Health Care Week in Review: Biden Administration Released a Final Rule on Surprise Billing

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, the Biden Administration released a final rule on surprise billing, President Biden issued an Executive Order on the implementation of the CHIPS Act of 2022, and HHS took action to strengthen access to reproductive health care. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On August 22, 2022, the Office of Inspector General (OIG), Department of Health and Human Services (HHS), issued a notice entitled, Publication of OIG Special Fraud Alerts. This notice discusses two Special Fraud Alerts previously published by OIG. The first Special Fraud Alert, entitled Speaker Programs, highlights the fraud and abuse risks associated with the offer, payment, solicitation, or receipt of remuneration relating to speaker programs by pharmaceutical and medical device companies. The second Special Fraud Alert, entitled OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies, details OIG’s investigation of fraud schemes involving companies that purported to provide telehealth, telemedicine, or telemarketing services and exploited the growing acceptance and use of telehealth.
• On August 22, 2022, the Food and Drug Administration (FDA) issued revised draft guidance entitled, Charging for Investigational Drugs under an Investigational New Drug Application: Questions and Answers. This guidance answers recent questions received from stakeholders on the implementation of FDA’s regulation on charging for investigational drugs under an investigational new drug application (IND) for the purpose of either clinical trials or expanded access for treatment use. Comments on this draft guidance are due by October 24, 2022.
• On August 22, 2022, the Centers for Medicare & Medicaid Services (CMS), issued an informational bulletin entitled, Medicaid nursing facility payment approaches to advance health equity and improve health outcomes. This Center for Medicaid & CHIP Services (CMCS) Informational Bulletin describes actions that states can implement using existing Medicaid authority to provide adequate, performance-driven nursing facility payment rates to ultimately achieve better health care outcomes and address longstanding inequities for Medicaid beneficiaries residing in nursing facilities. CMS also encourages states to “rebalance” their long-term services and supports (LTSS) systems to provide more home and community-based services (HCBS) relative to institutional care. The bulletin further describes CMS’ initiatives through the Medicaid program to use provider payment structures to encourage quality of care, to improve accountability in nursing facilities, to support high-quality staffing, and to address safety issues during emergencies and pandemics.
• On August 23, 2022, FDA issued final guidance entitled, Tobacco Products: Principles for Designing and Conducting Tobacco Product Perception and Intention Studies. This guidance provides information intended to assist applicants design and conduct tobacco product perception and intention (TPPI) studies that may be submitted as part of a modified risk tobacco product application (MRTPA), a premarket tobacco product application (PMTA), or a substantial equivalence (SE) report. TPPI studies can help applicants demonstrate that their product meets the applicable premarket authorization standard. This guidance also discusses scientific issues applicants should consider as they design and conduct TPPI studies.
• On August 24, 2022, HHS and the Departments of Labor and Treasury jointly issued a final rule entitled, Requirements Related to Surprise Billing. This rule finalizes provisions of the No Surprises Act, which provides surprise billing protections to consumers seeking emergency care, non-emergency care from out-of-network providers at in-network facilities, and air ambulance services from out-of-network providers. Specifically, the No Surprises Act provides Federal protections against surprise billing by limiting out-of-network cost sharing and prohibiting “balance billing,” which is when out-of-network providers bill patients for the difference between the charges and the amount collected from the plan and the patient’s cost share. Provisions in this final rule include: (1) determination of appropriate out-of-network rates in the federal Independent Dispute Resolution (IDR) process, including treatment of the qualifying payment amount (QPA); (2) additional disclosures when claims subject to the surprise billing prohibitions are “downcoded;” and (3) required content of written IDR decisions.
• On August 24, 2022, CMS issued a notice entitled, Proposed Rule: Clinical Laboratory Improvement Amendments Fees; Histocompatibility, Personnel, and Alternative Sanctions for Certificate of Waiver Laboratories; Extension of Comment Period. The proposed rule updates the Clinical Laboratory Improvement Amendments of 1988 (CLIA) fees and clarifies the CLIA fee regulations. It includes proposals to: (1) provide sustainable funding for the CLIA program through a biennial two-part increase of CLIA fees; (2) incorporate limited/specific laboratory fees, substantiated complaint surveys, and revised certificates; (3) distribute administrative overhead costs of test complexity determination for waived tests and systems with an increase in Certificate of Waiver (CoW) fees; (4) clarify the methodology used to determine program compliance fees; (5) amend histocompatibility and personnel regulations under CLIA to address obsolete regulations and update the regulations to incorporate technological changes; and (6) amend the provisions governing alternative sanctions to allow for the imposition of such sanctions on CoW laboratories. This notice announced that the comment period has been extended until September 26, 2022.
• On August 25, 2022, CMS issued a final rule entitled, Radiation Oncology (RO) Model. This final rule delays implementation of the RO Model from January 1, 2023 to a date to be determined in future rulemaking. This final rule is the latest of several delays to the model’s implementation, which was initially set to begin on January 1, 2021. The RO Model was designed to test whether making site-neutral, prospective, episode-based payments to hospital outpatient departments, physician group practices, and freestanding radiation therapy centers for radiation therapy (RT) episodes of care would preserve or enhance the quality of care furnished to Medicare beneficiaries while reducing or maintaining Medicare program spending. The RO Model’s initial January 1, 2021 start date was first delayed by six months due to the COVID-19 public health emergency (PHE). Congress further delayed the model twice through legislation, prohibiting CMS from implementing prior to January 1, 2022 and January 1, 2023 respectively. According to the final rule, CMS plans to give at least six months’ notice prior to implementation.
• On August 26, 2022, FDA issued draft guidance entitled, E11A Pediatric Extrapolation. Prepared under the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), this draft guidance provides a systematic approach to the use of pediatric extrapolation during drug development. This draft guidance also discusses study designs and statistical methodologies that can be utilized to develop and implement a pediatric extrapolation approach. This guidance is intended to provide recommendations for the use of pediatric extrapolation during drug development, which can increase the efficiency of pediatric drug development and accelerate the availability of safe and effective drugs approved for use in children. Comments are due by October 30, 2022.
• On August 26, 2022, FDA issued final guidance entitled, E14 and S7B Clinical and Nonclinical Evaluation of QT/QTc Interval Prolongation and Proarrhythmic Potential-Questions and Answers. Prepared under the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), this final guidance revises questions and answers (Q&As) for the ICH guidance that provide recommendations on considerations for an integrated risk assessment combining nonclinical and clinical data--in particular, at later stages of drug development when clinical data are available. This guidance is intended to provide a harmonized approach to integrate nonclinical and clinical information for proarrhythmia risk assessment to streamline drug development and provide clarity on regulatory decision making.
• On August 26, 2022, FDA issued draft guidance entitled, M12 Drug Interaction Studies. Prepared under the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), this draft guidance provides general recommendations on how to evaluate the pharmacokinetic drug interaction potential mediated via enzyme and transporter for investigational drugs. This guidance harmonizes the regional requirements on in vitro and clinical evaluation of drug-drug interactions for a more consistent approach in design, conduct, and interpretation of enzyme and transporter-mediated interaction during the development of an investigational drug. This draft guidance is intended to decrease the risk of adverse events, sometimes leading to hospital admissions or reduced treatment efficacy. Comments are due by September 28, 2022.

Event Notices

• September 1-2, 2022: The Centers for Disease Control and Prevention (CDC) announced a meeting of the Advisory Committee on Immunization Practices (ACIP). The agenda will include discussions on use of COVID-19 vaccines booster doses.
• September 6, 2022: The Substance Abuse and Mental Health Services Administration (SAMHSA) announced a meeting of the Advisory Committee for Women’s Services (ACWS). The meeting will include discussions on assessing SAMHSA’s current strategies, including the mental health and substance use needs of women and girls. Additionally, the ACWS will be addressing priorities regarding the impact of COVID-19 on the behavioral health needs of women and children and directions around behavioral health services and access for women and children.
• September 8, 2022: The National Institutes of Health (NIH) National Institute on Alcohol Abuse and Alcoholism (NIAAA) announced a change in time of a meeting of the National Advisory Council on Alcohol Abuse and Alcoholism. The meeting will be closed to the public for the first hour to review and evaluate grant applications. The agenda for the open portion will include presentations and discussions on other business of the Council.
• September 8-9, 2022: NIH announced a partially open meeting of the Fogarty International Center. The open agenda will include an update and discussion of current and planned Fogarty International Center activities.
• September 13, 2022: NIH announced a partially open meeting of the National Institute of Biomedical Imaging and Bioengineering (NIBIB). The open agenda will include a report from the Institute Director and other Institute Staff, as well as presentations by the task group.
• September 14-16, 2022: The Health Resources and Services Administration (HRSA) announced a public meeting of the National Advisory Committee on Rural Health and Human Services (NACRHHS). The agenda will include discussions on the provision of the Program of All-inclusive Care for the Elderly (PACE) in rural communities.
• September 15, 2022: The Agency for Healthcare Research and Quality (AHRQ) announced a meeting for software developers on the common formats for patient safety data collection. The agenda will include discussions of the implementation of the Common Formats with software developers and other interested parties.
• September 19, 2022: NIH announced an open meeting of the Center for Scientific Review Advisory Council (CSRAC). CSRAC will provide advice to the Director, Center for Scientific Review (CSR), on matters related to planning, execution, conduct, support, review, evaluation, and receipt and referral of grant applications at the Center for Scientific Review (CSR).
• September 20-21, 2022: NIH announced a partially open meeting of the National Institute of Mental Health’s (NIMH) National Advisory Mental Health Council (NAMHC). The open agenda will include a presentation of the NIMH Director's Report and discussion of NIMH programs.
• October 18, 2022: NIH announced a virtual and open meeting of the Office of Research on Women's Health (ORWH) Advisory Committee on Research on Women's Health. The agenda will include the ORWH Director's Report; a presentation from the Director of the National Institute of Environmental Health Sciences (NIEHS); a panel discussing the environmental effects on the health of women; a presentation on the content areas for the FY2024 - 2028 Strategic Plan on Research on the Health of Women; e-Learning course demonstration; and a discussion of ORWH concept clearance.
• October 31, 2022: FDA announced a public advisory committee meeting of the Endocrinologic and Metabolic Drugs Advisory Committee. The agenda will include committee discussion on a new drug application (NDA) 215559, for palovarotene capsules, submitted by Ipsen Biopharmaceuticals, Inc., which is proposed to prevent heterotopic ossification in adults and children with fibrodysplasia ossificans progressive.
• November 2-3, 2022: FDA announced a public advisory committee meeting of the Pharmaceutical Science and Clinical Pharmacology Advisory Committee. The agenda will include discussions on two topics related to the Office of Pharmaceutical Quality’s mission of promoting the availability of quality medicines for the American public: (1) the Center for Drug Evaluation and Research (CDER) Quality Management Maturity (QMM) program, and (2) the next stages of Knowledge-Aided Assessment and Structured Application (KASA).

II. Reports, Studies & Analyses

• On August 22, 2022, the Congressional Research Service (CRS) published an updated report entitled, Veterans Service Organizations (VSOs): Frequently Asked Questions. VSOs offer a wide range of services for veterans, service-members, dependents, and survivors, including job fairs, fundraising support, and housing. They are primarily nonprofit organizations or state, county, tribal, or local government agencies. This updated report answers frequently asked questions to clarify how VSOs are funded, administered, and connected to the federal government. This report also notes that there is no comprehensive directory listing all VSOs but provides several resources for identifying lists of selected VSOs.
• On August 22, 2022, the Kaiser Family Foundation (KFF) published an issue brief entitled, COVID-19 Cases and Deaths by Race/Ethnicity: Current Data and Changes Over Time. This brief examines racial disparities in COVID-19 cases and deaths and how they have changed over time based on CDC data. The authors report that overall, Black, Hispanic, American Indian or Alaska Native (AIAN), and Native Hawaiian or Other Pacific Islander (NHOPI) people have experienced higher rates of COVID-19 cases and deaths compared to White people. The authors also found that disparities in cases and deaths have generally widened during surges of the virus and narrowed during periods of decreasing infection rates. The issue brief concludes that structural inequities that result in disproportionate burden of cases and death among people of color remain.
• On August 23, 2022, authors from The RAND Corporation published an article in Health Affairs entitled, Predicting Race And Ethnicity To Ensure Equitable Algorithms For Health Care Decision Making. This article argues “race-blind” health care algorithms are misguided because knowledge and measurement of race and ethnicity are necessary to achieve health equity. The authors summarize that methodological approaches, which acknowledge race and ethnicity, can be used to enforce equitable algorithmic performance and combat bias. They describe two applications in which imputation of race and ethnicity can help mitigate potential biases: (1) equitable disease screening algorithms using machine learning and (2) equitable pay-for-performance (PFP) incentives. Regarding the first application, machine learning, the authors recommend first ensuring electronic health records capture complete race and ethnicity data and then assessing the screening algorithm for inequitable performance and adjusting accordingly. Regarding the second application, PFP, the authors recommend creating equitable PFP or value-based payment schemes that can then be used to ensure payments to providers are not correlated with the racial and ethnic composition of patient populations.
• On August 25, 2022, OIG released a memorandum entitled, Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the First Quarter of 2022 (OEI-03-22-00210). This memorandum summarizes the results of OIG’s comparison of average sales prices (ASPs) and average manufacturer prices (AMPs) for the first quarter of 2022. Currently, CMS substitutes 103 percent of the AMP for the ASP-based reimbursement amount if OIG identifies that the drug code exceeds the drug’s AMP by 5 percent or more. In other words, if the 5-percent threshold is met, the Secretary may disregard the drug’s ASP when setting the reimbursement amount and substitute the lesser of either the widely available market price or 103 percent of the AMP. Overall, this memorandum finds that eight drugs met CMS’ price-substitution criteria by exceeding the 5-percent threshold and 12 drugs exceeded the threshold but were not eligible under other price-substitution criteria.
• On August 25, 2022, the Kaiser Family Foundation released an issue brief entitled, Medicare Advantage in 2022: Enrollment Update and Key Trends. The report finds that nearly half of all Medicare beneficiaries in 2022 are enrolled in a Medicare Advantage (MA) plan, double the enrollment rate since 2007, and accounting for $427 billion (or 55 percent) of total federal Medicare spending. Total MA enrollment grew by about 8 percent from 2021 to 2022, and the Congressional Budget Office (CBO) projects that this will rise to 61 percent by 2032. The share of Medicare beneficiaries in MA plans varies greatly by state, and enrollment continues to be highly concentrated among just a few firms. The authors conclude that the exponential growth in MA plans highlights the importance of assessing MA payment methodology and care delivery to ensure beneficiaries can access timely, affordable, and high-quality care.

III. Other Health Policy News

• On August 22, 2022, HHS announced nearly $25 million in planning grants to Illinois, Kansas, and New Hampshire, as well as for American Samoa and Puerto Rico, to expand access to HCBS through Medicaid’s Money Follows the Person (MFP) demonstration program. With these awards, 41 states and territories across the country will now participate in MFP. This funding for MFP will allow the states to establish partnerships with community stakeholders, conduct system assessments to understand community need for HCBS, develop community transition programs, enhance Medicaid HCBS quality improvement programs, and recruit HCBS providers and coordinate technical assistance programs. More information on this announcement can be found here.
• On August 23, 2022, HHS announced more than $20 million in HRSA funding to expand HIV prevention, testing, and treatment services at 64 health centers nationwide. The funding is part of HHS’ Ending the HIV Epidemic in the U.S. (EHE) initiative, which aims to reduce the number of new HIV infections in the U.S. by 90 percent by 2030. Health centers who receive this funding will leverage it to expand access to medication to prevent HIV (including Pre-Exposure Prophylaxis or PrEP and related services), connect people to care, coordinate care, and strengthen partnerships with community organizations such as HRSA’s Ryan White HIV/AIDS Program-funded organizations and health departments. More information on this announcement can be found here.
• On August 25, 2022, the President Biden issued an Executive Order (EO) on the Implementation of the CHIPS Act of 2022. The Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022 establishes investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security. Specifically, the bill will provide an income tax credit for semiconductor equipment or manufacturing facility investment through 2026, establish a trust fund to ensure consistency and transparency in policies related to microelectronics, require research and development of microelectronics by the Department of Commerce, and more. The investments aim to strengthen the manufacturing and industrial base; create well-paying, high-skilled jobs; catalyze regional economic development; bolster the country’s technology leadership; and reduce dependence on critical technologies from foreign supply chains. Additionally, the EO also announces the creation of a Steering Council to coordinate policy development and ensure effective implementation within the executive branch. More information on this Executive Order can be found here.
• On August 26, 2022, HHS issued a letter to U.S. governors inviting them to work with CMS and apply for Medicaid 1115 waivers to provide increased access to reproductive care for women from states where reproductive rights may be denied. The letter also underscored that abortion restriction laws do not negate providers’ responsibilities to comply with federal laws protecting access to emergency health care. HHS will also be issuing a report on agency actions taken to-date to ensure access to reproductive health care following the Dobbs v. Jackson Women’s Health Organization Supreme Court decision, which include: (1) protecting access to emergency medical care, (2) safeguarding health information and patient rights, (3) protecting patients and providers from discrimination, (4) protecting patient privacy, (5) supporting quality reproductive health care, and (6) protecting access to birth control. More information on these actions can be found here.
• On August 26, 2022, HHS announced $98.9 million in grant funding to 59 Navigator organizations for the 2023 Open Enrollment Period, the single largest Navigator funding award provided to date. The awards will enable the Navigator organizations to recruit and retain staff during the 2022 open enrollment period to help consumers navigate enrollment through the Marketplace, Medicaid, and the Children’s Health Insurance Program (CHIP) and make health coverage more equitable and accessible to everyone. The staff play a vital role in helping consumers prepare applications to establish eligibility and enroll in coverage; provide outreach and education to raise awareness about the Marketplaces; and refer consumers to ombudsman and consumer assistance programs. The 2022 Navigator awardees will focus on outreach to underserved communities. More information on this announcement can be found here.

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