backHHS Proposes Repeal of Two Trump Administration Rules on Guidance, Enforcement, and Adjudication Procedures—On October 20, 2021, HHS published in the Federal Register a proposal to repeal two final rules issued during the Trump administration. The final rules up for repeal are the “Department of Health and Human Services Good Guidance Practices,” (the GGP Rule) published in the Federal Register on December 7, 2020 and the “Department of Health and Human Services Transparency and Fairness in Civil Administrative Enforcement Actions,” (the Civil Enforcement Rule), published in the Federal Register on January 14, 2021. The GGP Rule relates to guidance documents published by federal agencies, and the Civil Enforcement Rule relates to civil administrative enforcement and adjudication processes. As stated in the Federal Register, HHS “has taken a renewed and critical look at the HHS GGP and Civil Enforcement rules and has concluded that both rules frustrate the Department’s ability to efficiently direct and operate in the interest of public health and are inconsistent with the policies and goals of the current Administration.” HHS is seeking comments on the proposed repeal of the GGP and Civil Enforcement Rules. To ensure consideration, comments must be submitted to https://www.regulations.gov by no later than 11:59 on December 20, 2021.
The GGP and Civil Enforcement Rules were promulgated in accordance with two Executive Orders (EO) issued by the Trump administration on October 9, 2019 (EOs 13891 and 13892). These EOs have now been repealed, but the GGP and Civil Enforcement Rules remain in place. The GGP Rule requires: (1) guidance documents issued by federal agencies to state that the guidance does not have the force and effect of law and is not binding unless specifically incorporated into a contract; (2) heightened procedures for “significant guidance documents;” (3) a repository for all guidance documents; and (4) procedures for the public to petition to withdraw or modify guidance documents. Key aspects of the Civil Enforcement Rule require: (1) that agencies only apply standards and practices in a civil enforcement action that have been publicly stated; (2) that if an agency relies on a decision to assert new or expanded claims of jurisdiction, it must publish the initial decision in the Federal Register or the Department’s guidance repository before the conduct over which the jurisdiction is sought occurs; and (3) that before a civil enforcement action is taken, the agency taking the action must give written notice of its initial legal and factual determinations, give the entity an opportunity to respond, and provide a written response to the affected entity if timely requested.
According to HHS, the proposed “repeal is consistent with the policies of the Biden-Harris Administration as reflected in the last three EOs issued by President Biden.”
First, EO 13992, “Revocation of Certain Executive Orders Concerning Federal Regulation,” 86 FR 7049 (Jan. 25, 2021) (EO 13992), revoked both EOs 13891 and 13892 and directed agencies to promptly take steps to rescind any orders, rules, regulations, guidelines, policies, or portions thereof, implementing or enforcing the revoked EOs, as appropriate and consistent with applicable law.
Second, EO 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” 86 FR 7009 (Jan. 25, 2021) (EO 13985), states that it is the policy of the Biden-Harris Administration for the federal government to pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality. The EO directed agencies to recognize and work to redress inequities in their policies and programs that serve as barriers to equal opportunity.
Third, EO 14009, “Strengthening Medicaid and the Affordable Care Act,” 86 FR 7793 (Feb. 2, 2021) (EO 14009), states that it is the policy of the Biden-Harris Administration for the federal government to protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American. The EO directs HHS, among others, to examine its regulations, policies, and the like to ensure that they are consistent with the policy of providing high quality and accessible healthcare for all, and do not undermine protections for people with pre-existing conditions under the ACA, reduce coverage under or otherwise undermine Medicaid or the ACA, or undermine the Health Insurance Marketplace or the individual, small group, or large group markets for health insurance in the United States. According to HHS, because it “frequently issues guidance to clarify policies and beneficiary protections under Medicaid, the additional regulatory hurdles and confusion created by the HHS GGP final rule would likely undermine those goals by impeding and delaying the issuance of Medicaid guidance.”
Click here to access HHS’ publication of the proposed repeal of the GGP Rule the Civil Enforcement Rule in the Federal Register.
Reporter, Amy L. O’Neill, Sacramento, +1 916 321 4812, aoneill@kslaw.com.
HHS Releases New Frequently Asked Questions Regarding CARES Act Provider Relief Funds—Last week, HHS released seven new and modified Frequently Asked Questions (FAQs) regarding payments distributed to providers via the CARES Act Provider Relief Fund. The FAQs cover a wide range of topics, including appealing payments made in the Phase 3 distribution, the Phase 4 payment methodology, and more.
The new FAQs broadly discuss the following general categories: (1) general information; (2) terms and conditions; (3) appeals; and (4) Phase 4 distribution. Notably, the FAQs explain that providers who believe their Phase 3 distribution was miscalculated now have until November 12, 2021 at 11:59:59 pm EST to submit the Provider Relief Fund Reconsideration Request Form. HRSA encourages providers to apply early to facilitate review and expedite any revised payments. Any corrections to payment determinations are subject to the availability of funds. More information on the reconsideration process is available here.
The FAQs also provide additional information on the Phase 4 payment methodology. Approximately 75% of the Phase 4 allocation will be used for Base Payments, which are a percentage of a provider’s change in quarterly operating revenues and expenses, as follows:
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Provider size categories (Small, Medium, and Large) will be based on annual net patient care revenues and will be established after the close of the Phase 4 application.
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Large providers will receive a Base Payment amount that is a percentage of the change in their quarterly operating revenues and expenses.
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Base Payments for medium and small providers will include the same percentage of the change in their quarterly operating revenues and expenses plus a scaled supplement, with small providers receiving the greatest amount.
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No provider will receive a Base Payment that exceeds 100% of their change in quarterly operating revenues and expenses.
Approximately 25% of the Phase 4 allocation will be put towards bonus payments, as follows:
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Bonus payments will be based on the amount and type of services provided to Medicaid, CHIP, and Medicare beneficiaries from January 1, 2019 through September 30, 2020.
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HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
The new FAQs explain that HRSA will use the applicant’s adjusted gross revenue to categorize providers’ size, and instructs applicants to apply at the filing TIN level and include all subsidiary billing TINs. HRSA will make $12.75 billon (75% of $17 billion) in payments based on changes in operating revenue and expenses and $4.25 billion (25% of $17 billion) in bonus payments.
The complete FAQ document is available here.
Reporter, Ahsin Azim, Washington, D.C., +1 202 626 9262, aazim@kslaw.com.
Healthcare Providers Say Anthem Blue Cross is Behind on Billions of Dollars in Payments—According to hospital officials in multiple states, Anthem Blue Cross is behind on billions of dollars in payments to hospitals because of new reimbursement rules, computer problems, and mishandled claims—this according to an article in Kaiser Health News published on October 6, 2021 available here. An Anthem spokesperson was quoted, saying “[w]e recognize there have been some challenges” and “[w]e apologize for any delays or inconvenience this may have caused.” Hospitals cite a variety of causes to the payment delays and denials, including “new layers of document requirements, prior-authorization hurdles for routine procedures and requirements that doctors themselves—not support staffers—speak to insurance gatekeepers.”
This is nothing new to King & Spalding’s healthcare partner in Los Angeles, Daron Tooch, who has represented providers for almost three decades to recover underpayments from insurers like Anthem. Mr. Tooch is representing a number of hospitals that are owed tens of millions of dollars from Anthem for a variety of reasons, including:
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Denials for outpatient infusion medications for hospital refusing to comply with Anthem’s Specialty Pharmacy or “White-Bagging” policy;
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Line-item denials of charges on claims on the grounds that such charges are “routine” or included in other charges;
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Improper downcoding of DRGs or CPT codes;
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Denials for lack of authorization for services that do not need prior authorization or for which authorization was received;
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Denials of claims as the financial responsibility of IPAs or other payors;
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Claims that are priced incorrectly;
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Delays in processing and payment of claims; and
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Out-of-network payments that are not reasonable value.
Another example was discussed in the Kaiser Health News article regarding VCU Health, a healthcare system in Virginia. VCU Health says Anthem owes it $385 million dollars, and that 40% of those claims are more than 90 days old.
Anthem’s regulatory filings reflect the issues about which the providers are complaining and that the situation may be getting worse because of the COVID-19 pandemic. The Kaiser Health News article reports that on June 30, 2019, 43% of Anthem’s medical bills for that quarter were unpaid. Two years later, that figure rose to 53%—representing a difference of $2.5 billion. The Kaiser Health News article further reports that in 2020, Anthem profits were $4.6 billion, and in just the first half of 2021 that figure was $3.5 billion. In other words, Anthem is reaping large profits while failing to accurately and timely pay hospitals.
Reporters, Daron Tooch, Los Angeles, +1 213 443 4312, dtooch@kslaw.com, and Dominic Nunneri, Los Angeles, +1 213 443 4329, dnunneri@kslaw.com.
Also in the News
CMS Says Medicare and Medicaid Accountable Care Models to be Nearly Universal by 2030 – On October 20, 2021, CMS and the Center for Medicare & Medicaid Innovation (CMMI) published a white paper detailing anticipated changes to the federal value-based payment (VBP) models for Medicare and Medicaid under the Biden Administration. One of the goals announced in the white paper is to get every Medicare and most Medicaid fee for service beneficiaries into an accountable care program by 2030. CMS and CMMI leadership expect that this approach will involve increased support for providers, particularly for critical access and disproportionate share hospitals, as well as more “actionable data, learning collaboratives and more regulatory and payment flexibility.” Other objectives for VBP models going forward include: (1) advancing health equity, (2) supporting innovation, (3) addressing affordability, and (4) partnering to achieve system transformation. There are no plans to end any ongoing VBP models early, but these goals will guide revisions to current models and development of future models. As part of the effort to increase affordability, CMMI is speaking with stakeholders about integrating specialty care into accountable care models, outcome-based drug pricing, and bundled payments that cover treatment episodes. The white paper is available here.
King & Spalding Webinar – Navigating the Federal Vaccine Mandate and the State Vaccine Mandate Bans: What Employers (Including Government Contractors) Can Expect – President Biden recently issued an Executive Order that requires all employees of federal contractors to be fully vaccinated against COVID-19. The White House subsequently issued guidance explaining the vaccination requirements and other COVID-19 related safety measures for federal prime contractors and subcontractors. The timeline for implementation is very fast and the logistical challenges to execution are vast. King & Spalding has been working with clients to break through these challenges. On Thursday, October 28, 2021, from 12:00 – 1:00 pm ET, join our experts in a discussion of this issue to assist you as you work to act on this order.
In this briefing, our attorneys will cover the following:
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Navigating that competing compliance obligations arising from state and federal executive orders
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Determining which contracts are covered and excluded
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Defining the scope and requirements of the order
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Timing of the new requirements
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Dealing with practical and geographic challenges to the order
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Understanding the risks of non-compliance
To register for the event, click here.
King & Spalding California Roundtable Webinar – Best Practices for Providers After They Receive a Payment Denial: Setting up Appeals and Disputes for Success – As healthcare providers struggle to survive in the California healthcare market, a critical component to maintaining revenue is recovering money owed from payers through the appeal and disputes process. On Thursday, October 28, 2021, at 12:00 pm PT, King & Spalding will be hosting a 60-minute California Roundtable Webinar to discuss the many ways that healthcare providers can increase their recoveries through the claims appeal and litigation/arbitration process and save money while doing so through streamlined processes and procedures. Key topics include:
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Effective appeals, and getting the most out of the meet-and-confer process
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Avoiding accrual and time-bar traps relevant to managed care disputes, and important California considerations that might help
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Trending managed care reimbursement issues that providers should be aware of
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Tips for negotiating managed care agreements that make the appeal and disputes process more efficient and effective
King & Spalding presenters will include members of our Los Angeles and Sacramento offices who regularly work on payer provider disputes involving denied and underpaid claims for California providers. The presenters include Glenn Solomon, Stephen Goff, Amanda Hayes-Kibreab, and Amy O’Neill. To register for the event, click here.
Monthly Editors: Ahsin Azim and Dennis Mkrtchian