The Fifth Circuit Court of Appeals has handed down a significant decision in response to a challenge from health care providers to the implementing regulations of the No Surprises Act (“NSA”). The Court upheld the Departments of Treasury, Labor, and Health and Human Services’ (the “Departments”) approach to certain key
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Relator, No More? Florida Federal Court Declares Qui Tam Provisions of False Claims Act Unconstitutional, with Potentially Broad Implications for Government Fraud Litigation
By Vinay Kohli, G. Patrick Regan & D. Austin Rettew on
On September 30, 2024, the U.S. District Court for the Middle District of Florida issued an order dismissing a qui tam case under the False Claims Act (“FCA”) and holding the relator provisions of the FCA to be unconstitutional.[1] In reaching this conclusion, the Court reasoned that the…
Post‑Chevron Spotlight: Disproportionate Share Hospital Payments Restored as Texas Hospitals Prevail in Challenge to HHS Exclusion Rule
By Vinay Kohli & D. Austin Rettew on
In a victory for Texas health care providers, in Baylor All Saints Medical Center dba Baylor Scott & White All Saints Medical Center‑Fort Worth et al. v. Xavier Becerra, case number 4:24‑cv‑00432, the United States District Court for the Northern District of Texas (“District Court”) has vacated a regulation…
No Surprises Here! Fifth Circuit Upholds Health Care Provider Challenge to No Surprises Act Regulations
By D. Austin Rettew & Vinay Kohli on
In a recent win for health care providers, the United States Court of Appeals for the Fifth Circuit has affirmed a lower court’s decision to vacate key portions of regulations issued by the U.S. Departments of Treasury, Labor, and Health and Human Services (collectively, the “Departments”) under the No Surprises…
No Surprises Here! CMS Audit Uncovers Non-Compliance by Aetna in Calculation and Disclosure Requirements Under the No Surprises Act
By D. Austin Rettew & Vinay Kohli on
In a recent audit, the Centers for Medicare & Medicaid Services (“CMS”) uncovered non-compliance by Aetna Health Inc. of Texas (“Aetna”) in calculating key payment information for air ambulance services under the No Surprises Act (“NSA”). These audit results highlight the ongoing challenges faced by providers and payors in…
No Surprises Here! Divergent Court Rulings Spotlight Ongoing Challenges in No Surprises Act Implementation; Tee Up Split in Authority on Award Enforcement Mechanisms
By D. Austin Rettew & Vinay Kohli on
Two District Courts have reached opposite conclusions on the enforceability of arbitration awards under the No Surprises Act (“NSA”). The two decisions, while far from the final word on the subject, highlight the most recent challenge relating to the implementation of the NSA.
Enacted by Congress in 2020, the NSA…
NYS DFS Revisits PBM Regulation with Scaled-Back Draft Rules
By Ashley Seibler & Whitney Phelps on
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.”
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
By Whitney Phelps & Michael Menconi on
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”
By Jacquelyn R. Daniel & Whitney Phelps on
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
By Whitney Phelps & Matthew J. Westbrook on
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.