Posted by Chris Raphaely
on August 12, 2021
Two chambers of commerce, the Chamber of Commerce the United States of America and the Tyler (TX) Area Chamber of Commerce, filed a lawsuit on August 10, 2021, in the US District Court for the Eastern District of Texas against the United States departments of Health and Human Services, Labor and Treasury to block the implementation of two provisions contained in the federal regulations entitled Transparency in Coverage (“Rule”).
The first challenged provision requires health plans to post on a website internal pricing data, including allowed amounts, in-network rates, and the negotiated rates for all services and the “historical net price” of prescription drugs, in “machine-readable” (searchable) files. The second provision being challenged requires the inclusion of the “historical net price” of prescription drugs in the machine-readable files. The provisions are set to go into effect for “plan years” beginning after January 11, 2022. Another major provision of the Rule, the one requiring insurers to provide “cost-sharing information” to individuals upon request via a website or in paper form, is not being challenged in the lawsuit.
The United States Departments of Health and Human Services, Treasury and Labor released interim final rules (“Rules”) regarding the “No Surprises Act” (“Act”) yesterday. The Rules are effective beginning on January 1, 2022. They cover the requirements for the billing and payment of emergency and air ambulance services by non-participating providers and non-emergency services performed by non-participating providers at participating health care facilities. The Rules do not detail the independent dispute process between plans and providers (“IDR”), transparency requirements, or price comparison tools that are outlined in the Act. The agencies intend to issue rules covering those aspects of the Act later this year.
While we, along with the plans, providers and patient advocacy groups sift through over 400 pages of preamble and regulations in the coming days and weeks, there are a few items worth noting initially:
On December 28, 2020, the District Court for the Northern
District of California granted a motion for a preliminary injunction enjoining
the Centers for Medicare and Medicaid Services from implementing the Most
Favored Nation Rule (the “Rule”, summarized in our December
23 post) until the notice and comment procedures required by the federal
Administrative Procedures Act (“APA”) are completed. The opinion,
penned by Judge Chhabria, largely adopts the reasoning of the District Court
for the District of Maryland, which granted a temporary restraining order
against the implementation of the Rule last week. Judge Chhabria notes that the
plaintiffs are “virtually certain” to prevail on their claim that the
government violated the APA, and concludes that vacating the Rule in its
entirety pending completion of the notice and comment period is the only
appropriate path, as enjoining its enforcement as to the plaintiffs only runs
contrary to the underlying purposes of the Rule itself. We will continue
to monitor pending suits and other developments related to the Rule’s
Posted by Danielle Sapega
on December 23, 2020
On December 23, 2020, The District Court for the District of
Maryland granted a temporary restraining order temporarily ceasing the
implementation of the Centers for Medicare and Medicaid Services’ (“CMS”) Most
Favored Nations Rule (the “Rule”) for fourteen (14) days. The Rule,
published on November 27, seeks to lower the amount paid for 50 high-cost
Medicare Part B drugs to the lowest price that drug manufacturers receive in
similar countries. The Rule was set to take effect on January 1, 2021. Several
suits have been filed challenging the Rule’s validity and CMS’ authority in
issuing the Rule, particularly since the Rule was issued without the usual
notice and comment procedures. In granting the TRO, the Court found that the
plaintiffs demonstrated a likelihood of success on the merits of their claim
under the Administrative Procedures Act, which requires an agency to publish a
general notice of proposed rulemaking in the Federal Register and allow stakeholders
to comment. We will continue to monitor developments on this case and the other
pending cases closely.
On Friday, November 20, 2020, the Centers for Medicare and
Medicaid Services (“CMS”) released final regulations to remove certain barriers
to the implementation of physician compensation arrangements under value-based
payment arrangements posed by the “Stark” Physician Self-Referral law. The new
regulations are the first substantive changes to the regulations in two years
and the first attempt by CMS to update the regulations specifically to address
value-based payment arrangements that have proliferated since the regulations were
initially implemented in the early 2000s.
The new rules contain three new exceptions to the Stark law’s
general prohibition on physician referrals for designated health services to
entities with which the physician has a financial relationship that are
specifically targeted at value-based arrangements; one for value-based arrangements
involving full financial risk, one for value-based arrangements with meaningful
downside risk for physicians, and one for value-based arrangements that involve
neither full financial for physicians or meaningful downside risk.
On October 29, 2020, Governor Wolf signed House Bill 81 into law, creating new minimum education and certification requirements for central service technicians and surgical technicians working in the Commonwealth, and regulating the practice of surgical technology. The Act will take effect on December 28, 2020.
Central Service Technicians
The Act defines central service technicians (“Central Tech”)
as “an individual who provides the services of inspecting, assembling,
decontamination, preparation, packaging and sterilization of reusable medical instruments
or devices.” Under the Act, a health care facility cannot employ or otherwise
contract for the services of a Central Tech unless the individual has
successfully passed a nationally accredited central service exam for central
service technicians and holds and maintains either a certified registered
central service technician or a certified sterile processing and distribution
technician credential. Currently employed health care facility Central Techs and
contracted Central Techs are grandfathered from the requirements, but any Central
Tech that is considered a new employee must meet the minimum requirements
within 18 months from the date of hire. Techs must complete 10 hours of annual
continuing education. The Act directs the Department of Health (“DOH”) to
promulgate regulations necessary to implement the Act’s requirements, and
grants the DOH general oversight.
As we indicated in last week’s blog post , the D.C. Circuit Court’s refusal to uphold HHS’ pharmaceutical price disclosure rule (“RX Rule”) was not a predictor of how the trial court might rule in the closely watched challenge to HHS’ hospital price transparency rule (“Hospital Rule”). In a June 23, 2020 ruling on cross motions for summary judgment, American Hospital Association, et. al. v. Azar, D.C. District Court Judge, Carl Nichols, ruled that HHS did not overstep its authority under Section 2718 of the Public Health Services Act (“Section 2718”) by requiring hospitals to publish their “gross charges”, payer-specific negotiated rates, discounted cash prices, and de-identified minimum and maximum negotiated charges.
On June 16, the D.C. Circuit Court struck down the Centers for Medicare and Medicaid Services’ (“CMS”) rule issued in May 2019 requiring pharmaceutical companies to disclose the wholesale acquisition cost of drugs over $35 in their direct-to-consumer television advertisements (“RX Rule”). Similar to the RX Rule, the Hospital Price Transparency Rule, issued on November 27, 2019, requires hospitals to publish, among other information, payor-specific rates for certain services on their websites beginning on Jan 1, 2021 (“Hospital Rule”). Both rules stem from the Trump administration’s stated efforts to improve the nation’s health care quality and transparency, and both were met with swift legal opposition. The Hospital Rule litigation, American Hospital Association et al v. Azar, is currently before the U.S. District Court for the District of Columbia. While the D.C. Circuit Court’s RX Rule decision could be viewed as a predictor of the outcome of the Hospital Rule litigation, the alleged statutory authority underlying the Hospital Rule is different than the statutory authority underlying the RX Rule. Therefore, the Circuit Court’s ruling in the RX Rule litigation may not be an accurate barometer of the likely outcome in the Hospital Rule litigation.
On Friday, April 24th, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act (“Act”) into law that will send an additional $75 billion to the Public Health Emergency and Social Services Fund (“Fund”) used to reimburse eligible health care providers for health care related expenses or lost revenues that are attributable to COVID-19. These funds will be in addition to the $100 billion previously appropriated to the Fund in the CARES Act. Of that $100 billion, the first $30 billion was distributed through the Health Resources and Services Administration (HRSA) to health care providers proportionally, based on the providers’ share of total 2019 Medicare payments. HHS has outlined how the remaining $70 billion of the initial $100 billion Congress dedicated to the Fund in the CARES Act would be allocated to providers, with additional payments starting April 24th. However, HHS has not published any additional guidance as to how the Act’s additional $75 billion will be allocated.
The CARES Act (“Act”) appropriates $100 billion to create a
Public Health Social Service Emergency Fund (“Fund”) to prevent, prepare for,
and respond to coronavirus domestically and internationally for necessary
expenses to reimburse, through grants or other mechanisms, eligible health care
providers enrolled in Medicare and Medicaid who provide diagnoses, testing, or
care for individuals with possible or actual cases of COVID–19, for health
care-related expenses or lost revenues that are attributable to coronavirus.
Although the Act sets forth some high level qualifying criteria, the actual
mechanism by which providers can apply for or request funds, or additional
qualifiers for eligibility, if any, have not yet been released. To date, the
Act notes that funds appropriated under this provision may be used for: