This will be the last Capitol Insights newsletter published before the New Year. The next newsletter will be published on January 12, 2024.

The House of Representatives passed the ‘Lower Costs, More Transparency’ Act. The bill, which includes price transparency measures targeting hospitals and PBMs, in addition to an expansion of site-neutral payments for drug administration services, passed in a 320 to 71 vote.

Representatives Cherfilus-McCormick (D-FL) and Jennifer Kiggans (R-VA) introduced the Department of Veterans Affairs Therapeutic Medical Physicist Pay Cap Relief Act. This bill would eliminate a below-market salary cap for Therapeutic Medical Physicists within the Department of Veterans Affairs.

A tumultuous year on Capitol Hill is coming to an end. Amid headline-grabbing divisions, Congress made some progress on notable healthcare priorities this year, including passing the Lower Costs, More Transparency Act through the House of Representatives and advancing the Better Mental Health, Lower Drug Costs and Extenders Act in the Senate. Legislation was also filed to close the EFT transaction fee loophole, reform Medicare physician reimbursement, and mitigate the 2024 Physician Fee Schedule cuts.

In 2024, we expect Congress to continue their work on this year’s priorities while embracing new ones. Congress will likely wait until after the 2024 elections before acting on major legislative changes, if they choose to act at all. Here’s what to watch for:

Medicare Payments

Congress will likely not pass legislation preventing the 3.37% reduction to the 2024 Medicare Physician Fee Schedule Conversion Factor from going into effect before January 1^st. Legislation to avert 2024 Physician Fee Schedule cuts could be included in a government funding bill that must be passed by January 19^th.

Congress is also considering legislation that would reform the Medicare Physician Fee Schedule reimbursement model. H.R. 2474, which would provide an inflationary update (MEI) to the Physician Fee Schedule Conversion Factor, will likely cost hundreds of billions of dollars and is unlikely to pass. However, H.R. 6371, which gives CMS more flexibility to make budget neutrality adjustments in the PFS and limit changes to the Conversion Factor by no more than 2.5%, recently advanced through the House Energy and Commerce Committee in a bipartisan vote. This bill may be passed through Congress by the end of next year, but it remains to be seen whether the Senate is on the same page as the House on reforming the Physician Fee Schedule.

Telehealth

Congress proactively extended some COVID-19-era Medicare telehealth policies through 2024. These policies included removing the originating site and geographic requirement, expanding the list of practitioners who are eligible to bill Medicare for telehealth, and allowing audio-only telehealth services for some mental health and addiction services. Extending these provisions, permanently or temporarily, will be a bipartisan priority during the new year. While there will likely be an extension, Congress will likely need to “pay for” these measures by proposing other proposals that would help save money in other areas of the Medicare program.

Artificial Intelligence

Congress and the Biden Administration have signaled that regulating artificial intelligence will be a bipartisan priority during the new year. So far, Republicans on the Senate HELP Committee and House Energy and Commerce Committee have called for an “industry-specific” approach to regulating artificial intelligence, while some Senate Democrats have signaled support for comprehensive and broader AI legislation. The significant lack of expertise in AI technology on Capitol Hill will likely delay legislative action on this issue, but Congress may successfully pass legislation to regulate AI before the end of next year. Initial healthcare-related AI regulatory proposals would possibly address data privacy concerns.

Medicare Advantage

In 2023, enrollment in Medicare Advantage (MA) plans surpassed Traditional Medicare. 30.8 million Americans are enrolled in an MA plan, amounting to 51% of the eligible Medicare population. As enrollment in MA plans has increased, bipartisan scrutiny on the plans’ prior authorization rules, slow reimbursement timelines, unfair contract negotiations with providers, and the plans’ marketing practices. Bipartisan proposals to standardize prior authorization and address overpayments to MA plans by reforming the risk assessment process could receive some momentum in the new year.

The Federal Independent Dispute Resolution Process portal has reopened for all dispute types. Parties involved have specific deadlines to select a certified IDR entity, resubmit disputes and submit fees and offers, with extensions provided for certain circumstances, such as disputes impacted by temporary suspension.

Cigna is no longer attempting to acquire Humana, as the two health plans failed to agree on a price. Instead, Cigna announced that they will initiate a $10 billion stock buyback.

An analysis of CMS’ 500 most shoppable services found that prices for these services at large hospitals increased by 2% during the first three months of 2023. The report analyzed the prices for these services set by UnitedHealthcare, Blue Cross Blue Shield, Cigna and Aetna.

Healthcare spending in the United States reached $4.1 trillion in the United States in 2022, increasing by 4.1%, according to the Office of the Actuary at CMS. Healthcare spending grew faster in 2022 than in 2021, when spending grew 3.2%. Medicare spending grew by 5.9% in 2022, reaching $944.3 billion.

HHS announced a final rule that implements transparency requirements for artificial intelligence used in clinical settings. The final rule requires AI developers to disclose the representation of the data used to train the AI, and the steps that were taken to avoid biases, among other measures.

A new GAO report found that IDR entities received approximately 490,000 surprise billing arbitration requests between April 2022 through June 2023. The number of arbitration requests filed is nearly 20 times higher than HHS originally estimated. Providers won 77% of the IDR cases during this timeframe.

The Biden Administration announced plans to address consolidation among hospitals by issuing a Request for Information seeking feedback on the impacts of private equity’s increasing influence in healthcare. The administration also announced that they are planning to increase transparency measures targeting Medicare Advantage plans, and published ownership data on Federal Qualified Health Centers and Rural Health Clinics.

Source: Centers for Medicare and Medicaid Services (CMS) MLN Connects Newsletter, 12/14

News

• CMS Releases Revised Guidance for Medicare Prescription Drug Inflation Rebate Program
• Medicare Part B Inflation Rebate Guidance: Use of the 340B Modifier — Revised
• Billing for Flu, Pneumococcal, & COVID-19 Vaccines
• Expanded Home Health Value-Based Purchasing Model: October 2023 Interim Performance Reports

Claims, Pricers, & Codes

• New Place of Service Code 27 for Outreach Site/Street
• National Correct Coding Initiative: January Update

MLN Matters® Articles

• Medicare Part B Clinical Laboratory Fee Schedule: Revised Information for Laboratories on Collecting & Reporting Data for the Private Payor Rate-Based Payment System — Revised
• Clinical Laboratory Fee Schedule: 2024 Annual Update
• Medicare Program Integrity Manual: CY 2024 Home Health Prospective Payment System Updates
• Activation of Validation Edits for Providers with Multiple Service Locations — Revised

Publications

• Medicare Diabetes Prevention Program Expanded Model — Revised
• Rural Emergency Hospitals — Revised

Multimedia

• Expanded Home Health Value-Based Purchasing Model: Agency Perspectives Video Series

From Our Federal Partners

• Severe & Fatal Confirmed Rocky Mountain Spotted Fever among People with Recent Travel to Tecate, Mexico