In this update:
- Legislative Updates
- House Passes Lower Costs, More Transparency Act
- Federal Agencies
- CMS Announces AHEAD Office Hours
- HHS Releases Summary of 2022 National Health Expenditures Survey
- CMS Announces Planned Changes to the VBID Model
- ONC Announces First Set of TEFCA Participants
- ONC Finalizes Rule on Interoperability and Algorithm Transparency
- HHS OIG Publishes Toolkit on High-Risk Diagnosis Codes in Medicare Advantage
- CMS Releases Revised Guidance for Medicare Prescription Drug Inflation Rebate Program
- CMS Issues Guidance on State Establishment of HCBS Worker Registries
- Other Updates
- GAO Issues Report on Surprise Billing
- MedPAC Holds December Meeting
- ICER Publishes Report on Non-Evidence-Based Drug Price Hikes in 2022
- Mike Tuffin Appointed CEO of AHIP
- New York State Updates
- Governor Hochul Signs Health Care Legislation on Equity and Pricing
- CMS Approves SPA to Allow Article 28 Clinics to Bill for LMFT and LMHC Services
- CMS Approves SPAs to End Article 16 BH Utilization Adjustment and Continue Minimum Wage Adjustments
- CMS Approves SPA to Transition NEMT Program to Risk-Based Broker
- DOH Announces Implementation of Medicaid Reimbursement of Doula Services
- OASAS Announces Updated Reimbursement Structure for Part 822 Services
Legislative Update
House Passes Lower Costs, More Transparency Act
On December 11th, the House of Representatives passed H.R. 5378, the Lower Costs, More Transparency Act, by a vote of 320 to 71. This bipartisan legislation pulled on work from three separate House committees. Key provisions in the bill include:
- Pharmacy Transparency: The bill would require providers and pharmacy benefit managers (PBMs) to publicly list prices before charging patients. In the case of PBMs, this involves the disclosure of negotiated rebates and discounts.
- Codification of Hospital Transparency: The bill would codify current regulatory requirements for hospitals to publish their pricing information, including negotiated charges and discounted cash prices, through machine-readable files.
- DSH Delay: The bill includes the delay of $16 billion in disproportionate share hospital (DSH) program cuts through 2025.
- Community Health Centers: For community health centers, the bill includes a 10% increase in yearly funding to $4.4 billion, with seven additional years of funding for the Teaching Health Center Graduate Medical Education Program.
- Site-Neutral Payments: The bill would equalize payments for certain drugs covered under Medicare Part B, regardless of whether they are administered in a hospital outpatient department or physician’s office.
The Congressional Budget Office found that the bill will result in overall taxpayer savings of $715 million from 2024 to 2033.
More information on the legislation is available here.
Federal Agencies
CMS Announces AHEAD Office Hours
On December 20th, at 2pm ET, the Centers for Medicare and Medicaid Services (CMS) will host its first office hours session to answer questions related to the Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. AHEAD is a state-based, all-payer total cost of care model design that will implement hospital global budgets for hospitals in a given region. The AHEAD Model is currently soliciting applications from states. Aside from overall payment model reform, CMS is making $12 million available to each of eight states for a cooperative agreement to begin the implementation of AHEAD.
The link is available here.
HHS Releases Summary of 2022 National Health Expenditures Survey
On December 13th, the Department of Health and Human Services (HHS) released new data on national health care expenditures in 2022. HHS found that, overall, spending grew 4.1% in 2022 to reach $4.5 trillion; this is a steeper increase than in 2021, but far below 2020’s increase.
HHS noted significant growth in Medicaid and private health insurance enrollment (92% of total population insured), which was offset by an end to pandemic-era spending and supplemental funding. By type of service, hospital care spending led at 30%, followed by physician and clinical services at 20% and retail prescription drugs at 9%.
The report is available here.
CMS Announces Planned Changes to the VBID Model
On December 13th, the CMS Innovation Center (CMMI) published a blog post outlining planned changes to the Medicare Advantage (MA) Value-Based Insurance Design (VBID) demonstration. Under VBID, MA plans may offer supplemental benefits and reduced cost-sharing to targeted subsets of enrollees based on their socioeconomic status and/or chronic health conditions. CMMI notes that the VBID model has grown significantly since its inception in 2017 and now includes 69 MA organizations covering about 8.7 million Medicare beneficiaries. In 2024, 88% of Dual Eligible Special Needs Plans (D-SNPs) will participate in VBID.
Based on its early evaluation of the program (released in September), CMMI is making the following changes which will be effective in 2025:
- New reporting requirements on risk score trends and on utilization of supplemental benefits;
- Additional participation eligibility requirements related to program integrity, including a minimum three Quality Stars requirement for participating MA contracts; and
- A new financial requirement for participating plans to show a net savings to CMS, both during CY 2025 and over the course of the model.
The blog post is available here.
ONC Announces First Set of TEFCA Participants
On December 12th, the HHS Office of the National Coordinator for HIT (ONC) announced the initiation of the Trusted Exchange Framework and Common Agreement (TEFCA) by designating the first tranche of Qualified Health Information Networks (QHINs).
QHINs are national entities that meet TEFCA requirements to provide shared services and governance to support network-to-network exchange of electronic health information (EHI). The primary service of each QHIN is referred to as a “Connectivity Broker,” which allows participants in each QHIN to access functions such as a master patient index, record locator service, broadcast and directed queries, and returning EHI upon authorized requests. QHINs connect directly to each other to serve as the core for nationwide operability.
The five designated QHINs are eHealth Exchange, Epic Nexus, Health Gorilla, KONZA, and MedAllies. They will now begin work with the Sequoia Project, ONC’s recognized coordinating entity, to further operationalize TEFCA.
The announcement is available here.
ONC Finalizes Rule on Interoperability and Algorithm Transparency
On December 13th, the HHS ONC finalized a rule updating requirements on interoperability and requirements for health IT participating in ONC’s voluntary certification program. Key components of the rule include:
- Adoption of the updated third version of the United States Core Data for Interoperability (USCDI v3) as the new standard as of January 2026;
- Establishment of new transparency requirements for the use of artificial intelligence and other predictive algorithms in certified health IT, which will require developers of certified health IT to publish a consistent, baseline set of information about any such algorithms they use; and
- Revisions to information blocking requirements to make definitions more precise and revise the conditions under which the Infeasibility exception may apply, including two new conditions: (1) requests that would enable modification of EHI without a Business Associate Agreement; and (2) cases where the actor has already offered several alternatives.
The rule also implements a new required condition of certification for health IT developers to report certain interoperability-focused metrics.
The announcement is available here.
HHS OIG Publishes Toolkit on High-Risk Diagnosis Codes in Medicare Advantage
On December 14th, the HHS Office of the Inspector General (OIG) published a toolkit for MA organizations to help them identify diagnosis codes that are frequently coded incorrectly and result in improper payments. The toolkit provides OIG’s actual programming code (in SQL) used to query CMS’s systems. OIG identified eight high-risk groups in which certain diagnosis codes were entered in error more than 80% of the time in its sample.
The toolkit is available here.
CMS Releases Revised Guidance for Medicare Prescription Drug Inflation Rebate Program
On December 14th, CMS released revised guidance for the new Medicare prescription drug inflation rebate program. This guidance details requirements and procedures for the calculation of rebates and the process of invoicing manufacturers for rebates owed. These rebates will go into the Medicare Trust Fund beginning in 2025 for years 2022 onward depending on which part of Medicare a drug is covered under.
The revised fact sheet for the program is available here.
CMS Issues Guidance on State Establishment of HCBS Worker Registries
On December 12th, CMS announced new guidance through an Informational Bulletin outlining how states can improve access to Home and Community-Based Services (HCBS) through building and maintaining worker registries to help connect eligible individuals to services. States may establish registries to help recruit workers and to help beneficiaries identify qualified workers. Examples of workers who might be listed in such registries include home care workers, direct support professionals, personal care attendants, and others. CMS notes that the development of such registries is an eligible use of American Rescue Plan (ARP) enhanced funding for HCBS in Medicaid.
Accompanying this, CMS also released an update on how the enhanced HCBS funding has been used so far. As of December 2022, states had allocated planned spending of almost $39 billion, representing nearly $5,000 in additional spending per beneficiary. The largest funding categories were workforce recruitment, workforce training, and quality improvement activities.
The Bulletin is available here. The enhanced spending data is available here.
Other Updates
GAO Issues Report on Surprise Billing
On December 12th, the U.S. Government Accountability Office (GAO) released a report on the rollout of the independent dispute resolution process for out-of-network claims, also known as surprise billing. The No Surprises Act of 2021 prohibits surprise billing for certain services and creates an independent forum to resolve disputes over how much insurers should pay for out-of-network care. As of June 2023, 61% of these disputes are unresolved, signaling ongoing challenges with the roll out of the program.
The report is available here.
MedPAC Holds December Meeting
On December 7th and 8th, the Medicare Payment Advisory Commission (MedPAC) convened for its December meeting. The meeting focused on reviewing draft recommendations and updating payments for physicians, hospital inpatient and outpatient services, hospice services, outpatient dialysis services, skilled nursing facility services, and home care services. MedPAC’s recommendations included:
- Physician Payment
- For CY 2025, Congress should update the 2024 Medicare base payment rate for physician and other health professional services by the amount specified in current law plus 50 percent of the projected increase in the Medicare Economic Index. CMS currently forecasts a 2.6 percent increase in the MEI for 2025).
- Congress should enact a non-budget neutral add-on payment, not subject to beneficiary cost sharing, under the physician fee schedule for services provided to low-income Medicare beneficiaries, amounting to:
- 15 percent for primary care clinicians; and
- 5 percent for non-primary care clinicians.
- Hospitals
- For FY 2025, Congress should update the 2023 Medicare base payment rates for acute care hospitals by the amount determined under current law plus 1.5 percent.
- Congress should redistribute existing disproportionate share hospital and uncompensated care payments through the Medicare Safety-Net Index (MSNI) using the mechanism described in MedPAC’s March 2023 report and add $4 billion overall to the MSNI pool.
- Hospice: For FY 2025, Congress should eliminate the update to the 2024 Medicare hospice base payment rates.
- Outpatient Dialysis Services: For CY 2025, Congress should update the CY 2024 Medicare end-stage renal disease (ESRD) prospective payment system base rate by the amount determined under current law.
- Skilled Nursing Facilities: For FY 2025, Congress should reduce the 2024 Medicare base payment rates for skilled nursing facilities by 3 percent.
- Home Health: For CY 2025, Congress should reduce the 2024 Medicare base payment rates for home health care services by 7 percent.
- Inpatient Rehabilitation Facilities: For FY 2024, Congress should reduce the 2023 Medicare base payment tare for inpatient rehabilitation facilities by 5 percent.
The next MedPAC meeting will take place on January 11th and 12th. The slides from the presentation are available here.
ICER Publishes Report on Non-Evidence-Based Drug Price Hikes in 2022
On December 11th, the Institute for Clinical and Economic Review (ICER) published its latest report on prescription drugs in the U.S. Among the top ten drugs with net price increases and substantial effects on U.S. spending during 2022, ICER determined that eight of them lacked adequate new clinical evidence to support such a price increase. Of the eight drugs, Humira, an immunosuppressant, was responsible for the largest unsubstantiated price increase.
The announcement is available here.
Mike Tuffin Appointed CEO of AHIP
On December 11th, America’s Health Insurance Plans (AHIP) announced Mike Tuffin as its next President and CEO. Tuffin has served as Senior Vice President for External Affairs for UnitedHealth Group since 2015. In this role, Tuffin will lead AHIP’s national advocacy efforts on priority issues. AHIP members cover both the commercial market as well as Medicare and Medicaid beneficiaries.
The announcement is available here.
New York State Updates
Governor Hochul Signs Health Care Legislation on Equity and Pricing
Over the past week, Governor Hochul signed the following health care-related legislation:
- S1839A/A2609A directs the Health Equity Council within the State Department of Health (DOH) to issue recommendations to the Commissioner of Health regarding screening and detection of and public health outreach and education for sickle cell disease, particularly among unserved or underserved populations.
- S1451/A782 includes programs to address disparities in health care access or treatment and/or conditions of higher prevalence in certain populations (i.e., racial/ethnic minority groups, persons with disabilities, etc.) among the initiatives authorized under the Hospital-Home Care-Physician Collaborative Program.
- S3609A/A3113A enhances the scope of Health Equity Impact Assessments, required as part of certain Certificate of Need (CON) applications, to include consideration of the impact of the proposed project on reproductive health services and maternal health care.
- S4097B/A5817A requires the Department of Civil Service to collect and analyze health care claims data to develop (and make publicly available) a New York State Health Insurance Program (NYSHIP) Hospital Pricing Report.
- S4907A/A6275A prohibits medical debt from being collected by a consumer reporting agency or included in a consumer report and prohibits medical service providers (i.e., hospitals, health care professionals, and ambulance providers) from reporting medical debt directly or indirectly to a consumer reporting agency.
- S608C/A5653B prohibits the sale of medicine for an “unconscionably excessive price” during a drug shortage (as defined by the U.S. Food and Drug Administration).
The Governor’s press releases related to the above legislation are available here and here.
CMS Approves SPA to Allow Article 28 Clinics to Bill for LMFT and LMHC Services
On December 12th, CMS approved New York’s State Plan Amendment (SPA) that allows freestanding Article 28 clinics to be reimbursed for services provided by Licensed Marriage and Family Therapists (LMFTs) and Licensed Mental Health Counselors (LMHCs). The SPA also revises the Ambulatory Patient Group (APG) reimbursement methodology to include recalculated weight and component updates.
The SPA is available here. The CMS approval is available here.
CMS Approves SPAs to End Article 16 BH Utilization Adjustment and Continue Minimum Wage Adjustments
On December 12th, CMS approved the following two New York SPAs relevant to Office for People with Developmental Disabilities (OPWDD) licensed Article 16 clinics:
- An amendment to continue minimum wage adjustments through current Medicaid reimbursement methodologies until all regions have reached an hourly wage of $15.00 per hour (SPA, Approval).
- An amendment to sunset the Behavioral Health Utilization Controls payment reductions for Article 16 clinics, effective July 1, 2022 (SPA, Approval).
CMS Approves SPA to Transition NEMT Program to Risk-Based Broker
On December 12th, CMS approved New York’s SPA to transition the Medicaid non-emergency medical transportation (NEMT) program from an administrative services only model to a risk-based broker model. The amendment is effective August 1, 2023. As a result of this change, NEMT will be transitioned from the current Medicaid Transportation managers to one or more Medicaid Transportation Broker(s) based on a competitive procurement. The Medicaid Transportation Broker(s) will contract directly with transportation providers to develop an adequate network, ensure compliance with transportation network driver and vehicle requirements, and negotiate fee-for-service transportation provider reimbursement.
The State will reimburse the Medicaid Transportation Broker(s):
- Monthly through an administrative fee on a per-member per-month basis for each Medicaid-eligible individual whose transportation is being managed by the broker; and
- Annually through a risk-sharing arrangement pursuant to a gain-sharing agreement in which the broker will share with the State net income gains over specified limits (the State will not share in net losses).
The SPA is available here. The CMS approval is available here.
DOH Announces Implementation of Medicaid Reimbursement of Doula Services
On December 13th, DOH issued a public notice indicating that the NYS Medicaid program will begin reimbursing for doula services on or after January 1, 2024. Doulas are non-licensed providers that provide physical, emotional, educational, and non-medical support for pregnant and postpartum individuals before, during, and after childbirth or end of pregnancy. Doula services must be recommended by a licensed practitioner and may include the following:
- Development of a birth plan and continuous labor support;
- Patient-centered advocacy and physical, emotional, and non-medical support;
- Education, guidance, and health navigation;
- Facilitating communication between the Medicaid member and medical providers; and
- Providing connections to community-based resources and childbirth and parenting resources.
The public notice is available here. Public comment may be submitted to spa_inquiries@health.ny.gov.
OASAS Announces Updated Reimbursement Structure for Part 822 Services
On December 13th, the NYS Office of Addiction Services and Supports (OASAS) announced that it will amend the reimbursement structure for clinic, outpatient rehabilitation, and Opioid Treatment Program (OTP) services so that each will be reimbursed at the same base rate for their region (upstate or downstate). This adjustment, part of OASAS’s initiative to integrate OTP and clinic programs, will be effective January 1, 2024.
The announcement is available here. Updated and projected base rates can be found in the Rate Code Section of the OASAS APG Manual here.