Healthcare Legislation and Rulemaking

On November 30, 2020, the United States Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) issued a final rule (“Final Rule”) that makes significant changes to the federal Antikickback Statute (“AKS”) safe harbor regulations as such regulations relate to the cost of prescription drugs as covered by the Medicare and Medicaid programs.  More specifically, the Final Rule amends the AKS discount safe harbor (“Discount Safe Harbor”) at 42 C.F.R. §1001.952(h) to eliminate safe harbor protection for drug discounts and rebates offered by pharmaceutical manufacturers to pharmacy benefit managers (“PBMs”) and  Medicare Part D prescription drug plan (“Medicare Part D”) sponsors.  In addition to making significant changes to the Discount Safe Harbor, the Final Rule creates two new pharmaceutical-related safe harbors: (i) a safe harbor applicable to certain prescription drug point-of-sale discounts as offered to Medicare and Medicaid beneficiaries to reduce their direct out-of-pocket prescription drug costs (the “Point-of-Sale Safe Harbor”) and (ii) a safe harbor applicable to flat fee arrangements paid by drug companies directly to PBMs for PBM services (the “PBM Service Fees Safe Harbor”).

Continue Reading Eleventh Hour Rulemaking: HHS Eliminates Safe Harbor Protections for PBM Drug Rebates and Creates Two New Safe Harbors for Point-of-Service Discounts and PBM Fixed-Fee Arrangements

On October 29, 2020, the Department of Health and Human Services (“HHS”), the Department of Labor, and the Department of the Treasury (collectively, the “Departments”) released the Transparency in Coverage Final Rules (the “Final Rules”), which require non-grandfathered group health plans and health insurance issuers offering non-grandfathered health insurance coverage in the individual and group markets to disclose certain information including negotiated rates with providers and estimated out-of-pocket expenses to enable consumers to make informed health care purchasing decisions.
Continue Reading Trump Administration Finalizes The Transparency in Coverage Rule

In a June 23, 2020 decision, Judge Nichol of the United States District Court for the District of Columbia ruled in favor of the Center for Medicare and Medicaid Services (“CMS”) and against the plaintiff hospital associations challenging CMS’s transparency rule. As a result,  hospitals will (pending any appeals) have to post private negotiated rates with payors effective January 1, 2021.  We discussed the lawsuit brought by the American Hospital Association (“AHA”), the Federation of American Hospitals, the Children’s Hospital Association and the Association of American Medical Colleges against CMS in our previous article.
Continue Reading The Decision is in: Hospitals Will be Required to Disclose Rates in 2021

Last week, new legislation was introduced in the U.S. House of Representatives that would require Medicare to reimburse certain telehealth services post the public health emergency period.  If passed, the bipartisan  Helping Ensure Access to Local TeleHealth Act of 2020 or HEALTH Act of 2020 (the “HEALTH Act of 2020”) would codify Medicare reimbursement and allow reimbursement for telehealth services provided by federally qualified health centers (“FQHCs”) and rural health clinics (“RHCs”).
Continue Reading Introducing the HEALTH ACT: Expanding Medicare Reimbursement

On March 9th, the U.S. Department of Health and Human Services (HHS) finalized two rules that are designed to give patients access to their health data and to increase interoperability among health care providers and payers using health information technology.  The two rules, issued by the HHS Office of the National Coordinator for Health Information Technology (ONC) and Centers for Medicare & Medicaid Services (CMS), implement interoperability and patient access provisions of the 21st Century Cures Act.  A primary aim of the 21st Century Cures Act was to push the healthcare industry to facilitate interoperability of healthcare data across the spectrum, including amongst health care payers, providers, patients and technology vendors.  For decades, HHS has largely relied on the industry to enable interoperability through a market-driven approach that would, in theory, benefit industry while achieving the interoperability goals established by the regulators. Unfortunately, it has been observed that the theory behind a market-driven approach has not been manifested in reality. In reality, the market-driven approach has allowed industry to monetize data by limiting data sharing and, in turn, impeding the benefits of interoperability which rely upon data sharing to promote improved care coordination, better patient outcomes, and material cost reductions. In order to bend the curve toward interoperability, the new HHS rules are designed to provide for binding and specific steps to “free” health care data and recognize the aforementioned benefits.
Continue Reading CMS Releases Interoperability Rule Designed to Increase Patient Access to Health Information

On July 16, 2019, the Congressional Budget Office (“CBO”) released a Cost Estimate for Senate Bill S. 1895, the “Lower Health Care Costs Act.” The bipartisan bill, introduced June 19, 2019, intends to end surprise medical bills, reduce the prices of prescription drugs, improve transparency in health care costs, and increase public health awareness and access to health information.
Continue Reading CBO Report Shows Senate’s Bipartisan Bill on Surprise Billing, Drug Prices, Transparency, and More Would Result in Deficit Decrease

On May 3, 2019, the Centers for Medicare & Medicaid Services (“CMS”) published a comprehensive proposed rule (“Proposed Rule”) to revise the Medicare payment structure for inpatient prospective payment systems (“IPPS”) hospitals. According to the preamble of the Proposed Rule, the purpose of the Proposed Rule is to bump up Medicare’s reimbursements to rural hospitals, some of which receive the lowest rates in the country.

Unfortunately for urban hospitals, any proposed changes in the Medicare reimbursement system must be budget-neutral; therefore, any increase in rural hospital reimbursement must be matched with an equal and offsetting decrease in urban hospital reimbursement.[1] As reported in the Kaiser Health News on June 3, 2019, the Kaiser Family Foundation likens this to a Robin Hood-like effect – robbing from the rich to give to the poor. Like in Sherwood Forest, there are winners and losers in the world of Medicare reimbursement.
Continue Reading CMS Proposes Changes to Medicare Wage Index that Would Increase Reimbursement Rates to Rural Hospitals at the Expense of Urban Hospitals

The Office for Civil Rights (“OCR”) issued a request for information (“RFI”) to assist OCR in identifying provisions of the Health Insurance Portability and Accountability Act (“HIPAA”) privacy and security regulations (the “HIPAA Rules”) that may impede the transformation to value-based health care or that limit or discourage coordinated care among individuals and covered entities without meaningfully contributing to the protection of the privacy or security of individuals’ protected health information (“PHI”).
Continue Reading OCR Seeks Ideas on HIPAA Rule Changes to Promote Value-Based Care and Coordinated Care

Part C and Part D Quality Rating System

The November 1, 2018 proposed rule issued by the Centers for Medicare & Medicaid Services (“CMS”) includes enhancements and substantive changes to the Star Rating System in order to increase the stability and predictability of the Medicare Advantage program (aka “Part C”) and the Medicare Prescription Drug Benefit program (aka “Part D”) Star Ratings.

Measure Level Star Ratings.

CMS’ Star Ratings proposals are intended to eliminate some of the volatility and unpredictability of the calculation methodology, which is a welcome change for Medicare Advantage organizations (“MAOs”) and Part D plan sponsors. Based on stakeholder feedback and analyses of the data, CMS proposes two enhancements to the current hierarchical clustering methodology that is used to set cut points for non-Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) measures:
Continue Reading Blog Series Part 7: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid Fee-For-Service, and Medicaid Managed Care Programs for 2020 and 2021

Dual Special Needs Plans

This part 6 of our 7 part series focuses on the provisions regarding dual special needs plans (“D-SNPs”) released by the Centers for Medicare and Medicaid Services (“CMS”) in the proposed rule issued on November 1, 2018 (the “Proposed Rule”). D-SNPs enroll individuals who are entitled to both Medicare and medical assistance from a state under Medicaid. States cover some Medicare costs, depending on the particular state and the member’s eligibility. As reported by the Kaiser Family Foundation in “Medicare Advantage 2017 Spotlight: Enrollment Market Update,” Gretchen Jacobson, Anthony Damico, Tricia Neuman, and Marsha Gold ( June 6, 2017), enrollment in special needs plans increased from 2.1 million in 2016 to 2.3 million in 2017 – and 81% of members of these plans are enrolled in D-SNPs.
Continue Reading Blog Series Part 6: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid Fee-For-Service and Medicaid Managed Care Programs for Years 2020 and 2021

Part D Plan Sponsors’ Access to Medicare Parts A and B Claims Data Extracts

As detailed in previous posts in this series, one major objective that the Centers for Medicare and Medicaid Services (“CMS”) addressed in a proposed rule issued November 1, 2018 (the “Proposed Rule”), was to implement new Social Security Act provisions that Congress added in the Bipartisan Budget Act of 2018 (“BBA”). One such provision will open fee-for-service Medicare data up to prescription drug benefit (“Part D”) plans.
Continue Reading Blog Series Part 5: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid Fee-For-Service, and Medicaid Managed Care Programs for 2020 and 2021