Weekly Health Care Policy Update - March 15, 2024

In this update:

Legislative Updates
- Biden Signs Spending Minibus with Health Care Provisions
- Biden Delivers State of the Union Address
- Biden Administration Releases FY 2025 Budget Request
- Providers Ask Congress to Extend Acute Hospital-at-Home Waiver Program
Federal Agencies
- HHS Shares Updates on Change Healthcare Cyberattack
- CMS Requests Comments on ACA Plan Quality Initiatives
- CMS Issues Final Part One Guidance for Medicare Prescription Drug Plans
- ONC Coordinator Publishes Blog on Upcoming Interoperability Rules
- HHS and Other Agencies Release RFI on Consolidation in Health Care Markets
- CMS Announces Release of the Manufacturer RFA for the CGT Access Model
Other Updates
- MACPAC Holds March 2024 Meeting
- MEDPAC Holds March 2024 Meeting
- Whistleblower Accuses Aledade of Fraud
- CVS and Walgreens to Start Dispensing Mifepristone
New York State Updates
- DFS Issues Guidance to Insurance Plans on Handling Change Healthcare Cyberattack
- OMH Requests Comment on Guidance for Outpatient Providers Collaborating with Hospitals on Admissions and Discharges
- DOH Announces Approval of Section 1332 Waiver that Expands Eligibility for the Essential Plan
- DOH Adopts Regulations Updating Adult Home Quality Improvement Committee Requirements

Legislative Updates

Biden Signs Spending Minibus with Health Care Provisions
On March 9^th, President Biden signed into law H.R. 4366, the Consolidated Appropriations Act, 2024. This bill provides funding for six federal agencies (Agriculture-FDA, Commerce-Justice-Science, Energy-Water Development, Interior-Environment, Military Construction-VA, and Transportation-HUD), but also included a number of key health care riders, including the below.

Program Extensions
The bill extends funding for the following programs through calendar year (CY) 2024 (i.e., December 31, 2024):

Federally qualified health center (FQHC) funding through the Community Health Center Fund;
The Teaching Health Center Graduate Medical Education (THCGME) program;
The National Health Service Corps; and
Various security-related provisions of the Public Health Service Act.

Medicare
The bill provides a temporary increase of 2.93 percent to the conversion factor for payments under the Medicare Physician Fee Schedule (PFS) for payments from March 9, 2024 through the end of CY 2024. Currently, the conversion factor is subject to a temporary increase of 1.25 percent, so this change will cause current reimbursement levels to increase by 1.66 percent overall. The full 2.93 percent would expire after 2024, if not further extended.

The bill also extends bonus payments for qualifying participants in Medicare Alternative Payment Models (APMs) by an additional year, through payment year 2026 (based on performance year 2024), at an adjusted amount of 1.88 percent. This is a decrease from 3.5 percent for payment year 2025.

The bill also extends various special hospital reimbursement provisions under Medicare, including the payment adjustment for low-volume hospitals, the Medicare-dependent hospital program, and the current work geographic index floor.

Medicaid
The bill includes the following Medicaid provisions:

Permanent addition of Certified Community Behavioral Health Clinics (CCBHCs) as a standard Medicaid benefit option for states. Any CCBHC organization that has been certified by a state as meeting the CCBHC criteria as of January 1, 2024, regardless of whether that state is participating in the federal CCBHC demonstration, is considered a CCBHC for this purpose.
Postponement of the Affordable Care Act cuts of $8 billion to Medicaid Disproportionate Share Hospital (DSH) payments through December 31, 2024.
Prohibition on terminating of Medicaid eligibility for individuals when they are incarcerated. Also, the bill provides $113.5 million for HHS to provide grants to states to enhance continuity of care for Medicaid-eligible individuals who are being discharged from incarceration.
Permanent enactment of the option for states to provide Medicaid benefits to individuals who have short-term stays in an Institution for Mental Disease.
Requirement for states to include medication-assisted treatment (MAT) for substance use disorder in the Medicaid benefit.
Direction for HHS to produce guidance on opportunities to increase access to integrated behavioral health (BH) care in Medicaid.
New data collection requirements for Medicaid programs.

The text of the bill is available here.

Biden Delivers State of the Union Address
On March 7^th, President Biden delivered the 2024 State of the Union address. Biden used the speech to highlight progress on key policy issues over the past three years while outlining priorities for the final year of this term as well as a second term, should he be reelected. Health policies mentioned in the address included:

Enacting national protections for in-vitro fertilization;
Increasing the number of drugs for which Medicare can negotiate prices;
Allowing some drugs to qualify for negotiation sooner after market entry than currently permitted;
Extending Medicare’s inflation rebate policy to the commercial market;
Applying surprise billing rules to ground ambulance providers;
Expanding mental health coverage in Medicare and private insurance; and
Limiting the availability of “junk insurance” products, which is understood to refer to plans not compliant with Affordable Care Act (ACA) requirements.

Several of these policies are also addressed in additional detail in the President’s fiscal year 2025 budget request (below).

Biden Administration Releases FY 2025 Budget Request
On March 11^th, the Biden Administration released its annual budget request for federal Fiscal Year (FY) 2025. The President’s Budget carries no force of law, but signals the Administration’s priorities for funding and programming over the coming year. Budgets are messaging tools, particularly in a Presidential election year when Congress is still working to fund the current fiscal year and is highly unlikely to pass budget and spending bills before the November elections. Key health care proposals include:

Drug prices: The Budget proposes to increase the pace of drug price negotiation by bringing more drugs into negotiation sooner after they launch, expand the Inflation Reduction Act’s inflation rebates and $2,000 out-of-pocket prescription drug cost cap beyond Medicare and into the commercial market; and extend the $35 cost-sharing cap for a month’s supply of insulin to the commercial market.
Access: The Budget proposes to make permanent the expanded premium tax credits that the Inflation Reduction Act extended; provide Medicaid-like coverage to individuals in States that have not adopted Medicaid expansion; allow States to extend the existing 12-month continuous eligibility for all children to 36 months; and allow all States to provide continuous eligibility for children from birth until they turn age 6.
Medicare solvency: The Budget proposes to extend HI trust fund solvency indefinitely by increasing the Medicare tax rate on incomes above $400,000 and directing savings from proposed Medicare drug reforms into the HI trust fund.
HCBS: The Budget proposes to invest $150 billion over 10 years to improve and expand Medicaid home and community-based services (HCBS).
Behavioral Health: The Budget proposes to expand the 988 Suicide and Crisis Lifeline; expand mental health care and support services in schools; support the integration of behavioral health services into primary care settings; provide $1 billion to advance Health IT adoption for certain behavioral health providers; and commit $275 million over 10 years to increase the Department of Health and Human Services’ capacity to ensure that large group market health plans and issuers comply with mental health parity laws.
Family Planning/Maternal Mortality: The Budget proposes a 36 percent increase for the Title X Family Planning program, and $376 million to support the White House Blueprint for Addressing the Maternal Health Crisis to reduce maternal mortality and morbidity rates.

The next step in the federal budget process is for Congress to adopt a concurrent resolution to set budget parameters for the next fiscal year. The Congressional Budget Act of 1974 established April 15^th as a target date for Congress to adopt the budget resolution, though Congress regularly misses the targeted date.

More information is available here.

Providers Ask Congress to Extend Acute Hospital-at-Home Waiver Program
On March 11^th, a large stakeholder group of hospitals and health systems sent a letter to House Ways & Means Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA) that requests an extension of the Acute Hospital Care at Home waiver program. This program is scheduled to expire at the end of 2024 under current law. The program was created at the height of the Covid-19 pandemic to help alleviate hospital capacity strain, and allowed Hospital at Home programs to grow from 20 to over 300 hospitals across 129 health systems in 37 states.

The letter’s authors request an extension of at least five years for the program. They argue that clinical outcomes in the program have been “outstanding,” including “substantial reductions in adverse events, better patient and family experience, lower caregiver stress, better functional outcomes, high provider satisfaction, and lower costs of care.” Some notable organizations signing the letter included the American Medical Association, Mount Sinai Health System, and NYU Langone Health.

The letter is available here.

Federal Agencies

HHS Shares Updates on Change Healthcare Cyberattack
On March 15^th, the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) issued a “Dear Colleague” letter addressing the disruption caused by the Change Healthcare cybersecurity incident. In the letter, OCR announced that it is opening an investigation into Change Healthcare and UnitedHealth Group focused on the potential breach of protected health information (PHI) and the organizations’ compliance with Health Insurance Portability and Accountability (HIPAA) rules.

This action follows several others by HHS addressing the Change Healthcare attack, which began on February 21^st. On March 10^th, HHS Secretary Xavier Becerra released a letter to health care leaders noting the need for public-private partnerships to help health care providers in the wake of the cyberattack on Change Healthcare. Specifically, Becerra urged UnitedHealthcare, other insurers, clearinghouses, and other health care entities to take specific actions to mitigate negative effects of the Change Healthcare outage on patients and providers, particularly safety net providers, including:

Ensure expedited delivery of funds to affected providers;
Provide Medicaid agencies with a list of providers affected in their states;
Make interim payments to affected providers;
Simplify electronic data exchange requirements and timelines and accept paper claims; and
Pause prior authorizations and other utilization management requirements.

Also, on March 5^th, CMS announced that it would provide certain flexibilities for parties affected by the cyberattack. These included allowing providers to request new electronic data interchange enrollment as facilitated by their Medicare Administrative Contractor (MAC) and encouraging Medicare Advantage and Part D sponsors to relax some prior authorization and utilization management requirements.

The HHS OCR Dear Colleague is available here. Secretary Becerra’s March 10^th letter is available here. The March 5^th announcement is available here.

CMS Requests Comments on ACA Plan Quality Initiatives
The Centers for Medicare and Medicaid Services (CMS) is currently requesting comments for the 2024 Draft Call Letter for the Quality Rating System (QRS) and the Qualified Health Plan (QHP) Enrollee Experience Survey. This Draft Call Letter includes a number of refinements and changes, including modifications to the QRS measure set, updates to the QHP Enrollee Survey, changes to the Electronic Clinical Data System reporting, and new health equity initiatives.

To better address health disparities, CMS is proposing the addition of the Social Need Screening and Intervention (SNS-E), further screening and follow up for depression, and the expansion of mandatory stratified race and ethnicity data for five additional measures.

Interested parties may submit comments by March 28^th. The Draft Call Letter is available here.

CMS Issues Final Part One Guidance for Medicare Prescription Drug Plans
On February 29^th, CMS issued the final version of Part One of its guidance for the new Medicare Prescription Drug Plan. Beginning in 2025, the Medicare Prescription Drug Plan allows Medicare Part D beneficiaries to pay out-of-pocket costs in monthly payments, spread out over the course of the year (also known as “smoothing”). Part One of the guidance focuses on programmatic infrastructure, including outline requirements for plan sponsors, data collection, the opt-in process for beneficiaries, and participant protections.

CMS simultaneously released an Information Collection Request (ICR) for the program, seeking feedback before April 29^th. Separately, the draft Part Two guidance is also open for comment.

The guidance is available here.

ONC Coordinator Publishes Blog on Upcoming Interoperability Rules
On March 13^th, Micky Tripathi, the head of the Office of the National Coordinator for Health Information Technology (ONC), published a blog post entitled “Looking Forward: HTI-2 & ONC’s Commitment to Furthering the Vision of Better Health Enabled by Data.” The blog post previews the Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability Proposed Rule (HTI-2). It lays out several goals for the rule, including:

Improving public health IT via certification requirements for technology;
Proposing certification for application programming interfaces (APIs) used for electronic prior authorization and care coordination; and
Preventing health information blocking.

The blog post can be found here.

HHS and Other Agencies Release RFI on Consolidation in Health Care Markets
On March 5^th, HHS, in partnership with the Federal Trade Commission (FTC) and the Department of Justice (DOJ), announced a new cross-government public inquiry into consolidation in health care, particularly private equity and corporate ownership. The agencies issued a Request for Information (RFI) on the topic of deals (including non-reportable deals) by health systems, private payers, and/or private equity funds that increase consolidation. The RFI’s topics of inquiry include:

The effects of consolidation on patients, payers (public and private), providers (including their workforces), and employers who provide health insurance;
The claimed business objectives of transactions, and whether they are realized post-transaction;
Examples of notable transactions;
Potential actions the agencies should consider taking; and
Other impacts from such transactions.

This RFI builds on recent requests soliciting information on Medicare Advantage and pharmaceutical middleman groups. It is part of the Biden Administration’s broader efforts to address high health care costs.

The announcement is available here. The RFI can be found here.

CMS Announces Release of the Manufacturer RFA for the CGT Access Model
On March 7^th, CMS announced a Manufacturer Request for Applications (RFA) for the Cell and Gene Therapy (CGT) Access Model. The CGT Access Model, which was announced in January, will initially focus on treatments and therapies for sickle cell disease. This RFA is open to manufacturers who have a gene therapy approved or licensed by the Food and Drug Administration (FDA). CMS is accepting applications through May 1^st.

The RFA is available here.

Other Updates

MACPAC Holds March 2024 Meeting
On March 7^th and 8^th, the Medicaid Access and Payment Advisory Commission (MACPAC) convened for its monthly public meeting. Commissioners discussed the following topics:

Transparency of Medicaid Financing: Commissioners generally supported requiring states to submit an annual, comprehensive report on their Medicaid and CHIP financing methods.
HCBS: Commissioners were mixed on whether Congress should increase the waiver renewal period beyond five years, and generally opposed a recommendation that Congress remove cost neutrality requirements for such waivers.
State Medicaid Agency Contracts: Commissioners generally supported a recommendation for Medicaid agencies to require Medicare Advantage dual eligible special needs plans (D-SNPs) to regularly submit data on care coordination and encounters for purposes of monitoring and oversight.
Health-Related Social Needs: Commissioners heard a panel discussion on incorporating health-related social needs (HRSN) services into Medicaid benefits and discussed the potential return on investment of New York and Oregon’s Section 1115 waiver demonstrations.

More information is available here.

MedPAC Holds March 2024 Meeting
On March 7^th and 8^th, the Medicare Payment Advisory Commission (MedPAC) convened for its monthly public meeting. Commissioners discussed the following topics:

Medicare Advantage Utilization: Commissioners were generally interested in improving measurement of health care utilization in Medicare Advantage. They expressed specific interest in using Medicare Administrative Contractors (MACs) to increase the completeness of such data.
Medicare Advantage Quality: Commissioners expressed support for reforming data processes and better assessing quality in Medicare Advantage plans.

More information is available here.

Whistleblower Accuses Aledade of Fraud
Earlier this month, news organizations reported on the recent unveiling of a whistleblower lawsuit against Aledade, the nation’s largest independent network of primary care medical practices. The civil suit alleges that the company engaged in Medicare fraud by “rigging” its software and billing apps to make patients appear to be sicker than they were by adding overstated medical diagnoses to their records. According to the suit, the company explicitly instructed physicians to upcode in order to fraudulently boost revenues. The case is now pending in court, and Aledade is expected to file a response shortly. A company spokesperson said that “the whole case is totally baseless and meritless.”

CVS and Walgreens to Start Dispensing Mifepristone
This month, the nation’s largest pharmacy chains, CVS and Walgreens, announced that they will begin dispensing mifepristone pills in select states. CVS and Walgreens have been certified by the Food and Drug Administration (FDA) to dispense mifepristone, following the FDA’s rule change last year that increased access to the treatment. Walgreens has begun dispensing the treatment in New York, Pennsylvania, Massachusetts, California, and Illinois, while CVS has begun dispensing in Massachusetts and Rhode Island. These states are among those where medication abortions are legal. The chains are planning to gradually expand to other states where abortion is legal and pharmacies are legally protected in the dispensing of abortion pills.

New York State Updates

DFS Issues Guidance to Insurance Plans on Handling Change Healthcare Cyberattack
On March 8^th, the New York State (NYS) Department of Financial Services (DFS) issued guidance to regulated insurance plans regarding the suspension of certain utilization review requirements, appeal and claim submission timeframes, and eligibility verifications as a result of the Change Healthcare cyberattack. Specifically, the guidance directs insurance plans to:

Suspend preauthorization, concurrent, and retrospective review requirements for providers that use or rely on Change Healthcare for such authorizations/reviews;
Toll the timeframes for providers to submit internal and external appeals, reconsiderations, and claims if the cyberattack has an adverse impact on the provider’s ability to comply with these timeframes; and
Waive a provider’s contractual obligations to verify an individual’s eligibility for coverage for providers that use or rely on Change Healthcare for this function.

These requirements must remain in effect until providers can use Change Healthcare again for these functions or upon notification from the provider that the suspension is no longer needed because the provider has secured an alternative vendor or the insurance plan develops an acceptable workaround solution. Providers are required to provide signed certification (form available here) to the insurance plan that the suspension or tolling of these requirements is necessary as a result of the cyberattack.

Insurance plans should also work with providers to ensure that there are no delays in access to health care services or prescription drugs for members, and to minimize and resolve payment delays as a result of the cyberattack. For providers experiencing cash flow disruptions, the State encourages plans to work with the provider to develop a mutually acceptable plan for assistance to avoid any disruption of services, including through the provision of periodic interim payments.

The Governor’s press release is available here. The DFS guidance is available here. Questions may be submitted to health@dfs.ny.gov. The NYS Office of Mental Health (OMH) and Office of Addiction Services and Supports (OASAS) have also released a resource sheet and FAQ document regarding the cyberattack, which is available here.

OMH Requests Comment on Guidance for Outpatient Providers Collaborating with Hospitals on Admissions and Discharges
On March 4^th, OMH issued for public comment draft guidance for outpatient treatment, residential, and care management programs on best practices and expectations for collaborating with hospitals on admissions and discharge practices for individuals with behavioral health presentations. The draft guidance builds upon previously issued guidance for hospitals (here) and corresponding proposed regulations from OMH (here) and DOH (here).

The draft guidance covers the following topics by organization type (programs are classified in the appendix):

Communication and collaboration with hospital providers, including identifying staff who are responsible for communicating with hospital staff and providing relevant records/information;
Coordinated after-care and discharge planning, including specific timeframes in which certain programs must offer follow-up appointments after discharge; and
Referrals of new individuals from hospitals to community providers.

The draft guidance is available here. Feedback on the draft guidance may be submitted to planning@omh.ny.gov through March 18^th.

DOH Announces Approval of Section 1332 Waiver that Expands Eligibility for the Essential Plan
On March 1^st, the NYS Department of Health (DOH) announced federal approval of the State’s Section 1332 State Innovation Waiver application that will use existing federal funding to expand eligibility for the Essential Plan. Effective April 1^st, eligibility for the Essential Plan will now include adults (ages 19-64) with incomes between 200% and 250% of the Federal Poverty Level (FPL). On August 1^st, the expanded eligibility will be extended to individuals with Deferred Action for Childhood Arrivals (DACA) status. For this expanded population (between 200% and 250% FPL), there will be no monthly premium, no deductible, limited cost-sharing, and an out-of-pocket maximum of $2,000. There will be no changes for current Essential Plan enrollees. New York has projected that, once the expansion is fully implemented, over 100,000 new individuals will be covered under the Essential Plan, including over 20,000 who would have otherwise been uninsured.

The State intends to use pass-through savings derived from the Waiver to support grants that address the social determinants of health and behavioral health needs of Essential Plan enrollees. The State has specified that such grants may be used for:

Food insecurity (e.g., medically tailored meals, food pharmacies, and personalized coaching);
Preparing for climate change by providing air conditions to enrollees with persistent asthma and helping communities prepare for extreme weather;
Knowledge sharing, including provider training on mental health services and social determinants of health; and
Incentives for insurers to provide improved access to behavioral health services, including mobile crisis units, crisis diversion centers, and crisis respite centers.

The State also included an Insurer Reimbursement Implementation Plan (IRIP) to alleviate premium increases in the Qualified Health Plan (QHP) market as a result of individuals transitioning from QHP coverage to Essential Plan coverage.

The Governor’s press release is available here. Additional details on the 1332 waiver are available here.

DOH Adopts Regulations Updating Adult Home Quality Improvement Committee Requirements
On March 13^th, the New York State (NYS) Department of Health (DOH) adopted final regulations to update the quality improvement committee requirements for Adult Homes and residences for adults. The updated regulations require the development of plans for quality assurance activities, including infection control standards, and within such plans require the creation of a quality improvement committee. The quality improvement committee will be charged with meeting at least every six months to review findings from the facility’s monitoring of their plans, evaluate the effectiveness of corrective action policies, and identify trends and improvement activities. The committee will include the administrator or operator of the facility, the resident council president or other resident representative, and representatives from frontline employees from each area of operation.

The final regulations are available here.

OMH Issues Proposed Amendments to Regulations for Residential Treatment Facilities (RTFs)
On March 13^th, the NYS Office of Mental Health (OMH) issued proposed updates to the regulations for Residential Treatment Facilities (RTFs). In addition to technical amendments, the proposed changes would remove the pre-admission certification committee (PACC) process in favor of a more streamlined and centralized application process. The regulations also update staffing, timeframe, and eligibility requirements, including processes for children designated as priority applications for admission.

The proposed regulations are available here. Public comment may be submitted to regs@omh.ny.gov through May 11^th.