January 21, 2021

At the Buzzer! CMS’ Last Minute Regulatory Actions

As we usher in a new administration, the outgoing one certainly left behind its final mark. In the last few weeks of the Trump Administration, the Centers for Medicare & Medicaid Services (CMS) issued numerous final regulations, some of which came only a handful of days after public comments were due on the associated proposed regs. By law, federal agencies, such as CMS, must take into account public comments from proposed regs when drafting final policies. The short timetable between the public comments deadline and the final regs were released begs the question of whether CMS was adequately able to go through all the public comments before finalizing the regs.

So what did CMS do in the final days of the last administration? Last Thursday, CMS released the final 2022 Notice of Benefit and Payment Parameters (NBPP). This is the annual notice that governs policies around private plans on the Affordable Care Act (ACA) Exchange. In the notice, CMS makes a number of changes that ACEP and other stakeholders expressed concerns with. Comments on the proposed notice were due on December 30, just 15 days before the final notice was released. Two significant and controversial policies included:

  • CMS decided to finalize its proposal (despite objections) to allow certain states to rely on private sector entities that establish their own independent websites—rather than using a centralized, Exchange-run website that consumers know and trust—to enroll consumers into ACA health plans. ACEP strongly believes that this approach increases the risk that consumers mistakenly purchase less comprehensive and potentially more expensive health care coverage from non-sanctioned private websites.
  • CMS also codified key portions of its previous ACA "Section 1332" guidance. Section 1332 of the ACA allows states, through a waiver process, to develop an alternative approach for meeting the ACA coverage requirements. While Section 1332 requires any such state waiver to offer as comprehensive and affordable health care options as consumers would have otherwise received under a traditional ACA Exchange, the Trump Administration issued guidance in 2018 that opened the door for states to promote Association Health Plans and short-term, limited duration plans as viable alternatives to ACA Exchange plans. These plans do not have to cover all ten essential health benefits, including emergency services. In our response to the proposed notice, ACEP had reiterated our previous concerns about the section 1332 guidance. We strongly believe that allowing states to pursue these “State Relief and Empowerment Waivers” will create more instability in the market and make it more difficult for vulnerable populations to access care. 

If 15 days seems like a quick turnaround, amazingly, CMS issued another final reg even quicker! In the span of just 11 days from when proposed reg comments were due to when the final reg was issued, CMS finalized a major reg last Friday that imposes new requirements for certain health plan (excluding Medicare Advantage plans) to improve the electronic exchange of health care data and streamline processes related to prior authorization. It requires increased patient electronic access to their health care information and would improve the electronic exchange of health information among payors, providers, and patients. 

CMS wasn’t done yet. The agency also finalized other major regs, including a reg governing Medicare Advantage and Medicare Part D private health plans and a rule that creates a new Medicare coverage pathway, Medicare Coverage of Innovative Technology (MCIT), for breakthrough devices. Finally, it issued its Medicare Advantage and Medicare Part B annual rate notice last Friday—three months earlier than the annual notice is typically released.

Beyond regs, CMS approved multiple Medicaid demonstration waivers in the last couple of weeks, some of which represent a significant shift away from how Medicaid traditionally operates. For example, on January 8, CMS approved a waiver from Tennessee to test a block-grant approach for its state Medicaid program. The “TennCare III demonstration” takes advantage of many of the flexibilities that CMS provided in its Healthy Adult Opportunity Initiative. Outgoing CMS Administrator Seema Verma also wrote a letter to state Medicaid directors, asking them to lock in these Medicaid changes as soon as possible. This move was criticized by some Democrats in Congress, who believe that it would make it harder for the Biden Administration to modify any of the demonstrations.

In terms of next steps for the Biden Administration, it does have some options if it wants to revisit any of these regulatory actions, but the road ahead will be challenging. President Biden issued a moratorium on regs still under development. This means that those regs that were not published in the Federal Register when the change in administration occurred are now on-hold until further review. However, the ACA NBPP made it officially into the Federal Register on January 19, the day before the inauguration. Therefore, to rescind or negate any of the policies included in the notice, the new administration would need to delay the effective dates (by up to 60 days), consider reopening the public comment period to get additional stakeholder feedback, and/or issue another reg that would change these final policies.  

All in all, it remains to be seen how the Biden Administration will tackle each one of these final regulations, and which of the final policies actually will go into effect unchanged.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.

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