January 30, 2023

Volume XIII, Number 30

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January 30, 2023

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Healthcare Regulatory Check-Up August 2022: Other Notable Developments

Inflation Reduction Act Permits Medicare Drug Price Negotiation 

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA), which is intended to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030. The law also contains unprecedented healthcare provisions, such as allowing Medicare to negotiate with manufacturers on prescription drug prices.

The IRA’s healthcare provisions include the following:

• Establishing a Medicare Drug Price Negotiation Program HEALTHCARE REGULATORY CHECK-UP 10

• Requiring drug manufacturers to pay a rebate for certain drugs if the average increase in total allowed charges for a drug outpaces inflation increases

• Establishing a price cap on insulin

• Establishing a $2,000 out-of-pocket cap for beneficiary payments under Medicare Part D plans

• Extending the premium tax credits established under the ACA for three years, until January 1, 2026.

For more information on the IRA’s healthcare provisions, see McDermott+Consulting’s article, “The Inflation Reduction Act of 2022: Healthcare Provisions Updated: 08/16/2022.

House Passes Bill to Extend Telehealth Flexibilities Through 2024

The US House of Representatives passed a bill to extend telehealth reimbursement flexibilities established during the COVID-19 pandemic for two years. The bill, HR 4040, easily passed by a vote of 416–12 and is currently in committee in the Senate. The bill provides that certain flexibilities would continue to apply until December 31, 2024, if PHE ends before that date. The bill would allow the following:

• Medicare beneficiaries to continue to receive telehealth services at any site, regardless of type or location (e.g., the beneficiary’s home)

• Occupational therapists, physical therapists, speech-language pathologists and audiologists to continue to receive reimbursement for telehealth services furnished to Medicare beneficiaries

• Federally qualified health centers and rural health clinics to continue to serve as the distant site (i.e., the location of the healthcare practitioner) during a telehealth encounter

• Providers to render evaluation and management and behavioral health services via audio-only technology

• Hospice physicians and nurse practitioners to continue to complete certain requirements relating to patient recertifications via telehealth.

The bill would also delay implementation of certain in-person evaluation requirements for mental health telehealth services until January 1, 2025, or the first day after the end of the PHE, whichever is later. The bill has been referred to the Senate Finance Committee.

HHS Repeals Rules on Guidance, Enforcement, and Adjudication Procedures

HHS repealed two procedural rules in the July 25, 2022, Federal Register that were both promulgated during the previous administration’s last days to implement executive orders issued on October 9, 2019. The first executive order required all federal agencies, not just HHS, to treat guidance documents as legally non-binding and to publish all their guidance on a website. The second executive order created new requirements about the standards (including those spelled out in guidance) on which HHS agencies rely to bring administrative enforcement actions, make decisions and enforce punishments. The Biden administration revoked both executive orders in January 2021 and instructed HHS to rescind the corresponding final rules.

HHS articulated several policy bases for the repeal of the procedural rules. HHS stated that the rules ran counter to the administration’s goals of advancing public health and welfare, imposed burdensome standards and procedures, harmed historically underserved constituencies, impeded department flexibility and diverted limited department resources. HHS formally announced in an October 2021 notice of proposed rulemaking that it would repeal the rules.

HHS also formally withdrew a related final rule that would have terminated almost every HHS regulation on its 10th anniversary. The department posted notice that it was withdrawing the rule in late May 2022.

Joint Commission to Add Health Equity Standards to Accreditations 

The Joint Commission announced that effective January 1, 2023, it will implement new and revised requirements to reduce healthcare disparities. These requirements will apply to organizations in the Joint Commission’s ambulatory healthcare, behavioral healthcare and human services, critical access hospital and hospital accreditation programs. The updated standards include designating an officer to lead a strategy for reducing health disparities and screening patients for social determinants of health.

The Joint Commission will also require accredited organizations to add demographic breakdowns to quality and safety data, which will assist organizations in identifying disparities in health outcomes. The Joint Commission will require organizations to develop an action plan to eliminate these disparities, track their progress, and regularly update internal leaders and staff.

Departments Issue No Surprises Act Rules, Fact Sheet

On August 19, 2022, HHS and the US Departments of Labor and the Treasury released the Requirements Related to Surprise Billing: Final Rules, along with a fact sheet. The rules finalize certain requirements under the July 2021 interim final rules relating to information regarding the qualifying payment amount that group health plans and health insurance issuers offering group or individual health insurance coverage must share. The final rules also finalize select provisions of the October 2021 interim final rules related to information that a certified independent dispute resolution entity must consider when making a payment determination under the federal independent dispute resolution process. For additional analysis, see our On the Subject.

© 2023 McDermott Will & EmeryNational Law Review, Volume XII, Number 249
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About this Author

Tony Maida Health Care Attorney McDermott WIll Law Firm
Partner

Tony Maida is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s New York office.  Tony has extensive experience in health care fraud and abuse and compliance issues, including the federal Anti-Kickback and Physician Self-Referral/Stark laws, false claims and overpayments, and government investigations.    He works closely with our health and white collar teams on criminal, civil, and administrative investigations and counseling clients on corporate transactions and compliance programs.

Tony previously served...

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Emily J. Cook, McDermott Will Emery Law Firm, Health Care Attorney
Partner

Emily J. Cook is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Los Angeles office.  She focuses her practice on Medicare provider certification, reimbursement and regulatory compliance.

310-284-6113
Monica Wallace regulatory counseling lawyer McDermott Will Emery Law Firm
Associate

Monica A. Wallace is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  She focuses her practice on complex regulatory and transactional counseling to health care organizations such as health systems, hospitals, physician groups, integrated delivery systems, durable medical equipment prosthetics and orthotics suppliers, home health agencies, and other health care providers. Monica’s regulatory practice focuses on the Anti-Kickback and Stark laws; Medicare and Medicaid reimbursement and billing; legal assessments and compliance...

312-984-7757
Amanda Enyeart Healthcare and Life Sciences Attorney Mcdermott WIll Emery Law Firm
Partner

Amanda Enyeart is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Amanda focuses her practice on general regulatory health law matters. 

Previously, Amanda was an associate at a national law firm in its Chicago office where she provided guidance on regulatory issues, such as practitioner licensure; telehealth; Medicare and Medicaid reimbursement; and compliance with Stark Law and the Anti-Kickback Statute and state fraud and abuse laws.

Additionally, Amanda has...

312 984 5488
Cathy Ren Regulatory & Transactional Attorney McDermott Will & Emery Los Angeles, CA
Associate

Cathy Ren focuses her practice on regulatory and transactional matters affecting a wide range of clients in the healthcare industry, including hospitals, health systems, and other healthcare providers.

While in law school, Cathy was a legal intern at the National Health Law Program in Los Angeles and served as Co-President of the Harvard Health Law Society.

Related Services & Industries:

  • Healthcare
  • Healthcare Mergers & Acquisitions
  • Healthcare Regulatory & Compliance
  • Hospitals & Health Systems
310-788-4152
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