants. Applicants must propose reimbursement rates that do not exceed OTDA’s maximum rates, which are as follows for each of the five outcomes: 

  • Job placement (maximum rate of $1,600)
  • 90-Day Job Retention (maximum rate of $3,500)
  • Self-sufficiency (maximum rate of $3,500)
  • FSSP 6-month Follow-up assessments (maximum rate of $300)
  • FSSP 12-month Follow-up assessments (maximum rate of $300)

The RFP is available here. Proposals are due by October 5th. Questions may be submitted to Denis Mistric at Denis.Mistric@otda.ny.gov by September 18th.