Health Care Week in Review: CMS Released Four Major Annual Payment Final Rules

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, CMS released four major annual payment final rules and HHS approved demonstration programs and grants to address health-related social needs. Read about these actions and other news below.

I. Regulations, Notices & Guidance

• On October 31, 2022, the Food and Drug Administration (FDA) issued final guidance entitled, Regulation of Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps): Small Entity Compliance Guide. The small entity compliance guide (SECG) is intended to help small entity establishments that manufacture HCT/Ps better understand the comprehensive regulatory framework for HCT/Ps set forth in the regulations and comply with certain HCT/P-related final rules. The SECG announced in this notice supersedes the SECG of the same title dated August 2007.
• On October 31, 2022, FDA issued draft guidance entitled, Measuring Growth and Evaluating Pubertal Development in Pediatric Clinical Trials. The purpose of this draft guidance is to outline the most appropriate methods for measuring and recording growth and evaluating pubertal development for drugs or biological products in development for pediatric use when such an assessment is necessary to support safety. This draft guidance is intended to encourage a consistent approach to collecting interpretable and accurate growth and pubertal development data. This draft guidance does not address use of growth or pubertal development data to support primary evidence of efficacy in growth disorders and does not address evaluation of nutritional status.
• On October 31, 2022, the National Institutes of Health (NIH) issued a notice entitled, Requests for Nominations: Interagency Pain Research Coordinating Committee. The Department of Health and Human Services (HHS) has created the Interagency Pain Research Coordinating Committee (IPRCC) and is seeking nominations for this committee. Membership on the committee will include six non-federal members from among scientists, physicians, and other health professionals and six non-federal members of the general public who are representatives of leading research, advocacy, and service organizations for individuals with pain-related conditions. Members will serve overlapping three-year terms and meet at least once a year. Nominations are due by November 30, 2022.
• On October 31, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule entitled, Medicare Program; Calendar Year (CY) 2023 Home Health Prospective Payment System Rate Update; Home Health Quality Reporting Program Requirements; Home Health Value-Based Purchasing Expanded Model Requirements; and Home Infusion Therapy Services Requirements. This final rule sets forth routine updates to the Medicare home health payment rates for calendar year (CY) 2023 in accordance with existing statutory and regulatory requirements. This final rule also finalizes a methodology for determining the impact of the difference between assumed versus actual behavior change on estimated aggregate expenditures for home health payments as result of the change in the unit of payment to 30 days and the implementation of the Patient Driven Groupings Model (PDGM) case-mix adjustment methodology and finalizes a corresponding permanent prospective adjustment to the CY 2023 home health payment rate. This rule finalizes the reassignment of certain diagnosis codes under the PDGM case-mix groups, and establishes a permanent mitigation policy to smooth the impact of year-to-year changes in home health payments related to changes in the home health wage index. This rule also finalizes recalibration of the PDGM case-mix weights and updates the low utilization payment adjustment (LUPA) thresholds, functional impairment levels, comorbidity adjustment subgroups for CY 2023, and the fixed-dollar loss ratio (FDL) used for outlier payments. Additionally, this rule discusses comments received on the future collection of data regarding the use of telecommunications technology during a 30-day home health period of care on home health claims. This rule also finalizes changes to the Home Health Quality Reporting Program (HH QRP) requirements; changes to the expanded Home Health Value-Based Purchasing (HHVBP) Model; and updates to the home infusion therapy services payment rates for CY 2023. These regulations are effective on January 1, 2023.
• On October 31, 2022, CMS issued a final rule entitled, Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model. This final rule updates and revises the End-Stage Renal Disease (ESRD) Prospective Payment System for calendar year 2023. This rule also updates the payment rate for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury. In addition, this rule updates requirements for the ESRD Quality Incentive Program and finalizes changes to the ESRD Treatment Choices Model. These regulations are effective on January 1, 2023, except for certain amendments, which are effective January 1, 2025.
• On November 1, 2022, FDA issued draft guidance entitled, Assessing User Fees Under the Over-the-Counter Monograph Drug User Fee Program. This guidance provides stakeholders with information regarding FDA’s implementation of the Over-the-Counter Monograph Drug User Fee Program (OMUFA) authorized under the Federal Food, Drug, and Cosmetic Act (FD&C Act). The FD&C Act authorizes FDA to assess and collect user fees from qualifying manufacturers of over-the-counter (OTC) monograph drugs and submitters of OTC Monograph Order Requests (OMOR), other than OMORs for certain safety changes. The draft guidance also describes the types of OMUFA fees authorized by the FD&C Act, the due dates of the fees, and explains the exceptions to certain fees. In addition, this guidance describes the process for submitting fee payments to FDA, the consequences for failing to pay the required fees, and the process for submitting refund requests or disputing FDA’s assessment of OMUFA fees.
• On November 1, 2022, FDA issued draft guidance entitled, Expanded Access to Investigational Drugs for Treatment Use: Questions and Answers. Since 2017, FDA has received many questions concerning implementation of the regulatory requirements of the expanded access program. In addition, FDA developed recommendations for fulfilling the new requirements for expanded access submissions promulgated in the 21st Century Cures Act (Cures Act) (2016) and the FDA Reauthorization Act of 2017 (FDARA). FDA is providing this guidance in a question-and-answer format, addressing the most recent frequently asked questions and sharing recommendations to fulfill the new statutory requirements. This guidance revises the guidance of the same title issued in June 2016 and updated in October 2017.
• On November 1, 2022, FDA issued final guidance entitled, S1B(R1) Addendum to S1B Testing for Carcinogenicity of Pharmaceuticals. The guidance was prepared under the auspices of the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), formerly the International Conference on Harmonisation. The final guidance expands the testing scheme for assessing human carcinogenic risk of pharmaceuticals by introducing an additional approach that is not described in the original S1B Guideline. The final guidance is intended to offer an integrative approach that provides specific weight of evidence criteria that inform whether a 2-year rat study is likely to add value in completing a human carcinogenicity risk assessment. The Addendum also adds a plasma exposure ratio-based approach for setting the high dose in the rasH2-Tg mouse model, while all other aspects of the recommendations for high-dose selection in ICH guidance for industry “S1C(R2) Dose Selection for Carcinogenicity Studies of Pharmaceuticals” still apply.
• On November 1, 2022, the Health Resources and Services Administration (HRSA) issued a notice entitled, Notice of Request for Public Comment on Proposed Update to the Bright Futures Periodicity Schedule as Part of the HRSA-Supported Preventive Services Guidelines for Infants, Children, and Adolescents. This notice seeks public comment on a proposed update to the Periodicity Schedule of the Bright Futures Recommendations for Pediatric Preventive Health Care (“Bright Futures Periodicity Schedule”), as part of the HRSA-supported preventive service guidelines for infants, children, and adolescents. Specifically, the proposed update to the Bright Futures Periodicity Schedule is to extend the upper age range for the existing universal Human Immunodeficiency Virus (HIV) screening recommendation. In the Bright Futures Periodicity Schedule, a “dot” with an “arrow” indicates a “range during which a service may be provided.” In the current Bright Futures Periodicity Schedule, the age range recommended for which adolescents may be provided universal screening for HIV is between the 15-year visit and 18-year visit. The proposed update to the Bright Futures Periodicity Schedule would indicate that the recommended age range for which adolescents may be provided universal screening for HIV is between the 15-year visit and 21-year visit. The proposed update also includes an accompanying footnote to provide updated information from the American Academy of Pediatrics (AAP) about more frequent screening for youth assessed as at high risk of HIV infection.
• On November 2, 2022, FDA issued final guidance entitled Cross Labeling Oncology Drugs in Combination Regimens. This guidance describes FDA’s current recommendations on including relevant information in labeling for oncology drugs approved for use in combination regimens. This guidance finalizes the draft guidance of the same title issued on November 20, 2020.
• On November 2, 2022, FDA issued a notice entitled, Advancing Premarket Safety Analytics Workshop; Request for Comments. FDA is requesting comments on the topics discussed at a public workshop entitled “Advancing Premarket Safety Analytics Workshop” held on September 14, 2022. The purpose of the public workshop was to present FDA’s work and perspective on premarket review of safety data. Comments are due by December 3, 2022.
• On November 2, 2022, CMS issued a final rule entitled, CY 2023 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Implementing Requirements for Manufacturers of Certain Single-dose Container or Single-use Package Drugs to Provide Refunds with Respect to Discarded Amounts; and COVID-19 Interim Final Rules. This final rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; Medicare Shared Savings Program (MSSP) requirements; updates to the Quality Payment Program (QPP); Medicare coverage of opioid use disorder services furnished by opioid treatment programs; updates to certain Medicare and Medicaid provider enrollment policies, including for skilled nursing facilities (SNFs); updates to conditions of payment for DMEPOS suppliers; HCPCS Level II coding and payment for wound care management products; electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan or an MA-PD plan under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (SUPPORT Act); updates to the Medicare Ground Ambulance Data Collection System; provisions under the Infrastructure Investment and Jobs Act; and finalizes the CY 2022 Methadone Payment Exception for Opioid Treatment Programs IFC. CMS also finalized, as implemented, a few provisions included in the COVID-19 interim final rules with comment period. These regulations are effective on January 1, 2023.
• On November 3, 2022, FDA issued a final order entitled, Microbiology Devices; Reclassification of Human Immunodeficiency Virus Viral Load Monitoring Tests. FDA is issuing this final order to reclassify human immunodeficiency virus (HIV) viral load monitoring tests, postamendments class III devices with the product code MZF, into class II (special controls), subject to premarket notification. Through this final order, FDA is also adding a new device classification regulation along with special controls that are necessary to provide a reasonable assurance of safety and effectiveness for this device type. The final order reclassifies this device type from class III (premarket approval) to class II (special controls) and will reduce the regulatory burdens associated with these devices because manufacturers will no longer be required to submit a premarket approval application (PMA) for this device type but can instead submit a less burdensome premarket notification (510(k)) and receive clearance before marketing their device.
• On November 3, 2022, CMS issued a final rule entitled, Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Acquisition; Rural Emergency Hospitals: Payment Policies, Conditions of Participation, Provider Enrollment, Physician Self-Referral; New Service Category for Hospital Outpatient Department Prior Authorization Process; Overall Hospital Quality Star Rating; COVID-19. This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for Calendar Year (CY) 2023 based on CMS’ continuing experience with these systems. CMS describes the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this final rule updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program; the ASC Quality Reporting (ASCQR) Program; and the Rural Emergency Hospital Quality Reporting (REH) Program. CMS also makes updates to the requirements for Organ Acquisition, REHs, Prior Authorization, and Overall Hospital Quality Star Rating. The agency is also establishing a new provider type for REHs, and finalizing proposals regarding payment policy, quality measures, and enrollment policy for REHs. In addition, CMS is finalizing the Conditions of Participation (COPs) that REHs must meet in order to participate in the Medicare and Medicaid programs. This rule also finalizes changes to the Critical Access Hospital (CAH) CoPs for the location and distance requirements, patient’s rights requirements, and flexibilities for CAHs that are part of a larger health system. Finally, the agency is finalizing as implemented a number of provisions included in the COVID-19 interim final rules with comment period (IFCs). The provisions of this rule are effective January 1, 2023 and comments must be received by January 3, 2023.
• On November 4, 2022, FDA issued final guidance entitled, M10 Bioanalytical Method Validation and Study Sample Analysis. This guidance was prepared under the auspices of ICH, formerly the International Conference on Harmonisation. This guidance describes recommendations for method validation for bioanalytical assays for nonclinical and clinical studies that generate data to support regulatory submissions, including the procedures and processes that should be characterized for chromatographic and ligand-binding assays that are used to measure the parent and active metabolites of drugs administered in nonclinical and clinical subjects. This guidance is intended to provide industry with harmonized regulatory expectations for bioanalytical method validation of assays used to support regulatory submissions.
• On November 4, 2022, FDA issued final guidance entitled, Studying Multiple Versions of a Cellular or Gene Therapy Product in an Early-Phase Clinical Trial; Guidance for Industry. This guidance document provides recommendations to sponsors interested in studying multiple versions of a cellular or gene therapy product in an early phase clinical trial for a single disease. Sponsors have expressed interest in gathering preliminary evidence of safety and activity using multiple versions of a cellular or gene therapy product in a single clinical trial, where each version of the product is distinct and is generally submitted to FDA in a separate investigational new drug application (IND). This guidance provides recommendations for conducting such studies, including how to organize and structure the INDs, submit new information, and report adverse events.

Event Notices

• November 21, 2022: HHS announced a meeting of the Tick-Borne Disease Working Group (TBDWG). The meeting agenda will include a review of the progress of the TBDWG and further discussion of Working Group activities.
• December 1, 2022: NIH announced a meeting of the National Heart, Lung, and Blood Institute’s (NHLBI’s) Sleep Disorders Research Advisory Board (SDRAB). The purpose of this meeting is to discuss with the Advisory Board timely research opportunities in sleep and circadian biology. Updates on the research agenda across the NIH for the upcoming fiscal year and the activities of professional societies will be provided to all stakeholders.
• December 5-6, 2022: HHS announced a meeting of the President’s Advisory Commission on Asian Americans, Native Hawaiians, and Pacific Islanders (the Commission). The agenda will include discussion of full and draft recommendations by the Commission’s six Subcommittees on ways to advance equity, justice, and opportunity for Asian American, Native Hawaiian, and Pacific Islander communities. The Subcommittees are: Belonging, Inclusion, Anti-Asian Hate, Anti-Discrimination; Data Disaggregation; Language Access; Economic Equity; Health Equity; and Immigration and Citizenship Status.
• December 7, 2022: HRSA announced a meeting of the Advisory Committee on Infant and Maternal Mortality (ACIMM). The agenda may include the following topics: a review of draft recommendations for the Secretary on improving birth outcomes among American Indian and Alaska Native (AI/AN) mothers and infants and a vote on whether to send them forward; discussions to determine new and continuing priority areas for ACIMM; and ACIMM operations.
• December 7-8, 2022: FDA announced a meeting entitled Drug Supply Chain Security Act Implementation and Readiness Efforts for 2023. The topics to be discussed are supply chain stakeholder experiences with implementation and overall readiness regarding implementation of enhanced drug distribution security requirements that will go into effect on November 27, 2023, standards for the interoperable data exchange of product tracing information, requests for product tracing information or verification from FDA for the purpose of investigating suspect or illegitimate products or for recalls, steps taken to build capacity for package-level tracing, pharmaceutical distribution supply chain best practices, and, in general, the impact that the Drug Supply Chain Security Act (DSCSA) requirements would have on public health, including patient safety and access to prescription drugs, and on stakeholders, in terms of costs, benefits, and regulatory burden.
• December 12, 2022: NIH announced a meeting of the Diabetes Mellitus Interagency Coordinating Committee (DMICC). The topic for this meeting will be “NIDDK’s Office of Obesity Research: Evolving Concepts in the Heterogeneity of Obesity”.
• December 15, 2022: NIH announced a meeting of the National Toxicology Program (NTP) Board of Scientific Counselors (BSC). The preliminary agenda topics include presentations on three contract concepts: Chemistry, Toxicology, and Pathology Support Services for the National Institute of Environmental Health Sciences (NIEHS).
• January 18-19, 2023: HHS announced a public meeting of the National Committee on Vital and Health Statistics (NCVHS) and its associated Request for Comment (RFC). The purpose of this hearing is to inform the Committee as it develops recommendations to HHS. During the hearing, the Committee will receive input from representatives of standards development organizations (SDOs), Operating Rule Authoring Entities (ORAEs) and industry stakeholders in response to requests received from two organizations: X12 and the Council for Affordable Quality Healthcare’s (CAQH) Committee on Operating Rules for Information Exchange (CORE) Board. Together, these requests ask NCVHS to consider and develop recommendations to HHS regarding proposed mandatory updates to four HIPAA-adopted transactions, mandatory updates to four adopted operating rules, and six new operating rules described below. The agenda for the hearing dedicates one day to the X12 proposed standards updates and one day to the proposed updated and new operating rules.

II. Reports, Studies & Analyses

• On November 1, 2022, the Congressional Research Service (CRS) published a two-part report entitled, EMTALA Emergency Abortion Care Litigation: Overview and Initial Observations (Part I and Part II). After the Dobbs v. Jackson Women’s Health Organization Supreme Court decision that overruled Roe v. Wade and Planned Parenthood of Southeastern Pennsylvania v. Casey, many states enacted restrictions or bans of abortion services. In response, HHS issued guidance in July 2022 to reinforce that the Emergency Medical Treatment and Active Labor Act (EMTALA), which requires physicians to provide stabilizing treatment to patients presenting with emergency medical conditions, applies to abortion services. Some states, such as Texas and Idaho, have placed preliminary injunctions on EMTALA, which temporarily suspends portions of the law’s applicability in those states. This two-part Legal Sidebar series provides an overview of the ongoing Texas and Idaho litigation and some initial observations, including on: (1) preemption as a context-specific analysis, (2) the uncertain scope of the life-saving exception as related to state abortion restrictions, and (3) if EMTALA preempts the state abortion restrictions.
• On November 1, 2022, the RAND Corporation published a report entitled, Lessons Learned from the COVID-19 Outbreak: Preventing and Managing Future Pandemics. This report contains a collection of essays that explore topics and potential actions to improve pandemic preparedness and to prevent future pandemics in light of lessons learned from the COVID-19 public health emergency (PHE). Topics include: (1) how to better frame public health messaging and intelligence to convince policymakers and the public to act; (2) lessons learned from the government response in Wuhan, China; (3) how to improve global health response organizations’ structures and processes; (4) how to best and safely utilize gain-of-function research to stimulate new policy; (5) how to prioritize biosafety and biosecurity in community and national response and planning efforts; (6) how to improve access to necessary medical supplies during emergencies; (7) how to improve attitudes around treatment and testing. The authors conclude that important strides have been made during the COVID-19 pandemic, including the rapid development and deployment of COVID-19 vaccines. However, they warn much can still be done to prepare and prevent future pandemics and urge policymakers, the public, and institutions to reflect on lessons learned from the COVID-19 PHE.
• On November 3, 2022, HHS Office of Inspector General (OIG) published a report entitled, During the Initial COVID-19 Response, HHS Personnel Who Interacted With Potentially Infected Passengers Had Limited Protections. During the initial phase of the COVID-19 response (January – March 2020), CDC issued travel-related containment measures and as such, HHS personnel screened passengers entering the U.S. at six federal quarantine sites in an effort to prevent the spread of COVID-19 in the U.S. OIG surveyed nearly 700 HHS personnel who worked at quarantine stations and sites to understand the effectiveness of this initial COVID-19 response. OIG found that CDC only recommended limited personal protective equipment (PPE), social distancing, symptom monitoring, and self-quarantining for HHS personnel, while interacting with potentially infected passengers. However, these initial recommendations did not meet standards set by the Occupational Safety and Health Administration (OSHA) or previous CDC pandemic-planning documents. Thus, OIG recommends that CDC: (1) update guidance for personnel working with potentially infected passengers, (2) ensure PPE trainings meet OSHA standards, and (3) implement a comprehensive plan and procedure for travel-related containment measures.
• On November 3, 2022, Senate Finance Committee Chair Ron Wyden (D-OR) published a report entitled, Deceptive Marketing Practices Flourish in Medicare Advantage (MA). This report details the deceptive MA and Part D marketing practices used by some insurance companies, brokers, and third-party marketers to push seniors to sign up for their MA plans and corroborates CMS’ findings that the number of beneficiary complaints related to MA marketing has nearly doubled between 2020 and 2021. The report found that beneficiaries are inundated with misleading information, which undermines access to care and erodes beneficiaries’ trust in the MA program. Senator Wyden’s report outlines five recommendations for CMS to better monitor and regulate these marketing tactics: (1) reinstate marketing requirements; (2) monitor disenrollment patterns and hold bad actors accountable; (3) require agents and brokers to adhere to best practices; (4) implement robust rules around MA marketing materials; and (5) support unbiased sources of information for beneficiaries.

III. Other Health Policy News

• On October 31, 2022, the White House issued several proclamations to recognize diseases and conditions as well as patients and their families during the month of November 2022, including: (1) a Proclamation on National Diabetes Month, (2) a Proclamation on National Family Caregivers Month, (3) a Proclamation on National Lung Cancer Awareness Month, and (4) a Proclamation on National Alzheimer’s Disease Awareness Month. These proclamations honor patients, family members, and providers who face, treat, and address these chronic illnesses. The Biden Administration outlines its progress and goals in addressing each of these issue areas. Finally, the proclamations urge action across all stakeholders, including citizens, government agencies, private businesses, nonprofit organizations, the media, and other interested groups to increase awareness and support for the diagnosis and treatment of such conditions as well as support for the patients and their loved ones. More information on these announcements can be found here, here, here, and here.
• On November 1, 2022, HHS and CMS announced the approval of Arkansa’s Medicaid section 1115 demonstration that will test innovative interventions to address health-related social needs, including housing and food insecurity. Specifically, Arkansas’ demonstration will work with local hospitals and community organizations to advance Life360 HOMEs, which are designed to connect people to necessary health services and community supports. The three types of Life360 HOMEs are: (1) Rural, which will support people with mental illness or substance use diagnoses in rural areas; (2) Maternal, which will support people with high-risk pregnancies for up to two years postpartum; and (3) Success, which will support young adults at high-risk for long-term poverty and poor health outcomes and veterans at high-risk for homelessness. The Life360 HOMEs initiative also includes access to nutritional services and case management. More on this announcement can be found here.
• On November 2, 2022, HHS, through the Administration for Children and Families (ACF), announced $4.5 billion in Low Income Home Energy Assistance Program (LIHEAP) funds to states, territories, and tribes, to provide subsidies for home heating costs and to cover unpaid utility bills for families. Additionally, LIHEAP funds will help families make cost-effective home energy repairs to lower their heating and cooling bills. The funds hope to help make heating and cooling more effective for low-income families, as low-income households spend nearly three times more of their income on energy bills than higher-income households. More on this announcement can be found here.

Click here to view the members of our Health Care Legislative & Public Policy team.