Given the number of healthcare-related congressional hearings this past week, you would think there was a legislative requirement to hold them all at once! There were at least five major healthcare hearings on Tuesday alone (and another one on Wednesday)—each one focusing on a hot-button issue. The hearings spanned a range of topics that we at McDermottPlus have been paying close attention to, including:

• An update on the Department of Veterans Affairs (VA)’s National Scope of Practice Initiative
• Implementation of the No Surprises Act (NSA)
• Potential reforms to pharmaceutical benefit manager policies
• Access to innovative drugs and technologies
• An examination of home health services
• Implementation of the Inflation Reduction Act

Let’s dig into two of the above issues—the VA’s National Scope of Practice Initiative and implementation of the NSA—and briefly discuss some of the regulatory implications (this is a regulatory blog, after all). In both cases, the congressional committees were critical of actions taken by federal agencies and used their oversight authority to investigate.

Will this oversight lead federal agencies to change course? That is the question! (And unfortunately, it’s too early to answer).

VA’s National Scope of Practice Initiative

The House Committee on Veterans’ Affairs’ Subcommittee on Health held a hearing regarding the VA’s National Scope of Practice Initiative. The VA, through this initiative, has set out to establish separate national scope of practice standards for different provider types. Although the VA is working on developing 51 standards, the hearing particularly focused on two: the optometry national standard and the certified registered nurse anesthetist (CRNA) national standard.

There were two panels at the hearing. The first included members from the American Medical Association (AMA), the American Academy of Ophthalmology (AAO), the American Optometric Association (AOA), the American Association of Nurse Anesthesiology (AANA) and the American Society of Anesthesiologists (ASA). The second included three VA officials.

Many members of the Subcommittee expressed concern over the lack of clarity and transparency from the VA on the development of national standards of practice. They reiterated the need for clear definitions of what a team-based model of care looks like, emphasizing that the VA must prioritize the highest quality of care for the nation’s veterans. Members from the physician societies (AMA, AAO and ASA) noted that team-based care models should be physician-led, and any alteration could lead to a lower quality of care and safety issues for the nation’s veterans. Witnesses from the AOA and the AANA highlighted that clinicians other than physicians are also valuable members of the care team—often leading teams while delivering high-quality care. Representatives of the VA in the second panel highlighted that they have continuously sought stakeholder input to help inform and develop national standards of practice. (They are currently holding a series of listening sessions to obtain input.) They noted that they remain committed to ensuring high-quality, safe care to veterans and highlighted that when finalized, the national standards of practice will not result in changes to most professions.

One significant question that was repeated throughout the hearing was whether certain practitioners who are licensed to perform specific services or procedures in one state will be able to travel to a VA facility in another state (where they don’t have a license) and perform that service or procedure. For example, the optometry national standard of practice could authorize optometrists in the ten states that allow them to perform laser eye surgery to practice and operate within the full scope of their license in all VA facilities regardless of location. The VA representatives present at the hearing stated that the VA is considering such a policy, which was very concerning to physician organizations, as well as to the Subcommittee chair, Dr. Mariannette Miller-Meeks (R-Iowa). The VA will evaluate the data and evidence when deciding how to shape the national standards of practice. Interestingly, while the VA is establishing national standards, it will ultimately be up to individual VA hospitals to determine whether their providers have the appropriate license, education and training necessary to conduct certain procedures.

Following the hearing, it is clear that many people (including Dr. Miller-Meeks) will be carefully monitoring the VA’s next steps. The VA plans to finish its series of listening sessions (the last one is today, September 21, focusing on the CRNA standard), propose the national standards in proposed regs with 60-day public comment periods, and finalize them. The VA says that it will allow ample opportunity for states to weigh in on the standards, and that they will be iterative even after they are finalized.

Implementation of the No Surprises Act

The House Ways & Means Committee held a four-hour long hearing on Tuesday highlighting various ways that the Biden Administration has failed to properly implement the NSA. There was nearly universal bipartisan agreement among members of the Committee that the law’s implementation had been a disappointment and was undermining the NSA’s important patient protections.

The witnesses included an emergency physician who works in a small, independent group in North Carolina, a patient advocate, a certified independent dispute resolution (IDR) entity (an arbiter), a chief financial officer from a health system, and a representative from the America’s Health Insurance Plans (AHIP). Interestingly, missing as a witness was a representative from the Biden Administration who may have tried to explain or justify some of the policy and operational flaws that the members highlighted.

Many of the members’ questions were targeted at the emergency physician, Dr. Seth Bleier, and the health system chief financial officer, Mr. Jim Budzinski, who detailed some of the financial ramifications of the flawed implementation. Dr. Bleier, for example, stated that two longstanding in-network contracts had been canceled by health plans, and his independent group has been forced to accept rate cuts of up to 70%. Initial payments for out-of-network services are being based on artificially low qualifying payment amounts (QPAs) that don’t reflect market rates (there also little to no transparency of how the QPA is calculated, as health plans are not required to “show their work.”) These low initial payments are forcing his group to try to utilize a “broken” IDR process. Although the IDR process was meant to be fair and balanced, the high refundable and nonrefundable administrative fees create a significant barrier to entry. Further, even if his group wins the IDR process, health plans not paying what they owe most of the time (an issue that the AHIP representative acknowledged. She said that was because of challenges with the “implementation technology” and the difficulty in reviewing thousands of lines of claims to match up to their systems in order to properly pay on time). Dr. Bleier also talked about the struggles that his group and many others face in staying afloat: If his group cannot adequately cover the cost of providing care in the emergency department, then despite the best efforts of all the emergency providers, patient care could be put at risk.

Many other issues were discussed during this hearing, including the fact that key elements of the NSA—such as the Advanced Explanation of Benefit requirement—had not been implemented yet. Some members discussed actions they could take to ensure better compliance with the law’s requirements, including financially penalizing health plans that fail to pay providers when they lose in the IDR process within the required 30-day timeframe.

From a regulatory perspective, it will be interesting to see what happens next. As I mentioned previously, no one from the Department of Health and Human Services, Department of Labor or Department of the Treasury was on hand to explain how they plan to take action. However, the day after the hearing, the Departments released a proposed reg establishing new IDR fees for 2024. The proposed non-refundable administrative fee is $150 (an increase of $100 over the current fee of $50) and the refundable certified IDR entity fee is $200 to $840 for single determinations and $268 to $1,173 for batched disputes. For batched disputes that exceed 25 line items, IDR entities may set a fixed fee within $75-$250 for each increment of 25 items included in the batched dispute. These fees would apply until another set of fee ranges were proposed and finalized through subsequent notice and comment rulemaking. Comments on this reg are due in 30 days.

Beyond that late-breaking news, here are my predictions:

• The Departments will likely reopen the IDR process soon. The IDR process, for all intents and purposes, has been closed since August 3, 2023, and the arbiter who was a witness at the hearing expressed concern about the huge pile of complaints that his organization will probably receive once the process reopens. The backlog of complaints that currently exists will most likely increase. The Departments have stated publicly that they expect “to direct certified IDR entities to resume issuing payment determinations for some disputes very soon.” More late-breaking news: As of today, September 21, the Departments have directed certified IDR entities to resume processing all single and bundled disputes submitted on or before August 3, 2023. The Texas Medical Association (TMA III) court order invalidated certain parts of the QPA methodology. For disputes initiated prior to the TMA III order, disputing parties have already supplied a QPA, and certified IDR entities are instructed to continue to consider the supplied QPA among other factors in light of the TMA III order, when selecting between the offers made by the disputing parties to determine which offer best represents the value of the services at issue. All other aspects of the IDR process remain closed.
• The Departments will issue another proposed reg soon. This proposed reg will deal with other IDR operational issues and is expected to update batching policies. Batching issues were raised at the hearing, with Mr. Budzinski stating that the current requirements do not correspond with how health systems typically bill for emergency department visits. As stated in a previous blog post, the Departments are working on that proposed reg, but its exact timing is unclear (it may come out soon given that the IDR fee reg was just released!).
• The Departments will continue to receive pressure to publicize their auditing and enforcement strategies. There is a perceived lack of enforcement among the provider community, with many providers complaining that they are penalized for not following the requirements outlined in the statute, but health plans are not.

All in all, many of the same NSA issues that existed before the hearing still exist today. However, some may argue that it was a useful exercise to publicly air all the grievances about the process and provide potential solutions (and the proof may be in the pudding with the release of the IDR fee proposed reg). The ball is in the Departments’ court to improve the implementation process, but if the Departments don’t act, Congress may step in to add some more “teeth” to ensure that the law works as intended. It remains to be seen whether that potential for Congress to take action will spur the Departments to beef up enforcement and get all aspects of the IDR process fully up and running sooner than planned.

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I know I only covered two of the many healthcare-related hearings that occurred this week, so please reach out if you have any questions about the others. However, the two I did highlight provide good insight into the way Congress views its oversight role and its potential power (or lack thereof) over the regulatory process.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.

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