Weekly Health Care Policy Update – June 27, 2022

July 4, 2022

In this update: 

  • Administration
    • Biden Chooses Arati Prabhakar as Next Science Advisor
  • Federal Agencies
    • CMS Releases CY 2023 End-Stage Renal Disease Proposed Rule
    • CMS Publishes CY 2023 Home Health Prospective Payment Proposed Rule
    • HHS Approves Colorado Public Option Section 1332 Waiver
    • FTC Issues Statement on Potential Anti-Competitive PBM Practices
    • HHS Issues RFI on Strengthening Primary Care
    • CMMI Staff Post Blog on Integrating Specialty Care
    • OIG Finds Inaccuracies in Medicare Data on Race and Ethnicity
    • HRSA Awards $115 Million to Support Ending the HIV Epidemic
  • Other Updates
    • SCOTUS Accepts HHS’s Interpretation of Medicare DSH Formula
    • SCOTUS Says Employer Health Plan Can Make All Dialysis Providers Out of Network
    • SCOTUS Denies United’s Appeal on MA Overpayments
    • Study Finds Medicare Telehealth Expansion Did Not Increase Costs
  • Congressional Hearings
  • New York State Updates
    • Governor Hochul Signs Legislation Expanding Scope of Practice for Certain Mental Health Practitioners
    • OMH Proposes Part 599 Regulations Moving Article 31 Clinics to Medicaid State Plan Rehabilitation Option
    • DOH Issues MLTC Policy Guidance on QIVAPP 2022-2023 Distributions
  • Funding Opportunities
    • HUD Announces $323 Million Supplemental Grant for Unsheltered Homelessness
    • HRSA Issues Additional FY 2023 FQHC Service Area Competition 
    • DOHMH Issues Concept Paper Outlining Planned RFP for On-Site Specimen Collection and/or Vaccination Sites

Administration Updates

Biden Chooses Arati Prabhakar as Next Science Advisor
On June 21st, the White House announced that President Biden will nominate Arati Prabhakar to serve as his next science advisor, replacing Eric Lander, who resigned in February. In this role, Prabhakar will also serve in the President’s cabinet. Prabhakar, an engineer and applied physicist, ran the Defense Advanced Research Projects Agency (DARPA) from 2012 to 2017 and the National Institute of Standards and Technology (NIST) from 1993 to 1997. Notably, Prabhakar has been critical of current science advisor Francis Collins’s plan to house the Advanced Research Projects Agency for Health (ARPA-H) within the NIH. Her nomination for head of the White House Office of Science and Technology Policy now goes to the U.S. Senate for confirmation.

Federal Agencies

CMS Releases CY 2023 End-Stage Renal Disease Proposed Rule
On June 21st, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule to update payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) and the Acute Kidney Injury (AKI) dialysis payment rate for services provided on or after January 1, 2023.
 
CMS proposes to increase the ESRD PPS base rate to $264.09, an increase of $6.19, which CMS estimates will increase payments to ESRD facilities by approximately $320 million in CY 2023, relative to CY 2022. The proposed payment rate for the AKI program is also $264.09. CMS proposes to rebase and revise the ESRD Bundled (ESRDB) market basket to a 2020 base year and to update the labor-related share to 55.2% based on the proposed 2020-ESRDB market basket weights. CMS further proposes to increase the wage index floor from 0.5 to 0.6. It will also apply the same 5% cap on decreases in the wage index, beginning in CY 2023, as in other payment rules this year, in order to “smooth” the impact of year-to-year changes in the ESRD wage index and to mitigate instability in ESRD PPS payments in the case of significant updates to the index.
 
CMS proposes to redefine the term “oral-only drug” at § 413.234(a) to include the word “functional,” effective January 1, 2025. If finalized, the term would be defined as “a drug or biological product with no injectable functionalequivalent or other form of administration other than an oral form.” CMS notes this proposed change would help ensure that CMS policies are appropriately supporting innovation for new drugs that are truly innovative and not simply variations of existing drugs.
 
CMS proposes to update the outlier services fixed-dollar loss (FDL) amounts using 2021 claims data and refine the methodology to more effectively meet its target of 1.0% of total ESRD PPS payments. Using 2021 claims data, the FDL amount for pediatric beneficiaries would decrease from $26.02 to $21.51 and the Medicare allowable payment (MAP) amount would decrease from $27.15 to $25.62 (relative to CY 2022). For adult beneficiaries, the same amounts would decrease from $75.39 to $40.75 and $42.75 to $36.85, respectively.
 
Due to the impact of the Covid-19 public health emergency (PHE) on the validity of several ESRD Quality Incentive Program (QIP) measures and on performance scores, CMS also proposes to pause the use of several measures for scoring and payment adjustment purposes for payment year (PY) 2023 (while continuing to collect and make public the measures), and to utilize data from CY 2019 as the baseline period for the PY 2023 ESRD QIP as this data was collected prior to the PHE. CMS also proposes measure changes for future years, including, in FY 2024, adoption of the new COVID-19 Healthcare Personnel (HCP) Vaccination reporting measure for ESRD facility employees.
 
CMS seeks comment in several areas of the proposed rule, including on: 

  • Closing the health equity gap. CMS seeks comments on how to evaluate appropriate initiatives to reduce health disparities for beneficiaries receiving renal dialysis services as well as how to improve detection and reduction of health disparities within the ESRD PPS payment program for pediatric patients.
  • Quality indicators for home dialysis patients. CMS seeks comments on potential indicators of quality for patients who receive dialysis at home, particularly indicators of quality that are not currently being captured. 
  • Social drivers of health. CMS requests comment on two social drivers of health (SDOH) screening measures for potential future inclusion in a future ESRD PPS. The first measure, Screening for Social Drivers of Health, would determine whether dialysis facilities screen all adult patients for SDOH measures. The Screen Positive Rate for Social Drivers of Health measure would assess the impact of individual-level social risk factors and community-level conditions in which patients live when evaluating quality of care.

Finally, CMS proposes to change the ETC Model’s scoring methodology and certain requirements surrounding flexibilities for kidney disease patient education services and to make certain performance data publicly available.
 
The proposed rule is available here and a fact sheet is available here. CMS will accept comments through August 27th.
 
CMS Publishes CY 2023 Home Health Prospective Payment Proposed Rule
On June 17th, CMS released a proposed rule to update the Home Health Prospective Payment System, which determines reimbursement for certified home health agencies (CHHAs). Under the proposed rule, overall payments to CHHAs would decrease by 4.2 percent, an $810 million cut relative to CY2022. The decrease reflects a 2.9 percent home health payment update, a 6.9 percent decrease based on a proposed prospective, permanent behavioral assumption adjustment of 7.69 percent, and a 0.2 percent decrease based on a proposed update to the fixed-dollar loss ratio (FDL) used in determining outlier payments. The rule does not include the final home infusion therapy payment amounts because the CPI-U for June 2022 is not yet available.
 
Additional policy changes in the proposed rule include:

  • As in other payment rules this year, a permanent, budget-neutral 5 percent cap on negative wage index changes for home health agencies;
  • A recalibration of the case-mix weights for the Patient-Driven Groupings Model (PDGM) and Low Utilization Payment Adjustment (LUPA) threshold using CY 2021 data to more accurately pay for the type of patients CHHAs are serving, resulting in a permanent negative 7.69 percent adjustment to the 30-day payment rate in CY 2023;
  • Updating the Home Health Value-Based Purchasing (HHVBP) Model CHHA baseline year from CY 2019 to CY 2022 for existing CHHAs with a Medicare certification date prior to January 1, 2019, and from 2021 to 2022 for CHHAs with a Medicare certification date prior to January 1, 2022 starting in the CY 2023 performance year;
  • Updating the HHVBP Model baseline year from CY 2019 to CY 2022 starting in CY 2023; and
  • Ending the suspension of non-Medicare/Medicaid OASIS data collection for CHHA patients and requiring CHHAs to submit all-payer OASIS data for purposes of the HH Quality Reporting Program (QRP) beginning with the CY 2025 program year.

In addition, CMS is soliciting comments in two areas:

  • Data collection regarding the use of telecommunications technology during a home health period of care; and
  • Health equity measure development for the Home Health QRP and the potential future application of health equity in the Expanded HHVBP Model’s scoring and payment methodologies.

The full proposed rule may be found here. CMS will accept comments on the rule through August 16th.
 
HHS Approves Colorado Public Option Section 1332 Waiver
On June 23rd, the Department of Health and Human Services (HHS) announced the approval of Colorado’s Section 1332 waiver application, which will require all plans that offer coverage in the individual or small group markets to also offer a State-designed “Colorado Option Standardized Plan” option. This is the first Section 1332 waiver to implement a public plan design.
 
The Colorado Option plans will be required to meet premium reduction targets each year, rising to 15% by 2025, the third year. The Colorado Division of Insurance will have new authorities to enforce premium reduction targets if they are not met, including requiring changes to provider contracts, issuing fines to hospitals, and requiring public rate hearings. Colorado’s actuarial analysis indicated premiums would be lower by more than 22% in 2023 as a result of the waiver.
 
A fact sheet on the program is available here.
 
FTC Issues Statement on Potential Anti-Competitive PBM Practices
On June 16th, the Federal Trade Commission (FTC) held a meeting to discuss the impacts of drug fees and rebates from Pharmacy Benefit Managers (PBMs) on lowering drug costs. As part of this meeting, the Commission voted unanimously to issue a policy statement signaling its intent to study drug fees and rebates paid by manufacturers to PBMs and other intermediaries in the pharmaceutical supply chain. The policy statement mentions insulin as a case study of a drug for which drug fees and rebates may be artificially driving up patient costs. The policy statement describes the ways in which the FTC will scrutinize the impact of rebates and fees on patients and take enforcement action against any unlawful conduct. The meeting follows the announcement of an FTC investigation into the business practices of the six largest pharmacy PBMs on June 7th, intended to scrutinize the effect of vertically integrated pharmacy benefit managers on the access and affordability of prescription drugs.
 
The meeting agenda is available here. The FTC’s full policy statement is available here.
 
HHS Issues RFI on Strengthening Primary Care
On June 24th, the HHS Office of the Assistant Secretary (OASH) posted a request for information (RFI) in the Federal Register on ideas for how the federal government can strengthen primary care. OASH is responsible for conducting the HHS Initiative to Strengthen Primary Care, whose first task is to develop an HHS plan that describes actions agencies can take in support of improved primary care. OASH seeks information about successful approaches to improve primary health care payment, delivery models, service integration, and other aspects of primary care.
 
The RFI can be found here. Responses are due August 1st.
 
CMMI Staff Post Blog on Integrating Specialty Care
On June 17th, staff from the CMS Innovation Center (CMMI) posted a blog article summarizing themes from CMMI’s listening tour to understand challenges facing specialty care integration. CMMI staff identified four themes:

  • Providing data on specialist performance and enhancing data sharing would facilitate integration with primary care;
  • Episode-based payment models should be designed to align the incentives of specialists and primary care value models such as accountable care organizations (ACOs);
  • Many primary care practices and ACOs recognize value in specialty care providers assuming the primary responsibility for specialty populations; and
  • Beneficiaries with complex conditions may benefit from specialists being integrated into primary care disease pathways. For example, collaborative care, like in behavioral health, codes could be used to support integration of some specialty care, such as palliative care.

The blog post is available here.
 
OIG Finds Inaccuracies in Medicare Data on Race and Ethnicity
On June 21st, the HHS Office of the Inspector General (OIG) released a data brief finding that Medicare’s enrollment data on race and ethnicity have inaccuracies, particularly for American Indian/Alaska Native, Asian/Pacific Islander, and Hispanic beneficiaries. Medicare’s primary source of race and ethnicity data, which comes from the Social Security Administration, contain limited race and ethnicity categories as well as missing information, which inhibits Medicare’s efforts to identify and combat health disparities. OIG recommended that CMS create its own source data by collecting race and ethnicity information during enrollment. OIG also urged CMS to rely more on self-reported race/ethnicity data, which tends to be more reliable.
 
The OIG data brief can be found here.
 
HRSA Awards $115 Million to Support Ending the HIV Epidemic
On June 16th, the Health Resources and Services Administration (HRSA) awarded nearly $115 million to 60 recipients to help implement the Ending the HIV Epidemic in the U.S. (EHE) initiative. The initiative is part of the Biden Administration’s effort to reduce new HIV infections by at least 90 percent by 2030. The awards link people with HIV to care, support, and treatment, and provide workforce training and technical assistance. The awards include:

  • ​​Nearly $103 million to 39 metropolitan areas (including over $13 million to Bronx, Kings, New York, and Queens Counties) and eight states (Mississippi, Kentucky, Missouri, South Carolina, Alabama, Arkansas, Oklahoma, and Ohio) to implement strategies and interventions to provide core medical and support services to reduce new HIV infections in the U.S.;
  • $4 million to provide workforce capacity development and technical assistance to 11 Ryan White HIV/AIDS Program AIDS Education and Training Centers Programs across the country; and
  • $8 million to two non-profit organizations to support grantees with technical assistance and health care and social systems coordination.

The full list of awardees is available here. More about the EHE initiative is available here. 

Other Updates

SCOTUS Accepts HHS’s Interpretation of Medicare DSH Formula
On June 24th, the Supreme Court ruled to accept HHS’s interpretation of Medicare Disproportionate Share Hospital (DSH) statute. HHS had adjusted the Medicare DSH payment formula in 2005 to expand the definition of hospital visits by individuals “entitled to” Medicare to include all those who were Medicare-eligible, regardless of whether the associated stay had had costs reimbursed by Medicare. The 5-4 majority opinion included the three liberal justices and Justices Clarence Thomas and Amy Coney Barrett. Besides not requiring HHS to make adjusted DSH payments, the ruling also did not contain the ramifications for Chevron deference to agency interpretations that had been anticipated to be possible.
 
SCOTUS Says Employer Health Plan Can Make All Dialysis Providers Out of Network
On June 21st, the Supreme Court ruled in favor of an employee health plan that has no in-network dialysis providers. Current law prohibits differentiating benefits between ESRD patients and others enrolled in the plan, but Justice Kavanaugh, writing for the 7-2 majority, argued that the plan’s behavior did not discriminate against ESRD patients because they receive the same coverage as other people enrolled in the plan, and Congress did not mandate that group health plans cover particular benefits or to require parity between different kinds of benefits for them. Justice Kagan and Sotomayor dissented, arguing that barriers to dialysis fundamentally target patients with kidney failure. The full opinion is available here.
 
SCOTUS Denies United’s Appeal on MA Overpayments
On June 21st, the Supreme Court declined to hear UnitedHealthcare’s challenge of a federal regulation making Medicare Advantage liable for False Claims Act lawsuits when they fail to return overpayments related to undocumented diagnoses. The Court’s announcement allows an appeals court ruling upholding the regulation to remain in force. The rule, enacted in 2014, requires Medicare Advantage plans to return certain overpayments within 60 days of receipt and applies to cases in which plans submit claims using diagnostic codes that are not documented on a patient’s chart. Failure to comply leaves the plan subject to civil damages and penalties. UnitedHealthcare challenged the rule in a lawsuit in 2016, arguing that the rule treats Medicare Advantage and traditional Medicare unequally, which violates the “actuarial equivalence” standard between the two forms of coverage. In a statement, UnitedHealthcare said it will comply with the rule.
 
Study Finds Medicare Telehealth Expansion Did Not Increase Costs
On June 21st, University of Michigan researchers released a brief study which found that telehealth flexibilities during the Covid-19 PHE have “not increased the overall volume of outpatient E&M services received by Medicare beneficiaries.” The researchers examined the telehealth claims during the period from 2019 through 2021 and found that total volume of outpatient E&M services decreased in 2020 and 2021, compared to 2019, even though telehealth claims increased and then stabilized during that period.
 
The study is available here. 

Congressional Hearings

Tuesday, June 28th: 

  • At 11am, the House Energy & Commerce Committee Subcommittee on Oversight and Investigations will hold a hearing on oversight of Medicare Advantage plans in the private sector. The hearing will discuss “quality of care” and “fiscal sustainability” of Medicare Advantage. More information, including the briefing memo, is available here.

Wednesday, June 29th: 

  • At 11am, the House Energy & Commerce Committee hold a hearing entitled “Investing in Public Health: Legislation to Support Patients, Workers, and Research.” An array of 11 bills will be considered. More information is available here.

New York State Updates

Governor Hochul Signs Legislation Expanding Scope of Practice for Certain Mental Health Practitioners
On June 24th, Governor Hochul signed legislation (S9449/A6008) that permits licensed mental health counselors (LMHCs), licensed marriage and family therapists (LMFTs) and licensed psychoanalysts that meet certain requirements to receive “diagnostic privilege,” allowing them to diagnose and develop assessment-based treatment plans. Providers will apply to the State Education Department to obtain the diagnostic privilege, which will be valid indefinitely. Providers have until June 24, 2025 to receive the diagnostic privilege, during which they may continue to diagnose and develop treatment plans.
 
This legislation was passed to address the expiration of the “Social Worker Exemption,” which lapsed also on June 24th. The licensing exemption, first enacted in 2002, allowed certain staff to perform direct care functions that would ordinarily be outside their scope of practice.
 
On June 22nd, prior to the passage of this legislation, the New York State Office of Mental Health (OMH) and Office of Addiction Services and Supports (OASAS) issued guidance addressing provider questions and concerns regarding sunset of the exemption. As noted in the guidance, the State Fiscal Year 2019 Enacted Budget included legislation that amended and clarified the social work and mental health practitioner licensing exemption, as follows: 

  • Continue to allow unlicensed individuals to independently perform an array of supportive and recovery-oriented services, including home and community-based services for adults and children, residential rehabilitation, peer support, and skill development services;
  • Allow unlicensed individuals and individuals with different scopes of practice to participate as part of multi-disciplinary teams and assist licensed professionals to develop and implement behavioral health treatment or service plans; and  
  • Provide for “grandparenting” of individuals who are employed or commence employment in a program or service operated, regulated, funded, or approved by OMH, OASAS, or another human services agency on or before June 24, 2022, enabling such individuals to practice under the original exemption provisions as long as they remain employed in settings by such agencies (additional guidance on eligibility for this exemption is forthcoming).

This guidance was issued based on current law, meaning that it does not take into account the passage of S9449 and may be updated shortly. The guidance is available here.
 
OMH Proposes Part 599 Regulations Moving Article 31 Clinics to Medicaid State Plan Rehabilitation Option
On June 8th, OMH published a proposed rule in the State Register amending Part 599 of Title 14 of the New York Codes, Rules, and Regulations. The proposed amendments, as approved by CMS, will move the authority for existing Article 31 clinic treatment programs to the Medicaid rehabilitative services option, which may be considered home and community-based services (HCBS). On July 12th from 1:30pm to 2:30pm, OMH will present an overview of the proposed regulations. Registration for the webinar is available here.
 
The proposed rule makes certain programmatic changes, which include: 

  • Renaming “Clinic” to “Mental Health Outpatient Treatment and Rehabilitative Services Programs”;
  • Allowing psychiatric nurse practitioners to sign off on treatment plans;
  • Adding the ability to provide peer/family support services on an individual or group basis, up to 3 hours per day. Programs may provide an unlimited number of pre-admission peer/family support services for engagement, and such visits will not count towards the 30 or 50-visit utilization thresholds;
  • Expanding programs’ ability to provide off-site visits, which are currently available only to children under 19 and reimbursed at 150% of the on-site rate through State-only funding, to all enrollees;
  • Incorporating the Intensive Outpatient Program (IOP) in regulation, eliminating the need for associated waivers;
  • Permanently authorizing the flexibility to round service durations according to AMA guidelines, as currently allowed under Covid-19 PHE authority;
  • Permitting group therapy to be provided for durations between 40-60 minutes, with a 30% reduction in reimbursement; and
  • Allowing individuals to be simultaneously enrolled in multiple programs, although they still may not receive the same service on the same day from multiple programs.

The Notice of Proposed Rule Making is available here. The text of the proposed rule is available here. Public comments may be submitted to regs@omh.ny.gov through August 8th. 
 
DOH Issues MLTC Policy Guidance on QIVAPP 2022-2023 Distributions
On June 22nd, the New York State Department of Health (DOH) issued policy guidance for managed long term care (MLTC) organizations that receive funding from the Quality Incentive Vital Access Provider Pool (QIVAPP). The State Fiscal Year 2022-2023 Enacted Budget includes $37.4 million (state share) in additional QIVAPP funding for providers, which will be distributed to providers based on 2020-2021 utilization. DOH will reconcile the enhanced QIVAPP payments among plans/providers against 2020-2021 utilization later this year, in conjunction with the annual distribution of the historical QIVAPP base program funding ($35 million state share).
 
Prior to distribution of funding to Licensed Home Care Services Agencies (LHCSAs), MLTCs should request and receive attestations from participating providers stating that the organization: 

  • Still qualifies for the QIVAPP program; and
  • Will use funds to maintain or enhance current health benefits.

The guidance is available here. Questions may be submitted to mltcrs@health.ny.gov. 

Funding Opportunities

HUD Announces $323 Million Supplemental Grant for Unsheltered Homelessness
On June 22nd, the Department of Housing and Urban Development released a special Notice of Funding Opportunity (NOFO) under the Continuum of Care CoC program which will make funds available to address unsheltered and rural homelessness. Under the NOFO, existing or new prospective CoC providers would be able to apply to fund homeless outreach, permanent housing, and other costs as part of a comprehensive approach to solve unsheltered homelessness. CoC applicants should be composed of representatives of nonprofit homeless providers, public housing agencies, governmental entities, and other stakeholders. HUD “strongly promotes partnerships with health care organizations” as part of this opportunity.
 
A press release on the program is here, and the NOFO is available here. Applications will be due October 20th.
 
HRSA Issues Additional FY 2023 FQHC Service AreaCompetition
On June 16th, 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 the Bronx, Brooklyn, Manhattan, and Staten Island
 
Applications are due August 15th. More information is available here. 
 
DOHMH Issues Concept Paper Outlining Planned RFP for On-Site Specimen Collection and/or Vaccination Sites
On June 21st, the New York City Department of Health and Mental Hygiene (DOHMH) released a Concept Paper outlining a planned Request for Proposals (RFP) for the provision of: 

  • On-site testing/specimen collection; and/or
  • Immunization services in a variety of settings to prevent, detect, or mitigate communicable and vaccine-preventable disease outbreaks.

The awarded contractor(s) would be expected to maintain a citywide network of appropriate on-call personnel to deploy services at locations across the five boroughs at DOHMH’s request. Onsite specimen collection and vaccination service locations may include community settings, and congregate and non-congregate residential settings, among others.
 
DOHMH will allocate up to $120 million in total funding, to be awarded to up to four contractors over the six-year program period. Each contractor must have a New York State-licensed physician to oversee planning and operations.
 
The Concept Paper is available in the PASSPort system here by searching “81622Y0193.” Questions and comments may be submitted to rfp@health.nyc.gov with “Onsite Specimen Collection and Vaccination Services” in the subject line through August 5th. DOHMH anticipates issuing the RFP in late fall 2022, with award decisions made by late winter 2023.