Sellers Dorsey Digest

Federal Updates

Federal Legislation

Senate HELP Committee Approves Six Health Program Reauthorization Bills

• On May 23, the Senate’s Health, Education, Labor, and Pensions (HELP) committee approved six bills that would reauthorize healthcare programs, including the Dr. Lorna Breen Health Care Provider Protection Act (3679), the Bold Infrastructure for Alzheimer’s Act (S.3775), the Emergency Medical Services for Children Reauthorization Act of 2024 (S.3765), the Congenital Heart Futures Reauthorization Act of 2024 (S.3757), the East Palestine Health Impact Monitoring Act (S.4045), and the Lifespan Respite Care Reauthorization Act of 2024 (S.4325) (Inside Health Policy, May 23, 2024).

House Budget Committee in Agreement on Site-Neutral Payments

• On May 23, the House Budget Committee held a hearing to discuss the impact of healthcare consolidation on cost, quality, and access. Lawmakers from both parties were united in concern over rapid consolidation in the healthcare industry. The hearing focused on the rise in hospitals and health systems purchasing physician offices and other providers. According to a 2023 AMA policy paper, the percentage of physicians employed by a hospital or health system increased from 29% in 2012 to 41% in 2022. Hearing witnesses discussed trends that highlighted increased prices without increased quality following consolidation and shared concerns that higher prices may result in a greater federal deficit. Most lawmakers in the hearing expressed support for site-neutral payment policies as a mechanism to equalize reimbursement rates for the same services across the healthcare system. The Lower Costs, More Transparency Act (5378), which includes site-neutral payment provisions, has passed the House but awaits action in the Senate. These policies face opposition from the hospital industry which argues that these reforms don’t consider their higher overhead costs or more complex patients. Other proposed reforms include reducing the administrative burden on physicians, stabilizing Medicare payments, and addressing concerns with the 340B program (Healthcare Dive, May 23; Fierce Healthcare, May 23).

Bipartisan Group of Senate Finance Committee Members Releases Proposal to Improve Medicare Physician Training

• On May 24, a group of bipartisan Senate Finance Committee members released a proposal to improve Medicare physician training to reduce workforce shortages. Now, members are asking stakeholders for feedback on the policy outline which includes increasing Medicare graduate medical education (GME) slots, encouraging hospitals to train physicians in rural areas, creating a temporary council, and improving data collection. The proposal also includes a provision to allow more community hospitals and Medicare-dependent hospitals to receive indirect GME payments and extend the ability of teaching physicians to use telehealth to supervise residents beyond December 31 (Inside Health Policy, May 24).

Federal Litigation

Trade Groups File Lawsuit Over Staffing Minimums in CMS Final Rule

• On May 23, two nursing home trade groups sued CMS, seeking to overturn the final rule, which mandates minimum staffing levels in nursing homes. The final rule CMS issued in April requires nursing homes deliver 3.48 hours of care per resident per day in total staffing and that an RN be on staff 24 hours a day, seven days a week. The American Health Care Association joined the Texas Health Care Association and three Texas-based nursing homes to file suit in the Northern District of Texas. In the lawsuit, the trade groups argue that the minimum staffing rule is not in alignment with the staffing “context-sensitive” standards set by Congress and exceeds CMS authority. The lawsuit also alleges that the final rule violates the Administrative Procedure Act and cites concerns that facilities will be forced to close because they cannot meet the minimum staffing levels. Last week, two members of the House introduced a resolution to overturn the final rule through the Congressional Review Act and the trade group LeadingAge announced that they were considering a legal challenge to the staffing mandate. However, AARP, the nation’s largest seniors lobby, has backed CMS and the minimum staffing rule, citing that the rule will save senior’s lives. According to a poll conducted by AARP, the final rule and staffing minimums have strong bipartisan support (Inside Health Policy, May 24; Modern Healthcare, May 24).

Federal Regulation and Guidance

CMS Seeking Input on Using Medicare to Improve Maternal Health

• CMS is seeking input through a request for information within the proposed FY2025 Inpatient Prospective Payment System rule regarding payment rates and baseline health and safety standards for inpatient pregnancy and obstetrical services. CMS specifically requests comments regarding a proposal to establish a Medicare obstetrics-based Conditions of Participation requirement in an effort to improve rates and outcomes related to maternal morbidity and mortality. Comments on the rule are due June 10 (Modern Healthcare, May 28).

State Updates

News

Governors Whitmer (D-MI) and Scott (R-VT) Sign Laws Strengthening Mental Health and Substance Use Disorder Services

• State legislatures have advanced bills this year seeking to strengthen mental health and substance use disorder (SUD) services access, with bills signed into law in Michigan and Vermont, and another under consideration in Illinois. Michigan’s SB 27 guarantees the uniformity of coverage for mental health and SUD treatment in addition to other medical care and intends to close longtime gaps, ensuring that Michigan residents get access to the care and treatments they need. Vermont’s HB 766 loosened prior authorization limitations to improve and provide more effective patient care while also reducing administrative burden for providers. In response to insurers concerned about premiums increasing, Governor Scott requested that the Vermont Agency of Human Services and the Vermont Department of Financial Regulation study the effect of the regulation on cost and patient outcomes. Meanwhile, in Illinois, the Healthcare Protection Act, a bill that aims to ban prior authorization for mental health services, bans step therapies for private payers and Medicaid managed care, and eliminates ghost networks of medical providers, passed the Senate on May 25 (Health Payer Specialist, May 24).

Oregon Taps North Carolina Deputy Director to Lead State Medicaid Program

• Effective July 24, North Carolina Deputy Director of Medicaid policy, Emma Sandoe, will become the Oregon Medicaid Director. Oregon’s Medicaid program provides coverage to 1.4 million people in the state and has a two-year program budget of $28 billion. Sandoe has worked in the North Carolina Medicaid program since 2019, and comes to Oregon with experience developing and implementing policies to improve health equity. Sandoe’s arrival in Oregon comes as the state’s new five-year Medicaid plan received federal approval (Portland Tribune, May 27; Yahoo, May 24).

SPA and Waiver Approvals

SPAs

• Eligibility
  • Oregon (OR-24-0009, effective April 1, 2024): Removes the requirement to obtain employer sponsored insurance as a condition of Medicaid eligibility.
• Services
  • Washington (WA-24-0017, effective January 1, 2024): Revises the Rehabilitative Services section to update the definition and description of a Mental Health Care Provider.
• Payment
  • Ohio (OH-24-0006, effective April 1, 2024): Updates the Interagency Agreements outlining the subrecipient relationship between the Single State Medicaid Agency and the Ohio Department of Health (ODH) and the Ohio Department of Aging (ODA).

Private Sector Updates

News

Epic Releases its First Open-Source Tool for AI Validation

• On May 22, Epic, an electronic health record (EHR) company, launched an open-source tool with capabilities to allow healthcare providers to test and monitor AI models. The company chose to release the software suite on GitHub, making it free and available to the public, as well as open to contributors across the globe. Health systems that are interested in integrating the tool can download the code to their EHR systems (Fierce Healthcare, May 22).

WebTPA Reports Data Breach from April 2023

• On May 8, WebTPA Employer Services, a Texas-based third-party administrator, reported a data breach to the U.S. Department of Health and Human Services. WebTPA is a subsidiary of Guidewell, which owns the largest Blue Cross Blue Shield plan of Florida, Florida Blue. Although the data breach was discovered in December 2023, enrollee data was compromised in April 2023 and may have included contact information, Social Security numbers, dates of birth and death, and individual health insurance information for up to 2.4 million enrollees. The company did not disclose how the breach occurred (Health Payer Specialist, May 22).

CVS Health Corporation Seeks Investor for New Oak Street Clinics

• CVS Health Corporation is seeking a private equity partner to fund growth at Oak Street Health, a $10.6 billion primary care provider. Oak Street Health focuses on serving seniors in privately managed Medicare plans and CVS has been working with financial advisors to help find capital to back new clinics that will be opened by Oak Street Health. Deliberations with potential partners are preliminary at this time (Modern Healthcare, May 23).

Sellers Dorsey Updates

Don’t Miss our Summaries of Proposed State Budgets FY2025

• What are states planning to budget for in Fiscal Year 2025? Sellers Dorsey experts summarized everything you need to know including states’ specific Medicaid spending plans and program changes for the year ahead. Click here to download the report, today.