July 2024

Recent Supreme Court Decisions

Have Implications for Healthcare Policy

By Marlowe Galbraith with Alison Falb

The Supreme Court concluded its 2023-2024 term with several rulings with significant implications for healthcare policy. These included overturning Chevron deference and checking the authority of administrative law judges (ALJs).

Chevron deference

In its joint review of Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce—cases about the cost of ferrying federal inspectors on fishing vessels and seemingly unrelated to healthcare—the Court considered whether to overrule or clarify Chevron deference.

Chevron deference, established by the Supreme Court's 1984 decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., addressed who should resolve gaps or ambiguities in federal statutes. It required that courts defer to a federal agency's interpretation of laws if the interpretation of a gap or ambiguity was reasonable. Courts would only intervene to change or overrule a regulation if the agency's interpretation was deemed unreasonable.

Defenders of Chevron deference argued that requiring courts to defer to executive branch agencies allowed experts to make informed policy decisions. This deference helped ensure uniformity in statutory interpretation by preventing different courts from having multiple alternative readings of the same statute. While Chevron promoted predictability in resolving issues, it also allowed agencies to adapt their interpretations over time based on new scientific developments and changing circumstances, including political factors.

Chevron’s critics argued that it had led to an over-concentration of power within the executive branch, diminishing judicial oversight and compromising the checks and balances integral to the constitutional framework.

Introducing the Applied Policy Podcast

Click below to start listening.

From the President's Desk:

The Focus of Our Work

By Jim Scott, President and CEO

Depending on the client needs, we will:

• Predict potential outcomes and implementation timelines of the CMS proposals that matter to them
• Discern whether their organization’s engagement on a particular issue could make a difference in the outcome to improve lives 
• Identify actions a client can take to be ready to adapt to new or changed policies
• Identify which other stakeholders, such as patient advocates, physician specialty societies, trade associations, etc., share an interest in the issues that matter to our client
• Engage with those stakeholders to determine if they are taking a position on our client’s issues (or inform them of these issues and advocate for their support) 
• Meet with CMS officials to support or oppose an agency proposal.  

If a CMS proposal is likely to be problematic for a client, we help them craft an alternative proposal that is within CMS’s statutory authority to implement. Ideally, this proposed alternative meets the agency’s goals while avoiding or solving a problem for our client. If the desired solution is not within the agency’s current authority to implement, we can identify the relevant section of the Social Security Act that needs to be changed and help the client draft legislation that would fix the problem.

Once we have identified the problem or opportunity and charted a path forward, we help our clients explain the issue and proposed solution within their organization to build consensus, help them raise awareness among external stakeholders, and arrange and attend meetings regarding the issue with appropriate CMS officials. Additionally, we coordinate our efforts with the client’s other resources, such as lawyers, lobbyists, and media relations professionals to maximize the client’s chances of achieving their desired result. 

When we help our clients succeed, we know that we are helping their patients live better lives. At the end of the day, it’s that end result that energizes our work and focuses our search for solutions.

AI HealthWatch:

Will AI Regulations Lag Further Behind Innovation

After Loper Bright?

By Will Henkes

Join NVHPF

on Wednesday, July 17, for

A Conversation with AHRQ Leadership

This is a virtual event.

Lawmakers Renew Push to Reform

Prior Authorizations in MA

Members of Congress are once again pursuing legislation to address the administrative burdens and delays in patient care associated with the prior authorization process in the Medicare Advantage (MA) program.

As Applied Policy has previously reported (here, here, and here), the prior authorization process has become a significant obstacle for both patients and providers. The American Medical Association has identified prior authorizations as "perennial concern," and the American Hospital Association (AHA) has urged the Senate Budget Committee to streamline the process. 

In June, U.S. Senator Roger Marshall, M.D. (R-KS), alongside Senators Kyrsten Sinema (I-AZ), John Thune (R-SD), and Sherrod Brown (D-OH), and U.S. Representatives Mike Kelly (R-PA), Suzan DelBene (D-WA), Larry Bucshon, M.D. (R-IN), and Ami Bera, M.D. (D-CA), reintroduced the bipartisan, bicameral Improving Seniors’ Timely Access to Care Act. 

The bill, a previous version of which passed in the House in 2022, would establish an electronic prior authorization process and institute measures to increase transparency around prior authorization requirements and usage. It would also expand beneficiary protections and require the Department of Health and Human Services (HHS) and other agencies to report to Congress on efforts to improve the prior authorization process.

Most provisions of the legislation would go into effect three years after enactment. Data reporting requirements would go into effect after four years.

As Insight goes to press, the proposed legislation has garnered support from over 400 national and state organizations. AHA has praised it for its potential to alleviate administrative burdens, reduce delays in care, and improve health outcomes for the over 33 million seniors enrolled in Medicare Advantage plans.

The reintroduction of the legislation follows the CMS's January release of the Advancing Interoperability and Improving Prior Authorization Processes for Medicare Advantage Organizations, Medicaid Managed Care Plans, State Medicaid Agencies final rule, which finalizes policies to streamline prior authorization processes.

Applied Policy's Latest Summaries

CMS Proposes Payment Cuts for Physicians in 2025, Updates Several Payment Policies 

By Simay Okyay McNutt

On July 10, CMS issued the proposed calendar year (CY) 2025 Physician Fee Schedule, which proposes policies for physician payment and other outpatient services covered under Medicare Part B.

The rule includes proposals to:

• Decrease the conversion factor for CY 2025 by 2.80 percent from the conversion factor for 2024,
• Extend some telehealth flexibilities and add services to the Medicare Telehealth List 
• Permanently adopt virtual supervision and teaching physician policies for telehealth services,
• Expand coverage for colorectal cancer screening, 
• Relax direct supervision requirements for certain provider types and services,
• Expand ability to bill the G2211 add-on code, 
• Establish new HCPCS codes to describe Advanced Primary Care Management Services,
• Update the Shared Savings Program and the Quality Payment Program,
• Update policies for advancing behavioral health services,
• Update Medicare inflation rebate guidance with new policies, 
• Expand coverage of hepatitis B vaccines 
• Establish fee schedule for drugs covered as additional preventative services, 
• Clarify payment for radiopharmaceuticals in the physician office setting, 
• Clarify policies on manufacturer refunds for discarded drugs, 
• Clarify payment policy for self-administered clotting factors, 
• Expand coverage of dental services linked to certain covered treatments,
• Update the data reporting timeline for the Clinical Laboratory Fee Schedule, and
• Update the Medicare Diabetes Prevention program to align with Centers for Disease Control and Prevention standards.

This proposed rule is scheduled to be published in the Federal Register on July 31, 2024, and comments are due September 9, 2024. 

CMS Releases Proposed Hospital Outpatient and Ambulatory Surgical Center Update for CY 2025, with New Conditions of Participation (CoPs) for Hospital Obstetrical Services

By April Gutmann

On July 10, CMS issued the Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems proposed rule, which proposes updates to the Medicare OPPS and ASC payment system for calendar year (CY) 2025.



This rule proposes to:

• Apply a payment update of 2.6 percent for CY 2025,
• Update payment rates for Partial Hospitalization Program and Intensive Outpatient Program,
• Address maternal health crisis through new obstetrical services specific conditions of participation,
• Update the hospital, ASC, and Rural Emergency Hospital quality reporting programs,
• Continue pass-through payment for certain drugs, biologicals, and devices, 
• Implement payment for non-opioid pain management drugs and devices, 
• Pay separately for diagnostic radiopharmaceuticals that meet a cost threshold,
• Provide an add-on payment for radiopharmaceuticals using Tc-99m derived from domestic Mo-99,
• Revise incarceration definitions to allow for Medicare payment for services furnished to individuals on parole, probation, or home detention,
• Change prior authorization timeframes for outpatient services that require prior authorization,
• Add 20 surgical procedures to the Ambulatory Surgical Center Covered Procedures List,
• Change payment policy for investigation device exemption studies and coverage with evidence development clinical trials,
• Implement mandatory continuous eligibility for children in Medicaid and CHIP,
• Add exceptions to the Medicaid clinic services “four walls” requirement,
• Clarify payment for telehealth outpatient therapy services, and
• Provide add-on payment for high-cost drugs provided by Indian Health Service and tribal facilities.

This proposed rule is scheduled to be published in the Federal Register on July 22, 2024, and comments are due by September 9, 2024. 

CMS Proposes Payment Increase for ESRD Facilities in CY 2025

By April Gutmann

On June 27, CMS issued the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) proposed rule for (CY) 2025. 

This rule proposes to:

• Increase ESRD payment rates by 2.2 percent,
• Implement a new ESRD PPS-specific wage index,
• Modify the low-volume payment adjustment (LVPA) policy to create a two-tiered LVPA,
• Include oral-only drugs in the ESRD PPS bundled payment,
• Extend the home dialysis benefit to patients with Acute Kidney Injury (AKI),
• Update ESRD facility Conditions for Coverage (CfCs),
• Make changes to the ESRD Quality Incentive Program (QIP), and
• Make additional changes to the ESRD Treatment Choices (ETC) Model.

Comments are due by August 26, 2024. 

CMS Proposes Payment Cuts for Home Health Agencies for CY 2025

By Simay Okyay McNutt

On June 26, CMS released the (CY) 2025 Home Health Prospective Payment System proposed rule for home health agencies (HHAs). This proposed rule includes the annual payment update, proposed policies for the home health conditions of participation, the quality reporting program, and the value-based purchasing model as well as updates to the provider and supplier enrollment requirements.

The proposed rule also includes several requests for information. 



Comments are due by August 26, 2024.

Applied Policy Announces Staff Promotions

Simay Okyay McNutt

Okyay McNutt will continue to lead Applied Policy’s DME and MedTech portfolios.

Voorhees also announced that Meghan Basler has been promoted to Senior Health Policy Associate.

Meghan Basler

By Emma Hammer

Each June, the Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC) is required to report to Congress on the Medicaid program.

This year's report was released on June 11. It includes chapters on:

• Improving the transparency of Medicaid and CHIP financing
• Optimizing State Medicaid Agency Contracts
• Medicare Savings Programs: enrollment trends
• Medicaid demographic data collection.

MedPAC Report to Congress

By April Gutmann

Each June, the Medicare Payment Advisory Commission (MedPAC) is required to report to Congress on the Medicare program.

This year's report was released on June 13. It includes chapters on:

• Approaches for updating clinician payments and incentivizing participation in alternative payment models
• Provider networks and prior authorization in Medicare Advantage (MA) 
• Assessing data sources for measuring health care utilization by Medicare Advantage enrollees: Encounter data and other sources
• Paying for software technologies in Medicare
• Considering ways to lower Medicare payment rates for select conditions in inpatient rehabilitation facilities (IRFs)
• Medicare’s Acute Hospital Care at Home program.

Thank you to Marlowe Galbraith

Regular Northern Virginia Health Policy Forum attendees will recognize Marlowe’s name from her communications regarding NVHPF events. She has also been an essential partner in producing this newsletter. We are grateful for her dedication and expertise and wish her all the best in her future endeavors.

On the Docket/Under Review

Applied Policy is following these rules under review at the Office of Management and Budget:

• Occupational Exposure to COVID-19 in Healthcare Settings 
• Healthcare System Resiliency and Modernization  (CMS-3426)
• Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program  (CMS-2433)
• Administrative Simplification: Modifications to NCPDP Retail Pharmacy Standards (CMS-0056) (CMS-0056)
• Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2025 Rates  (CMS-1809)
• FY 2025 Skilled Nursing Facility (SNFs) Prospective Payment System and Consolidated Billing and Updates to the Value-Based Purchasing and Quality Reporting Programs (CMS-1803)
• FY 2025 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Program (CMS-1804)
• FY 2025 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements (CMS-1810)
• FY 2025 Inpatient Psychiatric Facilities Prospective Payment System Rate and Quality Reporting Updates (CMS-1806)

See all rules under OMB review here.

July 12

NIH: Commemorating the 50th Anniversary of the National Research Act

July 16

FDA Webinar - In Vitro Diagnostic Product (IVD): Classification

July 28-August 8

ADLM 2024

Bloomberg Law

Drug, device online misinformation gets FDA look 

Fierce Healthcare

Legislation to grant 4-year coverage of breakthrough medical devices passes Ways and Means, with a heavy discount

JAMA Network

Physicians at this medical center now write 'power prescriptions'

Pharmaceutical Technology

Left in limbo: When pharma halts rare disease research

Washington Post

FTC opens investigation into Teva, escalating patent fight with pharma industry

Why did the pillow go to the doctor?