In this update:
- Federal Agencies
- CMMI Updates AHEAD Hospital Global Budget Methodology
- HHS Reorganizes to Increase the ONC’s Scope to Include All Technology Policy
- CMS Seeks to Stop Unauthorized Broker Activity in Marketplaces; Senator Wyden Introduces Legislation Applying Criminal Penalties
- CMS Announces Marketplace Insurers Will Pay $10.3 Billion Under Risk Adjustment Program
- Ready, Set, PrEP to Cease Enrollments on July 30th
- ONC Releases USCDI Version 5
- Other Updates
- AMA Publishes Survey on Physician Burnout
- New York State Updates
- OASAS Seeks Feedback on Draft 2025-2029 Strategic Plan
Federal Agencies
CMMI Updates AHEAD Hospital Global Budget Methodology
On July 24th, the Center for Medicare and Medicaid Innovation (CMMI) held a second webinar on the AHEAD program, which will enable participating states to implement hospital global budgets (HGBs) in Medicare fee-for-service and across other payers. The webinar provided updates on the methodology to calculate hospital global budget amounts in Medicare. Key changes from the first version, released in February, include:
- HGB Baseline: CMMI shifted the baseline period for global budget calculations forward by six months. For a hospital beginning payment through global budgets in January 2026, the baseline revenue period will now run from July 2022 through June 2025. For To account for any claims for the 2025 year that are incurred but remain unpaid as of the calculation of the baseline, CMMI will employ a completion factor.
- Part B Drugs: CMMI revised the carve-out of Part B drugs to only exclude cancer drugs and antineoplastics, which staff said are a significant and highly variable portion of hospital spending.
- Annual Payment Adjustment (APA): CMMI makes two changes to the proposed trend factors to adjust the budget year-over-year:
- First, CMMI will use a “higher of” policy for uncompensated care (UCC) and disproportionate share hospital (DSH) payment adjustments. In each case, CMS will select the higher of the factors that would apply to either the new performance year or the previous year. For example, in calculating a hospital’s budget in 2027, CMS will apply the DSH Operating and Capital Adjustment Factors from either 2026 or 2027 (whichever is higher) and the UCC Per Claim Amount from either 2026 or 2027 (whichever is higher).
- Second, CMMI will accelerate the effect of the market basket and other updates from its annual IPPS and OPPS rules on HBGs to align with the current October schedule. For example, in 2027, CMMI will make an additional one-time payment to reflect the increased IPPS and OPPS rates from the period between October 2026 and January 2027 that go into effect due to the 2027 IPPS and OPPS rules (published around August).
- Stability of the Demographic Adjustment: CMMI will no longer apply a post-performance year modification to the Demographic Adjustments. Previously, CMMI had proposed to apply a “forecast correction” that would have changed the next year’s Demographic Adjustment to account for actual counts and HCC scores experienced during a performance year. This change will eliminate the possibility of a hospital’s global budget being retrospectively decreased due to demographic changes.
- AHEAD-specific adjustments: Under the new methodology, the same geographic delineations will be used for the Total Cost of Care, Social Risk, and Market Shift Adjustments.
- Market Shift Adjustment: CMMI will add a 120-mile distance threshold for the Market Shift Adjustment to exclude long distance outliers.
- Social Risk Adjustment: CMMI will standardize the area deprivation index (ADI) to account for varying housing prices. This is intended to account for ADIs that are lower than otherwise expected in urban areas with high housing prices.
- Critical Access Hospitals: The HGBs will set a payment floor for Critical Access Hospitals of 101 percent of what Medicare FFS would have paid, in line with CAH policy.
Slides from the webinar are available here.
HHS Reorganizes to Increase the ONC’s Scope to Include All Technology Policy
On July 25th, the Department of Health and Human Services (HHS) announced a reorganization of its technology, cybersecurity, data, and artificial intelligence strategy and policy functions. Today, these functions are distributed across the Office of the National Coordinator for Health Information Technology (ONC), the Assistant Secretary for Administration (ASA), and the Administration for Strategic Preparedness and Response (ASPR). Under the reorganization, ONC will be renamed the Assistant Secretary for Technology Policy and Office of the National Coordinator for Health Information Technology (ASTP/ONC), and all of the Department’s technology, data, and AI policy and strategy will move to ASTP/ONC. The HHS positions of Chief Technology Officer, Chief Data Officer, and Chief AI Officer will also move to ASTP/ONC.
Micky Tripathi, currently the National Coordinator for Health Information Technology, will take on two additional titles: Assistant Secretary of Technology Policy and the Acting Chief AI Officer. HHS will launch searches to permanently fill the roles of Chief Technology Officer, Chief AI Officer, and Chief Data Officer.
More information on the reorganization is available here.
CMS Seeks to Stop Unauthorized Broker Activity in Marketplaces; Senator Wyden Introduces Legislation Applying Criminal Penalties
On July 19th, the Centers for Medicare & Medicaid Services (CMS) announced its intention to block unauthorized broker activity on the Federally-facilitated Marketplace (FFM). Effective July 19th, CMS will block any agent or broker from making changes to a consumer’s FFM enrollment unless that individual has an established association with the consumer’s enrollment. Even with their consent, an agent or broker must take additional steps to update a consumer’s FFM enrollment while new agents or brokers will be required to participate in a three-way call with the consumer and CMS. In the first six months of 2024, CMS has received 134,368 complaints of situations in which a consumer claims to be the victim of unauthorized enrollment and 73,884 complaints of situations in which a consumer claims to be a victim of unauthorized plan switches.
In addition, on July 24th, Senate Finance Committee Chairman Ron Wyden (D-OR) introduced legislation to apply criminal penalties to insurance brokers who change an enrollee’s marketplace plan without their knowledge or consent. The bill, the “Insurance Fraud Accountability Act,” would impose civil penalties of up to $50,000 on agents and brokers for submitting incorrect information, holds agents and brokers criminally responsible for knowingly and willfully providing false or fraudulent information, and requires the HHS Secretary to establish a consent verification process for new enrollments and coverage changes, among other changes.
The CMS announcement is available here. More information on Senator Wyden’s bill is available here.
CMS Announces Marketplace Insurers Will Pay $10.3 Billion Under Risk Adjustment Program
On July 22nd, CMS released a summary report on risk adjustment transfers in the individual and small group market for the 2023 benefit year. Overall, insurers will transfer approximately $10.3 billion under the risk adjustment program in 2023. While this amount is an 11.5% increase over 2022, total payments are 10.4% less as a share of premiums than they were last year.
In the New York market, total risk transfers across all insurers amounted to $82 million in the individual market and $202 million in the small group market. The largest beneficiary of transfers was UnitedHealthcare, with $18 million in the individual market and $127 million in the small group market.
The report is available here.
Ready, Set, PrEP to Cease Enrollments on July 30th
On July 30th, Ready, Set, PrEP, a federal HHS program that provides free PrEP HIV-prevention medications, will cease enrollments. The program was launched in 2019 as part of a Trump Administration initiative to reduce HIV transmissions by 90% by 2030. It accepted individuals without health insurance coverage as long as they have a prescription for PrEP, but never functioned as a comprehensive solution to reaching its intended population. In stopping enrollments, HHS noted that cheaper generics have made PrEP far more accessible than it was several years ago, and that many states have created their own programs to help individuals afford the treatment. Ready, Set, PrEP will continue to provide free PrEP to current enrollees.
More information on the program is available here.
ONC Releases USCDI Version 5
On July 18th, ONC released the fifth version of the United States Core Data for Interoperability Version 5 (USCDI v5). USCDI is a standardized set of data elements developed by ONC to support interoperable health information exchange. Its fifth release is informed by stakeholder feedback collected earlier this year. USCDI v5 adds new data classes, new elements in existing data classes, and clarifies definitions and uses. Specifically, it introduces:
- New data classes:
- The Observation data class, which has Advance Directive Observation and Sex Parameter for Clinical Use as its data elements.
- The Orders data class, which includes the five data elements of Medication, Laboratory, Diagnostic Imaging, Clinical Test, and Procedure.
- Additions to existing data classes:
- Emergency Department Note and Operative Note is added to the Clinical Notes data class.
- Interpreter Needed, Pronouns, and Name to Use is added to the Patient Demographics/Information data class.
- Author and Author Role is added to the Provenance data class.
- Lot Number is added to the Immunizations data class.
- Route of Administration is added to the Medication data class.
ONC’s full announcement is available here.
Other Updates
AMA Publishes Survey on Physician Burnout
On July 2nd, the American Medical Association (AMA) released survey data on physician burnout from 2023. The survey found that 48.2% of physicians reported experiencing at least one symptom of burnout in 2023, after peaking at 62.8% in 2021. With this, physician burnout rates dipped below 50% for the first time since the start of the Covid-19 pandemic. The AMA surveyed physicians across several domains, finding that job satisfaction improved and physicians felt more valued with an accompanying drop in job stress. While this is a step in the right direction, leaders at the AMA insist that executive leaders must maintain their commitment to organizational well-being, particularly given the considerable cost of turnover; researchers estimate that each physician who leaves due to burn out costs the system between $500,000 and $1 million.
The announcement is available here.
New York State Updates
OASAS Seeks Feedback on Draft 2025-2029 Strategic Plan
The New York State (NYS) Office of Addiction Services and Supports (OASAS) is seeking input on its draft five-year Strategic Plan. The draft Strategic Plan, which covers 2025-2029, aims to optimize outcomes for New Yorkers impacted by addiction by supporting and developing the addiction service provider system. OASAS will host the following webinars on the Strategic Plan:
The draft Strategic Plan is available here. Feedback may be provided using the electronic form here.