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January 11, 2021

Health Headlines – January 11, 2021


Final Rule Requires Retrospective Review of HHS Regulations – Last week, HHS issued a final rule setting expiration dates for regulations that are not retrospectively reviewed in a timely manner.  The final rule requires HHS to review its regulations every 10 years to determine whether they are subject to the Regulatory Flexibility Act (RFA) and, if so, whether they comply with the RFA.

HHS has five years to review regulations that are ten years or older and may request a one-time, one-year extension.  The RFA, a statute enacted in 1980, requires each agency to issue a plan for periodic review of regulations to assess whether they have a significant economic impact on a large number of small entities and to determine whether the regulations should be amended based on that assessment.  In reviewing its regulations, an agency is tasked with considering a number of factors including duplication with other rules, the need for the regulations, public input, complexity of the regulations, and the length of time since the last assessment and review.

Certain regulations are exempt from the final rule including some Food and Drug Administration regulations, jointly issued regulations, procedural rules, and internal management regulations.

The new rule would apply to regulations found in Titles 21 (Food and Drugs), 42 (Public Health), and 45 (Public Welfare) of the Code of Federal Regulations subject to certain exceptions.  If HHS does not review a regulation within the mandated time period, the regulation will expire at the later of: (1) five years after the final rule is effective; (2) ten years after the regulation is promulgated; or (3) ten years after the last required assessment and review.  According to the rule, the sunset provisions are intended to incentivize HHS to perform more retrospective reviews of its regulations in a timely manner.

During the 60-day comment period, HHS received 532 comments from healthcare providers, industry trade organizations, members of Congress, and non-profit public interest groups.  According to the final rule, a majority of commenters opposed the rule and about 25% of commenters asked HHS to withdraw the proposed rule.  Those commenters opposing the rule highlighted in their comments the additional regulatory burden associated with the required regulatory review process and the possibility that the rule would negatively affect HHS’s ability to focus on administering current programs.

The rule will become effective 60 days after the publication date, which is after President-elect Joe Biden’s inauguration.  It is uncertain whether the final rule’s implementation would be blocked by the incoming administration.

Reporter, Taylor Whitten, Sacramento, +1 916 321 4815, twhitten@kslaw.com.

CMS Issues Guidance to States Regarding Social Determinants of Health Strategies - On January 7, 2021, CMS issued a guidance letter to state health officials describing opportunities under Medicaid and the Children’s Health Insurance Program (CHIP) to address social determinants of health (SDOH).  The guidance letter, entitled Opportunities in Medicaid and CHIP to Address Social Determinants of Health, purports to assist states in designing programs, benefits, and services to improve population health, reduce disability, and lower overall healthcare costs in the Medicaid and CHIP programs by addressing SDOH.  The guidance letter supersedes a 2015 Information Bulletin focusing on housing-related activities and services for individuals with disabilities.  The newly issued guidance letter does not provide new flexibilities or opportunities under Medicaid and CHIP to address SDOH but rather describes how states may address SDOH under current law.

The guidance letter describes the CDC’s definition of SDOH as “conditions in the places where people live, learn, work, and play that affect a wide range of health risks and outcomes.”  The letter also acknowledges that some social interventions targeted at Medicaid and CHIP beneficiaries can result in improved health outcomes and significant savings to the healthcare sector.

According to CMS, addressing SDOH is part of its broader shift toward a value-based model of care delivery.  According to CMS Administrator Seema Verma, “The evidence is clear: social determinants of health, such as access to stable housing or gainful employment, may not be strictly medical, but they nevertheless have a profound impact on people’s wellbeing.”  The letter also cites evidence that challenges related to SDOH can lead to poorer health outcomes for beneficiaries and higher healthcare costs for Medicaid and CHIP programs, particularly with underserved and underrepresented populations. 

According to CMS’s press release, the guidance letter details how state Medicaid and CHIP programs can use a variety of delivery approaches, benefits, and reimbursement methodologies to address SDOH in an attempt to improve beneficiary outcomes. The guidance letter acknowledges that states have flexibility to design programs and services to address SDOH while providing uniform services and supports that states can cover under current law.  These include categories such as housing-related services and supports, non-medical transportation, home-delivered meals, educational services, and employment supports.

Providers that serve Medicaid and CHIP populations may realize additional reimbursement opportunities as state health agencies respond to the guidance letter. 

CMS’s letter is available here.  CMS’s press release is available here

Reporter Michael L. LaBattaglia, Washington, D.C., +1 202 626 5579, mlabattaglia@kslaw.com.

King & Spalding Client Alert:  Congress Restores Application of Federal Antitrust Laws to Health Insurers - On December 23, 2020, the U.S. Senate unanimously passed the Competitive Health Insurance Reform Act of 2020, which includes a provision that would repeal the limited federal antitrust immunity currently granted to certain health insurance business practices by the 1945 McCarran-Ferguson Act.  The U.S. House of Representatives previously passed this bill on September 21, 2020.  The bill was presented to the President on January 1, 2021 and will become law when the President signs the bill, as expected.  Additional discussion and analysis is available in the King & Spalding Client Alert available here

ALSO IN THE NEWS:

King & Spalding Webinar - The New Frontier in Managed Care: An Overview of the Newly Passed Federal Surprise Billing Legislation – King & Spalding will host a webinar on Tuesday, January 12, 2021 from 12:30 – 2:00 p.m. ET about the recently enacted “No Surprises Act.”  The presentation will discuss the anticipated effect of the legislation on existing and future managed care arrangements, revenue cycle practices, and disputes concerning out-of-network reimbursement, and potential unintended consequences.  Registration for the event is available here

King & Spalding Webinar - Rounding Out 2020: Overview of Recent Statutory and Regulatory Changes to Medicare and Medicaid Reimbursement – King & Spalding will host a webinar Tuesday, January 19, 2021 from 1:00 P.M. – 2:30 P.M. ET on the changes to Medicare and Medicaid reimbursement that came in the final month of 2020.  The webinar will include a discussion of: (1) the final rules for the Calendar Year 2020 Outpatient Prospective Payment System (OPPS) and Physician Fee Schedule (PFS), including Congress’s partial repeal of the budget neutrality adjustment for the PFS; (2) statutory changes to Medicare Graduate Medical Education (GME) payments, including the distribution of additional residency positions and a second chance for some hospitals to build new full-time equivalent (FTE) caps and per-resident amounts; (3) statutory changes to Medicare payment for rural providers, including a new payment provision for rural emergency hospital services and enhanced payments for rural health clinics; and (4) statutory changes to Medicaid Disproportionate Share Hospital (DSH) payments, including the elimination of the DSH allotment reductions for 2021 through 2023 and the modified DSH cap.  Registration for the event is available here.

King & Spalding Webinar - Recalculating: Major Stark, Anti-Kickback and CMP Final Rule Changes Are Taking Us in a New Direction  (Parts 2 and 3) – Part 2 of King & Spalding’s three-part webinar about the recently finalized changes to the Stark Law rules, the Anti-Kickback Statute (AKS) safe harbors, and the Beneficiary Inducements Civil Monetary Penalties (CMP) regulations will be presented on Thursday, January 14, 2021 from 1:00 – 2:30 p.m. ET.  This will be followed by Part 3, which will be presented on Thursday, January 21, 2021 from 1:00 – 2:00 p.m. ET.  Information about the content of each part of this series is available here.  Registration for the event is available here.