CMS Final and Proposed Regulations, Including the Recent Basic Health Program Option

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander BerlajolliBrianna J. Santolli, or Daniel J. Parziale.

CMS Issues Proposed Rule on the Basic Health Program Option

The Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule on federal payment amounts to states that elect to establish a Basic Health Program (“BHP”) under the Patient Protection and Affordable Care Act (the “Act”) for program year 2022. Under the Act, BHPs may offer health benefits coverage to low-income individuals. States may find that a BHP is a useful option for several reasons, including the ability to potentially coordinate standard health plans in the BHP with their Medicaid managed care plans, or to potentially reduce the costs to individuals by lowering premiums or cost-sharing requirements.

In states that elect to operate a BHP under the Act, the BHP will make affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the federal poverty level who are not otherwise eligible for Medicaid, the Children's Health Insurance Program, or affordable employer‑sponsored coverage, as well as for lawfully present non-citizens ineligible for Medicaid, whose income is below these levels. For those states that have expanded Medicaid coverage under section 1902(a)(10)(A)(i)(VIII) of the Social Security Act, the lower income threshold for BHP eligibility is effectively 138 percent, due to the application of a required 5 percent income disregard in determining the upper limits of Medicaid income eligibility.

Comments are due by December 3, 2020. 

CMS Issues Proposed Rule Regarding Medicare Coverage, Payment, and Coding for Innovative New Technologies and Providing Beneficiaries with Diabetes Better Access and More Therapy Choices

CMS issued a proposed rule that changes the Medicare durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”) coverage and payment policies under Medicare Part B. In addition, the proposed rule would expand the interpretation of when external infusion pumps are appropriate for use in the home and covered as DME under Medicare Part B, increasing access to drug infusion therapy services in the home. CMS hopes that this rule will provide more choices for beneficiaries with diabetes, while streamlining the process for innovators in getting their technologies approved for coverage, payment, and coding by Medicare. If finalized, the proposed rule will also expand Medicare coverage and payment for continuous glucose monitors that provide critical information on blood glucose levels to help patients with diabetes manage their disease. Lastly, CMS proposes to continue to pay higher amounts to suppliers for DMEPOS items and services furnished in rural and non‑contiguous areas to encourage suppliers to provide access and choices for those beneficiaries. 

Comments are due by January 4, 2021.

CMS Finalizes Home Health Payment Rule for 2021

CMS issued a final rule that sets forth routine updates to the home health payment rates for calendar year 2021. This rule also finalizes the regulatory changes related to the use of telecommunications technology in providing care under the Medicare home health benefit. Under the rule, CMS will increase payments to home health agencies by about 1.9 percent, or $390 million, and will decrease payments to home infusion therapy suppliers by 0.7 percent, or $384,800. The rule also finalizes a 5 percent cap on wage decreases in 2021. For more information, review the fact sheet issued by CMS. The final rule becomes effective January 1, 2021.

CMS Finalizes Dialysis Payment Rule

CMS released a final rule updating and revising the End-Stage Renal Disease Prospective Payment System (“ESRD PPS”) for calendar year 2021. Among other things, the rule caps any decrease in a dialysis facility’s wage index at 5 percent. The final base rate for 2021 is $253.13, a $13.80 increase from the current rate of $239.33. CMS estimates that the aggregate ESRD PPS expenditures in 2021 will increase by approximately 2 percent, or $250 million, as compared to 2020. For more information, review the fact sheet issued by CMS. The final rule becomes effective January 1, 2021.

HHS Says COVID-19 Provider Relief Funds Can Be Used to Pay for Vaccine Distribution

The Department of Health and Human Services (“HHS”) has updated its frequently asked questions to clarify that Provider Relief Fund payments may be used to support distribution of a COVID‑19 vaccine licensed or approved by the Food and Drug Administration (“FDA”). Funds also may be used prior to an FDA‑licensed or approved vaccine becoming available for items such as additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine.

CMS Extends Compliance Dates for Interoperability Due to COVID-19

CMS issued an interim final rule that gives health IT developers and health care providers flexibilities to effectively respond to the public health threats posed by the spread of COVID‑19. This rule will extend certain compliance dates and timeframes adopted in the 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program Final Rule (“Cures Act Final Rule”), including compliance and applicability dates for the information blocking provisions, certain 2015 Edition Health IT Certification criteria, and Conditions and Maintenance of Certification requirements under the ONC Health IT Certification Program. 

2022 Medicare Advantage Advance Notice

CMS has issued Part II of its Advance Notice of proposed methodological changes for calendar year (“CY”) 2022 for Medicare Advantage capitation rates, and Medicare Advantage (Part C) and Medicare prescription drug (Part D) payment policies. CMS expects these proposed changes to result in a 2.82 percent increase revenue for calendar year (“CY”) 2022.

CMS has proposed that the Part C risk adjustment model fully phase in the hierarchical condition categories (“CMS‑HCC”) model first implemented for CY 2020 (the “2020 CMS‑HCC model”), as required by the 21st Century Cures Act. The 2020 CMS‑HCC model adds variables that count conditions in the risk adjustment model and includes for payment additional conditions for mental health, substance use disorder, and chronic kidney disease. With the proposed phase‑in of the 2020 CMS‑HCC model, the Part C risk score used for payment for CY 2022 would rely entirely on encounter data and Medicare fee‑for‑service (“FFS”) claims as the source of Medicare Advantage diagnoses.

In response to requests from stakeholders, CMS also has proposed an updated version of the Part D risk adjustment (“RxHCC”) model used to adjust direct subsidy payments for Part D benefits offered by stand-alone prescription drug plans and Medicare Advantage prescription drug plans. Consistent with the Part C proposal, the Part D risk score for CY 2022 would be calculated by using only encounter data and FFS claims.

For more information, review the fact sheet issued by CMS. Comments are due November 30, 2020.