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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including a dispensing fee of $10.18 per drug claim to be paid to pharmacies, but the proposed regulations were later withdrawn by the agency in October 2023 following the public comment period.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.”

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…

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.

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.

This past week, the Supreme Court of the United States (Supreme Court) denied UnitedHealthcare Insurance Company’s (UnitedHealthcare) petition for a writ of certiorari (Petition) challenging, in part, the Centers for Medicare & Medicaid Services’s (CMS) Overpayment Rule, which requires Medicare Advantage (MA) plans, such as UnitedHealthcare, to return identified “overpayments” to CMS within 60 days.  With this denial, the Overpayment Rule remains in full force and effect, and UnitedHealthcare, among other MA plans, must comply or potentially face False Claims Act (FCA) liability.

This post reviews Part II of the federal No Surprises Act regulations.  In previous publications, we have commented upon the No Surprises Act, and Part I of the regulations.

The “Requirements Related to Surprise Billing; Part II” (the “Part II Rule”), published on October 7, 2021, is the second interim final rule (IFR) implementing the No Surprises Act, following a prior No Surprises Act IFR (the “Part I Rule”) published on July 13, 2021.  Both of these regulations are generally set to take effect on January 1, 2022.

In this post, we outline how the Part II Rule addresses: (A) the independent dispute resolution (IDR) and open negotiation processes for health plans and other payers (“Plans”), (B) patient-provider dispute resolution processes for uninsured individuals, and (C) the expansion of the federal external review provisions of the Affordable Care Act to cover disputes regarding the application of the No Surprises Act.

This post provides an update to our previous publication summarizing the federal No Surprises Act and is part two of two in a series on new interim regulations implementing certain requirements of the No Surprises Act.

In part one of this series, we discussed the recently issued interim final rule implementing the No Surprises Act and the protections afforded to patients in connection with emergency services furnished by out-of-network (OON) facilities and providers or in connection with non-emergency services performed by OON providers at certain in-network facilities.

Here, in part two of the series, we address the interim final rule’s plan coverage requirements, the methodology a health plan offering group or individual health insurance coverage must use to determine a patient’s cost-sharing responsibility, and communications between insurers and providers detailing payment amounts.

As promised, this is a follow-up to our first blog post on the new federal transparency requirements. In our prior post, we summarized the Hospital Price Transparency rule which went into effect on January 1, 2021, and here we discuss the transparency rules contained in the Consolidated Appropriations Act, 2021 (the “Act”), which apply to both health plans and health care providers.

Beginning January 1, 2022, the Act requires providers (individual practitioners and facilities) to send the health plan a “good faith estimated amount” of scheduled services, including any expected ancillary services and the expected billing and diagnostic codes for all items and services to be provided. This notice then triggers the health plan’s obligation to send enrollees an “Advanced Explanations of Benefits” (“AEOB”) prior to scheduled care (or upon patient request). If the patient is uninsured, the provider must send the notice directly to the patient.

This post is part one of two in a series on new transparency requirements impacting both health plans and health care providers.

In an effort to assist patients in understanding the cost of hospital services, the Hospital Price Transparency rule at 45 C.F.R. § 180.10 et. seq., effective January 1, 2021, requires all hospitals to make public the following pricing information:

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