Health Care Week in Review: HHS Finalizes Provider Disincentives for Information Blocking and House Ways and Means Committee Advances Health Care Legislation

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, HHS issued a final rule establishing provider disincentives for information blocking and the House Ways and Means Committee advanced four health care innovation bills.

I. Regulations, Notices & Guidance

• On June 24, 2024, the Centers for Disease Control and Prevention (CDC) released a notice entitled, Solicitation of Nominations for Appointment to the Board of Scientific Counselors, National Center for Injury Prevention and Control. In accordance with the Federal Advisory Committee Act, CDC is seeking nominations for membership on the Board of Scientific Counselors, National Center for Injury Prevention and Control (BSC, NCIPC). The BSC, NCIPC consists of up to 18 experts in pertinent disciplines involved in injury, overdose, and violence prevention.
• On June 24, 2024, the Food and Drug Administration (FDA) released a notice entitled Laboratory Developed Tests: Small Entity Compliance Guide; Guidance for Laboratory Manufacturers and Food and Drug Administration Staff; Availability. This small entity compliance guide (SECG) is intended to help small entities comply with applicable medical device regulations, consistent with the laboratory developed tests (LDT) final rule. This includes the phasing out of FDA’s general enforcement discretion approach for LDTs so that in vitro diagnostic products (IVDs) manufactured by a laboratory will generally fall under the same enforcement approach as other IVDs.
• On June 25, 2024, the Administration for Children and Families (ACF) released a notice entitled, Unaccompanied Children Program Foundational Rule; Correction. ACF is correcting a final rule that appeared in the Federal Register on April 30, 2024. The final rule adopted and replaced regulations relating to key aspects of the placement, care, and services provided to unaccompanied children referred to the ORR, pursuant to ORR’s responsibilities for coordinating and implementing the care and placement of unaccompanied children who are in Federal custody by reason of their immigration status under the Homeland Security Act of 2002 (HSA) and the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008 (TVPRA). The final rule established a foundation for the Unaccompanied Children Bureau Program (UC Bureau Program) that is consistent with ORR’s statutory duties, for the benefit of unaccompanied children and to enhance public transparency as to the policies governing the operation of the UC Bureau.
• On June 25, 2024, FDA released a notice entitled, Priority Zoonotic Animal Drug Designation and Review Process; Guidance for Industry; Availability. FDA announced the availability of a final guidance for industry #283 entitled, Priority Zoonotic Animal Drug Designation and Review Process. This guidance is intended to assist sponsors pursuing Priority Zoonotic Animal Drug (PZAD) designation for a new animal drug. This guidance is intended to provide the eligibility criteria for PZAD designation, the process for requesting PZAD designation, and enhancements in the FDA review process for PZADs.
• On June 25, 2024, FDA released a notice entitled, Food and Drug Administration Information Technology Strategy and Customer Experience Strategy; Request for Comments. FDA is requesting comments on its “Information Technology (IT) Strategy” and “Customer Experience (CX) Strategy.” In accordance with FDA’s User Fee Program commitments and Omnibus Bill requirements, FDA must annually update and publish its IT Strategy by September 30. The initial strategy, released in September 2023, outlines the future direction of FDA’s data and technology capabilities. A key objective of FDA’s IT Strategy is to modernize enterprise services and capabilities to improve customer experience. FDA CX Strategy was created to guide this effort. This comprehensive enterprise plan introduces FDA’s CX framework and considers the perspective of interested parties such as the public, employees, and industry.
• On June 25, 2024, the National Institutes of Health (NIH) released a notice entitled, Office of the Director; Notice of Charter Renewal. The Charter for the National Institutes of Health Clinical Center Research Hospital Board was renewed for an additional two-year period on June 15, 2024. It is determined that the National Institutes of Health Clinical Center Research Hospital Board is in the public interest in connection with the performance of duties imposed on NIH by law, and that these duties can best be performed through the advice and counsel of this group.
• On June 26, 2024, the Centers for Medicare & Medicaid Services (CMS) released a notice entitled, Medicaid Program; Ensuring Access to Medicaid Services; Correction. This document corrects technical and typographical errors in the final rule that appeared in the May 10, 2024, Federal Register entitled, Medicaid Program; Ensuring Access to Medicaid Services. The effective date of the final rule is July 9, 2024.
• On June 26, 2024, CMS released a notice entitled, Medicare and Medicaid Programs: Application by the Accreditation Association for Ambulatory Health Care for Continued CMS-Approval of Ambulatory Surgical Center Accreditation Program. This proposed notice announces the receipt of an application from the Accreditation Association for Ambulatory Health Care for continued recognition as a national accrediting organization for Ambulatory Surgical Centers that wish to participate in the Medicare or Medicaid programs.
• On June 26, 2024, CMS issued a proposed rule entitled, Medicare Program; Calendar Year (CY) 2025 Home Health Prospective Payment System (HH PPS) Rate Update; HH Quality Reporting Program Requirements; HH Value-Based Purchasing Expanded Model Requirements; Home Intravenous Immune Globulin (IVIG) Items and Services Rate Update; and Other Medicare Policies. This proposed rule would set forth routine updates to the Medicare home health payment rates; the payment rate for the disposable negative pressure wound therapy (dNPWT) devices; and the intravenous immune globulin (IVIG) items and services payment rate for CY 2025 in accordance with existing statutory and regulatory requirements. In addition, it proposes changes to the Home Health Quality Reporting Program (HH QRP) requirements and provides an update on potential approaches for integrating health equity in the Expanded Health Value Based Purchasing (HHVBP) Model. It also proposes a new standard for acceptance to service policy in the HH conditions of participation (CoPs) and includes requests for information (RFIs) soliciting input on permitting rehabilitative therapists to conduct the initial and comprehensive assessment and the factors that may influence the patient referral and intake processes. Lastly, it proposes updates to provider and supplier enrollment requirements and changes to the long-term care reporting requirements for acute respiratory illnesses.
• On June 26, 2024, CMS issued a final rule entitled, 21st Century Cures Act: Establishment of Disincentives for Health Care Providers That Have Committed Information Blocking. This final rule implements the provision of the 21st Century Cures Act specifying that a health care provider determined by the HHS Inspector General to have committed information blocking shall be referred to the appropriate agency to be subject to appropriate disincentives set forth through notice and comment rulemaking. This rulemaking establishes, for certain health care providers, a set of appropriate disincentives using authorities under applicable Federal law.
• On June 27, 2024, CDC issued a notice entitled, Advisory Committee on Breast Cancer in Young Women; Notice of Charter Renewal. CDC is announcing the renewal of the charter of the Advisory Committee on Breast Cancer in Young Women (ACBCYW).
• On June 27, 2024, ACF issued an interim final rule entitled, Temporary Assistance for Needy Families Work Outcomes Measures. This interim final rule modifies ACF regulations in order to implement the statutory changes enacted by section 304 of the Fiscal Responsibility Act of 2023 (FRA) related to the reporting of work outcomes under the Temporary Assistance for Needy Families (TANF) program. ACF is promulgating this rule as an interim final rule to ensure states and territories have sufficient time to comply with data collection for fiscal year 2025.
• On June 27, 2024, the Administration for Community Living (ACL) released a notice entitled, Intent to Award a Single-Source Supplement for the Expanding ACL Innovation Lab. ACL is announcing the intent to award a single-source supplement to the current cooperative agreement held by the National Council on Aging for the ACL Innovation Lab (“the Lab”) program. The purpose of the Lab is to support research, demonstration, and evaluation efforts related to falls prevention amongst older adults and older adults with disabilities.
• On June 27, 2024, FDA released draft guidance entitled, Diversity Action Plans To Improve Enrollment of Participants From Underrepresented Populations in Clinical Studies; Draft Guidance for Industry; Availability. FDA is announcing the availability of a draft guidance for industry entitled, Diversity Action Plans to Improve Enrollment of Participants from Underrepresented Populations in Clinical Studies. FDA is issuing this draft guidance as mandated under the Food and Drug Omnibus Reform Act of 2022 (FDORA) which requires that FDA update or issue guidance relating to the format and content of Diversity Action Plans required by the Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended by FDORA. This guidance describes the format and content of Diversity Action Plans, including the timing and process for submitting such plans by application or notification type. In addition, this draft guidance describes the criteria and process by which FDA will evaluate sponsors’ requests for waivers from the FD&C Act. Because FDA is required by statute to specify the form and manner for the submission of Diversity Action Plans in guidance, insofar as this draft guidance specifies the form and manner for submission of Diversity Action Plans, when this guidance is finalized, it will have binding effect.
• On June 27, 2024, NIH released a notice entitled, Final Draft National Institute of Environmental Health Sciences FY2025-FY2029 Strategic Plan. The goal of the National Institute of Environmental Health Sciences (NIEHS) strategic planning process is to set scientific areas of emphasis and priority approaches to anticipate and meet areas of opportunity for furthering environmental health sciences research, training, and translation. NIEHS makes available the final draft of the fiscal year (FY) 2025-FY 2029 NIEHS Strategic Plan.
• On June 27, 2024, the Substance Abuse and Mental Health Services Administration (SAMHSA) released a notice entitled, Fiscal Year (FY) 2024 Notice of Supplemental Funding Opportunity. This notice is to inform the public that SAMHSA is supporting one supplement (in scope of the parent award) for the Cooperative Agreement for National Suicide Prevention Lifeline and Disaster Distress Helpline recipient, Mental Health Association of New York City, Inc. (DBA Vibrant Emotional Health), funded in FY 2021 under Notice of Funding Opportunity (NOFO) SM 21-005. The recipient may receive up to $80,000,000 and has a project end date of September 29, 2026. The supplemental funding will be used to maintain 988 operations and services, both at local levels and across all backup, chat, text, LGBTQI+ youth, Spanish language, and videophone based services. This funding will ensure continuation of all 988 services and supports.
• On June 27, 2024, CMS released a proposed rule entitled, Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, Conditions for Coverage for End-Stage Renal Disease Facilities, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model. This proposed rule would update and revise the End-Stage Renal Disease (ESRD) Prospective Payment System for calendar year 2025. This rule also proposes to update the payment rate for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury. In addition, this proposed rule would update requirements for the Conditions for Coverage for ESRD Facilities, ESRD Quality Incentive Program, and ESRD Treatment Choices Model.
• On June 28, 2024, FDA released draft guidance entitled, Essential Drug Delivery Outputs for Devices Intended to Deliver Drugs and Biological Products; Draft Guidance for Industry; Availability. guidance addresses key aspects of drug delivery performance information for devices, and combination products that include device constituent parts, intended for delivery of a human drug, including a biological product (herein referred to as drug delivery devices). The guidance describes FDA’s recommendations related to the device design outputs that are essential for establishing and assessing drug delivery performance. FDA is providing recommendations for development and organization of device drug-delivery performance information to improve the consistency of this information in applications and submissions. The guidance is intended to facilitate and streamline development of drug delivery devices.
• On June 28, 2024, the Health Resources and Services Administration (HRSA) released a notice entitled, Lists of Designated Primary Medical Care, Mental Health, and Dental Health Professional Shortage Areas. This notice informs the public of the availability of the complete lists of all geographic areas, population groups, and facilities designated as primary medical care, dental health, and mental health professional shortage areas (HPSAs) in a designated status as of April 15, 2024. The lists are available on the shortage area topic page on HRSA’s data.hrsa.gov website. All currently designated HPSAs remain designated until final lists are published later this fall. HPSA designations that are currently proposed for withdrawal will remain in this status until the publication of the HPSA Federal Register notice on or before November 1, 2024. HPSAs proposed for withdraw will be re-evaluated before final publication if additional information is made available to HPSA by states. If these HPSAs do not meet the requirements for designation at the time of the publication of the HPSA Federal Register on or before November 1, 2024, they will be withdrawn.
• On June 28, 2024, CMS released a proposed rule entitled, Medicare Program: Mitigating the Impact of Significant, Anomalous, and Highly Suspect Billing Activity on Medicare Shared Savings Program Financial Calculations in Calendar Year 2023. This proposed rule addresses policies for assessing performance year (PY) 2023 financial performance of Medicare Shared Savings Program (Shared Savings Program) Accountable Care Organizations (ACOs); establishing benchmarks for ACOs starting agreement periods in 2024, 2025, and 2026; and calculating factors used in the application cycle for ACOs applying to enter a new agreement period beginning on January 1, 2025, and the change request cycle for ACOs continuing their participation in the program for PY 2025, as a result of significant, anomalous, and highly suspect billing activity for selected intermittent urinary catheters on Medicare Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) claims. Under the Shared Savings Program, providers of services and suppliers that participate in ACOs continue to receive traditional Medicare fee-for-service (FFS) payments under Medicare Parts A and B, but the ACO may be eligible to receive a shared savings payment This document is scheduled to be published in the Federal Register on 07/03/2024 and available online at https://federalregister.gov/d/2024-14601, and on https://govinfo.gov if it meets specified quality and savings requirements. ACOs participating in two-sided models may also share in losses.

Event Notices

July 1-2, 2024: HHS announced a meeting of the President’s Advisory Commission on Asian Americans, Native Hawaiians, and Pacific Islanders. This is a hybrid meeting open to the public.

July 11-12, 2024: FDA announced a meeting entitled Evaluating Immunosuppressive Effects of In Utero Exposure to Drug and Biologic Products. This is a hybrid meeting open to the public.

July 25, 2024: FDA announced a meeting of the Oncologic Drugs Advisory Committee. This meeting is open to the public.

June 26, 2024: NIH announced a meeting of the National Cancer Institute Council of Research Advocates. This is a virtual meeting open to the public.

II. Hearings & Markups

• On June 26, 2024, the House Committee on Ways and Means Health Subcommittee held a hearing entitled, Improving Value-Based Care for Patients and Providers. Witnesses present included: Dr. Sarah Chouinard, Chief Medical Officer, Main Street Health; Stephen Nuckolls, CEO, Coastal Carolina Health Care and PA, Coastal Carolina Quality Care; Dr. Matthew Philip, Chief Medical Officer, Duly Health & Care; and Dr. Robert Berenson, Institute Fellow, Urban Institute.
• On June 27, 2024, the House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a markup entitled, Markup of FY25 Labor, Health and Human Services, Education, and Related Agencies Act.
• On June 27, 2024, the House Committee on Ways and Means held a markup entitled, Markup of H.R. 1691, H.R. 2407, H.R. 8816, and H.R. 4818. All four bills were reported favorably and advanced to the full U.S. House of Representatives.

III. Reports, Studies, & Analyses

• On June 25, 2024, the U.S. Office of the Inspector General (OIG) released a report entitled, North Carolina Did Not Report and Return All Medicaid Overpayments for the State’s Medicaid Fraud Control Unit Cases. The report found that North Carolina failed to report and return the federal share of Medicaid overpayments identified by the state’s Medicaid Fraud Control Unit (MFCU) for the period October 1, 2019, through September 30, 2021. OIG found that North Carolina did not report and return $30.4 million ($20.1 million federal share) for seven cases, delayed reporting $11.0 million ($7.3 million federal share) for five cases, and correctly reported and returned $27,033 ($17,834 federal share) for one case. According to the report, the discrepancies occurred because North Carolina relied on the MFCU to provide recovery information without having procedures to ensure all MFCU-determined overpayments were reported. Additionally, the MFCU was unaware that overpayments had to be reported even if payments weren’t collected from providers. OIG recommended that North Carolina: 1) report and return the federal share for the unreported cases, totaling $30.4 million ($20.1 million federal share); 2) strengthen internal controls by developing procedures for requesting, recording, and reporting all MFCU-determined overpayments within required timeframes; and 3) collaborate with the MFCU to identify and report Medicaid overpayments for cases beyond the audit period. North Carolina concurred with the recommendations and committed to refunding the federal share for unreported cases and improving their internal procedures.
• On June 28, 2024, HHS OIG Review of the Department of Health and Human Services’ Compliance with the Federal Information Security Modernization Act of 2014 for Fiscal Year 2023. OIG sought to assess HHS’ information security programs and practices to evaluate the agency’s compliance with federal standards. OIG identified significant shortcomings and, overall, found that HHS’ information security program was deemed "Not Effective," which is consistent with findings from the previous year. The report noted disparities among HHS Operating Divisions and Staff Divisions, with some divisions showing stagnation or regression in achieving necessary security standards. OIG recommended that HHS enhance oversight and accountability within the agency to strengthen cybersecurity measures. They also separately addressed specific deficiencies reviewed the Operating and Staff Division levels. While HHS concurred with some recommendations, disagreements on others highlight ongoing challenges in aligning cybersecurity strategies across the organization.

IV. Other Health Policy News

• On June 24, 2024, HHS finalized a rule to establish disincentives for healthcare providers that engage in information blocking, as mandated by the 21st Century Cures Act. This rule is intended to ensure that both patients and healthcare providers have access to electronic health information (EHI), thereby improving the coordination and efficiency of care. Disincentives established in the final rule include:
  • Medicare Promoting Interoperability Program: Hospitals and critical access hospitals (CAHs) found to be information blocking by HHS OIG ill not be considered meaningful electronic health information (EHR) users for the calendar year in which the OIG referred its determination to CMS. This may result in financial penalties, including reduced payment adjustments. Hospitals will experience a reduction in the market basket update by 75 percent, and payments for CAHs will be reduced from 101 percent of reasonable costs to 100 percent.
  • Merit-based Incentive Payment System (MIPS): MIPS eligible clinicians found to have committed information blocking will receive a zero score in the Promoting Interoperability performance category, negatively impacting their overall MIPS score. If an individual eligible clinician is found to have committed information blocking and is referred to CMS, then the disincentive would only apply to the individual, even if individual eligible clinician reports as part of a group.
  • Medicare Shared Savings Program: Providers associated with an accountable care organization (ACO) that commit information blocking may be deemed ineligible to participate in the program for at least one year, forfeiting potential shared savings revenue.
• These policies will be effective 30 days after the final rule’s publication in the Federal Register, with specific penalties under the Shared Savings Program starting after January 1, 2025. Additional disincentives may be established through future rulemaking. This final rule complements the OIG’s June 2023 rule, which established penalties for non-provider entities, such as health IT developers and health information exchanges (HIEs), that engage in information blocking. Such entities may face civil monetary penalties (CMPs) of up to $1 million per violation. This comprehensive approach is designed to promote transparency and accessibility in health information while ensuring robust protections for patient privacy. A press release with more information is available here. The final rule text is available here.
• On June 25, 2024, the HHS Office of Climate Change and Health Equity (OCCHE) highlighted two case studies demonstrating how nonprofit safety net healthcare providers are leveraging the Inflation Reduction Act (IRA) to decarbonize their communities and enhance health equity. The case studies showcase initiatives by Boston Medical Center and OhioHealth, providing other health organizations a roadmap to utilize IRA funds for similar purposes. Boston Medical Center launched a pilot program offering solar energy credits to patients, while OhioHealth used IRA tax incentives to establish electric vehicle charging stations with free access for rural residents. These efforts illustrate how healthcare providers can use IRA resources to reduce carbon emissions, improve sustainability, and maintain operations during emergencies. These case studies are part of OCCHE’s Catalytic Program on Utilizing the IRA, which aims to connect safety net healthcare providers to IRA funding opportunities for energy efficiency and environmental justice projects. The program includes webinars and a Quickfinder tool summarizing key IRA programs and policies to assist providers in planning and implementing similar initiatives. A press release with more information is available here.
• On June 26, 2024, the House Appropriations Committee released the FY 2025 Labor, Health and Human Services, Education, and Related Agencies Subcommittee spending bill, which would allocate $185.8 billion in discretionary funding. This represents an 11 percent reduction from the previous year’s spending level and a 15 percent decrease from President Biden’s budget request. The intent of the spending bill is to direct valuable taxpayer dollars toward initiatives that genuinely benefit healthcare and education sectors while promoting fiscal responsibility and transparency. Notably, the spending bill allocates approximately $1.3 billion for health workforce development, including $70 million in grants to expand and support graduate medical education for physicians. The bill also would allocate $400 million for rural hospital programs to help rural hospitals remain open. The legislation also would prioritize mental health and substance misuse prevention by significantly increasing funding for the SAMHSA Substance Misuse Prevention and Mental Health Services block grants. The House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies held a markup of the bill on June 27, 2024.  A full Committee markup is expected to take place in July. A press release with more information is available here. The bill text is available here.
• On June 27, 2024, the Supreme Court of the United States issued a per curium decision that dismissed Moyle v. United States and Idaho v. United States, as their writs of certiorari were “improvidently granted.” The dismissal of these cases leaves in place the district court’s order that temporarily prohibits Idaho from enforcing its abortion ban to the extent it conflicts with the Emergency Medical Treatment and Labor Act (EMTALA). The decision also dissolves the Court’s January 2024 stay of that order. Five justices, Chief Justice John Roberts and Justices Sonia Sotomayor, Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett, agreed to dismiss the case without examining the merits. Four justices, Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Ketanji Brown Jackson would have ruled on the merits of the cases. The cases now return to the lower courts for final judgment. The Court’s slip opinion can be found here.
• On June 28, 2024, the Supreme Court of the United States overruled Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce. The Chevron deference doctrine has governed the extent to which a federal court has deferred to a federal agency’s view of its own statutory authority. Specifically, the Court held that the Administrative Procedure Act (APA) requires courts to exercise their independent judgment in determining whether an agency has acted within its statutory authority, and courts are not permitted to defer to an agency interpretation of the law simply because a statute is ambiguous. Chief Justice John Roberts delivered the opinion of the Court, in which Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett joined. Justice Sonia Sotomayor filed a dissenting opinion which Justices Elena Kagan and Ketanji Brown Jackson joined. The Court’s slip opinion is available here.

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