Weekly Health Care Policy Update – September 13, 2024

September 20, 2024

In this update: 

  • Legislative Update
    • Congress Returns from Recess, Considers Government Funding and Health Bills
  • Federal Agencies
    • HHS and Other Agencies Finalize Updates to Mental Health Parity Rules
    • CMS Further Extends Medicaid Unwinding Deadline to End of 2025
    • HHS Drops Data Tracking Lawsuit Appeal
    • ARPA-H Announces PRECISE-AI
    • CDC Publishes Report on Medication Use, Coverage, and Nonadherence
    • SAMHSA Announces $68 Million for Suicide Prevention and Mental Health Programs
  • Other Updates
    • MedPAC Holds September 2024 Meeting
    • AMA Releases 2025 CPT Code Set
    • Census Bureau Reports Uninsurance Rate Stable for 2023
    • Fitch Finds Hospital Wage Inflation Decreased to 3% in 2024
    • Hospitals Sue HHS Over Medicare Advantage DSH Payments
    • United Introduces Prior Authorization Gold Card Program
  • New York State Updates
    • Governor Hochul Announces Total Funding Amount for 1332 Waiver Essential Plan Expansion
    • OMH Releases Resources to Support Implementation of Commercial Rate Mandate
    • OPWDD Releases Final Report from Independent Assessment of Managed Care
    • DOH Issues Public Notice on Inpatient Capital Add-on Reduction
    • DOH Issues Non-Patient Specific Order Allowing Pharmacists to Administer Mpox Vaccine
    • DOH Issues Updated Guidance on MLTC Involuntary Disenrollment

Legislative Update

Congress Returns from Recess, Considers Government Funding and Health Bills
This week, the House and Senate returned from recess. Both houses are scheduled to be in session through September 27th. The main order of business is passing a government funding bill, which is expected to be a continuing resolution (CR), as the federal government will otherwise undergo a shutdown after September 30th. Negotiations in both houses, and among and within the two parties, are ongoing, and no clear resolution is apparent. One possible solution is a CR that would extend through December 13th, creating a new deadline during the lame-duck session after the 2024 general election.
 
Health care bills are once again likely to be part of a lame-duck spending deal. Congress is under pressure to deal with several major topics, including the expiration of Medicare telehealth flexibilities at the end of 2024 and the scheduled decrease of 2.8% in Medicare physician payments. On September 11th, the House Education and Workforce Committee advanced three health care bills, two of which were similar to language advanced by the Senate Health, Education, Labor, and Pensions (HELP) Committee. These bills may serve as potential offsets for bills that would extend telehealth or mitigate the payment reductions. However, all such legislation remains in the early stages of negotiation.

Federal Agencies

HHS and Other Agencies Finalize Updates to Mental Health Parity Rules
On September 9th, the Departments of Labor (DoL), Health and Human Services (HHS), and the Treasury finalized rules to update requirements for parity between physical and mental health services. The new rules are intended to strengthen requirements originally established in the Mental Health Parity and Addiction Equity Act (MHPAEA) in 2008. MHPAEA was intended to ensure that coverage of mental health services is available on the same basis as medical or surgical treatment, including copayments, prior authorization, and other utilization management tools. It applies in general to group health plans, including self-insured and fully-insured arrangements, that cover more than 50 employees. However, agency reports to Congress have repeatedly highlighted concerns around inadequate compliance with MHPAEA, most recently in July 2023 (available here).

The final rule establishes new requirements for network composition and places new guardrails on medical management techniques, also known as non-quantitative treatment limitations (NQTLs). Specifically, the rule would: 

  • Limit NQTLs: The rule reinforces that NQTLs for mental health care may not be more restrictive than those for medical and surgical care. The rules provide specific examples of practices that are forbidden under MHPAEA, including some prior authorization requirements, standards for network composition, and methodologies to determine out-of-network reimbursement rates.
  • Require Uniform Benefits: The final rule requires that if a plan/issuer provides coverage for a mental health condition or SUD in any benefits classification, it must provide meaningful benefits for such condition or disorder in every classification in which meaningful medical/surgical benefits are provided.
  • Require Further Data Collection: The rule requires that health plans and insurers evaluate data related to the outcomes of NQTLs and other coverage rules to ensure people have equivalent access between their mental health and medical benefits. However, it does not prescribe specific data requirements, instead allowing flexibility for plans and insurers to determine what data is appropriate to evaluate.
  • Codify Comparative Analysis: The rule codifies a requirement set forth in MHPAEA that health plans and insurers must conduct comparative analysis to quantify the impact of NQTLs. Plans and insurers must include information related to network composition, methodologies to determine out-of-network reimbursement rates, and NQTLs like prior authorization.
  • Expand Applicability to Non-Federal Government Health Plans: The rule codifies congressional changes made to MHPAEA in the Consolidated Appropriations Act of 2023 (CAA 2023) by requiring non-federal government health plans to comply with MHPAEA. Non-federal government plans were previously allowed to opt out of MHPAEA compliance. Under the final rule, such plans will no longer be allowed to apply for a new exemption (effective as of December 29, 2022, the enactment date of the CAA 2023). Plans subject to collective bargaining agreements that have an exemption in effect may renew the exemption until the date on which the term of the last collective bargaining agreement expires. Carriers in the Federal Employee Health Benefits Program already comply with MHPAEA.
  • Align Rules with Sunset of Opt-Outs: The rules align current regulations with the sunset of the MHPAEA opt-out exemption provisions. According to the White House, this provision will extend MHPAEA’s protections to 200 additional plans.

Most provisions in the final rule will apply to group health plans on the first day of the first plan year beginning on or after January 1, 2025.

The announcement is available here, and a fact sheet is available here. DOL’s Employee Benefits Security Administration will hold a webinar on September 19th at 2pm to provide information about the final rule. Registration is available here.

CMS Further Extends Medicaid Unwinding Deadline to End of 2025
On August 29th, the Centers for Medicare & Medicaid Services (CMS) issued two guidance documents for states on complying with regulations regarding timely processing of Medicaid and Children’s Health Insurance Program (CHIP) eligibility renewals and the timeline for completing unwinding-related renewals. CMS is providing states additional time to complete eligibility renewals, address backlogs in processing redeterminations, and comply with federal renewal timeliness requirements. The guidance establishes a new deadline of December 31, 2025 for states to complete all unwinding-related renewals for Medicaid and CHIP beneficiaries. Additionally, CMS is permitting states to delay or redistribute non-unwinding-related renewals until this date to achieve a more even distribution of redeterminations going forward. Starting January 1, 2026, states will be required to process periodic renewals of eligibility in a timely manner, consistent with federal regulations and routine state processing timelines.

The announcement is available here.

HHS Drops Data Tracking Lawsuit Appeal 
On August 30th, HHS dropped its appeal of a recent federal court decision that curbed its efforts to restrict the use of online trackers often utilized by hospitals. In June, a federal judge in Texas ruled that 2022 HHS guidance limiting the use of pixel tracking technologies, which are routinely found on hospitals and health systems website, was illegal. Specifically, the rule posited that third-party web technologies that capture pixels on websites and mobile apps could be in violation of the Health Insurance Portability and Accountability Act (HIPAA). The lawsuit was originally brought by the American Hospital Association (AHA) and centered on concerns of government overreach, with the AHA arguing that these technologies are important for overall data sharing and protect patient privacy. This decision by HHS comes amid ongoing class action suits against hospitals over pixel and other tracking technology-related privacy breaches.

ARPA-H Announces PRECISE-AI
On August 29th, the Advanced Research Projects Agency for Health (ARPA-H) launched the Performance and Reliability Evaluation for Continuous Modifications and Useability of Artificial Intelligence (PRECISE-AI) program. This program will support technical capabilities that can automatically detect and correct performance errors with AI-enabled medical tools. To date, the Food and Drug Administration (FDA) has approved nearly 1,000 medical devices with integrated AI capabilities. In order to maintain functional integrity and ensure peak performance, PRECISE-AI will develop tools and capabilities to address AI degradation across five technical areas and multiple awards.

The announcement is available here, and the draft solicitation is available here.

CDC Publishes Report on Medication Use, Coverage, and Nonadherence 
On September 5th, the Centers for Disease Control and Prevention (CDC) published a report on prescription medication use, coverage, and nonadherence among adults aged 65 and older between 2021 and 2022. Overall, 88.6% of adults took prescription medications and 82.7% had prescription drug coverage. However, 3.6% of older adults did not get a needed medication due to cost and 3.4% did not take medication as prescribed due to cost. Not surprisingly, the report found that older adults without drug coverage were less likely to get prescription medication and less to take needed medication as prescribed. In addition, older adults who were food insecure, older adults with disabilities, or those reporting fair or poor health (as compared with those reporting excellent, very good, or good health) had higher rates of cost-related medication nonadherence.

The full report is available here.

SAMHSA Announces $68 Million for Suicide Prevention and Mental Health Programs 
On September 10th, the Substance Abuse and Mental Health Services Administration (SAMHSA) announced $68 million in grants to suicide prevention and mental health programs as part of Suicide Prevention Month. The largest portion of these awards ($42.9 million) went to the Children’s Mental Health Initiative for children with serious emotional disturbances (SED), followed by grants for Cooperative Agreements for the Garrett Lee Smith (GLS) State/Tribal Youth Suicide Prevention and Early Intervention Program ($15.3 million). SAMHSA also awarded grants to the new Center for Mental Health: Dissemination, Implementation, and Sustainment and the GLS Campus Suicide Prevention program. Funding in New York flowed to two counties and the state Office of Mental Health (OMH).

The announcement is available here.

Other Updates

MedPAC Holds September 2024 Meeting 
On September 5th, the Medicare Payment Advisory Commission (MedPAC) held its September
public meeting. MedPAC provided an overview of Medicare’s current financial status as a preview of the March 2025 Report to Congress. In 2022, Medicare spending reached $950 billion, principally due to a 2% increase in enrollment, an increase in the volume and intensity of services, and a 3% inflation rate. MedPAC also anticipates a considerable increase in spending on GLP-1 drugs under Medicare Part D. Additionally, Medicare’s Hospital Insurance (HI) trust fund and the Supplementary Medical Insurance (SMI) trust fund are expected to remain solvent until 2035. Commissioners also reviewed outpatient cost-sharing at Critical Access Hospitals (CAHs), sharing a desire to address charge-based coinsurance, but they did not reach a consensus on how.
 
The slides from the presentation are available here.
 
AMA Releases 2025 CPT Code Set 
On September 10th, the American Medical Association (AMA) released the Current Procedural Terminology (CPT) 2025 code set. CPT codes are used nationwide to define and bill for medical procedures and services. In order to reflect advancements in clinical practice, the 2025 code set includes 420 updates (including 270 new codes, 112 deletions, and 38 revisions). The largest portion of the additions (37%) stemmed from new areas within proprietary laboratory analyses, including novel genetic testing. The 2025 code also includes edits to digital medicine codes while adding seven new codes for AI augmentative data analysis.
 
The announcement is available here.
 
Census Bureau Reports Uninsurance Rate Stable for 2023 
On September 10th, the Census Bureau released a report entitled “Health Insurance Coverage in the United States: 2023,” which updates estimates of national insurance coverage. According to the report, in 2023, 92.0% of people surveyed had health insurance at some point during the year, which is largely unchanged from 2022. Overall, private insurance enrollment outpaces public insurance (65.4% to 36.3%, respectively) and employer-sponsored health insurance was the most prevalent type of insurance, covering 53.7% of those surveyed. However, because the Census survey only categorizes individuals as uninsured if they lack health insurance for the entire year, it likely undercounts the true number of uninsured individuals. This is particularly true in 2023, as states began unwinding the Medicaid continuous enrollment requirement that applied during the Covid-19 public health emergency.
 
The announcement is available here.
 
Fitch Finds Hospital Wage Inflation Decreased to 3% in 2024
On September 9th, Fitch Ratings released findings showing that hospital wage inflation was cooling to more sustainable levels. In 2024, year-over-year average hourly earnings averaged 3%, compared to 4.2% in 2023. However, overall payrolls continued to rise for both hospitals (6.7% above levels in February 2020) and ambulatory care services (12.6% above levels in February 2020). Fitch notes that part of this phenomena can be understood as the slow unwinding of inflated salaries and wage increases to counteract high turnover during the Covid-19 pandemic, and that hospitals may still be experiencing pent-up service demand, particularly from seniors.
 
The announcement is available here, and the report is available here.
 
Hospitals Sue HHS Over Medicare Advantage DSH Payments 
On September 9th, a group of 80 hospitals across California, Ohio, Pennsylvania, and Texas filed a new lawsuit against HHS over Disproportionate Share Hospital (DSH) payments. The hospitals charge that HHS violated the Administrative Procedures Act (APA) in a June 2023 rule that modified how Medicare Advantage patients are included in DSH payment calculations. The plaintiffs are also seeking a reversal of denied appeals from the Provider Reimbursement Review Board. The hospitals allege that these changes to the DSH payment calculations have cost an estimated $3 billion to $4 billion, as the change was applied retroactively.
 
United Introduces Prior Authorization Gold Card Program
On September 4th, UnitedHealthcare announced the launch of its Gold Card program, which is intended to reduce the burden of prior authorization requests for eligible providers. Beginning October 1st, the program will be available to providers serving patients in all lines of business including commercial, individual exchange, Medicare Advantage, and Medicaid. It will apply to approximately 500 procedure codes.
 
In-network provider groups who have submitted at least 10 prior authorization requests for eligible procedures over each of the past two years and have a 92% of higher approval rate are eligible for the program. Once enrolled, these providers can submit “advance notification” to United, rather than the clinical documentation review typically required for prior authorization. 
 
The announcement is available here, and the fact sheet is available here.

New York State Updates

Governor Hochul Announces Total Funding Amount for 1332 Waiver Essential Plan Expansion
On September 9th, Governor Hochul announced that New York will receive $10 billion from the federal government to implement the transition of New York’s Essential Plan to a 1332 State Innovation Waiver. Through this transition, which went into effect on April 1st, the Essential Plan became newly available to adults with incomes between 200% and 250% of the federal poverty line (FPL) while maintaining its previous availability to people with incomes between 138% and 200% of FPL and people with lower incomes who are ineligible for federal Medicaid.
 
The $10 billion of funding does not represent “new” money for New York. Instead, it reflects pass-through funding that replaces the payments the State previously received under the Basic Health Program (BHP) option of the Affordable Care Act, which would have been approximately $9.7 billion, as well as the costs of Advance Premium Tax Credits for the newly-covered 200-250% FPL population, estimated at about $300 million. However, pass-through funding may be used for a wider variety of purposes than the BHP funding, subject to federal approval.
 
The Governor’s press release is available here. The CMS letter finalizing the pass-through funding is available here. Additional details on the waiver are available here.
 
OMH Releases Resources to Support Implementation of Commercial Rate Mandate
On September 10th, OMH announced a new webpage with resources to support commercial insurance plans and behavioral health providers in complying with the upcoming commercial rate mandate. On January 1, 2025, in accordance with the 2024-25 Enacted NYS Budget, commercial insurance plans will be required to reimburse outpatient mental health and substance use disorder services provided by in-network providers at the Medicaid rate (at minimum).
 
To assist with implementation of the mandate, the webpage includes the minimum Medicaid reimbursement rates for non-Ambulatory Patient Group (APG) OMH outpatient services (here) and the APG weight schedule to calculate reimbursement for Mental Health Outpatient Treatment and Rehabilitation Services (MHOTRS) and school-based mental health (SBMH) clinic services (here). Additional resources include a SBMH clinic site list and billing guidance for SBMH clinics.
 
Additional details and resources are available on the webpage here. Questions may be submitted to commercial-billing@omh.ny.gov.
 
OPWDD Releases Final Report from Independent Assessment of Managed Care 
On September 6th, the NYS Office for People with Developmental Disabilities (OPWDD) announced the release of the final report from an independent evaluation on the effectiveness of a managed care payment model for intellectual and/or developmental disability (I/DD) services. The final report, completed by Guidehouse Inc., includes an assessment of the current system and recommendations for programmatic improvements.
 
The final report “does not recommend a transition to full managed care for the whole OPWDD service delivery system.” Instead, it recommends “first assessing the financial viability and feasibility of implementing a partial managed care model” for certain services or sub-populations. In particular, it recommends that “all waiver services should remain in fee-for-service through OPWDD.” Guidehouse also recommended that any managed care implementation should procure a “limited number of qualified managed care plans” who are able to “demonstrate their experience serving people with IDD and their success in a traditional MCO structure.” OPWDD accompanied the publication with a note that “no decision on the managed care recommendations of Guidehouse will be released today.”
 
The final report, executive summary, and plain language document may be accessed here. Questions may be submitted to ARPA.Inquiry@opwdd.ny.gov.
 
DOH Issues Public Notice on Inpatient Capital Add-on Reduction
On September 4th, the New York State (NYS) Department of Health (DOH) announced its proposal to reduce the hospital budgeted inpatient capital rate add-ons and the actual capital expense add-ons by 20%, effective on or after October 1st. This proposal was authorized by the 2024-25 Enacted NYS Budget.
 
The public notice is available in the State Register here. Public comment on this proposal may be submitted to spa-inquiries@health.ny.gov.
 
DOH Issues Non-Patient Specific Order Allowing Pharmacists to Administer Mpox Vaccine 
On September 5th, the Commissioner of the New York State (NYS) Department of Health (DOH) issued a statewide standing order allowing pharmacists to administer the mpox vaccine to adults without a separate prescription from a physician. While DOH reports that mpox cases in New York are low, health officials are remaining vigilant and seeking to expand access to the vaccine as a new, more virulent variant is currently circulating in countries in Africa.
 
The standing order is available here. The DOH press release is available here. A health advisory for providers on mpox is available here.
 
DOH Issues Updated Guidance on MLTC Involuntary Disenrollment 
On September 3rd, DOH issued updated guidance on the resumption of Managed Long Term Care (MLTC) involuntary disenrollment. The updated guidance includes a new reason for mandatory disenrollment: “Enrollee refused to cooperate or was unable to be reached to complete the required assessment.” Completed evidence packets may be submitted for this new reason starting October 3rd for involuntary disenrollment dates in November or later.
 
The guidance is available here.