Federal Regulatory and Litigation Update

For more information about this blog post, please contact Khaled J. KleleRyan M. Magee, or Labinot Alexander Berlajolli.

Medicare Program: Comprehensive Care for Joint Replacement Model Three-Year Extension and Changes to Episode Definition and Pricing

85 FR 10516:  On February 24, 2020, CMS proposed a rule intended to revise certain aspects of the Comprehensive Care for Joint Replacement (CJR) model, which was CMS’s first mandatory bundled payment initiative, which began on April 1, 2016 and is set to expire on December 31, 2020.   Specifically, the proposed rule now incorporates the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements and the appeals process.  For proposed performance years 6 through 8, the proposed rule also eliminates the 50 percent cap on gainsharing payments, distribution payments, and downstream distribution payments for certain recipients.

Additionally, the proposed rule would allow time to test the proposed changes by extending the length of the CJR model for an additional three years, through December 31, 2023, for certain participant hospitals.  As part of its public comment period, the proposed rule solicits input as to how to best conceptualize and design a future bundled payment model focused on lower extremity joint replacement (LEJR) procedures performed in the ambulatory surgical center (ASC) setting.  Comments are due by April 24, 2024.

Medicare Program:  Update to the Required Prior Authorization List of Durable Medical Equipment, Prosthetics, Orthotics, and Supply Items That Require Prior Authorization as a Condition of Payment

85 FR 7666:   This proposal continues the current list for prior authorization requirements for Durable Medical Equipment.  It also adds six more codes to this list.  The Rule becomes effective on May 20, 2020.  The six additional codes are:

L5856  Addition to lower extremity prosthesis, endoskeletal knee-shin system, microprocessor control feature, swing and stance phase, includes electronic sensor(s), any type.

L5857  Addition to lower extremity prosthesis, endoskeletal knee-shin system, microprocessor control feature, swing phase only, includes electronic sensor(s), any type.

L5858  Addition to lower extremity prosthesis, endoskeletal knee-shin system, microprocessor control feature, stance phase only, includes electronic sensor(s), any type.

L5973  Endoskeletal ankle foot system, microprocessor controlled feature, dorsiflexion and/or plantar flexion control, includes power source.

L5980  All lower extremity prostheses, flex foot system.

L5987  All lower extremity prosthesis, shank foot system with vertical loading pylon.

Medicaid Program: Preadmission Screening and Resident Review

85 FR 9990:  CMS introduced this proposed rule, which would modernize the requirements for Preadmission Screening and Resident Review (PASRR).  The proposed rule aims to overhaul outdated provisions of the Preadmission Screening and Annual Resident review by incorporating statutory changes, reflecting updates to diagnostic criteria for mental illness and intellectual disability, reducing duplicative requirements and other administrative burdens on State PASRR programs, and making the process more streamlined and person-centered.  The proposed rule is subject to public comment until April 20, 2020. 

Data Privacy and Price Transparency Top the List of ONC Advisory Group Priorities

On February 19, 2020, the Health Information Technology Advisory Committee (HITAC) finalized a list of 31 issues it intends to address over the next two years.  The 31 issues relate to three priority areas mandated by the Century Cures Act:  (1) interoperability, (2) privacy and security, and (3) patient access to information.  HITAC’s priorities are aptly timed, as the trio are often interrelated and, at times, subject to controversy.  For example, an HHS proposed rule establishing Application Programming Interfaces (APIs) to improve access and sharing of patient data,  discussed below, has met vocal opposition from many health systems that believe the proposed rule compromises interoperability and patient access for privacy and security.

HITAC also categorized its list of priorities into immediate opportunities versus long-term goals.  Among its immediate opportunities are third party access to data, price transparency, hearings on emergent technologies in patient matching, assessing patient portals and patient-facing mobile apps, and recommending strategies for improved patient safety while handling health records. 

HITAC’s long-term goals, characterized as goals to be pursued in three or more years, include recommending steps to improve interoperability with behavioral health and long-term care providers and reviewing the federal government’s role in setting guidelines about interoperability at the state level.

60 Health Systems Sign Joint Letter Opposing HHS Proposed Rule Intended to Improve Access to Patient Records

We previously reported on a proposed rule that would advance interoperability by making it easier to share medical records data with patients and apps.  Approximately 60 health systems have signed a joint letter urging hospitals and clinics to oppose the proposed rule.  Among other things, the proposed rule focuses on establishing Application Programming Interfaces (APIs) for interoperability purposes, such as improving patient access to their own health information and easing the transmission of patient data between facilities.  The 60 health systems, led by Epic, claim the new provisions will comprise patient privacy and may result in app makers having access to patient data without consent.  Those in favor of the rule, however, say the proposed rule will facilitate long overdue changes to the ways hospitals share patient records with other medical offices or hospitals.

Federal Litigation Involving the HITECH Act

Ciox Health, LLC v. Azar, et al.:   In 2013, HHS issued a rule limiting the amount a party can charge a patient for accessing the patient’s own records.  Fees had to be based on calculating the labor cost it takes to fulfill a record request or by charging a flat fee capped at $6.50 per request.  In 2015, HHS extended the limitation to when a patient requests to send their health data to a third party.  HHS did so without following the rule making procedure in the Administrative Procedure Act.  The Federal District Court for the District of Columbia nullified HHS’s rule. The judge also vacated an HHS rule from 2013 under the HITECH Act.  That Act said that patients can request that organizations send a copy of their electronic health record to a third party, but the regulation issued said that the provider also had to send paper records. The judge held that this language regarding paper records could not be added to the regulation since it goes beyond statutory requirements set by Congress.