McDermottPlus Check-Up: July 28, 2023 - McDermott+Consulting

McDermottPlus Check-Up: July 28, 2023


The House and Senate were both in session this week, with healthcare activity at the committee level. The House Ways and Means Committee held a markup focused on healthcare transparency and consolidation legislation. The Senate Finance Committee held a markup of pharmacy benefit manager (PBM) reform legislation. On the regulatory front, the US Departments of Health and Human Services (HHS), Treasury and Labor released a proposed rule on mental health parity requirements for health plans, and the Centers for Medicare & Medicaid Services (CMS) released the final FY 2024 Inpatient Rehabilitation Facility (IRF) and FY 2024 Inpatient Psychiatric Facility (IPF) rules.


House Ways and Means Committee Holds Markup of Bills on Price Transparency and Provider and Payer Consolidation. On July 26, the House Ways and Means Committee advanced two bills: H.R. 4822, the Health Care Price Transparency Act, and H.R. 3284, the Providers and Payers COMPETE Act. The bills contain many similar provisions to the PATIENT Act (H.R. 3561) passed by the House Energy and Commerce Committee earlier this year.

While Republicans were supportive of the bills and believed they addressed transparency issues, Democrats expressed concern that neither piece of legislation addressed private equity and its impact on Medicare fraudulent practices. As a result, Democrats opposed both bills, and they were advanced on party lines—a very different result than the 49–0 passage of the PATIENT Act in the Energy and Commerce Committee. Details include the following:

  • H.R. 4822, the Health Care Price Transparency Act, would require certain providers (hospitals, ambulatory surgical centers, providers of imaging services, and clinical labs) and group health insurance plans to report price information; require certain reporting from PBMs and Medicare Advantage plans; limit cost sharing in Medicare Part D; require off-campus outpatient departments to use an identifier for billing; and align payments for drug administration services in hospital outpatient departments by requiring Medicare to pay them the same rate as independent physicians’ offices for administering the same medications. The bill also incorporates consumer protections regarding the use of prior authorization.
    • This bill advanced by a party-line vote of 25–16.
  • H.R. 3284, the Providers and Payers COMPETE Act, would require the HHS Secretary to submit an annual report on the impact of certain Medicare regulations on provider and payer consolidation, and would require the CMS Innovation Center to consider the extent to which models impact consolidation.
    • This bill advanced by a party-line vote of 23–17.

Senate Finance Committee Holds Markup of PBM Legislation. On July 26, in a harmonious markup where members from both sides of the aisle demonstrated strong collaboration on the topic, the Senate Finance Committee advanced the Modernizing and Ensuring PBM Accountability (MEPA) Act. Both Republican and Democratic Senators noted that PBMs have operated without oversight for too long. They highlighted that the PBM industry is highly consolidated, with a few large companies controlling most of the market. They noted that this consolidation has given PBMs a great deal of power, which they have used to drive up drug prices. The bill advanced by a strong bipartisan vote of 26–1, with Sen. Johnson (R-WI) the only one voting against the legislation.


CMS Publishes Final IRF Rule. On July 27, CMS issued the final FY 2024 IRF payment and quality reporting program (QRP) rule and supporting documents. CMS now estimates that IRFs will see a 3.4% increase in total payments (totaling an increase of $355 million) relative to FY 2023, an improvement compared to the proposed rule’s update of 3.0%. The rule also finalizes a new COVID-19 vaccination measure for patients and healthcare personnel. CMS declined to act on recommendations from some commenters that it apply a forecast error adjustment to the FY 2024 IRF Prospective Payment System (PPS), noting that its past forecast errors have been “both positive and negative” for the IRF base rates in recent years. Overall, the estimated payments per discharge for IRFs in FY 2024 are projected to increase by 4.0%, compared with the estimated payments in FY 2023. The CMS fact sheet on the rule can be found here.

CMS Publishes Final IPF Rule. On July 27, CMS issued the final FY 2024 IPF PPS rule. CMS estimates that IPFs will see a 2.3% increase in total payments (totaling an increase of $70 million) relative to FY 2023. CMS is also adopting three measures focused on health equity for the Inpatient Psychiatric Facility Quality Reporting Program: the Facility Commitment to Health Equity measure, the Screening for Social Drivers of Health (SDOH) measure, and the Screen Positive Rate for SDOH measure. In addition, CMS is modifying the COVID-19 Vaccination Coverage Among Healthcare Personnel measure, beginning with the fourth quarter of CY 2023 and affecting the FY 2025 payment determination. The CMS fact sheet on the rule can be found here.

HHS Releases Proposed Rule on Mental Health Parity Requirements for Health Plans. HHS, along with the Departments of Labor and the Treasury, released a proposed rule on July 25 requiring commercial health plans to evaluate the outcomes of their coverage rules to help ensure that people have equivalent access between their mental health and medical benefits. The proposed requirements include evaluating the health plan’s provider network, how much it pays out-of-network providers, how often prior authorization is required and the rate at which prior authorization requests are denied. Based on this analysis, health plans would then be required to address the gaps.

The proposed rule provides additional guidance for instances when health plans use prior authorization, other medical management techniques or narrower networks that may limit access to mental health and substance use disorder services. The proposed rule would also codify more recent congressional changes made to the Mental Health Parity and Addiction Equity Act (MHPAEA) by requiring more than 200 additional health plans to comply with MHPAEA, including non-federal governmental health plans such as those offered to state and local government employees.

The Department of Labor, in consultation with HHS and Treasury, also issued a technical release that requests public feedback on proposed new data requirements for limitations related to the composition of a health plan’s or issuer’s network.

The press release on the proposed rule can be found here, and a White House fact sheet can be found here. There will be a 60-day public comment period following publication in the Federal Register, which is expected in the coming days.


  • CMS approved proposals from California and Kentucky for community-based mobile crisis intervention teams to provide Medicaid crisis services. This marks six states that have expanded access to community-based mental health and substance use crisis care through the provisions of the American Rescue Plan. California and Kentucky will be able to provide Medicaid services through mobile crisis teams by connecting eligible individuals in crisis to a behavioral health provider 24 hours per day, 365 days a year.
  • CMS released the 2022 Part C and Part D Program Audit and Enforcement Report, compiled by the Medicare Parts C and D Oversight and Enforcement Group. In 2022, CMS conducted 26 program audits across 25 sponsors covering approximately 33.6 million beneficiaries (i.e., 63%) enrolled in the Part C and Part D programs. CMS noted issues with its financial audits, where sponsors processed claims with incorrect provider payment amounts. The agency urged sponsors to ensure that beneficiaries aren’t overcharged for services and to refund beneficiaries promptly if incorrect payments are identified. CMS also mentioned numerous instances of inappropriate cost-sharing for Part D medications, which the agency said should be managed by keeping a close eye on Part D claims that span multiple member identification numbers for the same beneficiary.
  • The Health Resources and Services Administration (HRSA) awarded almost $11 million to 15 awardees to strengthen the health workforce by establishing new residency programs in rural communities. Award recipients will each receive up to $750,000 to establish new rural residency programs. This funding may be used to support accreditation costs, curriculum development, faculty recruitment and retention, resident recruitment activities and consultation services to support program development. Throughout the duration of their grant, award recipients will have access to one-on-one advisor support, tools and resources provided by the HRSA-funded Rural Residency Planning and Development Technical Assistance Center to navigate the various stages of program development.


Congress’s August recess begins next week, with the Senate scheduled to return September 5 and the House on September 12. The Administration is expected to continue to release final rules of interest, including the FY 2024 Inpatient Prospective Payment System final rule.

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

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