The following is the latest health policy news from the federal government for September 5-11.  Some of the language used below is taken directly from government documents.

Congress

With fewer than three weeks until the end of the federal fiscal year, congressional leaders are beginning to devise a strategy to avoid a federal government shutdown on October 1.  Whatever strategy they ultimately adopt will certainly involve some form of continuing resolution (CR).  Some conservatives in Congress would like to see a full-year CR that would keep funding at current levels and permit the President to cut spending via rescissions.  Appropriators are advocating a short-term CR, through mid-November, to force negotiations so Congress can pass actual appropriations bills.  The White House has expressed a preference for a CR lasting through at least January of 2026.

Democrats and some Republicans are calling for an extension of the enhanced premium tax credits for health insurance purchased on the Affordable Care Act marketplace but it is unclear whether such an extension will be part of a spending bill to pass this month.  Also, it is widely expected that expiring health care extenders, including delays to Medicaid DSH cuts, extensions of telehealth and Acute Hospital Care at Home program flexibilities, and extensions of other programs, including the low-volume hospital adjustment, will be included in whatever legislation passes, at least for the duration of the CR.

CMS Preliminary Guidance on Medicaid State Directed Payments

The July FY 2025 federal budget reconciliation bill (the One Big Beautiful Bill Act) calls for new limits on states’ use of Medicaid managed care state directed payments.  While CMS works to develop regulations to implement these new limits, the agency has issued preliminary guidance to the states and stakeholders to give them a better sense of the directions it is pursuing and the limits states may face in the future under the law.  The highlights include:

  • Payment limits – beginning with rating periods on or after July 4, 2025, state directed payments for inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at an academic medical center must not exceed 100 percent of Medicare rates in Medicaid expansion states or 110 percent of Medicare rates in non-expansion states.  In the absence of a Medicare rate, the Medicaid state plan rate applies.
  • Grandfathering period – certain eligible state directed payments submitted or approved before July 4, 2025 may qualify for temporary grandfathering until rating periods beginning January 1, 2028, followed by a phased reduction until they meet the new payment limits.
  • Next steps for states – states must revise any pending or future state directed payments preprints that do not qualify for grandfathering to comply with the new law before CMS will continue review.  For applicable state directed payments that are currently under review by CMS, CMS will notify states of whether any state directed payments likely qualify for grandfathering in its approval letters for the state directed payments once CMS has completed its review.

Learn more about how CMS tentatively plans to regulate state directed payments from this CMS news release, this CMS informational bulletin, and this CMS memo to the states.

Centers for Medicare & Medicaid Services
Department of Health and Human Services
  • HHS’s Make America Healthy Again (MAHA) Commission, charged with responsibility for investigating and addressing the root causes of America’s escalating health crisis with a focus on childhood chronic diseases, has released two documents presenting its work so far:  a 73-page assessment and a 20-page strategy document with more than 120 recommendations.  The strategy is built around three major concepts:  advancing critical research to drive innovation; realigning incentives and systems to drive health outcomes research to drive innovation; and increasing public awareness and knowledge.  Learn more about the commission’s new work products from this HHS news release; a video presentation of the commission’s work; the commission’s assessment report; and the commission’s strategy document.
  • HHS’s Office for Civil Rights has issued a letter notifying state recipients of Vaccines for Children Program funding that participating immunization programs and program-registered providers must respect state religious and conscience exemptions from vaccine mandates.  In the letter, the Office of Civil Rights offers states and participating providers assistance and support in their efforts to operate the program in compliance with the law.  Learn more from this HHS news release and from the HHS letter to the state programs.
  • HHS and the FDA have announced that they will require drug companies to include full safety warnings in their direct-to-consumer ads.  Since 1997, an FDA loophole has permitted them to footnote vital information such as full contraindications and common precautions via web pages and 1-800 toll-free numbers.  In announcing the policy, HHS notes that “The proliferation of simplistic pharmaceutical ads on television and digital media distorted physician prescribing habits and patient decisions.”  Learn more from this HHS news release.  In a separate news release the FDA notes that it is sending “…thousands of letters warning pharmaceutical companies to remove misleading ads” and issuing approximately 100 cease-and-desist letters to companies with deceptive ads.  Find the FDA news release here; the news release includes a link to a sample of the letters the FDA is sending (please note that clicking the “letters” link automatically downloads a file).  The White House is participating in this initiative as well through this memorandum from the President to the HHS Secretary and the commissioner of the FDA and this White House fact sheet.
  • New data is available for public use to help inform understanding of the history and current state of the certified health IT market.  HHS’s Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology outlines this data in this new blog post.
  • HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE) has published a report on how to identify measures of innovation for medical products.  Find its report here.
  • ASPE has issued a report on understanding the role of patient advocacy organizations in funding medical product research and development.  Find that report here.
HHS Office of the Inspector General  
  • Medicare Part B payment trends for skin substitutes raise major concerns about fraud, waste, and abuse, HHS’s Office of the Inspector General (OIG) has concluded after a recent audit.  Learn more about what the OIG found and why it believes this problem has arisen from this OIG report.
  • Most children enrolled in Medicaid did not receive timely suicide-related follow-up care, according to the OIG in a new audit report.  Learn more about what the OIG found and what it recommends for addressing this shortcoming from this OIG report.
  • By requiring emergency preparedness plans for independent labs, CMS could better ensure that Medicare patients have access to infectious disease diagnostic testing during public health emergencies, the OIG has concluded after a recent review.  Learn more about why the OIG performed this audit, what it found, and what it recommends for addressing the problems it uncovered from this OIG report.
Medicaid State Plan Amendments

CMS has approved the following state plan amendments for Medicaid and CHIP programs.

  • To Washington, updating the current policies and practices in the physician services section of the Medicaid state plan.
  • To Nevada, adding and clarifying services for adult, youth, and family peer support.
  • To Nevada, updating the disproportionate share hospital payment time period to the current fiscal year, the fiscal year amount, and the payment frequency.
  • To California, decreasing the geographic areas offering targeted case management services for the following target population:  individuals in jeopardy of negative health or psycho-social outcomes.
  • To California, decreasing the geographic areas offering targeted case management services for the following target population:  individuals at risk of institutionalization.
  • To California, decreasing the geographic areas offering targeted case management services for the following target population:  individuals with a communicable disease.
  • To California, decreasing the geographic areas offering targeted case management services for the following target population:  medically fragile individuals.
  • To California, decreasing the geographic areas offering targeted case management services for the following target population:  children under age 21.
  • To Iowa, increasing rates for an acuity add-on for each service date for individuals who meet the medical necessity of various levels.
  • To New Hampshire, updating the quarterly pool amount and total Medicaid days count for the state’s nursing facility supplemental payment, also known as MQIP, for both private and non-state government-owned and operated facilities.
  • To New Hampshire, updating the payment amounts to be made for state fiscal year 2025 to non-public hospitals that qualify for DSH payment adjustments under New Hampshire state plan provisions governing inpatient hospital services payments.
  • To Texas, making requirements for Indian Health Services and tribal clinics consistent with the requirements set forth in 42 Code of Federal Regulations §440.90 and requiring a mandatory exception to the four-wall requirement for the Medicaid clinic services benefit to authorize reimbursement for clinic services provided outside of the four walls of Indian Health Services and tribal clinics.
  • To Georgia, updating the rates for two primary care codes (99213 and 99214) to 2.154 percent.
  • To Georgia, updating the rate for selected dental codes to 2.5 percent.
  • To Georgia, updating emergency air ambulance rates.
  • To South Carolina, updating the Supplemental Teaching Physician Payment Program.
  • To Florida, updating the personal care benefit for home health agencies and terminology for excluding care provided by legally responsible adults for beneficiaries under 21 years of age.
  • To South Dakota, addressing peer support services and a rate increase for community mental health centers and substance use disorder agency services.
  • To Delaware, providing additional postpartum visits with a recommendation by a practitioner or clinician licensed under Title 24 acting within their scope of practice.
  • To Wyoming, updating and clarifying language regarding the eligible prescriber of physical therapy, occupational therapy, and speech pathology services.
State-Directed Medicaid Payments

CMS has approved the following state applications for Medicaid state-directed payments.

  • To Texas, renewing the state’s behavioral health services directed payment program, which is a uniform increase for community mental health centers and local behavioral health authorities for the rating period covering September 1, 2025 through August 31, 2026, to be incorporated into capitation rates through a risk-based rate adjustment.
  • To Texas, renewing the state’s Comprehensive Hospital Increase Reimbursement Program, which has components consisting of both uniform increases and pay for performance for eligible hospitals for the rating period covering September 1, 2025 through August 31, 2026, to be incorporated into capitation rates through a risk-based rate adjustment.
  • To Texas, renewing value-based payments for physician and professional services, including both uniform increases and pay for performance for eligible providers, for the rating period covering September 1, 2025 through August 31, 2026, to be incorporated into capitation rates through a risk-based rate adjustment.
  • To Louisiana, approving a uniform percentage increase for professional services at an academic medical center, primary care services, and specialty care services for the rating period covering July 1, 2024 through June 30, 2025, which was incorporated into capitation rates through a separate payment term of up to $1.2 million.
  • To Louisiana, establishing a new value-based payment arrangement for general and pediatric dentists practicing in dental clinics, Federally Qualified Health Centers, and Rural Health Clinics and who are participating in the Medicaid dental program for the rating periods covering July 1, 2024 through June 30, 2027, to be incorporated into capitation rates through a separate payment term up to $36.6 million.
  • To Louisiana, renewing a uniform increase for non-emergency medical transport providers for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into capitation rates through a separate payment term of up to $2.8 million.
  • To North Carolina, renewing the minimum fee schedule established by the state for laboratory services provided by in-state acute-care hospitals and critical access hospitals for the rating period covering July1, 2025 through June 30, 2026, to be incorporated into capitation rates through a risk-based rate adjustment.
  • To Rhode Island, renewing a uniform percentage increase for services provided in inpatient hospitals for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into monthly capitation rates through a risk-based rate adjustment in the amount of $10.5 million.
  • To Rhode Island, amending a uniform percentage increase of 14.7 percent per claim for nursing facility services for the rating period covering July 1, 2024 through December 31, 2025, which was incorporated into capitation rates through a risk-based rate adjustment in the amount of $14.9 million.
  • To Rhode Island, renewing a uniform percentage increase for services provided in outpatient hospitals for the rating period covering July 1, 2025, through June 30, 2026, to be incorporated into monthly capitation rates through a risk-based rate adjustment in the amount of $10.2 million.
  • To Rhode Island, renewing a uniform percentage increase of 5.3 percent per claim for nursing facility services for the rating period covering July 1, 2025, through June 30, 2026, to be incorporated into capitation rates through a risked-based adjustment amount of up to $265,553.
  • To Virginia, renewing a uniform percentage increase for physician services by physicians employed by or contracted with a private acute care type 2 hospital system with at least one level 2 trauma center as of January 2022 and located in Lord Fairfax Health District and Northwest Health Planning Region for the rating period July 1, 2025 through June 30, 2026, to be incorporated into capitation rates through a separate payment term of up to $5.1 million.
  • To Virginia, renewing a uniform increase for inpatient and outpatient services rendered by non-state government-owned acute-care hospitals for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into capitation rates through a separate payment term of up to $74.6 million.
  • To Virginia, renewing a uniform percentage increase for services performed by physicians employed by or contracted with NSGO hospitals for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into rates through a separate payment term amount of up to $950,000.
  • To Arizona, renewing a uniform dollar increase established by the state for nursing facility services for the rating period of October 1, 2025 through September 30, 2026, to be incorporated into capitation rates through a separate payment term of up to $95.4 million.
  • To Massachusetts, renewing a minimum fee schedule and maximum fee schedule for inpatient hospital discharges from freestanding pediatric hospitals with a MassHealth DRG weight of 3.0 or greater and hospitals with a pediatric specialty unit with a MassHealth DRG weight of 3.0 or greater, using an approved state plan fee schedule, for the rating period covering January 1, 2025 through December 31, 2025.
  • To New York, renewing a value-based payment arrangement for hospitals providing labor and delivery services for the rating period covering April 1, 2025 through March 31, 2026, to be incorporated into capitation rates through a separate payment term of up to $50 million.
  • To Illinois, renewing a value-based payment arrangement established by the state for eligible primary care providers with the Lurie Children’s Hospital All Hands Health Network for the rating periods covering January 1, 2025 through December 31, 2026, to be incorporated into capitation rates through a risk-based rate adjustment.
  • To New Hampshire, renewing a value-based payment for eligible community mental health centers established by the state for behavioral health outpatient services for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into capitation rates through a risk-based rate adjustment.
HHS Newsletters, Reports, and Videos
  • CMS – MLN Connects – September 11
  • AHRQ News Now – September 9
  • CMS – CMS has sent to state survey agencies its congressionally mandated FY 2022 report to Congress presenting its review of Medicare’s program oversight of accrediting organizations and the Clinical Laboratory Improvement Amendments of 1988 (CLIA) Validation Program for FY 2021.  The report was delayed because of the COVID-19 public health emergency.
Centers for Disease Control and Prevention (CDC)

Sixteen people in ten states have gotten sick from the same strain of Salmonella, with seven hospitalized and no deaths reported.  Some of the cases have been traced to the Metabolic Meals home delivery service.  Learn more from this CDC news release, which is intended primarily for consumers, and an accompanying CDC food safety alert, which includes information about symptoms and treatment.

Food and Drug Administration (FDA)

The FDA has issued proposed guidance to expand non-opioid options for chronic pain.  This guidance is intended to assist sponsors in the development of non-opioid analgesics for the treatment of chronic pain. Learn more from this FDA news release and this official notice.  The deadline for stakeholders to submit comments is  November 10

National Institutes of Health (NIH)

Treating opioid addiction in jails improves treatment engagement and reduces overdose deaths and reincarceration, according to a new NIH-supported study.  Learn more from this NIH news release.

Federal Trade Commission (FTC)
  • Last year the FTC introduced a regulation limiting the use of noncompete agreements by businesses.  After a successful legal challenge to the agency’s authority to enforce the regulation, the FTC’s commissioners have voted to abandon the agency’s appeal of the court’s decision and to focus instead on limited enforcement through anti-trust efforts.  Learn more from this FTC news release.  On September 4, the day before the FTC’s commissioners cast this vote, the agency issued a request for information on employee noncompete agreements.  Find that request for information here and learn more from this FTC news release.  The deadline for responses to the request for information is November 3.
  • Almost simultaneous with these developments, the FTC has sent letters to several large health care employers and staffing firms urging them to conduct a comprehensive review of their employment agreements, including any noncompete or other restrictive agreement, to ensure that they are appropriately tailored and comply with the law.  An FTC news release explains that “Many healthcare employers and staffing companies may include unreasonable noncompete agreements in employment contracts for vital roles like nurses, physicians, and other medical professionals.  These restrictions can unreasonably limit healthcare professionals’ employment options and thereby limit patients’ choices over who provides their medical care – including, critically, in rural areas where medical services are already stretched thin, the letters state.”  Learn more from this FTC news release and find a template of the FTC warning letters here.
Congressional Budget Office
  • Spending on prescription drugs by 340B-eligible providers increased from $6.6 billion in 2010 to $43.9 billion in 2021, an increase of 565 percent, according to the CBO.  These totals include only purchases made through the Health Resources and Services Administration’s (HRSA) Prime Vendor Program.  The CBO estimates that one-third of this increase in spending can be attributed to trends in marketwide growth in drug spending and disproportionate growth among drug classes that account for more spending in the 340B program than in the overall market.  CBO examined three additional factors that contributed to growth in spending under the 340B program:  the integration of hospitals and off-site clinics, increased facility participation after the implementation of the Affordable Care Act, and expanded use of off-site pharmacies.  CBO notes that it does not have sufficient data to quantify those factors’ effects but believes the largest of those three factors was the integration of hospitals and clinics.  Learn more from the CBO publication “Growth in the 340B Drug Pricing Program.”
  • The CBO  has just published a new report:  “The 340B Drug Discount Program: Litigation Topics and Trends.”  Find it here.
Government Accountability Office (GAO)

Medicare national coverage determinations are generally timely but improvements are needed, the GAO has concluded after a recent audit.  Learn more about the GAO’s findings and its recommendations from this GAO report.

Stakeholder Events

CDC – Providers Call on Drug-Resistant Candida (Yeast) Infections – September 18

The CDC will share current evidence demonstrating the increase in antifungal resistance among C. auris and C. parapsilosis and discuss recommendations for testing and treatment during a webinar on Thursday, September 18 at 2:00 (eastern).  Learn more about the issue, the webinar’s objectives, continuing education credits, and how to participate from this CDC notice.

MACPAC – Commissioners Meeting – September 18-19

MACPAC’s commissioners will hold their next public meeting virtually on Thursday, September 18 and Friday, September 19.  Go here to register to participate.

HHS Office of Minority Health – September 18 and 25

HHS’s Office of Minority Health will hold a two-part webinar on sickle cell disease.  Part 1, on clinical trials and transformative therapies, will be held on Thursday, September 18 at 1:00 (eastern).  Part 2, on innovations and advances in sickle cell disease gene therapies, will be held on Thursday, September 25 at 2:00 (eastern).  Learn more about the webinars and how to register to participate from this Office of Minority Health notice.

Agency for Healthcare Research and Quality – Prepping for the Future: Digital Solutions for Aging Populations Webinar – October 8

HHS’s Agency for Healthcare Research and Quality (AHRQ) will hold a webinar on digital solutions for aging populations on Wednesday, October 8 at 2:30 (eastern).  Presenters will discuss how tools such as remote monitoring, telehealth, and personalized health apps are transforming care for older adults by enabling timely interventions, improving access, and supporting independence and can help improve health outcomes, overcome adoption barriers, and ensure older adults benefit from accessible, user-friendly, and effective digital solutions.  Go here to register to participate and for additional information about the webinar and continuing education credits for a variety of health care professionals.

MedPAC – Commissioners Meeting – October 9-10

MedPAC’s commissioners will hold their next public meeting virtually on Thursday, October 9 and Friday, October 10.  An agenda and registration information are not yet available but when they are they will be posted here.