News & Insights


November 1, 2021

Health Headlines – November 1, 2021

President Biden Announces Healthcare Provisions in Build Back Better Framework
Last week, President Biden presented an outline of a $1.75 trillion Build Back Better (BBB) social spending reconciliation framework resulting from months of negotiations with House and Senate Democrats.  Congressional negotiations continue over certain outstanding healthcare provisions, such as prescription drug price negotiation and expansion of Medicare benefits to dental and hearing (the framework included only an expansion of coverage for hearing services).  With a 50-50 Senate and a three-vote majority in the House of Representatives, Democratic lawmakers continue to face a challenge in achieving unanimous support in the Senate and not losing more than three votes in the House.  As a result, although there is a push to finalize the BBB framework as quickly as possible, the timing for full House and Senate consideration is uncertain. 
A summary of healthcare provisions follows.

  • Affordable Healthcare Coverage. The BBB framework includes the following initiatives relating to affordable healthcare coverage:

    • Affordable Care Act.The BBB framework would provide temporary enhanced Affordable Care Act (ACA) Marketplace cost-sharing reduction assistance to individuals with household incomes below 138 percent of the federal poverty level (FPL) who do not qualify for government sponsored insurance.  This provision may be intended to address Medicaid coverage gaps for individuals who live in non-expansion states.  To provide health insurance consumer information, $100 million would be provided for the ACA’s health insurance consumer information grants.  ACA cost-sharing reduction assistance would also be provided to individuals receiving unemployment compensation.  These provisions would all apply to calendar years 2022 through 2025.

    • Other Provisions.  The BBB framework would also establish a health insurance affordability fund, which would make available $10 billion annually to states for calendar years 2023 through 2025.  States could use the funds to provide financial assistance that would lower out-of-pocket costs or to establish a state reinsurance program.  CMS would be required to establish and implement a temporary reinsurance program in states that are not expending amounts under the state plan. 

  • Medicaid. The BBB framework includes the following initiatives relating to Medicaid:

    • Home and Community-Based Services.  Improvement Planning Grants would be provided to states to develop plans to expand access to home and community- based services (HCBS) and strengthen the HCBS workforce, in combination with increases to the federal medical assistance percentage (FMAP).  The HHS Secretary would be required to report on the grants and provide technical assistance to states for implementation of the HCBS improvement programs.  HHS would also be required to publish HCBS quality metrics for state Medicaid programs.  The protection against spousal impoverishment for individuals whose partners receive Medicaid HCBS would be permanently extended and funding would be made permanent for the Money Follows the Person Rebalancing Demonstration.

    • Other Medicaid Provisions.  State Medicaid programs would be required to provide 12 months of continuous Medicaid and Children’s Health Insurance Program (CHIP) eligibility to postpartum women; 12 months of continuous eligibility to children enrolled in Medicaid and CHIP; and coverage to justice-involved individuals 30 days prior to their release.  A new option would be authorized for states to provide coordinated care for pregnant and postpartum women through a health home.  Investments would also be made to expand access to behavioral health and extend for an additional two years the 100 percent FMAP for urban Indian organizations and Native Hawaiian Health Centers.  Comprehensive dental, vision, and hearing services would be added as mandatory Medicaid benefits.

    • DSH Payments.  Duplicative payments would be ended to states where individuals below 100 percent of poverty will be able to enroll in Marketplace coverage.  It also adjusts Medicaid disproportionate share hospital (DSH) allotments for these states to reflect the lower rates of uncompensated care.

    • Territories.  Each territory’s FMAP would be increased to 83 percent.

    • Maintenance of Effort.  States would be encouraged to maintain Medicaid eligibility standards that were in place prior to the public health emergency.  Efforts would be made to ensure Medicaid accurately reimburses for prescription drugs.  The Medicaid expansion FMAP would be increased to 93 percent through 2025.

  • SNF Services.The BBB framework includes the following initiatives relating to skilled nursing facility (SNF) services reimbursed by Medicare:

    • Data Validation.  $50 million would be appropriated to HHS beginning in FY 2026 for the purposes of conducting data validation of nursing home quality data submitted through the Minimum Data Set, SNF Value-Based Purchasing Program, or Payroll Based Journal staffing dataset.  Subparagraph 1888(e)(6)(A) of the Social Security Act would also be amended to reduce SNF payments by 2% beginning in FY 2026 for SNFs that submit inaccurate data through any of these data systems.

    • SNF Cost Report Auditing.  $250 million would be appropriated to HHS over FY 2023 to FY 2031 for auditing SNF Medicare cost reports.

    • Survey Improvements.  $325 million would be appropriated to HHS over FY 2023 to FY 2031 for improvements to existing surveys and enforcement processes to improve compliance with SNF conditions of participation.

    • Nurse Staffing Ratio Studies.  $50 million would be appropriated to HHS over FY 2023 to FY 2031 to conduct studies on the appropriateness of establishing minimum staff-to-resident ratios in SNFs, which HHS shall promulgate through regulations.

  • Elder Justice Initiatives.  The BBB framework includes the following initiatives relating to healthcare services for the elderly:

    • Nursing Home Worker Grants.  $400 million would be appropriated over FY 2023 to FY 2026 for grants to states to support workers in post-acute and long-term care settings. Permissible uses of funds include wage subsidies, student loan repayment, tuition assistance, childcare, and transportation assistance, among other things.

    • Long-Term Care Ombudsman Programs. $112.5 million would be appropriated over FY 2023 to FY 2025 for grants to states for long-term care ombudsman programs to address abuse and neglect complaints.

    • Medical-Legal Partnerships.$500 million would be appropriated to establish a grant program for states to develop medical-legal partnerships, which would combine clinical staff with social workers and lawyers at a single site of care to ensure patients’ social needs (e.g., housing, food, education, and access to care) are met.

  • Residency Programs. The BBB framework would amend the Medicare statute to exclude from the residency slot cap any residents who participated in Rural and Underserved Pathway to Practice Training Programs at certain hospitals recognized by Accreditation Council for Graduate Medical Education for committing to certain additional training requirements.

  • Health Profession Opportunity Grants.The BBB framework would authorize $425 million for awards under the Health Profession Opportunity Grant program, pursuant to which HHS awards grants to organizations to provide education and training to certain low-income individuals for occupations in healthcare.

  • VA Funding. The BBB framework would provide funding for certain healthcare-related initiatives of the Department of Veterans Affairs (VA), including$2.4 billion for immediate and long-term infrastructure needs,$1.8 billion for major medical leases and clinics, and$268 million for up to 500 residency positions at VA facilities over 7 years.

  • Children’s Health Insurance Program.  Permanent funding to CHIP would be authorized, as well as permanent funding for several programs related to CHIP (including the pediatric quality measures program and the child enrollment contingency fund).  CHIP programs would be able to receive low-cost prescription drugs and states would have the option to increase CHIP eligibility levels.

  • Medicare Coverage of Hearing Services.  Additional professionals would be allowed to deliver hearing assessment services, beginning January 1, 2024.  Hearing aids would be covered under Medicare Part B, pursuant to individuals meeting certain conditions.

  • Public Health.  The BBB framework would provide allocations for healthcare infrastructure and workforce; pandemic preparedness; addressing maternal mortality; mental health and substance abuse treatment and prevention; HIV healthcare services programs; research capacity at minority serving institutions; research related to developmental delays; the World Health Center Health Program; and Native Hawaiian health.

For a copy of the current Rules Committee Print of the Build Back Better Act, please click here. For a section-by-section summary, please click here.

Reporters, J. Gardner Armsby, Atlanta, +1 404 572 2760,, Rebecca Gittelson, Atlanta, +1 404 572 4679,, and Allison Kassir, Washington, D.C., +1 202 626 5600,

DOJ Alleges Kaiser Defrauded Medicare Out of $1 Billion
On October 25, 2021, DOJ intervened in a False Claims Act (FCA) case against Kaiser Permanente, Kaiser Foundation Health Plan, Inc., and certain Permanente Medical Groups (Kaiser).  In its complaint, DOJ contends that Kaiser defrauded Medicare out of approximately $1 billion through “systematically altering” Medicare Advantage patient medical records “to add diagnoses that either did not exist or were unrelated to the patient’s visit with the Kaiser physician.”  The DOJ claims Kaiser added these diagnoses after the patient medical visit using a mechanism called an addendum.  Alleging that these addenda were often added months or even a year or more after the visit, DOJ states that many patients “were not even told that they supposedly had the diagnoses that Kaiser had added to their medical records.”  

According to the DOJ complaint, Kaiser engaged in initiatives called “data mining” and “chart review” where Kaiser would utilize automated algorithms and/or human reviewers to identify new diagnoses for the patients.  DOJ asserts that Kaiser focused its efforts “especially on diagnoses it knew were lucrative,” and “routinely ignored” the requirement that every diagnosis must have required or affected patient care, treatment, or management at the visit in order to be submitted to CMS for payment.  According to the DOJ complaint, these added diagnoses should not have resulted in addenda because they “were, almost by definition, not relevant to the visit.”

Beginning in 2007, shortly after the risk adjustment’s full implementation went into effect, whistleblowers started filing FCA complaints against Kaiser alleging Medicare Advantage fraud.  According to the DOJ complaint, between 2009 and 2018, Kaiser added roughly half-a-million diagnoses using addenda submitted to CMS and received Medicare payments in the range of $1 billion from these additional diagnoses.

Kaiser released a statement on October 25, 2021, announcing, “We are confident that Kaiser Permanente is compliant with Medicare Advantage program requirements and we intend to strongly defend against the lawsuits alleging otherwise.”  Kaiser further claims, “Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS.”

A copy of the complaint-in-intervention filed by the U.S. in U.S. ex rel. Osinek, et al. v. Kaiser Permanente, et al., U.S. District Court, Northern District of California, Case No. 3:13-cv-03891, is available here.

Reporter, Kelley T. Tran, Los Angeles, +1 213 443 4328,


CMS Issues ESRD PPS Final Rule – On October 29, 2021, CMS issued a final rule updating payment rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for services on or after January 1, 2022.  The final rule increases the ESRD PPS base rate to $257.90, which is an increase of approximately $5 over the current base rate of $253.13.  CMS projects an increase in total payments of 3.3 percent for hospital based ESRD facilities and an increase in total payments of 2.5 percent for freestanding facilities.  CMS also finalized changes to the Acute Kidney Injury dialysis payment rate for renal dialysis services furnished by ESRD facilities and finalized changes to the ESRD Treatment Choices Model that are designed to help address health equity.  CMS’s fact sheet regarding the final rule is available here and the final rule is available here

King & Spalding Adds a Former Chief Compliance and Privacy Officer to Its Healthcare Practice - King & Spalding is pleased to announce that Andi Bosshart has joined King & Spalding’s healthcare industry practice as a Senior Compliance Advisor.  King & Spalding’s healthcare industry practice includes more than 400 professionals who serve the entire spectrum of healthcare organizations.  Andi will serve as a valuable addition to our healthcare compliance practice.  She has over 30 years of experience in the healthcare industry, including 23 years serving as the Chief Compliance and Privacy Officer for a national health system. She has extensive expertise in the development, implementation, and evaluation of compliance program design and effectiveness, as well as the integration of compliance into organizational governance. Andi also has significant HIPAA privacy experience, including evaluating the design and effectiveness of an organization’s privacy program.