CHS The Word: December 18, 2020

Stakeholders Call for Changes to Surprise Billing Agreement

An agreement among bipartisan, bicameral health care leaders on surprise medical bills has elicited strong reactions from health care stakeholders.  While the arbitration-focused proposal has drawn the ire of insurers, hospitals have also called for a bevy of changes.

Known as The No Surprises Act, the agreement uses an arbitration system to settle disputes over out-of-network bills.  Any decision made through arbitration would be binding, and arbiters would be required to consider median in-network rates for services.  The legislation also contains a ban on air ambulance surprise bills.  Notably, the bill includes extensions of mandatory funding for the National Health Service Corps, Special Diabetes Programs, graduate medical education, and community health centers all at current levels for fiscal years 2021-2024.  While The No Surprises Act has yet to be scored, the Congressional Budget Office estimated that H.R. 5826, a similar proposal put forth by the House Ways and Means Committee last year, would generate $17.8 billion in savings over a decade.  However, the inclusion of health extenders in the current measure likely eliminates any potential for savings.

Announcement of the bipartisan agreement immediately prompted criticism from insurers and employers who favor using benchmark payment rates over arbitration as a solution to surprise billing.  Generally, payer organizations such as America’s Health Insurance Plans have expressed that arbitration will lead to higher administrative costs and favor providers and private equity firms due to the “opaque” nature of dispute resolution.   Additionally, the ERISA Industry Committee stated that the group would only support the bipartisan agreement if the bill added the several provisions including a ban on gag clauses and transparency for employers on prescription drug prices.

Title Publication Date Intended Goal
Protecting Vulnerable Newborn and Infant Children TBD (Signed 9/25/20) Requires medical care to be given to infants who are born alive after an abortion attempt.
Lowering Drug Prices by Putting America First 9/23/20 Caps prices of Medicare Part B and Part D drugs at “most favored nation” price.
Lowering Drug Prices by Putting America First 9/18/20 Caps prices of Medicare Part B drugs at “most favored nation” price.
Buy American 8/14/20 Prioritizes US government purchase of US-manufactured drugs.

HHS Calls for Major Changes to HIPAA Privacy Rule

On December 10, the Department of Health and Human Services (HHS) Office for Civil Rights proposed considerable changes to the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule.  Some of the proposed changes address the rise of digital health, which has radically changed the health information landscape since HIPAA’s enactment in 1996.

One of the rule’s most prominent proposals would allow HIPAA covered entities to disclose a patient’s protected health information to members of the patient’s health care delivery team, including family members, caregivers, and community-based organizations, if the disclosure is in the best interests of the patient.  Additionally, patients would no longer need to provide a physical signature to approve the disclosure of information.  While current HIPAA regulations permit covered entities to share protected health information under the “exercise of professional judgement,” the proposed rule would expand this to allow disclosures based on a “good faith belief” in cases where the patient poses a “serious and imminent threat” such as suicidal ideation.

The proposed rule would help improve patients’ access and usage of their health information by shortening the period by which providers are required to respond to health information requests from 30 days to 15 days.  Providers would also be required to provide patients estimates of fees for requests for physical materials containing protected health information, while electronic health information would be provided at no charge.  Patients would then be permitted to share directly electronic health records containing personal information and capture health information using a smart phone.

Comments on the proposed rule are due within 60 days of the rule’s publication in the Federal Register, which has yet to occur.  This means comments are not due until at least February, giving the incoming Biden Administration wide latitude to change the proposed rule should the new Administration choose to finalize it.


340B Sees Changes to Dispute Resolution, New Lawsuit

December has proven to be another newsworthy month for stakeholders in the 340B Drug Pricing Program after the Administration signed off on a new dispute resolution process, while providers filed more litigation calling for increased enforcement.  Both actions revolve around manufacturers’ decision to restrict discounts for certain 340B drugs. Additionally, a newly issued report has shed light on providers’ compliance with 340B requirements.

Under a final rule issued on December 10, the Health Resources and Services Administration (HRSA) will establish a binding dispute resolution process to resolve claims related to monetary damages or equitable relief between 340B providers and drug manufacturers.  The rule comes amid growing tensions between providers and manufacturers, specifically with regards to manufacturers’ recent moves to limit 340B discounts for certain providers and impose additional requirements for providers to receive discounts.

Initially required under the Affordable Care Act in 2010, HRSA did not propose rulemaking on a dispute resolution process until August 2016.  Last month, National Association of Community Health Centers filed a lawsuit to force HRSA to accelerate the rule’s finalization.  Despite the issuance of the final rule, a statement from 340B Health, which represents 340B covered entities, indicates that providers are still concerned.  According to 340B Health, the final rule does not represent a “timely solution” for providers due to the fact its implementation will take “many months.”  The statement also accused several manufacturers of violating the 340B statute for limitations on discounts.

Only a day following the release of the final rule, eight provider organizations including the American Hospital Association filed a lawsuit alleging that HHS is failing to enforce the 340B statute by not requiring drug manufacturers to provide discounted drugs to hospitals and community-based pharmacies.  The lawsuit also calls on HHS to require drug companies to issue refunds to hospitals that were denied discounts and asks HHS to penalize those companies involved.

On a related note, the Government Accountability Office issued a report on December 14 on providers’ compliance with 340B.  Of the 1,240 audits conducted by HRSA in fiscal years 2012-2019, the GAO found that nearly 900 resulted in at least one finding of non-compliance.  Examples of noncompliance cited in the report include failure to maintain program eligibility requirements, the diversion of 340B drugs to ineligible patients, and duplicate discounts.