Health Headlines – January 3, 2022

CMS to Resume Enforcement of COVID-19 Vaccination Mandate for Healthcare Workers in Jurisdictions Not Covered by Federal Injunctions – On December 28, 2021, CMS announced that it would resume enforcement of its COVID-19 vaccine mandate for healthcare providers in areas not covered by injunctions issued by federal courts. As of December 15, 2021, federal courts issued injunctions staying the vaccine mandate as to 25 states. As a result of CMS’s new policy announcement, healthcare workers in the remaining 25 states, the District of Columbia, and the territories must receive their first dose of a two-shot vaccine, or a single-dose vaccine, by January 27, 2022, and must be fully vaccinated or receive an exemption by February 28, 2022. On January 7, 2022, the Supreme Court is set to hear oral argument as to whether the existing injunctions should be kept intact pending further court proceedings, and, in so doing, may provide guidance about the legal authority of CMS to impose any vaccine mandate. 

CMS had previously announced, on December 2, 2021, that it would not enforce the Omnibus COVID-19 Health Care Staff Vaccination, 86 Fed. Reg. 61,555, 61,556 (Nov. 5, 2021) (the “COVID-19 vaccine mandate”) “while there are court-ordered injunctions in place prohibiting enforcement” of the mandate. These injunctions enjoin the COVID-19 vaccine mandate in the following 25 states: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Missouri, Mississippi, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming.

On December 22, the Supreme Court announced it would hear oral arguments on January 7, 2022 about whether to stay the various district court issued injunctions pending further appellate review. In addition, the Supreme Court will consider whether a preliminary injunction is warranted to stay enforcement of the rule issued by OSHA that requires that employers with 100 or more employees ensure each of their workers is fully vaccinated or tests for COVID-19 on a weekly basis.

In the December 28, 2021 update, CMS stated that, as an exercise of enforcement discretion, the COVID-19 vaccine mandate will be implemented and enforced as to the remaining 25 states, the District of Columbia, and the territories, not subject to any district-court injunctions. Per CMS’s announcement, the deadline for Phase 1 implementation in those areas is now January 27, 2022. This means that by January 27, 2022, healthcare workers in the affected jurisdictions must either: (1) receive the first dose of the primary series or a single-dose COVID-19 vaccine; or (2) request and/or be granted a lawful exemption, prior to providing any care, treatment or other services for the facility and/or its patients. The deadline for Phase 2 implementation, which requires all applicable staff be fully vaccinated, except for those who have been granted lawful exemptions, is now February 28, 2022. CMS also confirmed that the public comment period for the interim final rule will close on January 4, 2022, as originally scheduled.

This new enforcement timeline affects healthcare workers in the following jurisdictions: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, Washington, Wisconsin, the District of Columbia, and all U.S. territories.

Of course, the Supreme Court upon hearing the pending appeals on January 7 could issue a ruling that could restrict or otherwise affect CMS’s ability to move forward with implementation of the vaccine mandate. Alternatively, it could issue a ruling that could allow CMS to move forward with the mandate nationwide. Therefore, the legal authority of CMS’s mandate still remains in flux despite the agency’s recent policy announcement.  

The December 28, 2021 CMS update can be found here. CMS’s November 5, 2021 Interim Final Rule, “Medicare and Medicaid Programs; Omnibus COVID-19 Health Care Staff Vaccination,” can be found here.

Reporters, Nikesh Jindal, Washington, D.C., +1 202 383 8933, njindal@kslaw.com, Christopher (Chris) Kenny, Washington, D.C., +1 202 626 9253, ckenny@kslaw.com, Ariana Fuller, Los Angeles, +1 213 443 4342, afuller@kslaw.com.
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CMS Approves CalAIM proposal to transform California’s Medi-Cal – On December 29, 2021, the California Department of Health Care Services (DHCS) announced CMS’s approval of its California Advancing and Innovating Medi-Cal (CalAIM) proposal. CalAIM’s launch on January 1, 2022 is part of a commitment to make Medi-Cal more equitable, coordinated, and person-centered.

Medi-Cal is California’s Medicaid program which covers one in three Californians including more than half of school-age children, more than half of the state’s births, and more than two in three patient days in long-term care facilities. With federal approval of this proposal, CalAIM will shift Medi-Cal to a population health approach that prioritizes prevention and addresses social drivers of health. Key provisions of CalAIM’s approved initiatives include:

• Community Supports.  This includes new statewide services covered by Medi-Cal managed care plans provided by local community providers as medically appropriate, cost-effective alternatives to traditional medical services or settings. Examples of Community Supports include assistance with housing supports, caregiver respite, food insecurity relief, and transitioning from nursing home care to the community. They are intended to both improve health and lower health care costs.

• Enhanced Care Management.  This addresses clinical and non-clinical needs of the highest-need enrollees through intensive coordination of health and health-related services and meets enrollees primarily through in-person engagement where they live, seek care, and choose to access services.

• Delivery System Transition and Alignment. CalAIM shifts all of California’s managed care delivery systems – Medi-Cal Managed Care, Dental Managed Care, Specialty Mental Health Services, and Drug Medi-Cal Organized Delivery System – to one coordinating authority in order to simplify and align the state’s managed care programs, and enhance oversight and accountability of the managed care delivery systems as a whole.

• Providing Access and Transforming Health (PATH) Supports.  CalAIM provides funding for community-based organizations, counties, and other local providers to expand capacity as some of the key CalAIM initiatives scale up across the state.

• Substance Use Disorder Services and Initiatives.  CalAM authorizes several new initiatives that will advance treatment for individuals with substance use disorder, including contingency management, peer support specialists, and drug Medi-Cal organized delivery system services for short-term residents of institutions for mental disease.

• Supporting Coordination and Integration for Dual Eligibles.  CalAIM coordinates Medi-Cal’s two distinct coverage programs to provide a more integrated experience for dual eligibles and makes available a statewide managed care plan that coordinates all Medicare and Medi-Cal benefits in one plan for enrollees who are eligible for both programs.

• New Dental Benefits.  The proposal focuses on preventive services and continuity of care by expanding key dental benefits statewide including a statewide expansion of a Caries Risk Assessment bundle for all Medi-Cal children, silver diamine fluoride for children and high-risk adult populations, and pay-for-performance initiatives for dental providers.

• Chiropractic Services for Indian Health Service and Tribal Facilities.  CalAIM provides authority to continue to pay for chiropractic services provided by Tribal providers that were eliminated as a Medi-Cal covered benefit in 2009.

• Global Payment Program.  It renews the Global Payment Program to provide a statewide pool of funding for care provided to California’s remaining uninsured population in an effort to streamline funding sources for the state’s uninsured population served by public hospitals, with a renewed focus on addressing social needs and responding to the impacts of systemic racism and inequities.

In addition to the above initiatives, two additional components of CalAIM that are still being negotiated include: (i) services and supports for justice-involved adults and youth, which will focus on stabilizing health pre-release, ensuring continuity of coverage through Medi-Cal pre-release enrollment strategies, and supporting re-entry to the community, and (ii) approval for reimbursements for services provided by Traditional Healers and Natural Helpers.

More information about CalAIM from California DHCS can be found here. 

Reporter, Jasmine Becerra, Atlanta, +1 404 572 3537, jbecerra@kslaw.com.
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HHS Releases Notice of Benefit and Payment Parameters 2023 Proposed Rule – On December 28, 2021, HHS released a proposed rule governing plans issued in the Patient Protection and Affordable Care Act (ACA) marketplaces beginning with the 2023 plan year (the Proposed Rule).
Among other changes to the rules in effect for the 2022 plan year, the Proposed Rule would implement the following changes on applicable ACA marketplace plans:

• CMS would conduct network adequacy reviews for all federally-facilitated marketplace (FFM) states other than in states that adhere to standards at least as strict as the federal network adequacy standards and elect to perform their own reviews. The federal standard would be based on time, distance, and appointment wait standards, and reviews would be conducted during the Qualified Health Plan certification process;

• Issuers unable to meet the standard would be permitted to submit a justification explaining why the standards are not being met, what they are doing in order to meet them, and how their customers will be protected in the meantime.  HHS would review the submitted justifications to determine whether the variance(s) from the standards are reasonable based on circumstances, such as the local availability of providers and variables reflected in local patterns of care, and whether offering the plan through the federally-facilitated exchange would be in the interest of qualified individuals and employers;

• CMS would require issuers in FFMs and in State-based Marketplaces on the Federal Platform to offer standardized plan options at every product network type, plan level, and service area in which they offer non-standardized plan options beginning in plan year 2023.  A non-standardized plan is one with variation in the cost-sharing structure that may make it difficult to compare in terms of total expected out-of-pocket costs (including premiums) against plans with standardized cost-sharing structures;

• CMS would prohibit marketplaces, issuers, agents, and brokers from discriminating based on sexual orientation and gender identity, characteristics that had been protected under the ACA until the issuance of a 2020 HHS rule;

• The Proposed Rule would refine the Essential Health Benefits (EHB) nondiscrimination policy by providing examples illustrating presumptively discriminatory plan designs that violate the prohibition against discriminating based on age, health conditions, and sociodemographic factors.  Under the Proposed Rule, one example of a presumptively discriminatory EHB design provided by HHS would be the inclusion of an age-limit for coverage of hearing aids, which would violate the prohibition on age discrimination in the coverage of EHBs;

• The Proposed Rule would relax pre-enrollment Special Enrollment Period (SEP) verification so that verification would be required only for loss of minimum essential coverage, not for any other SEP type;

• The Proposed Rule would update Quality Improvement Strategy (QIS) standards to require issuers to address health and health care disparities as part of their QIS;

• The Proposed Rule would raise the Essential Community Provider threshold from 20% to 35%;

• The Proposed Rule would make several changes to the risk adjustment models used in the ACA marketplace, including adding a two-stage weighted approach for the adult and child models; removing the current severity illness factors from the adult models and adding hierarchical condition category (HCC) count model specifications to the adult and child models; and replacing the current enrollment duration factors with HCC-contingent enrollment duration factors; and

• The Proposed Rule would prohibit the inclusion of overhead attributable to Quality Improvement Activity expenses for purposes of calculating the Medical Loss Ratio.

The full text of the Proposed Rule is available here.

Reporter, David Tassa, Los Angeles, + 213 443 4335, dtassa@kslaw.com.
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COMPLIANCE COLUMN

OIG Issues Semiannual Report to Congress – In December 2021, OIG issued its Semiannual Report to Congress (SAR) covering OIG’s activities for the reporting period of April 1, 2021 through September 30, 2021, as well as the entire Fiscal Year (FY) 2021 (October 1, 2020 through September 30, 2021). The SAR projects that for FY 2021 approximately $787 million is expected be returned based on OIG audit findings and $3 billion is expected to be collected based on OIG investigative initiatives. In addition, the SAR summarizes OIG’s key reports and significant activities.

In FY 2021, OIG issued 162 audit reports, representing a slight decrease from the 178 reports issued in FY 2020. OIG’s work in FY 2021 included 532 criminal actions, 689 civil actions and 1,689 exclusions, all of which are minor decreases from the FY 2020 statistics, as reported in the April 1, 2020-September 30, 2020 SAR.

The SAR summarizes OIG’s work responding to the COVID-19 pandemic, which includes coordination with key oversight and law enforcement partners. OIG also highlighted its reports regarding COVID-19, including the impact on nursing home beneficiaries as well as pandemic-related schemes to fraudulently bill Medicare. The SAR highlights other key areas of OIG focus in FY 2021 such as children’s health, opioid misuse, nursing home quality of care, cybersecurity threats, Medicare and Medicaid program integrity, and oversight of NIH grant programs and operations.

The SAR underscores that OIG’s audit and enforcement focus remains strong. Although the COVID-19 pandemic introduced new risks and enforcement areas, OIG has also continued to focus its efforts on key non-pandemic related areas as well.

The April 1, 2021 - September 30, 2021 SAR is available here, and OIG’s press release is available here.

Reporter, Lauren S. Gennett, Atlanta, + 1 404 572 3592, lgennett@kslaw.com.
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ALSO IN THE NEWS
Don’t Be Surprised – The No Surprises Act is in Effect – As previously reported, the No Surprises Act (the Act), enacted December 27, 2021, took effect on January 1, 2022. The Act puts into place important patient protections from surprise medical bills while also imposing significant obligations on healthcare providers and facilities. The Act also ushers in major changes to provider reimbursement for out-of-network services, the effects of which are rippling throughout the managed care industry.

AMA Releases New Health App Guidance – The AMA released new guidance for health apps that addresses data collection, sharing, and governance. The AMA encourages app designers to incorporate privacy by design into new health apps and wearable devices and reminds app and wearable device companies about the importance of obtaining meaningful consent from consumers before sharing their data. The guidance supplements the AMA’s “Privacy Principles” that were released in 2020.