Health Policy Report: (7/6)

July 6, 2021

Capitol Hill Update

Congress is adjourned for the Independence Day district work period ahead of what is shaping up to be a hectic month of July. At the centerpiece of this month’s activity is the Biden-endorsed bipartisan infrastructure deal (fact sheet), as Democratic lawmakers are hoping to push this agreement across the finish line prior to the August district work period. At the same time, leadership will be working to clinch a budget resolution that contains some key provisions contained in the President’s American Jobs Plan and American Families Plan. Senate Democrats will be kicking off the reconciliation process to craft policies that can clear the 50-50 Senate with a simple majority, such as home and community-based services, child care, education, paid leave, climate change, and health care, among others. In addition to the Biden administration’s agenda, lawmakers must also resume their work on: (1) fiscal year (FY) 2022 appropriations; (2) the National Defense Authorization Act (NDAA); (3) expiring surface transportation programs; and (4) budgetary issues stemming from the American Rescue Plan (ARP) and the expiring debt ceiling suspension.

CMS Proposed New Incentives for Home Dialysis for Disadvantaged Beneficiaries

The Centers for Medicare and Medicaid Services (CMS) proposed its annual rule making updates to payments for kidney care. The rule would set payment rates for 2022 and make changes to encourage the provision of home dialysis to disadvantaged patients. Specifically, CMS proposed a Health Equity Incentive to reward improvements in the End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model amongst low-income beneficiaries. Thorn Run Partners’ analysis of the rule notes that CMS is also proposing that ETC Model participants provide telehealth education to beneficiaries regarding Kidney Disease Education. In addition, the proposal would adjust benchmarks so that providers with higher volumes of lower-income beneficiaries do not face negative financial consequences. 

The goal of the changes is to encourage dialysis providers to decrease disparities in home dialysis and transplant rates, in line with the Biden Administration’s effort to promote health equity. Studies show that lower-income Medicare beneficiaries have higher rates of ESRD, are more likely to experience higher hospital readmissions and costs, and often receive in-center hemodialysis instead of home dialysis. CMS said that “these two proposed changes acknowledge that socioeconomic disparities in access to alternative renal replacement modalities exist and may impact the ability of ETC Participants to perform well in the ETC Model, while providing an incentive for all ETC Participants to reduce such disparities among their Medicare patients.”

CMS Released a Rule to Expand Value-Based Purchasing for Home Health

CMS proposed to update the Medicare Home Health Prospective Payment System (HH PPS) and the home infusion therapy services rates for 2022. The proposal included a push to expand the Home Health Value-Based Purchasing (HHVBP) Model and would make the home health Conditions of Participation (CoP) that were implemented during the COVID-19 public health emergency permanent. Specifically, the agency is seeking to make certain COVID-19 waiver flexibilities related to home health aide supervision and the use of telecommunication permanent. Thorn Run Partners reported that CMS estimates that Medicare payments to home health agencies in CY 2022 will increase by 1.7 percent (or $310 million) in the aggregate.

Home health stakeholders are reacting to the sticker shock. “It was a very extensive rule — almost 400 pages compared to last year’s, which was 130 pages,” Joanne E. Cunningham, executive director of the Partnership for Quality Home Healthcare (PQHH), told Home Health Care News. “I think that the size of it certainly signifies there are some pretty big proposed changes.” While the 1.7 percent increase is down from the 1.9 percent bump for 2021, stakeholders remain optimistic, as the proposed 2022 rate would represent the third-highest Medicare home health rate update over the past 15 years. Expanding the HH VBP Model, a substantial part of the proposed rule, was somewhat expected. Since its implementation, the model has resulted in an average annual savings of $141 million to Medicare, according to CMS.

CMS Proposed a Rule to Expand Open Enrollment, Eliminate Direct Enrollment

(CMS) proposed a rule to eliminate some Trump-era changes to the Exchanges and to make enrollment in an ACA plan more accessible. The rule builds from the annual Notice of Benefit and Payment Parameters (NBPP) process, including repealing some changes that the previous administration promulgated just before leaving office. In particular, it repeals much of the 1332 waiver guidance that the Trump Administration announced earlier this year and creates a new special enrollment period (SEP) for low-income individuals to enroll in coverage. The proposal would also increase 2022 Exchange user fee rates and expand the annual open enrollment period and Marketplace Navigator duties. Thorn Run Partners’ analysis of the rule offers more details of the proposal.

CMS asserts that the open enrollment extension would allow consumers more time to review plan choices and seek in-person assistance and enroll in a plan that best meets their needs. If finalized, the new annual open enrollment period for all individual market exchanges and off-exchange individual market plans would change to November 1 through January 15. Another provision included in the proposed rule would allow exchanges to create a monthly special enrollment period for consumers with a household income of less than 150 percent of the federal poverty level.

CMS Banned Surprise Billing for Emergency Services

CMS issued an interim final rule to address large out of pocket costs to consumers from “surprise billing.” This rule is the first set of rulemaking issued by the Biden-Harris Administration to implement certain provisions of the No Surprises Act, which was included as part of the Consolidated Appropriations Act, 2021, the year-end bill that was signed into law last December. Among the rule’s provisions is a ban on surprise billing for emergency services and out-of-network cost-sharing that is higher than what a patient would pay in coinsurance and deductible for in-network care. The rule goes into effect in about two months, though many surprising billing regulations will not be applicable until January 1, 2022.

“No patient should forgo care for fear of surprise billing,” HHS Secretary Xavier Becerra, said publicly following the rule’s release. “Health insurance should offer patients peace of mind that they won’t be saddled with unexpected costs. The Biden-Harris Administration remains committed to ensuring transparency and affordable care, and with this rule, Americans will get the assurance of no surprises.” The No Surprises Act requires the establishment of an independent dispute resolution (IDR) process that will enable payers and providers to resolve out-of-network charges that would otherwise be the responsibility of the patient through balance billing. Healthcare provider groups have been generally accepting of the IDR process, supporting it over the adoption of an out-of-network payment benchmark that was proposed in other legislation. However, these groups are anxious to see more specifics of the IDR process.

Supreme Court Granted Cert to 340B Drug Pricing Case

The Supreme Court on Friday granted cert for a case on the Trump Administration’s nearly 30 percent cut in reimbursement rates for 340B program drugs. The cuts were upheld by the D.C. Circuit Court of Appeals last summer, and hospitals are fiercely opposing the decision. In response, the American Hospital Association and four other national hospital groups and pharmacists filed a federal lawsuit against the Department of Health and Human Services.

A couple months later in February 2021, “a federal judge from the U.S. District Court for the Northern District of California dismissed the lawsuit, stating that hospitals cannot sue individually under federal law for 340B violations,” according to JDsupra. The Supreme Court recently shot down hospitals’ petition to overturn a Trump-era “site-neutral” policy, indicating a possible upholding of the 340B reimbursement cuts. The Court will likely hear oral arguments when the new term commences in October.

Democrats, Administration are Pushing for Medicaid Expansion

In an effort to support Medicaid expansion, CMS has been rejecting wavier applications that could reduce coverage eligibility. In April 2022, CMS officials denied Texas’ wavier, and the agency followed suit in denying waivers for Arizona and Indiana. Arizona’s and Indiana’s waivers would have required some Medicare beneficiaries to work, attend job training, or participate in other activities to maintain health coverage. “Losing health care coverage undoubtedly has negative consequences for affected beneficiaries down the road,” Brooks-LaSure wrote. No state currently has a work requirement for Medicaid coverage, and the Biden administration would like to keep it that way.

In addition to avoiding waivers that could reduce coverage, House Energy & Commerce Health Subcommittee Chair Anna Eshoo (D-CA) and full committee vice chair Robin Kelly (D-IL) are pushing to include Medicaid and Medicare reforms in a reconciliation package. Rep. Kelly is actively arguing for federal policies to close the Medicaid coverage gap