The ever-changing healthcare policy landscape will witness at the federal level regulatory changes driven by the need to transform healthcare delivery, quality and innovation. Looking forward in 2024, this summary examines a number of healthcare innovation topics that have seen significant policy activity in recent years and that are relevant to healthcare stakeholders, including providers, plans, electronic health record (EHR) vendors and health technology companies.

Stakeholders should use this summary to examine existing regulatory and compliance gaps, prepare their organizations to comply with forthcoming federal regulations, and keep apprised of federal funding opportunities. For more information on these policy developments, please contact the professionals listed below, or your regular Crowell contact.

Continue Reading Healthcare Policy Developments to Watch in 2024

On January 30, the Centers for Medicare & Medicaid Services’ (CMS’) Innovation Center announced that sickle cell disease (SCD) will be the first focus of the Cell and Gene Therapy (CGT) Access Model, a model for eligible states and pharmaceutical manufacturers designed to improve Medicaid beneficiaries’ access to cell and gene therapies.

Continue Reading CMS Innovation Center Announces Sickle Cell Disease Focus under Cell and Gene Therapy Access Model

On November 2, 2023, the Centers for Medicare & Medicaid Services (“CMS”) released the calendar year (“CY”) 2024 Physician Fee Schedule (PFS) Final Rule (“CY 2024 PFS Final Rule”). The final rule reflects CMS’ broader strategy to promote a more equitable health care system.

Key Takeaways

  • In the CY 2024 PFS Final Rule, CMS decreased payment rates by 1.25% while increasing rates for primary care.
  • CMS finalized changes for services that address health-related social needs to allow patients to better access patient navigation services. In addition, CMS finalized proposals related to telehealth by adding additional services to the Social Determinants of Health Risk Assessments and related to payment changes for opioid treatment programs, diabetes screening, and vaccination administration services.
  • The provisions of the CY 2024 PFS Final Rule are effective starting January 1, 2024. Below we provide an overview on a few of the key provisions included in the CY 2024 PFS Final Rule related to payment rates, SDOH, value-based care, and telehealth.

The CY 2024 PFS Final Rule includes the following provisions:

Updates to PFS payment rates: CMS reduced PFS payment rates by 1.25% in CY 2024 compared to CY 2023. The final CY 2024 PFS conversion factor is $32.74, a decrease of $1.15 (or 3.4%) from the current CY 2023 conversion factor of $33.89. On the other hand, CMS is finalizing increases in payment rates for primary care and other types of direct patient care.

Updates for Services Addressing Health-Related Social Needs: To align with the HHS Social Determinants of Health Action Plan and help implement the Biden-Harris Cancer Moonshot goal of helping patients with cancer have access to better patient navigation services, CMS finalized coding and payment changes for resources involved in furnishing patient-centered care involving a multidisciplinary team of clinical staff and other auxiliary personnel.

One of those changes was finalizing separate payment codes for Community Health Integration, Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation services to account for resources involving various types of health care support staff such as community health workers, care navigators, and peer support specialists. The Principal Navigation codes are used to describe services involving auxiliary personnel, such as peer support specialists to better support individuals with behavioral health conditions like severe mental illness and substance use disorder. The SDOH risk assessment codes will be used to recognize when practitioners spend time and resources assessing SDOH that may be impacting their ability to treat the patient. In addition to the risk assessment codes, CMS also added the SDOH risk assessment to the annual wellness visit as an optional element with an additional payment and no patient coinsurance nor deductible (when provided with the annual wellness visit). Lastly, CMS finalized codes and payments for SDOH risk assessments given out during an evaluation or behavioral health visit.

Telehealth Services under the PFS: In the CY 2024 PFS final rule, CMS finalized their proposal to add health and well-being coaching services to the Medicare Telehealth Services List on a temporary basis for CY 2024, and Social Determinants of Health Risk Assessments on a permanent basis.

CMS also finalized the implementation of several telehealth-related provisions of the Consolidated Appropriations Act, 2023 (CAA, 2023):

  • The expansion of the (1) scope of telehealth originating sites for services furnished via telehealth to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual’s home; and (2) definition of telehealth practitioners to include qualified occupational therapists, qualified physical therapists, qualified speech-language pathologists, and qualified audiologists.
  • The continued payment and coverage of (1) telehealth services furnished by Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) using the methodology established for those telehealth services during the COVID-19 PHE; and (2) telehealth services included on the Medicare Telehealth Services List (as of March 15, 2020) until December 31, 2024.
  • Delaying the requirement for an in-person visit with the physician or practitioner within six months prior to initiating mental health telehealth services, and again at subsequent intervals as the Secretary determines appropriate, as well as similar requirements for RHCs and FQHC.
  • Telehealth services furnished to people in their homes will be paid at the non-facility PFS rate to protect access to mental health and other telehealth services by aligning with telehealth-related flexibilities that were extended.
  • Define direct supervision to permit the presence and immediate availability of the supervising practitioner through real-time audio and video interactive telecommunications through December 31, 2024.

Updates to Remote Therapeutic Monitoring (RTM) services: CMS finalized their proposal to include Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) in the general care management HCPCS code G0511 when these services are provided by RHCs and FQHCs. Additionally, CMS finalized a regulatory change to allow therapy assistants to be supervised by physical and occupational therapists in private practice for RTM services. This change aligns with the RTM general supervision policy that CMS finalized in their CY 2023 rulemaking. In the final rule, CMS clarified that the 16-day data requirement does not specifically apply to RTM CPT codes 98980 and 98981.

Medicare Part B Payment for Preventive Vaccine Administration Services: CMS finalized three proposals for vaccination payment continuity. CMS finalized the proposal to maintain the additional payment for the administration of a COVID-19 vaccine in the home, and to extend this in-home additional payment to the other three preventive vaccines: the pneumococcal, influenza, and hepatitis B vaccines – when provided in the home. Relatedly, CMS also finalized the proposal to limit the additional payment to one payment per home visit, even if multiple vaccines are administered during the same home visit. Lastly, effective January 1, 2024, Medicare will pay the same payment amount for the in-home administration of all four vaccines.  

Behavioral Health Services: In the PFS final rule, CMS implements Section 4123 of the CAA, 2023, which requires the Secretary to establish new HCPCS codes for psychotherapy for crisis services that are furnished in an applicable site of service. This section specifies that the payment amount for psychotherapy for crisis services shall be equal to 150% of the fee schedule amount for non-facility sites of service for each year for the services identified.

CMS is now allowing the Health Behavior Assessment and Intervention (HBAI) service codes (CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and 96168, and any successor codes) to be also billed by clinical social workers, marriage and family therapists (MFTs), and mental health counselors (MHCs) in addition to clinical psychologists.

CMS also finalized the proposal to apply an adjustment to the work relative value units (RVUs) for psychotherapy codes payable under the PFS which will be implemented over a four-year transition.

Opioid Treatment Programs (OTPs): The CY 2024 final rule will now allow OTPs to bill Medicare under the Part B OTP benefit for furnishing periodic assessments via audio-only telecommunications when video is not available to the beneficiary. CMS is also finalizing their proposal to extend current flexibilities for periodic assessments given over via audio-only telecommunications through the end of CY 2024.

Expanded Diabetes Screening and Medicare Diabetes Prevention Program (MDPP) Expanded Model: The PFS final rule aims to remove barriers, reduce provider and patient burden and confusion, and allow for greater person-centered care in expanding diabetes screen frequency limitations. CMS finalized their proposal to expand coverage of diabetes screening to include the Hemoglobin A1c (HbA1c) test and to simplify the regulatory definition of “diabetes” for diabetes screening, Medical Nutrition Therapy (MNT) and Diabetes Outpatient Self-Management Training Services (DSMT).

For the MDPP Expanded Model, CMS finalized changes to (1) extend the model’s Public Health Emergency Flexibilities for four years, which will allow all MDPP suppliers to continue to offer MDPP services virtually through December 31, 2027; and (2) simplify MDPP’s current performance-based payment structure by allowing fee-for-service payments for beneficiary attendance.

Provisions from the Inflation Reduction Act Relating to Drugs and Biologicals Payable Under Medicare Part B: The PFS final rule addressed the following changes related to drugs and biologicals:

  • Section 11101 requires that beneficiary coinsurance for a Part B rebatable drug is to be based on the inflation-adjusted payment amount if the Medicare payment amount for a calendar quarter exceeds the inflation-adjusted payment amount, beginning on April 1, 2023. CMS issued initial guidance implementing this provision and are finalizing conforming changes to regulatory text.
  • Section 11407 provides that for insulin furnished through an item of durable medical equipment (DME) on or after July 1, 2023, the deductible is waived and coinsurance is limited to $35 for a month’s supply of insulin furnished through a covered item of DME. CMS is finalizing the codification of this provision for 2024 and future years.
  • Section 11402 amends the payment limit for new biosimilars furnished on or after July 1, 2024, during the initial period when the average sales price (ASP) data is not available. CMS is finalizing the codification of this provision in subsequent regulation.
  • Section 11403 makes changes to the payment limit for certain biosimilars with an ASP that is not more than the ASP of the reference biological for a period of five years. CMS is finalizing conforming changes to regulatory text to reflect these provisions.

Conclusion

The CY 2024 PFS Final Rule can be viewed on the Federal Register here. CMS also released a fact sheet on the final rule.

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

On November 28, Crowell Health Solutions published a white paper outlining several policy recommendations to advance widespread adoption of decentralized clinical trials (DCTs). The white paper titled, “Advancing Adoption of Decentralized Clinical Trials: Rationale, Current State, and Policy Recommendations” examines the current environment on decentralized and hybrid clinical trials, including a discussion on benefits and challenges that DCTs may pose; existing legislation and regulation; and background on programs and policies that can be leveraged to support DCT adoption.

Continue Reading Crowell Health Solutions Examines the Adoption of Decentralized Clinical Trials and Provides Policy Recommendations

On October 24, 2023, the U.S. Food and Drug Administration (“FDA”), Health Canada, and the U.K.’s Medicines and Healthcare products Regulatory Agency (“MHRA”) jointly released a publication identifying five guiding principles for predetermined change control plans (“PCCP”) for machine learning-enabled medical devices (“MLMD Guiding Principles”).

Continue Reading FDA Releases Predetermined Change Control Plans for Machine Learning-Enabled Medical Devices: Guiding Principles

On October 19, 2023, the U.S. Food and Drug Administration (FDA) issued final guidance entitled, “Enforcement Policy for Non-Invasive Remote Monitoring Devices Used to Support Patient Monitoring,” (the Final Guidance) to provide clarification on its enforcement policies and premarket review expectations for certain non-invasive remote monitoring devices used for patient monitoring at the conclusion of the COVID-19 public health emergency (PHE). Specifically, the FDA will continue to allow most remote monitoring devices to be used in home settings and to allow certain hardware or software changes to allow for increased remote monitoring capabilities under enforcement discretion.

Continue Reading FDA Issues Final Guidance on Enforcement Policy for Non-Invasive Remote Monitoring Devices Used to Support Patient Monitoring

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.