Washington Healthcare Update - August 2021 #3

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This week in Washington: Senate passes infrastructure bill; Senate passes budget resolution with reconciliation instructions; Congress enters recess with House members to return Aug. 23.

Congress

Senate

  • Senate Passes Infrastructure Bill
  • Budget Resolution Passes Senate with Instructions Setting Up Health Care Debate in the Fall

Administration

  • President Biden Issues Statement Urging Congress to Lower Prescription Drug Prices
  • Vice President Harris Announces That 2.5 Million Americans Enrolled in Exchange Coverage Since Start of SEP
  • HHS to Require Staff Receive COVID-19 Vaccines
  • FDA Updates EUA to Allow Booster Shot for Immunocompromised Individuals
  • CMS Issues Guidance on the Resumption of Normal Medicaid, CHIP and BHP Operations
  • CMS Rejects Defense of Work Requirement Waivers from Ohio, Utah and South Dakota
  • CMS Requests Comments on Tennessee Funding Demonstration
  • CMS Announces Approval of Colorado Section 1332 Waiver
  • CDC Issues Updated Guidance Advising Pregnant People to Get Vaccinated

Proposed Rules

  • CMS Issues Proposed Rule to Reassign Medicaid Provider Claims
  • CMS Issues Calendar Year 2022 Medicare Hospital Outpatient Prospective Payment System Proposed Rule
  • CMS Issues CY 2022 Medicare Physician Fee Schedule Proposed Rule
  • CMS Issued Proposed Rule for End-Stage Renal Disease Prospective Payment System
  • CMS Proposes 2022 Home Health Prospective Payment System Rate Update

Final Rules

  • CMS Issues Final Rule on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities
  • CMS Issues Final Rule on Inpatient Rehabilitation Facility Prospective Payment System
  • CMS Issues Final Rule on Inpatient Psychiatric Facilities Prospective Payment System
  • CMS Issues Final Rule on Hospice Wage Index and Payment Rate Update
  • CMS Issues Final Rule for Long-Term Care Hospital Quality Reporting Program

Courts

  • Two Lawsuits Filed Over Trump-Era HHS Rule

Reports

  • CBO Provides Sequestration Update for August 2021
  • GAO Report on New Bid Surety Bond Requirement on Medicare’s Competitive Bidding Program
  • GAO Report on Results of Covert Testing for Sales Representatives on Healthcare.gov
  • GAO Report on Medicare Reporting and Staffing Information for Skilled Nursing Facilities

Congress

Senate

Senate Passes Infrastructure Bill

On Aug. 10, the Senate voted 69-30 to pass the bipartisan infrastructure bill, with 19 Republicans voting in favor. The path forward for the bill is not straightforward, as House Speaker Nancy Pelosi has repeatedly stated that the House will not take up the infrastructure bill until the Senate passes the reconciliation package.

The infrastructure bill includes two offsets related to drugs: it would delay the Trump-era Part D drug rebate rule and require drug companies to refund Medicare for leftover medicine when vials contain more than patients need. The rebate rule was intended to eliminate Part D rebates unless they are shared upfront at the point of sale, and its delay will offset $49 billion. The measure, which requires drug companies to pay back Medicare Part B for unused portions of drugs packaged in vials, would save $3 billion over a decade.

Budget Resolution Passes Senate with Instructions Setting Up Health Care Debate in the Fall

In the early morning, the Senate adopted a budget resolution with reconciliation instructions after 14 hours of continuous amendment votes. This will allow the Senate to deliver legislation to address the Biden administration’s “human infrastructure” legislation without Republican votes. The budget resolution calls for a $3.5 trillion framework of climate and social initiatives, including subsidized childcare, expanded Medicare and paid family and medical leave benefits. The House will return early from their district work period to consider the resolution. The budget measure instructs committees to begin drafting the pieces of President Joe Biden’s plan, with a flexible deadline of Sept. 15.

Some of the health issues the resolution makes way for include: adding dental, vision and hearing benefits to Medicare; lowering the age of Medicare eligibility; permitting Medicare to negotiate drug prices; and addressing the “Medicaid Gap” created by some states not having expanded their Medicaid programs. In addition, it is expected that the reconciliation package may also include other drug pricing reforms. Two Democratic senators who already voted for the resolution are expressing discomfort with the top line $3.5 trillion number.

Administration

President Biden Issues Statement Urging Congress to Lower Prescription Drug Prices

On Aug. 12, President Joe Biden detailed his vision for reducing the cost of prescription drugs as part of his Build Back Better Agenda. He called on Congress to act to allow Medicare to negotiate drug prices. He stated that these actions would build on existing progress, including a recent executive order to improve competition. He also stated his administration will be working with states and tribes to import safe prescription drugs from Canada.

The statement can be found here.

Vice President Harris Announces That 2.5 Million Americans Enrolled in Exchange Coverage Since Start of SEP

On Aug. 10, Vice President Kamala Harris announced that more than 2.5 million Americans signed up for exchange coverage since the start of the special enrollment period (SEP). The special enrollment period ended on Aug. 15.

HHS to Require Staff Receive COVID-19 Vaccines

On Aug. 12, Secretary of the Department of Health and Human Services (HHS) Xavier Becerra announced that the department would require its workforce to get vaccinated against COVID-19. This requirement will also apply to staff at the Indian Health Service (IHS) and the National Institutes of Health (NIH), as well as to employees, contractors, trainees and volunteers who come into contact with patients.

FDA Updates EUA to Allow Booster Shot for Immunocompromised Individuals

On Aug. 12, the Food and Drug Administration (FDA) updated its emergency use authorizations to allow a third booster shot of the Pfizer or Moderna vaccine to be administered to certain immunocompromised individuals. The agency stated that the booster doses should only be used by patients who have had solid organ transplants or have a condition that similarly weakens their immune system.

The guidance can be found here.

CMS Issues Guidance on the Resumption of Normal Medicaid, CHIP and BHP Operations

On Aug. 13, the Centers for Medicare and Medicaid Services (CMS) released a State Health Official letter to help states in their planning efforts to resume routine Medicaid, Children’s Health Insurance Program (CHIP) and Basic Health Program (BHP) operations upon the eventual end of the COVID-19 public health emergency (PHE). The letter notes that the greater flexibilities offered by agencies during the PHE will result in a large volume of pending eligibility and enrollment actions when the PHE declaration ends.

The State Health Official letter can be found here.

CMS Rejects Defense of Work Requirement Waivers from Ohio, Utah and South Dakota

On Aug. 10, the Centers for Medicare and Medicaid Services (CMS) rejected 1115 Medicaid work requirement waivers from Ohio, Utah and South Dakota, saying the three states’ appeals to keep their Medicaid work requirements did not sufficiently explain how they would minimize coverage losses and reduce the impact of COVID-19. This decision leaves Georgia with the last work requirement waiver from the Trump administration.

CMS Requests Comments on Tennessee Funding Demonstration

On Aug. 10, the Centers for Medicare and Medicaid Services (CMS) stated it would reopen comments for 30 days on Tennessee’s Medicaid funding demonstration following a lawsuit brought by beneficiaries and their advocates in April. Earlier this year, the Department of Health and Human Services (HHS) requested extra time from the court to respond to the lawsuit. The HHS response is due Aug. 27.

The 10-year capped funding demonstration was approved in the last days of the Trump administration. Under the demonstration, Tennessee would receive a capped funding amount for Medicaid and could reinvest savings into other health programs. In addition, the waiver allowed the state to change its program without CMS approval if the changes are “additive in nature.”

CMS Announces Approval of Colorado Section 1332 Waiver

On Aug. 13, the Centers for Medicare and Medicaid Services (CMS) announced that the Departments of Health and Human Services (HHS) and the Treasury approved Colorado’s application for an extension of Section 1332 waiver under the Affordable Care Act (ACA) for five additional years.

The fact sheet with additional information can be found here.

CDC Issues Updated Guidance Advising Pregnant People to Get Vaccinated

On Aug. 11, the Centers for Disease Control and Prevention (CDC) announced updated guidance that advises people who are pregnant, recently pregnant, breastfeeding or contemplating pregnancy to get the COVID-19 vaccine. The CDC states that new data demonstrates no increased risk for miscarriage among individuals who received the RNA vaccines before 20 weeks of pregnancy. This is a change from the previous CDC guidance that pregnant people eligible for COVID-19 vaccines should discuss the decision with their doctors.

Additional information from the CDC can be found here.

Proposed Rules

CMS Issues Proposed Rule to Reassign Medicaid Provider Claims

On July 30, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule titled “Medicaid Program; Reassignment of Medicaid Provider Claims.” The proposed rule would explicitly authorize states to make payments to third parties to benefit individual practitioners by ensuring health and welfare benefits, training, and other benefits customary for employees, if the practitioner consents to such payments to third parties on the practitioner’s behalf.

Comments will be accepted until Sept. 28.

The proposed rule can be found here.

CMS Issues Calendar Year 2022 Medicare Hospital Outpatient Prospective Payment System Proposed Rule

On July 19, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Calendar Year (CY) 2022 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule.” CMS is required by the Jan. 2021 Hospital Price Transparency Final Rule to update Medicare payment policies for OPPS hospitals and ASCs on an annual basis. In the proposed rule, CMS proposes several changes aimed at increasing compliance and reducing hospital burden. These changes include setting a minimum civil monetary penalty (CMP) of $300 a day that would apply to smaller hospitals and apply a $10/bed/day charge for hospitals with a bed count over 30, not to exceed a daily amount of $5,500. The minimum total penalty amount for a full year of noncompliance would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.

CMS is seeking input on how to make data on health disparities based on social risk factors more comprehensive. The proposed rule includes a request for information (RFI) to seek public input on establishing rural emergency hospitals (REHs). CMS is also proposing changes to the Radiation Oncology (RO) Model and halting the elimination of the inpatient-only list. The final rule will be published in early November.

Comments will be accepted until Sept. 17.

The fact sheet on the proposed rule can be found here.

The proposed rule can be found here.

CMS Issues CY 2022 Medicare Physician Fee Schedule Proposed Rule

On July 13, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled “Calendar Year (CY) 2022 Medicare Physician Fee Schedule Proposed Rule.” The proposed rule includes policy changes for Medicare payments under the Physician Fee Schedule (PFS) and would continue the coverage of Medicare telehealth services through the end of 2023, among other changes.

The proposed CY 2021 PFS conversion factor is $33.58, a decrease from the CY 2021 factor of $34.89. The proposed rule would also waive the provider enrollment Medicare application fee for organizations that apply as a Medicare Diabetes Prevention Program (MDPP) supplier on or after Jan. 1, 2022. In the proposed rule, CMS requests feedback on how to best update pay rates for the administration of preventive vaccines covered under Part B and whether to assign certain Section 505(b)(2) drug products to existing multiple source codes.

Comments will be accepted until Sept. 13, 2021.

The proposed rule can be found here.

The fact sheet for the rule can be found here.

For additional information on the proposed rule, click here.

CMS Issued Proposed Rule for End-Stage Renal Disease Prospective Payment System

On July 1, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule titled “End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model.” The proposed rule would update payment rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services starting Jan. 1, 2022. The rule also would update the acute kidney injury (AKI) dialysis payment rate for renal dialysis services and the ESRD Treatment Choices (ETC) Model.

Comments will be accepted until Aug. 31, 2021.

The proposed rule can be found here.

A CMS fact sheet on the proposed rule can be found here.

CMS Proposes 2022 Home Health Prospective Payment System Rate Update

On June 28, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule titled “Calendar Year (CY) 2022 Home Health Prospective Payment System Rate Update.” The rule would expand the Home Health Value-Based Purchasing (HHVBP) Model. In addition, the rule would update the Medicare Home Health Prospective Payment System (HH PPS) and the home infusion therapy services payment rates for CY 2022. In addition, the proposed rule would also make permanent changes to the home health Conditions of Participation (CoP) implemented during the COVID-19 public health emergency.

Comments will be accepted until Aug. 27.

The proposed rule can be found here.

The CMS Fact Sheet on the rule can be found here.

Final Rules

CMS Issues Final Rule on Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities

On July 29, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2022; and Technical Correction to Long-Term Care Facilities Physical Environment Requirements.” The final rule updates the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2022. In addition, the final rule includes a forecast error adjustment for FY 2022, updates the diagnosis code mappings used under the Patient Driven Payment Model (PDPM), rebases and revises the SNF market basket, implements a recently enacted SNF consolidated billing exclusion along with the required proportional reduction in the SNF PPS base rates and includes a discussion of a PDPM parity adjustment. The regulations are effective Oct. 1, 2021.

The final rule can be found here.

CMS Issues Final Rule on Inpatient Rehabilitation Facility Prospective Payment System

On July 29, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2022 and Updates to the IRF Quality Reporting Program; Payment for Complex Rehabilitative Wheelchairs and Related Accessories (Including Seating Systems) and Seat and Back Cushions Furnished in Connection with Such Wheelchairs.” The final rule provides updates to and finalized proposals for the fiscal year (FY) 2022 Inpatient Rehabilitation Facilities Quality Reporting Program (IRF QRP). This rule includes one new finalized measure, the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure, as well as an update to the specifications for the Transfer of Health (TOH) Information to the Patient-Post-Acute Care Quality Measure. The rule will go into effect on Oct. 1, 2021.

The final rule can be found here.

CMS Issues Final Rule on Inpatient Psychiatric Facilities Prospective Payment System

On July 29, the Centers for Medicare and Medicaid Services (CMS) released a final rule titled “FY 2022 Inpatient Psychiatric Facilities Prospective Payment System and Quality Reporting Updates for Fiscal Year Beginning October 1, 2021 (FY 2022).” The rule updates the prospective payment rates, the outlier threshold and the wage index for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPF), which include psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital.

The final rule can be found here.

CMS Issues Final Rule on Hospice Wage Index and Payment Rate Update

On July 29, the Centers for Medicare and Medicaid Services (CMS) released a rule titled “FY 2022 Hospice Wage Index and Payment Rate Update, Hospice Conditions of Participation Updates, Hospice and Home Health Quality Reporting Program Requirements.” The final rule updates the hospice wage index, payment rates and aggregate cap amount for fiscal year 2022. In addition, this rule makes changes to the labor shares of the hospice payment rates and finalizes clarifying regulations text changes to the election statement addendum that was implemented on Oct. 1, 2020. The regulations are effective on Oct. 1, 2021.

The final rule can be found here.

CMS Issues Final Rule for Long-Term Care Hospital Quality Reporting Program

On Aug. 2, the Centers for Medicare and Medicaid Services (CMS) issued a final rule titled “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2022 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Changes to Medicaid Provider Enrollment; and Changes to the Medicare Shared Savings Program.” The rule will update and finalize proposals for the FY 2022 Long Term Care Hospital Quality Reporting Program and includes the new COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure, among other things. The rule will go into effect Oct. 1, 2021.

The final rule can be found here.

Courts

Find a comprehensive look at “The Courts and Healthcare Policy” here.

Two Lawsuits Filed Over Trump-Era HHS Rule

On Aug. 10, the U.S. Chamber of Commerce filed a suit in a Texas federal district court to challenge the Department of Health and Human Services’s (HHS) transparency in coverage rule. HHS issued the Transparency in Coverage final rule on Oct. 29, 2020, and it will go into effect in 2022. The final rule imposed new transparency requirements on group health plans and health insurers. The rule requires insurers, including self-funded group plans, to disclose certain pricing data via machine-readable files, including information on the historical net price of prescription drugs. In their lawsuit, the Chamber of Commerce states that the rule would require the disclosure of confidential commercial information and violates the Administrative Procedure Act. The Tyler Area Chamber of Commerce joined the lawsuit on the side of the U.S. Chamber of Commerce.

On Aug. 12, pharmacy benefit managers (PBMs) filed a separate lawsuit in the D.C. District Court regarding the Transparency in Coverage Final Rule. The Pharmaceutical Care Management Association (PCMA), which represents the PBMs, claims that the additional disclosures required by the final rule would increase drug prices as it would weaken PBMS’s negotiating position with pharmaceutical companies. PCMA also states that the rule would lead to higher Medicare Part D premiums.

Reports

CBO Provides Sequestration Update for August 2021

On Aug. 12, the Congressional Budget Office (CBO) published a short blog post to provide a sequestration update for Aug. 2021. The CBO is required to report annually on its estimate of limits on discretionary budget authority and provide projections on those limits for the following fiscal year.

CBO’s Final Sequestration Report for Fiscal Year 2021 in January found that appropriations had not exceeded caps and no sequestration was needed. Since that report was published, an additional $2.1 billion has been appropriated, making the total $1.6 billion. However, the additional funding was designated an emergency requirement, which caused the caps to be adjusted upward rather than breached. Therefore, CBO predicts that no sequestration will be required as of now. However, CBO observes that caps could still be breached if Congress provides additional appropriations before September without increasing the limits.

The post can be found here.

GAO Report on New Bid Surety Bond Requirement on Medicare’s Competitive Bidding Program

On Aug. 12, the Government Accountability Office (GAO) released a report titled “Medicare Durable Medical Equipment: Effect of New Bid Surety Bond Requirement on Small Supplier Participation in the Competitive Bidding Program.” The report states that CMS administers a competitive bidding program (CBP) to determine which suppliers can provide durable medical equipment (DME) to Medicare beneficiaries in certain geographical areas. Starting in 2021, bidding suppliers were required to get a $50,000 bid surety bond for each CBP area where they submitted a bid. The GAO found that small suppliers successfully obtained contracts and were not negatively impacted by this change.

The full report can be found here.

GAO Report on Results of Covert Testing for Sales Representatives on Healthcare.gov

On Aug. 10, the Government Accountability Office (GAO) published a report titled “Private Health Coverage: Results of Covert Testing for Selected Sales Representatives Listed on Healthcare.gov.” The report states that since 2014, millions of consumers have purchased individual market health insurance plans through the marketplaces established under the Patient Protection and Affordable Care Act (PPACA). Sales representatives on the Department of Health and Human Services’s (HHS) website can also sell other types of health coverage that may cost less and offer less coverage. The GAO carried out covert tests on selected sales representatives to see if they engaged in potentially deceptive practices when speaking with a fictitious applicant. Of all 31 sales representatives contacted by GAO, they all appropriately referred the fictitious applicant and none engaged in potentially deceptive or misleading marketing practices.

The full report can be found here.

GAO Report on Medicare Reporting and Staffing Information for Skilled Nursing Facilities

On Aug. 9, the Government Accountability Office (GAO) reissued with revisions a report titled “Medicare: Additional Reporting on Key Staffing Information and Stronger Payment Incentives Needed for Skilled Nursing Facilities.” The report was previously published July 9. In the revised report, the GAO found that 2019 skilled nursing facilities (SNF) staffing data found that almost all facilities frequently met a federal requirement for a registered nurse on site for eight hours per day. However, fewer SNFs met staffing measures that specify the number of nursing hours per resident per day. GAO recommended that Congress direct the Department of Health and Human Services (HHS) secretary to implement appropriate payment reductions for SNFs that generate Medicare spending on preventable critical incidents. GAO also recommends that the Centers for Medicaid and Medicare Services (CMS) report more staffing information.

The full report can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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