Weekly Health Care Policy Update – September 27, 2024

In this update: 

• Legislative Updates
  • Congress Passes CR Funding Government through December 20^th
• Federal Agencies
  • CMS Releases Preliminary FY 2025 Readmissions Penalty Data
  • CMS Issues Final Rule on Medicaid Drug Rebate Program
  • HHS OIG Publishes Report on Remote Patient Monitoring
  • HHS OIG Publishes Report on Access to OUD
  • CMS Issues Final Rule on Likely Fraudulent DME Activity in MSSP
  • CMS Releases Medicaid and CHIP Guidance Emphasizing Requirement to Provide BH Services
• Other Updates
  • MACPAC Holds September 2024 Meeting
• New York State Updates
  • DOH Releases Final Monthly PHE Dashboard
  • DOH Adopts Final Regulations on Adult Home Admission and Reporting Requirements
  • OASAS Adopts Voluntary Certification Process for Recovery Residences 
  • DOH Announces Article 28 Rate Enhancements for Individuals with Disabilities and FQHC Dental Services
  • DOH Issues Public Notice Regarding Changes to Pharmacy and Physician Administered Drug Reimbursement
  • CMS Approves New York SPA Implementing Supplemental Payments and COLA for Health Home Plus
  • New York School-Based Health Foundation Issues 2022-23 Annual Report

Legislative Update

Congress Passes CR Funding Government through December 20^th
On September 25^th, the House and Senate passed a Continuing Resolution (CR) to fund the government through December 20, 2024. The CR punts major legislative battles, including new total spending numbers, until after the November election, and potentially into a new administration. House Speaker Mike Johnson originally tried to pass a six-month extension but attached language that would have required individuals to prove citizenship before registering to vote in federal elections (although voting by non-citizens is already illegal in federal elections). Most Democrats and 14 Republicans voted to defeat that bill. The CR then passed both chambers by wide margins.

Federal Agencies

CMS Releases Preliminary FY 2025 Readmissions Penalty Data 
On September 20^th, the Centers for Medicare and Medicaid Services (CMS) released preliminary hospital admissions penalty data for fiscal year (FY) 2025, showing that penalties are set to drop for a third year in a row. The Hospital Readmissions Reduction Program reduces Medicare payments for hospitals who have excessive unplanned readmissions over a three-year rolling period. The readmissions performance data for FY 2025 includes claims from July 2020 through June 2o23, the first data collection to capture the bulk of the Covid-19 pandemic. In FY 2025, only 7% of hospitals will be issued a penalty that reduces Medicare fee-for-service (FFS) payments by 1% or more. This the lowest number of hospitals subject to the penalty in five years. The final data set will be released on October 1^st.

CMS Issues Final Rule on Medicaid Drug Rebate Program 
On September 20^th, CMS issued a final rule on the Medicaid Drug Rebate Program (MDRP). The MDRP requires manufacturers to enter into a National Drug Rebate Agreement (NDRA) in exchange for state Medicaid coverage of their products. On a quarterly basis, manufacturers must submit product and pricing information to determine manufacturer rebates to states. This final rule implements new statutory authority from the Medicaid Services Investment and Accountability Act of 2019to address situations in which manufacturers incorrectly report or classify drugs.

Under the final rule, CMS may determine that a manufacturer has misclassified a drug and, as a result, is paying a lower rebate to state Medicaid programs than would be supported by drug data reported to MDRP. The rule also allows CMS to suspend the NDRA in the case of late reporting. In addition, CMS has new authorities to tighten the timeline and invoicing process for manufacturer rebates.

The final rule is available here, and the fact sheet is available here.

HHS OIG Publishes Report on Remote Patient Monitoring 
On September 19^th, the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS) published a report on remote patient monitoring (RPM) in Medicare. RPM of health data is currently covered by Medicare for any chronic or acute condition. In recent years, RPM utilization has increased dramatically, from about 55,000 enrollees in from 2019 to more than 570,000 in 2022, across both fee-for-service Medicare and Medicare Advantage (MA).

OIG expressed concerns about potential RPM fraud. It found that 43% of enrollees did not receive the “full set” of three RPM services (device provision, setup and education, and treatment management). OIG claims that this “rais[es] questions about whether the monitoring is being used as intended.” OIG therefore made five recommendations for CMS to implement: 

1. Implement additional safeguards to ensure that RPM is used and billed appropriately in Medicare.
2. Require that RPM be ordered and that information about the ordering provider be included on claims and encounter data for RPM.
3. Develop methods to identify what health data are being monitored.
4. Conduct provider education about RPM billing.
5. Identify and monitor companies that specialize in RPM.

The report is available here.

HHS OIG Publishes Report on Access to OUD
On September 17^th, HHS OIG published a report on Medicare and Medicaid beneficiary access to medications for Opioid Use Disorder (MOUD). OIG’s report included county-level analysis, finding that hundreds of counties lacked office-based buprenorphine providers and opioid treatment programs, and for those that did, many did not treat Medicare and Medicaid beneficiaries. The authors outline a number of potential reasons for this disparity, including MA prior authorization requirements, the low level of Medicaid reimbursement, and the accessibility of provider information.

The report is available here.

CMS Issues Final Rule on Likely Fraudulent DME Activity in MSSP 
On September 24^th, CMS issued a final rule entitled, “Medicare Program: Mitigating the Impact of Significant, Anomalous, and Highly Suspect (SAHS) Billing Activity on Medicare Shared Savings Program (MSSP) Financial Calculations in Calendar Year 2023” as part of a broader effort to address billing anomalies in Accountable Care Organization (ACO) reconciliations. Specifically, CMS has been tracking an increase in urinary catheter billings among a small group of durable medical equipment (DME) supply companies, which CMS found to be fraudulent. Beneficiaries did not receive the catheters, physicians did not order them, and the supplies were not even needed. As a result of the suspicious catheter billing activity, the rule makes changes to policies assessing performance year (PY) 2023 for MSSP ACOs and establishes new benchmarks for ACOs for agreement periods in 2024 through 2026.

The fact sheet is available here.

CMS Releases Medicaid and CHIP Guidance Emphasizing Requirement to Provide BH Services
On September 26^th, the CMS released new guidance on health coverage requirements for children enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). The guidance reinforces Medicaid Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) requirements and state best practices. As required under the Bipartisan Safer Communities Act (BSCA), this guidance highlights state responsibility to maintain access to mental and behavioral health services. Without adding additional requirements, this guidance clearly explains statutory and regulatory expectations under the EPSDT program.

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

Other Updates

MACPAC Holds September 2024 Meeting 
On September 19^th and 20^th, the Medicaid and CHIP Payment and Access Commission (MACPAC) convened for its first meeting of the 2024-25 work cycle. Commissioners spoke at length about the recent Access and Managed Care Final Rules, including voicing concern over the “80/20” rule which requires Home- and Community-Based Services (HCBS) providers to pass 80% of Medicaid reimbursements onto direct care workers. The meeting covered other HCBS topics including a streamlined application process and Section 1915(c) waivers, with policy proposals to address cumbersome administrative requirements. Lastly, the Commissioners discussed the Program of All-Inclusive Care for the Elderly (PACE) Model.
 
The slide deck is available here.

New York State Updates

DOH Releases Final Monthly PHE Dashboard
On September 23^rd, the New York State (NYS) Department of Health (DOH) released the twelfth and final issue of the State’s Public Health Emergency (PHE) Unwind Dashboard, a monthly enrollment report on the renewal process for New York’s Medicaid, Child Health Plus, and Essential Plan populations.

The twelfth issue includes the renewal status, demographics, and program transitions of enrollees who had an May 31^st coverage end date, which is the last cohort of eligibility redeterminations. The report shows that 75% of the 601,539 individuals in this cohort have renewed their coverage across the NYSOH marketplace and Local Departments of Social Services. The report does not include information on former enrollees who found coverage through non-public sources, such as employer-based insurance.

The twelfth issue and previous issues may be accessed here. A final report detailing the overall outcomes of the State’s PHE Unwind is forthcoming.

DOH Adopts Final Regulations on Adult Home Admission and Reporting Requirements
On September 25^th, DOH adopted final regulations that clarify the pre-admission screening process and reporting process for adult home residents with a diagnosis of serious mental illness (SMI). The regulations amend sections 487.4 and 487.10 of Title 18 of the New York Codes, Rules, and Regulations (NYCRR) to require adult homes to:  

• Clarify the pre-admission screening requirements for persons suspected of having SMI;
• Continue to report any resident with SMI until DOH issues a written notice to the facility that such reporting is no longer required for that resident; and
• Submit a roster of all residents to DOH on a quarterly basis.

The final regulations are available here and are effective on December 24^th. There were no changes compared to the proposed regulations. Comments received on the proposed regulations may be accessed in the State Register here.

OASAS Adopts Voluntary Certification Process for Recovery Residences 
On September 25^th, the NYS Office of Addiction Services and Supports (OASAS) adopted final regulations outlining a voluntary certification process for Recovery Residences, which are also known as recovery homes or sober homes. The voluntary process aims to standardize safe and quality housing that supports individuals on the continuum of recovery, provide a pathway for providers to legitimize recovery support services, and allow OASAS to develop a framework to collect data on resident outcomes. Recovery residences that do not wish to go through the voluntary certification process will be able to continue operating.

To be approved for certification, recovery residences must meet requirements related to: 

• Staffing and training;
• Support for residents who return to substance use;
• Safety and housing standards; and
• Terminating residency.

The final regulations are available here. There were no changes compared to the proposed regulations. Comments received on the proposed regulations may be accessed in the State Register here.

DOH Announces Article 28 Rate Enhancements for Individuals with Disabilities and FQHC Dental Services
On September 25^th, DOH issued a public notice indicating that, effective on or after October 1^st, it ends to increase by 150% the Ambulatory Patient Group (APG) base rates for Article 28 clinics that serve individuals with intellectual and/or developmental disabilities. The State also intends to establish APG clinic base rates for Article 28 clinics that serve individuals with physical disabilities that are 150% of the current general clinic base rates. This rate enhancement was authorized by the 2024-25 Enacted NYS Budget.

DOH also announced that, effective on or after October 1^st, payments to Federally Qualified Health Centers (FQHCs) for medically necessary dental implants and implant-supported services will be made using an alternative payment methodology (APM) via the NYS Medicaid dental fee schedule, in lieu of the prospective payment system (PPS) base rate. This method will reimburse FQHCs an amount greater than the PPS rate, to acknowledge the higher costs associated with resources, materials, treatment time, and scope of skilled services necessary to perform these procedures.

The public notices are available in the State Register here. Comments may be submitted to spa-inquiries@health.ny.gov.

DOH Issues Public Notice Regarding Changes to Pharmacy and Physician Administered Drug Reimbursement
On September 25^th, DOH issued a public notice indicating that, effective on or after October 1^st, it intends to amend pharmacy reimbursement for brand prescription drugs from the current methodology (wholesale acquisition cost minus 3.3 percent) to wholesale acquisition cost, with no subtraction. DOH also intends to amend the physician administered drug reimbursement for drugs provided and claimed separately by a medical practitioner from actual acquisition cost to the lower of: 

• National Average Drug Acquisition Cost (NADAC) or, in the event of no NADAC pricing available, the Wholesale Acquisition Cost (WAC); or
• The Federal Upper Limit (FUL); or
• The State Maximum Acquisition Cost (SMAC); or
• The actual cost of the drug to the practitioner.

The medical practitioner would never be reimbursed lower than the SMAC or, for drugs that do not have a SMAC, the WAC of the drug based on package size.

The public notice is available in the State Register here. Comments may be submitted to spa-inquiries@health.ny.gov.
CMS Approves New York SPA Implementing Supplemental Payments and COLA for Health Home Plus
On September 25^th, CMS approved New York’s State Plan Amendment (SPA) to implement a supplemental per member per month (PMPM) care management fee for Health Home Plus services provided to individuals under an Assisted Outpatient Treatment (AOT) order. The supplemental payment was authorized by the 2023-24 Enacted NYS Budget and are effective retroactive to April 1, 2024. The SPA also includes a 2.84% Cost of Living Adjustment (COLA) for Health Home Plus, as per the 2024-25 Enacted NYS Budget.

The SPA is available here. The CMS approval letter is available here.

New York School-Based Health Foundation Issues 2022-23 Annual Report 
On September 25^th, the New York School-Based Health Foundation (NYSBHF) issued its 2022-23 Annual Report on School-Based Health Centers (SBHCs). SBHCs provide preventive, primary, oral, and reproductive health services to approximately 250,000 students across New York. This report describes the work of New York’s SBHCs, including the demographics of the students they serve, the mix and volume of services they offer, and their performance on quality metrics.

The report uses data from the Statewide SBHC Data Hub, with participation from over 50% of the state’s SBHCs. Based on data available for the report, nearly half of students served by SBHCs are Medicaid beneficiaries, and 13% are uninsured.

The report is available here. Comments and questions may be submitted to Lisa Perry at lisa.perry@nysbhfoundation.org.