This newsletter outlines key federal regulatory developments and highlights PAI’s advocacy on matters that impact physicians and patients, including:

1. President Biden Signs Into Law End of Year Package
2. Texas Medical Association (TMA) Files New Legal Challenge Seeking to Overturn Parts of the Surprise Billing Final Rule
3. Departments Release Initial Report on the Independent Dispute Resolution (IDR) Process
4. Centers for Medicare and Medicaid Services (CMS) Releases Prior Authorization (PA) Proposed Rule
5. CMS Extends Merit-Based Incentive Payment System (MIPS) Extreme and Uncontrollable Circumstances (EUC) Application Deadline
6. CMS Releases Quality Payment Program (QPP) Small Practices Newsletter
7. CMS Releases Proposed Rule on 2024 Policy and Technical Changes to Medicare Advantage (MA) and Medicare Part D
8. Department of Health and Human Services (HHS) Issues New Strengthened Conscience and Religious Nondiscrimination Proposed Rule
9. Federal Trade Commission (FTC) Publishes Proposed Rule to Ban Noncompete Clauses
10. CMS Releases Innovation Center Report to Congress

For information on PAI’s advocacy initiatives, physician payment resources and research, please visit PAI’s website or follow us on LinkedIn. Healthsperien’s Resource Updates page also has information on key issues in the health policy landscape and identifies potential reforms under the Biden administration, Congress and in the states.

President Biden Signs Into Law End of Year Package

On December 29, President Biden signed into law a $1.7 trillion omnibus spending package, also known as the Consolidated Appropriations Act of 2023. Outlined below are relevant highlights from the package, including provisions on physician payment cuts, telehealth and alternative payment models (APMs). Click here to access Healthsperien’s summary of key provisions included in the package. PAI plans to publish a webinar on our website in the coming weeks highlighting key changes for physicians in the Medicare Physician Fee Schedule (MPFS) Final Rule and the omnibus spending package.

PAI is deeply disappointed that Congress was unable to prevent Medicare cuts for physician services in 2023 and believes critical reforms to the MPFS system are needed. The current budget neutrality requirement leads to arbitrary reductions to reimbursement unrelated to the cost of providing care. PAI supports the extension of telehealth flexibilities but believes that flexibilities should continue permanently. Many physician practices, especially those in primary care and mental health, remain heavily reliant on telehealth services to provide timely, accessible care to many patients, particularly in rural and underserved areas.

TMA Files New Legal Challenge Seeking to Overturn Parts of the Surprise Billing Final Rule

On November 30, TMA filed a third lawsuit challenging regulations implementing provisions of the No Surprises Act (NSA). Specifically, TMA’s complaint asserts that the provisions in the July 2021 Interim Final Rule establishing the methodology for how insurers calculate the “qualifying payment amount” (QPA) will result in an artificially deflated QPA. Under the NSA, the QPA is an insurer-calculated amount that arbiters are required to consider, among other factors, when deciding between the physician’s and the health insurer’s offer as the appropriate out-of-network rate in the IDR process. TMA contends that, contrary to the plain language in the NSA, the challenged regulatory provisions inappropriately allow insurers to include “ghost” rates that insurers negotiate with physicians who don’t regularly perform the specific service at issue. These ghost rates are typically well below the “market” rate for the service and therefore bring down the in-network median rate, which Congress intended to be reflected in the QPA. The lack of transparency in the calculation of the QPA exacerbates this problem. TMA argues that this skewed QPA calculation allows insurers to set the QPA at a lower-than-market rate that then becomes an artificially low starting point for payment and contract negotiations. 

PAI supports TMA’s continued efforts to ensure that the regulations implementing the NSA reflect Congress’ carefully constructed legislative language. These challenged provisions unfairly disadvantage physicians in payment disputes with health insurers and work against patients’ long-term interests. On Dec. 20, the U.S. District Court for the Eastern District of Texas heard arguments in TMA's second lawsuit challenging certain portions of the Aug. 26, 2022, final rules implementing the NSA. PAI filed an amicus curiae brief supporting that lawsuit.

Departments Release Initial Report on the IDR Process 

On December 27, the Department of Health and Human Services, the Department of Labor and the Department of the Treasury (“the Departments”), released an initial report (April 15 – Sept. 30, 2022) on the NSA’s IDR process. For each calendar quarter in 2022 and each calendar quarter in subsequent years, the Departments are required to publish on a public website certain information about the IDR process. Key highlights are outlined below:
 

PAI is concerned about the volume of ongoing disputes and the significant delays that physicians are experiencing with the IDR process, which further underscores the need for a fair, transparent and timely arbitration process that reflects the intent of the NSA. 

CMS Releases PA Proposed Rule  

On December 6, CMS released a proposed rule (fact sheet) on new requirements related to interoperability and PA processes for the following payers: MA plans, state Medicaid and Childrens Health Insurance Plan fee-for-service, Medicaid managed care plans, and Qualified Health Plan (QHP) issuers on the Federally Facilitated Exchange (FFE). The rule withdraws and replaces a previous proposed rule published in December 2020 and addresses comments received on that rule. Comments on the new rule are due March 13, 2023. Proposals in the rule include the following:

PAI commends CMS for addressing key PA issues that can alleviate administrative burden and allow practices to reinvest resources back into patient care. Provisions in the proposed rule reflect many of the key tenants (e.g., transparency, expedited timeliness and electronic PA) included in the Improving Seniors’ Timely Access to Care Act, which PAI actively championed in the last Congress. PAI will submit a detailed comment letter offering input on the proposed rule.

CMS Extends MIPS EUC Application Deadline 

On December 29, CMS announced it extended the MIPS EUC application deadline for individuals, groups, virtual groups and APM Entities, citing COVID-19 as the triggering event, through 8 p.m. ET on Friday, March 3, 2023. Applications received between Jan. 3, 2023 and March 3, 2023 will not override submitted data for individuals, groups and virtual groups. For the 2022 performance year, CMS is continuing its use of the MIPS EUC application to allow clinicians, groups, virtual groups and APM Entities to request reweighting of MIPS performance categories due to the COVID-19 public health emergency.

APM Entities participating in MIPS APMs can submit a MIPS EUC Exception application with some differences from the existing policy for individuals, groups and virtual groups:

• APM Entities are required to request reweighting for all performance categories.
• At least 75% of the MIPS eligible clinicians in the APM Entity will need to qualify for reweighting in the Promoting Interoperability performance category.
• Data submission for an APM Entity won't override performance category reweighting from an approved application.

PAI supports the extension of the MIPS EUC application deadline, as many physician practices are still experiencing impacts from the COVID-19 pandemic. This is an especially important flexibility, as physicians should not be overly burdened administratively while trying to continue providing high-quality care to their patients.

CMS Releases QPP Small Practices Newsletter

On January 10, CMS released its first QPP Small Practices Newsletter. This is a monthly resource that provides small practices (15 or fewer physicians) with program updates, upcoming QPP milestones and additional resources. Each month, CMS will share required and recommended activities for small practices to support their successful participation in the QPP. The activities are presented using a rolling quarter approach, letting physicians and their practice see activities for the previous month, the current month and the following month. Activities include information on topics such as data submission windows, MIPS eligibility status, quality measure changes and more. CMS plans to send this newsletter to subscribers on the second Tuesday of each month. You can sign up here to receive this monthly resource.

CMS Releases Proposed Rule on 2024 Policy and Technical Changes to MA and Medicare Part D

On December 14, CMS released their annual MA and Part D Proposed Rule for 2024 (fact sheet), which governs requirements for MA and Part D plans. Among its provisions, the rule includes stricter PA requirements; increases beneficiary marketing protections; better incorporates health equity into Star Ratings, provider directories and quality improvement programs; improves access to behavioral health; and expands access to the Medication Therapy Management program. Comments are due Feb. 13, 2023. Details on key provisions of the proposed rule are provided below:
 

PAI is supportive of CMS’ efforts to include stricter PA requirements for MA plans. PAI supports a set of PA principles established by the American Medical Association and multiple stakeholders that include these key areas: clinical validity, continuity of care, transparency and fairness, and timely access and administrative efficiency.

HHS Issues New Strengthened Conscience and Religious Nondiscrimination Proposed Rule 

On January 3, the HHS Office for Civil Rights announced a Notice of Proposed Rulemaking, entitled Safeguarding the Rights of Conscience as Protected by Federal Statutes, which proposes to restore the process for the handling of conscience complaints and provide additional safeguards to protect against conscience and religious discrimination.

The Department also proposes to retain certain provisions of the 2019 Final Rule regarding federal conscience protections but eliminate others, noting that some provisions may be redundant or confusing, undermine the balance Congress struck between safeguarding conscience rights and protecting health care access, and raise legal authorization questions. The Department is seeking public comment on the proposal to retain certain provisions of the 2019 Final Rule, including on any alternative approaches for ensuring compliance with the conscience protection laws. 

FTC Publishes Proposed Rule to Ban Noncompete Clauses

On January 5, the FTC released a proposed rule to prohibit employers from imposing noncompete clauses on workers. Specifically, the FTC’s new rule would make it illegal for an employer to:

• enter into or attempt to enter into a noncompete with a worker;
• maintain a noncompete with a worker; or
• represent to a worker, under certain circumstances, that the worker is subject to a noncompete.

The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid. It would also require employers to rescind existing noncompetes and actively inform workers that they are no longer in effect. The proposed rule would generally not apply to other types of employment restrictions, like non-disclosure agreements. However, other types of employment restrictions could be subject to the rule if they are so broad in scope that they function as noncompetes.

This is a complex issue, and PAI recognizes there are various implications for physicians and patients. While noncompete covenants can protect physician groups from termination by larger employers, overly restrictive noncompetes may limit employment opportunities and impact patient access to care. PAI plans to continue examining this issue and will keep members informed of any relevant updates.

CMS Releases Innovation Center Report to Congress 

On December 12, CMS released the Center for Medicare and Medicaid Innovation’s (the Innovation Center) 2022 Report to Congress. The Innovation Center is required by statute to report to Congress on its activities, at minimum, every other year. This is the Innovation Center’s sixth Report to Congress and covers activities from Oct. 1, 2020, through Sept. 30, 2022. During the period of report, the Innovation Center had 33 models operational (either launched or continued). 

Since the inception of the Innovation Center, six model tests have delivered statistically significant savings, net of any incentive or operational payments, namely: the Pioneer Accountable Care Organization (ACO) Model; the ACO Investment Model (AIM); the Medicare Prior Authorization Model: Repetitive Scheduled Non-Emergent Ambulance Transport (RSNAT); the Home Health Value-Based Purchasing (HHVBP) Model; the Maryland All-Payer (MDAPM) Model; and the Medicare Care Choices Model (MCCM). Further, two of these models showed significant improvements in quality; the HHVBP Model exhibited a continued trend with significant improvement in Total Performance Scores relative to a comparison group, and MCCM showed significant improvements in the quality of care received at the end of life. The findings from these demonstrations may inform changes in CMS policies, as well as the development and testing of new models. 

PAI has developed a comprehensive resource for members on APM financial methodologies, attribution and alignment and benchmark calculation, as well as other important factors to consider when participating in models, which can be accessed here.