Weekly Health Care Policy Update – June 13, 2022

June 20, 2022

In this update: 

  • Covid-19 Updates
    • CDC Rescinds Order Requiring Covid Tests for International Arrivals
  • Legislative Update
    • Senators Announce Deal on Gun Violence and Mental Health Legislation
  • Agency Update
    • HHS OCR Releases Post-PHE Guidance for Audio-Only Telehealth
    • CMS Issues First Hospital Penalties for Noncompliance with Price Transparency; JAMA Study Says Overall Compliance Was Under 6% in 2021
    • FTC Launches Investigation into PBMs
    • AHRQ Seeks Nominations to National Advisory Council
    • GAO Seeks Nominations for Physician-Focused Payment Model Technical Advisory Committee
  • Other Updates
    • KFF Releases Report on 2022 MLR Rebates
    • SCOTUS Expands States’ Abilities to Collect Tort Settlements from Medicaid Beneficiaries
  • Congressional Hearings
  • New York State Updates
    • OMH Extends Commissioner’s Regulatory Waiver
    • Governor Hochul Sign Legislation Expanding Red Flag Law to Include Health Care Practitioners
    • CMS Approves New York SPAs Implementing Rate Increases and Minimum Wage Adjustments
    • DOH Issues Third Quarterly Report on Enhanced HCBS Spending Plan
  • Funding Opportunities
    • OPWDD Releases 2022 Integrated Supportive Housing RFA
    • HRSA Launches $1 Million Challenge for Innovative Technical Assistance for FQHCs

Covid-19 Updates

CDC Rescinds Order Requiring Covid Tests for International Arrivals
On June 10th, the Centers for Disease Control and Prevention (CDC) announced that the requirement to show a negative Covid-19 test result before boarding a flight to the United States is rescinded as of June 12th. The requirement was put in place in January 2021. Secretary of Health and Human Services (HHS) Xavier Becerra emphasized that the decision was “based on science and available data” and that travel testing requirements will be reinstated if needed.
 
The announcement is available here. 

Legislative Updates

Senators Announce Deal on Gun Violence and Mental Health Legislation
On June 12th, a group of 20 Senators, including 10 Republicans and 10 Democrats, announced they had reached an agreement on a proposal on gun violence, including a variety of proposals related to mental health, which will likely include some of the proposals under discussion in the Senate Finance Committee’s bipartisan mental health bill. Policies that have been agreed on include:

  • National expansion of the certified community behavioral health center (CCBHC) model;
  • Investments to increase access to mental health and suicide prevention programs;
  • Support for community-based support services, including crisis and trauma intervention and recovery;
  • Funding for school-based mental health and supportive services;
  • Funding for programs that increase youth access to telehealth modalities of behavioral health; and
  • Additional funding to states to implement court-ordered crisis intervention orders.

The Finance Committee package contains several other policies that are not included in this agreement. Most of these pertain to Medicare, including making audio-only telehealth permanent and removing the requirement for Medicare beneficiaries to have periodic in-person visits with their practitioner to receive behavioral health visits through telehealth.
 
The announcement of the gun violence bill is available here. The discussion draft of the Senate Finance Committee bill is available here. 

Federal Agencies

HHS OCR Releases Post-PHE Guidance for Audio-Only Telehealth
Today (June 13th), the HHS Office for Civil Rights (OCR) released guidance on the use of audio-only telehealth in compliance with the Health Insurance Portability and Accountability Act (HIPAA). During the Covid-19 public health emergency (PHE), OCR has employed enforcement discretion for all good faith telehealth service provision using non-public audio or video technologies, even if they do not fully comply with HIPAA provisions that limit the use of consumer data without consent (the Privacy Rule) and require entities to employ security measures (the Security Rule). This discretion will lapse when the PHE ends.
 
The new guidance states that: 

  • HIPAA-covered entities may provide audio-only telehealth services under the HIPAA Privacy Rule, so long as they employ reasonable safeguards (such as being provided in private to the extent possible).
  • For telehealth services that do not involve electronic protected health information (ePHI), such as those delivered via traditional landlines, the Security Rule does not apply. However, for communication using smartphone apps, Internet-based calls, or electronic translation, transcription, or storage of audio sessions, the Security Rule does apply.
  • Entities are not required to form a Business Associate Agreement (BAA) with a telecommunications provider that has “only transient access to” and serves only as a “conduit” for EPHI. If the vendor provides other services (such as translation, transcription, or storage), the provider and entity still must form a BAA.

The full guidance is available here.
 
CMS Issues First Hospital Penalties for Noncompliance with Price Transparency; JAMA Study Says Overall Compliance Was Under 6% in 2021
On June 7th, the Centers for Medicare and Medicaid Services (CMS) announced the issuance of the first fines to hospitals that are noncompliant with the Hospital Price Transparency final rule. This rule, which took effect in January 2021, requires hospitals to post comprehensive machine-readable files with hospital prices for all services, including payer-negotiated rates, as well as consumer-friendly displays for a set of 300 shoppable services. Noncompliance may result in a civil monetary penalty of up to $10 per bed per day.
 
CMS penalized two hospitals, both part of the Northside health system in Georgia, that failed to submit Corrective Action Plans (CAPs) after receiving a warning letter from CMS. The fine amounts were $883,180 and $214,320, while the two hospitals have 621 and 211 beds, respectively, indicating fines for roughly three to four months. Collectively, the hospitals had net patient revenue of about $3 billion in 2021.
 
Also on June 7th, JAMA Network published a research note on compliance with the Transparency Rule which found overall compliance in mid-2021 (six to nine months after the compliance date) to be less than 6%. The researchers found that hospitals were more likely to be in compliance if they had lower revenue per patient-day, were located in unconcentrated health care markets, and/or were in urban areas
 
The research letter is available here.
 
FTC Launches Investigation into PBMs
On June 7th, the Federal Trade Commission (FTC) announced the launch of an inquiry into pharmacy benefit managers (PBM). The FTC will require the six largest national PBMs—CVS Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics, and MedImpact—to provide information and records on their business practices. The inquiry is intended to scrutinize the effect of vertically integrated PBMs on the access and affordability of prescription drugs. The inquiry will specifically investigate several practices, including:

  • Fees and clawbacks charged to unaffiliated pharmacies;
  • Methods to steer patients towards PBM-owned pharmacies;
  • Potentially unfair audits of independent pharmacies;
  • Complicated and opaque methods to determine pharmacy reimbursement;
  • The prevalence of prior authorizations and other administrative restrictions;
  • The use of specialty drug lists and surrounding specialty drug policies; and
  • The impact of rebates and fees from drug manufacturers on formulary design and the costs of prescription drugs to payers and patients.

The companies will have 90 days to respond. More information is available here.
 
AHRQ Seeks Nominations to National Advisory Council
On June 7th, the Agency for Healthcare Research and Quality (AHRQ) announced that it is seeking nominations for new members to join its National Advisory Council (NAC). NAC advises AHRQ’s director and HHS on activities proposed or undertaken to carry out AHRQ’s statutory mission. AHRQ specifically seeks “diverse representation geographically and across priority and underrepresented populations.” NAC is comprised of 21 individuals; at this time, AHRQ seeks seven members to replace seven members whose terms expire in November 2022. Members meet three times per year.
 
Applicants should submit a resume and a statement of service by July 5th to Jaime Zimmerman at nationaladvisorycouncil@ahrq.hhs.gov. More information is available here.
 
GAO Seeks Nominations for Physician-Focused Payment Model Technical Advisory Committee
On June 9th, the Government Accountability Office (GAO) published a notice in the Federal Register that it is accepting nominations for the Physician-Focused Payment Model Technical Advisory Committee (PTAC). PTAC was created in 2015 to provide recommendations to HHS on physician payment models, and HHS must officially review and respond to PTAC comments on any physician-focused payment model. In 2022, PTAC has been conducting a series of meetings to discuss population-based total cost of care (TCOC) models, including most recently a meeting on June 7th-8th focused on TCOC care delivery model design.
 
The 11 members of the PTAC committee serve for staggered three-year terms. Appointments typically occur once per year in October. Three positions are expected to be nominated or renominated this year.
 
The request for nominations can be viewed here. Nominations must be submitted by July 11th. 

Other Updates

KFF Releases Report on 2022 MLR Rebates
On June 1st, the Kaiser Family Foundation published a new report estimating that insurers will owe approximately $1 billion in medical loss ratio (MLR) rebates this year across all commercial lines of business, down substantially from the $2.1 billion paid in 2021. The majority of these rebate payments ($603 million) will go to the individual market, with the small group and large group markets receiving $275 million and $168 million, respectively.
 
Rebates in 2022 will be calculated using payer financial data from 2019, 2020, and 2021, and the Kaiser report uses preliminary data submitted by payers to state regulators. Rebates issued in the last several years were particularly high in part because many insurers overshot their 2018 premiums given uncertainty surrounding repeal and replace efforts in Congress during 2017, and also due to lower health care utilization and spending in 2020. This year’s rebates will be much lower, although still higher than those issued during 2013-2018. The report notes that 2023 will likely be a year of uncertainty in premium-setting, because the continued pandemic and the possible extension or expiration of enhanced ACA tax credits are factors that insurers must weigh as they look to set premiums.
 
The full report is available here.
 
SCOTUS Expands States’ Abilities to Collect Tort Settlements from Medicaid Beneficiaries
On June 6th, the Supreme Court issued a ruling in the case Gallardo v. Marstillerwhich expanded the ability of states to recoup health care costs from Medicaid beneficiaries who have been accident victims. In a 7-2 decision, the Court upheld the decision of the 11th Circuit Court of Appeals, deciding that a state Medicaid program can reimburse itself for a beneficiary’s medical expenses fromanyportion of a tort settlement that is allocated to medical expenses. This includes portions of the settlement allocated both for past and future medical expenses.
 
Writing for the majority, Justice Clarence Thomas argued that a state is entitled to a portion of the settlement to recover expenses it has incurred for the injured party, and that nothing limits this payment to only the portion of the settlement allocated for past medical care. In her dissent, Justice Sonia Sotomayor argued that Medicaid law cannot be read to allow a state to take a settlement directed at future medical expenses to compensate for past expenses. Justice Sotomayor, joined by Justice Stephen Breyer, argues that the decision will cause “unfairness and disruption.”
 
The full opinion is available here. 

Congressional Hearings

Thursday, June 16th:

  • At 9:30am, the Senate Health, Education, Labor, and Pensions (HELP) Committee will hold a hearing entitled “An Update on the Ongoing Federal Response to COVID-19: Current Status and Future Planning.” More information is available here.

New York State Updates

OMH Extends Commissioner’s Regulatory Waiver
On June 6th, the Commissioner of the New York State Office of Mental Health (OMH) extended the telehealth regulatory waiver for an additional 120 days through October 4th. The waiver indicates that the emergency/proposed rule updating the Part 596 telehealth regulations remains fully effective (except for Part 596.5(a)-(e), which outlines approval requirements). OMH is in the process of receiving and reviewing comments on the proposed changes to Part 596 and will release final regulations and associated guidance documents afterwards. In the interim, providers should continue to follow the Covid-19 emergency telehealth guidance, which will remain in place until the end of the federal public health emergency.
 
The waiver is available here. The emergency/proposed regulations are available here. SPG’s summary of the regulations is available here.
 
Governor Hochul Sign Legislation Expanding Red Flag Law to Include Health Care Practitioners
On June 6th, Governor Hochul signed legislation (S9113A/A10502) that expands New York State’s “Red Flag Law” by authorizing certain health care providers to file an application for an Extreme Risk Protection Order (ERPO) against an individual if the provider has treated the individual within the last six months. Authorized providers include: 

  • Licensed physician;
  • Licensed psychiatrist;
  • Licensed psychologist;
  • Registered nurse;
  • Licensed clinical social worker;
  • Certified clinical nurse specialist;
  • Certified nurse practitioner;
  • Licensed clinical marriage and family therapist;
  • Registered professional nurse;
  • Licensed master social worker; and
  • Licensed mental health counselor.

The bill was signed as part of a legislative package to address gun violence prevention and public safety. The Governor’s press release is available here.
 
CMS Approves New York SPAs Implementing Rate Increases and Minimum Wage Adjustments
On June 6th, CMS approved the following State Plan Amendments (SPAs) that implement rate increases in accordance with the State’s enhanced Federal Medical Assistance Percentage (FMAP) spending plan: 

  • Four separate temporary rate increases for Assertive Community Treatment (ACT) teams for program enhancement, workforce recruitment and retention, and enhanced funding for Youth and Young Adult ACT teams (SPA; Approval); and
  • Temporary rate increases from November 2021 through June 2022 for certain Office of Addiction Services and Supports (OASAS) licensed programs, including: 
    • A 10 percent increase for Residential Addiction Rehabilitation services;
    • A 10 percent increase for Outpatient Addiction Rehabilitation services;
    • A 10 percent increase for all Medicaid State Plan-approved addiction services; and
    • Incorporation of Residential Rehabilitation reintegration programs into the Medicaid benefit package, as well as a 50 percent rate increase during this period (SPA; Approval).

CMS also approved minimum wage adjustments for the following programs/services: 

DOH Issues Third Quarterly Report on Enhanced HCBS Spending Plan
On May 25th, the New York State Department of Health (DOH) posted the Third Quarterly Update for spending proposals to enhance home and community-based services (HCBS) using the enhanced FMAP available under Section 9817 of the American Rescue Plan. DOH now estimates that it will be eligible for $2.56 billion in state funds equivalent (SFE), up by an additional $122 million from the second quarterly update. Since the portion of SFE funds that are spent on eligible Medicaid services may be matched by further federal funds, DOH estimates that a total of $5.2 billion (up from $4.8 billion in the last update) will be available for investments to improve HCBS.
 
The Third Quarterly Update also contains new information on the current status of proposals. DOH has withdrawn and replaced one proposal, but the other 46 proposals remain the same as in the second quarterly update. Of the proposals, 37 have been approved by CMS, the same as before. NYS is awaiting approval on one original proposal, the eight proposals from the Second Quarterly Update, and the new proposal in this update. NYS has begun spending for 14 of the 37 approved projects. Notable changes to proposals include:

  • Home Care Worker Wage Increase: This is a new proposal that replaces the “Home Care Worker Bonus” proposal. It would implement the 2023 Enacted Budget provision that increases the minimum wage for home care workers (home health aides, personal care aides, home attendants, and consumer-directed personal assistants) by $3 per hour. This would use $1.22 billion in SFE, nearly half of the total. As of the time of the update, DOH was still considering how to obtain federal authority.
  • Transform the Long-Term Care Workforce and Achieve Value-Based Payment Readiness: This project has been decreased in scope to include only the already-approved state-directed payment that will provide $143 million of SFE ($358 million total) to licensed home care services agencies (LHCSAs) in the top third of providers in utilization. The remaining $620 million that was originally allocated has been moved to pay for the Home Care Worker Wage Increase. 

The full Quarterly Update is available here. SPG’s updated summary table outlining all of the proposed HCBS enhancement projects and their current status can be found here. 

Funding Opportunities

OPWDD Releases 2022 Integrated Supportive Housing RFA
On June 1st, the New York State Office for People with Developmental Disabilities (OPWDD) released a Request for Applications (RFA) for the 2022 Integrated Supportive Housing (ISH) program. The ISH program encourages and supports the development of new housing opportunities for people with intellectual and/or developmental disabilities (I/DD) who can benefit from an independent, non-certified community-integrated residential setting.
 
OPWDD will provide up to $15 million in capital funding for housing units that offer preference in tenant selection to individuals with an I/DD diagnosis, in addition to rental subsidies and non-housing support services to the residents of these units. Programs must be linked to a housing development project that will create new housing units through new construction, the adaptive reuse of non-residential space, or the repurposing of vacant residential units.
 
This year, applicants may choose to request solely ongoing rental subsidies (without capital funding) to support a capital project funded by other governmental capital programs. As such, funding awarded through this RFA will support either: 

  • Solely rental subsidies and supportive services once in operation; or
  • Rental subsidies and capital funding

The RFA is available here and SPG’s summary of the opportunity is available here. Applications are due on July 11th.
 
HRSA Launches $1 Million Challenge for Innovative Technical Assistance for FQHCs
On June 9th, the Health Resources and Services Administration (HRSA) launched the “Building Bridges to Better Health” challenge, a $1 million opportunity for individuals or organizations to propose and implement new concepts for “low-cost, scalable” technical assistance solutions for HRSA-supported federally qualified health centers (FQHCs). Proposed concepts should help improve patient access to primary care and strengthen links between health care and social services. Specifically, projects should consider new ways to link FQHCs with providers of services such as transportation, food, and housing that address the social determinants of health (SDOH). Funding will be awarded as follows:

  • In Phase 1, up to 30 winners will receive $10,000 for concept papers.
  • In Phase 2, HRSA will select up to 15 winners to receive $20,000 each to develop and test prototypes.
  • In Phase 3, up to 8 awardees will receive a total prize purse of $400,000, with the first place receiving $150,000.

Any individual or entity, other than a federal employee, may apply. The challenge website is available here. Initial submissions are due August 2nd, and the challenge is expected to run through August 2023.