In this update:
- Legislative Updates
- Bipartisan Congressional Group Sends Letter to HHS on Medicare Telehealth Flexibilities
- Senate 340B Bipartisan Working Group Releases Draft Legislation
- Senator Wyden Sends Letters to MA Plans on Marketing
- Senate Finance Committee Publishes White Paper on Drug Shortages
- Bipartisan Congressional Digital Health Caucus Launches
- Federal Agencies
- CMS Releases Proposed Payment Updates for 2025 Medicare Advantage and Part D Programs
- CMS Announces Increased Participation in ACOs
- CMS to Hold Webinar on AHEAD Global Budget Methodology on February 14th
- CMS Issues RFI on MA, Prior Authorization, Access, and Benefits
- HHS Releases Updated 2024 Federal Poverty Levels
- CMS Announces Actions to Help Hospitals Meet EMTALA Obligations
- HHS Makes OUD Treatment Flexibilities Permanent
- HHS Announces Actions to Increase Contraception Care Coverage
- CMS Announces 21.3 Million Americans Enrolled in ACA Marketplace Coverage
- HHS Releases Voluntary Cybersecurity Goals
- HHS Makes First Offers in Drug Price Negotiation Program
- CMS Announces Improved Access to Sickle Cell Treatments
- CMS Opens Submissions for Measures Under Consideration Entry/Review Information Tool
- Other Updates
- MACPAC Holds January Meeting
- WHO Releases AI Ethics and Governance Guidance
- RWJF Analysis Shows Black Medicaid Enrollees More Likely to be Hospitalized for Preventable Reasons
- Fitch Publishes 2024 Non-Profit Hospital Outlook
- New York State Updates
- DOH to Post Informational Webinar on NYHER Waiver on February 12th; Questions Due February 6th
- DOH Releases Independent Contractor Study on Managed Care Procurement
- NYS Medicaid Announces Coverage Implementation for CHW and Nutrition Services and Annual ACE Screening
- DOH Adopts Final Regulations for Medical Respite Programs
- OPWDD Opens Public Comment Period for 1915(c) Comprehensive HCBS Waiver
- SED Issues Rule on Histotechnology Profession and Other Laboratory Clinicians
- OMH Issues Proposed Regulations for Hospital Admission and Discharge Criteria
- DOH Issues Public Notice for Proposed Children’s Waiver Amendment
Legislative Update
Bipartisan Congressional Group Sends Letter to HHS on Medicare Telehealth Flexibilities
On January 19th, a bipartisan Congressional group sent a letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra regarding telehealth flexibilities for Medicare beneficiaries. Medicare relaxed restrictions on telehealth delivery during the Covid-19 public health emergency (PHE), in particular the geographic restrictions on using telehealth outside of rural areas. These flexibilities currently remain in effect through temporary waivers, which were most recently extended through December 31, 2024.
The letter argues in favor of making these flexibilities permanent. It cites studies showing that telehealth is a convenient and accessible mode of care delivery that offers both beneficiaries and payers a cost-effective alternative to in-person care. The group encourages HHS to utilize upcoming executive actions such as the President’s Budget and the 2025 Medicare Physician Fee Schedule to convey HHS’s intentions and clarify any legislative requirements to make the telehealth flexibilities permanent.
The letter is available here.
Senate 340B Bipartisan Working Group Releases Draft Legislation
On February 2nd, a bipartisan group of six senators from the Senate 340B bipartisan working group released a legislative discussion draft that would update the operating rules for the 340B Prescription Drug program. Specifically, the legislation addresses the following areas:
- Rules around the use of contract pharmacies, including a requirement to register such pharmacies;
- A definition of the term “patient” for the purposes of the 340B program, to clarify the clinical relationship needed for eligibility;
- Eligibility of child sites to participate in the 340B program;
- Transparency and reporting requirements;
- Program integrity and audits;
- Prevention of duplicate discounts through the establishment of a national third-party data clearinghouse;
- Requirements preventing payers from discriminating against 340B covered entities, including a prohibition on reimbursing less than standard rates; and
- Establishment of a user fee on 340B covered entities, amounting to 0.1% of savings.
The draft language is here. A press release is available here.
Senator Wyden Sends Letters to MA Plans on Marketing
On January 11th, Senator Ron Wyden (D-OR) sent five letters to third-party marketing organizations regarding their marketing tactics for Medicare Advantage (MA) plan enrollment. The letters, sent to the company heads of eHealth, GoHealth, Agent Pipeline, SelectQuote, and TRANZACT, inquire about how these companies work with lead generators and insurance agents, what information brokers share about MA plans, and how patient data is handled. This is an area of ongoing work for Senator Wyden as Chair of the Senate Committee on Finance. Last year, the Centers for Medicare and Medicaid Services (CMS) finalized rules on the marketing of these plans.
The letter is available here.
Senate Finance Committee Publishes White Paper on Drug Shortages
On January 25th, the Senate Committee on Finance released a white paper detailing factors contributing to drug shortages as well as potential solutions via changes to the Medicare and Medicaid programs. Specifically, the Committee is interested in working on bipartisan legislation to address:
- Medicare Part A and B payment reforms for generic sterile injectable medicines;
- New incentives for providers to engage in shortage prevention/mitigation efforts;
- New Medicare Part D programs; and
- Potential reforms to the Medicaid Drug Rebate Program.
The white paper is available here.
Bipartisan Congressional Digital Health Caucus Launches
On February 1st, Representatives Troy Balderson (R-OH) and Robin Kelly (D-IL) announced the formation of the new, bipartisan Congressional Digital Health Caucus. The intent of the Caucus is to support policymakers navigating the world of digital health innovation. The Caucus hopes to explore digital health’s positive and negative impacts on patient and health system operations, while informing broader Congressional efforts to craft legislation on artificial intelligence (AI) and health care.
The announcement is available here.
Federal Agencies
CMS Releases Proposed Payment Updates for 2025 Medicare Advantage and Part D Programs
On January 31st, CMS released the Calendar Year (CY) 2025 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Advance Notice). The Advance Notice proposes updates to MA and Part D capitation rates and payment policies.
Overall, CMS estimates that the policies proposed in the Advance Notice will increase average MA plan revenue by 3.70%, or more than $16 billion, relative to CY 2024. Major factors driving the increase include an effective growth rate of 2.44% and an average risk score trend of 3.86%, moderated by a -2.45% adjustment due to risk model revision and fee-for-service (FFS) normalization and small reduction (-0.15%) in estimated Quality Bonus Payments under the Star Ratings program. The average benchmark rate is estimated to decline by 0.16%. These estimates do not include the impact of rebasing or repricing, which will be available upon finalization of the average geographic adjustment index in the CY 2025 Rate announcement.
Policy proposals in the Advance Notice include:
- CMS proposes to continue to phase in the updated Part C risk adjustment model, which began in CY 2024. This new model includes technical updates such as restricted condition categories using ICD-10 (rather than ICD-9) and updated underlying FFS data years (2018 diagnoses and 2019 expenditures, rather than 2014 and 2015, respectively). Additional revisions to the model are designed to reduce its sensitivity to coding variation. This phase in will include a mix of the updated and the 2020 MA risk adjustment model.
- CMS proposes policies to provide stability for MA program enrollees in Puerto Rico due to the greater proportion of people with Medicare who receive benefits through MA compared to every other state or territory.
- With the enactment of provisions in the Inflation Reduction Act (IRA), the Advance Notice includes a plan to cap out-of-pocket costs at $2,000 for CY 2025 and eliminate the coverage gap phase to affect a three-phase benefit (deductible, initial coverage, and catastrophic). A fact sheet on these CY 2025 Part D Redesign Program Instructions is available here.
- CMS proposes updates to the Part D risk adjustment model. Per a redesign required by the IRA, these updates include the increase in plan liability given the new out-of-pocket cap and a new Manufacturer Discount Program.
CMS will accept comments on the Advance Notice through March 1st and will publish the final Rate Announcement by April 1st.
The Advance Notice is available here. The fact sheet is available here and a press release is available here.
CMS Announces Increased Participation in ACOs
On January 29th, CMS announced an increase in accountable care organization (ACO) participation for 2024. An additional 50 ACOs are joining the Medicare Shared Savings Program (MSSP) in 2024, bringing the total to 480, covering 10.8 million beneficiaries. Additionally, 19 newly formed ACOs in the MSSP will be participating in a new payment option, receiving more than $20 million in advance investment payments (AIPs) for underserved beneficiaries. Including the other two ACO-style models—ACO REACH and the Kidney Care Choices (KCC) model—CMS noted that there were a total of 245 participating organizations.
The announcement is available here.
CMS to Hold Webinar on AHEAD Global Budget Methodology on February 14th
On February 14th, CMS will host a webinar to discuss the Medicare Fee-for-Service hospital global budget methodology for the Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. The Model is currently soliciting applications. Up to $12 million will be available to eight award recipients, including state Medicaid agencies, state public health agencies, and state insurance agencies. Through a cooperative agreement funding structure, the model will test a flexible framework with accountability targets for all-payer and Medicare fee-for-service cost growth, primary care investments, and health equity outcomes.
Members of the CMS team will discuss both the construction of the global budget payment amount and some operational considerations for hospitals. New York State has indicated its intention to apply to participate in the program.
Registration is available here.
CMS Issues RFI on MA, Prior Authorization, Access, and Benefits
On January 25th, CMS issued a Request for Information (RFI) on enhancing the Medicare Advantage (MA) insurance market’s data capabilities. CMS is looking for data-related input on multiple aspects of the MA program, including:
- Prior authorization;
- Access to care;
- Supplemental benefits;
- Marketing;
- Value-based care arrangements; and
- Equity.
This action is part of a set of efforts released in December to increase transparency in the MA program. CMS will accept comments through May 29th.
The announcement is available here.
HHS Releases Updated 2024 Federal Poverty Levels
On January 17th, HHS released the 2024 federal poverty levels (FPL). The FPL is used to determine eligibility for means-tested public benefits such as Medicaid and CHIP. For an individual, the poverty level increased from $14,580 to $15,060. For a family of three, the poverty level increased by nearly $1,000. Given the ongoing Medicaid unwinding, the new FPLs may play an important role in eligibility redeterminations. For some individuals who lost coverage because their income was above the previous FPL, there may be an opportunity to re-enroll.
The guidelines are available here.
CMS Announces Actions to Help Hospitals Meet EMTALA Obligations
On January 22nd, CMS announced a suite of actions to help hospitals meet their obligations under the Emergency Medical Treatment and Labor Act (EMTALA). EMTALA requires any hospital that receives Medicare funding with an emergency room to perform emergency, stabilizing care to any patient regardless of their insurance status. CMS’s planned actions include:
- For consumers, publishing new informational resources online to help them understand their rights under EMTALA;
- For providers, partnering with hospital and provider associations and facilitating conversations on best practices for complying with EMTALA; and
- At the federal level, HHS will convene a team of experts to support hospital compliance efforts.
These actions come in the midst of legal battles regarding EMTALA’s application to abortion in Texas and Idaho. In 2022, Texas sued HHS over a memorandum that clarified that EMTALA applies for patients seeking an emergency abortion. The Biden Administration also challenged Idaho’s near-total abortion ban under EMTALA. The Supreme Court recently agreed to hear the Administration’s case.
The announcement is available here.
HHS Makes OUD Treatment Flexibilities Permanent
On February 1st, HHS announced new actions to treat substance use disorder (SUD) and advance overdose prevention services. Included in these actions is a final rule that expands access to methadone treatment for opioid use disorder (OUD) by allowing patients to initiate treatment via telehealth and making pandemic-era flexibilities for take-home methadone doses permanent. Additionally, this rule would expand provider eligibility for medication ordering, broadening access to interim treatment, and allowing certain grant funds to be used to purchase xylazine test strips.
The announcement is available here.
HHS Announces Actions to Increase Contraception Care Coverage
On January 22nd, HHS announced a suite of actions to increase access to contraceptive care coverage. HHS, in conjunction with the Departments of Labor and the Treasury, released a new frequently asked questions (FAQs) for plans and issuers on meeting Affordable Care Act requirements for contraception coverage. Additionally, HHS also made updates to the plan year 2024 Medicare Part D clinical review process to include additional contraceptive methods. The Departments are also considering steps to increase coverage for over-the-counter contraception.
The announcement is available here.
CMS Announces 21.3 Million Americans Enrolled in ACA Marketplace Coverage
On January 24th, the Centers for Medicare and Medicaid Services (CMS) announced that 21.3 million Americans enrolled in plans on the ACA Marketplaces during the 2024 Open Enrollment Period. This includes 16 million on Healthcare.gov, the federally-facilitated exchanges, and about 5 million through State-based exchanges. Similarly, about 5 million enrollees were new to the Marketplaces, while about 16 million people renewed coverage.
CMS noted that about 15% of plan selections on Healthcare.gov were made by individuals previously enrolled in Medicaid or CHIP, indicating an influx of new enrollees as a result of the ongoing Medicaid redetermination process. Enhanced subsidies for coverage from the Inflation Reduction Act (IRA) also explain growing enrollment.
The announcement is available here.
HHS Releases Voluntary Cybersecurity Goals
On January 24th, HHS released new voluntary performance goals to strengthen health sector cybersecurity. These goals are designed to better protect health care organizations from cyberattacks and strengthen responses should they occur. The Administration for Strategic Preparedness and Response (ASPR) is leading the Department’s efforts in this space. ASPR also announced the creation of a new gateway website to increase access to cybersecurity resources.
The brief is available here.
HHS Makes First Offers in Drug Price Negotiation Program
On February 1st, HHS announced that it would soon be sending initial offers to drug companies participating in the inaugural Medicare Drug Price Negotiation Program. There are 10 prescription drugs participating in this program, which was authorized by the Inflation Reduction Act (IRA). Negotiations will take place over the next several months with agreed upon prices going into effect for Medicare beneficiaries in 2026.
The announcement is available here.
CMS Announces Improved Access to Sickle Cell Treatments
On January 30th, CMS announced that sickle cell disease (SCD) will be the first disease of focus for the Cell and Gene Therapy (CGT) Access Model. This model is designed to increase access to novel cell and gene therapies, while mitigating the high cost of drugs. Given that approximately 50% to 60% of patients with SCD are Medicaid enrollees, this program is hoped to dramatically bolster health outcomes for this population. This model will pilot in 2025.
The announcement is available here.
CMS Opens Submissions for Measures Under Consideration Entry/Review Information Tool
On January 31st, CMS announced the opening of the CMS Measures Under Consideration Entry/Review Information Tool (CMS MERIT) for 2024 submissions. As required by the Patient Protection and Affordable Care Act (ACA), the CMS Pre-Rulemaking process provides CMS the opportunity to consider multi-interested party input on quality measure selection. CMS will accept submissions through May 10th.
CMS MERIT is available here.
Other Updates
MACPAC Holds January Meeting
On January 25th and 26th, the Medicaid and Children’s Health Insurance Program (CHIP) Access and Payment Advisory Commission (MACPAC) convened for its January meeting. The Commissioners discussed recommendations on denials and appeals in Medicaid managed care, agreeing on the need for beneficiary impact evaluation and a more standardized data collection system. Other topics included better data collection for beneficiaries with disabilities, state financing methods, state contracting, and a number of matters concerning physician rates and practices.
The slide presentation from the meeting is available here.
WHO Releases AI Ethics and Governance Guidance
On January 18th, the World Health Organization (WHO) released new guidance surrounding the ethics, governance, and recommended use of generative AI, specifically large multi-modal models (LMMs), in health care. Through over 40 recommendations, the WHO outlines both the potential benefits and risks of LMMs across five main domains:
- Diagnosis and clinical care;
- Patient-guided use;
- Administrative work;
- Medical and nursing education; and
- Research and development.
The announcement is available here.
RWJF Analysis Shows Black Medicaid Enrollees More Likely to be Hospitalized for Preventable Reasons
On January 23rd, the Robert Wood Johnson Foundation (RWJF) released a research brief on preventable hospitalizations among adult Medicaid enrollees in 2019. Examining the three most common reasons for preventative hospitalizations (asthma/chronic obstructive pulmonary disease, diabetes, and heart failure), the analysis found that Black Medicaid enrollees are significantly more likely to be hospitalized than white enrollees, regardless of supplemental security income (SSI) status.
The brief is available here.
Fitch Publishes 2024 Non-Profit Hospital Outlook
On January 29th, Fitch Ratings released their 2024 non-profit hospital outlook. On the whole, Fitch found that margins are improving, but remain pressured due to core credit drivers. Additionally, Fitch projects that the industry will continue to struggle with labor shortages and the associated salary/benefits costs. Some credit drivers such as volumes and overall liquidity will continue to improve. One pressing question is whether operating margins resetting in the 1-2% range will facilitate downgrades across the sector.
The report is available here.
New York State Updates
DOH to Post Informational Webinar on NYHER Waiver on February 12th; Questions Due February 6th
On February 12th, the New York State (NYS) Department of Health (DOH) will post a webinar on its new Section 1115 Medicaid demonstration amendment, the New York Health Equity Reform (NYHER) program. On the webinar, DOH will outline key initiatives in the waiver amendment and address specific questions from stakeholders.
The webinar will not have a live Q&A, but stakeholders may submit questions to NYHER@health.ny.gov by 5pm on February 6th. The webinar will be posted on the DOH website here.
DOH Releases Independent Contractor Study on Managed Care Procurement
On January 22nd, DOH released the final report of an independent study conducted by the Boston Consulting Group (BCG) that assesses the current Medicaid Managed Care Organization (MCO) market in New York and analyzes whether a procurement process for MCO plans would be beneficial to the State. The study was commissioned by the NYS Legislature as specified in the Fiscal Year (FY) 2023 Budget. Governor Hochul’s Executive Budget had proposed to implement a competitive bid process to procure Medicaid MCOs, but the final Enacted Budget instead directed DOH to select an independent contractor to conduct a study on the proposal.
For the mainstream MCO market, the report finds that New York has more plans than all but one peer state. The report notes that, on average, mainstream plans outperform peer states in quality and administrative cost; however, several plans are underperforming with high cost and/or low quality. The report also highlights behavioral health (BH) issues that are impacting both mainstream plans and Health and Recovery Plans (HARPs), including inadequate access, low utilization of BH care management models/services, and limited improvement in BH quality measures. The report indicates that a competitive procurement process for mainstream and HARP plans would drive competition, elevate overall performance, and “allow the state to holistically rethink the BH model within managed care.”
BCG also analyzed the Medicaid Managed Long Term Care (MLTC) market, finding that NYS has a disproportionately large number of MLTC plans compared to peer states, many of which have low enrollment. Challenges identified within the MLTC market include higher administrative costs, lower profitability, higher member complaint rates, increased provider burden, overextended state resources, limited integration with Medicare, and quality issues. The report indicates that many of these challenges stem from the fragmentation of the market and recommends implementing a competitive procurement process.
In addition to recommending a competitive procurement process for MCOs, BCG recommends that the State “optimize the model contract” by improving requirements for quality, network adequacy, and enforcement provisions.
The report is available here.
NYS Medicaid Announces Coverage Implementation for CHW and Nutricion Services and Annual ACE Screening
Effective January 1, 2024, as per last year’s Enacted Budget, the NYS Medicaid program will begin covering the following services for Medicaid managed care and fee-for-service members:
- Medical Nutritional Therapy (MNT) provided by qualified dieticians/nutritionists; and
- Community Health Worker (CHW) services for all children under 21 years of age, adults with chronic conditions, justice-involved individuals, those with unmet health-related social needs (HRSN), and individuals experiencing community violence. CHW services may already be provided to pregnant and postpartum individuals during pregnancy and up to 12 months after the pregnancy ends.
Both services must be recommended by a physician or licensed practitioner of the healing arts. Certified dieticians/nutritionists must be enrolled in Medicaid to receive reimbursement and, to provide services in an Article 28 facility, must be affiliated with the facility and enrolled as an Ordering/Prescribing/Referring/Attending (OPRA) provider.
CHWs will not enroll or bill Medicaid directly; CHW services will be billed by one of the following NYS Medicaid-enrolled providers that will serve as the supervising entity:
- Clinic
- Hospital Outpatient Department (HOPD)
- Physician
- Midwife
- Nurse Practitioner (NP)
- Psychologist
- Licensed Clinical Social Worker (LCSW)
- Licensed Mental Health Counselor (LMHC)
- Licensed Marriage Family Therapist (LMFT)
Additional provider types (e.g., Health Homes) may be identified at the discretion of DOH. However, Medicaid members who receive care coordination services through the Health Home program, a Health Home/Care Coordination Organization (CCO), Certified Community Behavioral Health Clinics (CCBHCs), or Assertive Community Treatment (ACT) are not eligible for CHW services at this time. Medicaid members in institutional settings are not eligible for CHW service coverage.
NYS Medicaid will also begin coverage of an annual Adverse Childhood Experiences (ACEs) screening conducted in primary settings for children and adolescents up to 21 years of age. This expanded coverage is effective January 1, 2024 for Medicaid fee-for-service beneficiaries and April 1, 2024 for Medicaid managed care beneficiaries.
Additional details, including service descriptions and reimbursement rates, are available in the December Medicaid update here.
DOH Adopts Final Regulations for Medical Respite Programs
On January 31st, DOH adopted final regulations for not-for-profit entities seeking certification as Medical Respite Program (MRP) operators. The second Medicaid Redesign Team (MRT II) recommended, and the 2021-2022 Enacted NYS Budget authorized, the establishment of standards for medical respite programs as a lower-intensity care setting for patients who are homeless or at risk for homelessness and who would otherwise require a hospital stay or lack a safe option for discharge and recovery. Programs provide temporary room and board, allowing individuals to rest in a safe environment while accessing on-site medical care, care coordination, and other supportive services.
The regulations require that medical respite programs meet the minimum operating standards, offer the required services, provide sufficient qualified staff, implement a quality improvement program that is reviewed at least annually, meet the required physical standards of the facility, and maintain accurate and current records for each recipient.
The Notice of Adoption is available here.
OPWDD Opens Public Comment Period for 1915(c) Comprehensive HCBS Waiver
On January 24th, the NYS Office for People with Developmental Disabilities (OPWDD) opened a public comment period for its 1915(c) Comprehensive Home and Community Based Services (HCBS) Waiver renewal application. The renewal application seeks to maintain funding for all current HCBS Waiver services for an additional five years, through September 30, 2029. The renewal application includes minor technical changes, revisions to performance measures to better align with waiver assurances, and information on a new contracting process that will be used to identify qualified providers for the recently authorized Home-Enabling Supports services.
The draft renewal application is available here. Public comment may be submitted to peoplefirstwaiver@opwdd.ny.gov through February 26th.
SED Issues Rule on Histotechnology Profession and Other Laboratory Clinicians
On January 24th, the NYS Education Department (SED) issued a proposed/emergency rule that establishes regulations and requirements for histotechnologist licensure. The emergency/proposed rule also adds the following clinical laboratory professionals to the general misconduct provisions for health professions:
- Clinical laboratory technician;
- Clinical laboratory technologists;
- Cytotechnologist;
- Histotechnician; and
- Histotechnologist.
Additional details are available in the State Register here. Public comment may be submitted to regcomments@nysed.gov through March 24th.
OMH Issues Proposed Regulations for Hospital Admission and Discharge Criteria
On January 24th, the NYS Office of Mental Health (OMH) issued proposed regulations for admission and discharge criteria for psychiatric inpatient units and Comprehensive Psychiatric Emergency Programs (CPEPs). The proposed regulations update outdated definitions and include standardized requirements for admissions and discharges, including a list of required screenings and the components that should be included in case records.
Additional details are available in the State Register here. Public comment may be submitted to regs@omh.ny.gov through March 24th.
DOH Issues Public Notice for Proposed Children’s Waiver Amendment
On January 24th, DOH issued a public notice regarding its proposal to amend the 1915(c) Children’s Waiver to transition Environmental Modifications, Vehicle Modifications, and Adaptive and Assistive Technology services to a Financial Management Services (FMS) contractor under self-direction. This amendment will allow an FMS contractor, instead of the Local Department of Social Services or managed care plan, to manage requests for these services. The amendment will also authorize these services to be paid fee-for-service, regardless of the child’s managed care enrollment status.
Additional details are available in the State Register here. Comments may be submitted to BH.Transition@health.ny.gov.