Weekly Health Care Policy Update – August 22, 2024

August 30, 2024

In this update: 

  • Federal Agencies
    • CMS Releases State NOFO for the CGT Access Model
    • CMS Issues Report on Enforcing Surprise Billing and Other Consumer Complaints
    • HHS Proposes Rule on Acquisition Regulations for Health Information Technology
    • CMS Announces Drug Prices After First Round of Negotiations
  • Other Updates
    • Republican Attorneys General Sue CMS on DACA Policy
    • Texas Sues to Stop Nursing Home Staffing Rule
    • Democratic National Committee Releases Party Platform
    • Federal Judge Blocks FTC Noncompete Ban
    • CDC Releases 2021 Life Expectancy Data
    • Carequality Announces Moves to Align with TEFCA
    • Humana to Pay $90 Million Settlement for Overcharging Medicare
    • AHA Names New Trustees to its Board
    • New Jersey to Erase $100 Million in Medical Debt

Federal Agencies

CMS Releases State NOFO for the CGT Access Model
On August 15th, the Centers for Medicare & Medicaid Services (CMS) announced the release of the State Notice of Funding Opportunity (NOFO) for the Cell and Gene Therapy (CGT) Access Model. The CGT Access Model aims to test a “CMS-led approach to developing and administering outcomes-based agreements (OBAs) for cell and gene therapies.” CGT’s initial focus is on sickle cell disease. CMS will negotiate a set of pricing and outcome measures with pharmaceutical measures, and States may decide whether to join these arrangements and receive rebates. In return, they will commit to making such treatments widely accessible under a standard access policy.

State Medicaid programs must apply to participate in the CGT model through the State Request for Applications (RFA), which was released in June. The NOFO is a separate, optional component which offers them cooperative agreement funding of up to $9.6 million per state. Both applications are due February 28, 2025, with an anticipated award date of July 1, 2025. 

More information on the model is available here.

CMS Issues Report on Enforcing Surprise Billing and Other Consumer Complaints
On August 20th, CMS released a document entitled “Complaint Data and Enforcement Report on Health Insurance Market Reforms,” giving an overview of how it has enforced certain health care consumer protections under its jurisdiction. The vast majority of complaints were related to surprise billing protections under the No Surprises Act, although CMS also lists complaints related to mental health parity and other ACA protections.

According to the report, CMS has received over 16,000 complaints in total as of June 30, 2024, of which more than 12,000 were related to the No Surprises Act while fewer than 300 were related to mental health parity or the ACA. Many of these claims were outside of CMS’s jurisdiction and forwarded onto other agencies. Of the 4,838 complaints that CMS closed, it found a violation in 400 of them. CMS subsequently directed plans, issuers, providers, health care facilities or providers of air ambulance services to “take remedial and corrective actions to address instances of non-compliance,” resulting in about $4 million in monetary relief paid to consumers or providers.

The report is available here.

HHS Proposes Rule on Acquisition Regulations for Health Information Technology
On August 9th, the Assistant Secretary for Technology Policy (ASTP) and Office of the National Coordinator for Health IT (ONC) within the Department of Health and Human Services (HHS) issued a proposed rule as part of the HHS Health IT Alignment Policy Initiative. The initiative, started in 2022, aims to align health IT requirements across grants, cooperative agreements, and contracts. This proposed rule amends and updates the HHS Acquisition Regulation (HHSAR) to add more requirements to the procurement of health IT under certain HHS contracts.

Any contracting entity (including providers or health plans) must adopt IT that meets HHS’ standards of interoperability if the contract involves implementing, acquiring, or upgrading health IT. This proposed rule could apply broadly to contracts that use health IT for data management and/or pilot new tools in this space.

HHS acknowledges that ONC-certified IT may not be appropriate in all contracts, allowing contractors some leeway and recourse. Experts have already weighed in on the proposed rule, with some voicing concern that these requirements may stifle innovation, particularly for exploratory technology grants. The rule is open to public comment through October 8th.

The rule is available here.

CMS Announces Drug Prices After First Round of Negotiations 
On August 15th, CMS announced new prices for all 10 drugs selected for the first round of negotiations under the Medicare Drug Price Negotiation Program. The new prices, which go into effect on January 1, 2026, range from 38% to 79% of the list price. CMS calculates that these prices will translate to $1.5 billion in out-of-pocket savings for beneficiaries in 2026. CMS also estimates that if these prices had taken effect in 2023, CMS would have saved an estimated $6 billion. As an example, Eliquis, the drug with the highest utilization, will be available to beneficiaries for $231 in 2026 compared to $521 in 2023 for a 30-day supply, a decrease of 56%. CMS is set to select an additional 15 Part D drugs for negotiation by February 1, 2025.

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

Other Updates

Republican Attorneys General Sue CMS on DACA Policy
On August 8th, a group of 15 Republican attorneys general (AGs) filed a suit against CMS over a recent rule that extended federal support for health coverage to the children of undocumented immigrants enrolled in the Deferred Action for Childhood Arrivals (DACA) program. Their case rests on the argument that these children are not “legally present” under the Administrative Procedure Act (APA) and therefore not eligible for coverage under the Affordable Care Act (ACA). The AGs are requesting that the courts postpone the rule’s implementation, which is currently scheduled to take place November 1st.

CMS is anticipating that more than 100,000 DACA recipients could receive coverage with this expansion, though the suit posits that the eventual number may be as high as 200,000. Some DACA recipients under this rule will be eligible for advance premium tax credits (APTCs) and other cost-sharing reductions. The rule did not propose changes to Medicaid eligibility (DACA recipients are not eligible for Medicaid or CHIP). The American Medical Association (AMA) previously endorsed the rule.

The suit is available here.

Texas Sues to Stop Nursing Home Staffing Rule
On August 14th, Texas Attorney General Ken Paxton filed a suit in the Northern District of Texas against CMS over its nursing home staffing rule, finalized in April (SPG summary here). Under the new requirements, nursing homes that receive Medicare or Medicaid funding will be required to have a registered nurse on staff 24/7, providing at least 3.48 hours of direct nursing care per resident per day, among other requirements. The Texas suit argues that CMS does not have the statutory authority to implement such requirements. The rule provides a longer runway and certain other flexibilities for rural facilities, but the Texas suit also raises concerns over the rule’s impact on these facilities. The American Health Care Association filed a similar lawsuit in this district in May.

The announcement is available here.

Democratic National Committee Releases Party Platform 
On August 19th, the Democratic National Committee (DNC) convention kicked off in Chicago, Illinois. Accompanying this, the DNC officially released the 2024 Democratic Party Platform. The platform makes no sweeping proposals regarding health care, instead highlighting smaller specific issues: 

  1. Coverage: The platform proposes to make the current “enhanced” level of ACA plan premium subsidies permanent, and to expand “Medicaid-like coverage” to low-income adults in states that have refused to expand Medicaid.
  2. Surprise billing: The platform proposes to expand surprise billing protections to include ground ambulances.
  3. Drug pricing: The platform proposes to add at least 50 drugs annually to the list eligible for negotiation, totaling 500 within the decade. The platform also proposes to develop a generic drug model limiting Medicare cost-sharing for some generic pharmaceuticals to $2 for all beneficiaries.
  4. PBMs: The platform proposes to require additional transparency from pharmacy benefit managers (PBMs).
  5. Medical Debt: The platform proposes to finalize the current Biden Administration proposal to exclude medical debt from credit reporting.
  6. Abortion: The platform proposes to push for national legislation to make Roe v. Wade the law again, as well as legislation to strengthen access to contraception and in vitro fertilization.

Many of these proposals would require the cooperation of Congress. The full platform is available here.

Federal Judge Blocks FTC Noncompete Ban 
On August 20th, U.S. District Judge Ada Brown of the Northern District of Texas struck down the recent rule by the Federal Trade Commission (FTC) banning noncompete agreements (covered by SPG here). Judge Brown found that the ban was “arbitrary and capricious” and that the FTC did not have the statutory authority to issue it. In her ruling, Judge Brown noted that the FTC lacked “evidence as to why they chose to impose such a sweeping prohibition” and said the rule was “based on inconsistent and flawed empirical evidence.” The rule had been scheduled to take effect in early September. The FTC says it is considering an appeal.

CDC Releases 2021 Life Expectancy Data 
On August 21st, the Centers for Disease Control and Prevention (CDC) released U.S. State Life Tables for 2021, which reflect life expectancy data for all 50 states and the District of Columbia. The data show that Hawaii has the longest life expectancy of any U.S. state, at 79.9 years, while Mississippi has the shortest, at 70.9 years. Overall, residents of southern states have the lowest life expectancies while residents of western and northeastern states have the highest, and women continue to have longer life expectancies than men throughout the U.S.

New York has the 4th highest life expectancy in the CDC’s data, at 76.3 years for men and 81.6 years for women. For New Yorkers who have reached the age of 65, life expectancy is another 17.9 years for men and 20.7 years for women. Between 2020 and 2021, life expectancy for New Yorkers increased 1.3 years, while it declined in 39 other states.

The full report is available here.

Carequality Announces Moves to Align with TEFCA
On August 16th, Carequality announced that it will “forge a strategic path of alignment” with the Trusted Exchange Framework and Common Agreement (TEFCA), the federally-endorsed framework to help connect health exchange networks. Carequality is a non-profit organization founded ten years ago as one of the first electronic health record (EHR) interoperability frameworks. Currently, Carequality supports the exchange of 940 million documents monthly over 45 networks, including 4,200 hospitals and 600,000 care providers.

Carequality notes that “as consensus builds around TEFCA,” it will seek to support alignment, migration, and eventually, “convergence” between its framework and TEFCA. In the short term, Carequality specifically intends to: 

  • Address community concerns about required responses to queries;
  • Accelerate the process of adoption policy revisions to align with TEFCA’s approach to the definition of treatment;
  • Institute stronger directory integrity controls; and
  • Incorporate TEFCA Delegate policies into Carequality’s existing On-Behalf-Of policies.

More information is available here.

Humana to Pay $90 Million Settlement for Overcharging Medicare 
On August 16th, Humana settled a whistleblower lawsuit with the federal government, agreeing to pay $90 million for overcharging Medicare for prescription drugs. The whistleblower lawsuit was originally brought by Steven Scott, a former actuary at Humana, who said that the company misrepresented the cost of drugs to gain a more lucrative Medicare Part D plan contract from CMS. Scott claimed that Humana, in overstating the level of benefits it was providing to beneficiaries, was able to keep the difference between their submitted bid cost and the actual plan cost. Humana will pay the settlement amount but did not admit any wrongdoing.

AHA Names New Trustees to its Board 
On August 9th, the American Hospital Association (AHA) elected six new members to its Board of Trustees: 

  • Joan Coffman (President and CEO, St. Tammany Health System, Covington, LA)
  • Leslie Hirsch (President and CEO, Saint Peter’s Healthcare System, New Brunswick, NJ)
  • Phillip Ozuah (President and CEO, Montefiore Medicine, Bronx, NY)
  • Brian Peters (CEO, Michigan Health & Hospitals Association)
  • Lisa Shannon (President and CEO, Allina Health, Minneapolis, MN)
  • Robert Vissers (President and CEO, Boulder Community Health, Boulder, CO).

Terms for newly elected members will begin on January 1, 2025. The announcement is available here.

New Jersey to Erase $100 Million in Medical Debt 
On August 20th, Governor Phil Murphy of New Jersey announced that he would leverage $550,000 in American Rescue Plan (ARP) funds to eliminate $100 million in medical debt for almost 50,000 New Jerseyans. The debt relief will be achieved through a partnership between Undue Medical Debt, a national nonprofit, and Prime Healthcare, a New Jersey health system. The debt includes $61.6 million owed directly to Prime hospitals and $38.4 million owed to secondary owners of debt, primarily collections agencies. Undue and Prime identified unpaid medical debts that qualify for erasure based on the debtors’ income (if either their income is below 400% of the federal poverty line, or if the medical debt equaled 5% of or more of their income). This makes New Jersey the first state in the nation to relieve $100 million in medical debt.

More information is available here.