This Week’s Dose

President Trump signed an Executive Order aimed at improving rural healthcare and expanding telehealth access, and the Centers for Medicare and Medicaid Services (CMS) released annual Medicare payment rules. Congress has yet to reach an agreement on the next coronavirus (COVID-19) relief package. 

Congress

Negotiations Continued on Next COVID-19 Relief Package. Last week, Senate Majority Leader Mitch McConnell (R-KY) released a Republican stimulus and relief proposal called the Health, Economic Assistance, Liability Protections and Schools (HEALS) Act. The Senate Republican bill was intended to be a response to the House Democrats’ COVID-19 relief package, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which the House approved in May. There are significant differences between the proposals, including $2 trillion in the total costs of the bills, and a compromise has yet to emerge. Lawmakers are up against growing political pressure as some relief provisions, including the $600 per week federal unemployment benefit, have expired. The White House has indicated that it may try to extend the enhanced unemployment benefit, along with the expired eviction moratorium and a delay of federal payroll taxes, through executive action if a deal is not reached. The President’s legal authority to do so is not clear. 

Administration

Administration Tackled Telehealth Expansion Through Executive Order and Medicare Physician Fee Schedule. The Executive Order on Improving Rural Health and Telehealth Access outlines four broad policy proposals: expanding certain temporary regulatory flexibilities beyond the COVID-19 public health emergency; creating a new payment model to help rural providers move to value-based arrangements; improving telecommunications infrastructure; and reducing regulatory burdens for rural providers. Separately, the annual Medicare Physician Fee Schedule proposed rule includes provisions to make some rural telehealth flexibilities permanent and a solicitation for the types of services to add to the Medicare telehealth list of services. CMS Administrator Seema Verma noted that the Administration is limited in its ability to make telehealth flexibilities permanent beyond rural areas, and that certain other expansions would require congressional action. Some lawmakers and stakeholders are advocating to make some of the necessary legislative changes in the next COVD-19 relief package. Given the complexity of the negotiations so far, it is unclear whether telehealth policy will make it into the final bill.

HHS Announced Additional Application Opportunities for the PRF. Late last week, the Department of Health and Human Services (HHS) announced that starting the week of August 10, Medicare providers who missed the opportunity to apply for additional funding from the $50 billion General Distribution of the Provider Relief Fund (PRF) will have a second chance to apply. HHS will also open an application process on August 10 for Medicare providers that experienced a change in ownership in 2020 that prevented them from applying for the original $30 billion portion of General Distribution funding. The application deadline for both groups is August 28, 2020. The agency also extended the deadline for Medicaid and dental providers to apply for funding through the PRF to August 28, 2020, and will soon be providing a simplified application form.

CMS Released Annual Payment Update Rules.

• CMS released the Changes to Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Addition of New Categories for Hospital Outpatient Department Prior Authorization Process [CMS-1736-P] and the CY 2021 Revisions to Payment Policies under the Physician Fee Schedule (PFS) and Other Changes to Part B Payment Policies [CMS-1734-P] proposed rules, which make payment updates and policy changes for calendar year 2021 affecting Medicare hospital outpatient and ambulatory surgical center services and physician payment, respectively. Detailed summaries of the OPPS and PFS proposed rules are available here.

• CMS released the FY 2021 Inpatient Psychiatric Facilities Prospective Payment System Rate Updatesfinal rule, which updates the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities for fiscal year (FY) 2021.

• CMS released the FY 2021 Skilled Nursing Facility Prospective Payment System Rate and Value-Based Purchasing Program Updates final rule, which updates the payment rates used under the prospective payment system for skilled nursing facilities.

• CMS released the FY 2021 Hospice Wage Index, Payment Rate Update final rule, which updates the hospice wage index, payment rates and cap amount.

• CMS released the FY 2021 Inpatient Rehabilitation Facility Prospective Payment System Rate Updatefinal rule, which updates the prospective payment rates for inpatient rehabilitation facilities.

Courts

Federal Appeals Courts Issued Conflicting Opinions on Public Charge Rule. Last week, a federal district court issued a temporary nationwide injunction against the Trump Administration’s public charge rule during the COVID-19 public health emergency, siding with the states of New York, Connecticut and Vermont, who argued that the policy poses a public health risk by deterring immigrants from seeking healthcare. The US Court of Appeals for the 2nd Circuit upheldthe injunction this week but narrowed the scope to apply only in the plaintiff states. In a separate decision, the US Court of Appeals for the 4th Circuit sided with the Administration and reversed another nationwide injunction against the rule issued by a federal district court in Maryland. The rule was set to take effect in October 2019 but was delayed by several lawsuits before the US Supreme Court ruled that it could take effect in January 2020. With differing decisions at the appeals court level, litigation over the controversial policy is sure to continue. 

States

Missouri Voted to Expand Medicaid. Voters in Missouri approved an amendment to the state constitution that requires the state to expand Medicaid to adults with incomes up to 138% of the federal poverty level by July 2021. Missouri is the second state to vote to expand Medicaid during the pandemic (Oklahoma voters approved a similar ballot measure in June). In addition to expanding Medicaid, the constitutional amendment prohibits any additional restrictions or requirements for the expansion population, effectively banning proposals like Medicaid work requirements, which many Republican-led states have pursued with the Administration’s support. Medicaid enrollment in Missouri rose nearly 9%between February and May, underscoring the link between the safety net program and the pandemic as unemployment continues to rise across the country. Twelve states that have not expanded Medicaid. They may face increased pressure to do so as the pandemic continues and unemployment worsens.

Quick Hits

• The House Ways and Means Committee Rural and Underserved Communities Health Task Force held a member discussion on the role of telehealth during COVID-19 and beyond.

• Representatives Cindy Axne (D-IA) and Neal Dunn (R-FL) introduced the Eliminating the Provider Relief Fund Tax Penalties Act, which would make PRF payments tax free and expenses attributable to the PRF tax deductible.

• Senators Tina Smith (D-MN) and Chris Murphy (D-CT) introduced the Improving Social Determinants of Health Act, which would authorize the Centers for Disease Control and Prevention to create a program aimed at addressing social determinants of health and reducing health inequality.

• President Trump signed an Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States, which encourages the domestic production of essential medicines and medical countermeasures and directs federal agencies to prioritize procurement of US-made products.

• CMS and the Substance Abuse and Mental Health Services Administration announced that Michigan and Kentucky will join eight other states as participants in the Certified Community Behavioral Health Clinic Demonstration, which aims to improve access to community-based behavioral healthcare. 

M+ Resources

• To provide additional financial support for Medicare providers responding to COVID-19, CMS expanded the Accelerated and Advance Payment Programs. Now, approximately four months after the first accelerated and advance payments were distributed, early applicants are approaching the date when Medicare will begin recouping payments through zeroed out claims, absent congressional action. Our report details the current status of the program and considerations for providers.

• Our consultants offer their key takeaways from the 2021 Medicare Physician Fee Schedule proposed rule on this week’s episode of the Health Policy Breakroom.

• Those interested in learning more about the CY 2021 Medicare Physician, Hospital Outpatient and Ambulatory Surgical Center Proposed Rules can join McDermottPlus for a one-hour webinar on Tuesday, August 18, 2020, at 1:30 PM ET. Register here. 

Next Week’s Diagnosis

Congress has yet to reach an agreement on the next COVID-19 relief package and is facing mounting pressure from industry stakeholders and the public. Negotiators are aiming to produce a bill by early next week but so far, the negotiations remain at an impasse.