While Congress was in its second and last week of recess, the Biden Administration had a busy week of announcements, published rulemakings and difficult court decisions. As a reminder, we did not publish a check-up last week, so this newsletter includes two weeks of updates.
Public Health Emergency Renewed. As expected, on April 13, Health and Human Services (HHS) Secretary Xavier Becerra extended the current COVID-19 public health emergency (PHE) for an additional 90 days. The PHE was set to expire on April 16, and the latest 90-day extension means most of the flexibilities and waivers tied to the PHE can continue through mid-July (On April 7, the Centers for Medicare and Medicaid Services announced that it would begin phasing out select pandemic-related flexibilities applicable to skilled nursing facilities and nursing facilities, inpatient hospices, intermediate care facilities for individuals with intellectual disabilities, and end-stage renal disease facilities). Future extensions, however, are not certain as political pressure to wind down the COVID-19 pandemic policies continues to mount. Regarding potential future extensions, the Administration maintains it will provide 60-day notice before any PHE expiration. If this is to be the last COVID PHE, look for a signal from the Administration in mid-May, at the latest.
Skilled Nursing Facility Proposed Rule Released. The Centers for Medicare & Medicare Services (CMS) on April 11 released the fiscal year (FY) 2023 Skilled Nursing Facilities (SNF) Prospective Payment System (PPS) proposed rule. Overall, if finalized, policy changes made by the rule would decrease SNF payments $320 million in FY 2023, compared to FY 2022. While CMS is proposing an annual payment update of 3.9%, the agency is also proposing a 4.6% cut to SNF PPS rates because of the proposed recalibrated parity adjustment. A fact sheet on the rule is available here.
Inpatient Prospective Payment System Proposed Rule Released. On April 18, CMS issued the FY 2023 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System proposed rule. Notably, CMS estimates that, while the rule provides an update of 3.2% to the standardized amount for hospitals meeting quality reporting program requirements, the overall proposed update and other rule changes will decrease IPPS payments to hospitals in FY 2023 by approximately $300 million. Other proposals addressed in the rule include updates to graduate medical education (GME) policies, changes to the quality reporting programs to address COVID-19 and several requests for information that focus on climate change, health equity, and maternal health. Of note, CMS proposes to maintain a policy that supports hospitals in low wage index areas notwithstanding a court decision invalidating the policy that was first implemented in FY 2020. Our full summary of the proposed rule is available here. Comments on the rule are due on June 17.
HHS Releases New Data on Ownership Changes and Mergers. On April 20, HHS released data on mergers, acquisitions, consolidation, and change of ownership (CHOW) for hospitals and nursing homes enrolled in Medicare from 2016 to 2022. This is the first time this data is publicly available, and HHS intends to update and release the data quarterly. The Hospital CHOW dataset provides information on individual, organizational ownership interest and managerial control associated with the buyer and seller organizations, role of the owner, association date, address of the organizational owner and other ownership details. The SNF CHOW dataset includes information on the buyer and seller organization’s legal business name, provider type, change of ownership type (CHOW, Acquisition/Merger, or Consolidation) and the effective date of the change. HHS’s Office of the Assistant Secretary for Planning and Evaluation also released a report analyzing the new change in ownership data, which is available here. These data are expected to guide policy on provider combinations and the role of private equity investment in SNFs.
Federally Regulated Transportation Mask Mandates Lifted. On April 18, U.S. District Judge Kathryn Kimball Mizelle of Florida struck down the Biden Administration’s COVID-19 mask directive for planes, trains, and other means of public interstate transportation. Prior to the ruling, the federal transportation mandate had been due to expire on May 3. Most U.S. airlines, many public transit systems, Amtrak and Uber dropped the requirement after the Transportation Security Administration said it would no longer enforce the mandate. The Justice Department announced on April 20, two days later, that it would appeal the ruling. It is not yet known if the government will seek a stay in the case to keep the mandates in place while the appeal is pending.
Medicaid Work Requirements Cases Thrown Out. The Supreme Court on April 18 agreed that the cases disputing Medicaid work requirements in Arkansas and New Hampshire are now moot after the Biden Administration revoked the Medicaid work policies. The Supreme Court instructed the lower courts to vacate the prior rulings. As background, requests by several states to impose work requirements as a condition for certain Medicaid eligibility were approved under the Trump Administration. Generally, these waivers allowed states to require beneficiaries to work, go to school, or volunteer in their communities to remain eligible for safety-net insurance coverage. After a series of legal challenges, a federal appeals court unanimously ruled against Arkansas’ Medicaid work requirements. The US Supreme Court agreed in late 2020 to hear an appeal made by the Trump Administration to review the Arkansas case, joined by the New Hampshire case. The Biden Administration then revoked the waivers in Arkansas, New Hampshire and other states with approved waivers, thereby leading to the Supreme Court’s recent decision that the cases are now moot.
The House and Senate will return from recess to work on the stalled pandemic-relief package, and all eyes will be on whether Democrats show signs of negotiating a revised reconciliation package with Senator Manchin.
For more information, contact Debra Curtis, Madeline Hodge, Rachel Kosh, Kristen O’Brien or Erica Stocker.
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