Washington Healthcare Update

April 29, 2024

This Week in Washington: CMS releases SNF minimum staffing standards final rule; Senate HELP Committee chairman requests information on Ozempic and Wegovy pricing; HHS OCR releases final rule concerning HIPAA reproductive healthcare privacy.

Congress

House

Senate

Administration

Proposed Rules

Final Rules

Reports

House

House Budget Committee Chairman Requests GAO Investigation of CMMI

On April 25, House Budget Committee Chairman Jodey Arrington (R-TX) and House Budget Committee Healthcare Task Force Chairman Michael Burgess (R-TX) sent a letter to Government Accountability Office (GAO) Comptroller General Gene L. Dodaro, requesting the GAO investigate whether Center for Medicare and Medicaid Innovation (CMMI) payment models will decrease net federal spending for Medicare.

The chairmen are concerned that the models will increase federal spending despite initial estimates that they would decrease spending. A September 2023 Congressional Budget Office report revealed that CMMI activities increased spending by $5.4 billion between 2011 and 2020 despite projections that they would save $2.8 billion.

For more information, click here.

House Members Urge HHS to Ensure Coverage of CDC-Recommended Vaccines Without Cost-Sharing

On April 19, Reps. Eshoo (D-CA), Bucshon (R-IN), Trone (D-MD) and Garamendi (D-CA) sent a letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra, concerning commercial coverage of vaccines recommended by the Centers for Disease Control and Prevention (CDC).

The members state that final regulations issued by HHS and the Departments of Labor and Treasury that limit health insurance coverage of vaccines to those that are considered “routine,” defy congressional intent and the Public Health Services Act requirement that all CDC-recommended vaccines be covered without cost-sharing. The members are urging HHS to align the final regulations with the statutory requirement.

For more information, click here.

House Energy and Commerce Committee Oversight and Investigations Subcommittee to Hold Hearing on Change Healthcare Cyberattack

On May 1, the House Energy and Commerce Committee Oversight and Investigations Subcommittee will hold a hearing to examine the Change Healthcare cyberattack. The UnitedHealth Group Chief Executive Officer will testify.

For more information, click here.

Senate

Senate HELP Committee Chairman Requests Information on Ozempic and Wegovy Pricing

On April 24, Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders (I-VT) sent a letter to Novo Nordisk Chief Executive Officer Lars Fruergaard Jørgensen, concerning the list and net prices of Ozempic and Wegovy.

The chairman is requesting information on the:

  • Costs and volumes of the drugs sold;
  • Prices paid by government payers;
  • Revenue Novo Nordisk has made from selling the drugs;
  • Manner in which prices are determined; and
  • Research and development expenditures linked to the drugs.

For more information, click here.

Sanders Long COVID Proposal Receives Mixed Comments

On April 9, Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders (I-VT) released a draft proposal concerning Long COVID and requested stakeholder feedback. The proposal has received mixed comments from stakeholders who are divided over the proposal’s funding levels and on whether other chronic conditions should be addressed in the bill.

The Long COVID Moonshot Advocacy Group has requested that the proposal’s funding be used to study infection-associated chronic conditions and illnesses but the Long COVID Foundation has expressed concern that the funding is inadequate. The Long COVID Action Project and the Long COVID Foundation have requested that these conditions be addressed by separate legislation.

Senate Finance Committee to Hold Hearing on Change Healthcare Cyberattack

On May 1, the Senate Finance Committee will hold a hearing to examine the Change Healthcare cyberattack. The UnitedHealth Group Chief Executive Officer will testify.

For more information, click here.

Administration

White House Releases 2024 National Strategy for Suicide Prevention

On April 23, the White House released the 2024 National Strategy for Suicide Prevention. The strategy addresses suicide risk and protective factors and outlines best practices for community-based suicide prevention, treatment and crisis services, health equity and research quality.

For more information, click here.

FDA Requests Comments Concerning Clinical Pharmacology Policy Topics

On April 26, the Food and Drug Administration announced that it is seeking comments to identify clinical pharmacology policy topics that the Office of Clinical Pharmacology should prioritize when issuing guidance concerning drug development programs. Comments are due by June 25.

For more information, click here.

FDA Revises Guidance on Biologics Advertising and Promotion

On April 24, the Food and Drug Administration (FDA) released draft guidance concerning the advertising and promotion of biological reference and biosimilar products. The guidance answers questions manufacturers may have when developing FDA-regulated promotional communications.

For more information, click here.

FTC Bans Noncompete Clauses

On April 23, the Federal Trade Commission (FTC) issued a final rule that prohibits employers from issuing noncompete clauses except under very limited exceptions. Existing noncompetes will no longer be enforceable after the rule goes into effect.

The rule has prompted business groups and the U.S. Chamber of Commerce to file lawsuits against the FTC. Hospital groups and the American Hospital Association have expressed concerns with the rule, arguing that the FTC is overstepping the authority it was granted by Congress and disregarding evidence that shows the rule will have adverse impacts on the healthcare market.

For more information, click here.

Proposed Rules

CMS Proposed Rule Updates Payment Rates for Inpatient and LTC Hospitals for FY2025

On April 10, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would update the Medicare fee-for-service payment rates and policies for inpatient and long-term care hospitals (LTCHs) for fiscal year (FY) 2025.

The proposed rule would:

  • Increase LTCH standard rate payments by 1.2 percent;
  • Raise the fixed-loss amount for high-cost outlier payments to $90,921, reducing overall standard rate payments by 1.3 percent;
  • Rebase the LTCH market basket using a 2022 base year;
  • Adopt and modify patient assessment items related to health-related social needs within the LTCH Quality Reporting Program;
  • Require LTCHs to collect and report specific data related to living situation, food and utilities beginning in FY2028; and
  • Extend the window in which patient assessments must be done from three to four days after admission.

CMS is also requesting comments on two requests for information related to the development of a LTCH QRP (Quality Reporting Program) Star Rating System and future QRP measures.

The American Hospital Association raised concerns about the proposed rule and stated in a press release that the payment update is inadequate and will exacerbate resource challenges for hospitals.

Public comments will be accepted until June 10, 2024. For more information, click here.

CMS Proposed Rule Updates Inpatient Rehabilitation Facility PPS Rates for FY2025

On March 29, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would update the prospective payment system (PPS) rates for inpatient rehabilitation facilities (IRFs) for fiscal year (FY) 2025 and modify the IRF Quality Reporting Program (QRP).

The proposed rule would:

  • Update the IRF PPS payment rates by 2.8 percent or $255 million;
  • Update the IRF PPS wage index using Office of Management and Budget statistical area delineations of revised census data;
  • Phase out the rural adjustment for IRFs that transition from rural to urban status under the new Core-Based Statistical Areas; and
  • Adopt four new items into the IRF Patient Assessment Instrument, modify the Transportation item and remove the “Admission Class” assessment item, beginning on Oct. 1, 2026.

In addition, CMS is requesting comments on two requests for information concerning the development of an IRF QRP Star Rating System and future QRP measures.

Public comments will be accepted until May 28, 2024. For more information, click here.

CMS Proposed Rule Would Update Hospice Payment Rate and Cap Amount for FY2025

On March 28, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would update the Medicare hospice payment and aggregate cap amounts for fiscal year (FY) 2025 and modify the Hospice Quality Reporting Program (HQRP).

The proposed rule would:

  • Update the hospice payment rate by 2.6 percent, an estimated increase of $705 million;
  • Implement a hospice cap amount of $34,364.85;
  • Add two new process measures to the HQRP;
  • Implement the Hospice Outcomes and Patient Evaluation (HOPE) patient-level data collection tool beginning in FY2025 to replace the Hospice Item Set structure; and
  • Modify the Hospice Consumer Assessment of Healthcare Providers and Systems Survey.

In addition, CMS is seeking comments on a request for information concerning the implementation of a separate payment mechanism to account for high-intensity palliative care services.

Public comments will be accepted until May 28, 2024. For more information, click here.

CMS Proposed Rule Would Update Inpatient Psychiatric Facility PPS Rates for FY2025

On March 28, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would update the prospective payment system (PPS) rates for inpatient psychiatric facilities (IPFs) for fiscal year (FY) 2025 and modify the IPF Quality Reporting Program (QRP).

The proposed rule would:

  • Update IPF PPS payment rates by 2.7 percent;
  • Revise IPF PPS patient-level adjustment factors;
  • Require IPFs to submit patient-level quality data every quarter;
  • Increase the cost of electroconvulsive therapy to $660.30 per treatment; and
  • Adopt one new measure under the IPF QRP.

In addition, CMS is requesting comments on two requests for information concerning the development of an IPF PPS Patient Assessment Instrument and potential revisions to the IPF PPS Facility-Level Adjustment Factors.

Public comments will be accepted until May 28, 2024. For more information, click here.

CMS Proposed Rule Would Update Skilled Nursing Facility PPS Rates for FY2025

On March 28, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would update the prospective payment system (PPS) rates for skilled nursing facilities (SNFs) for fiscal year (FY) 2025 and modify the SNF Quality Reporting Program (QRP) and Value-Based Purchasing (VBP) Program.

The proposed rule would:

  • Update SNF PPS rates by 4.1 percent, or $1.3 billion;
  • Revise ICD-10 code mappings to improve payment and coding accuracy;
  • Expand CMS’ ability to impose financial penalties on nursing homes for health and safety deficiencies;
  • Add four new social determinants of health (SDOH) assessments and modify one SDOH assessment item for the SNF QRP beginning in FY2027; and
  • Adopt a measure selection, retention and removal policy and update the Total Nurse Staffing measure and case-mix methodology in the SNF VBP program.

In addition, CMS is requesting comments on two requests for information concerning future updates to the Non-Therapy Ancillary component of the Patient-Driven Payment Model and SNF QRP measures.

Public comments will be accepted until May 28, 2024. For more information, click here.

FDA Proposed Rule Would Ban Electrical Stimulation Devices

On March 26, the Food and Drug Administration (FDA) released a proposed rule that would ban electrical stimulation devices (ESDs) intended for self-injurious behavior (SIB) or aggressive behavior (AB). The FDA believes the devices present an unreasonable and substantial risk of illness or injury that cannot be corrected or eliminated by labeling.

The proposed rule would:

  • Designate ESDs for SIB or AB as banned devices; and
  • Apply the ban to devices already in use, commercially distributed and those set to be sold or commercially distributed in the future.

Public comments will be accepted until May 28, 2024. For more information, click here.

FDA Proposed Rule Establishes Criteria for Drug Products with Demonstrable Compounding Difficulties

On March 20, the Food and Drug Administration released a proposed rule that would establish criteria for the lists of drug products or categories of drug products that present demonstrable difficulties for compounding under the Federal Food, Drug and Cosmetic Act.

The proposed rule would:

  • Create separate lists for 503A and 503B products that present demonstrable difficulties for compounding;
  • Establish six criteria used to determine which list/lists products are placed on; and
  • Add oral solid modified-release drug products that employ coated systems, liposome drug products and drug products produced using hot melt extrusion as categories to the 503A and 503B product lists.

Public comments will be accepted until June 18, 2024. For more information, click here.

Final Rules

FTC Final Rule Revises Health Breach Notification Rule

On April 26, the Federal Trade Commission (FTC) released a final rule that revises the Health Breach Notification Rule that requires vendors of personal health records (PHR) and related entities not covered by the Health Insurance Portability and Accountability Act, to notify individuals and the FTC of unsecured PHR data breaches. The rule will:

  • Modify the definition of PHR identifiable health information and add new definitions for covered healthcare provider and healthcare services or supplies;
  • Clarify that a “breach of security” includes an unauthorized acquisition of identifiable health information that occurs as a result of a data security breach or unauthorized disclosure;
  • Revise the definition of a PHR-related entity to make clear that the rule applies to entities that offer products and services through online services, including mobile applications;
  • Clarify multiple sources of PHR identifiable health information;
  • Expand the use of electronic notification and consumer notice content; and
  • Require covered entities to report breaches involving 500 or more individuals to the FTC at the same time notices are sent to affected individuals and no later than 60 calendar days after discovery of the breach.

The final rule has not yet been submitted to the Federal Register but will go into effect 60 days after submission.

For more information, click here.

CMS Releases Final Rule Concerning Nondiscrimination in Health Programs

On April 26, the Centers for Medicare and Medicaid Services released a final rule that revises Section 1557 of the Affordable Care Act to advance health equity and reduce disparities. The rule will:

  • Apply nondiscrimination standards to all Department of Health and Human Services (HHS)-administered health programs and activities;
  • Reinstate Section 1557’s application to health insurance issuers that receive federal financial assistance;
  • Affirm that sex discrimination protections apply to discrimination on the basis of sexual orientation, gender identity, pregnancy and sex characteristics and stereotypes;
  • Require state and federally-facilitated exchanges, recipients of federal financial assistance and HHS programs to inform individuals that language assistance services and auxiliary aids are available; and
  • Require covered entities to train staff on Section 1557 policies.

The rule also clarifies nondiscrimination requirements for telehealth services and patient care decision support tools.

The rule has not yet been submitted to the Federal Register but will go into effect 60 days after submission. Some provisions of the rule will be phased-in to allow covered entities to come into compliance.

For more information, click here.

CMS Releases Final Rule Concerning Medicaid and CHIP Access to Care

On April 22, the Centers for Medicare and Medicaid Services (CMS) released a final rule that will improve access to care, strengthen quality and health outcomes and address health equity issues for Medicaid and Children’s Health Insurance Program (CHIP) managed care enrollees.

The rule will:

  • Establish maximum wait times for obstetric, primary care and outpatient mental health and substance use disorder services;
  • Require states to implement a remedy plan for managed care organizations that fail to meet required standards;
  • Prohibit the use of separate payment terms;
  • Remove the requirement that providers must be in-network with managed care plans to receive state-directed payments; and
  • Require managed care plans to report any identified or recovered overpayments to states within 30 calendar days.

In addition, the rule will implement revisions concerning in Lieu of Service and Setting, External Quality Review and the Medicaid and CHIP Quality Rating System.

The rule will go into effect on July 9, 2024. For more information, click here.

CMS Final Rule Implements SNF Minimum Staffing Levels

On April 22, the Centers for Medicare and Medicaid Services (CMS) released a final rule that will establish minimum staffing levels for long-term care (LTC) and skilled-nursing facilities (SNFs) and strengthen transparency of worker compensation. The rule will require facilities to:

  • Have a registered nurse (RN) on-site 24 hours a day, seven days a week;
  • Provide a minimum of 3.48 hours of nursing care per resident day, including a minimum of 0.55 hours of care from a RN and 2.45 hours of care from a nurse aide per resident day;
  • Use evidence-based methods when planning care for their residents and the facility assessment when assessing the needs of each resident in the facility;
  • Develop staffing plans to maximize recruitment and retention of staff in accordance with Executive Order 14095; and
  • Implement new Medicaid Institutional Payment Transparency Reporting provisions.

The rule will be implemented in phases across a three-year period. Nursing homes may apply for a temporary exemption to the rule but must meet certain hardship criteria. Notably, there are two bills in Congress that, if enacted, would prevent the rule from going forward.

The rule will go into effect on June 21, 2024. For more information, click here.

CMS Releases Final Rule Concerning Access to Medicaid Services

On April 22, the Centers for Medicare and Medicaid Services (CMS) released a final rule to improve access to care, service quality and outcomes under Medicaid fee-for-service (FFS), managed care and home and community-based services (HCBS). The rule will require states to:

  • Rename and expand the scope of Medical Care Advisory Committees and require states to establish a Beneficiary Advisory Committee;
  • Meet nationwide incident management system standards for monitoring HCBS programs;
  • Ensure that a minimum of 80 percent of Medicaid payments for homemaker, home health aide and personal care services be spent on compensation for direct-care workers furnishing these services within six years;
  • Publicly publish all FFS Medicaid fee schedule payment rates; and
  • Establish and manage a grievance process for beneficiaries receiving HCBS in FFS plans.

The final rule will go into effect on July 9, 2024. For more information, click here.

HHS OCR Releases Rule Concerning HIPAA Reproductive Care Privacy

On April 22, the Department of Health and Human Services Office for Civil Rights (OCR) released a final rule concerning Health Insurance Portability and Accountability Act (HIPAA) reproductive healthcare privacy provisions. The rule will:

  • Prohibit the use or disclosure of reproductive healthcare protected health information (PHI) when it is requested to investigate or impose liability on patients and providers who seek, obtain or provide lawful reproductive healthcare services;
  • Require providers, health plans, clearinghouses and business associates to obtain a signed attestation that acknowledges PHI related to reproductive healthcare is not to be used for prohibited purposes; and
  • Require providers, health plans and clearinghouses to modify their Notice of Privacy Practices to support reproductive healthcare privacy.

The final rule will go into effect on June 25, 2024. For more information, click here.

HRSA Final Rule Revises 340B Administrative Dispute Resolution Process

On April 18, the Health Resources and Services Administration (HRSA) released a final rule that modifies requirements and procedures for the 340B Program administrative dispute resolution (ADR) process. The rule aims to make the process more accessible, administratively feasible and timely. It will:

  • Eliminate the $25,000 minimum dispute threshold for drug manufacturers and 340B providers;
  • No longer require the ADR process to be governed by the Federal Rules of Evidence and Civil Procedure;
  • Require members of the ADR panel to be 340B subject matter experts under the HRSA Office of Pharmacy Affairs;
  • Require parties to engage in good-faith efforts to resolve disputes before initiating the ADR process;
  • Prioritize the ADR process for disputes related to overcharging, discount diversion or duplicate discounts; and
  • Establish an ADR dispute appeal and reconsideration process.

The American Hospital Association and the 340B Health organization have expressed support for the rule.

The rule will go into effect on June 18, 2024. For more information, click here.

CMS Releases CY2025 Medicare Advantage and Part D Final Rule

On April 4, the Centers for Medicare and Medicaid Services (CMS) released a final rule that will amend regulations for the Medicare Advantage (MA), Part D, Cost Plan and Programs of All-Inclusive Care for the Elderly programs. The rule will:

  • Codify nine core chronic diseases and HIV/AIDS to the Part D Medication Therapy Management Program eligibility criteria;
  • Add the “Outpatient Behavioral Health” facility-specialty type to network adequacy standards;
  • Cap compensation for MA plan agents and brokers;
  • Require MA organizations to establish bibliographies for each of the Special Supplemental Benefits for the Chronically Ill that they include in their bid;
  • Streamline enrollment for dual-eligible beneficiaries and limit out-of-network patient cost-sharing for certain plans serving dual-eligible populations;
  • Require Quality Improvement Organizations to review the appeals process for enrollees if their MA plan terminates coverage for certain post-acute care services; and
  • Lower the D-SNP (dual eligible special needs plans) look-alike threshold from 80 to 70 percent.

In addition, the rule will standardize the MA Risk Adjustment Data Validation appeals process and provide Part D sponsors flexibility to substitute lower cost biosimilar biological products for reference products.

The final rule will go into effect on June 3, 2024, but the applicability of the provisions depend on plan coverage dates.

For more information, click here.

CMS Releases Notice of Benefit and Payment Parameters for 2025 Final Rule

On April 2, the Centers for Medicare and Medicaid Services (CMS) released the Notice of Benefit and Payment Parameters for 2025 final rule, which finalizes standards for issuers, Marketplaces and requirements for agents, brokers, direct-enrollment entities and assisters. The rule will:

  • Implement new network adequacy standards on State and State-based Marketplaces;
  • Allow states to add routine non-pediatric dental benefits as an Essential Health Benefit (EHB);
  • Revise prescription drug benefits;
  • Simplify plan choice and selection by revising the Marketplace re-enrollment hierarchy and the EHB-Benchmark Plan update process;
  • Align special enrollment period coverage dates with regular coverage effective dates;
  • Enhance standards and guaranteed consumer protections;
  • Establish new marketplace call center standards; and
  • Implement a Federally-Facilitated Marketplace user fee rate of 1.5 percent and a State-based Marketplace user fee rate of 1.2 percent of total monthly premiums.

In addition to CMS, the Department of Treasury is proposing the rule.

The final rule will go into effect on June 4, 2024. For more information, click here.

CMS Releases Final Rule Concerning STLDI Plans

On March 28, the Centers for Medicare and Medicaid Services (CMS) released a final rule that restricts the length of short-term, limited-duration insurance (STLDI) plans. The rule will:

  • Limit the initial coverage period of a STLDI plan to no more than three months;
  • Cap the maximum coverage period to four months;
  • Prohibit plan “stacking” by considering multiple plan purchases from the same issuer as a renewal or extension;
  • Require plan and fixed indemnity policy applications, enrollment, reenrollment and consumer-facing marketing materials to be more transparent; and
  • Revise requirements for hospital indemnity or other fixed indemnity insurance to be considered an excepted benefit in the group and individual health insurance markets.

In addition to CMS, the Internal Revenue Service and the Employee Benefits Security Administration are proposing the rule.

The final rule will go into effect on June 17, 2024. For more information, click here.

CMS Final Rule Amends Medicaid Eligibility and Enrollment Process

On March 27, the Centers for Medicare and Medicaid Services (CMS) released a final rule that will streamline the process of eligibility determinations, enrollment and renewal processes for Medicaid, the Children’s Health Insurance Program (CHIP) and the Basic Health Program. The rule will:

  • Prohibit CHIP premium lock-out periods and annual and lifetime limits on CHIP benefits;
  • Remove the State option to require a waiting period prior to CHIP enrollment;
  • Modernize eligibility determination information and documentation recordkeeping requirements for states;
  • Eliminate the State option to require in-person interviews as part of the application and renewal processes for non-MAGI (modified adjusted gross income) beneficiaries;
  • Implement provisions aimed at simplifying the coverage enrollment and renewal process for individuals 65 and older or living with a disability; and
  • Require states to use specific types of available information to update an individual’s address.

In addition, the rule will grant individuals 15 days to return information requested for an initial application and 30 days when needed to retain enrollment.

The final rule will go into effect on June 3, 2024. For more information, click here.

FDA Final Rule Implements Direct-To-Consumer Prescription Drug Ad Standards

On Nov. 21, the Food and Drug Administration (FDA) released a final rule to implement new standards for direct-to-consumer (DTC) television and radio prescription drug advertisements. The final rule will require advertisers to:

  • Present information using language that is clear and readily understandable by consumers;
  • Place textual information against a contrasting background for a sufficient duration, using a font style and size that is easily legible;
  • Announce prescription drug information in the same volume, articulation and pacing used in the rest of the ad;
  • Certify that no distracting representations including statements, text, images or sounds are used during the ad’s major statement; and
  • Simultaneously present visual and audible information for ads in television format.

The final rule complements a final guidance the FDA issued in June that outlined how advertisers should present quantitative efficacy and risk information in DTC promotional labeling and ads.

The final rule will go into effect on May 20, 2024. The compliance date of the rule is Nov. 20, 2024.

For more information, click here.

FDA Issues Final Rule Regarding Mammography Quality Standards

On March 9, 2023, the Food and Drug Administration (FDA) issued a final rule that updates the regulations implemented by the Mammography Quality Standards Act of 1992. The FDA has decided to update the regulations due to advancements made in mammography technology and information. The final rule will:

    • Improve the delivery of mammography services;
    • Strengthen communication of healthcare information;
    • Require mammography facilities to provide patients with additional health information;
    • Ensure the availability of qualified mammography personnel;
    • Bolster medical outcome audits;
  • Modernize technological aspects of mammography services; and
  • Implement enforcement tools to deal with noncompliant facilities.

The rule will go into effect on Sept. 10, 2024. For more information, click here.

Reports

CBO Releases Presentation on Projected Federal Healthcare Spending

On April 25, the Congressional Budget Office (CBO) released a presentation summarizing the CBO’s long-term projections of federal healthcare spending and distribution of subsidies. The presentation also examines the drivers of healthcare cost growth and options to reduce spending.

The CBO predicts that Medicare spending will account for more than two-thirds of federal healthcare spending growth through 2054.

For more information, click here.

Authors

Stephanie Kennan
Senior Vice President
Federal Public Affairs
Washington, DC
Gina Sherick
Policy Consultant
Federal Public Affairs
Washington, DC
Gabriel Wiedenhoever
Research Associate
Federal Public Affairs
Washington, DC