PAI Regulatory Advocacy Update

The latest Physician Advocacy Institute advocacy and federal regulatory developments.

PAI Files Amicus Curiae Brief in No Surprises Act Qualifying Payment Amount (QPA) Case Before U.S. Court of Appeals for the Fifth Circuit
PAI’s brief supports the Texas Medical Association’s (TMA) challenge to certain QPA calculation factors that allow insurers to skew the benchmark downward. Read more.

Federal Trade Commission (FTC), Department of Justice (DOJ) and Department of Health and Human Services (HHS) Prompt Investigation into Private Equity and Corporations’ Influence in Health Care
The cross-government public inquiry will investigate the effects of this trend on quality of care, patient health, workers’ safety and cost. PAI will weigh in. Read more.

Centers for Medicare and Medicaid Services (CMS) Releases Background on Federal Independent Dispute Resolution (IDR) Process Showing Physicians Prevailing in 77% of IDR Determinations
The resource shows a large volume of disputes submitted through the Federal IDR portal and substantial complexity in determining the disputes’ eligibility for the Federal IDR process. Read more.

President Biden Releases Fiscal Year (FY) 2025 Budget
The President's budget prioritizes investment in permanent premium tax credits, Medicaid coverage, drug price negotiation,  mental health services and substance abuse treatment initiatives. Read more.

Substance Abuse and Mental Health Services Administration (SAMHSA) Issues Final Rule to Enhance Integrated Care and Confidentiality for Patients with Substance Use Conditions
The rule finalizes changes to the Confidentiality of Substance Use Disorder Patient Records regulations to protect the privacy of patients’ substance use disorder (SUD) treatment records. Read more.

CMS Ends Hospice Benefit Component of Value-Based Insurance Design (VBID) Model
CMS will conclude the Hospice Benefit Component at the end of 2024 and will not accept applications for calendar year (CY) 2025 due to escalating operational difficulties and decreasing participation. Read more.

HHS Releases 2023 Equity Action Plan Update
The 2023 update prioritizes child neglect prevention and care improvement, health care access, maternal health outcomes, behavioral health and diversity in clinical research. Read more.

For information on PAI’s advocacy initiatives, physician payment resources and research, please visit PAI’s website. Healthsperien’s Resource Updates page also has information on key issues in health policy and identifies potential reforms under the Biden Administration, Congress and in the states. Additionally, CMS releases their Quality Payment Program (QPP) Small Practices Newsletter, a monthly resource that provides small practices (15 or fewer physicians) with program updates, upcoming QPP milestones and resources to support their continued participation and success in the QPP. You can sign up here to receive this monthly resource.

PAI Files Amicus Curiae Brief in No Surprises Act QPA Case Before U.S. Court of Appeals for the Fifth Circuit

On March 26, PAI announced it filed an amicus curiae brief with the United States Court of Appeals for the Fifth Circuit supporting TMA’s third challenge to federal regulations implementing the No Surprises Act. In August 2023, United States District Court for the Eastern District of Texas Judge Jeremy D. Kernodle ruled partially in TMA’s favor. The ruling struck down provisions of federal agencies’ interim final rules that depressed the QPA and unbalanced the IDR process but upheld its minimal transparency requirements. The Administration subsequently appealed that decision.

PAI is joined on the brief by 15 state medical associations and six medical specialty societies. PAI’s brief supports TMA’s challenge to certain QPA calculation factors that allow insurers to skew the benchmark downward. The inclusion of “ghost rates”—prices for services a physician never or rarely provides—and out-of-specialty rates and the exclusion of incentive or bonus payments like those in value-based care arrangements depress the insurer-calculated QPA and make the IDR process inherently unfair. Addressing insurer payment practices that threaten patient access to care is foundational to PAI. That principle drives PAI’s support of TMA’s challenges to No Surprises Act implementation and will continue to guide its advocacy for as long as needed.

FTC, DOJ and HHS Prompt Investigation Into Private Equity and Corporations’ Influence in Health Care

On March 5, FTC, DOJ and HHS initiated a cross-government public inquiry to address the growing influence of private equity and other corporations within health care. Private equity and other corporate firms are increasingly participating in health care system transactions. The inquiry will investigate the effects of this trend on quality of care, patient health, workers’ safety and cost. The three agencies issued a Request for Information (RFI) soliciting public feedback about transactions conducted by health systems, private payers, private equity funds or alternative asset managers involving physicians, facilities or services. The RFI seeks comments regarding deals related to a wide range of health care entities and seeks to inform policy efforts to target consolidation and promote and preserve competition throughout the health care marketplace.

PAI is preparing an extensive comment letter in response to this RFI to share key research findings that document how practice acquisitions by private equity firms, insurer-owned entities, hospitals/health systems and large national pharmacies over the past decade have dramatically altered how physicians practice medicine in the United States. The related trend of physicians shifting from independent practice into employment has been equally dramatic, growing steadily every year over the past decade and nearing 80% at the start of 2024.

PAI will also share findings from the recently released employed physician survey for PAI by NORC at the University of Chicago that examined the experiences of physicians employed by hospitals and health systems, venture capital and private equity firms, health insurance companies and staffing agencies. Almost 60% of physicians who practice as employees of hospitals and other corporate entities reported that non-physician practice ownership results in a lower quality of patient care. Most physicians surveyed cited decreased time with patients and greater focus on financial success as factors negatively affecting quality at non-physician-owned medical practices. The survey demonstrates a belief among many employed physicians that corporate ownership may erode foundational aspects of the patient-physician relationship and impact patient outcomes.

CMS Releases Background on Federal IDR Process Showing Physicians Prevailing in 77% of IDR Determinations 

On February 16, CMS released public use files for the Federal IDR process between January 1, 2023 and June 3, 2023. The resource notes that the first six months of 2023 were characterized by a large volume of disputes submitted through the Federal IDR portal and substantial complexity in determining disputes’ eligibility for the Federal IDR process. Between January 1, 2023 and June 30, 2023, disputing parties initiated 288,810 disputes through the Federal IDR portal. The number of disputes initiated through the Federal IDR portal over this six-month period was 13 times greater than the Departments of Treasury, Labor and HHS initially estimated for a full calendar year and has grown each quarter. Certified IDR entities rendered 83,868 payment determinations in the first six months of 2023. Physicians were the prevailing party in approximately 77% of payment determinations. Despite the increase in payment determinations, some disputing parties are still awaiting eligibility and payment determinations.

On December 28, PAI submitted a comment letter in response to a surprise billing proposed rule published by HHS. Physicians bear the brunt of the inefficient IDR process as medical practices across the nation experience significant payment delays awaiting eligibility and payment determinations. Widespread failure by insurers to make timely payments once determinations have been made exacerbate the issue further. PAI emphasized that the IDR process needs to be further refined, with input from physicians, to ensure that all parties have incentives to settle disputes more quickly and engage in fair contracting practices.

President Biden Releases FY 2025 Budget

On March 11, President Biden released his budget for FY 2025. The President's 2025 budget prioritizes significant health care investments and aims to expand access to high-quality services and lower costs. Key provisions include permanent premium tax credits, Medicaid coverage, drug price negotiation to reduce prescription costs, and initiatives targeting mental health services and SUD treatment. The budget also addresses health equity, veterans' health care needs and bolstering public health infrastructure. The table below highlights relevant provisions for physicians:

SAMHSA Issues Final Rule to Enhance Integrated Care and Confidentiality for Patients with Substance Use Conditions

On February 8, SAMHSA released a final rule that finalizes modifications to the Confidentiality of Substance Use Disorder Patient Records regulations, which protect the privacy of patients’ SUD treatment records. The rule was informed by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that, among other things, required HHS to bring the Part 2 program into closer alignment with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Breach Notification, and Enforcement Rules. The final rule includes the following modifications to Part 2:

CMS Ends Hospice Benefit Component of VBID Model

Beginning in CY 2021, the VBID Model permitted Medicare Advantage Organizations (MAOs) to incorporate the Medicare hospice benefit into their Medicare Advantage (MA) benefits package, known as the Hospice Benefit Component. Due to escalating operational difficulties and decreasing MAO participation, CMS announced on March 4 it will conclude the Hospice Benefit Component at the end of this year and will not accept applications for the CY 2025 Request for Applications for the component. The Hospice Benefit Component of the VBID Model aimed to alleviate coverage inconsistencies for MA enrollees electing hospice and assessed if MAOs covering the Medicare hospice benefit would enhance care quality while remaining budget neutral. Policies within the component, including comprehensive palliative care and concurrent care, fostered collaboration between MAOs and hospice physicians, aiming to mitigate care fragmentation at end-of-life stages. CMS gathered insights from various stakeholders to gauge the component's impact on care quality and safety. The decision to discontinue the Hospice Benefit Component does not indicate its success; CMS plans to evaluate it separately. CMS indicated that it would utilize the lessons learned from the Component and release clarifying guidance later this year.

HHS Releases 2023 Equity Action Plan Update

On February 14, HHS released the 2023 update to the Equity Action Plan related to its implementation of President Biden’s Executive Order on Further Advancing Racial Equity and Support for Underserved Communities Through The Federal Government. In alignment with the Biden-Harris Administration’s whole-of-government equity agenda, this Equity Action Plan supports HHS in advancing health equity and well-being for all. The plan includes the following five priority areas:

Since the release of the HHS’ first Equity Action Plan in 2022, HHS has proposed rules on language access and rules that prohibit discrimination based on disability. Additionally, HHS approved the provision of 12 months of continuous postpartum coverage through CMS in 42 states, D.C. and the Virgin Islands.

PAI is focused on addressing health equity issues for both patients and physicians, especially those in rural areas. This is a complex issue, and PAI will draw on the work of The Physicians Foundation, which has studied the problem of health-related social needs, as it works to advance policies that reduce inequities in health care delivery.

by NCMS