Sellers Dorsey Digest

Federal Updates

News

Hospital Groups File Brief to Encourage SCOTUS to Correct Changes in DSH Payments

• On August 14, multiple hospital lobbying groups filed a brief advocating for the U.S. Supreme Court to review and correct the Department of Health and Human Services (HHS’) current practices regarding the consideration of Supplemental Security Income (SSI) eligible individuals in the calculation of DSH payments. The groups believe that the HHS is undercounting SSI eligible recipients within the calculation of DSH payments, based on the argument that patients are only entitled to SSI benefits if they are receiving them, which decreases hospital DSH payments as a result. The hospital groups argue that if current practices are allowed to continue, hospitals could lose over a billion dollars in DSH funds each year, which puts both hospitals and their patients at risk, especially vulnerable populations. Among groups signing on in support of the brief were the American Hospital Association, National Rural Health Association, and America’s Essential Hospitals (Inside Health Policy, August 16).

Federal Legislation

Congressional Appropriations Committees Focus on Rural Opioid Crisis

• Both the House and Senate Appropriations Committees’ funding bills have prioritized funding to address opioid misuse and overdose in FY2025, with a special focus on rural areas. The Senate budget bill provides $155 million for the Substance Abuse and Mental Health Services Administration (SAMHSA) Rural Communities Opioid Response Program (RCORP), an increase of $10 million, to support grant funding of prevention and response programs in rural areas. The House bill encourages the National Institute on Drug Abuse (NIDA) to expand education on pain management prescribing practices for physicians and other treatment providers along with the inclusion of substance abuse screening as part of routine care. Both the House and Senate bills address youth nicotine use through the CDC, with the Senate also suggesting that the National Institutes of Health support research to develop more effective cessation treatments for children and adolescents (Inside Health Policy, August 16).

Federal Litigation

Federal Trade Commission’s (FTC) Noncompete Ban Blocked by Federal Judge

• On August 20, a federal judge for the U.S. District Court for the Northern District of Texas, Dallas Division ruled that the FTC’s noncompete ban was ”unreasonably overbroad without a reasonable explanation.” Judge Ada Brown sided with the U.S. Chamber of Commerce and tax firm Ryan LLC in the ruling. Typically, hospitals, health systems, physician groups, and insurance companies utilize noncompete clauses in employment contracts to prohibit former employees from sharing private company information with competitors. At this time, the FTC is considering an appeal, but the ban is not permitted to take effect on September 4 or be enforced (Modern Healthcare, August 20).

Federal Regulation and Guidance

American Hospital Association (AHA) Requests Rejection of Updated Telehealth Guidelines

• On August 12, the AHA requested that Congress’ Medicare payment advisers reject the updated telehealth guardrails as unnecessary. The AHA reasoned that since there was not increased fraud during the expanded telehealth flexibilities permitted during the COVID-19 pandemic, the updated guardrail that targets “outlier” providers would not do much to detect fraud and abuse. In addition, the prohibition of “incident to” billing for telehealth could negatively impact patient access to telehealth services, especially for behavioral health (Inside Health Policy, August 16).

CMS Issues Informational Bulletin (CIB) to Advance Continuity of Coverage for Individuals Receiving Home- and Community-Based Services (HCBS)

• On August 19, CMS released an informational bulletin, Ensuring Continuity of Coverage for Individuals Receiving Home and Community-Based Services (HCBS), to highlight federal renewal requirements and available flexibilities for states to maintain continuity of coverage for individuals receiving HCBS. These flexibilities include the following:
  • Consider assets as stable and reliable in ex parte renewals;
  • Disregard income, assets, or both at application and renewal for individuals receiving HCBS;
  • Adopt temporary section 1902 (e)(14)(A) waiver flexibilities to facilitate continued coverage of eligible individuals;
  • Partner with local agencies to enhance “No Wrong Door” systems to provide assistance to individuals in order to maintain Medicaid enrollment; and
  • Perform level of care (LOC) evaluation and person-centered service plan review prior to financial eligibility renewal.

Additionally, the guidance includes strategies to facilitate reenrollment in HCBS such as reserving HCBS waiver capacity, prioritizing entrance, allowing provisional service plan, LOC determination, and conducting additional outreach on the renewal and fair hearing processes (Medicaid.gov, August 19).

State Updates

News

California Bill Proposes Increased Regulations on Private Equity Deals in Healthcare

• A bill sponsored by California’s Attorney General Rob Bonta would require private equity groups and hedge funds to notify and obtain consent from the attorney general’s office of planned purchases for certain healthcare businesses. This bill also strengthens state laws that prevent nonphysicians from directly employing doctors or directing their activities. Consumer advocates, labor unions, and the California Medical Association are supportive of the bill while hospitals and the California Chamber of Commerce are strongly opposed over concerns about potential funding losses. This comes as private equity deals in healthcare are facing increased scrutiny across the country. States like Connecticut, Massachusetts, and Minnesota have proposed increased regulations in private equity deals. In 2021, the value of private equity healthcare deals in California increased to $20 billion, compared to less than $1 billion in 2005 (Modern Healthcare, August 16).

BCBS of Michigan Blames Layoffs on High Drug Costs

• BCBS of Michigan attributes its decision to cut 64 jobs to increases in claims and pharmacy costs. The payer is also reducing discretionary spending and marketing, in an attempt to address administrative costs. BCBS of Michigan currently insures approximately 45% of the state’s population (Health Payer Specialist, August 14).

Vermont’s Shortage of Primary Care Physicians Lends to Other Significant Challenges

• In Vermont, there are considerable challenges surfacing within the state’s healthcare system, and numerous stakeholders are concerned that these challenges may start to emerge nationwide. Although Vermont currently has very high insurance premiums, the state also boasts some of the largest per capita healthcare expenditures in the country, putting financial pressure on insurers. The state has an undersupply of primary care doctors, which causes individuals to seek acute care at venues that cost more, such as urgent care facilities. Additionally, many low-income residents who are sicker have plans with higher deductibles that prevent them from seeking care. Many are worried the shortage of primary care doctor availability across the country will lead to similar dynamics seen currently playing out in Vermont (Health Payer Specialist, August 19).

SPA and Waiver Approvals

Waivers

• 1115
  • Minnesota
    • On August 2, 2024, Minnesota submitted a request to extend its 1115 demonstration, “Reform 2020: Pathways to Independence (Reform 2020),” through January 31, 2030. This waiver provides home- and community-based services to participants aged 65 years and older who meet a nursing facility level of care and have limited income and/or assets but are not financially eligible for Medicaid. Services in this waiver include companion and day services, nutrition, chore services, home health, family caregiver services, specialized equipment, and accessibility modifications for homes and vehicles. This extension also adds transitional services as a covered benefit. The federal public comment period will be open from August 16, 2024, through September 16, 2024.

SPAs

• Payment SPAs
  • Kansas (KS-24-0009, effective July 1, 2024): Increases the reimbursement rate for community health worker services.
  • Kansas (KS-24-0010, effective July 1, 2024): Updates the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) reimbursement rates to include rate changes for positive air pressure (PAP) devices and accessories and certain wheelchair cushion replacements.
  • Kansas (KS-24-0011, effective July 1, 2024): Increases reimbursement rates for Global Pregnancy services.
  • Kansas (KS-24-0013, effective July 1, 2024): Updates reimbursement rates for two EPSDT provider services: behavioral analysis for Intensive Individual Supports and family training and counseling services.
  • Massachusetts (MA-24-0017, effective April 1, 2024): Updates payment methodologies for chronic maintenance dialysis treatments and home dialysis supplies.
  • Massachusetts (MA-24-0020, effective May 1, 2024): Updates payment methodologies for Physician, Certified Midwife, and Nurse Practitioner services.
  • Massachusetts (MA-24-0022, effective April 1, 2024): Updates payment methodologies for prosthetic devices; including orthotics.
  • Massachusetts (MA-24-0027, effective June 1, 2024): Updates payment methodologies for dental services.
  • Washington (WA-24-0027, effective April 15, 2024): Updates the link to the fee schedule for Optometrist services and adds a clarification on the conversion factor.

Private Sector Updates

News

Elevance Health Teams Up with a Private Equity Firm to Launch Nation Primary Care Delivery Platform

• Elevance Health and private equity firm, Clayton, Dubilier & Rice (CD&R), are teaming up to launch Mosaic Health to provide a “whole-health approach to client care” and offer clinical and digital tools to diverse and higher-need patient populations. Mosaic is made up of Elevance’s Carelon Health and CD&R’s apree health and Millenium Physician Group. The new national care delivery platform will serve commercial, Medicaid, and Medicare enrollees (Health Payer Specialist, August 16).

Possible Nova Biomedical Sale Valued at More Than $2 Billion

• Waltham, Massachusetts-based Nova Biomedical, a company that develops and manufactures medical devices and diagnostic equipment, is exploring a prospective sale that could value the company at more than $2 billion. The medical device company has drawn interest from private equity firms and strategic buyers. Currently, deliberations are ongoing and there is no guarantee that a deal will be reached. Representatives from Nova Biomedical have refused to comment (Modern Healthcare, August 16).

Sellers Dorsey Updates

IN CASE YOU MISSED IT: Summaries of Enacted State Budgets FY2025

• What’s ahead for state budgets in Fiscal Year 2025 (FY2025)? In this comprehensive overview, we lead you through each state’s enacted budget for the year, their Medicaid spending plans, and program changes for FY2025. See where states are looking to allocate funds to best address their most mission-critical challenges and align with the needs of their communities. Download the Report here.

Sellers Dorsey Special Coverage of the 2024 NASBO Annual Conference

• Sellers Dorsey’s exclusive coverage of the 2024 National Association of State Budget Officers (NASBO) Annual Conference, summarizing everything you need to know about the national economic outlook, state of the states, federal budget and state budge interactions, state regulation of artificial intelligence, and more! Explore our coverage here.