In the context of Medicare Advantage (“MA”) reform initiatives, we previously addressed the Centers for Medicare & Medicaid Services’ (“CMS”) December 27, 2022 proposal to amend its regulations set forth at 42 C.F.R. § 401.305(a) regarding the standard for an “identified overpayment” under Medicare Parts A–D
OIG Reports that Clinical Trials Lack Diverse Subjects: What Role Can Artificial Intelligence Play?
As the largest public funder of biomedical research in the world, the National Institutes of Health (“NIH”) annually funds over $38 billion in extramural research, including about $6 billion for clinical trials. On May 28, 2024, OIG published a report (“OIG Report”) summarizing its finding that, of the NIH‑funded clinical trials randomly selected by OIG for review, a majority failed to meet NIH’s requirements for inclusion of diverse trial participants.
New HIPAA Requirements Place Additional Privacy Obligations on Covered Entities and Patients in an Effort to Protect Reproductive Health Care Information
On April 22, 2024, the Office for Civil Rights (OCR) for the United States Department of Health and Human Services issued a Final Rule amending the Privacy Rule of the Health Insurance Portability and Accountability Act (HIPAA). The Final Rule, which goes into effect on June 25, 2024, promulgates
As Scrutiny Escalates, DOJ Announces the Formation of the Health Care Monopolies and Collusion Task Force
The U.S. Department of Justice (“DOJ”) recently announced the creation of the Health Care Monopolies and Collusion Task Force (the “HCMC Task Force”) aimed at resolving antitrust issues in the health care industry. Specifically, the HCMC Task Force will focus on investigating issues related to the quality of patient care
Public Portal to Promote Healthy Competition
On Thursday, April 18, the Department of Justice (“DOJ”), the Federal Trade Commission (“FTC”), and the Department of Health and Human Services (“HHS”) announced the launch of an online portal that allows the public to report potential health care antitrust violations.
The portal, HealthyCompetition.gov, aims to advance government efforts
NYS DFS Revisits PBM Regulation with Scaled-Back Draft Rules
On February 6, 2024, the New York State Department of Financial Services (“DFS”) released “pre-proposed” consolidated rulemaking related to the business practices of Pharmacy Benefit Managers (“PBMs”) licensed to operate in New York.
The draft regulations represent DFS’s latest attempt to promulgate PBM market conduct rules following state PBM licensing legislation that was enacted in 2021. In August 2023, DFS issued proposed regulations addressing consumer protection, conflicts of interest, and transparency issues related to PBM industry practices, including a dispensing fee of $10.18 per drug claim to be paid to pharmacies, but the proposed regulations were later withdrawn by the agency in October 2023 following the public comment period.
DFS’s announcement of the draft regulations and pre-proposal comment period stated that the draft regulations were informed by DFS’s “extensive outreach to industry, health plans, pharmacy groups, state and federal regulators, and the general public.”
The Key Health Care Initiatives Proposed in Governor Hochul’s Fiscal Year (FY) 2025 Executive Budget
This year’s Health and Mental Hygiene Bill (“HMH Bill”) (part of the Governor’s FY 2025 Executive Budget, which proposes a $233 billion balanced budget), includes $35.5 billion to fund Medicaid, $4.8 billion to address serious mental illness and $6 billion in federal funding through the 1115 Waiver.
In addition to those provisions that look to extend current government programs, the HMH Bill proposes the following new initiatives:
Long Awaited Approval of the 1115 Waiver Amendment for New York State Medicaid – Just in Time for the Executive Budget State Fiscal Year (SFY) 2025
On Tuesday, January 16, 2024, Governor Kathy Hochul released the SFY 2025 New York State Executive Budget (“Executive Budget”). While still subject to legislative approval, the Executive Budget incorporates the recently approved amendment (“Waiver Amendment”) to New York’s Medicaid Section 1115 Demonstration that includes $7.5 billion in Medicaid investments over
2024 Final Rule: CMS Announces More Changes to Medicare Advantage but Declines to Reform the “60 Day Rule”
On April 5, the Centers for Medicare & Medicaid Services (“CMS”) released the 2024 Medicare Advantage and Prescription Drug Benefit Programs Final Rule (“Final Rule”), which will be codified at 42 C.F.R. Parts 417, 422, 423, 455, and 460. The Final Rule adopts a host of reforms aimed at improving health care access, quality, and equity for Medicare beneficiaries that receive coverage through Part C (“Medicare Advantage” or “MA”) and prescription drug benefits through Part D. As discussed below, the Final Rule also has some notable omissions compared to what CMS previously proposed in December (“Proposed Rule,” published at 87 Fed. Reg. 79452 (2022)). The Final Rule is effective June 5, 2023.
Medicare Advantage 2024 Rate Announcement – Further Impacts to Risk Adjustment
On Friday, March 31, 2023, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (Rate Announcement). This Rate Announcement follows CMS’s February 1 notice of planned changes to rates and the risk adjustment methodology, which provided an opportunity for the public to submit comments during a 30-day period (Advance Notice), as required by Section 1853(b)(2) of the Social Security Act (the Act). The Rate Announcement — providing for 60 days prior to the bid submission deadline of June 5, 2023 — provides notice of the annual capitation for MA for CY2024 related to the benchmark, risk adjustment, and other factors to be used in adjusting rates and responds to all substantive comments received from the Advance Notice.
We summarize the key factors and adjustments to the overall expected average rate increase of 3.32% (which is about $13.8 billion more than CY2023, and an increase from the 1.03% in the Advance Notice), and comments from CMS. We also highlight other key developments affecting MA rates, notably relating to the MA risk adjustment methodology (the 2024 Risk Model). Major changes identified in the Rate Announcement include updates to the risk adjustment model that uses International Classification of Diseases (ICD)-10 codes instead of the ICD-9 system, using data from 2018 diagnoses and 2019 expenditures, and the removal or reclassification of codes disproportionately coded in MA compared to Medicare Fee-For-Service (FFS) that CMS does not consider to accurately reflect increased costs to care for beneficiaries.