April 15, 2024 Special Edition | This Week in Health Policy for April 12, Spring Payment Rule Update and Other Recess Activity This Week (April 15 - 19) Congress is in session this week and there are several health care hearings on the calendar. House Energy & Commerce Health Subcommittee will hold a hearing on "Examining Health Sector Cybersecurity in the Wake of the Change Healthcare Attack."
House Energy & Commerce Innovation, Data, and Commerce Subcommittee will hold a hearing on "Legislative Solutions to Protect Kids Online and Ensure Americans' Data Privacy Rights."
House Energy & Commerce Health Subcommittee will hold a hearing on "Fiscal Year 2025 Department of Health and Human Services Budget."
Senate Health, Education, Labor & Pensions Subcommittee on Primary Health and Retirement Security will hold a hearing on "Feeding a Healthier America: Current Efforts and Potential Opportunities for Food is Medicine."
House Committee on Veterans' Affairs Subcommittee on Health will hold a markup on "Pending Legislation"
House Committee on Education & the Workforce Subcommittee on Health, Employment, Labor, and Pensions
House Appropriations Committee will hold a budget hearing on "FY 2025 Request for the Department of Veterans Affairs"
Senate Appropriations Committee will hold a hearing on "the President's Fiscal Year 2025 Budget Request for the Department of Health and Human Services"
Senate Appropriations Committee will hold a hearing on "the President's Fiscal Year 2025 Budget Request for the U.S. Department of Agriculture"
House Appropriations Committee will hold a budget hearing on "FY 2025 Request for the Department of Veterans Affairs"
Last Week (April 8-12) Health Care Highlights CMS issues FY 2025 Inpatient and Long-Term Care Hospital Payment Proposed Rule. On Wednesday (April 10), the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2025 proposed rule for the Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System, which includes a 2.6% payment bump for acute care hospitals. CMS estimates the overall impact of the rule would increase acute care hospital IPPS payments by about $3.2 billion in FY 2025. CMS expects the LTCH standard payment rate to increase by 2.8% and LTCH payments for discharges paid the LTCH standard payment rate to increase by approximately 1.2%, or $26 million. Throughout the rule, CMS proposes several ways to increase health equity and improve maternal health, an ongoing priority for the Biden administration. CMS also proposes updates to hospital quality and value-based payment programs, among other changes. In addition, CMS proposes a new mandatory payment model, the Transforming Episode Accountability Model (TEAM), that would provide bundled payment for certain surgical procedures. CMS will accept public comments on the proposed rule through June 10. Click here for the press release. Click here for the fact sheet. Click here for the proposed rule. Click here for a fact sheet on TEAM. To learn more, check out WCEY's overview of the proposed rule in the attached PDF. HRSA looks to improve care transition for incarcerated persons. On April 10, the Health Resources and Services Administration (HRSA) announced a $51 million funding opportunity for HRSA-funded health centers to implement programs to support care transitions for individuals leaving incarceration. Click here for the press release. Lawmakers unveil bipartisan data privacy bill. On Sunday (April 7), House Energy & Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Senate Commerce Committee Chair Maria Cantwell (D-WA), released a discussion draft of the American Privacy Rights Act (APRA) that would provide new and tougher privacy rights governing the collection and use of consumer data. This new enforceable federal standard would pre-empt state privacy laws, creating a national data privacy standard. The new bill builds on much of the language in the 2022 American Data Protection and Privacy Act (ADPPA). However, the new bill does not include many of the ADPPA's minor-specific provisions and would not create a new division at the Federal Trade Commission (FTC). Under the bill, health and medical information would be treated as "sensitive covered data," and would require companies to take several actions to ensure data privacy and patient consent. Sen. Sanders unveils long-COVID draft bill. On Tuesday (April 9), Senate Health, Education, Labor & Pensions Committee Chair Bernie Sanders (I-VT) unveiled a draft legislative proposal to address long-COVID. Among other things, the proposal would provide $1 billion in mandatory funding for the National Institutes of Health (NIH) to study long COVID over a decade and directs the NIH to create a centralized coordinating entity for long COVID research activities, establish a new grant process, establish a research advisory board and establish a long COVID database. Sanders is seeking feedback on the proposal through April 23. Click here for the press release. Click here for the draft proposal and RFI. ICYMI: Health Care Highlights from Spring Recess CMS issues CY 2025 Medicare Advantage Rate Announcement. On April 1, CMS issued the calendar year 2025 rate announcement for Medicare Advantage (MA) and Medicare Part D, which includes an estimated 3.7%, or over $16 billion, payment increase for 2025. CMS in the rule will continue the phase-in of their revised version of the CMS Hierarchical Condition Category (HCC) risk adjustment model. The blended rate for CY 2025 will be 67% of the updated model with 33% from the old model, which is 3.86% for CY 2025. CMS also finalized Part D risk adjustment changes to reflect the redesign of the benefit, including eliminating the coverage gap phase and cap on out-of-pocket costs at $2,000. CMS also finalized measure specification updates and the list of measures included in the Part D Improvement Measures and Categorical Adjustment Index for the 2025 Star Ratings. Click here for the factsheet. Click here for the press release. Click here for the Rate Announcement. CMS issues 2025 Medicare Advantage and Part D Final Rule. On April 4, CMS issued the CY 2025 MA and Part D Final Rule, which includes several updates to the MA and Part D programs. The rule finalizes policies aimed at preventing agents and brokers from steering enrollees to plans that may not best meet their needs, including prohibiting anti-competitive contract terms between MAOs and agents, brokers or TMPOs; setting a single compensation rate for agents and brokers, eliminating separate payments for "administrative services;" revising what is considered "compensation;" and increasing by $100 the additional payment for administrative costs, as opposed to $31 as proposed. The rule also creates a new exemption from network adequacy time and distance requirements if supplemental telehealth benefits are offered and adds new mid-year enrollee notification requirements and standards regarding supplemental benefits. The rule also finalizes updates to network adequacy to include newly eligible behavioral health providers under an outpatient behavioral health category and adds new health equity requirements for MAOs to conduct annual health equity analyses of their prior authorization process and include a health equity representative on utilization management committees. Click here for the fact sheet. Click here for the press release. Click here for the Final Rule. CMS issues 2025 Notice of Benefit and Payment Parameters final rule. On April 2, CMS issued the Notice of Benefit and Payment Parameters for 2025 Final Rule, which finalizes changes to standards for Affordable Care Act exchange plans. The rule adds new information collection requirements on telehealth services, allows states to add routine dental benefits as essential health benefits, and updates prescription benefit requirements. The rule also includes provisions to ease the enrollment process and simplify the plan selection process, including creating exceptions for non-standardized plans for plans that facilitate treatment of chronic and high-cost conditions. The rule also includes provisions to enhance standards and consumer protections, including establishing state marketplace call center standards, enrollment period requirements, standards around web-brokers and direct enrollment entities, etc. Click here for the fact sheet. Click here for the press release. Biden administration issues short-term, limited duration insurance final rule. On Thursday (March 28), the Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments), released final rules regarding short-term, limited-duration insurance (STLDI) and independent, non-coordinated excepted benefits coverage. The final rules pull back the Trump-era expansion of STLDI coverage, limiting the length of the initial contract term to no more than three months and the maximum coverage period to no more than four months, considering any renewals or extensions. The rules also finalize new consumer notice requirements. benefits coverage. The rule did not finalize proposed changes for fixed-indemnity plans. Click here for the press release. Click here for the fact sheet. Click here for the final rule. To learn more, check out WCEY's overview of the final rule in the attached PDF. CMS clarifies informed consent guidance for hospitals. On April 1, CMS released updated guidance to clarify existing policy on informed patient consent at teaching hospitals and medical schools related to sensitive examinations, such as pelvic, prostate, breast and rectal examinations. CMS issues FY 2025 hospice proposed payment rule. On March 28, CMS issued the FY 2025 Hospice Payment Rate Update Proposed Rule. In the rule, CMS proposed increasing payments to hospices by 2.6%, or $705 million for FY 2025, compared with FY 2024, as well as increasing by 2.6% the hospice cap amount for FY 2025. CMS also proposed adopting the most recent Office of Management and Budget (OMB) statistical area delineations, which would affect the geographic wage index for Medicare payments. Hospices impacted by the change would be able to apply to limit payment cuts stemming from the wage index change to 5% from the previous year. The rule also proposes updates to the Hospice Quality Reporting Program and to implement the Hospice Outcome and Patient Evaluation (HOPE) tool to facilitate patient-level data collection and assessment, replacing the existing Hospice Item Set. CMS is accepting public comments on the proposals until May 28. Click here for CMS' fact sheet and here for the proposed rule. CMS issues FY 2025 Inpatient Psychiatric Facilities proposed payment rule. On March 28, CMS issued the FY 2025 Inpatient Psychiatric Facilities (IPF) Prospective Payment System Proposed Rule. In the rule, CMS proposed increasing IPF payments by a net 2.6%, or $70 million, for FY 2025, compared with FY 2024. CMS also proposed to update the outlier threshold to keep estimated outlier payments at 2.0% of total payments, resulting in a 0.1% decrease to aggregate payments. CMS also proposed updating the IPF patient-level adjustment factors used to set payment rates for psychiatric hospitals and psychiatric units to reflect cost and claims data from 2019 through 2021. The current regression model was implemented in 2005 and the proposed updates would be made in a budget neutral manner. In addition, CMS proposed adopting the most recent OMB statistical area delineations, including phasing out over 3 years an existing rural adjustment. CMS previously finalized a policy providing a 5% cap on any decrease to the provider's wage index from its wage index in the prior year. CMS also clarified eligibility criteria for filling all-inclusive cost reports and proposed new updates to the IPF Quality Reporting Program. Click here for CMS' fact sheet and here for the proposed rule. CMS issues FY 2025 Inpatient Rehabilitation Facility proposed payment rule. On March 27, CMS issued the FY 2025 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Proposed Rule. In the rule, CMS proposed increasing payments to IRFs by 2.8%, or $280 million for FY 2025, compared with FY 2024, as well as a $25 million decrease due to adjustments for higher outlier payments. CMS also proposed updates to improve collection of social determinants of health data in the IRF Quality Reporting Program and seeks information on a potential "star rating" system for IRFs. CMS is accepting public comments on the proposals until May 28. Click here for CMS' fact sheet and here for the proposed rule. CMS issues FY 2025 Skilled Nursing Facility proposed payment rule. On March 28, CMS issued the FY 2025 2024 Skilled Nursing Facility (SNF) Prospective Payment System Proposed Rule. In the rule, CMS proposed increasing payments to SNFs by 4.1%, or $1.3 million for FY 2025, compared with FY 2024. CMS proposed to adopt the most recent OMB statistical area delineations. CMS previously finalized a permanent 5% cap on payment decreases stemming from the wage index updates. CMS also proposed updates to the Patient Driven Payment Model ICD-10 code mappings, the SNF Quality Reporting Program, the Value-based Purchasing Program, and civil monetary penalties. The rule does not address minimum staffing requirements proposed in September. A final rule on the minimum staffing proposals is in the final stages of review at OMB. CMS is accepting public comments on the proposals until May 28. Click here for CMS' fact sheet and here for the proposed rule. OMB issues memo on AI. On March 28, the Office of Management and Budget (OMB) issued a memorandum establishing new agency requirements and guidance to strengthen AI governance, advance responsible AI innovation, and manage risks from the use of AI. Click here for the memo. Click here for the fact sheet. ONC issues two new reports. In March, the Office of the National Coordinator for Health IT issued two new reports:
Hearings, Markups, and Other Committee Activity Senate Finance Committee held a hearing on "Bolstering Chronic Care through Medicare Physician Payment." On Thursday (April 11), the Committee held a hearing to discuss Medicare physician payment. During the hearing, lawmakers and witnesses discussed ways to reform MACRA and accelerate the shift to value-based care, particularly for primary care physicians. Lawmakers and witnesses discussed barriers to patient care, including prior authorization processes, as well as ways to improve Medicare physician reimbursement, including raising the trigger threshold for budget neutrality.
Senate Finance Subcommittee on Health Care held a hearing on "Closing Gaps in the Care Continuum: Opportunities to Improve Substance Use Disorder Care in the Federal Health Programs." On Tuesday (April 9), the Subcommittee held a hearing during which lawmakers and witnesses discussed how Medicare and Medicaid could take a more comprehensive approach to coverage of substance use disorder treatments and improve access to treatment for patients. Witnesses noted that many evidence-based substance use disorder treatments are not available to Medicare and Medicaid patients and in some cases they face delays in treatment due to prior authorization requirements. Witnesses and lawmakers also discussed the role value-based payment models could play in improving access to treatments for patients.
House Energy & Commerce Health Subcommittee held a hearing on "Health Subcommittee Hearing: "Legislative Proposals to Support Patient Access To Telehealth Services." On Wednesday (April 10), the Subcommittee held a hearing during which lawmakers heard from a panel of witnesses including patient and Medicare beneficiary advocates, digital health care providers, and academics. Witnesses and lawmakers discussed 15 bills aimed at increasing patients' access to telehealth coverage. There was broad bipartisan agreement on the need to extend Medicare telehealth flexibilities, with most of the debate centered on ways to monitor and ensure care quality for a virtual service and the cost associated with extending or making permanent the current waivers.
House Committee on Oversight and Accountability Committee held a hearing on "Oversight of the U.S. Food and Drug Administration." On Thursday (April 11), the Committee held a hearing during which members heard testimony from FDA Commissioner Robert Califf. During the hearing, lawmakers discussed a range of topics including ways to diversify the US' drug supply chain, the 2022 infant formula shortage, and the FDA's approach to tobacco regulation.
House Education & the Workforce Committee held a hearing on "Unlocking Opportunity: Allowing Independent Contractors to Access Benefits." On Thursday (April 11), the Committee held a hearing on employee benefits for independent contractors. During the hearing, lawmakers and witnesses discussed the tension that currently exists between independent contractors and their ability to access benefits. Democrats on the panel spoke favorably of policies that would give independent contractors the same benefit rights as employees, while Republicans spoke about the need to ensure independent contractors' ability to remain independent.
House Veterans' Affairs Committee held an oversight hearing on "U.S. Department of Veterans Affairs Budget Request for Fiscal Years 2025 and 2026." On Thursday (April 11), the Committee held a hearing on President Biden's $369 billion FY 2025 budget request for the VA. During the hearing, lawmakers questioned VA Secretary Denis McDonough over how VA manages its budget and the need to increase the workforce and modernize facilities and IT. Lawmakers also heard from a panel of witnesses representing veterans' organizations.
Senate Veterans' Affairs Committee held a hearing on "Caring for All Who Have Borne the Battle: Ensuring Equity for Women Veterans at VA." On Wednesday (April 10), the Committee held a hearing on women's health at the VA, hearing from VA representatives, as well as a panel of veterans' advocates. The hearing discussion focused on ways to improve female veterans' access to care and ways to build upon or improve existing VA programs.
Senate Health, Education, Labor & Pensions Subcommittee held a field hearing on "When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk." On April 3, Subcommittee Chair Ed Markey (D-MA) held a field hearing in Boston, Massachusetts, during which members discussed the impact of private equity ownership on patients, providers and health care quality and access, as well as proposals to increase transparency into for-profit health care companies. In connection to the hearing, Sen. Markey released a discussion draft of the Health Over Wealth Act, which adds new requirements for private equity firms involved in health care.
Reports, Studies, and Journals Government Accountability Office: Health Centers: Revenue, Grant Funding, and Methods for Meeting Certain Access-To-Care Requirements. The total revenue for community health centers (CHCs) rose from $26.3 billion in 2017 to $42.9 billion in 2022, a more than 60 percent increase over that period. Additionally, GAO found that the largest source of revenue from 2018—2022 was Medicaid, accounting for over one-third of total revenue. Kaiser Family Foundation: Medicaid Enrollment and Unwinding Tracker. The tracker, which has been recently updated, provides an overview of monthly Medicaid disenrollments, renewals, and other enrollment activity reported by states during the Medicaid redetermination process. Government Accountability Office: COVID-19 Relief: State and Local Fiscal Recovery Funds Spending as of September 30, 2023. The report finds as of September 30, 2023, states, including the District of Columbia, have spent $103.7 billion, or 53% of COVID-19 recovery funding from the Department of Treasury, while localities have spent $59.4 billion, or 47% of their funding. Department of Health and Human Services: Policy Considerations to Prevent Drug Shortages and Mitigate Supply Chain Vulnerabilities in the United States. The report highlights potential policies for consideration, including incentivizing investments in supply chain resilience, increasing transparency into the sector, a manufacturing resiliency assessment program, and more.
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