Capitol Insights Newsletter
Authors: Matt Reiter, Caroline Oliver, and Amanda Williams
What happened in Congress this week?
Congress has passed legislation extending federal funding before the January 19th deadline. This Continuing Resolution (CR) will extend funding into March giving Congress more time to negotiate the 12 appropriations bills to fund the government for the remainder of the fiscal year. The CR does not include language to mitigate the 3.37% reduction to the Medicare Physician Fee Schedule Conversion Factor that took effect on January 1st.
CMS Publishes Final Rule to Streamline Prior Authorization
This week, the Centers for Medicare and Medicaid Services (CMS) published its much anticipated final rule on how Medicare Advantage (MA) plans, Medicaid plans, and Affordable Care Act (ACA) plans sold on the federal exchange can use prior authorization. Physician practices have long been frustrated by frequently used and burdensome prior authorization requirements. This final rule seeks to improve the prior authorization process but ultimately does not curtail how much MA plans can use prior authorization.
The final rule is largely consistent with the proposed policies. Under the final rule, these plans must utilize a standardized electronic process to accept prior authorization requests and issue decisions. These plans must also provide a response within seven calendar days for non-urgent requests and within 72 hours for urgent requests. Additionally, impacted health plans will be required to provide a specific reason for denied prior authorization decisions. These decisions do not need to be communicated via the standard electronic process. These policies will take effect on January 1, 2026.
Beginning January 1, 2027, health plans must begin using a new standardized Prior Authorization API that will communicate prior authorization decisions and provide the documentation requirements for the request.
In addition to the prior authorization improvements, CMS is finalizing the creation of three new APIs which must be implemented by January 1, 2027:
- A Patient Access API which will provide patients with information about prior authorizations for their medical care,
- A Payer-to-Payer API to allow health plans to exchange patient health information when a patient switches to a new health plan, and
- A Provider Access API to which impacted payers must implement. This API will facilitate sharing of patient data with in-network providers with whom the patient has a treatment relationship. Impacted payers will be required to make the following data available via the Provider Access API: individual claims and encounter data (without provider remittances and enrollee cost-sharing information); data classes and data elements in the United States Core Data for Interoperability (USCDI); and specified prior authorization information (excluding those for drugs).
The final rule largely mirrors bipartisan legislation in Congress called the Improving Seniors Timely Access to Care Act. Congress might not feel there is a need to continue advancing this bill if the final rule is similar to the legislation. The final rule is also not expected to cause much controversy outside of Congress as it has support from both the payer and provider community
Top Stories in Healthcare Policy
On Wednesday, the Supreme Court heard oral arguments in a case regarding the legal doctrine of “Chevron deference.” Overturning the doctrine would impact healthcare by limiting federal agencies’ regulatory authority in administering programs such as Medicare and Medicaid.
Twelve state attorney generals sent a letter to the U.S. Drug Enforcement Agency this week requesting that cannabis be reduced from a Schedule I to a Schedule III controlled substance. Doing so would provide the states an opportunity to regulate the cannabis industry.
A group of Senate Democrats submitted a letter to the Office of Management and Budget last Friday asking for final rules to be published on banning menthol-flavored cigarettes. Originally proposed in 2022, the ban has been delayed by the Biden administration until March of this year.
NPR reports that according to 46Brooklyn Research around 600 drug prices have increased in January 2024. Price increases are at a lower percentage than they were during the last decade and significant decreases in prices for inhalers and insulin were noted.
RSV vaccination appointments are promoting the utilization of other preventive healthcare services for older Americans who have not had a recent primary care visit. However, RSV vaccination rates remain low at about 20%.
The Department of Veteran Affairs reported this week that almost 50,000 veterans utilized the emergency suicide prevention program that was created last year. This program provides emergency services at no cost for veterans experiencing an acute suicidal crisis.
The FDA has authorized the use of AI in a medical device from DermaSensor to assist in skin cancer diagnoses. The algorithm for the device has been trained to assess lesions and is meant to be used in conjunction with a first diagnosis from a practicing physician or dermatologist.
Last Friday, four senators introduced the Health Care PRICE Transparency Act 2.0. This bill would require that health plan rates and actual prices of services be made available.
CDC data through January 6th shows that COVID-19 hospitalizations increased for nine consecutive weeks.