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November 19, 2020

The Holiday Gift-giving Season (of Regulations) is Here!

With the holiday season almost upon us, it looks like the health care policy community will be getting many “gifts”—and by gifts, I mean a whole holiday basket full of regulations! The Centers for Medicare & Medicaid Services (CMS) started their gift-giving a little early this year. A couple weeks ago, CMS released the Calendar Year (CY) 2022 Medicare Advantage and Part D Advance Notice, an annual reg that proposes changes to Medicare private plan policies. While the release of this notice was not surprising, what was unusual was the timing. CMS decided to release the advance notice a few months earlier than in previous years. CMS usually releases the Medicare Advantage and Part D advance notice in January or February since the notice doesn’t need to be finalized until April.

This early gift represents a pattern of what we will likely see play out through the remainder of the year—CMS (and other federal agencies) will try to get as many regs out the door as it can to establish a lasting policy footprint and solidify some key administration priorities. So what other regulatory gifts can we expect this holiday season? Here are some I’m monitoring that CMS has or will soon release.

Last week, CMS released the 2020 Medicaid and Children’s Health Insurance Program (CHIP) Managed Care final reg. This reg provides more flexibility to states on how they can manage their Medicaid managed care programs. Of note, the reg changes minimum standards that states must use to develop their network adequacy requirements for Medicaid managed care plans. ACEP had submitted comments on the proposed reg requesting that CMS specify emergency physicians as a specialty type that states would be required to include in their network adequacy standards. Unfortunately, CMS did not adopt this request in the final reg, instead deferring to states on which specialists to include in their standards.

Next, CMS is rumored to release a reg any day that would set Medicare drug prices at the lowest price that manufacturers sell the drug in certain foreign countries. The reg aligns with President Trump’s executive order on drug pricing that promoted the concept of “most-favored-nation price.” Interestingly, CMS may issue a final policy instead of first proposing it and seeking public comments. The pharmaceutical industry may challenge the reg in court in part because CMS is not going through the usual regulatory process.

Going forward, we expect the 2021 Medicare Physician Fee Schedule (PFS) final reg to come out sometime within the next couple of weeks. As I have discussed in previous Regs & Eggs posts, this major reg includes numerous policies that will have a significant impact on your reimbursement and on patient care. Of utmost concern is a potential 6 percent pay cut to emergency medicine physicians—which we know would be extremely challenging for many of you to absorb, especially during a pandemic. ACEP submitted a robust set of comments to CMS on the proposed reg with recommendations on how to eliminate or mitigate the cut and is actively working with Congress on legislation that would hold physicians harmless from any payment reductions in 2021. While we are hopeful that CMS will make some policy changes in the final reg that will at least soften the blow to emergency physicians, we will definitely continue to advocate on your behalf and push Congress to institute some financial relief if CMS does in fact finalize these drastic cuts. For now, we have issued an action alert asking that you urge your U.S. Senators to support legislation that would address this issue.

Around the same time CMS will issue the final PFS reg, it will also release the 2021 Medicare outpatient prospective payment system final reg which sets payment rates for hospital outpatient services. In this reg, CMS may finalize a proposal to eliminate the Inpatient Only (IPO) list. This is a list of procedures which currently can only be performed in a hospital inpatient setting. In our comments on the proposed reg, we expressed concerns about the effects eliminating the IPO list will have on observation stay reimbursement policies.

Lastly, CMS and the Office of the Inspector General (OIG) within the Department of Health and Human Services will likely release final regs on the physician self-referral law (aka the Stark Law) and the anti-kickback statute respectively. The main impetus for these regs is to help encourage new value-based arrangements in health care. Many stakeholders believe that the Stark Law and anti-kickback statute are roadblocks to value-based care since they create confusion about whether some care coordination activities are legally permissible. The final regs will create permanent exceptions to the Stark Law and safe harbors to the anti-kickback statute that would allow for these value-based arrangements. ACEP submitted detailed comments on both the CMS and OIG proposed regs, where we noted that the current gap in emergency medicine-focused alternative payment models impedes efforts for emergency physicians to embrace value-based care. We will see if CMS and OIG address any of our comments in the final regs.

While these are the major regs on my radar screen at the moment, others may pop up in the next few weeks and I will keep you informed when/if any additional ones are released. Also, stay tuned for a detailed summary and analysis of the PFS final reg once it comes out.

A programming note before I conclude. There will be no Regs & Eggs next week due to Thanksgiving. Please safely enjoy the holiday, and until next time, this is Jeffrey saying, enjoy reading regs with your eggs!

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