Legislative Weekly Update March 3-9

Table of Contents

1. No Surprises Act & TinC
2. DC and Federal Update
3. Cybersecurity, AI, & Tech
4. The States
5. The Industry

Highlights

• Pres. Trump signs price transparency EO
• Medicaid in crosshairs of Congressional budget
• Medicare telehealth flexibilities at risk again
• Trump Admin. to defend ACA preventive services coverage in court
• Federal bill allows AI to prescribe drugs
• HAL 9000 may be your new “licensed practitioner”
• Obesity main driver of rising costs

No Surprises Act (NSA) & TinC

President Trump signed an Executive Order (EO) supporting healthcare price transparency and promising the issuance of guidance or proposed regulations within the next 90 days that would:

• Require “actual prices of items and services, not estimates” (presumably for price transparency tools);
• Ensure price information is standardized and comparable across hospitals and plans; and
• Update enforcement policies.
• Read the full fact sheet here. Note that some summaries of the EO imply that new transparency requirements will be mandated within 90 days. In contrast, the EO states that proposed regulations, guidance, and other “action” on transparency will be forthcoming.

At the same time, a congressman reintroduced legislation that increases fines for hospitals that violate federal transparency rules. The Hospital Transparency Compliance Enforcement Act doubles the current CMS fines for noncompliant hospitals.

• o Readers may remember that a November 2024 study found that only 21% of hospitals were fully compliant with federal rules.
• Relatedly, additional hospitals have recently been fined by CMS for alleged price transparency violations.?

DC and Federal Update

As Congress faces another looming deadline to fund the government, the House passed a “budget blueprint” that would have the House Energy and Commerce Committee find at least $880 billion in cuts from the programs it oversees – which includes Medicare and Medicaid.

• House Speaker Johnson stated that the budget would not cut from policies that result in “direct hits” to people’s Medicaid benefits, but that the program is “hugely problematic” because of fraud, waste, and abuse.

?With the looming gov’t shutdown, telehealth flexibilities within Medicare are on the chopping block yet again as their March extension deadline is fast approaching. Healthcare organizations – including Elevance Health, Johns Hopkins and Mayo Clinic – sent a letter to congressional leaders urging them to extend the flexibilities permanently.

?Upon Robert K. Kennedy Jr.’s confirmation as HHS Secretary, Pres. Trump created the Make American Healthy Again Commission, which Sec. Kennedy will chair.? The commission’s stated goal is to “empower Americans through transparency and open-source data” and increasing “health coverage flexibility.”

The Trump Admin. informed the Supreme Court that it intends to maintain the Biden Administration’s arguments in court over the ACA preventive services coverage mandate.

• SCOTUS agreed to review the case in January, but experts were previously unsure of whether the new Admin. would continue pursuing the case.

?The Trump Admin. reduced funding for the ACA Navigator program by 90%, arguing that Navigators enrolled less than 1% of overall plan selections in the federal exchanges for the 2024 plan year despite receiving $98m in funding.

• Opponents of the cuts argue that Navigators fulfill many other roles, including helping people understand their coverage as well as transition across different types of coverage.

?Pres. Trump issued an EO mandating that all independent agencies submit their draft regulations to the White House for review.? This includes the FTC, which has been in the news – and the courts – lately for its ban on noncompete agreements commonly utilized in healthcare.?

• The noncompete issue is currently before the 5th Circuit and the 11th Circuit after judges in both Texas and Florida ruled the ban unenforceable.

The FTC is also in court as a plaintiff against PBMs Caremark, Express Scripts, and Optum RX alleging that the PBMs were artificially driving up the cost of insulin.? While the PBMs asked the Missouri district judge presiding over the case to block the suit, the judge ruled in favor of the FTC and will allow it to proceed.

• While the Trump Admin. is considered generally more friendly to private sector businesses, Pres. Trump has made remarks critical of PBMs in the past.

Cybersecurity, AI, & Tech

A Congressman proposed a bill that would allow AI and machine learning technology to be considered a “practitioner licensed by law” that is allowed to prescribe drugs approved by the FDA.

• The Prescription of Drugs by Artificial Intelligence or Machine Learning Technologies Act would required state authorization of the process before prescriptions could be prescribed.
• Readers may remember a recently proposed Oregon bill that prohibited any non-human entity from using the title “nurse” or similar titles, suggesting that giving AI authority in specific areas could be a contentious legislative issue.

?An American Medical Association (AMA) survey found that physicians have dramatically embraced AI in healthcare as 66% report using the technology in 2024, as compared to a mere 38% in 2023.

• Over half of respondents noted that reducing administrative burden was the biggest opportunity for AI.
• Relatedly, EHRs are getting a “makeover” thanks to AI, Becker’s Health IT reports. Some vendors are attempting to address technical inefficiencies and administrative burdens by using AI for voice-powered commands and streamlined documentation.

The States

Medicaid work requirements are expected to make a resurgence under Pres. Trump’s second term, but the two states that implemented such requirements – Georgia and Arkansas – have pulled back on their programs.

?States are aggressively addressing private equity investment in healthcare, even amidst what is expected to be a more welcoming environment at the federal level.? Read more here.

?A new report on US healthcare spending by county found that the states with the highest per capita healthcare spending were Alaska, New York, and Massachusetts, while Idaho, Utah, and New Mexico had the lowest.? This data indicates that “some states have found more efficient ways to deliver care without escalating costs”. Full report here.

Cate Brantley, Senior Gov’t Affairs Liaison at Zelis, shares what’s happening in the states when ground ambulance - the hottest topic in balance billing - is not included in the No Surprises Act here.

The Industry

The FDA announced that compounding pharmacies producing generic versions of GLP-1 will need to phase out production, as the GLP-1 shortage is officially over and drug’s manufacturers can meet both current and projected needs. (Non-generic GLP-1 drugs include Ozempic and Wegovy.)

• Compounding pharmacies subsequently filed a lawsuit against the FDA challenging its decision.?

A United Healthcare report finds that obesity is a major driver of rising healthcare costs. The study cites a gov’t stat that obesity will cost nearly $10T in medical expenditures over the next 10 years.

• Given the stats, if an employer plan with 5K members made a 25% reduction in obesity, it could save nearly $9M annually.?

A JAMA study found that hospitals are busier than they were before C19, which means the country could be heading for a care shortage. A bed shortage is expected by 2032 if these rates continue.

This update is solely for informational purposes and should not be relied upon as legal advice.