Health Care Week in Review: CMS Releases Three Major Medicare Final Rules

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in health care regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news.

Week in Review Highlight of the Week:

This week, the Centers for Medicare & Medicaid Services (CMS) released three final rules that will broadly affect physician and hospital outpatient department reimbursement, quality reporting, and transparency requirements.

I. Regulations, Notices & Guidance

• On October 30, 2023, the Centers for Disease Control and Prevention (CDC) issued a request for information (RFI) entitled, World Trade Center Health Program; Youth Research Cohort. CDC’s National Institute for Occupational Safety and Health (NIOSH) is extending the public comment period for an RFI that was initially published April 26, 2023 and extended on August 18, 2023, regarding a World Trade Center (WTC) Health Program research cohort for future studies on health, social, and educational impacts among persons exposed to the September 11, 2001, terrorist attacks who were aged 21 years or younger at the time of their exposures. With this notice, the comment period is extended an additional 90 days to allow interested parties additional time to respond.
• On October 30, 2023, the Drug Enforcement Agency (DEA) issued a notice entitled, Controlled Substance Destruction Alternatives to Incineration. DEA is seeking information about destruction processes which may be used to render controlled substances to a non-retrievable state. DEA invites comment from stakeholders in the controlled substance disposal industry, as well as registrants engaged in the destruction and disposal of controlled substances in their possession or inventory.
• On October 30, 2023, DEA issued an interim final rule entitled, Schedules of Controlled Substances: Placement of Zuranolone in Schedule IV. On August 4, 2023, the Food and Drug Administration (FDA) approved a new drug application for Zurzuvae (zuranolone) capsules for the treatment of post-partum depression. The Department of Health and Human Services (HHS) provided the DEA with a scheduling recommendation to place zuranolone and its salts in schedule IV of the Controlled Substances Act (CSA). In accordance with the CSA, as amended by the Improving Regulatory Transparency for New Medical Therapies Act, DEA is issuing an interim final rule placing zuranolone, including its salts, in schedule IV of the CSA. This action facilitates the public availability of zuranolone as a schedule IV controlled substance.
• On October 30, 2023, HHS and the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, 21^st Century Cures Act: Establishment of Disincentives for Health Care Providers That Have Committed Information Blocking. This proposed rule would implement the provision of the 21st Century Cures Act specifying that a health care provider determined by the HHS Office of the Inspector General (OIG) to have committed information blocking be referred to the appropriate agency to be subject to appropriate disincentives set forth through notice and comment rulemaking. This proposed rule would establish such disincentives for certain health care providers who are enrolled in Medicare and are found to be information blocking as determined by the HHS OIG.
• On October 31, 2023, the Agency for Healthcare Research and Quality (AHRQ) issued a notice entitled, Supplemental Evidence and Data Request: Healthcare Delivery of Clinical Preventive Services for People with Disabilities. AHRQ is seeking scientific information submissions from the public. Scientific information is being solicited to inform AHRQ’s review on Healthcare Delivery of Clinical Preventive Services for People with Disabilities, which is currently being conducted by the AHRQ’s Evidence-based Practice Centers (EPC) Program. Access to published and unpublished pertinent scientific information will improve the quality of this review.
• On October 31, 2023, CMS issued a notice entitled, Privacy Act; Matching Program. In accordance with the Privacy Act of 1974, as amended, CMS is providing notice of the re-establishment of a computer matching program between CMS and the Department of Defense (DOD), Defense Manpower Data Center for Verification of Eligibility for Minimum Essential Coverage Under the Patient Protection and Affordable Care Act through a Department of Defense Health Benefits Plan.
• On October 31, 2023, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued a notice entitled, Notice: Fiscal Year 2024 Supplemental Funding Opportunity. This notice is to inform the public that SAMHSA is supporting a supplement in scope of the original award to the Community-Based, Advocacy-Focused, Data-Driven, Coalition-Building Association (CADCA) recipient funded in FY 2019 under the Coalitions Training Grant, Notice of Funding Opportunity (NOFO) SP-19-002.
• On October 31, 2023, SAMHSA issued a notice entitled, Notice: List of Certified Laboratories and Instrumented Initial Testing Facilities that Meet Minimum Standards to Engage in Urine Drug Testing. HHS notifies federal agencies of the laboratories and instrumented initial testing facilities (IITFs) currently certified to meet the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs using urine or oral fluid.
• On October 31, 2023, HHS issued a notice entitled, Federal Independent Dispute Resolution Operations. This document sets forth proposed rules related to certain provisions of the No Surprises Act (NSA) regarding the federal independent dispute resolution (IDR) process, which was established as part of the Consolidated Appropriations Act, 2021 (CAA, 2021). These proposed rules would set forth new requirements relating to the disclosure of information that group health plans and health insurance issuers offering group or individual health insurance coverage must include along with the initial payment or notice of denial of payment for certain items and services subject to the surprise billing protections in the NSA.
• On November 1, 2023, DEA issued a notice entitled, Proposed Aggregate Production Quotas for Schedule I and II Controlled Substances and Assessment of Annual Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2024. DEA proposed to establish the 2024 aggregate production quotas (APQ) for controlled substances in schedules I and II of the CSA and the assessment of annual needs (AAN) for the list I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine. For the 2024 quota year, DEA intends to allocate procurement quotas to DEA-registered manufacturers of schedule II-controlled substances on a quarterly basis.
• On November 1, 2023, AHRQ issued a notice entitled, Supplemental Evidence and Data Request on Trauma Informed Care. AHRQ is seeking scientific information to inform the review on Trauma Informed Care, which is currently being conducted by the AHRQ’s Evidence-based Practice Centers (EPC) Program. Access to published and unpublished pertinent scientific information will improve the quality of this review.
• On November 1, 2023, FDA issued a notice entitled, Charter Amendments, Establishments, Renewals and Terminations: Patient Engagement Advisory Committee. FDA announced the renewal of the Patient Engagement Advisory Committee by the Commissioner of Food and Drugs (the Commissioner). The Commissioner has determined that it is in the public interest to renew the Patient Engagement Advisory Committee for an additional 2 years beyond the charter expiration date. The new charter will be in effect until the October 6, 2025.
• On November 1, 2023, the National Institutes of Health (NIH) issued a notice entitled, Licenses; Exemptions, Applications, Amendments etc.: Prospective Grant of an Exclusive Patent License; Mutant IDH1 Inhibitors Useful for Treating Cancer. The National Center for Advancing Translational Sciences, an institute of NIH, is contemplating the grant of an exclusive patent license to practice the inventions embodied in the patents and patent applications listed in the Supplementary Information section of the notice.
• On November 2, 2023, CMS issued a final rule entitled, Medicare Program: Calendar Year 2024 Home Health Prospective Payment System Rate Update; Quality Reporting Program Requirements; Value-Based Purchasing Expanded Model Requirements; etc. This final rule sets forth routine updates to the Medicare home health payment rates for calendar year (CY) 2024 in accordance with existing statutory and regulatory requirements. This rule discusses comments received regarding access to home health aide services; implements home health payment-related changes; rebases and revises the home health market basket and revises the labor-related share; codifies statutory requirements for disposable negative pressure wound therapy (dNPWT); and implements the new items and services payment for the home intravenous immune globulin (IVIG) benefit. In addition, the rule finalizes changes to the Home Health Quality Reporting Program (HH QRP) requirements and the expanded Home Health Value-Based Purchasing (HHVBP) Model; implements the new Part B benefit for lymphedema compression treatment items, codifies the Medicare definition of brace, and makes other codification changes based on recent legislation.
• On November 2, 2023, FDA issued guidance entitled, Enforcement Policy for Clinical Electronic Thermometers. FDA announced the availability of a final guidance entitled Enforcement Policy for Clinical Electronic Thermometers. This guidance applies to clinical electronic thermometers, which are regulated as class II devices.
• On November 2, 2023, FDA issued a notice entitled, Medical Devices: Exemptions from Premarket Notification: Class II Devices; Clinical Electronic Thermometers. FDA identified certain class II clinical electronic thermometers that, when finalized, will be exempt from premarket notification requirements, subject to certain limitations. FDA published this notice of that determination and requesting public comment in accordance with the procedures established by the 21st Century Cures Act.
• On November 2, 2023, CMS issued a final rule entitled, Medicare and Medicaid Programs: Calendar Year 2024 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; etc. This final rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, changes in the statute; payment for dental services inextricably linked to specific covered medical services; Medicare Shared Savings Program (MSSP) requirements; updates to the Quality Payment Program; Medicare coverage of opioid use disorder services furnished by opioid treatment programs; updates to certain Medicare and Medicaid provider and supplier enrollment policies, electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan or an Medicare Advantage and Prescription Drug (MA-PD) plan under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act); updates to the Ambulance Fee Schedule regulations and the Medicare Ground Ambulance Data Collection System; codification of the Inflation Reduction Act (IRA) and Consolidated Appropriations Act, 2023 (CAA 2023) provisions; expansion of the diabetes screening and diabetes definitions; pulmonary rehabilitation, cardiac rehabilitation and intensive cardiac rehabilitation expansion of supervising practitioners; appropriate use criteria for advanced diagnostic imaging; early release of Medicare Advantage risk adjustment data; a social determinants of health risk assessment in the annual wellness visit; and Basic Health Program.
• On November 2, 2023, CMS issued a final rule entitled, Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; etc. This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2024. The final rule describes the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Additionally, this final rule updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) Program, and the Rural Emergency Hospital Quality Reporting (REHQR) Program. In this final rule, CMS also establishes a payment for certain intensive outpatient services under Medicare, beginning January 1, 2024. In addition, this final rule updates and refines requirements for hospitals to make public their standard charge information and the enforcement of hospital price transparency requirements.
• On November 2, 2023, CMS issued a final rule entitled, Medicare Program: Hospital Outpatient Prospective Payment System: Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022. This final rule describes the agency’s actions on remand from the United States (U.S.) District Court for the District of Columbia to craft a remedy in light of the U.S. Supreme Court’s decision in American Hospital Association v. Becerra relating to the adjustment of Medicare payment rates for drugs acquired under the 340B Program from CY 2018 through September 27th of CY 2022. 340B covered entities will get a lump sum, and OPPS hospitals will face a -0.5 percent payment decrease for 16 years to account for the lump sum payment.
• On November 3, 2023, HHS issued a notice entitled, Trusted Exchange Framework and Common Agreement: Version 1.1. This notice fulfills an obligation under the Public Health Service Act (PHSA), which requires the National Coordinator for Health Information Technology (ONC) to publish on the Office of the National Coordinator for Health Information Technology's public internet website, and in the Federal Register, the common agreement developed under the PHSA.

Event Notices

• November 7, 2023: FDA announced a meeting of the Radiological Devices Panel of the Medical Devices Advisory Committee. This is a virtual meeting open to the public.
• November 9, 2023: ONC announced a meeting of the Health Information Technology Advisory Committee. This is a hybrid meeting open to the public.
• November 13 and 14, 2023: The Administration for Strategic Preparedness and Response (ASPR) announced its Biomedical Advanced Research and Development Authority (BARDA) Industry Day 2023. BARDA annually hosts a two-day conference with industry and government partners to share BARDA’s goals and objectives, increase awareness of U.S. government medical countermeasure (MCM) priorities, and facilitate collaboration between public and private sectors within the health security space. This year, BARDA plans to discuss implementation efforts for the 2022-2026 Strategic Plan. This is a hybrid event open to the public.
• November 14, 2023: CDC announced a meeting of the Advisory Committee to the CDC Director. This is a hybrid meeting that is open to the public. There will be an opportunity for public comment.
• November 16, 2023: NIH announced that the Diabetes Mellitus Interagency Coordinating Committee will hold a public online meeting entitled, The Application of Digital Health Technology to Type 2 Diabetes Management: Current Status, Research Gaps, and Opportunities.
• November 16, 2023: FDA announced a meeting of the Oncologic Drugs Advisory Committee. This is a virtual meeting that will be open to the public and the agency is establishing a docket for public comment.
• November 17, 2023: NIH announced a meeting of the National Advisory Child Health and Human Development Council Task Force on Research Specific to Pregnant Women and Lactating Women (PRGLAC) Implementation Working Group. This is a virtual meeting open to the public.
• November 28, 29, 30, 2023: CMS announced a virtual public meeting entitled, New Revisions to the Healthcare Common Procedure Coding System (HCPCS) to discuss preliminary coding, Medicare benefit category, and payment determinations for new revisions to the HCPCS Level II code set for non-drug and nonbiological products.
• November 29, 2023: NIH announced the National Cancer Institute will hold a meeting of their Frederick National Laboratory Advisory Committee. This is a virtual meeting open to the public.
• November 30, 2023: CDC announced a meeting of the Board of Scientific Counselors, Deputy Director for Infectious Diseases. This is a virtual meeting open to the public.
• November 30, 2023: FDA announced a public workshop entitled, Advancing the Development of Pediatric Therapeutics on Drug Dosing in Pediatric Patients with Renal Impairment. The workshop will discuss the current landscape of drug dosing in pediatric patients with renal impairment, discuss the gaps in knowledge, and consider innovative approaches to improve the current paradigm for dosing in pediatric patients with renal impairment.
• December 4 and 5, 2023: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health and Human Development. The meeting will be videocast and is open to the public.
• December 5 and 6, 2023: The Health Resources and Services Administration (HRSA) announced a meeting of the Advisory Committee on Infant and Maternal Mortality (ACIMM). This is a hybrid meeting open to the public.
• December 6, 2023: SAMHSA announced a meeting of the Interdepartmental Substance Use Disorders Coordinating Committee (ISUDCC). The meeting will include reports from the ISUDCC working groups and discussion of the ISUDCC’s recommendations to HHS on how the federal government can further integrate and coordinate harm reduction approaches and strategies across the continuum of prevention, treatment, and recovery policies, programs, and practices. This is a virtual meeting open to the public.
• December 7, 2023: NIH announced the National Heart, Lung, and Blood Institute will hold a meeting to update their Advisory Board and public stakeholders on research agendas across NIH for fiscal year (FY) 2024. This is a virtual public meeting that requires registration to attend.
• December 12 and 13, 2023: CDC announced a meeting of the Advisory Council for the Elimination of Tuberculosis (ACET). This is a virtual meeting open to the public.
• December 13 and December 14, 2023: HHS announced it will hold a virtual public town hall meeting to discuss FY 2025 applications for add-on payments for new medical services and technologies under the hospital inpatient prospective payment system (IPPS).
• January 29, 2024: NIH announced the National Heart, Lung, and Blood Institute Sickle Cell Disease Advisory Committee will hold a virtual meeting open to the public.

II. Hearings & Markups

U.S. House of Representatives

• On October 31, 2023, the House Financial Services Committee held a hearing entitled, The Factors Influencing the High Cost of Insurance for Consumers. Witnesses present included: Robert Gordon, Senior Vice President, American Property and Casualty Insurance Association (APCIA); Frank Nutter, President, Reinsurance Association of America (RAA); Grace Arnold, Commissioner, Minnesota Department of Commerce, on behalf of the National Association of Insurance Commissioners (NAIC); Joseph Petrelli, President and Co-Founder, Demotech, Inc.; Baird Webel, Specialist in Financial Economics, Congressional Research Service (CRS); and, Sharon Lewis, Executive Director, Connecticut Coalition for Environmental Justice. Legislation discussed included: H.R. 5535, the Insurance Data Protection Act; H.R. 2933, the Federal Insurance Office Elimination Act; H. Res. ___, Expressing the continued support of Congress for the McCarran-Ferguson Act and its State-based regulatory system for the business of insurance; and, H.R. ___, the Wildfire Insurance Coverage Study Act.

U.S. Senate

• On October 31, 2023, the Senate Health, Education, Labor, and Pension (HELP) Committee held a hearing entitled, AI and the Future of Work: Moving Forward Together. Witnesses present included: Josh Lannin, VP, Productivity Technologies, Workday; Mary Kate Morley Ryan, Managing Director of Talent and Organization, Accenture; Tyrance Billingsley, Founder and Executive Director, Black Tech Street; and, Bradford Newman, Partner/Leader of the AI Practice, Baker & McKenzie LLP, Co-Chairman of the AI Subcommittee for the American Bar Association.

III. Reports, Studies, & Analyses

• On October 30, 2023, OIG released a report entitled, HHS's Oversight of Automatic Provider Relief Fund Payments Was Generally Effective but Improvements Could Be Made. In this report, OIG investigated whether HHS ensured that Phase 1 general distribution automatic Provider Relief Fund (PRF) payments were: (1) properly calculated and (2) disbursed only to eligible providers. OIG found that HHS’s oversight was effective in ensuring that most of the approximately $39.3 billion in automatic PRF payments were properly calculated and disbursed to eligible providers. However, HHS did not ensure that approximately 5.5 percent in automatic PRF payments were properly calculated as intended. Additionally, the report found that HHS did not prevent more than $247 million in payments from being disbursed to ineligible providers and did not utilize all readily available lists to identify these providers. OIG found that HHS did not ensure that all round 1 automatic PRF payments to Medicare providers were properly calculated as intended. Additionally, HHS did not ensure that calculations for round 2 automatic PRF payments were properly made to Medicare providers. Finally, HHS did not identify all ineligible providers and exclude them from receiving PRF payments.
• On November 2, 2023, the Kaiser Family Foundation (KFF) released a report entitled, How Has the Federal Process for Surprise Medical Billing Disputes Performed? This analysis examined the share of out-of-network surprise billing disputes initiated through the IDR process in the first year of the NSA. The report found that approximately 13 percent of these disputes resulted in payment determinations and another 19 percent of disputes were closed due to ineligibility or for other reasons. Additionally, nearly 68 percent of disputes remained outstanding and approximately 70 percent of payment determinations were in favor of the providers’ asking price and the remaining were in favor of the health plans’ payment offer. According to the report, most payment determinations through the federal IDR arbitration process have been in favor of providers even though most lawsuits against the NSA are filed by providers. The report highlighted recent proposed changes to the IDR process, with the goal of making the process more efficient and increasing early communication between the parties.

IV. Other Health Policy News

• On October 26, 2023, Senator Marsha Blackburn (R-TN) joined Senator Maggie Hassan (D-NH) in introducing the Extending Access to Addiction Treatment Act (S. 3136) to permanently expand Medicaid coverage for medication-assisted treatment for substance use disorder (SUD). Without action, Medicaid coverage for medication-assisted treatment for SUD is only available through 2025 but this bill would make it permanent. In the release Senator Blackburn stated that to “address this challenge head-on, it’s essential to think beyond short-term solutions. By permanently expanding Medicaid coverage for medication-assisted treatment, we are making a firm commitment to providing comprehensive care for those with substance use disorders, laying the groundwork for healthier communities.”
• On October 27, 2023, Ranking Member of the Senate Finance Committee Mike Crapo (R-ID), wrote a letter to Chiquita Brooks-LaSure, the Administrator for CMS. In the letter, Sen. Crapo asked CMS to withdraw certain proposed changes contained in the proposed rule entitled, Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program. The letter asks that Medicaid work with states, patients, providers, and policymakers to implement reforms to promote value-based payments rather than establishing new reporting requirements. According to the letter, the proposed rule lacks patient-oriented justifications for some of the proposed changes, which may interfere with quality patient care delivery. The letter was signed by Senator Crapo along with other Republican members of the Senate Finance Committee. The letter is available here.
• On October 30, 2023, President Joe Biden signed an executive order entitled, Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (the EO). The wide-ranging EO covers many sectors of the economy and corresponding Federal agencies from labor and workforce to national security. The Biden Administration outlines multiple overarching priorities and directives to establish broad guidance and standards as well as targeted directives for specific industries including healthcare. The EO instructs HHS to establish an AI Task Force to develop a strategic plan to include policies, frameworks, and regulatory action on the responsible deployment and use of AI and AI enabled technologies in the health and human services sector. Additionally, the Secretary of HHS must develop a strategy to address bias in AI associated with healthcare services, create an AI safety program, and consider strategies for regulating the use of AI or AI enabled tools in the drug development process. A fact sheet with more information is available here. The EO is available here.
• On October 31, the CDC NIOSH announced a campaign to help hospital leadership with the tools to identify and reduce healthcare worker burnout and maintain wellbeing. The NIOSH website includes a toolkit created by the Dr. Lorna Breen Heroes’ Foundation which provides guidance on removing intrusive mental health questions from credentialing applications and initiatives for workplace intervention and support. A press release with more information is available here.
• On October 31, 2023, House Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ-6) joined Ways and Means Committee Ranking Member Richard Neal (D-MA-1) in sending a letter to CMS Administrator Chiquita Brooks-LaSure urging increased oversight and transparency of broker participation and compensation in the Medicare Advantage (MA) market. The letter highlights increasing concern over broker and marketing practices that may lead beneficiaries from insurance plans best suited to meet their health needs in favor of plans with the best broker payment incentives. Representatives Pallone and Neal encouraged the Biden Administration to build on recent efforts to address deceptive marketing practices and broker compensation to better protect Medicare beneficiaries and the program overall. In addition to requiring reporting of total broker compensation, the Senators urged the Administration to reform the total amount brokers can receive in compensation per enrollee. The letter is available here.
• On November 2, 2023, Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) released a discussion draft that includes policies aimed at expanding mental health care under Medicare and Medicaid and reducing prescription drug costs for seniors. The discussion draft also includes Medicare and Medicaid provisions set to expire at the end of 2023 and changes to Medicare payments for physicians. At a Senate Finance Committee markup hearing scheduled for November 8, 2023, the committee intends to advance the legislative proposals included in the discussion draft as well as certain pharmacy benefit manager (PBM) reforms. A press release with more information is available here. The text of the discussion draft is available here.

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