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November 6, 2023

This Week in Health Policy for November 6

This Week (November 6 - 10)

The Senate on November 6 is scheduled to hold a procedural vote related to the nomination of Monica Bertagnolli to be Director of the National Institutes of Health (NIH) at 5:30 p.m.

Senate Finance Committee is expected to hold a markup of its health care discussion draft

  • Date: Wednesday, November 8 at 10 am ET
  • More information available here.

Senate HELP Subcommittee on Primary Health and Retirement Security will hold a hearing on "Avoiding a Cautionary Tale: Policy Considerations for Artificial Intelligence in Health Care."

  • Date: Wednesday, November 8 at 2:30 pm ET
  • More information available here.

House Veterans' Affairs Subcommittee on Disability Assistance and Memorial Affairs will hold a legislative hearing on pending legislation

  • Date: Wednesday, November 8 at 12:00 pm ET
  • Bills being considered: H.R. 1753 Jax Act; H.R. 3790 Justice for ALS Veterans Act of 2023; H.R. 4016 Veteran Fraud Reimbursement Act; H.R. 4190 Restoring Benefits to Defrauded Veterans Act; H.R. 4306 Michael Lecik Military Firefighters Protection Act; H.R. 5559: Protecting Veterans Claim Options Act; H.R. 5891: Veteran Appeals Decision Clarity Act; H.R. 5870: Veteran Appeals Transparency Act of 2023; H.R. 5890: Review Every Veterans Claim Act of 2023; and H.R. 5938: Veterans Exam Expansion Act of 2023
  • More information available here.

Last Week (October 30 - November 3)

Health Care Highlights

ONC releases updated version of Common Agreement. On Friday (November 3), the Office of the National Coordinator for Health IT (ONC) published an updated version (1.1) of the Common Agreement for Nationwide Health Information Interoperability in preparation for data sharing through the Trusted Exchange Framework and Common Agreement (TEFCA). Since the first version was released early last year, six organizations have become candidate Qualified Health Information Networks (QHINs) and committed to complete "onboarding" and "go live" by the end of 2023. According to an ONC blog, they are still on target. ONC is planning to publish the Common Agreement Version 2.0 by Spring 2024, which will include participation enhancements and technical updates to require support for Health Level Seven (HL7) FHIR-based transactions.

CMS issues 340B payment remedy final rule. On Thursday (November 2), the Centers for Medicare & Medicaid Services (CMS) issued a final rule detailing the agency's plan for repaying about 1,700 340B hospitals $9 billion in previous cuts to hospital outpatient payments under the 340B Drug Discount Program after the Supreme Court ruled the cuts unlawful, as well as recouping funds from hospitals that received increased rates for non-drug items and services from 2018 to 2022. CMS' final rule includes an updated hospital-by-hospital breakdown of expected repayment amounts in Addendum AAA (linked below). The final rule maintains CMS' proposal to repay hospitals in a budget neutral manner, making adjustments to the conversion factor starting in CY 2026 instead of CY 2025, as proposed. The final rule also includes a process for 340B covered hospitals to request the correction of any errors they identify in CMS' calculation of the specific remedial amount by November 30, 2023. Payments are expected at the end of CY 2023 or the beginning of CY 2024, following CMS issuing instructions to the Medicare Administrative Contractors (MACs), which will come as soon as possible after the technical corrections submission deadline has passed or after those requests are resolved. Payments will be made no later than 60 days after the MAC's receipt of instructions. Click here for the final rule. Click here for a fact sheet. Click here for Addendum AAA.

  • For more details see the attached WCEY Alert: CMS Finalizes Plan to Repay 340B Hospitals for Drug Underpayments and Recoup Increased Payments for Non-Drug Items and Services

CMS issues CY 2024 OPPS/ASC final rule. On Thursday (November 2), CMS issued the Calendar Year (CY) 2024 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center (OPPS/ASC) Payment Systems Final Rule. Hospital outpatient services and ambulatory surgical centers will see CY 2024 payments increase by 3.1%, up from 2.8% in the proposed rule. For Medicare Part B drugs, CMS will continue to pay 340B providers the statutory payment rate of average sales price plus 6% and will use a single modifier to identify separately payable drugs and biologicals acquired under the 340B program. CMS in the rule also finalized updates to hospital price transparency rules, requiring hospitals to use a standard format for machine-readable files and include links on their homepage footer that makes the machine-readable file easier to access. CMS also finalized a proposal to exempt intensive cardiac rehabilitation services provided at off-campus non-excepted hospital outpatient departments from site-neutral payments and said it will reimburse for those services at 100% of the OPPS rate. In addition, CMS made updates to the Hospital Outpatient Quality Reporting and ASC Quality Reporting programs and finalized new measures for the Rural Emergency Hospital Quality Reporting Program. Finally, CMS finalized plans to implement the statutorily required Intensive Outpatient Program (IOP) benefit under Medicare, establishing a payment rate for covered IOP services, as well as physician certification requirements, and coding and billing procedures. Click here for the final rule. Click here for the press release. Click here for the final rule fact sheet. Click here for a fact sheet on the price transparency provisions.

CMS issues CY 2024 Medicare Physician Fee Schedule. On Thursday (November 2), CMS issued the CY 2024 Medicare Physician Fee Schedule (MPFS) Final Rule, which includes several changes aimed at advancing the Biden administration's goals to improve health equity and access to behavioral health care, as well as provisions to extend many telehealth flexibilities through CY 2024. Similar to the proposed rule, CMS set the 2024 conversion factor at $32.74, representing a $1.15, or 3.4%, decrease from the 2023 conversion factor. The final conversion factor accounts for the 1.25% pay bump Congress included in the Consolidated Appropriations Act of 2024, meaning additional Congressional action would be needed to alleviate some of the 3.4% decrease. Most of the cut is attributable to CMS' decision to finalize a new add-on code for complexity associated with primary care and longitudinal care despite many objections from specialty providers over the agency's utilization assumption estimates. CMS finalized proposals to align expiration dates for many existing telehealth flexibilities, extending flexibilities enabling in-home telehealth services, payment parity and more through December 24, 2024. CMS also finalized its proposals to create separate coding and payment for community health integration services, allow marriage and family therapists and mental health and addiction counselors to enroll in Medicare, and more. The rule also updates the Medicare Shared Savings Program to move ACOs toward digital measurement of quality and increase participation by 10% to 20%. Among the changes, CMS will modify the beneficiary assignment methodology to better account for patients who receive primary care from physician assistants, nurse practitioners, and clinical nurse specialists. Click here for the final rule. Click here for the press release. Click here for the fact sheet. Click here for the MSSP fact sheet.

CMS issues CY 2024 Home Health final rule. On Wednesday (November 1), CMS issued the CY 2024 Home Health Prospective Payment System (HH PPS) Rate Update final rule, which includes a 0.8%, or $140 million, pay increase compared with CY 2023, up from a proposed 2.2% cut. CMS ultimately decided to finalize half of the behavioral adjustment that it had proposed, citing concerns about the impact the full cut would have on reimbursement. CMS also finalized updates to the Home Health Quality Reporting Program. Click here for the final rule. Click here for the fact sheet.

CMS issues CY 2024 ESRD final rule. On Friday (October 27), CMS issued the Calendar Year 2024 End-Stage Renal Disease (ESRD) Prospective Payment System Final Rule. Under the rule, ESRD facilities will see total payments rise by about 2.1%, with a base rate of $271.02 for CY 2024. The final rule also includes several policy changes impacting ESRD payments, including a payment adjustment that will increase payment for certain new renal dialysis drugs and biological products after the Transitional Drug Add-on Payment Adjustment, a new transitional add-on pediatric ESRD dialysis payment adjustment for CYs 2024, 2025, and 2026, as well as new reporting requirements, effective January 1, 2025, for "time on machine" data and amounts of discarded renal dialysis drugs and biological products from single-dose containers and single-use packages. Click here for a fact sheet. Click here for the final rule.

Senate Finance leaders unveil bipartisan health care bill. On Thursday (November 2), Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) released a discussion draft of health care legislation, set to be marked up by the committee on November 8, that contains provisions related to pharmacy benefit managers (PBMs), mental health, provider reimbursement, and more:

  • PBM provisions: The discussion draft would require HHS to collect data on drug acquisition costs, require plans to include discount-eligible drugs in formularies and tie cost-sharing to the drugs' net price, and require prescription drug plan sponsors to have a minimum share of in-network pharmacies in underserved areas that are not tied to a PBM or sponsor.
  • Mental health provisions: The draft includes incentives for primary care and behavioral health integration, expands the definition of provider, makes permanent the now-expired SUPPORT Act's state plan amendment option to waive the institutions for mental disease exemption, and direct HHS to draft guidance for states on ways to improve youth access to behavioral health and integrate primary and behavioral health care in Medicaid and CHIP.
  • Provider pay provisions: The draft includes a 1.25% bump to the CY 2024 Medicare Physician Fee Schedule, extends APM bonus payments at 1.75%, averts Medicaid Disproportionate Share Hospital pay cuts.
  • Other provisions: delays by one-year certain Medicare laboratory cuts, and extends the 75/25 blended Medicare reimbursement rate for durable medical equipment in non-competitive bid areas through 2024.

Cassidy launches bipartisan health care cybersecurity working group. On Thursday (November 2), Sen. Bill Cassidy, (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, along with Sens. Mark Warner (D-VA), John Cornyn (R-TX), and Maggie Hassan (D-NH) launched a bipartisan working group focused on health care cybersecurity. The working group will explore potential legislative solutions within the HELP Committee's jurisdiction to improve cybersecurity in the health care and public health sector.

President Biden signs EO on safe and secure artificial intelligence. On Monday (October 30), President Biden signed an Executive Order (EO) on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (AI) intended to establish "new standards for AI safety and security, protects Americans' privacy, advances equity and civil rights, stands up for consumers and workers, promotes innovation and competition, advances American leadership around the world, and more." The EO outlines federal priorities on AI, deploys numerous agencies to develop standards and safeguards, and instructs the creation of a White House AI Council to coordinate cross-agency activities. The includes several actions for the Health and Human Services Department (HHS), including developing a strategic plan within a year on the responsible use of AI, evaluating the performance of AI-enabled health care tools, actions to address algorithmic discrimination, and more.

In related news, the Office of Management and Budget on Wednesday (November 1) released draft guidance that calls on HHS and other agencies to have minimum guardrails in place for their AI use by August 1, 2024. The guidance is open for comments through December 5.

HHS proposes provider penalties for information blocking. On Monday (October 30), HHS issued a proposed rule that would establish new enforcement measures for providers who the HHS Office of Inspector General determines have violated federal information blocking rules. Under the rule, which implements a provision of the 21st Century Cures Act, hospitals could lose their status as a meaningful electronic health record user under the Medicare Promoting Interoperability Program and related incentive payments, individual clinicians could lose their status as a meaningful EHR user under the Promoting Interoperability performance category of the Medicare Merit-based Incentive Payment System, and health care providers could lose their ability to participate in the Medicare Shared Savings Program for at least one year. HHS estimated median penalties for hospitals would be about $394,000, while median penalties for an individual clinician would be $686. The rule, which will remain open for public comment through January 2, 2024, is designed to complement HHS OIG's rule that established information blocking penalties for health IT developers and health information exchanges and networks as of September 1, 2023. Click here for a ONC's Health IT Buzz blog post. Click here for the press release. Click here for the proposed rule.

Federal exchange open enrollment begins. On Wednesday (November 1), the federal open enrollment period began, meaning consumers can begin to select 2024 qualified health plans (QHPs) through CMS previously said there are 210 total QHP issues for the 2024 open enrollment period, nine fewer than last year.

HHS launches effort to bolster adolescent health. On Tuesday (October 31), HHS launched a new call to action to promote collaboration and spur action to improve the health and well-being of U.S. adolescents. The Take Action for Adolescents campaign outlines a vision, key principles, eight goals, and a set of initial action steps to support adolescents' health and well-being.

Hearings, Markups, and Other Committee Action

Senate HELP Subcommittee held a hearing on Employment and Workplace Safety held a hearing on "AI and the Future of Work: Moving Forward Together." On Tuesday (October 31), the Subcommittee held hearing focused on artificial intelligence with witnesses representing AI and technology companies, consulting firms, and legal experts. While the hearing was not health care focused, they touched on many health care related topics, including AI's potential impact on workforce and intellectual property and ways to regulate AI.

  • More information available here.

Senate Veterans Affairs Committee held a hearing on "Foundation of Care: Examining Research at the Department of Veterans Affairs." On Wednesday (November 1), the Committee held a hearing on research at the VA, with witness testimony from Rachel Ramoni, Chief Research and Development Officer for VA's Office of Research and Development. During the hearing, Chair Jon Tester (D-MT) pressed Ramoni on the need to ensure veterans living in rural areas are part of VA research projects.

  • More information available here.

Reports, Studies, and Journals

National Center for Health Statistics: Infant Mortality in United States: Provisional Data from the 2022 Period Linked Birth/Infant Death File. The report found U.S. infant deaths rose by more than 3% from 2021 to 2022, representing the largest increase in more than two decades, with rates increasing the most among American Indian and Alaska Native and White women.

Congressional Budget Office: Exploring the Effects of Medicaid During Childhood on the Economy and the Budget. The report found that costs for Medicaid are paid upfront when children (or their mothers) receive health care and that Medicaid enrollment is associated with long-term benefits, such as increased earnings in adulthood.

Government Accountability Office: VA Disability Benefits: Actions Needed to Address Challenges Reserve Component Members Face Accessing Compensation. The report, which found VA approved 11% to 20% fewer initial disability compensation claims for members of reserve components than active components each year from 2012 through 2021, includes recommendations to improve disability compensation for reserve component members.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   •  Heather Bell (


340B payment remedy final rule