Weekly Health Care Policy Update – May 17, 2024

May 24, 2024

In this update:

  • Legislative Updates
    • House Energy and Commerce Health Subcommittee Advances Health Legislation
    • Senate Finance Committee Publishes White Paper on Physician Fee Schedule and Chronic Care
    • Senators Publish RFI on Draft Hybrid Physician Payment Legislation
    • Bipartisan Senate Group Releases Report on Driving Innovation in AI
  • Federal Agencies
    • CMS Extends Unwinding Flexibilities through June 2025
    • USDA/HHS Announce Actions to Combat H5N1
    • White House Announces Tariffs on Chinese Products, Including Medical Items
    • HHS Issues Report on Maternal Mental Health and Substance Use
  • Other Updates
    • RAND Publishes Report on Hospital Pricing
  • New York State Updates
    • DOH Issues Revised Proposed Hospital Cybersecurity Regulations
    • DOH Proposes Regulations on In-Person Requirements for Prescribing Controlled Substances

Legislative Updates

House Energy and Commerce Health Subcommittee Advances Health Legislation
On May 16th, the House Energy and Commerce (E&C) Health Subcommittee held a markup session on 23 legislative proposals on health care. Many of the bills under consideration concerned telehealth. Other topics included Medicaid program administration and eligibility, drug development, transplant regulations, and access to care. All of the 23 proposals will advance to the full E&C Committee for consideration and potential inclusion in a future legislative package.

Some notable proposals include: 

  • Extension of Medicare telehealth flexibilities for two years and the Medicare Hospital at Home pilot for five years;
  • Extension of the Covid-related emergency blanket waiver for training and certification of nurse aides for twelve months;
  • Authorization for cardiac and pulmonary rehabilitation programs to be provided by telehealth for two years in Medicare.
  • Expansion of remote monitoring services in Medicare for two years to cover monitoring services that operate for at least two days (down from 16 currently) in a month;
  • Creation of a Medicare incident-to code or modifier for all telehealth services to account for services provided by auxiliary clinicians;
  • Introduction of Medicare coverage for diabetes prevention services, effective in 2025.

The E&C Health Subcommittee announcement on the session, with links to legislative text, is available here.

Senate Finance Committee Publishes White Paper on Physician Fee Schedule and Chronic Care
Today (May 17th), the Senate Finance Committee published a bipartisan white paper that examines Medicare physician payments for chronic care. The paper says that there are “pervasive challenges within Medicare’s Physician Fee Schedule (PFS)” that “may jeopardize a clinician’s ability to own and operate a health care practice.” The Committee notes that the proposals discussed in the white paper “reflect preliminary areas of interest, rather than formalized proposals,” and it intends to continue to conduct outreach to stakeholders as policy ideas develop.

Topics considered in the paper include: 

  • Alternative frameworks for updating the PFS conversion factor (CF), which has fluctuated in recent years due to one-off legislation, with the aim of providing more certainty and accounting for inflationary dynamics;
  • Modifications to the budget neutrality adjustment process for Relative Value Units (RVUs) that could “mitigate substantial payment fluctuations”;
  • A “new design” for bonus payments for providers participating in advanced Alternative Payment Models (A-APMs) that would encourage more providers to participate and offer more options;
  • Potential “repealing or scaling back” of the Merit-based Incentive Payment System (MIPS) program;
  • Implementing a “hybrid” payment for primary care or other physician services that would include both fee-for-service (FFS) and per-beneficiary per-month (PBPM) components (see also the Pay PCPs Act of 2024 proposal, below);
  • Policies to improve chronic care benefits and focus on high-value services; and
  • Structural improvements to the RVU and rate-setting processes, including whether CMS should reinstate a refinement panel.

The white paper is available here.

Senators Publish RFI on Draft Hybrid Physician Payment Legislation
On May 15th, Senators Sheldon Whitehouse (D-RI) and Bill Cassidy (R-LA) announced a Request for Information (RFI) seeking feedback on their newly introduced bill, the Pay PCPs Act, which would create a hybrid FFS/PBPM payment system in Medicare for primary care physicians. Under the proposed bill, the PBPM component would represent office-based E/M visits, care management services, patient communication, and behavioral health integration, and would make up “between 40 and 70 percent” of expected annual total billing. CMS would also be directed to consider whether risk adjustment of the PBPM amount is necessary. The bill would also provide for lower beneficiary cost-sharing for these services and create a new Technical Advisory Committee on RVU updates.

The RFI requests feedback on the legislative proposal on topics including: 

  • Primary care attribution process;
  • The PBPM payment calculation methodology;
  • Whether additional services should be included in the PBPM component;
  • Risk adjustment criteria;
  • Quality measures for hybrid payments;
  • The level of cost-sharing reduction and other measures to make the hybrid payment model more attractive to beneficiaries and providers; and
  • The structure of the proposed Technical Advisory Committee.

The text of the proposed bill is available here. The full RFI is here. Responses may be sent to physician_payment@cassidy.senate.gov by July 15th.

Bipartisan Senate Group Releases Report on Driving Innovation in AI
On May 15th, a bipartisan Senate group released a report entitled “Driving U.S. Innovation in Artificial Intelligence: A Roadmap for Artificial Intelligence Policy in the United States Senate.” The report represents the culmination of a year-long effort by Senators Chuck Schumer (D-NY), Todd Young (R-IN), Martin Heinrich (D-NM), and Mike Rounds (R-SD), the Bipartisan AI Senate Working Group, who aimed to “lay the foundation for a better understanding in the Senate of the policy choices and implications around AI.”

The report makes recommendations relative to federal investments, including at least $32 billion per year for non-defense AI innovation, in areas such as cross-government AI research and development, outstanding CHIPS and Science Act accounts not yet funded, semiconductor R&D, AI Grand Challenge programs, and AI efforts at NIST. The report also calls for funding AI activities related to defense, including for the National Nuclear Security Administration, AI-augmented chemical and biological synthesis, and increased funding for DARPA. The report also makes recommendations relative to the work of certain Senate committees, workforce considerations, high-impact uses of AI, elections and democracy, and more.

The report is available here.

Federal Agencies

CMS Extends Unwinding Flexibilities through June 2025
On May 9th, the Centers for Medicare & Medicaid Services (CMS) issued an Informational Bulletin announcing an automatic extension of unwinding flexibilities meant to protect access to coverage during ongoing Medicaid eligibility redeterminations. Under this extension, States can continue to use all currently approved Section 1902(e)(14)(A) waiver authorities through June 30, 2025. These include conducting ex parte renewals based on other program eligibility or without receiving updated information from the member. New York State additionally has an approved waiver that allows it to use Modified Adjusted Gross Income (MAGI) methods to determine eligibility for certain non-MAGI groups, which enables individuals becoming dually-eligible for Medicare to continue to have their eligibility processed through the New York State of Health (NYSOH).
 
CMS also clarifies that most of these flexibilities may be used multiple times for an enrollee, if needed. Specifically, individuals already ex parte renewed once may be ex parte renewed again this year based on the same verified income from March 2019 or before. In addition to these waiver authorities, states are encouraged to extend their Verification Plan Addendums and request approval for new flexibilities as needed.
 
The announcement is available here.
 
USDA/HHS Announce Actions to Combat H5N1
On May 10th, the United States Department of Agriculture (USDA) and the Department of Health and Human Services (HHS) announced a new set of actions to address the spread of H5N1 influenza in bovines and humans. H5N1 was first detected in dairy cattle in the Texas panhandle region on March 25th; to date, there is only one confirmed human case in the United States. USDA announced additional assistance for producers on affected premises (up to $28,000 worth of treatments, veterinary reimbursements, and testing products) for the next 120 days. HHS announced $101 million in funding through the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) to support surveillance, sequencing, vaccination, and product testing efforts.
 
The announcement is available here.
 
White House Announces Tariffs on Chinese Products, Including Medical Items 
On May 14th, President Biden announced new tariffs on Chinese products, including needles, syringes, and certain types of personal protective equipment (PPE). The White House argues that these tariffs are in part a response to the supply chain shocks seen during the Covid-19 pandemic and an effort to shore up domestic manufacturing. According to analysis, the tariffs are unlikely to have a strong inflationary impact in the short term given their structure and time delay (some will not take effect until 2026, including rubber medical and surgical gloves). Nonetheless, there could be price increases on certain items. The Chinese government has vowed retaliation for these new measures.
 
The announcement is available here.
 
HHS Issues Report on Maternal Mental Health and Substance Use 
On May 14th, HHS released a report of the Task Force on Maternal Mental Health which contains recommendations to address the crisis of maternal mental health and substance use issues. Over 22% of pregnancy related deaths are attributed to suicide, drug overdoses, and other mental health and substance use issues. The recommendations are centered around five main pillars, including making care and services more accessible, affordable, and equitable. To this end, the Task Force recommends more universal diagnostic criteria, new funding mechanisms for innovative care delivery models, and policies to increase reimbursements for interventions that demonstrate positive outcomes.
 
The announcement is available here.

Other Updates

RAND Publishes Report on Hospital Pricing 
On May 13th, RAND published a report on hospital prices paid by employers and private insurers from 2020-2022. Using medical claims data, RAND found that in 2022, across all hospital services (inpatient and outpatient), employers and private insurers paid, on average, 254 percent of Medicare payments for the same services, at the same facilities. In some states, including New York, California, and Florida, these payers paid over 300 percent of Medicare. These findings do not deviate from historical trends. Researchers conclude that “very little” price variation is explained by a hospital’s share of Medicare or Medicaid patients. Rather, price variation is more a function of market power.
 
The report is available here.

New York State Updates

DOH Issues Revised Proposed Hospital Cybersecurity Regulations
On May 15th, the New York State (NYS) Department of Health (DOH) issued revised proposed cybersecurity regulations for hospitals. The regulations would apply to all general hospitals licensed under Article 28 of the Public Health Law. Following a review of public comment, the revised proposed regulations include, but are not limited to, changes to: 

  • Extend the timeframe for reporting cybersecurity incidents to DOH from two hours to 72 hours;
  • Add requirements for identity and access management, including additional controls recognized by the industry such as separating non-privileged and privileged accounts; and
  • Add requirements for security controls to mitigate risks arising from electronic mail-based threats, such as phishing.

DOH also clarified that each hospital’s governing body, based on its risk assessment and organizational structure, should determine whether a single Chief Information Security Officer (CISO) can handle multiple hospitals within the organization’s network or if separate CISOs are necessary for each hospital.

The proposed regulations are available here. Public comment may be submitted to regsqna@health.ny.gov through July 1st. Comments received on the initial proposed regulations are available here.

DOH Proposes Regulations on In-Person Requirements for Prescribing Controlled Substances 
On May 15th, DOH issued proposed regulations to clarify patient evaluation requirements for the issuance of controlled substance prescriptions and align New York’s language with recent changes in federal law. The proposed regulations would clarify that an in-person medical evaluation conducted by the prescribing practitioner is required before prescribing controlled substances, with the following exceptions: 

  • Telemedicine: The practitioner may prescribe certain controlled substances during a telemedicine (two-way audiovisual synchronous) visit pursuant to the federal Drug Enforcement Agency (DEA) telemedicine policy and all other relevant state and federal laws and regulations.
  • Consulting or Referring Practitioner: The practitioner may prescribe controlled substances after reviewing the patient’s record for the result of an in-person medical evaluation performed by a consulting or referring practitioner within the previous 12 months specific to the medical condition for which the prescription is being considered.
  • Covering Practitioner: A practitioner covering for the temporary absence of the initial prescriber may prescribe controlled substances, provided the covering practitioner is part of the same practice as the initial prescriber and has a direct and adequate consultation with the initial prescriber, who assures the necessity of continued controlled substance prescribing.
  • Emergency Situation: An existing patient develops a new medical condition that would warrant the issuance of a limited 5-day supply prescription for a controlled substance.

Note that the DEA and HHS have temporarily extended the full set of telemedicine flexibilities regarding the prescription of controlled substances that were in place during the Covid-19 Public Health Emergency (PHE) through December 31, 2024. DEA had proposed a narrow set of telemedicine allowances to be made permanent in March 2023, but is currently modifying them in response to public feedback. DEA and HHS are now “working to promulgate a final set of telemedicine regulations by the fall of 2024.”

The proposed regulations are available here. Public comment may be submitted to regsqna@health.ny.gov through July 15th.

OMH and OASAS to Host Joint Webinar on Program-Specific Scope of Practice FAQs
On June 3rd from 1pm-2:30pm, the NYS Office of Mental Health (OMH) and Office of Addiction Services and Supports (OASAS) will host a webinar to review frequently asked questions specific to scope of practice for professionals in OMH/OASAS settings. The webinar is a follow-up to the webinar held on May 9th by OMH, OASAS, and the State Education Department (NYSED) on scope of practice and licensing processes following the sunset of the “social worker exemption” in 2022.

Registration is available here.