Weekly Health Care Policy Update – June 21, 2024

In this update: 

• Legislative Updates
  • House E&C Committee Issues RFI on Cures 2.0
  • Senator Cassidy Issues RFI on Portable Benefits
  • E&C Committee Advances Package of Health Care Legislation
• Federal Agencies
  • CMMI Releases Innovation in Behavioral Health Model NOFO
  • CMS Recalculates MA Star Ratings
  • Biden Administration to Ban Medical Debt from Credit Reports
  • CMS Releases 2023-2032 Health Expenditure Projections
  • CMS Extends Dispute Resolution Process Due to Change Healthcare Incident
  • CMS to Close Program Addressing Funding Issues from Change Healthcare Incident
• Other Updates
  • MedPAC Releases June 2024 Report to Congress
  • MACPAC Releases June 2024 Report to Congress
  • Judge Rules for AHA in Web-Tracking Technology Case
  • CBO Publishes Health Insurance Coverage Projections
  • SCOTUS Will Review Medicare DSH Case
  • KFF Publishes Report on Medical Loss Rebate Estimates
  • URAC Launches Accreditation for Organizations Employing Community Health Workers
• New York State Updates
  • DOH Issues Proposed Regulations for the Licensure of PACE
  • DOH Issues Standing Order for the Provision of Doula Services
  • DOH Submits 1115 Amendment Proposal for Continuous Medicaid/CHP Coverage for Children Ages 0-6
  • DOH Releases Revised Medicaid and CHP Quality Strategy for Public Comment
  • CMS Approves New York SPA Adding OASAS RSSY Services to the CHP Benefit Package
  • DOH Issues Guidance Regarding Upcoming Changes to Clinical Laboratory Personnel Requirements
  • DOH Issues Public Notice Regarding Capital Reductions for Adult Day Health Care Programs
  • DFS Issues Guidance on Disaster Planning, Preparedness, and Response in Life and Health Insurance Industries

Legislative Update

House E&C Committee Issues RFI on Cures 2.0
On June 6^th, the House Energy & Commerce (E&C) Committee issued a Request for Information (RFI) on potential policies to include in proposed Cures 2.0 legislation. The original 21^st Century Cures Act, enacted eight years ago, is widely regarded as a landmark reform to promote therapeutic research and development. It also enacted the federal ban on information blocking by health care providers.

In 2021, the original act’s sponsors, Representatives Diana DeGette (D-CO) and Larry Bucshon (R-IN), introduced legislation for a follow-up Cures 2.0 bill. Since then, several of the proposed provisions have been implemented through other legislative or executive actions, such as the establishment of the Advanced Research Project Agency for Health (ARPA-H), reforms to Food and Drug Administration (FDA), and emergency preparedness and response infrastructure initiatives. In the RFI, the lawmakers are soliciting stakeholder feedback in three key areas: 

1. Do the policies included in Cures 2.0 that have advanced through legislation or executive action meet the needs that the original Cures 2.0 bill aimed to address?
2. What elements might be missing that are essential for further progress?
3. What additional reforms, support mechanisms, or incentives are needed to enhance or improve the effectiveness of the steps already taken, including any structural reform to agencies, offices, or programs involved?

Interested parties must submit feedback by August 2^nd. The RFI is available here, and the announcement is available here.

Senator Cassidy Issues RFI on Portable Benefits 
On June 5^th, Senator Bill Cassidy (R-LA), the ranking member of the Senate Health, Education, Labor & Pensions (HELP) Committee, issued an RFI on extending portable workplace benefits, such as retirement supports and health insurance, to independent (or “gig”) workers. Federal labor and employment laws currently discourage or prohibit these workers—of whom there are more than 27 million in the United States—from accessing these workplace benefits. In the RFI, Senator Cassidy is soliciting stakeholder feedback in three key areas: 

1. Shortcomings of the current workers classification model;
2. Exploring portable benefits options for independent workers; and
3. Encouraging innovation on portable benefits, such as potentially expanding the use of individual coverage health reimbursement arrangements (ICHRAs) and applying lessons learned from the use of association health plans.

Interested parties must submit feedback by June 26^th. The RFI is available here, and the announcement is available here.

E&C Committee Advances Package of Health Care Legislation 
On June 12^th, the House E&C Committee held a markup session on health care legislation. During the session, the Committee unanimously agreed 13 health-related bills. These bills generally would propose to enact small-scale reforms in a variety of areas, including: 

• Medical research programs;
• Measures to make technical enhancements to Medicaid beneficiary and provider enrollment and eligibility verification processes; and
• Telehealth, including proposing the creation of a Medicare “incident to” modifier for mental health service claims that may be furnished through telehealth by auxiliary personnel as part of a provider’s professional services.

During the markup, members of the Committee also noted the need to reauthorize the rare pediatric disease priority review voucher (PRV) program and advance telehealth legislation that would permanently extend pandemic-era flexibilities. House leadership may now seek to pass these bills under suspension of the rules, given their bipartisan nature.

The markup and bills are available here.

Federal Agencies

CMMI Releases Innovation in Behavioral Health Model NOFO
On June 17^th, the Center for Medicare and Medicaid Innovation (CMMI) released a Notice of Funding Opportunity (NOFO) for states interested in participating in the Innovation in Behavioral Health (IBH) model. The IBH model is a new, state-based care model designed to encourage whole-person care in community-based behavioral health practices across both Medicare and Medicaid. IBH aims to improve outcomes and quality of care for Medicare and Medicaid beneficiaries with moderate to severe mental health conditions and/or substance use disorders (SUD).

In participating states, IBH will be open to community-based outpatient behavioral health practices who serve a minimum of 25 Medicaid enrollees with moderate to severe behavioral health conditions. Such practices will receive supports and incentives to develop and implement a model of interprofessional care teams that would focus on addressing all elements of a patient’s care, as well as social supports like housing, food, and transportation. IBH will include:  

• Infrastructure payments to support health IT capacity building, electronic health records, and practice transformation;
• Technical assistance; and
• A predictable value-based payment model, including a per-beneficiary per-month (PBPM) supplementary payment from Medicare and other performance-based payments.

This NOFO is for State Medicaid agencies, not providers. Up to eight states will be selected to participate in IBH and receive funding of up to $7.5 million through a cooperative agreement to implement the program. The model will start in fall 2024 and last for eight years, including a three-year pre-implementation period.

The NOFO is available here.

CMS Recalculates MA Star Ratings
On June 13^th, the Centers for Medicare & Medicaid Services (CMS) sent a letter to Medicare Advantage Organizations notifying them that CMS will be recalculating 2024 Star Ratings for 2025 Quality Bonus Payments “to address the application of Tukey outlier deletion.” The Tukey methodology, newly implemented for the 2024 Star Ratings, identified and eliminated outliers from the data before cut points were determined. CMS will be recalculating the 2024 Star Ratings using the published 2023 Star Ratings cut points, since Tukey outliers were not removed from the 2023 Star Ratings. If recalculated ratings result in higher QBP Ratings, CMS will use those results; plans with a lower rating will be held harmless.

Plans with increases in QBP Ratings will have an opportunity to resubmit Contract Year 2025 bids, including bid pricing tools, plan benefit packages, and formularies. Revised bids must be submitted no later than June 28^th. The letter noted that CMS was not announcing a “policy or position with regard to the calculation of the 2025 Star Ratings” to be issued in October.

The announcement is available here.

Biden Administration to Ban Medical Debt from Credit Reports 
On June 11^th, the Consumer Financial Protection Bureau (CFPB) announced a proposal to remove medical debt from credit reports. If finalized, the rule would both remove current medical debt and bar future medical bills from affecting credit scores. In doing so, the rule would raise the credit scores of more than 15 million Americans by an average of 20 points. The Administration estimates that this change could lead to the approval of an additional 22,000 mortgages every year.

The Biden Administration is also encouraging states to take additional actions to address medical debt, including buying and retiring medical debt, restricting debt collection by hospitals, and incentivizing more charity care. The rule would not affect the actual obligations, so patients would still owe these debts and providers could still pursue collection.

The fact sheet is available here.

CMS Releases 2023-2032 Health Expenditure Projections 
On June 12^th, CMS released its 2023-2032 National Health Expenditure (NHE) projections, including health insurance enrollment. Overall, the Office of the Actuary projects that the average annual growth in NHE will outpace annual growth in gross domestic product at 5.6% over the nine-year period. Specifically, the Office of the Actuary released estimates related to: 

• Medicare: The average annual expenditure growth is projected to be 7.4%.
• Medicaid: The average annual expenditure growth is projected to be 5.2%, citing a projected stabilization of enrollment post-unwinding.
• Private Health Insurance: The average annual expenditure growth is projected to be 5.6%.
• Out-of-Pocket Costs: The average annual expenditure growth is projected to be 4.7%, citing provisions in the Inflation Reduction Act (IRA).
• Hospital Care: The average annual expenditure growth is projected to be 5.6%.
• Physician and Clinical Services: The average annual expenditure growth is projected to be 5.6%.
• Retail Prescription Drugs: The average annual expenditure growth is projected to be 6.0%, citing provisions in the IRA that will take effect in 2027 such as negotiation and inflation rebates.

The projections are available here.

CMS Extends Dispute Resolution Process Due to Change Healthcare Incident 
On June 14^th, CMS announced an extension of independent dispute resolution (IDR) process flexibility for entities affected by the Change Healthcare cybersecurity incident. Under the No Surprises Act, a federal IDR process is available for payment disputes between payers and providers. The first step in the IDR process is the initiation of open negotiation, though many providers have been unable to begin this in the wake of the cybersecurity incident. This extension gives such providers additional flexibility to initiate the IDR process for services rendered since the beginning of 2024.

The announcement is available here.

CMS to Close Program Addressing Funding Issues from Change Healthcare Incident 
On June 17^th, CMS announced that the Accelerated and Advance Payment (AAP) Program for the Change Healthcare/Optum Payment Disruption (CHOPD) will end on July 12^th. This program was launched in March following the cybersecurity incident to ease cash flow disruptions affecting Medicare providers and suppliers. To date, CHOPD payments totaled more than $3 billion, of which CMS has recovered over 96%. Moving forward, any providers having difficulty billing should contact Change Healthcare directly.

Other Updates

MedPAC Releases June 2024 Report to Congress
On June 13^th, the Medicare Payment Advisory Commission (MedPAC) released its June 2024 Report to Congress, including policy options to address payment systems and care delivery for beneficiaries. Regarding Medicare Advantage (MA) plans, MedPAC acknowledged that more robust data collection, including of encounter data, could strengthen existing provider networks and prior authorization mechanisms. While not setting forth specific recommendations, the Commission explored options to update the fee-for-service (FFS) physician fee schedule, while accounting for cost growth and shoring up participation in advanced alternative payment methods (A-APM) by extending the participation bonus. This is of particular interest to the Commission as it has previously recommended repealing other value-based payment models such as the Merit-based Incentive Payment System (MIPS).
 
The report is available here, and the press release is available here.
 
MACPAC Releases June 2024 Report to Congress 
On June 11^th, the Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC) released its June 2024 Report to Congress. MACPAC’s recommendations centered around furthering Medicaid and CHIP financing transparency and efforts to bolster state Medicaid agency contracts (SMACs). To this end, MACPAC recommends that Congress require states to submit annual reports on their non-federal Medicaid financing methods. Additionally, MACPAC recommends actions for better oversight of dual eligible special needs plans (D-SNPs), including care coordination data submissions.
 
The report is available here.
 
Judge Rules for AHA in Web-Tracking Technology Case 
On June 20^th, the U.S. District Court for the Northern District of Texas ruled that the Department of Health and Human Services (HHS) cannot prohibit providers from using third-party web tracking technologies on their websites, siding with the American Hospital Association (AHA), the Texas Hospital Association, and other health systems. The judge ruled that HHS lacks the authority under the Health Insurance Portability and Accountability Act (HIPAA) to enforce the rule.
 
This suit was originally filed in November 2023, after the HHS Office of Civil Rights published a December 2022 bulletin specifying that HIPAA rules apply when hospitals collect patients’ protected information with third-party tracking technologies and subsequently share that data with vendors. In the bulletin, HHS noted that sharing such information with vendors for marketing purposes would require a patient’s HIPAA-compliant authorization. The judge vacated the rule but did not fulfill AHA’s request for a permanent injunction.
 
CBO Publishes Health Insurance Coverage Projections
On June 18^th, the Congressional Budget Office (CBO) released new data on projected trends in health insurance coverage over the next decade. CBO projects that the uninsurance in 2024 will rise to 7.7%, an increase from an all-time low of 7.2% in 2023, and will rise to 8.9% by 2034. CBO attributes the increase in the number of uninsured Americans to the expiration of pandemic Medicaid policies as well as enhanced subsidies available through Affordable Care Act Marketplaces. Increases in immigration are also projected to contribute to the rise in uninsurance rates. Children are expected to see limited reductions in coverage, while adults 19-44 will see the largest reductions in coverage. These reductions will be slightly tempered by an expected increase in the percentage of workers taking advantage of health coverage offered by employers. For the oldest adults, Medicare enrollment is expected to rise from 61 million in 2024 to 74 million in 2034.
 
More information is available here.
 
SCOTUS Will Review Medicare DSH Case
On June 10^th, the Supreme Court (SCOTUS) agreed to review Advocate Christ Medical Center v. Becerra. The case, originally brought in 2017, challenged how HHS considered certain patients when determining Medicare disproportionate share hospital (DSH) payments. HHS makes Medicare DSH payments to hospitals based on a formula which incorporates measurements of low-income patients in two components (the “Medicare fraction” and the “Medicaid fraction”).  
 
In this case, the plaintiffs, which include more than 200 hospitals, argued that HHS, in counting patients as entitled to Supplemental Security Income (SSI) only if they got such payments during a hospital stay, was operating inconsistently with SCOTUS’s previous ruling in Becerra v. Empire Health Foundation, which centered on HHS’s interpretation that patients are still considered “entitled to” Medicare Part A benefits even if they are not currently receiving them (i.e., if another payment source is funding hospital treatment). SCOTUS ruled 5-4 in favor of HHS in that case in 2022.
 
Plaintiffs argue that HHS is wrongly excluding SSI-eligible patients from the DSH calculation, which has downstream effects including the loss of 340B eligibility for some hospitals. The AHA estimated the ruling resulted in more than a billion dollars of total losses and submitted a friend-of-the-court brief in February urging SCOTUS to review the case.
 
KFF Publishes Report on Medical Loss Rebate Estimates
On June 5^th, the Kaiser Family Foundation (KFF) published a report on 2024 medical loss ratio (MLR) rebates. KFF’s analysis of preliminary data projects that insurers will issue approximately $1.1 billion in MLR rebates in 2024. Of this total, $550 million in rebates will be issued in the individual market, $285.8 million in the small group market, and $217.4 million in the large group market. This total rebate amount is slightly higher than the $947.4 million in rebates issued in 2023, and roughly in line with the $1 billion in rebates issued in 2022. KFF notes that the similar rebate amounts over the past three years suggest the market has stabilized, following record-high rebates issued in 2020 ($2.5 billion) and 2021 ($2 billion) during the height of the Covid-19 pandemic.
 
The report is available here.
 
URAC Launches Accreditation for Organizations Employing Community Health Workers 
On June 12^th, URAC, the nation’s largest utilization review accreditation commission, launched a new Community Health Worker (CHW) Program Accreditation. URAC will evaluate organizations that employ CHWs across 10 key areas, aligning with the Centers for Disease Control and Prevention’s (CDC) existing initiatives to bolster this workforce. The accreditation also focuses on providing recognition that the organization’s CHW services are in alignment with Medicare and Medicaid reimbursement requirements.
 
The announcement is available here.

New York State Updates

DOH Issues Proposed Regulations for the Licensure of PACE 
On June 14^th, the New York State (NYS) Department of Health (DOH) issued draft regulations that would implement a new licensure and application process for Programs of All-Inclusive Care for the Elderly (PACE). The process would consolidate the current requirements for PACE organizations under Article 28, Article 36, and Article 44 of New York’s Public Health Law into a single license under Article 29-EE. The proposed regulations outline criteria for PACE operations, a streamlined single PACE application process, codification of federal standards and definitions for comprehensive care, and updated parameters related to the governing authority of PACE programs.

Current PACE organizations would continue to operate as licensed until the transition process for Article 29-EE licensure is established. New PACE applications would be required to comply with the new licensure and application process established by these regulations.

The proposed regulations are available here. The proposed regulations will be posted in the State Register and open for public comment, after which they will require approval from the Public Health and Health Planning Council (PHHPC). If approved, the regulations will be effective upon final publication in the State Register. 

DOH Issues Standing Order for the Provision of Doula Services 
On June 10^th, the New York State (NYS) Department of Health (DOH) issued a non-patient-specific, statewide standing order for the provision of doula services to pregnant, birthing, and postpartum individuals. This standing order, authorized as part of the 2024-25 NYS Enacted Budget, would supersede any requirements to obtain a referral to access doula services. Under this standing order, doulas may provide physical, emotional, educational, and non-medical support for pregnant and postpartum persons before, during, and after childbirth or end of pregnancy, through twelve months postpartum.

The Standing Order is available here and remains in effect for one year.

DOH Submits 1115 Amendment Proposal for Continuous Medicaid/CHP Coverage for Children Ages 0-6
On June 10^th, DOH submitted a Medicaid Redesign Team (MRT) 1115 Waiver amendment proposal to CMS for the authorization of continuous enrollment for Medicaid and Child Health Plus (CHP) coverage for children up to age six, regardless of whether a child’s family income exceeds eligibility limits. The proposal aims to reduce churn rates for children and will not change eligibility limits for Medicaid or CHP. Disenrollment will continue for children who are no longer NYS residents, client request, those who enrolled in error, non-compliance with eligibility requirements, death, and for those receiving treatment in settings where Medicaid/CHP eligibility is not available (i.e., institution for mental disease). The State estimates that over 66,000 children, on average, will receive continuous enrollment on an annual basis as a result of this proposal.

The amendment proposal is available here. If approved by CMS, the amendment would be effective January 1, 2025.

DOH Releases Revised Medicaid and CHP Quality Strategy for Public Comment
On June 18^th, DOH announced the start of the 30-day public comment period for the revised NYS Medicaid and Child Health Plus (CHP) Quality Strategy for the 2023-2025 period (available here). Periodic updates to the Quality Strategy are required by federal regulations. The Quality Strategy provides an overview of the efforts of New York’s Medicaid/CHP programs and its contracted managed care plans to assess the quality of care that members receive and to establish goals and targets for improvement.

Comments may be submitted to qualitystrategy@health.ny.gov with “Quality Strategy” in the subject line through July 18^th.

CMS Approves New York SPA Adding OASAS RSSY Services to the CHP Benefit Package
On June 10^th, CMS approved New York’s State Plan Amendment (SPA) to add Office of Addiction Services and Supports (OASAS) Residential Rehabilitation Services for Youth (RRSY) to the CHP benefit package. The SPA is effective retroactive to April 1, 2023.

The SPA is available here. The CMS approval letter is available here.

DOH Issues Guidance Regarding Upcoming Changes to Clinical Laboratory Personnel Requirements
On June 11^th, DOH issued guidance to hospitals and Diagnostic and Treatment Centers regarding upcoming changes to clinical laboratory personnel requirements. On December 28, 2024, a CMS Final Rule will take effect that changes who can perform clinical laboratory testing. Once this rule is in effect, a nursing degree will continue to qualify nurses to perform waived and moderate complexity testing. However, to perform high complexity testing a nurse must: 

• Complete 60 semester hours from an accredited institution that includes 6 hours of chemistry, 6 hours of biology and 12 hours of a combination of chemistry, biology and/or medical laboratory technology; and
• Have a total of three months of training in high complexity testing for each category in which testing will be performed.

Nurses authorized to perform high complexity testing prior to the implementation date will be allowed to continue such testing if they maintain continuous employment in their position. This change will impact all point-of-care testing in medical facilities, including both waived and non-waived testing. Facilities should not assume that a test is waived because it is performed at patient bedside. As a best practice, DOH recommends that providers search the FDA database (here) for the test device in use to determine the complexity. Facilities will be responsible for documenting the status of their staff to ensure compliance with these requirements, which will be reviewed during the facility’s subsequent on-site inspection.

The guidance is available here. Questions may be submitted to clep@health.ny.gov.

DOH Issues Public Notice Regarding Capital Reductions for Adult Day Health Care Programs
On June 12^th, DOH issued a public notice in the State Register announcing its intent to reduce funding associated with Adult Day Health Care capital reimbursement by an additional 10 percent. This change, authorized as part of the 2024-25 NYS Enacted Budget, would be effective on or after July 1, 2024, and each state fiscal year thereafter.

The public notice is available here. Public comment may be submitted to spa-inquiries@health.ny.gov.

DFS Issues Guidance on Disaster Planning, Preparedness, and Response in Life and Health Insurance Industries 
On June 5^th, the NYS Department of Financial Services (DFS) issued guidance to various organizations, including health insurance companies, Article 43 corporations, Article 44 health maintenance organizations, municipal cooperative health benefit plans, and student health plans regarding disaster protocols. The guidance requires organizations to: 

1. Perform, at least annually, a business impact analysis to predict the consequences of disruption of any business function and process as a result of a disaster, and gather information needed to develop recovery strategies. The results of the business impact analysis should be used to establish, maintain, and update as necessary a business continuity plan.
2. Perform, at least annually, a risk-based analysis of its capacity to assist customers in NYS affected by a disaster occurring anywhere in the world. The results of the risk-based analysis should be used to establish, maintain, and update as necessary a disaster response plan.

The business continuity and disaster response plans should be separate documents. Plans “should be appropriate for the nature, scale, and complexity” of the organization. Organizations may be covered under a business continuity or disaster response plan established by a holding company or parent corporation. By August 16, 2024, organizations will be required to submit to DFS: 

• The disaster response plan;
• A response to the disaster response plan questionnaire; and
• A response to the business continuity plan questionnaire.

Additional details, including the specific content required in each plan, are available in the guidance here. Questions may be submitted to disasterplanning@dfs.ny.gov.