September 30, 2021 10:42 am

Democratic leaders struggling to satisfy both progressive and moderate factions’ demands are still trying to resolve divisions over scaling back the expansive health care policy wish list in their $3.5 trillion budget reconciliation package.

A smattering of members in both chambers have concerns with key issues ranging from drug pricing to Medicare spending, while Democratic holdouts like Sen. Joe Manchin III of West Virginia and Sen. Kyrsten Sinema of Arizona oppose the legislation’s overall price tag.

House Speaker Nancy Pelosi recently acknowledged that the $3.5 trillion number must come down. The Senate has yet to unveil companion text.

Democrats could try to shorten the duration of programs or focus on certain policies instead of others if the total amount falls. But some Democrats view adding end dates for programs as risky, since it would require lawmakers to extend them in the future.

“We have a tremendous opportunity right now with Democratic majorities in the House and Senate and a Democratic president,” Rep. Lauren Underwood, D-Ill., said on a Wednesday press call with the advocacy group Protect Our Care. “While we have the opportunity to do this work, I think we should take advantage of it because it is an assumption that is made that several years down the line we will have the opportunity to extend.”

Here are the biggest health care issues under consideration.

Drug pricing

Letting Medicare negotiate drug prices directly with manufacturers is a white whale for Democrats, who are gunning for the political victory as much as for the $700 billion in potential savings it would offer to fund their remaining health care agenda. But the party is dealing with several defections among members in both chambers that could derail or change the proposals, given Democrats’ slim majorities.

The House bill would set maximum prices for the most expensive drugs under the Medicare Part D prescription drug program and Part B outpatient program at 120 percent of the average paid by other wealthy countries. The bill would also levy an excise tax of up to 95 percent on manufacturers that don’t comply and require drugmakers to pay rebates when they raise prices faster than inflation.

Forecast: Tossup. The outcome depends on how the party wants to define success. House Democrats’ sweeping drug pricing bill is the foundation of discussions, but a recent bill from Rep. Scott Peters, D-Calif., demonstrated the possibility of designing a much narrower law that still achieves some negotiation. Holdout Sinema has also reportedly signaled opposition to negotiation as currently constructed.

The provision is central to the rest of Democrats’ health care agenda, since other spending largely depends on how far lawmakers are willing to go to generate savings from drug pricing measures.

Expanded insurance premium assistance

Democrats temporarily expanded tax credits for insurance premiums under the 2010 health care overhaul law as part of the $1.9 trillion COVID-19 aid law in March. The party now wants to extend the more generous credits permanently through the 10-year budget window at a rough cost of around $200 billion.

Households making up to 150 percent of the federal poverty level would receive fully covered insurance on the health law’s exchanges. The legislation would permanently eliminate a cap on subsidy assistance to households making more than 400 percent of the poverty level. Premiums would also be limited to 8.5 percent of a household’s income, making the insurance more affordable for people across the income spectrum.

Forecast: Best bet. Democrats have campaigned on the 2010 law for more than a decade, and retook the House in 2018 amid Republican attempts to repeal it. The provision has the broadest support within the caucus and the most manageable price tag. The expanded coverage would also help reach higher earners who want insurance in the individual market, and who suffer the brunt of the law’s infamous premium increases since they don’t qualify for subsidies.

Plugging the Medicaid coverage gap

All but 12 states expanded Medicaid under the 2010 health care law to cover households making up to 138 percent of the poverty level, despite Democrats’ attempts to sway the remaining Republican governors with additional financial incentives. Democrats are now attempting to close the gulf with a lookalike Medicaid program that would be run on the federal level, while covering eligible individuals on the exchanges until the new program is stood up.

House Majority Whip James E. Clyburn, D-S.C., said during a call with the left-leaning Center for American Progress last week that he would be open to a five-year authorization to expand Medicaid to start.

He argued on a separate press call Wednesday that it would be “un-American” for lawmakers to expand other benefits while leaving behind the vulnerable populations in those dozen states.

Forecast: Better odds. The Medicaid expansion is another piece of the 2010 law and important to Democrats’ platform. But questions over drug pricing savings and the slate of competing priorities is throwing the scope and duration of the program into doubt.

Democrats’ short-term solution to include would-be Medicaid recipients on the exchanges is a more expensive way to provide care, since Medicaid is a lower-cost program that pays providers lower rates. The cost is expected to total around $250 billion to $300 billion over 10 years.

Medicare dental, hearing and vision benefits

The traditional Medicare benefit has gaps, leaving many seniors without services like dental, hearing or vision care. Private Medicare Advantage or Medigap supplemental insurance plans help fill the gap, but lawmakers like Sen. Bernie Sanders, I-Vt., are pushing to cover them under the traditional benefit to ensure broader access.

But spending concerns are at the forefront of the discussion. The Congressional Budget Office previously estimated that adding the benefits would cost as much as $358 billion over 10 years.

Forecast: Longer odds. Spending constraints and the time needed for the Centers for Medicaid and Medicare Services to set up a new benefit forced the House to delay dental coverage under its bill until 2028, with patients responsible for more cost-sharing than under Medicare’s traditional Part B outpatient benefit. Democrats are debating ways to cram the provision into a final package, but further cuts to the scope and duration may be necessary.

The American Dental Association — which opposes a broad Medicare benefit — has also made headway with some skeptical Democrats. Rep. Kurt Schrader, D-Ore., plans to introduce an ADA-backed measure that would tailor dental benefits to low-income enrollees instead.

Home health

President Joe Biden is asking Congress for $400 billion over eight years to boost home- and community-based health services. The money would fund historically underpaid care workers’ salaries and boost Medicaid funding for states that take steps to improve home health programs.

Forecast: Tossup. Heavyweights like the Service Employees International Union back the full amount, but the House language only includes $190 billion over 10 years. Some senators are pushing for more, though. And although treating people at home is less expensive than treating them in an institution, the upfront investment is still a major debit on Democrats’ $3.5 trillion scorecard.

The provision is also less flashy than other priorities like expanding insurance, Medicare or Medicaid coverage, where many Democrats are directing the bulk of their efforts. Senate Finance Committee Chair Ron Wyden, D-Ore., a former advocate for the elderly, said he favors shortening the number of years to provide increased funding rather than cutting the topline number.

“If there are changes in the number, topline, I personally — and the caucus will talk about it — I personally would favor a shorter number of years,” Wyden said. “If you have 10,000 people turning 65 every day for years to come, and you have two options — good quality home- and community-based services versus institutional care. That’s not a close call in my book.”

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Shutdown at HHS: What Work Would Continue at the Health Agencies

September 29, 2021 4:04 pm

Health agencies’ efforts to combat the Covid-19 pandemic would likely continue in the event of a government shutdown, but other key work—including enrolling patients in clinical trials, drug and disease surveillance, and rulemaking—could come to a halt.

Thursday is the deadline to fund the federal government and avert a shutdown. Both the House and Senate will likely have to pass a short-term spending bill that would need to be signed into law by 11:59 p.m. ET.

The looming shutdown comes as more than 2,000 people die from Covid-19 daily and hospitals in pandemic hot spots consider rationing care. Agencies with public safety functions must assess each activity they conduct to determine if it has a source of funding or falls into an emergency exception that would allow it to continue.

But even when “critical activities” are allowed to continue during a shutdown, “it’s actually very hard to do” those activities because many workers are furloughed or out of action, Joshua Sharfstein, vice dean for public health practice and community engagement at the Johns Hopkins Bloomberg School of Public Health, told reporters.

“There are a lot of things that maybe aren’t critical and immediate, but they’re preventing things from becoming critical and immediate,” said Sharfstein, a former second-in-command at the Food and Drug Administration. For example, the CDC was prepared to suspend influenza surveillance during a previous government shutdown, he said.

The Health and Human Service Department would be able to keep a higher percentage of staff compared with 2018, when the last shutdown happened. In 2018, the department furloughed about half its staff—40,845 employees. This year it would furlough about 43%, or about 36,536 people. The HHS has about 3,000 more employees than it did three years ago.

The HHS’ contingency plan is unclear on what types of workers will be furloughed, however, and instead focuses on what work will continue. Here’s a rundown:

• The Food and Drug Administration would continue to authorize vaccines, therapeutics, and diagnostics, including Covid-19 vaccines for school-age children. The agency also would be able to continue any work that is funded by user fees, including the regulation and review of drugs, biologics, and medical devices. However, if the shutdown is prolonged, the agency could run out of the user fees that fund that work.
• The Centers for Disease Control and Prevention would continue addressing immediate ongoing disease outbreaks, including the Ebola outbreak in the Democratic Republic of Congo. The agency would also collect and report out data used to track, prevent, and treat diseases. The CDC’s labs and 24/7 emergency operations center would stay open.
• The National Institutes of Health would sustain its support for priority Covid-19 research and development. Supplemental funding from Covid-19 bills previously passed by Congress can be used to fund some of this work. The NIH would keep lean operations—about 25% of its staff or 4,500 personnel—to care for patients in its clinical center and to take care of animals and cell lines.
• The Centers for Medicare & Medicaid Services operations related to the pandemic were funded by the Coronavirus Aid, Relief, and Economic Security Act and won’t be affected by a shutdown. The agency will continue supporting the Medicare program and has enough money to fund Medicaid through the first quarter of fiscal 2022. The agency would also continue efforts to prevent fraud and abuse and the activities of the Center for Medicare & Medicaid Innovation. Some work maintaining the federal insurance exchange, including verifying eligibility, would be funded by user fees.

Here’s what work would stop if there is a lapse in government funding:

• High stakes work from the FDA, including policy-making functions and most surveillance inspections around compliance and safety, would stop in the event of a shutdown.
• Any less immediate surveillance from the CDC could be suspended, potentially slowing responses to emerging diseases.
• The NIH would have to furlough roughly 75% of its staff, a blowback that would exacerbate existing setbacks. The NIH already has lost or delayed at least $16 billion worth of research due to the pandemic. Work to enroll new patients in clinical trials, laboratories, and plans to build President Joe Biden’s proposed $6.5 billion biomedical incubator, dubbed the Advanced Research Projects Agency for Health, would be put on hold.
• The shutdown could delay the CMS’s release of several important regulations, including the 2022 Medicare physician fee schedule final rule, which determines how much doctors, surgeons, and other specialists are paid.

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House Group Unveils Bipartisan Mental Health, Addiction Legislative Plan

September 29, 2021 9:37 am

A bipartisan group of 144 House lawmakers plans to unveil their agenda Wednesday for expanding access to mental health care and combating the growing drug epidemic after overdose deaths hit new highs, CQ Roll Call has learned first exclusively.

The group plans to announce its agenda of 66 bills and one resolution during a midday Wednesday news conference. The 48-page bipartisan blueprint outlining the group’s legislative goals includes 12 policy subcategories including prevention, treatment, rural and underserved communities, workforce development, first responders, interdiction, children and families, veterans, prescribing, education, health care access and health parity.

The release of the agenda comes after progress in tackling the drug epidemic ground to a halt during the pandemic.

Over 95,000 people died from drug overdoses in the 12-month period ending in February 2021, the highest ever recorded in a year, according to preliminary Centers for Disease Control and Prevention data. A separate study released last week by the National Institute on Drug Abuse showed that methamphetamine-involved overdose deaths almost tripled from 2015 to 2019.

It also comes as the pandemic has highlighted a number of health disparities in various communities. A National Institutes of Health-supported study published this month showed a 38 percent increase in opioid overdose deaths among non-Hispanic Black individuals in four states from 2018 to 2019. The study of deaths in New York, Massachusetts, Kentucky and Ohio saw opioid overdose deaths for other racial and ethnic groups stay flat or decrease during this time.

An aide for House Majority Leader Steny H. Hoyer declined to make any calendar announcements on when a package would move but said leaders support the work on mental health and addiction.

The bipartisan agenda is spearheaded by the Bipartisan Addiction and Mental Health Task Force formed this year by Reps. Ann McLane Kuster, D-N.H., Brian Fitzpatrick, R-Pa., David Trone, D-Md., and Jaime Herrera Beutler, R-Wash.

The four lawmakers formed the task force by combining and expanding two narrower caucuses focused on opioid addiction to encompass mental health and other drug threats.

Series of bipartisan efforts

Congress has enacted multiple laws to fund prevention and expand treatment of substance use and mental health disorders in recent years.

Previous iterations of the former groups’ agenda formed a basis for material in a 2016 law known as the Comprehensive Addiction and Recovery Act, or CARA, and a 2018 opioid law.

Meanwhile, the Substance Abuse and Mental Health Services Administration announced Tuesday that it would distribute $825 million from the fiscal 2021 omnibus appropriations law to 231 community mental health centers across the country.

The swath of legislation falls under the jurisdiction of multiple committees, though most of the legislation is overseen by the Energy and Commerce or the Judiciary committees. But the agenda also touches on policies under the Ways and Means; Education and Labor; Armed Services; Veterans Affairs; and Oversight and Reform committees.

Details

The bills in the new bipartisan agenda are in different stages of the legislative process and have varying numbers of co-sponsors.

Among the bills is one from Trone and Rep. Steve Womack, R-Ark., that would create a task force to help prevent mental health crises caused by public health emergencies and craft a national strategy based on the impact of the pandemic.

Another by Reps. Mike Thompson, D-Calif., and John Katko, R-N.Y., would ensure Medicare coverage of marriage and family therapists and mental health counselors. The bill would not apply to the skilled nursing facility’s prospective payment system. It has 42 co-sponsors.

Legislation by Rep. Lisa Blunt Rochester, D-Del., would establish two grant programs related to maternal mental health and substance use with a focus on minority groups. It has 50 co-sponsors.

Another bill from Reps. Chrissy Houlahan, D-Pa., and Guy Reschenthaler, R-Pa., would limit copayments for mental health outpatient visits under TRICARE, the military’s health care program. It has four co-sponsors.

Legislation by Reps. Scott Peters, D-Calif., and John Curtis, R-Utah, would designate methamphetamine as an emerging drug threat and would direct the Office of National Drug Control Policy to implement a plan to address the issue. It is already awaiting floor action.

Another bill would authorize grants for law enforcement and corrections agencies to receive mental health crisis training. It is awaiting action from the House Judiciary Committee.

And a bill from Reps. Abigail Spanberger, D-Va., and David B. McKinley, R-W.Va., would authorize a 10 percent set-aside for recovery support within the Substance Abuse Prevention and Treatment Block Grant program. It has four co-sponsors and mirrors language in the president’s budget and House Labor-HHS-Education spending bill.

The agenda also includes legislation that has passed at least one chamber.

That includes a House-passed bill from Reps. Scott Peters, D-Calif., Gus Bilirakis, R-Fla., Ted Deutch, D-Fla., and Fitzpatrick that would fund grants to establish and implement evidence-based suicide awareness and prevention training policies. Another House-passed bill by Rep. Bonnie Watson Coleman, D-N.J., and Katko would establish programs to address racial inequalities in mental health.

The agenda also includes a bill by Reps. Susan Wild, D-Pa., Raja Krishnamoorthi, D-Ill., Judy Chu, D-Calif., and McKinley that has 126 co-sponsors. It would help prevent and reduce mental health conditions and suicide among health care workers. A similar version of the bill passed the Senate by voice vote.

The Senate Finance Committee has also been making inroads into a bipartisan mental health package.

Last week, Finance Chair Ron Wyden, D-Ore., and ranking member Richard M. Burr, R-N.C., sent a letter to stakeholders seeking input for policies related to access to care, behavioral workforce, telehealth, health parity and children’s mental health.

A Senate Democratic aide said the goal is to develop the proposal by year’s end with the hopes of realistically passing legislation next year.

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Providers Want More Time to Report, Spend Pandemic Relief Funds

September 27, 2021 5:30 am

Medical groups and health lawyers are calling on the government to give hospitals more time and clarity as they hustle to report how they spent governmental pandemic assistance money by an approaching deadline.

The delta variant has hit an already overburdened health-care workforce hard, with hospitals losing money and staff leaving the industry at a time when they’re needed most.

The more than $120 billion distributed via the Provider Relief Fund supports those “on the front lines who have experienced lost revenues and expenses” due to the Covid-19 pandemic, a spokesperson for the Health Resources and Services Administration, part of the Department of Health and Human Services, said. 

But regulations around how the money would be distributed, spent, and accounted for have changed several times since the pandemic began. The revisions have been difficult to keep track of, even though some of the changes and increased flexibility have benefited providers, health lawyers said. 

HHS recently offered providers subject to a Sept. 30 reporting deadline a 60-day grace period as part of an announcement that the department would release $25.5 billion additional funds to providers.

The deadline used to be 30 days after a provider received payments, but in June, the HHS pushed it back to 90 days. While the HHS still recommends that hospitals comply with the Sept. 30 deadline, it will not penalize hospitals that don’t during the grace period.

The grace period, while helpful, still won’t solve the many problems providers are facing related to the pandemic assistance fund, said Claire Ernst, director of government affairs for the Medical Group Management Association.

“Elective procedures are starting to get canceled again,” Ernst said. “They’re losing staff that they can’t retain.” The reporting deadline “is just an additional burden to worry about and they’re just too busy trying to treat patients,” Ernst said.

Gray Areas

Providers including hospitals, nursing facilities, and children’s hospitals are eligible for pandemic assistance funding if they care for patients “with possible or actual cases of Covid-19,” and have expenses and lost revenues due to the pandemic, according to HRSA.

The providers that received more than $10,000 in one of four payment periods need to report how they spent their assistance funds, and how much revenue they estimate they lost due to the pandemic. Providers are subject to different deadlines based on when they received money, and providers receiving money in multiple payment periods need to report multiple times. Sept. 30 is the earliest deadline, which about 126,900 providers must meet because they received more than $10,000 from April-June 2020, an HRSA spokesperson said.

The current deadline is the result of prioritizing “maximum flexibility for recipients and strong program integrity and safeguards for the use of taxpayer dollars,” an HRSA spokesperson said.

How much time it takes a hospital to report depends on their size and how proactive they were about holding onto financial statements, said Mark Polston, a health-care partner at King & Spalding. Many hospitals that “were probably not ahead of the curb in setting up those accounting systems” are now “playing catch up trying to go back and determine what expenses they had and whether or not they fit into the coronavirus expense bucket or not,” he said.

Inputting the information into the portal itself should take just a few hours, said Jed Roebuck, a Chambliss Bahner & Stophel PC shareholder.

But preparing to report the information—including performing accounting work, consulting with legal counsel, and staying on top of changes in regulations—can take “hundreds of hours,” said Chad Mulvany, vice president of federal policy for the California Hospital Association.

That’s why the MGMA is advocating for extending the reporting deadline to March 2023. Collapsing the four separate deadlines into one cumulative date—the same date the last group of providers needs to report spending by—would save providers who received funding in multiple periods from having to report it for each period.

The guidelines have some “gray areas” which make it difficult to make sure providers are interpreting them the same way HHS will, Polston said.

For example, it can be difficult to figure out what justifies as a Covid-19-related expense. “If you need to purchase a ventilator in order to provide ventilating assistance to Covid patients, that’s an obvious expense relating to the coronavirus,” Polston said. Estimating how many mask or gown purchases were related to Covid-19 is harder.

HHS has a website with fact sheets, guides, and question and answers, as well as a provider support line for specific questions.

The HHS “is committed to helping providers understand the reporting requirements so that they may complete their reports successfully,” the HRSA spokesperson said.

Over It 

Providers could be audited after they report how they spent the money. Hospitals should “keep their receipts,” should they need to justify their methodology to an auditor, said Joanna Hiatt Kim, vice president of payment policy and analysis for the American Hospital Association.

Providers who fail to submit a report by the end of the grace period will have to return “relevant funds” within 30 days, the HRSA spokesperson said.

The grace period may help some providers who are still working on their reporting, or who have been impacted by “extreme and uncontrollable circumstances” such as Hurricane Ida, the AHA wrote in a Sept. 24 letter to HRSA Acting Administrator Diana Espinosa.

But announcing it so soon before the deadline isn’t likely to have much of an impact on most providers, Roebuck said.

What would help is more funding, Mulvany said. The $25.5 billion, while much appreciated, “doesn’t cover the need nationally.” Hospitals are paying inflated wages to keep staff, particularly nurses, which is becoming “unsustainable,” Mulvany said.

Hospital groups like the AHA are also advocating for more time to use their funding. The deadline to spend the money given out in the first round was June 30, but the AHA said that extending the deadline until the public health emergency ends would be more reasonable. 

Although the deadline has now passed, “it’s definitely not a done deal,” Hiatt Kim said. The AHA will continue advocating for an extension, she said.

For providers weary of being told that there are more changes they must absorb, even those that are beneficial, finishing up the filing will bring a sense of relief, Roebuck said.

“I think most folks are just over it,” he said.

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Medicare, Medicaid to Pick Up the Tab for Covid Booster Shots

September 24, 2021 3:56 pm

Medicare, Medicaid, and the Children’s Health Insurance program will pay the full cost of Covid-19 booster shots with no cost-sharing for nearly all beneficiaries, the Biden administration announced Friday.

“The Biden-Harris Administration has made the safe and effective COVID-19 vaccines accessible and free to people across the country. CMS is ensuring that cost is not a barrier to access, including for boosters,” Chiquita Brooks-LaSure, administrator of the Centers for Medicare & Medicaid Services, said in a statement. “CMS will pay Medicare vaccine providers who administer approved COVID-19 boosters, enabling people to access these vaccines at no cost.”

The Food and Drug Administration has authorized a booster dose of the Pfizer vaccine for certain high-risk groups, and a Centers for Disease Control and Prevention advisory panel unanimously backed the shots for those aged 65 and up.

The panel voted against them for people ages 18 to 64 in jobs or settings where they’re at risk of becoming infected—a group that includes tens of millions of people and encompasses health-care staff and retail workers. But CDC Director Rochelle Walensky later overruled the panel, restoring the 18-to-64 workplace category to the eligible groups.

Medicare beneficiaries already pay nothing for the vaccines or their administration. And nearly all Medicaid and CHIP beneficiaries receive the same coverage. Covid vaccines and booster shots are also covered by most commercial insurers as well.

The CMS “continues to explore ways to ensure maximum access to COVID-19 vaccinations,” the CMS statement said.

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Important Federal Policy News You May Have Missed

September 24, 2021 3:14 pm

WSC has selected, and provided links, to particular WSC policy briefs and news articles from the past week that our clients may have missed.  

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WSC Report: House Democrats Finalize Reconciliation Package
WSC | Sept. 24 20, 2021

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Hospitals Worried About Surprise Billing Networks, Deadline
Bloomberg | Sept. 23, 2021

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Why 4 budget issues are causing so many problems on Capitol Hill
Politico Pro | Sept. 23, 2021

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IG’s Handling Of 340B Opinion Could Help HRSA In Court
Inside Health Policy | Sept. 23, 2021

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Greater Scrutiny of Payments to Private Medicare Insurers Urged
Bloomberg | Sept. 22, 2021

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Hospitals overwhelmed by covid are turning to ‘crisis standards of care.’ What does that mean?
Washington Post | Sept. 22, 2021

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Employers on Hook for Mental Health Parity Despite New Target
Bloomberg | Sept. 22, 2021

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Long-Term Care Providers Get New Look at Medicare Bad Debt Pay
Bloomberg | Sept. 21, 2021

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Reopening Medicare Reimbursement Review Bars Later Agency Appeal
Bloomberg | Sept. 20, 2021

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Pallone Wants Bipartisan Effort To Avert Doctor Pay Cuts — But Not Now
Inside Health Policy | Sept. 20, 2021

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WSC Report: House Democrats Finalize Reconciliation Package

September 24, 2021 1:10 pm

On September 15, 2021, House Democrats completed the enormous undertaking of translating President Biden’s economic agenda into a $3.5 trillion tax-and-spending proposal: the Build Back Better Act. The measure seeks to shepherd major changes to federal health care, education, immigration, climate, and tax laws, introducing a sprawling set of federal programs representing a range of Democratic priorities. 

Thirteen committees approved legislation to be included in a reconciliation package that can be used to try and pass Democrats’ policies without Republican support. The FY 2022 budget resolution (S. Con. Res. 14) adopted in August gave the panels until September 15 to report legislation that would increase or decrease the deficit by specified amounts over 10 years.

On September 24, the House Budget Committee released draft text in advance of the panel’s September 25 markup of the social spending package. According to Budget Chair John Yarmuth (D-KY), the committee is holding the rare Saturday markup at the request of House Speaker Nancy Pelosi, who asked Yarmuth to move the procedural process along. The price tag and parameters of the package are still very much in flux as the House approaches critical deadlines next week.

This WSC Brief outlines the major health care and employer-related provisions included in the reconciliation package. 

HEALTH CARE PROVISIONS

Drug Pricing

Create a “Fair Price Negotiation Program” for the Centers for Medicare and Medicaid Services to negotiate the price of 250 covered drugs and insulin. Prices couldn’t exceed 1.2 times the average price of the drug in six other countries. They would also be available to private insurance plans. Drugmakers that don’t negotiate successfully would face an excise tax of as much as 95%. Those that charge more than the negotiated maximum price would pay as much as ten times the difference in prices. The measure would also:

• Require drugmakers to repay the government their profits if they raise the price of a drug above inflation.
• Cap the cost of prescription drugs under Medicare Part D for beneficiaries.
• Block the drug rebate rule published under former President Donald Trump in November 2020.

Health Insurance Marketplace 

American Rescue Plan Act (ARPA) Subsidies: Makes two of the three ARPA subsidy enhancements permanent and extend the third through 2025. Collectively, these changes expanded the availability of premium tax credits (PTCs) to millions more people by eliminating the ACA’s subsidy cliff at 400 percent of the federal poverty level (FP) and bolstering existing subsidies for those who already qualified. This would allow ARPA subsidies to continue to flow to:

• Higher-income people (whose income is above 400 percent FPL) who did not previously qualify for PTCs under the ACA (permanent);
• Lower-income people (whose income is between 100 and 400 percent FPL) who previously qualified for PTCs (permanent); and
• Individuals who receive unemployment benefits and would thus qualify for maximal marketplace subsidies (extended through 2025).

Reinsurance Program: Provides $10 billion annually for a fund to provide reinsurance payments to insurers operating in marketplace exchanges and assistance to individuals to reduce out-of-pocket costs.

• States would have to apply for these funds but would be automatically approved unless the Department of Health and Human Services (HHS) notifies the state otherwise. Approval would span five years total and could be revoked by HHS if a state failed to use the money as required.
• Non-Medicaid Expansion states would not be eligible for this federal funding for 2023 and 2024. Instead, HHS would operate the reinsurance program and have additional flexibility to adjust reinsurance parameters in those states as needed. 

Family Glitch: Addresses the so-called “family glitch” (also known as the “employer firewall”) and revises the threshold to determine whether a taxpayer has access to affordable insurance through an employer-sponsored plan or a qualified small employer health reimbursement arrangement.

• Under the ACA, an employee’s job-based coverage is considered “affordable” if the employee contributes less than 9.5 percent of their household income towards premiums. This percentage has been adjusted each year and, for 2021, is 9.83 percent.
• This provision would better align the employee contribution with the enhanced subsidies by permanently reducing the employee contribution from 9.5 percent to

8.5 percent. The legislation would explicitly eliminate the indexing requirement (so the 8.5 percent requirement would not increase over time). This change would go into effect beginning with the 2022 plan year.

MAGI and Social Security Benefits: Amends the calculation of modified adjusted gross income for purposes of calculating PTC eligibility to exclude lump-sum Social Security benefits.

Medicare

Dental and Oral Health Care: Beginning Jan. 1, 2028, provides Part B coverage for the following:

• Preventive and screening dental and oral health services, which includes oral exams, dental cleanings, dental x-rays and fluoride;
• Basic treatments, which may include basic tooth restorations, basic periodontal services, tooth extractions and oral disease management services; and 
• Major treatments, which may include major tooth restorations, major periodontal services, bridges, crowns and root canals.

Hearing Care: Beginning Oct. 1, 2023, provides Part B coverage for hearing aids for individuals with severe or profound hearing loss. Limits payments made for hearings aids to only once in a five-year period and only for hearing aid types that are not over the counter.

Vision Care: Beginning Oct. 1, 2022, provides coverage of routine eye exams, glasses and contact lenses.

Medicare Part D Benefit Redesign: Beginning in 2024, this bill caps the cost for prescription drugs by setting the annual out-of-pocket limit at $2,000. Reduces from 80% to 20% the government reinsurance in the catastrophic phase of Part D coverage, converting the current coverage gap discount program into a benefit-wide responsibility, requiring manufacturers of single source drugs to contribute to payments in both the initial (10%) and catastrophic phases (30%) of the benefit.

Medicaid/CHIP & Coverage Provisions

Reinsurance Program: Provides $10 billion annually for a fund to provide reinsurance payments to insurers operating in marketplace exchanges and assistance to individuals to reduce out-of-pocket costs.

Medicaid Gap: The measure would close the Medicaid coverage gap for lower-income individuals in states that didn’t expand the program under the Affordable Care Act by:

• Temporarily expanding the ACA’s premium tax credits to individuals below 100% of the federal poverty line and providing further cost-sharing subsidies.
• Creating a federal Medicaid program, operated by third-party entities, for nonexpansion states beginning in 2025 to cover those individuals.

Spousal Impoverishment: Permanently extends protections against spousal impoverishment for partners of Medicaid beneficiaries who qualify for long-term care and choose to receive home- and community-based services.

Money Follows the Person: Permanently extends the Medicaid Money Follows the Person Rebalancing Demonstration Program, which authorizes CMS to award state grants to assist Medicaid participants transition from long-term care to a home setting. Allocates $450 million in grant funding for each fiscal year following FY 2021. Allocates $500 million allotments for each three-year period beginning in FY 2022 for technical assistance and oversight to upgrade quality assurance and improvement systems.

Pregnant and Postpartum Women: Under ARPA, states were allowed the option to expand Medicaid/CHIP postpartum coverage from the initial 60 days to cover the 12month period following pregnancy. This provision requires state Medicaid programs to provide 12 months of full, continuous Medicaid/CHIP eligibility to postpartum women. Effective the first day of the first fiscal year quarter beginning at least one year following enactment. 

Continuous Eligibility for Children: Builds upon the Medicaid disenrollment freeze implemented under the CARES Act to provide a full year of continuous Medicaid/CHIP coverage for children.

CHIP Extension: Makes the Children’s Health Insurance Program (CHIP) permanent and appropriate “such sums as are necessary” for it. It also would allow states to increase the income level needed for families to participate in CHIP and require states to provide one year of continuous eligibility for children enrolled in CHIP.

CHIP Eligibility: Provides states and territories with the option to increase CHIP income eligibility levels above the existing statutory ceiling, potentially increasing the number of eligible families for the program. 

Medicaid Home and Community-Based Services 

HCBS Improvement Planning Grants: Appropriates $130 million for FY 2022, to remain available until expended, for states to develop plans to expand access to home- and community-based services (HBCS) and strengthen the HCBS workforce. This includes $5 million for technical assistance and guidance to states. Sets a deadline of 12 months after the bill’s enactment for the Secretary to solicit state requests for and award grants to all states that meet the determined requirements. 

HCBS Improvement Program: Provides states with a permanent 7 percentage point increase to the federal medical assistance percentage (FMAP) if the state implements an HCBS improvement program to strengthen and expand HCBS, and provides an enhanced FMAP of 80% for administrative costs associated with improving HCBS.

Provides a two-year increase to the FMAP of 2 percentage points if a state adopts an HCBS model that promotes self-direction of care and meets certain other requirements. Caps the FMAP at 95% in all cases.

Technical Assistance for HCBS: Appropriates $35 million for FY 2022, to remain available until extended, for HHS to prepare and submit a report to Congress within four years of the bill’s enactment on the implementation and outcomes of state HCBS improvement programs. 

Maternal Mortality: Includes $830 million in new funding to address maternal mortality, including: 

• $175 million in funding to award grants to address social determinants of maternal health for pregnant and postpartum individuals. 
• $150 million in funding to award grants to accredited schools of nursing to grow and diversify the perinatal nursing workforce. 
• $50 million in funding to award grants to establish or expand programs to grow and diversify the doula workforce. 
• $75 million in funding to award grants to establish or expand programs to grow and diversify the maternal mental health and substance use disorder treatment workforce. 
• $100 million in funding to award grants to address maternal mental health conditions and substance use disorders with respect to pregnant, lactating and postpartum individuals.
• $85 million in funding to award grants to support the development and integration of education and training programs for identifying and addressing risks associated with climate change for pregnant, lactating or postpartum individuals. 

Medical Education  

GME Residency Slots: Creates a new program that would fund 1,000 scholarships per year for medical students from rural and underserved communities if they agree to practice in those communities after graduating.

Scholarships: Funds 1,000 new residency slots per year, beginning in 2026, for medical schools that commit to providing cultural competency training, training in the community and increased mentorship for students.

Medical School Funding: Includes $1 billion in funding for medical school construction, expansion and training in underserved communities that lack quality access to quality health care. 

VA GME: Provides 700 new health care residency positions at VA medical centers through FY 2029.

Teaching Health Center Grants

• $6 billion in funding for payments to teaching health centers that operate graduate medical education programs and the award of teaching health center development grants.
• $500 million in funding to award grants to qualified teaching health centers and to behavioral health care centers (including both substance abuse and mental health care facilities) to support the improvement, renovation, or infrastructure at such centers. 

Nurse Education

• $1 billion in funding to support schools of nursing with program enhancement and infrastructure modernization, simultaneously increasing the number of nursing faculty and students, including rural and underserved areas.
• $300 million in funding for Nurse Corps, which provides loan repayment assistance to registered nurses (RNs) and advanced practice registered nurses (APRNs).

Other Grants

• $10 billion in funding to award grants for construction or modernization projects for purposes of increasing capacity and updating hospitals and other medical facilities to better serve communities in need. o Priority will be given to projects that will include public health preparedness, natural disaster emergency preparedness or cybersecurity against cyber threats. 
• $10 billion in funding to award grants and enter into cooperative agreements for capital projects to community health centers.
• $7 billion in funding to support core public health infrastructure activities to strengthen the public health system through grants at the Centers for Disease Control and Prevention. o Qualifying activities include workforce capacity and competency; laboratory systems; all hazards public health and preparedness; testing capacity, including test platforms, mobile testing units and personnel;

health information, health information systems and health information analysis; disease surveillance; contact tracing; among other activities. 

Pandemic Preparedness

• $5 billion in funding to support renovation, expansion and modernization of state and local public health laboratory infrastructure; renovating, expanding and modernizing laboratories of CDC; and enhancing the ability of CDC to monitor and exercise oversight over biosafety and biosecurity of state and local public health laboratories. 
• $1.25 billion in funding to award grants to strengthen vaccine confidence; strengthen routinely recommended vaccine programs; and improve rates of vaccination. 
• $500 million in funding to support public health data surveillance, aggregation and analytics infrastructure modernization initiatives; enhance reporting and workforce core competencies in informatics and digital health; and expand and maintain efforts to modernize the United States disease warning system. 
• $8 billion in funding to the Assistant Secretary for Preparedness and Response, to prepare for, and respond to, public health emergencies, including shoring up the Strategic National Stockpile, strengthening our supply chains, supporting domestic and global manufacturing of vaccines, bolstering biosecurity and investing in therapeutics, among other activities. 

OTHER RELEVANT PROVISIONS

Paid Leave: Provide up to 12 weeks of paid leave for eligible workers for the birth or adoption of a child, a personal health condition, caregiving for a family member, circumstances related to a family member’s deployment, and bereavement. Benefits would be administered by the Treasury Department and would begin in July 2023.

Advance Refunding Bonds: Restores a tax exemption for interest on advance refunding bonds, which was repealed by the 2017 tax overhaul (Pub. L. 115-97). State and local governments used those bonds to refinance their debt and access lower interest rates.

Retirement: Requires employers with more than five workers to automatically enroll new hires for retirement benefits. Employees could choose to opt out of the savings plan or modify contributions. Employers would be subject to an excise tax of $10 per day for each employee who isn’t covered by an automatic retirement plan.

TAX PROVISIONS

Tax Increases

The Ways & Means package includes sweeping tax changes to raise revenue for other portions of the package, including:

• Raising the top marginal personal income tax rate to 39.6%, from 37%, for individuals making more than $400,000 and joint filers making more than $450,000. A 3% surtax also would be imposed on individuals with adjusted gross incomes of more than $5 million.
• Increasing the capital gains tax rate to 25% from 20% for “certain high-income individuals.”
• Replacing the flat 21% corporate income tax rate with graduated rates: 18% on the first $400,000 of income, 21% on income up to $5 million, increasing to 26.5% for income after that.
• Generally requiring investment funds to hold assets for more than five years, rather than three years, for managers to get a preferential tax rate on their share of profits, known as carried interest.
• Reinstating a 16.4 cents-per-gallon tax on crude oil and imported petroleum products to fund Superfund cleanups of hazardous sites. It also would double the tax rate on sales of certain chemicals.
• Barring taxpayers from claiming losses on digital assets, such as cryptocurrencies.
• Increasing the current rate of excise taxes on cigarettes, small cigars, and rollyour-own tobacco, as well as on nicotine that’s been extracted, concentrated, or synthesized in tobacco products.
• Providing $78.9 billion in additional funding for the Internal Revenue Service to increase audits on wealthy individuals.

Tax Credits

Other tax provisions in the Ways & Means measure are designed to aid certain households and industries, such as:

• Extending an expanded version of the child tax credit through 2025 and making it permanently refundable.
• Making permanent expanded versions of the earned income tax credit for childless workers and the child and dependent care credit under the American Rescue Plan Act, Pub. L. 117-2.
• Making permanent the expanded availability under ARPA of the Affordable Care Act’s premium tax credits for health insurance purchased through the exchanges. It also would allow individuals who receive unemployment benefits to receive premium-free insurance plans through 2025.
• Creating a refundable income tax credit for union-made electric vehicles placed into service before Jan. 1, 2027, and extending several tax credits related to renewable energy production, including the production and investment credits.

Infrastructure and Community Development

The Ways & Means legislation includes several tax changes related to infrastructure financing and community development, such as:

• Allowing state and local governments that issue qualified infrastructure bonds to receive a tax credit for a portion of the interest they pay, similar to the Build

America Bonds under the 2009 American Recovery and Reinvestment Act (Pub. L. 111-5). The credit would be 35% of interest paid for bonds issued from 2022 through 2024, phasing down to 28% for bonds issued in 2027 and later years.

• Restoring a tax exemption for interest on advance refunding bonds, which was repealed by the 2017 tax overhaul (Pub. L.115-97). State and local governments used those bonds to refinance their debt and access lower interest rates.
• Establishing a 30% tax credit for state, local, and tribal governments to operate and maintain government-owned broadband systems.
• Making permanent and expanding the New Markets Tax Credit, offered to taxpayers that invest in lower-income communities.
• Establishing a 30% tax credit for individuals and businesses that participate in a qualified wildfire resilience program.
• Increasing state Low-Income Housing Tax Credit (LIHTC) allocations.
• Establishing a neighborhood homes credit for rehabilitating homes in certain lower-income areas.

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Hospitals Worried About Surprise Billing Networks, Deadline

September 23, 2021 2:51 pm

The Biden administration’s first rule implementing a landmark 2020 law aimed at protecting patients against high hospital and doctor bills in emergencies and other situations will lower costs for patients, a group that represents large employers said.

But hospitals are worried the No Surprises Act’s rules won’t get at the real problem driving surprise billing—inadequate health-care networks—and they also say the law’s implementation date—Jan. 1, 2022—is too soon to get procedures into place.

The way the interim final rule (RIN 0938-AU63) for the law, published July 13, defines how the qualifying payment amount is calculated is the basis on which a patient’s share of a bill is calculated.

The amount will be based on rates averaged at the contract level, lowering lower costs for patients, the ERISA Industry Committee (ERIC) said this month in a comment letter. ERIC represents large employers’ interests as sponsors of employee benefit plans.

Employer groups, which cover about 150 million Americans, were generally happy with the first rule the Health and Human Services Department issued to implement the law that passed as part of appropriations legislation (H.R. 133) in December 2020. But the most important rule, determining how rate disputes between health plans and health-care providers are to be settled, isn’t due until Dec. 27.

The interim final rule was issued by the HHS, the departments of Labor and Treasury, and the Office of Personnel Management.

Settling Disputes

ERIC warned that billing disputes shouldn’t be used as chances to ramp up costs.

Under the law, doctors and hospitals are barred from billing patients more than they would pay for in-network care in emergencies and when patients receive treatment from out-of-network providers at in-network facilities.

If a billing dispute between health-care providers and payers goes to arbitration, ERIC said, the qualifying payment amount should be the primary consideration for arbitrators when determining final payment for out-of-network care.

The independent dispute resolution process (IDR) for resolving disputed bills should not become “an opportunity for inflating costs,” ERIC said.

“Rampant misuse of the IDR process in states such as New York, Texas, and New Jersey, shows how bad actors take advantage of the IDR process to bolster bottom lines at the patients’ expense,” it said.

Hospital Worries

Hospitals, meanwhile, are concerned that the law’s rules won’t do enough to ensure the adequacy of health-care networks—central to avoiding out-of-network billing in the first place.

Provider networks could be disrupted “if plans and issuers are able to pay less for services under the provisions of the No Surprises Act than by contracting at commercially reasonable rates with providers and facilities,” the American Hospital Association said in a letter to top officials at OPM, the IRS, and the departments of HHS, Labor, and Treasury.

Already, gaps in network adequacy standards have contributed to plans and insurers excluding providers from networks, pushing costs onto patients and making it harder to access and coordinate care, the AHA said.

Large, self-insured employer-sponsored health plans regulated under the Employee Retirement Income Security Act (ERISA) already aren’t subject to network adequacy rules, and requirements for fully insured health plans sold directly by insurers often don’t address some providers, such as anesthesiologists, radiologists, and laboratories, the AHA argued.

Those groups are often the groups that have been sending surprise bills to patients for out-of-network services—even when a procedure is held at an in-network facility.

Such risks “will continue to exist even once the No Surprises Act provisions go into effect,” the AHA wrote.

“The law does not address every instance of out-of-network care, nor does it address instances where plans or issuers label a provider as `in-network’ but then fail to cover medically-necessary services delivered by that provider, a form of network inadequacy not fully accounted for in existing rules,” it said.

Others point to concerns about applying the new law’s rules, no matter how far they do or don’t go.

“It’s going to be an operational nightmare” given differing laws in many states” that address surprise billing, Isabel Bonilla-Mathe, an associate with Phelps Dunbar LLP, said in an interview. Bonilla-Mathe represents hospitals and individual health-care practitioners.

The implementation deadline will be difficult to meet, Bonilla-Mathe said. The major rule that specifies how billing disputes will be resolved isn’t due until the end of this year, and it isn’t clear how that rule will work with the interim final rule, she said.

Time is also needed to educate staff and set up patient communications about bills that are required by the law, Bonilla-Mathe said.

Hospitals are concerned about how the qualifying payment amount is calculated, Amanda Hayes-Kibreab, a partner at King & Spalding who represents hospitals and providers, said in an interview.

Part of the concern is “what contracts are being used for the median calculation” that arbitrators must use to settle disputes, Hayes-Kibreab said. The departments have focused on network agreements, she said.

“There are a lot of agreements that might have rates for services that are not necessarily network agreements, and how might those be used,” she said. “There’s some more clarity that’s needed there.”

Those can include agreements between providers and payers that may cover a single service or emergency services not in the insurers’ networks, Hayes-Kibreab said.

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IG’s Handling Of 340B Opinion Could Help HRSA In Court

September 23, 2021 2:34 pm

HHS on Wednesday (Sept. 22) asked the HHS Inspector General to investigate six drug companies that restrict 340B discounts to pharmacies with which hospitals contract. The move, which could result in fines, is the Health Resources and Services Administration’s latest gambit to get drug companies to comply with its interpretation of a vague law, this time by seeking a favorable IG opinion that could influence pending court cases, a hospital lobbyist said.

During the Trump administration, the HHS general council issued an advisory opinion that stated drug companies must give discounts to hospitals in the 340B program no matter how many contract pharmacies dispense those drugs. Drug companies ignored that opinion and sued over it. In May, Biden’s HRSA threaten to fine companies that don’t comply with the advisory opinion, but so far the courts have not been sympathetic to HHS. In rejecting the Biden administration’s request to dismiss a lawsuit against the advisory opinion, a federal judge said the law is vague and HHS’ advisory opinion is a departure from previous policy. HRSA then withdrew the advisory opinion but said it would still fine companies that don’t follow the advisory opinion.

Which brings us to HRSA’s referral of six companies to the IG for fines. If the IG says contract pharmacies are an extension of hospitals, that might help the government in lawsuits filed by drug companies against HRSA’s enforcement actions.

The problem is that neither the law nor regulations mention contract pharmacies. Instead, HRSA is trying to enforce its stance through guidance.

Congress could fix the problem by adding contract pharmacies to the law, but despite the lip service in support of hospitals from many lawmakers in both parties, Congress has shown no interest in including such a measure in the drug pricing legislation it is writing. Some question the need for the 340B program if Medicare were to negotiate prices. 

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Greater Scrutiny of Payments to Private Medicare Insurers Urged

September 22, 2021 2:50 pm

A government watchdog agency is calling for greater oversight of 20 private Medicare Advantage plans that received a disproportionate share of $9.2 billion in enhanced payments in 2016 that were based on potentially suspect patient diagnoses.

The Health and Human Services Office of Inspector General’s report released Wednesday said the enhanced “risk-adjusted” payments were generated through both “chart reviews” of patient records to “identify diagnoses that a provider did not submit or submitted in error,” and through “health risk assessments,” in which someone who’s usually uninvolved in the patient’s care visited their home and evaluated their medical conditions.

The report follows a similar OIG report last year that called on the Centers for Medicare & Medicaid Services to tighten oversight of Medicare Advantage payments based on health risk assessments.

In 2020, 40% of Medicare beneficiaries—25 million people—received program coverage through Medicare Advantage plans, in which private insurance companies receive a set payment to cover each enrollee’s projected cost of care. The plans receive higher “risk-adjusted” payments for sicker beneficiaries with more projected medical costs. The Medicare Advantage plans accounted for $314 billion of Medicare’s $780 billion in program costs in 2020, according to the CMS.

Of 162 MA plans receiving payments based solely on chart reviews and HRAs in 2016, 20 plans generated $5 billion from chart reviews and health risk assessments (HRAs) that were the sole source of diagnoses in the encounter data. That’s 54% percent of the $9.2 billion in total program payments from chart reviews and HRAs, even though the 20 plans enrolled only 31% of MA beneficiaries, the report found. And half of the “20 companies drove payments mainly using the types of chart reviews and HRAs that are more vulnerable to misuse, the report added.

“Our findings raise concerns about the extent to which certain MA companies may have inappropriately leveraged both chart reviews and HRAs to maximize risk-adjusted payments,” report said.

One unnamed Medicare Advantage plan generated 40%—$3.7 billion—of all payments based on chart reviews and HRAs, “yet it enrolled only 22 percent of all MA beneficiaries,” the report said.

In addition to recommending more oversight of the 20 unnamed Medicare Advantage plans cited in the study, the OIG urged the CMS to “take additional actions to determine the appropriateness of payments” to this lone plan. The OIG also recommended “periodic monitoring to identify MA companies that had a disproportionate share of risk adjusted payments from chart reviews and HRAs.”

In response to the recommendation for more oversight of the 20 Medicare Advantage plans, the CMS said audits focusing on high risk plans are the “primary corrective action to recoup overpayments.” Because of this, MA plans at “higher risk for overpayments already have an increased likelihood of being included in audits,” the CMS said in a letter. The agency said it will take the OIG recommendation under consideration in developing policy options.

It said it would also weigh the other OIG recommendations.

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Hospitals overwhelmed by covid are turning to ‘crisis standards of care.’ What does that mean?

September 22, 2021 2:44 pm

Long-feared rationing of medical care has become a reality in some parts of the United States as the delta variant drives a new wave of coronavirus cases, pushing hospitals to the brink.

Alaska and Idaho have activated statewide “crisis standards of care,” in which health systems can prioritize patients for scarce resources — based largely on their likelihood of survival — and even deny treatment. The decisions affect covid and non-covid patients.Some health care providers in Montanahave turned to crisis standards as well, while Hawaii’s governor this month released health workers from liability if they have to ration care.

Some states have no crisis standards of care plans, while others just created them during the pandemic. The common goal: Give health-care workers last-resort guidance to make potentially wrenching decisions. But people disagree on the best calculus.“We only end up needing crisis standards of care when our other systems have utterly failed,” said Emily Cleveland Manchanda, an assistant professor of emergency medicine at Boston University School of Medicine.

What do crisis standards of care look like?

The emergency room at Providence Alaska Medical Center in Anchorage was so packed recently that patients waited in their cars for care. Physician Kristen Solana Walkinshaw told The Washington Post last week that her team had four patients who needed continuous kidney dialysis and only two machines available.

In Idaho, health officials said, crisis care standards may mean that patients end up treated in hallways or tents. Elective and nonurgent surgeries have been delayed at one hospital. There may be fewer nurses and doctors caring for more people. Patients may wait hours to get what they need or have to transfer to another hospital far away — though health leaders caution that neighboring states are struggling with an influx of coronavirus cases, too.

The resource crunch could also force health-care workers to give beds or ventilators to those most likely to recover. If resources become extremely tight, they can consider universal do-not-resuscitate orders for hospitalized adult patients who go into cardiac arrest.

“Your care will be affected,” Idaho’s health department warned on Facebook.

Not all hospitals may need to ration treatment, but they have a green light from authorities. Officials are also sending a statewide message.

“By announcing crisis standards of care going into effect, you’re also in essence saying to your population, if you’re a governor or a public health figure: ‘We’re in an emergency. Take heed. Take warning,’ ” said Jacob Appel, an associate professor of psychiatry and medical education at the Icahn School of Medicine at Mount Sinai in New York.

How are patients prioritized?

Hospitals typically operate on a first come, first served basis. In a crisis — a hurricane, mass shooting or multicar crash, for example, as well as a pandemic surge — they must triage by prioritizing some patients over others to save the most lives.

Different plans take different approaches, but there are common themes. Most typically start by scoring the health of major organs such as the brain, heart, kidney and liver. They may take into account people’s chances of recovery, their life expectancy and even their “essential worker” status.

“Exclusion criteria” can instruct health-care workers to withhold care from certain groups — patients in cardiac arrest, for instance, or those with severe dementia. Then others are ranked with scoring systems and sometimes a series of “tiebreakers.”

Doctors ask: How badly are patients’ organs failing? Do they have other diseases such as cancer, Alzheimer’s, or kidney damage requiring dialysis? Some plans also give priority to those who are pregnant, younger people or badly needed health-care staff. Patients are typically evaluated throughout their stay in the hospital to check if their priority should change.

Hawaii’s point system takes stock of both short-term and long-term survival with a rubric that states two values: “Save the most lives” and “Save the most life-years.”

Most state plans say that the doctor directly caring for a patient should not be making the call on what limited resources that person gets, according to an academic review of plans published last year. Some lay out an appeals process.

What parts of the crisis plans are most controversial?

Disability rights groups have filed complaints about crisis standards of care that they argue amount to illegal discrimination, and others have raised concerns about discrimination against the elderly.

“Using the categories of age to determine whether someone receives care is wrong. Plain and simple,” AARP Idaho State Director Lupe Wissel wrote in a recent post criticizing Idaho’s decision to make age a “tiebreaker” for limited resources. “The estimation of potential ‘life years’ an individual has does not equate to the value of a life.”

Scholars also worry that crisis standards of care will feed into long-standing inequalities in access to health care, because scoring systems are allocating resources based partly on health conditions that disproportionately afflict certain groups. Black Americans, for instance, are much more likely than White Americans to have kidney disease.

Some crisis plans try to counteract these deep-rooted racial disparities: Massachusetts’s scoring system limits penalty points for a history of poor kidney function, Cleveland Manchanda said. One paper in the medical journal JAMA Network Open, which examined more than 1,000 patients hospitalized last year in Miami, found that crisis standards of care policies did not seem to discriminate based on race or ethnicity.

But compensating for societal inequalities is “nearly impossible,” Cleveland Manchanda argued.The idea of factoring in coronavirus vaccination status has drawn particular backlash from the public. A critical care task force in Texas floated the concept last month — but the authorsdismissed it as a theoretical exercise after an uproar.

Where have crisis standards of care been used?

Arizona and New Mexico were the only states to declare crisis standards of care earlier in the pandemic, according to an August paper published by the National Academy of Medicine.

But experts note there is more to the story. Resources have been rationed without any official shift to crisis standards.

As a winter coronavirus surge slammed Los Angeles, for instance, ambulance crews were instructed to save oxygen and to treat patients on the scene rather than bring them to the hospital when they had little hope of survival.

“[Some] areas that were clearly in crisis related to ventilators, oxygen, or other resources, where painful triage decisions had to be made, never received a formal declaration authorizing [crisis standards of care],” the National Academy of Medicine paper says, attributing the phenomenon in part to “political concerns.”

In Arizona and New Mexico, meanwhile, health-care facilities did not apparently end up rationing ventilators despite the state declarations, the paper said.

Are there any national guidelines for crisis standards?

The 2009 H1N1 flu pandemic prompted a nationwide push to create clear plans for divvying up medical resources in times of overwhelming need. Federal officials asked the health arm of the National Academy of Sciences to craft guidelines.

But crisis standards of care vary widely by state.

More than half of states had explicit plans last year, though some of those leave key questions to hospitals, researchers found. And more than a dozen of those states’ crisis standards of care were crafted or updated in 2020, the researchers wrote. Idaho’s policy was still in the works as the scholars did their survey.

Arkansas is finalizing a covid-19-specific crisis standards of care policy, said Jerrilyn Jones, the state health department’s medical director for the health preparedness and response branch. The state also wants a more general policy, but Jones noted that those can take years to develop.

“As with all disaster planning, people don’t really think about the need for such things until it hits you in the face,” she said in an interview.

For now, hospitals have their own plans, Jones said. She said she has not heard of people in Arkansas being turned away from care, though some places have tried to conserve resources by halting elective surgeries.

The statewide guidance under development will still leave much of the decision-making to local institutions. Jones emphasized that each hospital’s situation is different.

“I don’t think it would be appropriate for us as a state to dictate what is happening at the bedside,” she said.

Ariana Eunjung Cha and Meryl Kornfield contributed to this report.

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September 22, 2021 2:41 pm

Health insurance companies are now in the crosshairs of the Department of Labor’s aggressive enforcement of mental health parity, but it’s unlikely to mean employers will escape scrutiny.

In what appeared to be a first for the department, it initiated litigation last month against an insurer to ensure health plans offering mental health and substance use disorder benefits are covering treatments at the same level as physical or surgical health care.

Although the action, which was quickly settled, signaled a significant shift in the policing of parity, benefits attorneys say employers aren’t off the hook.

Kathryn Bakich, who leads the national health compliance practice for benefits and human resources consulting firm Segal, said her clients still feel as though Labor will go after them to get to insurers, which serve as third-party administrators of their health plans.

“They don’t necessarily have a direct line to the administrator, so they’re coming after the employer who doesn’t even set these policies and may not have any kind of a policy that discriminates against folks based on mental health coverage,” she said.

Bakich, who is an expert on employer sponsored health coverage, has clients who are actively being audited by the Labor Department now.

In the Dark

UnitedHealthcare agreed in August to pay $15.6 million to settle claims it was being more restrictive in reimbursing out-of-network mental health services than out-of-network medical or surgical services, which included $2.5 million to settle claims brought by the Labor Department alone.

It was significant for Labor to take an enforcement action against a claims administrator or fiduciary of a health plan, said Meiram Bendat, founder and president of Psych-Appeal Inc., which helps patients challenge insurers when mental health claims are denied.

“They are the parties with essentially de facto control of the day-to-day administration of the health plans in our country,” he said, noting UnitedHealthcare, Cigna, and Aetna among the big administrators.

Because self-funded employers for the most part tend to accept what the third-party administrator, or TPA, is offering, employers are often in the dark about any potential violations, said Judith Wethall, a partner at McDermott Will & Emery, who represents employer plans.

“Sometimes a TPA does things behind the scenes that might violate mental health parity and an employer might not even know it,” she said.

That’s why some attorneys say it’s not really fair, or efficient, for Labor to go after employers unless an employer is doing something specific the claims administrator isn’t.

Public Shaming

The UnitedHealthcare settlement was the culmination of long-term negotiations with Labor for conduct that occurred prior to passage of the 2021 Consolidated Appropriations Act, which mandates that the department investigate employers for mental health parity compliance, said Kevin Malone, senior counsel at Epstein Becker & Green P.C.

The Labor Department reported its Employee Benefits Security Administration investigated and closed 180 health plan investigations in 2020, and 3,938 health plan investigations since 2011. All of the investigations described in the enforcement report were employers or other group health plan sponsors, and many were expanded to include insurers and third-party administrators, Malone noted.

The Consolidated Appropriations Act also amended the 2008 Mental Health Parity and Addiction Equity Act to require group health plans and issuers to complete an analysis that explains whether the factors used to justify non-quantitative treatment limits for mental health coverage differ from limits imposed for medical and surgical benefits.

The Labor, Health and Human Services, and Treasury departments released a list of frequently asked questions in April to clarify what the analysis must include, how it will be evaluated, and what steps will be taken if a plan is found to be noncompliant. Any group health plan or issuer found not in compliance will be named in a report to Congress.

The Labor Department will “very likely” begin publicly naming plans, “probably multiple” plans that aren’t in compliance with the mental health parity law, Malone said.

“Based on their actions with the United settlement, and based on the posture that they’ve taken, I think that they will need to make some examples of people,” he said.

Punitive Ire

Attorneys, however, say there’s still confusion over what the report is supposed to look like, and some employers are having problems getting the information they need for the analysis from their plan administrators.

Many third-party administrators are not willing to provide the level of assistance self-insured employers need to provide that documentation, said Leena Bhakta, a principal legal consultant in Mercer’s Regulatory Resource Group.

“I have worked with some self-insured plan sponsors where the TPA has come back and told them that ‘because you’re self-insured, the responsibility for preparing this documentation rests with you, the plan sponsor, and we’re not willing to provide any assistance,’” she said.

Malone thinks the UnitedHealthcare settlement shows the Labor Department is at least aware that administrators hold crucial information.

“That, I think, is a good sign for the employers,” he said. “It’s clear that in a situation where there’s pervasive practices across employers by a single administrator, the DOL is going to be directing most of their punitive ire at that administrator.”

Current Labor investigations do acknowledge the administrator has the information—but that’s not stopping the department from “really turning up the temperature on employers anyway,” Malone said.

In the Biden administration, the department has made mental health parity enforcement a high priority, going so far as to ask Congress for additional authority to fine violators, including employers. In its fiscal 2022 budget reconciliation proposal, the House Education and Labor Committee included a provision to allow the Labor Department to impose civil monetary penalties on plan sponsors, insurers, and plan administrators.

The new analysis, coupled with the prospect of penalties, has only made employers more worried about being caught violating the law.

“No one I’ve spoken to is quote-unquote relieved the DOL may be going after some TPAs,” Bhakta said.

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Long-Term Care Providers Get New Look at Medicare Bad Debt Pay

September 21, 2021 2:42 pm

Eight long-term care providers will recover more Medicare money to satisfy bad debts because the federal government wrongfully reduced payments for years they weren’t enrolled in state Medicaid programs, a federal court said.

The Centers for Medicare and Medicaid Services, a part of the U.S. Health and Human Services Department, must reevaluate nearly $2 million in claims filed by providers operated by Select Medical Corp. in Alabama, Arkansas, Mississippi, Nebraska, and Wisconsin, the U.S. District Court for the District of Columbia said.

Allowing CMS to deny these payments based on perceived state Medicaid liability subjects the providers to a must-bill policy and remittance requirement based on participating in and billing state Medicaid programs that the court previously found unlawful, it said.

Seventy-five providers located in 26 states sued HHS to recover over $20 million in Medicare reimbursements covering poor patients’ bad debts for fiscal years 2005 to 2010.

In 2007, CMS began requiring providers to submit the bad debt claims to state Medicaid agencies and obtain a state remittance advice document to prove there was no other source of payment before it would reimburse the costs. This is known as the “must-bill” policy.

Several providers, however, weren’t able to comply with the policy because the Medicaid programs in their states didn’t allow long-term care providers to participate.

The court held the agency’s new policy violated administrative procedural rules because CMS didn’t submit the change to notice-and-comment rulemaking first. It sent the providers’ reimbursement claims back to CMS for reconsideration.

CMS agreed to pay most providers more than $18 million plus interest. But it denied reimbursement of nearly $2 million to the eight providers.

This decision ignored the court’s earlier determination that CMS may not withhold or reduce reimbursements for bad debts incurred while providers weren’t participating in state Medicaid programs, the court said Monday in an opinion by Judge Beryl A. Howell.

Howell sent the providers’ claims back to CMS.

The agency may reduce or withhold payment for bad debt claims made after the providers enrolled in state Medicaid programs, she said.

Law Offices of Jason M. Healy PLLC represented the hospitals. The U.S. Department of Justice represented the HHS.

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