On December 22, 2023, FDA issued final guidance–Digital Health Technologies for Remote Data Acquisition in Clinical Investigations. This final guidance is aimed at sponsors and others who may be involved in remote data acquisition for clinical trials to evaluate medical products. As digital health technologies (DHTs) used for remote data acquisition are playing a growing role in health care and offer important opportunities in clinical research the FDA is providing guidance for ensuring that technologies used are safe, appropriate, and store and transmit data appropriately. Highlights of the guidance are below.

Continue Reading FDA Releases Guidance on Digital Health Technologies for Clinical Investigations  

On November 2, Crowell hosted an in-person roundtable discussion, featuring government officials, industry experts and other stakeholders, to discuss the development of artificial intelligence (AI) and machine learning (ML) systems and tools in the healthcare sector as well as the government’s role in regulating such technology. Policy makers, thought leaders, healthcare innovators, and business executives came together for a lively and engaging conversation. 

Continue Reading Crowell Presents “AI and Health Care: Perspectives from Policymakers and Movers in the Industry” 

On August 18, 2023, the World Bank issued a publication entitled, “Digital-in-Health: Unlocking the Value for Everyone (“World Bank Report”),” which recommends to governments a new digital-in-health approach where digital technology and data are infused into every aspect of health systems management and health service delivery to improve individuals’ health outcomes. The stated goal of the World Bank Report is to provide governments and other stakeholders with practical guidance on how to build digital health infrastructure, regardless of a country’s digital maturity or fiscal challenges.

Continue Reading World Bank Issues Digital Health Recommendations in Report

On November 2, 2023, the Centers for Medicare & Medicaid Services (“CMS”) released the calendar year (“CY”) 2024 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Final Rule (“CY 2024 OPPS/ASC Final Rule”). The final rule with comment period finalizes payment rates and policy changes affecting Medicare services furnished in hospital outpatient and ambulatory surgical center (“ASC”) settings for CY 2024.

Key Takeaways

  • In the CY 2024 OPPS/ASC Final Rule, CMS increased payment rates under the Hospital Outpatient Prospective Payment System and the ASC Payment System by a productivity-adjusted market basket factor of 3.1 percent.
  • CMS finalized changes to several hospital price transparency requirements, including requiring hospitals to use a template to submit charge information and requiring hospitals to affirm the accuracy of that information. CMS also finalized its implementation of the intensive outpatient program benefit, expanding federal support for behavioral health services.
  • The provisions of the CY 2024 OPPS/ASC Final Rule are effective January 1, 2024. Below we provide an overview of key provisions included in the CY 2024 OPPS/ASC Final Rule.

The CY 2024 OPPS/ASC Final Rule includes the following provisions.

Updates to OPPS and ASC payment rates: CMS finalized OPPS payment rates for hospitals and ASCs that meet applicable quality reporting requirements by 3.1 percent. This increase factor is based on the final inpatient hospital market basket percentage increase of 3.3 percent for inpatient services paid under the hospital inpatient prospective payment system (“IPPS”) reduced by a final productivity adjustment of 0.2 percentage point. This increase is 0.3 percent higher than the 2.8 percent increase outlined in the CY 2024 OPPS/ASC Proposed Rule.

ASC Rate Update Based on the Hospital Market Basket: CMS finalized extending the five-year interim period an additional two years, through CY 2024 and CY 2025. In the CY 2019 OPPS/ASC final rule, CMS finalized a policy to apply the productivity-adjusted hospital market basket update to ASC payment system rates for an interim period of five years (CY 2019-2023) in order to assess whether there is a migration of the performance of procedures from the hospital setting to the ASC setting as a result of the use of a productivity‑adjusted hospital market basket update. CMS extended the time period in the OPPS Final Rule to gather additional claims data further removed from the COVID-19 public health emergency (“PHE”) to more accurately analyze whether the application of the hospital market basket update to the ASC payment system affects the migration of services from the hospital setting to the ASC setting.

Intensive Outpatient Program: CMS established payment for intensive outpatient program (“IOP”) services under Medicare, thereby addressing a coverage gap when patients require more intense behavioral health services than traditional outpatient therapy but less than inpatient-level care provided by a partial hospitalization or hospitalization. The CY 2024 OPPS/ASC Final Rule includes the scope of benefits, physician certification requirements, coding and billing, and payment rates under the IOP benefit.

As mandated by section 4124 of The Consolidated Appropriations Act (“CAA”), 2023, CMS outlined the scope of benefits for IOP services. An IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder, consisting of a specified group of behavioral health services paid on a per diem basis under the OPPS or other applicable payment system when furnished in hospital outpatient departments, Community Mental Health Centers (“CMHCs”), Federally Qualified Health Centers (“FQHCs”), and Rural Health Clinics (“RHCs”). IOP services may also be furnished in Opioid Treatment Programs (“OTPs”) for the treatment of opioid use disorder.

OPPS Payment for Remote Mental Health Services: CMS finalized technical changes to reflect additional information provided by interested parties regarding how these services are furnished, including creating a new untimed code describing group psychotherapy intended to reduce administrative burden and increase access to group psychotherapy.

OPPS and ASC Payment for Dental Services: CMS finalized Medicare payment rates under the OPPS for over 240 dental codes to align with the dental payment provisions in the CY 2023 Physician Fee Schedule final rule by assigning them to clinical Ambulatory Payment Classifications. In addition, CMS finalized adding 26 separately payable dental surgical procedures to the ASC Covered Procedures List (“CPL”) and 78 ancillary dental services to the list of covered ancillary services to address patient access issues for dental services under anesthesia in the ASC setting.

Hospital Price Transparency: CMS finalized a number of requirements under the hospital price transparency regulations.

  • Standardization of Data Elements in Machine Readable Files (“MRF”): Beginning July 1, 2024, CMS is requiring hospitals to display their standard charge information and an expanded list of data elements within a CMS template layout, and according to CMS data specifications and dictionary.
  • Accessibility: CMS finalized two changes that would enable access to the files and standard charges data, including: 1) requiring hospitals to place a ‘footer’ at the bottom of the hospital’s homepage that links to the webpage that includes the MRF; and 2) requiring hospitals to ensure that a .txt file is included in the root folder of the publicly available website chosen by the hospital for posting its MRF.
  • Required Affirmation Statement: Beginning January 1, 2024, CMS is requiring that each hospital affirm that the data in the MRF is true, accurate, and complete to the best of the hospital’s knowledge and belief.
  • Enforcement: CMS finalized various updates to its assessment, monitoring, and enforcement mechanisms for hospital price transparency. For example, hospitals must submit acknowledgement of receipt of a CMS warning notice. The updates also provide that CMS may require an authorized hospital official to submit certification as to the accuracy and completeness of the data in the MRF. In addition, for hospitals that are part of a health system, CMS may also notify not just the hospital but also health system leadership of the noncompliance and corrective action to address deficiencies across the health system.

Rural Emergency Hospitals— Payment for Indian Health Service \ Facilities and Tribal Facilities: As mandated by the Consolidated Appropriations Act, 2021, CMS finalized regulations establishing the Rural Emergency Hospital (“REH”) provider type. A hospital is eligible to convert to an REH if it is a critical access hospital or rural hospital with no more than 50 beds, participating in Medicare as of the date of enactment of the statute. According to CMS, some Tribal and Indian Health Service (“IHS”) hospitals have expressed interest in converting to an REH but have expressed significant concerns about transitioning from their existing payment methodology under the All-Inclusive-Rate (“AIR”) the REH payment methodology.

In the CY 2024 OPPS/ASC Final Rule, CMS finalized a policy where IHS and Tribal facilities that convert to REHs will be paid for hospital outpatient services under the same AIR that would otherwise apply if these services were performed by an IHS or Tribal hospital that is not an REH. The existing beneficiary coinsurance policies applicable to such services under the AIR would remain the same. CMS also finalized a policy where IHS and Tribal facilities that convert to REHs would receive the REH monthly facility payment consistent with how this payment is applied to REHs that are not tribally or IHS operated.

Additional Costs of Establishing and Maintaining a Buffer Stock of Essential Medicines: In the proposed rule, CMS sought comment on separate payment under the IPPS for establishing and maintaining access to a buffer stock of one or more of 86 essential medicines to foster a more reliable, resilient supply of these medicines. While CMS is not adopting a policy regarding payment, the agency agrees with commenters that a multifaceted approach is necessary and intend to propose new Conditions of Participation in forthcoming notice and comment rulemaking addressing hospital processes for pharmaceutical supply.

OPPS Payment for Drugs Acquired Through the 340B Program: For CY 2024, consistent with the policy finalized for CY 2023, CMS finalized its proposal without modification to continue to pay for 340B acquired drugs and biologicals at the statutory default rate, which is generally average sales price (“ASP”) plus 6%.

In CYs 2018 and 2019 OPPS/ASC Final Rules, CMS finalized a policy that Medicare would reimburse hospital outpatient drugs purchased with a 340B discount at ASP minus 22.5 percent for physician-administered drugs, a departure from previous payment policy of ASP plus 6 percent. The CMS policy prompted litigation, which was the subject of a recent U.S. Supreme Court decision. Under the CY 2023 OPPS Final Rule, CMS restored payments for 340B drugs under OPPS to the total ASP plus 6 percent rate. The Supreme Court left open the question of the appropriate remedy for repayment.

In a separate final rule, CMS is repaying 340B hospitals underpaid from 2018 to 2022 in a single lump sum payment to each affected hospital. CMS estimates these repayments will total $10.6 billion in the aggregate and be made to 1,686 340B hospitals.

Hospital Outpatient/ASC/REH Quality Reporting Programs: CMS finalized a number of changes to the Hospital Outpatient Quality Reporting (“OQR”), Ambulatory Surgical Center Quality Reporting (“ASCQR”), and Rural Emergency Hospital Quality Reporting (“REHQR”) Programs to further meaningful measurement and reporting of quality of care in the outpatient setting.

Conclusion

The CY 2024 OPPS/ASC Final Rule can be viewed on the Federal Register here. CMS also released a fact sheet on the final rule in addition to one specifically on the rule’s hospital price transparency provisions.

For more information or additional analysis on the CY 2024 OPPS/ASC Final Rule’s provisions, please contact the professionals listed below, or your regular Crowell contact.

On October 30, President Joe Biden signed an Executive Order (“EO”) 14110 entitled, “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which establishes a policy framework to manage the risks of artificial intelligence (“AI”), to direct agency action to regulate the use of health AI systems and tools, and to guide AI innovation across all sectors, including in the health and human services sectors. OMB simultaneously released a draft memorandum that would specifically direct department and agency action by establishing new agency requirements in AI governance, innovation, and risk management and adopting specific minimum risk management practices for uses of AI. OMB is seeking public comment on the memorandum by December 5, 2023, which includes a list of questions requesting feedback on specific issues.

Continue Reading How President Biden’s Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence Addresses Health Care

On October 11, the National Institutes of Health (“NIH”) issued a request for information (“RFI”), which proposes sample language regarding the use of digital health technologies in research for inclusion in informed consent documents and requests public feedback on the utility and usability of the proposed language. Comments on the RFI are due by December 12, 2023.

Continue Reading NIH Requests Information on Developing Consent Language for Research Using Digital Health Technologies

On October 17, 2023, CMS held their quarterly National Stakeholder Call to provide updates on recent accomplishments and how their initiatives advance CMS’ Strategic Plan. Administrator Chiquita Brooks-LaSure, kicked off the call by announcing the start of Medicare open-enrollment and how the entire agency is focused on educating beneficiaries on all 2024 benefits and encouraging people to renew their vaccinations which are available at no additional cost. Brooks-LaSure also revealed how for the first-time, high-cost prescription drugs will have a “catastrophic limit” in 2024. Dr. Meena Seshamani, the Director for the Center for Medicare explained that in 2024, Part D enrollees who reach what CMS calls “catastrophic fees” (the maximum threshold for paying out of pocket) will no longer have to pay a co-pay or out of pocket costs at the pharmacy. Dr. Seshamani also shared that beneficiaries taking insulin will not have to pay more than $35 for each supply of insulin products covered under part D and that people will not have to pay nothing out of pocket for recommended vaccines like shingles. CMS also spoke about the drugs selected for the Medicare Drug Price Negotiation program. CMS will have a patient-focused listening session on 11/15 for each selected drug to provide an opportunity for patients, beneficiaries, caregivers, and patient organizations can share relevant input for these selected drugs. Lastly, Dr. Seshamani shared that ACOs participating in the Medicare Shared Savings Program (MSSP) saved Medicare $1.8 billion in 2022. This is the 6th consecutive year that the program has generated overall savings, and the 2nd highest annual savings accrued for Medicare since the program’s inception.

Continue Reading Current CMS Policy Priorities and Initiatives in Quarter 4

The Centers for Medicare & Medicaid Services (CMS) published new changes to the ACO REACH model to increase predictability for participating ACOs, protect against inappropriate risk score growth, and to advance health equity starting in performance year 2024 (PY2024). The ACO REACH model was created to deliver high-quality and coordinated care to patients while improving costs and health outcomes. Patients in a REACH ACO get help to manage chronic conditions, to receive more preventative health services, to receive care in more convenient ways like telehealth, and to better navigate the health system. When ACOs in the program achieve these goals of providing higher-quality care at a lower cost, they may be eligible to share in those savings. There are currently 132 ACOs participating in this model.

Continue Reading CMS releases updates to the ACO REACH model to advance health equity and increase participation

On October 30, President Joe Biden signed an Executive Order (“EO”) 14110 entitled the, “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which establishes a policy framework to manage the risks of artificial intelligence (“AI”); to direct agency action to regulate the use of health AI systems and tools; and to guide AI innovation across all sectors, including in the health and human services sectors.

The EO outlines eight guiding principles and priorities to advance and govern the use of AI: (i) ensure safe and secure AI technology; (ii) promote responsible innovation, competition, and collaboration; (iii) support American workers; (iv) advance equity and civil rights; (v) protect American consumers, patients, passengers, and students; (vi) protect privacy and civil liberties; (vii) manage the federal government’s use of AI; and (viii) strengthen U.S. leadership abroad, safeguarding ways to develop and deploy AI technology responsibly.

The EO encourages independent federal agencies to leverage their current authorities and impose current applicable requirements to protect Americans from fraud, discrimination, threats to privacy, and other risks arising from AI in the health and human services, education, transportation and communication sectors. The EO contains a number of provisions aimed at the Secretary of the Department of Health and Human Services (“HHS”) to develop policies on the use of AI in health care. These policies will build on existing HHS efforts by the U.S. Food and Drug Administration (“FDA”) and Office of the National Coordinator for Health Information Technology (“ONC”) related to the use of AI in the health and human sector, but will provide a more comprehensive approach beyond their current jurisdictions. For example, we will likely see guidance regarding nondiscrimination and privacy of health data related to AI and patient safety reporting.

In addition, the Biden Administration stated it will work with Congress as it continues to develop legislation on AI. The Administration also highlighted the importance of protecting individuals’ privacy when deploying AI tools and technologies and calls on Congress to pass comprehensive data privacy legislation.

This summary focuses on the EO’s health and human sector provisions, but the EO covers policies to govern AI generally and includes provisions that have multi-sector impact, including health care. (Crowell’s client alert provides a summary of all of the EO’s provisions.) Specifically, the EO directs the Secretary of HHS as follows:

  • Establish an HHS AI Task Force and develop a Strategic Plan on responsible deployment of AI by January 27, 2025 in the health and human services sector, including in the following areas:
    • development, maintenance, and use of predictive and generative AI-enabled technologies in health care delivery;
    • long-term safety and real-world performance monitoring of AI-enabled technologies;
    • incorporation of equity principles in AI-enabled technologies used in the health and human services sector, including protecting against bias;
    • incorporation of safety, privacy, and security standards into the software-development lifecycle for protection of personally identifiable information;
    • development and availability of documentation to help users determine appropriate and safe uses of AI in local settings;
    • work with state, local, tribal, and territorial health and human services agencies to advance positive use cases and best practices for use of AI in local settings; and
    • identifying uses of AI to promote workplace efficiency and satisfaction.
  • Develop a quality strategy by April 27, 2024 to determine whether AI-enabled technologies in the health and human services sector maintain appropriate levels of quality, including in the areas described above. This work would include the development of AI assurance policy and infrastructure needs for enabling premarket assessment and post-market oversight of AI-enabled health care technology algorithmic system performance against real-world data.
  • Advance nondiscrimination compliance by April 27, 2024 by considering appropriate actions to advance the prompt understanding of and compliance with federal nondiscrimination laws by health and human service providers that receive federal financial assistance, as well as how those laws relate to AI. These include convening and providing technical assistance about the obligations and the potential consequences of noncompliance with federal nondiscrimination and privacy laws as they relate to AI; and issuing guidance, or taking other action as appropriate, in response to any complaints or other reports of noncompliance.
  • Establish an AI Safety Program by October 29, 2024 that, in partnership with voluntary federally listed patient safety organizations (“PSOs”) establishes a common framework for approaches to identifying and capturing clinical errors resulting from AI deployed in health care settings as well as specifications for a central tracking repository for associated incidents that cause harm to patients, caregivers, or other parties; analyzes captured data and generated evidence to develop informal guidelines aimed at avoiding these harms; and disseminates those informal guidance to appropriate stakeholders.
  • Develop a Strategy for regulating use of AI in drug development by October 29, 2024 that would, at a minimum: (i) define the objectives, goals, and high-level principles required for appropriate regulation throughout each phase of drug development; (ii) identify areas where future rulemaking, guidance, or additional legislative authority may be necessary to implement such a regulatory system; (iv) identify the existing budget, resources, personnel, and potential for new public/private partnerships necessary for such a regulatory system; and (v) consider risks identified by the actions undertaken to implement section 4 of this order.

The EO also included a number of other provisions that would apply to the health and human sector, including for the National Institutes of Health (“NIH”) to prioritize grantmaking and cooperative agreement awards to promote innovation and competition.

To implement its policies, the EO creates the White House Artificial Intelligence Council, which will coordinate the activities of agencies across the federal government to ensure the effective formulation, development, communication, industry engagement related to, and timely implementation of AI-related policies (including policies set forth in the EO). Following the release of the EO, the Office of Management and Budget (“OMB”) released companion guidance to establish AI governance structures in federal agencies, advance responsible AI innovation, increase transparency, protect federal workers, and manage risks from government uses of AI.

Takeaways

The wide-ranging, long-awaited EO establishes a comprehensive vision for the responsible use and governance of AI. By establishing principles and including health care-specific directives, the Biden Administration has created an overarching framework that will have a significant impact on health care stakeholders’ development and deployment of AI systems and technologies. In addition, the EO offers a number of opportunities for government engagement and grant funding. As outlined, the various health and human sector provisions will be operationalized within the next several months. Stakeholders should expect to see agency-level developments and continue to track updates from the White House and various agencies (i.e., FDA, ONC, CMS, OCR).

Crowell will continue to provide analysis as federal agencies work to implement the policies described in the EO. For more information about the EO, please contact the professionals listed below, or your regular Crowell contact.

Infographic outlining CMS' plan for Medicare beneficiaries to pay prescription drug costs in monthly installments. More information below.

On August 21, 2023, the Centers for Medicare & Medicaid Services (CMS) released draft guidance, pursuant to the Inflation Reduction Act (IRA), to implement the Medicare Prescription Payment Plan, a new program to help Medicare Part D beneficiaries more easily afford their out-of-pocket (OOP) costs for prescription drugs. The IRA, among other provisions aimed at lowering prescription drug costs for Medicare beneficiaries, requires, starting in 2025, that Medicare Part D plan sponsors offer beneficiaries the option to pay their OOP costs for prescription drugs monthly over a year instead of at the point of sale. Under the new program, referred to as the Medicare Prescription Payment Plan, Part D sponsors must pay the pharmacy the OOP cost-sharing that beneficiaries would have paid if they were not in the program. Part D plan sponsors then will bill beneficiaries monthly for their OOP responsibility.

Continue Reading CMS Outlines Plan for Medicare Beneficiaries to Pay Prescription Drug Costs in Monthly Installments