Payers, Providers, and Patients – Oh My! Is Crowell & Moring’s health care podcast, discussing legal and regulatory issues that affect health care entities’ in-house counsel, executives, and investors. In this episode, hosts Payal Nanavati and Joe Records sit down with Xavier Baker and Kevin Kroeker to discuss medical loss ratio requirements. The first episode provided background on what an MLR is and some of the history of MLR requirements, among other things. This episode touches on how the MLR is determined for plans and some of the compliance risks that can arise under MLR requirements.

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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

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

In early February, two federal bills targeting surprise billing in healthcare advanced out of committee.  On February 11, the House Education and Labor Committee passed the Ban Surprise Billing Act (H.R. 5800), which was introduced by Chairman Rep. Bobby Scott (D. – Virginia) and Ranking Member Rep. Virginia Foxx (R. – North Carolina).  One day later, the House Ways and Means Committee unanimously advanced the Consumer Protections Against Surprise Medical Bills Act (H.R. 5826), led by Chairman Rep. Richard Neal (D. – Massachusetts) and Ranking Member Rep. Kevin Brady (R. – Texas).  Both bills would prohibit providers from balance billing patients for surprise medical bills and would limit patients’ cost-sharing to in-network amounts.  The two competing bills must be reconciled before the full House can vote on the issue.  Leaders hope to include the final product in a spending bill that must pass Congress by May 22.

Similar scopes of coverage

The competing bills are substantively similar in several ways.  Each bill applies to out-of-network emergency claims, to post-stabilization inpatient services provided to patients who are admitted to the hospital through the emergency room, and to non-emergency services provided at in-network facilities by out-of-network providers.  The Ban Surprise Billing Act also covers air ambulance services.  Additionally, both bills apply to all individual and group health plans (both fully- and self-insured) in the group and individual markets, but do not apply to federal programs such as Medicaid or the Federal Employees Health Benefits Program.  The Ban Surprise Billing Act also extends to grandfathered health plans.

Notice requirements Continue Reading Competing Surprise Billing Proposals Set to Collide in the U.S. House; States Test Different Solutions

Payers, Providers, and Patients – Oh My! Is Crowell & Moring’s health care podcast, discussing legal and regulatory issues that affect health care entities’ in-house counsel, executives, and investors. In this episode, hosts Payal Nanavati and Joe Records sit down with Xavier Baker and Kevin Kroeker to discuss medical loss ratio. This episode touches on what an MLR is, some of the history of MLR requirements in health coverage, and some of the similarities and differences across markets. Stay tuned for Part 2.

Subscribe to Payers, Providers, and Patients – Oh My! at:

PodBean | SoundCloud | Apple Podcasts

Crowell & Moring has released its Regulatory Forecast 2020: What Corporate Counsel Need to Know for the Coming Year, a report that explores the impact of regulatory changes on the technology industry and other sectors, and provides insight into the house counsel can expect to face in the coming year.

For 2020, the Forecast highlights the driving forces behind the increased regulatory focus, including access to the data, online platforms, and cutting-edge technologies that define competitive advantage. It explores regulatory trends in antitrust, environment and natural resources, and public affairs.

The health care section, “Will Health Care be Healthier in 2020,” discusses the profound impact that court challenges and new proposals could have on the Affordable Care Act, Medicaid and the Stark Law.

Be sure to read the full report and follow the conversation on social media with #RegulatoryForecast.

CMS approved requests from five additional states to launch reinsurance programs under Section 1332 state innovation waivers in order to help alleviate high premiums in the individual health insurance markets. Colorado, Delaware, Montana, North Dakota, and Rhode Island are embracing reinsurance as a way to help insurers cover the cost of the largest claims they face. They join Alaska, Maine, Maryland, Minnesota, New Jersey, Oregon, and Wisconsin, which have existing reinsurance programs. The positive results in these seven states are significant: a 17% drop in premiums on average in the first year of operation.

Reinsurance was a key feature of the ACA to help stabilize premiums in the individual market for 2014 – 2016, the first three years of the marketplaces. The marketplaces were new, and insurers faced much uncertainty in covering previously uninsured and under insured individuals. The ACA offered a partial safeguard against high, unpredictable medical expenses under Section 1341’s transitional reinsurance program. Estimates place the average reduction in premiums by the federal reinsurance program by as much as 14%. Based on the assumption that insurers would gain a better understanding of their members’ health status as time passed (and thus could price their products with greater accuracy), the ACA’s reinsurance program was temporary. But in 2017 premiums increased more sharply than they had in previous years, in part due to the loss of reinsurance.

Continue Reading Increased State Innovation Aimed at Stabilizing ACA Marketplaces

On February 11, the U.S. Court of Appeals for the Seventh Circuit ruled that consultants who provide services to nursing homes and long-term care facilities lack standing to sue the state Medicaid agency and its contracted Managed Care Organizations on behalf of patients.

In Bria Health Servs., LLC v. Eagleson, No. 18-3076 (7th Cir. Feb. 11, 2020), the plaintiff-consultants asserted that the state agency responsible for administering the Medicaid program—the Illinois Department of Healthcare and Family Services (HFS)—and the Medicaid managed care organizations (MCOs) that HFS used to deliver health benefits to Medicaid recipients had violated various federal laws and regulations by not paying outstanding bills owed to the consultants’ clients. Regarding standing, the plaintiff-consultants argued that they had been authorized to bring claims on behalf of Medicaid beneficiaries residing in their clients’ nursing homes because each resident had designated the consultants as authorized representatives under the Medicaid regulations to bring “action as necessary to establish eligibility for Medicaid.” The consultants pointed to the regulation at 42 C.F.R. § 435.923, which allows beneficiaries to designate authorized representatives to act on their behalf in relations with state Medicaid agencies, for the authority to bring suit on behalf of the residents.

The Seventh Circuit, however, upheld the district court’s grant of the defendants’ 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. The court explained that the language of 42 C.F.R. § 435.923 confines the power of the authorized representative to Medicaid eligibility actions and determinations. Therefore, the regulation did not authorize the plaintiff-consultants to bring civil claims on behalf of Medicaid beneficiaries.

The court noted that even if the regulation had authorized the consultants to bring a civil claim on behalf of the residents, the plaintiffs would still have to show some other support for their “representative standing” under Article III jurisprudence. The court pointed out that if a plaintiff cannot show an injury of their own, they must invoke some sort of recognized exception to the general standing requirements, such as a guardian bringing a claim on behalf of a minor, a next friend for a real party in interest who is disabled, or an association suing on behalf of its members. Even if 42 C.F.R. § 435.923 had by its terms conferred authority to bring a civil suit on behalf of beneficiaries, the court recognized that the plaintiffs had cited no support for the theory that a regulation could confer representative standing on the mere basis of authorization.

This case highlights the importance of considering—at any stage of litigation—whether subject matter jurisdiction exists, particularly when the plaintiff is not the injured party or when an authorized representative is involved in a suit.  It also highlights to MCOs that even if representative authority is conferred by regulation, it may not be enough for a representative plaintiff to establish Article III standing.

Crowell & Moring has released Litigation Forecast 2020: What Corporate Counsel Need to Know for the Coming Year. The eighth-annual Forecast provides forward-looking insights from leading Crowell & Moring lawyers to help legal departments anticipate and respond to challenges that might arise in the year ahead.

For 2020, the Forecast focuses on how the digital revolution is giving rise to new litigation risks, and it explores trends in employment non-competes, the future of stare decisis, the role of smartphones in investigations and litigation, and more.

The health care section, “The Growing Risk of Disability Litigation,” outlines how federal agencies and private plaintiffs are both turning their attention toward disability issues with businesses and how that could have a ripple effect across health care and other industries.

Be sure to follow the conversation on Twitter with #LitigationForecast.


On December 31, 2019, in New Mexico Health Connections v. U.S. Dep’t of Health and Human Services, the U.S. Court of Appeals for the Tenth Circuit upheld the methodology adopted by the U.S. Department of Health and Human Services (“HHS”) to administer the Risk Adjustment Program under the Affordable Care Act (“ACA”). In doing so, the panel, led by Judge Scott M. Matheson, Jr., overturned the decision of the U.S. District Court for the District of New Mexico that the use of statewide average premiums in the methodology was arbitrary and capricious.

The Risk Adjustment Program is a “premium stabilization” program created by the ACA to make premiums in the individual and small group markets more predictable. In essence, to limit incentives for health insurers to try to attract healthier enrollees, the Risk Adjustment Program transfers funds from health plans with healthier enrollees to those with less healthy enrollees. As with similar efforts under Medicare Advantage and some states’ Medicaid managed care programs, the Risk Adjustment Program was intended to mitigate potential adverse selection by targeting the impact of enrollee health status. Section 1343 of the ACA required that HHS create standards for the program through regulations, which have included the annual issuance of a risk adjustment formula for the payment transfers. Among other challenges to the program, insurers have challenged this formula, particularly the decision to base payment transfers on statewide average premiums instead of each plan’s actual premiums.

In 2018, in response to a challenge brought by New Mexico Health Connections, a New Mexico non-profit health plan, Judge James O. Browning of the U.S. District Court for the District of New Mexico found that the use of a statewide average premium in the risk adjustment formula was arbitrary and capricious on the basis that the agency failed to justify its reasoning in the notice-and-comment rulemaking process. This decision came one month after the U.S. District Court of Massachusetts upheld the same risk adjustment formula in a similar challenge. Judge Browning denied a request from the federal government to reconsider his decision in October 2018, and the federal government appealed to the Tenth Circuit.

In the opinion published on December 31, the Tenth Circuit reversed the district court, concluding that the use of a statewide average premium and adoption of a budget-neutral program were appropriate and reasonable. While the appeal was pending at the Tenth Circuit, HHS issued new rules for the 2017 and 2018 methodologies that rendered the case moot for those years. For the methodologies used in 2014 through 2016, the court determined that HHS appropriately justified its use of the statewide average premium in the risk adjustment methodology, including that HHS explained that it chose the statewide average premium to reduce the impact of risk selection, achieve a straightforward and predictable benchmark, promote risk neutral payments, avoid causing unintended distortions in transfers, and avoid disproportionately distributing costs to certain insurers. Further, the court determined that the budget-neutral design for the program was not improper because the ACA did not speak to budget neutrality and budget neutrality was necessary due to funding constraints.

Following this decision, New Mexico Health Connections may seek rehearing of the case en banc by the entirety of the Tenth Circuit or request review by the Supreme Court.