Weekly Health Care Policy Update – January 17, 2023

January 24, 2023

In this update: 

  • Federal Agencies
    • HHS Extends Covid-19 Public Health Emergency
    • CMS Announces ACO REACH and KCC Participants for 2023
    • CMS Issues Memorandum and Timeline for Medicare Drug Price Negotiation Program
    • CMS to Hold National Stakeholder Call on January 24th
    • CMS Awards 200 Medicare-Funded Residency Slots
  • Other Updates
    • U.S. District Court Rules HHS Must Repay 340B Hospitals, But Does Not Specify How
  • New York State Updates
    • Governor Hochul Issues 2023 State of the State Proposals
    • OMH Updates Guidance on Article 31 Clinics Applying for Intensive Outpatient Program
    • CMS Approves Evaluation Design for New York’s Covid-19 Retroactive Risk Mitigation Program
    • NYSOFA Issues Proposed Rule Updating Nutrition Program Regulations
  • Funding Opportunities
    • SAMHSA Offers $18 Million for the 2023 Medication-Assisted Treatment Prescription Drug and Opioid Addiction Program
    • DOH Releases RFA on Outreach for Prostate Cancer Screening to Older Black Men

Federal Agencies

HHS Extends Covid-19 Public Health Emergency
On January 11th, Secretary of Health and Human Services (HHS) Xavier Becerra announced a 90-day renewal of the Covid-19 public health emergency (PHE). The declaration will now expire on April 11th, unless renewed again. However, reports have indicated that the Administration intends to notify stakeholders in early February that this will be the final extension of the PHE.
 
Because of legislative provisions in the 2022 year-end omnibus bill, the end of the PHE is no longer tied to various health policy provisions, including the current Medicaid continuous eligibility requirement (which ends March 31st) and Medicare telehealth flexibilities (which will extend through December 2024). However, the end of the PHE will still trigger various changes, such as: 

  • The expiration of various state emergency flexibilities for Medicaid available under Section 1115, Section 1135, Section 1915(c) Appendix K, or disaster State Plan Amendment (SPA) authorities;
  • The end of various Medicare and Medicaid blanket waivers issued by the Centers for Medicare and Medicaid Services (CMS);
  • The end of requirements for insurers in the commercial market to cover Covid-19 tests free of charge and without cost-sharing;
  • The shift of the cost of Covid-19 vaccines and treatments to the private market; and
  • The end of the 20% increase to Medicare inpatient payments for patients diagnosed with Covid-19 and of the add-on payment for new Covid-19 treatments.

The formal announcement is available here.
 
CMS Announces ACO REACH and KCC Participants for 2023
Today (January 17th), CMS announced the participants for 2023 for two major accountable care organization (ACO) models, the ACO Realizing Equity, Access, and Community Health (REACH) program and the Kidney Care Choices (KCC) program.
 
In 2023, the ACO REACH program will expand to include 132 organizations total. This includes 48 new organizations joining in 2023, a substantially lower number than were originally accepted. CMS had announced in July 2022 that it received 271 applications and provisionally accepted 128 of them. Of the 99 organizations that participated in the model in 2022, a total of 84 remain. This includes 45 organizations from the 2021 cohort (participating for a third straight year), down from 50 last year, and 39 from the 2022 cohort (in their second year of participation), down from 49.
 
The KCC program will expand to include a total of 100 Kidney Contracting Entities (KCEs) and 30 Kidney Care First (KCF) Practices in 2023. This includes 50 new KCEs and four new KCF Practices. Only one KCF Practice and no KCEs discontinued their participation from 2022.
 
CMS estimates that the ACO REACH program will include 2.1 million beneficiaries attributed this year, up from 1.8 million last year, while KCC will include about 250,000 beneficiaries, up from about 150,000 last year. Overall, CMS estimates that, together with the Medicare Shared Savings Program (MSSP), its other major ACO program, 13.3 million Medicare fee-for-service beneficiaries will be in an accountable care relationship through an ACO in 2023, helping to make progress towards CMS’s goal for all beneficiaries to be in such a relationship.
 
A CMS press release is available here. A full list of participants in ACO REACH is available here. A full list of KCC participants is available here.
 
CMS Issues Memorandum and Timeline for Medicare Drug Price Negotiation Program
On January 11th, CMS announced key dates for implementation of the first year of the Medicare Drug Price Negotiation Program, which was established in the 2022 Inflation Reduction Act. Under this program, starting in 2026, Medicare may negotiate the price of certain high-expenditure, single-source Medicare Part B or Part D prescription drugs. The HHS Secretary will select 10 Part D high expenditure drugs for negotiation, and maximum fair prices for these drugs will apply in 2026. For 2027, HHS will select an additional 15 Part D drugs, an additional 15 Part B or Part D drugs for 2028, and an additional 20 Part B or Part D drugs for 2029.
 
Although price controls in the program will not start until 2026, CMS will conduct its initial negotiations this year. The period from June 2022 through May 2023 will be used for the initial total expenditure calculation used to determine negotiation-eligible drugs, and CMS expects to publish a list of negotiation-eligible drugs by September 2023. Over the course of 2023, CMS plans to issue formal guidance for the program as well as several Information Collection Requests (ICRs) covering negotiation data elements, offer and counteroffer exchanges, and the small biotech exception, with opportunities for public comment.
 
CMS’s proposed timeline for conducting negotiations for the initial year is as follows: 

  • September 1st: CMS publishes list of 10 Part D selected drugs for initial price applicability year 2026
  • October 1st: Deadline for manufacturers of selected drugs to sign an agreement with the Secretary to conduct negotiations
  • October 2nd: Deadline for manufacturers of selected drugs to submit data elements
  • February 1, 2024: CMS sends initial offers of a maximum fair price with a justification to manufacturers, negotiation period begins
  • March 2, 2024: Manufacturer has 30 days from when it receives the offer to propose a counteroffer, if desired
  • August 1, 2024: Negotiation period ends
  • September 1, 2024: CMS publishes maximum fair prices
  • January 1, 2026: Price applicability period begins for selected drugs

The full memorandum and timeline can be found here.
 
CMS to Hold National Stakeholder Call on January 24th
On January 24th, from 1pm to 2pm, CMS will host a National Stakeholder Call to discuss CMS’s accomplishments in 2022 and launch its priorities for the year ahead. CMS leadership, including Administrator Chiquita Brooks-LaSure and Principal Deputy Administrator and Chief Operating Officer Jon Blum, will lead the call, which will “highlight CMS’ key 2022 accomplishments and look ahead to how our 2023 priorities will advance the CMS Strategic Plan.”
 
Registration is available here. The CMS Strategic Plan is available here.
 
CMS Awards 200 Medicare-Funded Residency Slots
On January 9th, CMS announced the award of the first 200 of 1,000 new Medicare-funded physician residency slots which will be established over the next five years. In allocating the slots, CMS prioritized underserved communities, focusing on hospitals with training programs in geographic areas demonstrating the greatest need for additional providers, as determined by Health Professional Shortage Areas. The positions were awarded to 100 teaching hospitals across 30 states, the District of Columbia, and Puerto Rico, and will be effective July 1, 2023. Approximately three-quarters of the slots are designated for primary care (125 slots) and mental health (20 slots) specialists.
 
Awardees in the New York City region include Mount Sinai Hospital, Mount Sinai West, New York-Presbyterian/Queens, Montefiore Medical Center, NYU Langone Hospitals, Staten Island University Hospital, Stony Brook University Hospital, and Westchester Medical Center. The application period for the next round of 200 residency positions will open this month, and close March 31st.
 
The full list of awardees is available here.

Other Updates

U.S. District Court Rules HHS Must Repay 340B Hospitals, But Does Not Specify How
On January 10th, Judge Rudolph Contreras of the U.S. District Court for the District of Columbia ruled that while HHS must correct underpayments made to 340B-eligible hospitals, the court will defer to HHS’s judgment as to how the issue will be remedied. In 2018, HHS cut 340B payments by nearly 30% using a methodology based on the “average price” for drugs, not actual drug acquisition costs, and redistributed the savings through non-drug items and services. In June, the Supreme Court ruled unanimously that HHS did not have legal authority to make such changes and ordered them to pay back the money to safety net hospitals. Since then, 340B hospitals have been awaiting the repayment of nearly $10 billion accrued from the period 2018 through 2022. The plaintiffs, the American Hospital Association and America’s Essential Hospitals, expressed disappointment with the ruling. 

New York State Updates

Governor Hochul Issues 2023 State of the State Proposals
On January 10th, Governor Kathy Hochul delivered her second State of the State speech, which outlined her policy agenda for the 2023 Legislative Session. The accompanying State of the State Book, entitled “Achieving the New York Dream,” describes the Governor’s proposed agenda across 14 sections. Two sections focus on health care issues: 

  • Section II (“Fixing the Continuum of Care for Mental Health”), which plans a $1 billion investment into new inpatient and outpatient behavioral health capacity, including reactivating 850 licensed psychiatric beds, adding 150 State-operated psychiatric beds, and significantly expanding licensed mental health programs, including Comprehensive Psychiatric Emergency Programs (CPEPs), Assertive Community Treatment (ACT) teams, and Certified Community Behavioral Health Clinics (CCBHCs).
  • Section IV (“Building a Health Care System for New York’s Future”), which contains proposals for new reforms to the health care delivery system, including the creation of a new Commission on the Future of Health Care. The Commission would have a broad remit to advise on allocations of state funding, including safety net subsidies and capital allocations, as well as overall statewide and regional transformation efforts.

Other sections of the book outline the Governor’s plans for housing development, public safety, economic development, civil rights (including disabilities initiatives), child care, and governmental operations. Further details, including legislative language for proposals that require funding appropriations, will be included in the Governor’s upcoming Executive Budget and Financial Plan, which are to be submitted to the State Legislature in February.
 
SPG’s summary of the State of the State’s health care-related proposals is available here. The full State of the State book is available here.
 
OMH Updates Guidance on Article 31 Clinics Applying for Intensive Outpatient Program
On January 16th, the New York State Office of Mental Health (OMH) released updated Mental Health Outpatient Treatment and Rehabilitation Services (MHOTRS) clinic guidance for the delivery of Intensive Outpatient Program (IOP) services. MHOTRS programs may obtain prior approval from OMH to provide IOP through the Administrative Action (AA) process. Each MHOTRS program, including satellite sites, must submit a separate AA for IOP to be added as an optional service to its Operating Certificate.
 
IOP approval allows MHOTRS programs to bill Medicaid for additional outpatient services provided to individuals who may benefit from more intensive, time-limited treatment. Approved programs may bill Medicaid at a full rate for up to four MHOTRS program services provided to an individual in one day without utilization threshold restrictions.
 
The updated guidance is available here.
 
CMS Approves Evaluation Design for New York’s Covid-19 Retroactive Risk Mitigation Program
On January 10th, CMS announced the approval of the evaluation design for New York State’s retroactive risk mitigation protocol in Medicaid managed care. This protocol, which CMS approved in January 2022 on a time-limited basis due to the Covid-19 emergency, applied a retroactive risk sharing protocol under which plans would be subject to various adjustments, including an 86% minimum medical loss ratio (MLR) in most plans and an 89% MLR for Health and Recovery Plans as well as a special “Covid-19 risk corridor” which limited their upside and downside risk within a 4% range.
 
The evaluation design is available here. The original amendment request is available here, and the original CMS approval letter is available here.
 
NYSOFA Issues Proposed Rule Updating Nutrition Program Regulations
On January 11th, the New York State Office for the Aging (NYSOFA) issued a proposed amendment to update the regulations governing the Nutrition Program for older adults, as follows: 

  • Implement the portable meals service option, which has temporarily been in place during the Covid-19 pandemic; and
  • Expand the types of nutrition professionals, beyond Registered Dieticians, who can be employed by or contracted with an area agency on aging.

Public comments may be submitted through March 12th. The proposed rule is available in the State Register here.

Funding Opportunities

SAMHSA Offers $18 Million for the 2023 Medication-Assisted Treatment Prescription Drug and Opioid Addiction Program
On January 6th, the Substance Abuse and Mental Health Services Administration (SAMHSA) Released a Notice of Funding Opportunity (NOFO) for the 2023 Medication-Assisted Treatment – Prescription Drug and Opioid Addiction program. This program provides resources to help expand and enhance access to Medications for Opioid Use Disorder (MOUD). Award recipients will be expected to provide FDA-approved MOUD in combination with comprehensive psychosocial services. Funding must be used for direct service provision.
 
Through this opportunity, SAMHSA will award up to $18.2 million in total annual funding across 24 organizations (up to $750,000 per year per award) during the five-year program period. Contracts are expected to begin on September 30th. Eligible applicants include health facilities or other public or not-for-profit private entities.
 
The NOFO is available here. Applications are due on March 7th.
 
DOH Releases RFA on Outreach for Prostate Cancer Screening to Older Black Men
On January 10th, DOH issued a Request for Applications (RFA) seeking not-for-profit organizations to provide peer education and outreach, personalized coaching, linkage to community services, and referral to health care providers for prostate cancer screening. Services will be directed to Black men ages 45 to 69 years old who bear a disproportionately high burden of prostate cancer.
 
Eligible applicants are not-for-profit organizations located within or providing services in one of the following four counties: Kings County, Bronx County, Monroe County, or Erie County. Preference will be given to community-based organizations that have not traditionally had access to DOH grant funding to support prostate cancer-related services and organizations with leadership, management, and staff representative of the target population. Applicants are not required to provide grant activities throughout the entire service area and may identify specific areas and populations within the service area for the program. Applicants may apply for more than one service area; however, a separate application is required for each.
 
DOH will award $130,000 in annual grant funding to four awardees during the five-year program period. Contracts are expected to begin on January 1, 2024.
 
The RFP is available here. Applications are due on March 14th.  Questions may be submitted to canserv@health.ny.gov through February 1st. There will be an applicant conference on February 1st at 10am. Interested parties should register for the conference here by January 31st.