Weekly Health Care Policy Update – December 6, 2024

December 13, 2024

In this update: 

  • Administration Updates
    • Trump Announces Additional Leadership Nominations
  • Legislative Updates
    • Congress Continues Work on End of Year Spending Package
  • Federal Agencies
    • CMS Releases 200 Medicare Residency Slots
    • CMS Releases 2026 MA and Part D Proposed Rule
    • HRSA Announces $54 Million in Funding for FQHCs Caring for Patients After Incarceration
    • CMS Introduces Increasing Organ Transplant Access Model
  • Other Updates
    • Judge Orders CMS to Recalculate United’s Star Rating
  • New York State Updates
    • DOH Issues Guidance on PCMH Enhanced Payments and SCN Participation
    • DFS Issues Proposed Regulations Requiring the Collection of Voluntarily Disclosed Demographic Data
    • NYS Expands Medicaid RPM Coverage to Clinical Staff
    • NYS Medicaid to Separately Reimburse FQHCs and RHCs for CHW Visits
    • DOH to Host Webinar for Providers on 1115 Waiver SCN Participation Opportunities
    • OMH to Host Statewide Town Hall on the Future of State’s Public Mental Health System

Administration Update

Trump Announces Additional Leadership Nominations
Over the past two weeks, President-elect Trump has continued to announce his intention to nominate individuals to various health care roles. They include: 

  • Jim O’Neill for deputy secretary of the Department of Health and Human Services (HHS). O’Neill served as a speechwriter and policy advisor at HHS during the George W. Bush administration. He previously served as CEO of the Thiel Foundation of investor and early Trump backer Peter Thiel and currently works as a biotech investor. The deputy secretary is the second-highest ranking official at HHS, oversees daily operations of all sub-agencies, and is subject to Senate confirmation. O’Neill’s previous work in the federal government is likely to help his confirmation chances. If Robert F. Kennedy Jr.’s nomination stalls in the Senate, and O’Neill is confirmed, O’Neill could serve as the acting HHS secretary. 
  • Marty Makary to serve as the Commissioner of the Food and Drug Administration (FDA). Dr. Makary is a surgical oncologist at Johns Hopkins University who critiqued the FDA’s vaccine data review process during the pandemic and its vaccine recommendations for children. Dr. Makary has clarified that he supports vaccination but believes recommendations must be more nuanced. He has written on matters ranging from the high cost of health care to medical errors and is a member of the National Academy of Medicine. The FDA Commissioner is subject to Senate confirmation.
  • Dave Weldon to lead the Centers for Disease Control and Prevention (CDC). Dr. Weldon is a practicing internist who represented Florida’s 15th district in the U.S. House from 1995-2009. During that time, he expressed concerns about vaccine safety and the CDC’s potential conflict of interest in funding vaccine safety research. He authored the “Weldon amendment,” which provides conscience protections for health insurance plans, providers, and other health care entities unwilling to provide or cover abortions. The CDC Director is now subject to Senate confirmation as required by the PREVENT Pandemics Act of 2022.
  • Janette Nesheiwat, for Surgeon General. Dr. Nesheiwat is a family and emergency medicine physician and a medical director for CityMD, a provider of in-person and virtual urgent care in New York and New Jersey. She is also a frequent Fox News contributor. The Surgeon General is subject to Senate confirmation.
  • Dr. Jay Bhattacharya, to serve as the Director of the National Institutes of Health (NIH). Dr. Bhattacharya is a physician and economist at Stanford, though he never completed a residency nor practiced medicine. He emerged during the Covid-19 pandemic as a critic of lockdowns, authoring an anti-lockdown treatise (the Great Barrington Declaration) and calling on the Department of Health and Human Services (HHS) to “fire all people currently responsible for pandemic preparedness.” The role of NIH Director requires Senate confirmation by the Health, Education, Labor & Pensions Committee.

Legislative Update

Congress Continues Work on End of Year Spending Package
On December 3rd, congressional Republicans put forth a preliminary end-of-year funding package that included several key health care provisions: a three-year extension of pandemic Medicare telehealth provisions and hospital-at home programs, pharmaceutical benefit manager reforms, a one-year Medicare physician pay adjustment of 2.5%, community health center funding, and several public health program extensions. Republicans proposed to pay for the package with a $22 billion savings from repealing the nursing home staffing rule, as well as changes to pharmacy benefit manager transparency provisions. The staffing rule pay-for is likely unacceptable to congressional Democrats (although its repeal is likely anyway during the Trump Administration) and negotiations therefore continue. Government funding is set to expire on December 20th.

Federal Agencies

CMS Releases 200 Medicare Residency Slots
On November 21st, the Centers for Medicare and Medicaid Services (CMS) announced 200 additional residency positions through the Graduate Medical Education (GME) program. These placements span 109 teaching hospitals across 33 states, starting July 1, 2025. Seventy percent of the residency positions are in primary care and psychiatry. The Balanced Budget Act of 1997 capped the number of Medicare-supported residency positions, but the Consolidated Appropriations Act, 2021 and 2023 expanded available GME positions. Thus far, CMS has awarded half of the 1,200 total positions available.

Awardees in New York include BronxCare, Mount Sinai Hospital, Mount Sinai St. Luke’s-Roosevelt, Montefiore, Lincoln, Rochester Medical, Elmhurst, South Brooklyn, Metropolitan, Queens Hospital Center, Woodhull, and St. Barnabas. The announcement is available here.

CMS Releases 2026 MA and Part D Proposed Rule 
On November 26th, CMS released the Contract Year 2026 Medicare Advantage (MA) and Part D proposed rule. Broadly, this rule focuses on access to anti-obesity medications (AOMs) under Medicare Part D and Medicaid programs, prior authorization, and the regulation of AI. Specific policies include: 

  • Coverage of Anti-Obesity Medication: CMS is proposing to permit coverage of AOMs for the treatment of obesity in both the Medicare and Medicaid programs. Notably, AOMs will not be covered for patients that are overweight without being clinically obese. The Congressional Budget Office (CBO) recently estimated that such a policy change would increase federal spending by about $35 billion from 2026 to 2034, but CBO also anticipates that semaglutide, the active ingredient in many AOMs, will be included in prescription drug price negotiations in 2025, which could help bring down the cost of covering these expensive medications.
  • Prior Authorization and Utilization Management Guardrails: CMS is proposing a number of policies to further regulate MA plans’ utilization management techniques:
    • Transparency requirements for internal coverage policies and enrollee appeals rights;
    • Policies to address after-the-fact overturns; and
    • Policies to strengthen existing regulations around MA coverage of core Part A and B benefits.
  • Use of AI: CMS is proposing to amend MA regulations to add a new AI criterion for plans’ existing requirement to ensure that services are provided equitably. This would require plans to use AI and other automated systems “in a manner that preserves equitable access to MA services.”
  • MA Provider Directories: CMS is proposing to require MA plans to make provider directories available to CMS for incorporating in the Medicare Plan Finder.
  • Access to Behavioral Health Benefits: CMS is proposing a number of cost sharing limits, including a 20% coinsurance limit for mental health services (including specialty services, psychiatric services, partial hospitalization/intensive outpatient services, and outpatient substance abuse services), zero cost sharing for opioid treatment program services, and 100% of estimated Medicare Fee-For-Service (FFS) cost sharing for inpatient hospital psychiatric services.
  • MA Advertising: CMS is proposing to expand the types of MA advertisements subject to CMS review and the number of topics an agent or broker must cover before a beneficiary formally enrolls in a plan to increase information sharing.
  • Medical Loss Ratios: CMS is proposing changes to how MA and Part D plans calculate medical loss ratio (MLR) to minimize plan discretion. For example, under the proposed rule, provider incentive and bonus arrangements must be tied to clinical or quality improvement standards to be included in (and administrative costs tied to such activities would be excluded in) an MLR numerator.

Comments in response to the proposed rule are due on January 27, 2025, one week into the Trump Administration. As is typical practice for incoming administrations, the Trump Administration will likely “freeze” this and other pending regulations for further review. In that time, it is possible that his administration will amend the final version of the rule. In addition, the rule will be subject to the Congressional Review Act (CRA), which Congress can use to invalidate a final rule, although this could pose problems because administrations may not reissue rules that are “substantially the same” as one that is disapproved under the CRA.

The announcement is available here, and the fact sheet is available here.

HRSA Announces $54 Million in Funding for FQHCs Caring for Patients After Incarceration 
On November 22nd, the Health Resources and Services Administration (HRSA) announced nearly $52 million in awards to 54 federally qualified health centers (FQHCs) to implement primary care delivery models for patients nearing release and community re-entry after incarceration. Specifically, such FQHCs will be able to provide health services to individuals expected or scheduled for release within 90 days. In addition to traditional medical services, FQHCs are encouraged to provide case management services and work with community partners to address social determinants of health (SDOH). Community Healthcare Network, Inc. received $1 million.

The announcement is available here.

CMS Introduces Increasing Organ Transplant Access Model 
On November 26th, CMS finalized the Increasing Organ Transplant Access (IOTA) Model. This mandatory model for select transplant hospitals is aimed at increasing access to kidney transplants over the next six years. IOTA uses a tw0-sided risk model, providing participating transplant hospitals with a financial incentive to perform more transplants and a disincentive to perform fewer. Performance will be measured in terms of transplant volume, rate of organ acceptance, and post-transplant outcomes. Rather than requiring every transplant hospital to participate, CMS will select half of the donation service areas (DSAs) and mandate participation for all eligible transplant hospitals in those DSAs, amounting to 103 total. Treatments for chronic kidney disease account for 24% of annual Medicare spending. IOTA is slated to begin on July 1, 2025.

The announcement is available here, and the fact sheet is available here.

Other Updates

Judge Orders CMS to Recalculate United’s Star Rating
On November 22nd, a federal judge in Texas ruled in favor of UnitedHealthcare in its lawsuit against CMS over the insurer’s 2025 Medicare Advantage (MA) star rating. United alleged in the suit that CMS downgraded the company’s star ratings over one eight-minute test call handled by a private contractor. The judge determined that CMS violated the Administrative Procedure Act by unfavorably reporting this call in the plan’s rating. CMS must now reassess and republish United’s rating without the disputed call, a move that will likely result in millions of dollars in bonus payments. The judge also affirmed that it is illegal for agencies to delegate decision making to private contractors.
 
This is the third star ratings suit that CMS has lost in recent months. Humana and Centene also argued that flawed support calls caused their ratings to drop. Broadly speaking, this decision is considered a win for the MA industry and bodes favorably for outstanding suits. CMS has already moved to downgrade the importance of call center metrics when calculating star ratings.
 
The decision is available here.

New York State Updates

DOH Issues Guidance on PCMH Enhanced Payments and SCN Participation 
Primary care providers recognized under the NYS Patient-Centered Medical Home (PCMH) program currently receive a $6 per-member per-month (PMPM) payment. PCMH providers are now entitled to an incentive enhancement of $4 PMPM for children/young adults (under age 21) and $2 PMPM for adults. In order to continue receiving the enhanced payment, providers will be required to develop a workflow to refer patients to an 1115 waiver Social Care Network (SCN) and submit an attestation that confirms their SCN participation.
 
PCMH providers that submit an attestation confirming their SCN participation by March 31, 2025 will continue to receive the incentive enhancement. PCMH practices can submit attestations after the March 31, 2025 deadline and the PCMH practice will be included in the subsequent participation list for the additional payment. PCMH practices that submit attestations after March 31, 2025 will forfeit the $2 and $4 enhancement beginning April 1, 2025 until the attestation is received. The attestation will be completed once per physical site location, and will cover all recognized providers at that location.
 
Additional details are available in the October Medicaid update here. DOH will release more details about the attestation form and process in the coming weeks.
 
DFS Issues Proposed Regulations Requiring the Collection of Voluntarily Disclosed Demographic Data
On December 4th, the New York State (NYS) Department of Financial Services (DFS) issued proposed regulations that would require regulated health insurance plans to request race, ethnicity, preferred language, sexual orientation, and gender identity or expression data for all covered individuals and dependents. DFS seeks this information “to more clearly understand insurance benefit use and develop policy solutions to better serve the needs of all New Yorkers, including underrepresented communities.”
 
Insurance plans would be required to collect the demographic data via a separate and supplemental questionnaire either at the time of application for new members or at renewal for current members. Responding to the questionnaire would be optional for the member and their dependents.
 
The regulation would prohibit insurance plans from using the data for unfair or unlawful discriminatory purposes, including for eligibility, rate setting, and underwriting determinations. The proposed rule also includes limitations on the use and distribution of the data collected by insurers, including prohibiting insurers from sharing data with a third-party, unless the third-party agrees not to sell or share the information.
 
The proposed rule is available here. The DFS press release is available here. Public comment may be submitted to through February 3, 2025.
 
NYS Expands Medicaid RPM Coverage to Clinical Staff
Effective January 1, 2025, the NYS Medicaid program will reimburse for Remote Patient Monitoring (RPM) Current Procedural Terminology (CPT) code “99457” at a rate of $41.80. This code bills for RPM treatment management services, which may be delivered by clinical staff working under their scope of practice if ordered by a physician or other health care professional. Clinical staff includes individuals working under the direction of a physician or qualified health care professional who do not independently bill professional services, such as pharmacists (excluding retail pharmacists) and some registered dieticians. Medicaid managed care plans must comply with this coverage by March 1, 2025.
 
Additional details are available in the October Medicaid update here. Questions may be submitted to telehealth.policy@health.ny.gov.
 
NYS Medicaid to Separately Reimburse FQHCs and RHCs for CHW Visits
Effective immediately, the NYS Medicaid program and Medicaid managed care plans will reimburse Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs) for services rendered by a Community Health Worker (CHW). FQHCs/RHCs will be reimbursed as a separate payment amount carved out of the all-inclusive Prospective Payment System (PPS) rate when the CHW service is the only service provided. CHW services must be provided on-site at the FQHC; offsite CHW services are not reimbursable.
 
Additional details, including billing guidance, are available in the October Medicaid update here.
 
DOH to Host Webinar for Providers on 1115 Waiver SCN Participation Opportunities
On December 12th from 2pm-3pm, DOH will host a webinar for providers on the State’s 1115 Waiver Social Care Networks (SCNs). The webinar will provide an overview of SCNs and share opportunities for providers on how they can participate in the program, including referral, screening, clinical criteria attestation, and service deliver. The webinar is intended for hospitals/health systems, primary care practices, behavioral health organizations, and community health centers/FQHCs.
 
Registration is available here. Questions may be submitted to NYHER@health.ny.gov.
 
OMH to Host Statewide Town Hall on the Future of State’s Public Mental Health System
On December 18th from 2pm-4pm, the NYS Office of Mental Health (OMH) will host a Statewide Town Hall during which the OMH commissioner will present and take feedback on the future of the State’s public mental health system.
 
Registration is available here. Testimony may be sent in advance to Planning@omh.ny.gov.