Weekly Health Care Policy Update – October 25, 2024

November 1, 2024

In this update: 

  • Legislative Update
    • Senate Democrats Release Report on MA Denials
  • Federal Agencies
    • HHS Proposes Rule to Expand Access to OTC Birth Control
    • OIG Issues Report on Medicare Advantage Risk Assessments
    • DOJ Issues Proposed Rule Limiting Data Transfers to Countries of Concern
    • CDC Updates Covid and Pneumococcal Vaccination Recommendations
    • FCC Votes to Route 988 Calls to Caller Location
    • ARPA-H Announces $110 Million in Sprint for Women’s Health Awards
  • Other Updates
    • KFF Publishes Medicaid Enrollment and Spending Growth Data
    • United, Humana, and Centene File Lawsuits Over Star Ratings
  • New York State Updates
    • DOH Issues Guidance on Hospital Financial Assistance Expansion and New Consumer Protections
    • OMH Issues Final Guidance for Community Mental Health Programs on Hospital Admission and Discharge Practices

Legislative Update

Senate Democrats Release Report on MA Denials
On October 17th, the Senate Permanent Subcommittee on Investigations (PSI) released a report on Medicare Advantage (MA) plans’ use of prior authorization to reduce beneficiary stays in post-acute care facilities. The PSI surveyed actions by UnitedHealthcare, CVS, and Humana—
which cover nearly 60% of MA enrollees—between 2019 and 2022. It found that all three companies denied prior authorization requests for post-acute care at much higher rates than they did for other kinds of care. United and CVS denied prior authorization for post-acute care at approximately three times the rate of its overall company average, and Humana denied prior authorization for post-acute care at 16 times its overall denial rate.
 
The report also focused specifically on the companies’ use of automation and predictive technologies in prior authorization. As companies ramped up their use of such technologies, United’s prior authorization denial rate for post-acute care increased from 10.9% to 22.7%, CVS increased the percentage of post-acute care service requests subjected to prior authorization from 40% to 57.5%, and Humana’s denial rate for long-term acute care hospitals increased by 54%.
 
The report suggests that the Center for Medicare and Medicaid Services (CMS) is behind in their regulation of these technologies in coverage determinations. The report includes recommendations for advanced prior authorization data collection by service category, additional audits when spikes in denials are detected, and more oversight of insurer internal prior authorization committees. United, CVS, and Humana have heavily disputed the findings of the report, calling it partisan with inaccurate sourcing.
 
The report is available here.

Federal Agencies

HHS Proposes Rule to Expand Access to OTC Birth Control
On October 21st, the Departments of Health and Human Services (HHS), Labor, and the Treasury issued a proposed rule to require coverage of over-the-counter (OTC) contraceptive items without cost sharing or a prescription. Under current guidance, coverage of OTC preventive services, including contraceptive items, without cost sharing is only required when prescribed. The main provisions of the proposed rule include: 

  • Network Applicability: In- vs. out-of-network coverage requirements would still apply.
  • Reimbursement: Plans and issuers may comply with the proposed rule by requiring enrollees to pay out-of-pocket for OTC contraceptive items and pursue reimbursement, but such processes must not present unreasonable barriers. The Departments strongly encourage plans and issuers to pursue other coverage routes.
  • Preventive Services Coverage: The Departments seek feedback on whether and how to propose similar coverage requirements for more recommended preventive services.
  • Communicating Coverage: The Departments propose new requirements to ensure that enrollees are informed of this new coverage requirement.

If the proposed rule is finalized, provisions regarding coverage of OTC contraceptive items without cost sharing or prescription would be applicable for policy or plan years beginning on or after January 1, 2026. Comments are due 60 days after publication in the Federal Register. The White House has signaled a desire to finalize a rule before the end of the Biden-Harris Administration.

The proposed rule is available here, the fact sheet is available here, and the announcement is available here.

OIG Issues Report on Medicare Advantage Risk Assessments 
On October 24th, the HHS Office of the Inspector General (OIG) issued a report on MA health risk assessments. This report reviewed 2022 MA beneficiary diagnoses that were reported only on health risk assessments (HRA) by plans and not found in other records of services. In 2022, diagnoses of this sort amounted to $7.5 billion in MA risk-adjustments payments for 2023, leading OIG to conclude that these diagnoses and payments were either fraudulent or representative of considerable lapses in care. Moreover, OIG found that 20 MA companies drove 80% of estimated payments. OIG recommends that CMS should impose additional restrictions on and conduct audits to validate diagnoses of this sort.

The report is available here.

DOJ Issues Proposed Rule Limiting Data Transfers to Countries of Concern
On October 24th, the Department of Justice (DOJ) issued a Notice of Proposed Rulemaking (NPRM) to implement President Biden’s Executive Order 14117, which is aimed at preventing access to sensitive U.S. personal and government-related data by entities related to “countries of concern.” The rule targets specific national security risks related to bulk data, including genomic and health data, and defines prohibited and restricted transactions to limit access by countries of concern and covered persons.

Under the proposed rule, six countries are initially designated as “countries of concern”—China, Cuba, Iran, North Korea, Russia, and Venezuela. The rule restricts covered data transactions with any entities that are owned or based in such countries and individuals who are resident in such countries. DOJ also is authorized to designate other entities individually to be restricted. In general, restrictions apply only to these specifically designated countries of concern, although data transfers with parties in “third countries” must include provisions to prohibit onward transfers to countries of concern. The Cybersecurity and Infrastructure Security Agency (CISA) released a proposed set of accompanying security requirements for covered entities.

Comments on these documents are due November 29th. The DOJ proposed rule is available here. The CISA requirements are available here.

CDC Updates Covid and Pneumococcal Vaccination Recommendations 
On October 23rd, Centers for Disease Control and Prevention (CDC) Director Mandy Cohen endorsed two new recommendations from the CDC’s Advisory Committee on Immunization Practices (ACIP) for Covid-19 and pneumococcal vaccination: 

  • Covid-19: The CDC recommends a second dose of 2024-2025 Covid-19 vaccine six months after the first dose for people 65 years and older and those who are moderately or severely immunocompromised; and  
  • Pneumococcal: The CDC recommends lowering the age for the pneumococcal vaccination from 65 to 50 years old.

The full Covid-19 vaccination recommendation is available here. The full pneumococcal vaccination recommendation is available here.

FCC Votes to Route 988 Calls to Caller Location 
On October 17th, the Federal Communications Commission (FCC) voted to adopt a rule requiring cell phone carriers to georoute calls to 988, the Suicide & Crisis Lifeline, to the closest 988 call center based on the caller’s physical location. Previously, 988 routing was based on a caller’s area code, which can be misaligned with residence. This change is meant to streamline connections to local resources. Verizon and T-Mobile recently began this process voluntarily, and AT&T will begin the process soon. On the same day, the FCC released a Further Notice of Proposed Rulemaking which includes similar georouting requirements for 988 text messages.

The rule is available here, and the announcement is available here.

ARPA-H Announces $110 Million in Sprint for Women’s Health Awards
On October 23rd, the Advanced Research Projects Agency for Health (ARPA-H) announced the teams selected to receive Sprint for Women’s Health awards. Sprint for Women’s Health targets unmet global needs in women’s health through biomedical innovations. ARPA-H awarded $110 million to 23 awardees, ranging from small start-ups to global companies, across six topics (health at home, ovarian health, health outcomes based on sex, lymphatic targeting, chronic pain, and a wild card). New York-area awardees include Ancilia Biosciences Inc, Celmatix Inc, GE Medical Systems Information Technologies Inc, and Glaucus Inc.

The announcement is available here.

Other Updates

KFF Publishes Medicaid Enrollment and Spending Growth Data 
On October 23rd, the Kaiser Family Foundation (KFF) released data on Medicaid enrollment and spending growth in fiscal years (FY) 2024 and 2025. Data were provided by states through KFF’s annual survey of Medicaid directors. They reflect two major policy changes: the ending of the Covid-19 continuous Medicaid enrollment on March 31, 2023 and the phasing down of enhanced federal matching funds through the end of 2023. Key findings include: 

  • Enrollment: Medicaid enrollment declined by 7.5% in FY 2024. Officials expect enrollment to continue to decline by 4.4% in FY 2025.
  • Total Spending: Total Medicaid spending growth slowed to 5.5% in FY 2024. Officials expect spending growth to slow further to 3.9% in FY 2025.
  • State Spending: State Medicaid spending growth increased sharply in FY 2024 (19.2%) as the enhanced federal matching funds related to Covid-19 expired. Officials expect state Medicaid spending growth to slow to 7.0% in FY 2025.

The report is available here.

United, Humana, and Centene File Lawsuits Over Star Ratings
Over the past month, UnitedHealthcare, Humana, and Centene have each separately filed lawsuits against CMS over their 2025 MA Star Ratings. All three plans’ star ratings dropped in 2025 in response to poor customer service performance. Centene’s recently filed suit centers on one failed secret shopper call, which the company alleges will cost them $73 million in gross revenue. UnitedHealthcare and Humana’s suits hinge on one and three secret shopper calls, respectively, which they also claim were unfairly scored. These firms hope for advantageous outcomes like those achieved through lawsuits by Elevance Health and SCAN Health Plan.

New York State Updates

DOH Issues Guidance on Hospital Financial Assistance Expansion and New Consumer Protections
On October 18th, the New York State (NYS) Department of Health (DOH) issued guidance to hospitals regarding changes to health care consumer protection and financial assistance laws that were authorized by NYS’s 2024-25 Enacted Budget. Notable elements in the guidance include:

Hospital Financial Assistance Requirements

  • Increasing patient eligibility for financial assistance to individuals earning up to 400% of the federal poverty level (FPL);
  • Preventing hospitals from denying admission or treatment/services to patients because of an unpaid medical bill;
  • Requiring the use of a Uniform Financial Assistance Application for all hospitals (regardless of participation in the Indigent Care Pool);
  • Decreasing the maximum monthly payment a hospital may require under a payment plan to 5% of the patient’s monthly income, and the interest rate to 2%;
  • Banning the sale of patient debt to a third party, unless the third party will relieve the debt; and
  • Prohibiting hospitals from bringing lawsuits against patients earning up to 400% FPL to collect on unpaid medical bills.

These changes impact all medical services offered by the hospital and provided by employed physicians, including inpatient, emergency room, and outpatient services.

New Consumer Protections
The following new protections apply to all patients regardless of income level, eligibility for financial assistance, or the type of provider from which they are receiving services: 

  • Prohibiting hospitals and health care providers from completing any part of an application for a medical financial product (medical credit card or third-party medical installment loan) on behalf of a patient;
  • Prohibiting hospitals and health care providers from requiring credit card pre-authorization or requiring the patient to have a credit card on file prior to rendering emergency or medically necessary services;
  • Requiring hospitals to notify patients regarding the risk of paying for medical services with a credit card, including that they are forgoing state and federal protections regarding medical debt.

Separate Patient Consent for Payment and Treatment 
The Budget provision requiring hospitals and health care providers to obtain a separate patient consent for treatment and payment “is on hold until further guidance is released” following outreach and questions from stakeholders regarding its intent. All other changes are effective October 20, 2024.

The guidance is available here.

OMH Issues Final Guidance for Community Mental Health Programs on Hospital Admission and Discharge Practices
This week, the NYS Office of Mental Health (OMH) issued finalized guidance for community mental health programs on best practices and OMH expectations for collaborating with hospital emergency department and inpatient units on the admission and discharge of individuals with behavioral health presentations. The guidance applies to all OMH community-based treatment, rehabilitative, care management, and residential programs and builds upon previously issued guidance for hospitals (here) and corresponding proposed regulations from OMH (here) and DOH (here).

Following a public comment period on the draft guidance, OMH made several changes to the finalized guidance, including but not limited to adding: 

  • Provider protocols when patient consent cannot be obtained;
  • Methods for streamlining outreach among community providers to avoid the risk of recently discharged individuals receiving too many contacts (i.e., from outpatient treatment, residential, and care management providers); and
  • New requirements for residential providers for discharge planning, including that Residential Treatment Facility (RTF) staff should regularly participate in treatment team meetings in the hospital and that staff in non-congregate residential programs should have an in-person visit with the individual within 48 hours of discharge.

The guidance is available here.