Zelis Legislative Weekly Update: Aug. 12 - 16

Table of Contents

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

Highlights

Federal court upholds NSA ruling; Healthcare data breach costs decline; DOJ program rewards fraud whistleblowers; Uninsured count jumps following disenrollment; CMS reminder on provider directory requirements; KS and AL explore different staffing shortage solutions; FDA approves OTC diabetes device

No Surprises Act & TinC

Late last week, the US Court of Appeals for the Fifth Circuit ruled on the government’s appeal of the NSA TMA II decision and handed the Texas Medical Association (TMA) another victory.?

• The court upheld the previous ruling on the case from Texas in Feb. 2023 (TMA II) that vacated several CMS regulations related to the weight given to the QPA by Independent Dispute Resolution (IDR) Entities in the NSA IDR process. The court noted that CMS infringed on IDREs’ ability to consider other factors equally to the QPA.
• IDR Entities are already acting under the previous Feb 2023 ruling by not giving priority or extra weight to the QPA in their decision-making, so last week’s ruling on the appeal does not change the current IDRE process or policy.
• We are still awaiting a decision on the appeal of TMA III, in which aspects of how the QPA is calculated are at issue. Oral arguments are currently scheduled for Sept. 3, 2024.

Most Americans support the NSA and they're concerned about efforts to weaken the law, according to a new poll led by the American Heart Association. The poll found that 88% of Americans supported the law and 78% would view their lawmakers less favorably if they voted to weaken it.

• According to the poll, 18% of respondents had received a surprise medical bill totaling $1,000 or higher.

Cybersecurity, AI, & Tech

A new study found that the average cost of healthcare data breaches in 2024 is $9.8M (so far) —a slight decline from 2023’s high of $10.9M.

• For the 14th year in a row, healthcare is the most expensive industry in which to have a data breach.
• The study found that companies using AI to identify and contain breaches lowered their costs by about $2.2M.

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Amazon is partnering with health systems in Illinois, Massachusetts, and New York to explore how AI can improve patient experiences and outcomes.

• The partnership involves a tool called HealthScribe, a HIPAA-compliant service using generative AI to produce clinical notes from patient visits.

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CVS Health is planning to utilize AI and automation to save the company $2 billion, which comes on top of last year’s plan to cut $800 million by increasing the use of AI and eliminating non-customer facing positions.

DC and Federal Update

The DOJ is piloting a program that provides reward money to anyone who assists in exposing healthcare fraud schemes involving private insurance.

• The money will come from the net proceeds forfeited in a case, and the whistleblowers stand to receive up to 30% of the first $100M, and 5% beyond that.?

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According to this ONC blog post, while electronic public health reporting has grown significantly in recent years, hospitals and physicians continue to report barriers to public health data exchange.

• The most common challenge was hospitals' perception that public health authorities could not electronically receive information.

The CDC announced that the percentage of Americans without health insurance jumped to 8.2% in the first quarter of 2024.

• An estimated 27 million people had no form of health insurance as of March 2024, compared with 25 million at the same point in 2023.
• Similarly, about 25 million people have lost their Medicaid coverage since states began disenrollment campaigns.
• Much of the increase is blamed on states continuing to cut Medicaid rolls and a growth in unemployment.
• This has resulted in a growth for insurers participating in the ACA marketplace, which have hit “record levels” of enrollment.

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Zelis' Legislative Affairs team reported on a CMS reminder to state health officials on new “accurate, updated, and searchable” provider directory requirements for Medicaid/CHIP health plans going into effect July 2025.

• Key requirements include those related to data updates, data elements, provider types, and FHIR-compliant interoperability.

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The FDA announced industry experts and representatives who will serve on its new Digital Health Advisory Committee.

• The Committee, announced last year, will inform the agency on all things digital health including virtual reality, AI, machine learning, digital therapeutics, and remote patient monitoring.

The States

Los Angeles County in California passed a new ordinance this week that requires hospitals to inform the county’s health department about any attempts to collect medical debt from patients.

• The ordinance is not yet final and will require another vote before becoming effective.
• It would also require hospitals to report on medical debt amounts and what financial assistance is offered to patients.

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A Kansas hospital is launching a new program that encourages staff to live in the area they work in, providing affordable housing for providers in exchange for a three-year commitment.

• Similarly, last year, two Colorado health systems invested in a 42-united housing development for staff.

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Alabama is opening a new program allowing medical school graduates to train under a licensed physician as a solution to the state’s staffing shortage.

• The program allows students who did not match into residency programs to remain in hospitals and reapply for residency after gaining more experience.

The Industry

Continuous glucose monitors are now set to be sold over the counter, without a prescription, after the FDA approves applications from 2 medical device companies.

• The companies hope to open up the market to the 25 million diabetics who do not use insulin and the 100 million people who are prediabetic.

The number of private equity-affiliated (PE) dental practices nearly doubled from 2015 to 2021, according to a new study published in Health Affairs. The percentage of dentists affiliated with PE increased from 6.6% in 2015 to 12.8% in 2021.

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