Sellers Dorsey Digest

Federal Updates

News

House Committee Chairs Ask HHS to Identify Regulations and Cases Affected by the Overruling of Chevron’s Federal Agency Deference Doctrine

• Several House Committee Chairs have given HHS and other agencies until the end of July to identify all planned and current regulations, guidance documents, and ongoing or prior court cases dating back to January 20, 2021, that relied on the Chevron federal agency deference doctrine. The U.S. Supreme Court overruled the Chevron federal agency deference doctrine in its recent Loper Bright Enterprises decision. GOP lawmakers also request that agencies provide lists of certain rules, guidance, adjudication, enforcement actions, and judicial decisions where the Chevron federal agency deference doctrine may have been applied or was applicable since President Biden took office. These requests follow legislation introduced on July 2 by House Republicans that would require agencies to rely on pre-published and publicly accessible documents when taking regulatory final action (Inside Health Policy, July 11).

Federal Litigation

Healthcare Sector Faces Several Potential Legal Challenges without Chevron Precedent

• Following the U.S. Supreme Court’s decision to overturn the Chevron federal agency deference doctrine in June, there are several areas in healthcare that may experience big changes, including: Medicare Advantage audits and risk adjustments; D-SNP requirements; Critical Access Hospitals’ eligibility; the nursing home staffing mandate; at-home care reimbursement and wage requirements; 340B Drug Pricing Program; fixed indemnity insurance disclosure rules; restrictions on short-term, limited-duration health plans; continuous coverage requirements for children enrolled in CHIP; hold-harmless agreements; Medicare quality data reporting requirements for hospitals; Affordable Care Act (ACA) nondiscrimination policies; and the digital health sector. CMS may face several legal challenges spurred by final rules published over the last year. States and other impacted groups may file suits against unpopular provisions like the nursing home staffing minimums, changes to Medicare Advantage plan methodologies, HCBS wage requirements, and continuous coverage. For example, Florida has appealed its case against the continuous coverage requirement for children that was previously dismissed. Notably, the ACA is expected to face legal challenges given the polarizing nature of some interpretations in recent years (Modern Healthcare, July 15).

Possible Suit Against PBMs May Arise from the FTC over Insulin Rebates

• The Federal Trade Commission (FTC) has been investigating insulin rebate methods and is now preparing to file a lawsuit against the industry’s three largest pharmacy benefit managers (PBMs) claiming drug cost inflation. In its interim staff report, the FTC discusses key insights into what PBMs are doing, including self-preferencing, establishing unfair contract terms, and limiting access to low-cost competitors. In addition, states and municipalities have filed suits against PBMs and drug manufacturers based on claims that they drive up prices of insulin (Modern Healthcare, July 11; FTC, July 9).

Federal Regulation and Guidance

CMS Proposed Regulation Permanently Allows Audio-Only Telehealth Services

• On July 10, CMS published the Medicare and Medicaid Programs; CY 2025 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicaid Overpayments proposed rule that renews many telehealth flexibilities that began during the COVID-19 public health emergency (PHE). The proposed rule permanently allows for audio-only telehealth services when patients do not consent to or are not capable of using video and permits telehealth providers to continue utilizing office addresses instead of home addresses through calendar year (CY) 2025. CMS also proposed a permanent audio-only flexibility for Opioid Treatment Program (OTP) services (Inside Health Policy, July 10; Modern Healthcare, July 11).

CMS Proposes Changes That Could Widely Benefit ACOs

• Alongside a proposed 2.9% reimbursement reduction for physicians in its FY2025 Medicare fee schedule published for public inspection in the Federal Register on July 10, CMS has proposed a change that would allow accountable care organizations (ACOs) to claim a share of the savings they generate in advance. The advance payments could potentially give providers the tools to invest in clinical care and practice improvements that would ultimately drive cost savings. Furthermore, if finalized, this change could aid ACOs in bettering their coordination efforts with providers, promote a preventative care approach, and lessen spending (Modern Healthcare, July 12).

CMS Releases Companion Guide for Ensuring Access to Medicaid Services Final Rule

• CMS released a companion guide to the Ensuring Access to Medicaid Services Final Rule on July 12. The guide is intended to help states understand and reach compliance with the fee-for-service provisions in the final rule. The guide outlines the scope of the payment rate transparency publication provisions and details which rates must be published. CMS explains that certain bundled payments, value-based payment arrangements, and advanced payment methodologies fall within the scope of the final rule. Next, CMS details the requirements and exclusions for the comparative payment rate analysis to Medicare. To assist states in reaching compliance with this provision, CMS provides step-by-step instructions on how to complete the comparative analysis (CMS, July 12).

CMS Releases State Health Official Letter for Provider Directories

• On July 16, CMS released a State Health Official letter (SHO #24-003) to provide guidance and expectations for compliance with the Requiring Accurate, Updated, and Searchable Provider Directories requirement under the Consolidated Appropriations Act, 2023 (CAA). The SHO letter addresses the following: changes to Provider Directory data requirements and features resulting from Section 5123 of the CAA; availability of enhanced federal financial participation (FFP) for Medicaid fee-for-service Provider Directory development and operations; non-compliance; corrective action plan requirements for re-approval of Medicaid systems; and returning to compliance and requesting re-approval of Medicaid systems. Compliance with the Provider Directories requirement takes effect on July 1, 2025 (CMS, July 16).

Federal Studies and Reports

Part D Protections Report Published by the Alliance of Aging Research and Manatt

• In a report published by the Alliance of Aging Research (Alliance) and Manatt on June 26, CMS could take additional steps to safeguard Part D beneficiaries from potential insurance policies that could restrict access to benefits following price negotiations under the Inflation Reduction Act (IRA). According to a separate report commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), Medicare Part D drug price negotiations may result in increased out-of-pocket costs for 3.5M seniors by 2026. On average, out-of-pocket costs are predicted to increase by 12% for Part D drugs selected for negotiation. Additional concerns were raised by the Alliance in its June 26 report that plans might restrict drug access to offset higher costs from CMS-negotiated prices. Manatt and Alliance suggest that CMS establish minimum standards for Part D plans, including regulating specialty tier drugs and enhancing the appeals process. Additionally, they argue that CMS can circumvent these concerns by disapproving plan designs that discourage enrollment, creating a public watch list of unapproved formulary practices, and ensuring broader access to drugs (Inside Health Policy, July 12).

State Updates

News

North Carolina Medicaid Approves Coverage of STD Rapid Testing

• North Carolina has expanded its Medicaid services to cover rapid testing for syphilis and HIV as rates skyrocket within the state. In 2023, at least nine congenital syphilis related still births and neonatal deaths were reported within the state, with HHS reporting an increase in syphilis cases being nine times higher between 2012 and 2023 nationwide. The CDC recommends mothers to test for syphilis three times during their pregnancy, and once after giving birth. The coverage expansion follows the state’s decision to increase reimbursement rates for syphilis treatment in February (Newsweek, July 10).

Missouri Medicaid Adds Dental Exams to State Plan

• On July 1, Missouri’s Medicaid program, MO HealthNet, added routine dental exams for adults to the state plan. MO HealthNet previously covered teeth cleanings for adults but did not cover the cost of the exam, which resulted in some beneficiaries receiving bills for care. In 2022, Missouri increased rates to dental providers to 80% of the private insurance rate and now has over 1,000 providers that accept Medicaid. However, MO HealthNet still does not cover the cost of dentures or crowns. (KCUR, July 14).

Medicaid Contract Resolution Process Still Underway in Florida; Aetna, UnitedHealthcare, Florida Community Care, and Molina Could Keep Contracts

• Florida is still working to resolve disputes regarding its Medicaid contracts, potentially causing implementation to be delayed after January 1, 2025, when they are currently scheduled to go into effect. Aetna Better Health of Florida, AmeriHealth Caritas Florida, Florida Community Care, ImagineCare, Molina Healthcare of Florida, Sentara Care Alliance, and UnitedHealthcare of Florida initially filed protests after not being awarded the contracts. However, Florida’s Agency for Health Care Administration (AHCA) has reached agreements with Aetna, UnitedHealthcare, Molina Healthcare, and Florida Community Care to maintain most or all their Medicaid business. Contracts are expected to be formally announced in September or October (Health Payer Specialist, July 12).

Delaware Seeking to Expand Benefits to Individuals Who Were Wrongfully Imprisoned

• Delaware is working to expand its Medicaid and SNAP benefits to individuals who were wrongfully imprisoned for crimes they did not commit. The state currently offers compensation after a wrongful conviction but recently enacted a bipartisan bill, SB 169 that assists justice-involved individuals with other reentry benefits. The bill offers an emergency stipend, housing in a community corrections center, and easy access to general assistance, Medicaid, and SNAP while claims for compensation go through the approval process. The bill was passed by the Senate on June 30 and sent to Governor John Carney for approval (MSN, July 10).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Iowa
    • Iowa submitted a request to extend its demonstration titled, “Iowa Health and Wellness Plan.” The state seeks to continue providing coverage to the adult group and to continue demonstration elements including premiums, healthy behaviors, a waiver of non-emergency medical transportation, and a waiver of retroactive eligibility for certain beneficiaries. The demonstration also provides dental benefits for adults and children through a managed care delivery system known as a Prepaid Ambulatory Health Plan (PAHP). The federal public comment period will be open from July 12, 2024, through August 11, 2024.
  • New Hampshire
    • On July 16, 2024, CMS approved a five-year extension of New Hampshire’s demonstration titled, “Substance Use Disorder, Serious Mental Illness, and Serious Emotional Disturbance, Treatment Recovery and Access.” The state has received renewed authority to provide medical assistance to individuals with substance use disorder (SUD), serious mental illness (SMI), and serious emotional disturbance (SED) and to provide dentures to eligible individuals aged 21 and older who are residing in nursing facilities based on medical necessity. In addition, the state received new authority to provide certain pre-release services to eligible incarcerated individuals for up to 45 days prior to the expected date of release. The demonstration is effective from July 16, 2024, through June 20, 2029. The approval and additional documentation can be found here.

SPAs

• Eligibility
  • Montana (MT-24-0013, effective July 1, 2024): Allows for medically necessary eyeglasses once every 365 days for Medicaid beneficiaries aged 21 and older.
  • Nebraska (NE-24-0017, effective May 1, 2024): Extends the suspension of premiums for beneficiaries in the Transitional Medical Assistance Program, through September 30, 2024.
• Services
  • Alaska (AK-24-0006, effective May 13, 2024): Temporarily suspends behavioral health services and related service authorizations from May 13, 2024 through June 30, 2025, which was originally approved with the Disaster Relief Covid-19 policies.
  • Hawaii (HI-24-0003, effective May 1, 2024): Updates provisions for necessary non-emergency transportation services for beneficiaries to and from their healthcare providers to comply with the Consolidated Appropriations Act of 2021.
  • Missouri (MO-24-0009, effective April 1, 2024): Adds coverage of medically necessary prescription drugs that are not otherwise covered outpatient drugs during an FDA-identified drug shortage.
  • South Dakota (SD-24-0009, effective October 1, 2023): Provides coverage of SUD services for eligible beneficiaries within an institution for mental disease, which had previously been covered under the SUPPORT Act which sunset on September 30, 2023.
  • Washington (WA-24-0020, effective April 1, 2024): Adds coverage of and reimbursement for medically necessary prescription drugs that are not otherwise covered outpatient drugs during an FDA-identified drug shortage.
• Payment
  • North Dakota (ND-24-0010, effective July 1, 2024): Establishes an inflationary rate increase of 3% for rural health clinic services.

Private Sector Updates

News

Pennant Group to Acquire Some Signature Healthcare Assets

• Pennant Group, a healthcare services provider, has entered into two separate purchasing agreements with the home health and hospice company, Signature Healthcare at Home. The deals, which are each subject to regulatory approval, would expand Pennant Group’s footprint by 13 locations across Idaho, Oregon, and Washington. Pennant Group owns 113 home health and hospice facilities in 13 states, and the new acquisition is a part of its continued growth strategy (Modern Healthcare, July 11).

Sellers Dorsey Updates

Sellers Dorsey Welcomes Four New Directors Specializing in Managed Care

• Sellers Dorsey is pleased to welcome four new Directors to our National Consulting Practice as part of the Managed Care team, Maureen Cunningham, Imani Lewis, Maria Resurreccion, and Anne Rote. Together, these four women bring decades of experience across multiple facets of managed care and will provide clients with additional capabilities to solve their most mission-critical issues. Click here to learn more.