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New Regulations on Short-Term Plans

• The Biden Administration has proposed new regulations on short-term, limited-duration health insurance plans, undoing a policy implemented by the previous Administration. The proposed rule would limit the duration of short-term policies to three months and disallow reenrollment into the same plan. Consumers would still be allowed to purchase different short-term policies for a period of up to 36 consecutive months. The Biden Administration hopes to protect consumers from inadequate coverage and ensure that these short-term plans serve as temporary coverage. The proposed rule would also revamp the regulation of fixed indemnity medical plans, changing how claims are paid. Comments on the proposed rule can be submitted through September 11. The Association for Community Affiliated Health Plans and the American Hospital Association are in support of the proposed regulations. (Modern Healthcare, July 7)

340 B Payments

• Under a proposed rule, CMS is planning to make a one-time lump sum payment of $9 billion to 340B hospitals to compensate for the loss in 340B drug reimbursements that the U.S. Supreme Court determined unlawful. However, to maintain budget neutrality, CMS is proposing to make 0.5% cuts over 16 years to the non-drug aspects of the hospital outpatient pay system starting in 2025. The American Hospital Association and America’s Essential Hospitals endorse the lump sum payment proposal but disapprove of the 16 years of pay cuts. The funding will affect approximately 1,600 hospitals. (Inside Health Policy, July 7; Politico, July 7)

Alzheimer Drug Approvals

• On July 6, the FDA approved the Alzheimer’s drug Leqembi, marking a significant move that makes the treatment more widely available and accessible to Medicare patients. Following the approval, CMS made its registry for monitoring the effect of the drug available to providers. In order to receive Medicare coverage, enrollees will have to be diagnosed with mild cognitive impairment or mild Alzheimer’s dementia, with additional clinical evidence of beta amyloid plaque on the brain. In addition, the enrollee’s provider must participate in CMS’ registry, a qualifying alternative registry or a clinical study. Additional coverage and payment questions remain such as whether monitoring for side effects will be covered and reimbursed. The approval of Leqembi, which has a list price of $26,500 per year, is likely to significantly impact CMS’ budget with some stakeholders believing the drug’s utilization will inflate spending while others believe it will decrease overall spending on Alzheimer’s care in the long run. (Inside Health Policy, July 11)

News

• In reauthorizing the Pandemic and All-Hazards Preparedness Act (PAHPA), the Senate Health, Education, Labor, and Pensions (HELP) Committee released draft legislation that will provide $385 million annually for PAHPA’s Hospital Preparedness Program (HPP) for fiscal years 2024-2028. In response, the American Hospital Association (AHA) sent a letter to the HELP Committee requesting that HPP funding should “be at least doubled” to prepare the health system for another public health threat. Furthermore, the AHA is also lobbying for HPP funding to include “direct-to-hospital funding” for strengthening the program for public health threats, allow hospitals and hospital associations to compete over what organization will serve as the HPP recipient of their jurisdiction, and allow HPP funding to be used across state lines for better overall planning. (Fierce Healthcare, July 11)
• After the debt ceiling deal revoked a portion of the remaining COVID-19 funds, some attorneys have recommended that providers due provider relief funds (PRFs) consider taking HHS to court now that the Health Resources and Services Administration (HRSA) has stopped making PRF payments. Thousands of provider applications and reconsideration requests have been terminated under the Provider Relief Fund or the American Rescue Plan Rural Distribution processes. Many providers are cautious about moving their fight for additional COVID-19 funds to the judicial branch, but a handful of cases have made it, including Hartford Hospital in Connecticut and The Hospital for Special Surgery in New York. (Inside Health Policy, July 5).
• On July 6 the National Association for Home Care and Hospice (NAHC) filed a lawsuit against CMS and HHS regarding rate cuts in home health payments. The lawsuit challenges a 3.9% payment reduction that took effect earlier this year and a proposed 5.7% cut for 2024. These reductions are a result of overpayments made by CMS to home health agencies due to the new Home Health Patient-Driven Groupings payment model implemented in 2020. The NAHC contends that CMS and HHS used an “illogical and invalid” methodology in determining projected expenditures under the new model. The proposed rates for 2024 would reduce overall payments to home health providers by $375 million. As a side note, CMS is accepting public comment on the proposed payment cuts until the end of August and a final rule is expected to be issued in the fall. (Modern Healthcare, July 6)

Federal Regulation

• On July 11, HHS released a proposed rule that would ban discrimination based on a person’s gender identity or sexual orientation within any HHS program, service, or funding opportunity. The proposed rule would codify its nondiscrimination policies after many years of discussion and court rulings. The clarification would also reinstate the Obama-era policy related to the definition of sex discrimination that was eliminated during the Trump presidency. The proposed rule would also protect against discrimination based on age, disability, race, color, national origin, and religion. Religious exemptions to the discrimination ban can still be sought under the proposed rule. (Modern Healthcare, July 11)

Federal Studies and Reports

• A recent article published in the journal Health Affairs found that many people with private Medicare coverage cannot find a psychiatrist within their plan’s network. More than half of the counties that were a part of the study did not have a single psychiatrist participating in a Medicare Advantage plan and over 30 million people are enrolled in these private plans. The study further noted that more than two-thirds of the plans reviewed had narrow networks and less than 25% of available psychiatrist in a plan’s network. For reference, ACA marketplace plans and Medicaid managed care plans were less restrictive with approximately 40% of available psychiatrists. (New York Times, July 5)

SPAs

• COVD-19 SPAs
  • North Carolina (NC-23-0016, effective May 12, 2023): Extends the COVID-19 flexibilities related to Skilled Nursing Facilities, Personal Care Services, and Nitrous Oxide as originally approved in Disaster Relief SPA NC-23-0005.
• Payment SPAs
  • Illinois (IL-22-0039, effective January 1, 2023): Authorizes wage increases to certain Intermediate Care Facilities for Individuals with Intellectual Disabilities.
  • New York (NY-22-0025, effective January 1, 2022): Increases the minimum wage yearly for specialty and non-specialty nursing homes until the minimum wage reaches the per hour wage as statutorily prescribed.
  • Ohio (OH-23-0016, effective May 20, 2023): Authorizes a one-time Inpatient Hospital Relief Payment pursuant to Ohio statutory requirements at HB 45, Section 270.12.
  • Pennsylvania (PA-23-0010, effective May 7, 2023): Increases funding for disproportionate share hospital (DSH) payments to qualifying acute care general hospitals.

News

• Blue Cross Blue Shield of Arizona (AZBlue) recently announced a plan to expand its Prosano Health Solutions provider business across the state, with a specific focus on rural areas. Prosano already opened its first primary care facility in Maricopa County, the largest county in the state, which houses Phoenix, the largest city in the state. There are plans in place for Prosano to open three more clinics in Maricopa County by the end of 2023. AZBlue’s President of Prosano Health and Chief Transformation Officer, Beth Ginzinger, reaffirmed the payer’s commitment to advance primary care, integrate behavioral health, and meet members’ needs by making sure they know what comes next in their care plan. The commercial employer group rollout will open in January 2024 (Health Payer Specialist, July 10).
• This week, the Pennsylvania Department of Human Services (DHS) announced a new coverage and payment policy that will allow physicians, certified nurse midwives, certified registered nurse practitioners, physician assistants, psychologists, and mobile mental health treatment providers enrolled in Pennsylvania’s Medicaid program (called Medical Assistance) to provide care outside clinical settings to beneficiaries who are experiencing homelessness, otherwise known as “street medicine.” Street medicine includes both physical and behavioral health services to address the needs of beneficiaries in their living environment and seeks to build trust while easing barriers to care. Services are provided by health care professionals equipped with portable medical equipment. These services can be rendered to anyone enrolled in the state’s Medicaid program who is experiencing homelessness. (Yahoo, July 9).
• New York is poised to begin expanding health coverage to inmates in state and local correctional facilities through its Medicaid program. Though the federal government approved California’s request to use Medicaid funding for the same purpose earlier this year, New York has yet to take advantage of the expanded health coverage program. A spokeswoman from New York’s Department of Health says that negotiations are underway for a larger Medicaid coverage expansion that would align with the inmate reentry program. Providing targeted Medicaid services to inmates prior to release is part of New York’s strategy to address health disparities and improve health equity. A large percentage of people released from incarceration have a substance use disorder or a chronic health condition that can make reentry difficult. Other states could potentially cover healthcare services up to 90 days before an inmate’s scheduled release date by taking advantage of the program which provides for a 90% federal match for funds states would spend on the program. (Times Union, July 10)
• On June 29, the U.S. Election Assistance Commission (EAC) released data on voting and voter registration for all 50 states. According to their data, Massachusetts had a significant jump in voter registration applications through social service agencies (such as Medicaid programs) in the last election cycle. This is likely due to Massachusetts’ automatic voter registration (AVR) system, which was passed in 2018 and implemented in 2020. The AVR allows any state agency that collects enough data from residents to determine voting eligibility to offer AVR. In Massachusetts, the two agencies currently participating are the Registry of Motor Vehicles and MassHealth. With many states exploring new ways to expand access to voting, using state agencies such as Medicaid programs looks like a promising avenue. (Wisconsin Examiner, July 10)
• On July 6, the Maine legislature gave final approval to a proposal to expand access to abortions, allowing the procedure at any time if deemed medically necessary by a doctor. If signed by Governor Janet Mills (D), Maine will have one of the least restrictive abortion laws in the country. Currently, only six other states, Alaska, Colorado, New Jersey, New Mexico, Oregon, Vermont, and D.C., leave the decision up to doctors and patients without restrictions. (AP News, July 6)
• In a recently enacted state budget, New Hampshire will be extending Medicaid postpartum coverage from 60 days to a year. The budget will also require Medicaid to cover doulas, lactation services, donor breast milk, provide funding for family resource centers, and expand mental health services for young kids. (Yahoo, July 4)
• Since April 1, more than 1.5 million people have lost Medicaid coverage during the redetermination process. South Dakota’s Medicaid enrollment has dropped by more than 21,000 and Iowa has a disenrollment rate of nearly 55%. However, some states like Michigan, Mississippi, New Jersey, Virginia, and Wisconsin have voluntarily paused their redeterminations to give beneficiaries more time to respond to redetermination requests. (Inside Health Policy, July 6)