McDermottPlus Check-Up: February 16, 2024 - McDermott+Consulting

McDermottPlus Check-Up: February 16, 2024


  • House Hearing Examines Legislation to Support Patients and Caregivers: The House Energy and Commerce Health Subcommittee discussed 19 legislative proposals.
  • CMS Issues MA Prior Authorization FAQs: The Centers for Medicare & Medicaid Services (CMS) released frequently asked questions (FAQs) related to the Contract Year (CY) 2024 Medicare Advantage (MA) and Part D final rule.
  • CMS Seeks Comment on New Prior Authorization Demonstration Program: The new demonstration project is called the Prior Authorization Demonstration for Certain Ambulatory Surgical Center (ASC) Services.
  • CMS Issues Medicare Prescription Payment Plan Guidance: CMS released the second part of a draft guidance document on the Medicare Prescription Payment Plan.
  • HHS Releases Update to Equity Action Plan: The plan elaborates on five priority areas to advance equity.
  • HHS Launches Postpartum Maternal Mental Health Collaborative: The collaborative seeks to better understand challenges among the postpartum population and support new solutions to improve postpartum mortality.
  • FTC and HHS Release RFI on Generic Drug Shortages: The request for information (RFI) seeks comments on how the practices of group purchasing organizations (GPOs) and drug wholesalers may contribute to generic drug shortages.


House Energy and Commerce Health Subcommittee Holds Legislative Hearing on 19 Bills. Lawmakers discussed 19 pieces of legislation designed to support patients and caregivers in the key areas of autism, heart defects, Alzheimer’s disease, breast cancer screening, stillbirth, lung cancer, cardiomyopathy and Down syndrome. Summaries of each bill can be found in the subcommittee’s hearing memo.

Members and witnesses highlighted the importance of reauthorizing funding for programs that improve health outcomes, support research and advance health equity. Eighteen of the bills discussed at the hearing were bipartisan.

The next step for these bills is likely a Health Subcommittee markup.


CMS Issues MA Prior Authorization FAQs. The FAQs provide additional guidance on the final rule that went into effect on January 1, 2024. The rule prohibits MA plans from denying coverage for services covered by traditional Medicare. CMS also requires that prior authorization approvals remain valid for a patient’s entire episode of care as long as the care is medically necessary. All MA plans must establish a utilization management committee, which will review prior authorization policies annually to ensure they are consistent with coverage requirements, including traditional Medicare’s national and local coverage decisions and guidelines. The FAQs provide helpful guidance for compliance and focus on the following major issues:

  • Internal coverage criteria
  • Use of artificial intelligence
  • Post-acute facilities
  • Two-midnight rule
  • Post-claim reviews
  • Utilization management committees
  • Supplemental benefits
  • Enforcement

CMS Issues Notice on New Prior Authorization Demonstration Program Impacting ASCs. CMS released a notice seeking public comments on the information required to be collected for a new Prior Authorization Demonstration for Certain ASC Services. CMS states that it seeks to develop and implement the demonstration project but does not provide a specific timeline or which ASC services would be subject to prior authorization.  It is also unclear if the demonstration would be targeted at specific states or regions.

While the notice is light on details, CMS outlines that the need for the demonstration is based on developing improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring in ambulatory surgical centers providing services to Medicare beneficiaries.  The demonstration is developed under the US Department of Health and Human Services’ (HHS) “402 waiver” authority, and not the authority granted to the Center for Medicare & Medicaid Innovation.  Such waiver authority has been used to implement current demonstrations in the home health and inpatient rehabilitation facility sites of care.

CMS states that under the demonstration, providers should submit certain information to the Medicare Administrative Contractors (MACs) prior to delivering the services. Trained clinical reviewers at the MACs will review the information to determine if the requested services are medically necessary and meet Medicare requirements. If an ASC provider does not submit a prior authorization request before delivering the service and submitting a claim to Medicare for payment, the MAC will request the required information from the ASC provider to determine whether the service meets applicable Medicare coverage, coding and payment rules before the claim is paid.

Comments from the public are due by April 16, 2024.

CMS Issues Second Part of Draft Guidance on Medicare Prescription Payment Plan. Under the Medicare Prescription Payment Plan, Medicare Part D enrollees beginning in 2025 will have the option to pay out-of-pocket prescription drug costs in the form of capped monthly payments instead of all at once at the pharmacy. Part one of the guidance, released in August 2023, focused on operational requirements for the program, while the part two draft guidance focuses on Part D enrollee education, outreach, and communications for the program.

The part two draft guidance includes: 1) requirements on how Part D plan sponsors must educate their Part D enrollees on the Medicare Prescription Payment Plan; 2) requirements on how Part D plan sponsors should target specific Part D enrollees who are likely to benefit from the Medicare Prescription Payment Program; 3) information on how CMS plans to educate Part D enrollees about this new program; and 4) information on how CMS plans to engage other interested parties, and what resources CMS will provide to assist other interested parties’ education efforts on the new program.

Comments on the draft guidance are due on March 16, 2024. Comments should be sent to with the following subject line: “Medicare Prescription Payment Plan Guidance – Part Two.”

HHS Releases 2023 Update to Equity Action Plan. The Equity Action Plan is part of HHS’s efforts to implement the President’s Executive Order on Further Advancing Racial Equity and Support for Underserved Communities Through The Federal Government.

The Equity Action Plan outlines five priority areas:

  • Prevent neglect and improve care to help children thrive in their families and communities
  • Promote accessible and welcoming healthcare for all
  • Improve maternal health outcomes for rural, racial and ethnic minority communities
  • Prioritize the behavioral health of underserved populations
  • Increase clinical research and trial diversity to support innovation

The update discusses HHS’s progress toward equity and racial justice, including improvements to postpartum coverage, proposed rules on language access in all health programs and activities funded by HHS, proposed rules that would prohibit discrimination on the basis of disability, and guidance to HHS offices on identifying actions to ensure opportunity for all.

As this work continues, updates will be posted here.

FTC and HHS Release RFI on Generic Drug Shortages. The Federal Trade Commission (FTC) and HHS jointly released an RFI on how GPOs and drug wholesalers may be contributing to generic drug shortages. According to a press release, the joint RFI seeks to understand how GPOs and drug wholesalers impact the overall generic pharmaceutical market, including how both entities may influence the pricing and availability of pharmaceutical drugs. The joint RFI aims to help uncover the root causes and potential solutions to drug shortages.

Comments are due on April 14, 2024.

HHS Launches Postpartum Maternal Mental Health Collaborative. The six states that have agreed to participate in the Postpartum Maternal Health Collaborative are Iowa, Massachusetts, Maryland, Michigan, Minnesota and New Mexico.

This new collaborative seeks to bring together state experts, local providers, community partners and federal experts to better understand the challenges experienced by the postpartum population and to support new solutions that will reduce postpartum mortality. In conjunction with the collaborative, the National Governors Association launched its Improving Maternal and Child Health in Rural America State and Territory Policy Learning Collaborative. The initiative will focus on policy changes to improve maternal and child health outcomes in rural areas.


  • HHS Announces Winners in Challenge to Address Racial Equity in Postpartum Care. This national competition was developed to improve equity in postpartum care for Black or African American and American Indian/Alaska Native individuals enrolled in Medicaid or the Children’s Health Insurance Program. The list of winners can be found here.
  • HHS Expands TEFCA by Adding Two QHINs. HHS, through the Office of the National Coordinator for Health Information Technology, announced that CommonWell Health Alliance and Kno2 have been designated as Qualified Health Information NetworksTM (QHINs) capable of nationwide health data exchange governed by the Trusted Exchange Framework and Common AgreementSM.
  • CMS Holds AHEAD Model Webinar. CMS staff presented on the hospital global budget methodology and process for participation, measurement and payment for acute care hospitals, critical access hospitals and rural emergency hospitals. Additional information about the Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model can be found here, along with the hospital global budget fact sheet here.
  • Third Way Releases Report on Nonprofit Hospitals. With ongoing congressional interest in hospital financing, this report includes recommendations for Congress to create a new national charity care law.


The House is scheduled to be in recess next week and part of the following week, returning to session on February 28, 2024 – two days before the first of two upcoming appropriations deadlines. The Senate is also scheduled to be in recess next week, returning on February 26, 2024.

For more information, contact Debra CurtisKristen O’Brien, Priya Rathakrishnan or Erica Stocker.

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