Weekly Health Care Policy Update – November 15, 2024

November 22, 2024

In this update: 

  • Administration Updates
    • Trump Proposes to Nominate Robert Kennedy, Jr. for HHS Secretary
  • Federal Agencies
    • HHS OIG Publishes Report on Hospital Price Transparency Compliance
    • CMS Releases 2025 Medicare Parts A and B Premiums and Deductibles
    • CMS Releases PY 2023 ACO REACH Financial and Performance Results
    • CDC Releases 2023 Hospital-Acquired Infection Data
    • CDC Reports 7.6% of Americans are Uninsured
    • GAO Publishes Report on HHS Cybersecurity
    • CDC Finds U.S. Infant Mortality Plateaued in 2023
  • Other Updates
    • MedPAC Holds November Meeting
    • DOJ Sues to Block UnitedHealth Acquisition of Amedisys
    • AMA to Lobby Congress on Nonprofit Hospital Oversight
    • Cigna Not Pursuing Merger with Humana
    • J&J Sues HRSA Regarding 340B Terms
  • New York State Updates
    • Governor Hochul Announces Community-Based Partners for Statewide CDPAP Administration
    • CMS Approves New York 1115 Amendment Proposal for Continuous Medicaid/CHP Coverage for Children Ages 0-6
    • DOH Adopts Regulations Maintaining MCO Contingent Reserve Requirement at 7.25%
    • DOH Issues Guidance to MLTC Plans and Health Homes on Provision of Care Coordination
    • Comptroller Issues Audit Report on Provider Compliance with EVV Program

Administration Update

Trump Proposes to Nominate Robert Kennedy, Jr. for HHS Secretary 
On November 14th, President-elect Donald Trump announced that he will nominate Robert F. Kennedy, Jr. to serve as Secretary of the Department of Health and Human Services (HHS). He is the chairman and founder of Children’s Defense Fund, an anti-vaccine advocacy group. Kennedy also ran as an independent in the 2024 presidential campaign. Prior to his work at the Children’s Defense Fund, Kennedy served as Supervising Attorney and Co-Director of Pace University’s Environmental Litigation Clinic.
 
It is uncertain whether Kennedy can garner the necessary votes in the Senate to secure confirmation. Trump has suggested that he might use the “recess appointment” process for some nominees, which allows presidents to make appointments while Congress is in recess. In 2014, the Supreme Court ruled that the recess appointment process can only be used if Congress is in recess for more than 10 days, which will require cooperation of Congressional leaders, and Democrats may have some leverage to delay such a motion for adjournment.

Federal Agencies

HHS OIG Publishes Report on Hospital Price Transparency Compliance 
On November 8th, the HHS Office of the Inspector General (OIG) posted a report entitled “Not All Selected Hospitals Complied with the Hospital Price Transparency Rule”. The report summarizes the findings of a random audit of 100 hospitals conducted by OIG, investigating whether the facilities had made their standard charges available to the public as required by federal law.
 
OIG found that 63 hospitals complied with the hospital transparency rule requirements while 37 did not. Among non-compliant hospitals, 34 did not comply with one or more of the requirements associated with publishing comprehensive machine-readable files, while 14 did not comply with one or more of the requirements associated with displaying shoppable services in a consumer-friendly manner.
 
Based on the results of the audit, OIG estimates that 46% of all hospitals required to comply with the rules have not done so. OIG recommends that CMS review noncompliant hospitals associated with their findings and execute enforcement measures, consider providing written guidance clarifying the definition of “shoppable services” and developing a training and compliance program that is tailored for smaller hospitals, and maintain a robust program to review hospital compliance.
 
The full report is available here.
 
CMS Releases 2025 Medicare Parts A and B Premiums and Deductibles
On November 8th, the Centers for Medicare & Medicaid Services (CMS) released the 2025 premium, deductible, and coinsurance amounts for the Medicare Part A and Part B programs, as well as the 2025 Medicare Part D income-related monthly adjustment amounts. Standard Medicare Part A premiums (for individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage) will be $285 per month, a $7 increase from 2024. The Medicare Part A inpatient hospital deductible will be $1,676 in 2025, an increase of $44 from 2024.
 
The standard monthly Medicare Part B premium will be $185 for 2025, an increase of $10.30 from $174.70 in 2024, mainly due to projected price changes and assumed utilization increases. The annual deductible for all Medicare Part B beneficiaries will be $257, an increase of $17 from 2024. Part D monthly premiums are based on income. For individuals with modified adjusted gross income (MAGI) under $106,000, there is no adjustment. For individuals with incomes above $106,000, the monthly adjustment amount will range from $13.70 to $85.80, depending on income.
 
More information is available here.
 
CMS Releases PY 2023 ACO REACH Financial and Performance Results 
On November 8th, CMS released financial and quality results for the Accountable Care Organization Realizing Equity, Access and Community Health (ACO REACH) Model for Performance Year (PY) 2023.  In PY 2023, REACH ACOs generated approximately $1.643 billion (5.8%) in gross savings relative to their retrospective adjusted benchmarks. Net savings to CMS were $694.6 million (2.6%), and the net savings to ACOs were $948.4 million (3.4%) compared to model benchmarks. The PY 2023 numbers are an increase from the $371.5 million in net savings to CMS and the $484.1 million in net savings to ACOs in PY 2022. Overall, 73% of ACOs earned net savings while 27% of ACOs accrued net losses. The increase in net savings was largely driven by ACOs that started in PY 2021, as compared to those that started in PY 2022 or PY 2023.
 
Quality measurement (“total quality score” or “TQS”) changed in ACO REACH for PY 2023, shifting from pay-for-reporting to pay-for-performance, and including more measurement components. CMS used three measures across all ACOs: Risk-Standardized All-Condition Readmission (ACR) within 30 days of discharge, All-Cause Unplanned Admissions for Patients with Multiple Chronic Conditions (UAMCC), and Timely Follow-Up (TFU) after hospitalization for Standard and New Entrants ACOs, or Days at Home (DAH) for adults with complex, chronic disease for High Needs ACOs. The TQS was reported on a scale of 0 to 100% ACOs that did not show improvement or continued strong performance could receive a downward adjustment. The average total quality score in PY 2023 was 78.55% across the 118 Standard and New Entrant ACOs, and 86.73% across the 14 High Needs Population ACOs. Thirty-two ACOs earned a TQS of 100%. All but ten REACH ACOs met the Continuous Improvement/Sustained Exceptional Improvement (CI/SEP) requirements. Twenty-four ACOs also met the High Performers Pool requirements and will receive an additional financial benefit.
 
More information is available here.
 
CDC Releases 2023 Hospital-Acquired Infection Data
On November 6th, the Centers for Disease Control and Prevention (CDC) released data from two hospital-acquired infection surveillance systems, the National Healthcare Safety Network and the Emerging Infections Program Healthcare-Associated Infections – Community Interface. Overall, between 2022 and 2023, the data showed significant decreases in infections among acute care hospitals including methicillin-resistant Staphylococcus aureus (MRSA) (16%), central line-associated bloodstream infections (CLABSI) (15%), C. difficile infection (CDI) (13%), CAUTI (11%), and ventilator-associated events (VAE) (5%). Progress was also made in other health care settings including inpatient rehabilitation facilities and long-term acute care hospitals.
 
The full data are available here. 
 
CDC Reports 7.6% of Americans are Uninsured 
On November 8th, the CDC National Center for Health Statistics released health insurance coverage estimates for the second quarter of 2024. The early release estimates found that 7.6% of Americans, or 25.3 million people, were uninsured between April and June. While this is a 0.4 percentage point increase over the same quarter in 2023, it is consistent with last year’s annualized uninsured rate. As expected, given Medicaid continuous enrollment unwinding, the percentage of Americans with public health coverage dropped from 41.8% during the second quarter of 2023 Q2 to 39% during the second quarter of 2024. This coverage loss was partially offset by gains in private insurance coverage, which increased from 60.2% to 62.1% of Americans.
 
The report is available here.
 
GAO Publishes Report on HHS Cybersecurity
On November 13th, the Government Accountability Office (GAO) issued a report on HHS’s cybersecurity responsibilities. On the whole, GAO found that HHS continues to face significant challenges in responding to cybersecurity threats, as it has failed to implement past GAO recommendations. HHS ostensibly is responsible for monitoring ransomware mitigation practices across the sector, but GAO found considerable gaps in that monitoring. Specific areas of concern include addressing Internet of Things (IoT) and operational technology (OT) devices, and collaboration with the Administration for Strategic Preparedness and Response (ASPR).
 
The report is available here.
 
CDC Finds U.S. Infant Mortality Plateaued in 2023 
On November 14th, CDC released provisional data from 2023 on infant mortality. In 2023, the U.S. provisional infant mortality rate was 5.61 infant deaths per 1,000 live births, unchanged from the rate in 2022. However, major disparities persist between demographic groups. The infant mortality rate for infants of American Indian and Alaska Native women in 2023 was 9.20 infant deaths per 1,000 live births, for infants of Black women, the rate was 10.93 compared with 10.90, and for infants of Native Hawaiian or Other Pacific Islander women, the rate was 8.21.
 
The report is available here.

Other Updates

MedPAC Holds November Meeting 
On November 7th and 8th, the Medicare Payment Advisory Commission (MedPAC) convened for its November public meeting. During the meeting, Commissioners broadly agreed that inflationary adjustments to physician payments were necessary to support access to care, but consistency across services remains a challenge. Physician payment adjustments are one of the outstanding items on Congress’s agenda before the end of the year. Additionally, Commissioners discussed discrepancies between Prescription Drug Plans (PDPs) through Part D relative to Medicare Advantage (MA). Lastly, with new network adequacy standards on the horizon, Commissioners discussed the need for accurate MA provider directories. 
 
The slides are available here.
 
DOJ Sues to Block UnitedHealth Acquisition of Amedisys 
On November 12th, the Department of Justice (DOJ) announced an antitrust suit to block UnitedHealth Group’s $3.3 billion purchase of Amedisys, one of the largest home health and hospice care providers in the country. Last year, UnitedHealth successfully acquired LHC Group Inc, another home health and hospice provider. Since then, Amedisys emerged as UnitedHealth’s largest competitor. UnitedHealth hopes to add Amedisys to Optum, its provider subsidiary.  The DOJ’s suit claims that this deal would award UnitedHealth too much control in this market, eliminating competition and harming patients in the process. UnitedHealth has responded to these concerns by insisting that it will divest certain services to VitalCaring Group. Lastly, the DOJ is seeking civil penalties against Amedisys for failing to “produce millions of documents or disclose the deletion of other documents.” 
 
The announcement is available here.
 
AMA to Lobby Congress on Nonprofit Hospital Oversight 
On November 11th, the American Medical Association (AMA) voted to support greater oversight of nonprofit hospitals’ tax-exempt status, including their charity care policies. The announcement cites a study that found 80% of nonprofit hospitals provide less charity care than the value received in tax breaks, totaling a deficit of $25.7 billion. This report was heavily disputed by the American Hospital Association (AHA).
 
The group is narrowing in on the heterogeneity of eligibility criteria for patients qualifying for charity care. The AMA plans to advocate for publicly-available minimum eligibility standards for financial assistance programs, mandatory screening for patient eligibility prior to billing, a more standardized definition of community benefit, and greater oversight over and enforcement of hospitals that provide little to no community benefit (including a revocation of tax-exempt status).
 
The announcement is available here.
 
Cigna Not Pursuing Merger with Humana
On November 11th, Cigna Group confirmed in a press release that at its meetings with investors and analysts over the next several weeks, it expects to “communicate that the company is not pursuing a combination with Humana Inc.” Cigna noted that the company is committed to its “established M&A criteria and would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close.” A potential merger between the companies has been speculated throughout 2024, after the two companies called off serious merger talks in late 2023.
 
The press release is available here.
 
J&J Sues HRSA Regarding 340B Terms
On November 12th, Johnson & Johnson (J&J) filed a lawsuit against HHS and the Health Resources and Services Administration (HRSA) over its 340B prescription drug rebate model. J&J recently sought a change to the payment terms, swapping upfront 340B discounts for after-the-fact rebates, for Xarelto (blood thinner) and Stelara (plaque psoriasis treatment). The manufacturer argues that this new payment model will clamp down on fraud and abuse, while hospitals claim that this delay would burden financially vulnerable hospitals. HRSA moved to block the implementation of this model. J&J is seeking a ruling that declares its rebate plan legal and clears the way for rollout.
 
The lawsuit is available here.

New York State Updates

Governor Hochul Announces Community-Based Partners for Statewide CDPAP Administration
On November 12th, Governor Hochul announced 24 community-based home care agencies that will partner with Public Partnerships LLC (PPL) to administer the State’s Consumer Directed Personal Assistance Program (CDPAP). The State has granted conditional approval of these partners, pending successful resolution of any potential conflicts of interest. PPL, the entity selected as the single statewide Fiscal Intermediary (FI) for CDPAP, will select additional partners in the coming weeks, subject to state approval.

The statewide partnership is expected to begin in January 2025, with full implementation expected by April 1, 2025. Prior to implementation, the State will communicate with CDPAP users and caregivers, disability and older adult advocates, and other stakeholders to ensure an effective transition that considers the needs of home care users and caregivers.

The Governor’s press release, which includes the list of community-based partners, is available here.

CMS Approves New York 1115 Amendment Proposal for Continuous Medicaid/CHP Coverage for Children Ages 0-6
On November 14th, CMS approved New York’s 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 amendment 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 change. The amendment is effective immediately and is approved for the duration of the demonstration, which is set to expire March 31, 2027.

The CMS approval letter is here.

DOH Adopts Regulations Maintaining MCO Contingent Reserve Requirement at 7.25%
On November 13th, the New York State (NYS) Department of Health (DOH) adopted final regulations that maintain the contingent reserve requirement at 7.25% through 2025 for Medicaid managed care organizations (MCOs), including mainstream plans, HIV Special Needs Plans (HIV SNPs), and Health and Recovery Plans (HARPs). Although the contingent reserve has been scheduled to eventually increase to 12.5%, DOH has annually continued the 7.25% level for several years now. The lower reserve requirement allows DOH to maintain the current 2% reduction in the premium rates while maintaining actuarial soundness.

The adopted regulations are available here.

DOH Issues Guidance to MLTC Plans and Health Homes on Provision of Care Coordination
This month, DOH issued guidance on the provision of care coordination and efforts to avoid duplication of care for Medicaid members enrolled in Managed Long Term Care (MLTC) plans and Health Homes. Both partial capitation (MLTCP) and Medicaid Advantage Plus (MAP) plans provide care coordination of long term care services and supports for eligible beneficiaries who require more than 120 days of community-based long-term care services. Health Home care management is required to be offered to all consumers that meet eligibility requirements, including MLTCP and MAP beneficiaries; however, Health Home care management services are carved out of the MLTCP and MAP benefit package.

The respective roles of the MLTCP/MAP plan and Health Home must be formalized by entering into a Statewide Administrative Health Home Services Agreement (ASA) using the updated template (here). For MLTCP, the template ASA grants the MLTCP plans with the primary role of coordinating long term care services, while the Health Home is responsible for coordinating behavioral health care and other services and supports that are outside the MLTC benefit package. Since behavioral health services were carved into the MAP benefit package on January 1, 2023, the MAP plan and the Health Home are directed to work together to ensure a single comprehensive plan of care is developed for the beneficiary. It will be the joint responsibility of both parties to determine which care manager will serve as the lead care manager for each beneficiary. 

The guidance is available here. Additional details and resources are available here under the heading “MLTC and MAP Plan and Health Home Collaborations – Statewide Documents.”

Comptroller Issues Audit Report on Provider Compliance with EVV Program
On November 13th, the Office of the New York State Comptroller released an audit report investigating Medicaid provider compliance with the Electronic Visit Verification (EVV) program. In accordance with requirements included in the 21st Century Cures Act, the State implemented an EVV program for all Medicaid personal care (PC) services in January 2021 and home health care (HHC) services in January 2023. EVV systems use technology to verify home and community-based service visits, including the provider, recipient, service type, date, location, and duration of service.

The audit found that the NYS Medicaid program paid $14.5 billion for PC services and $97.6 million for HHC services that did not have matching EVV records. Only 56% of PC services and 11% of HHC services had matching EVV records. The audit also found that some services with matching EVV records were not valid because they were too short in duration to be billed under Medicaid rules or occurred while a recipient was hospitalized, during which PC and HHC services should be suspended.

The report recommends the State Medicaid program: 

  • Review the $14.5 billion in PC payments and $97.6 million in HHC payments with no matching EVV records and take steps to ensure these services are properly supported with EVV data;
  • Improve oversight of the EVV program and establish controls to ensure compliance, including preventing payment of claims for services that lack supporting EVV records; and
  • Review the $11.6 million for PC services that were too short in duration and the $9.7 million for PC and HHC services provided during hospital stays and recover overpayments, as appropriate.

The audit is available here.