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Executive Summary

The healthcare industry is undergoing a significant transformation, moving away from volume-based care towards value-based models that prioritize patient outcomes and cost efficiency. This issue brief delves into delta MLR contracting, a type of value-based contracting that measures and rewards improved performance based upon incremental improvements in medical loss ratio. 

Delta MLR contracting is the next chapter on the way to full risk delegation, aiming to improve medical loss ratios by reducing unnecessary utilization through innovative tech-enabled care delivery transformations and offering the potential for future revenue increases for providers who achieve improved quality and appropriately document and code clinical conditions for accurate risk adjustment.

Medical Loss Ratio (MLR) refers to the percentage of premiums payers spend on medical claims and healthcare quality improvement, as opposed to administrative costs and profits. Delta MLR contracting presents an innovative framework for population health providers and virtual care organizations to align to the clinical and operational value created for risk bearing entities. Below we discuss the necessary emphasis in delta MLR contracting on the integration of documentation and coding practices, data, actuarial analytics, quality initiatives, and medical management. We also focus on the need for full financial alignment of virtual care solutions and risk bearing entities in achieving the Quintuple Aim.

By focusing on these elements, innovative providers can enhance patient outcomes, optimize financial performance, and navigate the complexities of value-based care more effectively. Continue Reading Delta MLR Contracting: Integrating Risk, Quality and Affordability

On November 8, 2023, the Senate Health, Education, Labor and Pensions (HELP) Committee Subcommittee on Primary Health and Retirement Security discussed the impact of artificial intelligence (AI) on the healthcare sector in the Committee’s second AI hearing in nine days. The hearing comes as the White House and Congressional leaders seek to quickly respond to AI threats, mitigate its dangers, and harness its potential for American industry. Senators discussed the recent Executive Order issued by the White House to guide AI regulation and innovation across all sectors, including in the health and human services sectors.Continue Reading Avoiding a Cautionary Tale: Policy Considerations for Artificial Intelligence in Health Care

On July 13, 2022, the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) issued guidance to the nation’s retail pharmacies about their nondiscrimination obligations to ensure access to reproductive health care services, including medications used to terminate pregnancies. As we previously discussed, the Biden Administration and OCR have been taking action as some states seek to restrict or criminalize abortion services in response to the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization.  Continue Reading OCR Issues Anti-Discrimination Guidance for Pharmacies Related to Reproductive Health Care Services

On October 27, 2021, the U.S. Food and Drug Administration (FDA) in collaboration with Health Canada, and the UK’s Medicines and Healthcare products Regulatory Agency (MHRA), published Guiding Principles for the use of artificial intelligence and machine learning (AI/ML) in medical devices.   The principles are designed to support good machine learning practices (GMLP) and to help promote safe, effective, and high-quality medical devices that use AI/ML. The FDA is accepting public comment on these principles on an ongoing basis.
Continue Reading FDA Publishes Principles for AI and ML in Medical Devices

On May 14, 2021, CMS published FAQs addressing questions that have been raised regarding the Interoperability and Patient Access final rule published May 2020.  CMS is careful to note that the FAQs “do not have the force and effect of law and are not meant to bind the public in any way, unless specifically incorporated into a contract, as directed by a program.”  CMS has provided links and other guidance, including regarding technical standards, best practices, and privacy and security resources, and has directly addressed questions raised by trade associations and others.

We summarize some of the key points addressed in the FAQs.  We encourage you to review the full CMS response where questions arise in your implementation.
Continue Reading CMS Issues First FAQs on the CMS Interoperability and Patient Access Rule

On October 29, 2020, CMS issued the Home Health Prospective Payment System final rule [CMS-1730-F, CMS-1744-IFC, and CMS-5531-IFC], which permanently authorizes use of telecommunications technology as part of patient care under the Medicare home health benefit.[1]

The final rule is another regulatory step toward CMS recognizing the critical role of virtual care in the home health and other care settings, beyond the COVID-19 pandemic.[2]

Use of Telecommunications Technology in Home Health Services

In April 2020, CMS had initiated regulatory changes proposing to expand the use of telecommunication in the provision of home health services covered by Medicare.  CMS stated that its goal in expanding this permitted use of telecommunications technology in furnishing home health care is to “improve efficiencies, expand the reach of healthcare providers, allow more specialized care in the home, and allow home health agencies to see more patients or to communicate with patients more often.”

In the final rule, effective January 1, 2021, home health agencies (HHAs) will be able to use telecommunications – and receive reimbursement for home health services – under the following conditions:Continue Reading HHS Approves Telecommunications for Providing Medicare Home Health Services, on a Permanent Basis, Effective January 1, 2021

On August 20, 2020 the Department of Health and Human Services (HHS) published a notice of proposed rulemaking (85 Fed. Reg. 51397) on good practices for the release and maintenance of agency guidance documents. Comments must be posted by 11:59 pm on September 16, 2020.

As instructed in the October 9, 2019 Executive Order 13891 (EO), titled ‘‘Promoting the Rule of Law Through Improved Agency Guidance Documents (84 FR 55235 (Oct. 15, 2019)), HHS proposes to issue regulations to ensure (i) there is proper notice of any new guidance, and (ii) that the guidance does not impose obligations on regulated parties that are not already reflected in duly enacted statutes or regulations.

This proposed rule appears to follow the Office of Management and Budget, “Final Bulletin for Agency Good Guidance Practices,” issued on January 25, 2007 (72 Fed. Reg. 3432) with respect to the significant guidance document that may, for example “adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities” or “materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof” and generally requires a 30 day notice and comment period.

BackgroundContinue Reading HHS Proposes a New Rule to Govern Release and Maintenance of Agency’s Guidance Documents

Last week, the Center for Medicare & Medicaid Services (CMS) finalized long-awaited regulations on Interoperability and Patient Access (the “CMS Rule”) to require Medicare Advantage plans, Medicaid and Children’s Health Insurance Program (CHIP) managed care plans, state agencies, and Qualified Health Plan (QHP) issuers on federally-facilitated exchanges (“CMS Payers”) to provide patients easy access to their claims and encounter information, as well as certain clinical information, through third-party applications of their choice. On the same day, the Office of the National Coordinator for Health Information Technology finalized its rules on Interoperability, Information Blocking, and the ONC Health IT Certification Program (the “ONC Rule”) related to the 21st Century Cures Act (Cures Act). The CMS Rule and ONC Rule have far-reaching impacts.

As individuals and organizations covered by the rules are considering how they may facilitate their access to health information to support patients, health care providers, and others, it is important to understand when provisions in the rules will be effective and timing and what acts may constitute violations of these rules.  To help clients get familiar with these deadlines, we are providing this summary chart of compliance requirements and applicable deadlines to help your organization prepare for upcoming enforcement of the ONC Rule and the CMS Rule.  For legal advice tailored to the specific needs of your organization, please reach out to Jodi Daniel, head of the firm’s Digital Health Practice at jdaniel@crowell.com.

As you read the chart, you should keep the following in mind:Continue Reading Compliance Reference Chart for ONC and CMS Interoperability Rules

The past week has seen daily action at the state and federal level that seeks to ensure that health plans and insurers are providing unrestricted access to testing for COVID-19 and for related services.  Health plans nationally have responded by adopting copayment and preauthorization waivers even where they have not been mandated.

Here are a few of the headlines:

On March 2, 2020, New York Gov. Andrew Cuomo announced he would require state health insurers to waive fees related to coronavirus testing in the state in order to avoid cost as a barrier to testing.  To implement his directive, Governor Cuomo announced that the New York State Department of Financial Services (“DFS”) will promulgate an emergency regulation that (i) prohibits health insurers from imposing cost-sharing on an in-network provider office visit or urgent care center when the purpose of the visit is to be tested for COVID-19 and (ii) prohibits health insurers from imposing cost-sharing on an emergency room visit when the purpose of the visit is to be tested for COVID-19.  In addition, DFS issued other COVID-19 guidance to New York insurers, including: (a) directing insurers to develop robust telehealth programs with their participating providers, and (b) directing insurers to verify that their provider networks are adequately prepared to handle a potential increase in the need for health care services, including offering access to out-of-network services where appropriate and required.
Continue Reading Flurry of Regulatory Activity Driven by COVID-19 Anxiety Impacts Health Plan Requirements and Permissible Actions