Weekly Health Care Policy Update – July 25, 2022

August 1, 2022

In this update: 

  • Covid-19 Updates
    • Covid-19 Public Health Emergency Extended Through October 13th
    • CDC Recommends Novavax Covid-19 Vaccine for Adults
  • Federal Agencies
    • CMS Issues 2023 OPPS and ASC Proposed Rule
    • CMMI Releases White Paper Summarizing Evaluations of 21 Medicare Models
    • CMS Publishes HCBS Quality Measure Set
    • ONC Publishes Third Version of USCDI Data Standard
    • HHS Elevates ASPR to Operating Division Status
    • DoJ Announces Telehealth Fraud Charges of $1.2 Billion, HHS OIG Issues Telehealth Fraud Alert
    • HRSA Distributes $43 Million to Health Center Controlled Networks
  • Other Updates
    • CDC Analysis Shows Widening Disparities in Overdose Deaths
  • New York State Updates
    • Governor Hochul Announces Covid-19 “Fall Action Plan” and RFP to Review NYS Pandemic Response
    • DFS Issues Guidance on Utilization Review Requirements and Best Practices
    • Governor Hochul Signs Legislation on Studying Disparities in Postpartum Depression Screening
  • Funding Opportunities
    • DOH Announces SOI for $15 Million for Abortion Services Expansion
    • HRSA Announces Registered Nurse Training Program Funding Opportunity
    • HRSA Issues Additional FY 2023 FQHC Service Area Competition

Covid-19 Updates

Covid-19 Public Health Emergency Extended Through October 13th
On July 15th, Secretary of Health and Human Services (HHS) Xavier Becerra renewed the public health emergency (PHE) declaration for an additional 90 days, until October 13th. HHS has previously indicated its intent to provide stakeholders with 60 days’ notice before the end of the PHE, meaning any decision to end the PHE in October would be announced by August 14th. The extension continues the various temporary authorities provided by the PHE, including requirements for State Medicaid programs to provide continuous enrollment to continue receiving an increased federal medical assistance percentage (FMAP), waivers of Medicare telehealth restrictions, and more.
 
The formal PHE declaration is available here.
 
CDC Recommends Novavax Covid-19 Vaccine for Adults
On July 19th, the Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices voted unanimously to recommend Novavax’s Covid-19 vaccine. The recommendation follows the Food and Drug Administration’s (FDA) decision to issue an Emergency Use Authorization (EUA) for the Novavax vaccine for individuals aged 18 years and older on July 13th. CDC Director Rochelle Walensky accepted the recommendation shortly after the vote. The Novavax vaccine is the fourth Covid vaccine to be made available in the United States, but is already in use in 170 other countries.

Federal Agencies

CMS Issues 2023 OPPS and ASC Proposed Rule
On July 15th, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for the calendar year (CY) 2023 Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgery Center (ASC) payment rates.
 
Overall, the rule proposes that payment rates to hospitals and ASCs that meet quality reporting requirements would increase by 2.7% relative to 2022 rates. This update is based on the projected hospital market basket percentage increase of 3.1%, reduced by 0.4 percentage point for the productivity adjustment. In addition, and as a result of the COVID-19 public health emergency (PHE), CMS is proposing to use June 2020 cost report and CY 2021 data to set CY 2023 OPPS and ASC payment system rates. If finalized, CMS estimates that total payments to OPPS providers would be roughly $86.2 billion in CY 2023 — an increase of $6.2 billion from estimated CY 2022 payments — and total payments to ASCs would be approximately $5.4 billion — an increase of $130 million CY 2022 estimated payments.
 
The proposed rule’s provisions include:
 
Rural Emergency Hospitals

  • Implementing proposals related to Rural Emergency Hospitals (REHs), a new Medicare provider type available January 1, 2023. These include a monthly payment to each REH totaling about $3.2 million per year and a five percent bonus for each covered outpatient department service furnished by an REH in addition to the standard OPPS payment rate.

340B Drug Reimbursement

  • Setting the payment rate of the average sales price (ASP) minus 22.5% for drugs and biologicals acquired through the 340B Program. However, CMS expects that the final version of the CY 2023 rule will need to apply the pre-2018 rate of ASP plus 6% in the CY 2023 final rule due to the U.S. Supreme Court’s recent decision in American Hospital Association v. Becerra.CMS would also decrease the conversion factor to maintain OPPS budget neutrality. CMS continues to evaluate how to apply the Supreme Court decision to prior calendar years.

Telehealth

  • Considering as covered outpatient services (for which payment is made under the OPPS) behavioral health services that are furnished remotely by clinical staff of hospital outpatient departments, including staff of critical access hospitals (CAHs), through the use of telecommunications technology to beneficiaries in their homes. Currently, this flexibility is available through the PHE-specific policy referred to as Hospitals Without Walls (HWW), but the emergency waivers that enable this flexibility will expire when the PHE ends.

Site Neutral Payments

  • Creating an exemption from current site-neutral payment rules for rural sole community hospitals (SCHs). As a result, Medicare will pay for clinic visits furnished in excepted off-campus provider-based departments (PBDs) rural SCHs at the full OPPS rate, rather than the physician payment rate for other PBDs.

ASCs

  • Adding one procedure, a lymph node biopsy or excision, to the ASC Covered Procedures List (CPL).
  • Allowing separate payment in the ASC setting for four non-opioid pain management drugs that function as surgical supplies, including certain local anesthetics and ocular drugs, in order to eliminate financial disincentives to using these non-opioid pain management drugs in the ASC setting.

Other

  • Making payment adjustments to offset additional costs of procuring domestically made surgical N95 respirators, to incentivize domestic production.
  • Removing 10 services from the inpatient only (IPO) list after determining that these codes meet the current removal criteria.
  • Making Minor changes to the Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR), including making a cataract-related measure voluntary due to ongoing Covid-19-related issues.
  • Proposing a new method of accounting for research organs intended to improve payment accuracy and lower procurement costs.
  • Maintaining the existing rate structure under the Partial Hospitalization Program (PHP) with a single PHP Ambulatory Payment Classification (APC) for each provider type, for days with three or more services per day. Consistent with OPPS, CMS proposes to use the CY 2021 claims data, but use the cost information from prior to the COVID-19 PHE.
  • Requiring prior authorization for an additional service category: Facet Joint Injections and Nerve Destruction.

Star Ratings

  • Proposing to use publicly available measure results on Hospital Compare from a quarter within the prior twelve months (instead of the “prior year”) and conveys that although it intends to publish Overall Hospital Quality Star Ratings in 2023, CMS may apply the suppression policy discussed in the CY 2021 OPPS/ASC proposed rule should data analysis demonstrate that the COVID-19 PHE substantially affects the underlying measure data.

Requests for Comment

  • CMS seeks comments on specific payment approaches for Software as a Service (SaaS)-type technology, the potential for bias in algorithms and predictive modeling, and how to encourage software developers to prevent or mitigate the possibility of bias in new applications of this technology.
  • CMS seeks comment on several measures under consideration for the new Rural Emergency Hospital Quality Reporting (REHQR) Program, as well as on topics of interest for the REHQR Program for future rulemaking, including rural behavioral/mental health, rural maternal health, and rural telehealth services.
  • CMS requests information on how to promote transparency and inform potential future organ acquisition payment policy.

The proposed rule is available here. Comments on the proposed rule are due September 13th, and the final rule is anticipated in November. A fact sheet is available here; a press release is available here; and a fact sheet on provisions relating to Rural Emergency Hospitals is available here.
 
CMMI Releases White Paper Summarizing Evaluations of 21 Medicare Models
On July 20th, the CMS Innovation Center (CMMI) released a white paper that synthesizes the evaluation results of 21 Medicare payment model tests from the period 2012 through 2020. The paper is intended to provide a broad understanding of themes CMMI discovered across its initial wave of models. Notable findings in the paper include:

  • Most of the models (14 of the 21) demonstrated gross savings to Medicare. However, the 18 models that paid financial incentives to participants were equally split among showing net savings, net losses, and no impact (six models each).
  • Quality, measured through self-reported experience of care or through mortality, was largely unchanged in most models.
  • All of the models that focused on acute or specialty care (e.g., Bundled Payments for Care Improvement) or targeted populations (e.g., the Comprehensive ESRD Care Model) showed gross savings to Medicare, and almost all reduced utilization overall, particularly post-acute care utilization.
  • Only five of twelve primary care and population management models (e.g., the Comprehensive Primary Care initiatives) showed gross savings to Medicare.
  • “Generous” financial incentive payments encouraged participation but made it more difficult to show net savings to Medicare.

The paper notes that “longer time windows” may be necessary to see more meaningful effects from investments in infrastructure in the context of primary care or population management models.
 
The full paper is available here.
 
CMS Publishes HCBS Quality Measure Set
On July 21st, CMS published a State Medicaid Director (SMD) letter announcing the publication of a national set of quality measures for Medicaid home and community-based services (HCBS). This SMD letter contains the first standardized measure set for HCBS, including the list of measures and additional information about how they may be implemented. Measures are organized by the type of 1915(c) assurance and subassurance they pertain to (e.g., service plan requirements).
 
CMS plans to shortly issue a second guidance document describing how states can use the measure set as part of their HCBS quality measurement activities. States are not yet required to use the measure set, but CMS strongly encourages them to incorporate it into reporting requirements for relevant programs.
 
The SMD letter is available here.
 
ONC Publishes Third Version of USCDI Data Standard
On July 19th, the Office of the National Coordinator for Health Information Technology (ONC) published an official Version 3 of the United States Core Data for Interoperability (USCDI v3). The USCDI is a standardized set of health data classes and constituent data elements for nationwide, interoperable health information exchange. ONC published a draft version of the USCDI v3 in January and received over 800 public comments.
 
The finalized USCDI v3 expands upon USCDI v2 by adding two new data classes, as follows:

  • Health Insurance Information, which allows the capture of standardized insurance coverage information such as coverage status, relationship to subscriber, identifiers, and coverage type; and
  • Health Status/Assessments, which includes information such as disability status, mental/cognitive status, functional status, and pregnancy status.

Overall, USCDI v3 adds 24 specific data elements across six data classes, including 13 elements in the two new classes and 11 elements across four existing classes (laboratory, medications, patient demographics/information, and procedures).
 
The full document is available here. ONC is also now accepting submissions for data classes and elements to be considered in the next version, USCDI v4, through September 30th.
 
HHS Elevates ASPR to Operating Division Status
On July 20th, the Assistant Secretary for Preparedness and Response (ASPR), Dawn O’Connell, announced that HHS will elevate ASPR from a staff division to an operating division. This move will place the new division, which will be renamed as the Administration for Strategic Preparedness and Response, on par with other standalone operating divisions within HHS, such as the CDC or CMS. The change is intended to equip ASPR to more quickly coordinate a national response to future disasters and emergencies and provides the division with additional hiring and contracting authorities. The changes will be phased in over the next two years.
 
A copy of O’Connell’s memo to staff, obtained by the Washington Post, is available here.
 
DoJ Announces Telehealth Fraud Charges of $1.2 Billion, HHS OIG Issues Telehealth Fraud Alert
On July 20th, the Department of Justice (DoJ) announced criminal charges against 36 individuals in 13 federal districts across the country for more than $1.2 billion in alleged health care fraud involving telehealth, genetic testing, and durable medical equipment. The DoJ alleges that the clinical labs paid kickbacks and bribes in exchange for referrals from providers working with telehealth and digital health companies. One of the alleged schemes identified by DoJ involved a telemarketing company that deceived Medicare beneficiaries into agreeing to cardiovascular genetic testing and telehealth companies that allegedly arranged for providers to order the tests with little to no patient interaction.
 
In conjunction with the DoJ’s announcement, the HHS Office of the Inspector General (OIG) released a Special Fraud Alert which urges practitioners to “use heightened scrutiny” when entering arrangements with purported telehealth, telemedicine, or telemarketing services, because of the potential implications for anti-kickback violations.
 
A press release from the DoJ is available here. The HHS OIG Special Fraud Alert is available here.
 
HRSA Distributes $43 Million to Health Center Controlled Networks
On July 19th, the Health Resources and Services Administration (HRSA) announced the distribution of over $43 million to 49 Health Center Controlled Networks (HCCNs) to “improve care quality, reduce health disparities, and engage in value-based care delivery through the use of technologies.” HCCNs are networks of health centers that work together to strengthen and leverage health information technology to improve operational and clinical practices. The funding is intended to increase use of digital health tools such as electronic health records, telehealth, patient portals, and electronic registries.
 
In New York, funding recipients included the Community Health Care Association of New York State and the Health Center Network of New York. More information is available here.

Other Updates

CDC Analysis Shows Widening Disparities in Overdose Deaths
On July 19th, the CDC released new data on overdose deaths that indicate widening racial and ethnic disparities in mortality. While overdose deaths rose 30% overall between 2019 and 2020, rates rose 44% for Black individuals and 39% among American Indian and Alaska Native people. Rates rose roughly 22% for white, Asian or Pacific Islander, and Hispanic populations. Black individuals suffered the highest rate of overdose deaths over the study period, at 39 deaths per 100,000, followed by American Indian or Alaska Native individuals, at 36 per 100,000. The report is based on data from 25 states and the District of Columbia.
 
The full analysis is available here.

New York State Updates

Governor Hochul Announces Covid-19 “Fall Action Plan” and RFP to Review NYS Pandemic Response
On July 20th, Governor Hochul announced several new initiatives to support the State’s ongoing response to the Covid-19 pandemic. As part of this effort, the State is preparing a “Fall Action Plan” to address potential pandemic surges later this year. The Action Plan will focus on the following: 

  • Return to school strategy;
  • Increasing vaccinations and boosters;
  • Frequent and early testing through the distribution of at-home test kits;
  • Increased access to treatment through test-to-treat sites and statewide treatment hotline;
  • Stockpiles of personal protective equipment (PPE);
  • Strengthening the hospital systems through the current Surge Operations Center; and
  • Coordinating with federal and local partners.

Additionally, Governor Hochul announced a Request for Proposals (RFP) for an organization to develop a pandemic “After-Action Review” to assess the State’s response to the Covid-19 pandemic. The Review will identify strengths, best practices, and areas for improvement and will serve as a guide for the State to response to future emergencies, including pandemics and natural disasters.
 
The Governor’s press release is available here. The RFP is available here.
 
DFS Issues Guidance on Utilization Review Requirements and Best Practices
On July 20th, the New York State Department of Financial Services (DFS) issued guidance to regulated health insurance plans, utilization review agents, and providers reminding such entities about utilization review requirements and providing recommendations for best practices. Specifically, the guidance outlines requirements and best practices related to: 

  • Delegation of utilization review;
  • Clinical review criteria;
  • Preauthorization;
  • Peer-to-peer reviews for hospital services;
  • Electronic transmission of documents;
  • Designees; and
  • Grievances and utilization review notifications.

Best practices were developed by the Health Care Administrative Simplification Workgroup, composed of consumer groups, providers, insurance plans, and other stakeholders. Questions may be submitted to health@dfs.nys.gov.
 
Governor Hochul Signs Legislation on Studying Disparities in Postpartum Depression Screening
On July 19th, Governor Hochul signed legislation (S7753/A9102) that requires the Office of Mental Health (OMH) and Department of Health (DOH) to conduct a study and prepare a report that will: 

  • Identify any racial disparities within protocols and screening measures for postpartum depression; and
  • Review current protocols and screening measures used to identify postpartum depression and other issues.

OMH and DOH will submit a report to the State that will include the study’s findings, as well as specific recommendations for improving postpartum depression testing and other maternal health testing and/or screening.

Funding Opportunities

DOH Announces SOI for $15 Million for Abortion Services Expansion
On July 22nd, DOH released a Solicitation of Interest (SOI) for the second phase of its Abortion Provider Support Fund. This fund seeks to ensure continued access to abortion following the Dobbs v. Jackson decision. DOH previously awarded $10 million to facilities with existing participation in the State’s Comprehensive Family Planning and Reproductive Health Program. The remaining balance of the fund, $15 million, will be awarded through this Phase 2 SOI, with $10.5 million going to organizations in Western New York, the Southern Tier, and New York City, and the remainder allocated to the rest of the state.
 
Eligible applicants for the SOI are Article 28 licensed facilities or appropriately licensed health care practitioners. Providers with experience in abortion services in the last twelve months will be prioritized, but those without experience may also be considered. Applicants will be eligible for a base award of $300,000 and an additional amount, based either on operating multiple distinct sites ($50,000 per site) or on volume of abortions performed in the last year. Awards must be used to increase access to abortion services and not to supplant existing funding; eligible expenses include new staff, training, equipment, and other costs associated with abortion service provision.
 
The SOI is available here. Applications are due August 12th. Questions may be submitted to nysabortionaccess@health.ny.gov through July 29th.
 
HRSA Announces Registered Nurse Training Program Funding Opportunity
On July 20th, the Health Resources & Services Administration announced a funding opportunity for the 2022 Nurse Education, Practice, Quality, and Retention (NEPQR) Registered Nurse Training Program (RNTP). The NEPQR-RNTP program aims to increase the number of nursing students trained in acute care settings to address and manage social determinant of health factors and improve health equity and health literacy in underserved areas. Through this opportunity, HRSA will award $4.75 million in total annual funding across 13 awards during the three-year program period.
 
Eligible applicants are accredited schools of nursing, health care facilities (including federally qualified health centers or nurse-managed health clinics), or a partnership of such a school and facility. Schools of nursing must be an accredited public or private not-for-profit school.
 
Additional details are available here. Applications are due on August 19th.
 
HRSA Issues Additional FY 2023 FQHC Service Area Competition
On July 14th, HRSA posted a new Service Area Competition (SAC) opportunity for fiscal year (FY) 2023. Through the SAC, organizations may apply to participate in the federally qualified health center (FQHC) program by taking over a grant in an existing service area. FQHCs are typically approved for a three-year period and, if they seek to renew, must reapply to the SAC. For this opportunity, there are additional SACs open in New York City, Long Island, and Westchester.
 
Applications are due September 12th. More information is available here.