McDermottPlus Check-Up: September 8, 2023 - McDermott+Consulting

McDermottPlus Check-Up: September 8, 2023


  • The Senate returned from recess this week, while the House is scheduled to return next week.
  • House Republicans released a healthcare transparency package.
  • Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Cassidy (R-LA) released an artificial intelligence (AI) report and request for information (RFI).
  • On the regulatory front, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule on minimum staffing standards for long-term care (LTC) facilities and introduced a new voluntary state total-cost-of-care model.


House Republicans Release Healthcare Package. On September 6, House Republicans unveiled the Lower Costs, More Transparency Act, a draft package of healthcare transparency provisions, pharmacy benefit manager (PBM) reforms and healthcare extenders. The bill is expected to be formally introduced by the end of the week, with possible floor consideration this month. All provisions in the bill purportedly were marked up by at least one of the three key House healthcare committees (Energy and Commerce, Ways and Means, and Education and the Workforce).

Republicans released this bill with no formal support from House Democrats and did not negotiate with them when merging bills from the three committees. Since much of the bill’s content emerged from the bipartisan PATIENT Act (H.R. 3561) that passed out of the House Energy and Commerce Committee by a vote of 49–0 earlier this year, some House Democrats may vote yes on the House floor despite being left out of the negotiations. Republicans are anticipating a negotiation with Senate Democrats and may not have wanted to negotiate twice.

Key provisions in the bill include the following:

  • Hospital price transparency requirements with maximum civil monetary penalties for noncompliance
  • Health insurance and health plan price transparency requirements
  • Site-neutral payments related to certain drug administration services
  • PBM and drug pricing reform, including requirements for group plan sponsors and a ban on Medicaid spread pricing
  • Extension of community health center funding and the Special Diabetes Program
  • Elimination of Medicaid disproportionate share hospital cuts for fiscal years 2024–2025

The package does not include the following:

  • A provision from the Energy and Commerce bill to require the disclosure of private-equity-owned hospitals and physician practice groups
  • Prior authorization provisions contained in the Ways and Means Committee bill
  • While the bill does include a Medicare requirement for a separate identification number for off-campus outpatient departments, it does not include an Education and Workforce Committee provision that would have extended that requirement to the private health insurance marketplace by amending ERISA to prohibit group health plans and health insurers from paying claims for hospitals unless they had a separate identifier for off-campus outpatient departments.

For additional details on the draft bill’s provisions, read the section-by-section summary here.

Senate HELP Committee Ranking Member Cassidy Releases AI Report and Feedback Request. Stakeholders continue to grapple with how to regulate and ensure the privacy and safety of AI tools without limiting innovation. Seeking additional feedback on this topic, the report, released on September 6, is titled “Exploring Congress’ Framework for the Future of AI: The Oversight and Legislative Role of Congress Over the Integration of Artificial Intelligence in Health, Education, and Labor.” It calls for a flexible framework that allows regulation of AI under specific use cases, not a one-size-fits-all approach, and specifically discusses efforts related to researching and developing new medicines, diagnosing and treating diseases, supporting patients and providers, addressing healthcare administration and coverage, and safeguarding patient privacy.

The report requests feedback on several topics regarding AI in healthcare, support for medical innovation, and medical ethics and protecting patients. Comments are due September 22 and can be submitted to


CMS Proposes Minimum Staffing Standards for LTC Facilities. Since the COVID-19 pandemic, the Administration has suggested changes to LTC settings. On September 1, CMS released a proposed rule titled Medicare and Medicaid Programs; Minimum Staffing Standards for LTC Facilities and Medicaid Institutional Payment Transparency Reporting. The proposed rule would establish comprehensive nurse staffing requirements to hold nursing homes accountable for providing safe and high-quality care in Medicare and Medicaid-certified LTC facilities.

The proposed rule consists of three core staffing proposals:

  • Minimum nurse staffing standards of 0.55 hours per resident day (HPRD) for registered nurses (RNs) and 2.45 HPRD for nurse aides
  • A requirement to have an RN onsite 24 hours a day, seven days a week
  • Enhanced facility assessment requirements.

While many have voiced concern that finding and retaining staff has grown exceedingly difficult, CMS proposes to allow LTC facilities to qualify for a temporary hardship exemption from the minimum nurse staffing HPRD standards if they demonstrate workforce unavailability based on their location, good faith efforts to hire and retain staff, and a financial commitment to staffing by documenting the total annual amount spend on direct care staff.

The Medicaid institutional payment transparency reporting provisions would build on proposals in the Ensuring Access to Medicaid Services proposed rule by requiring states to report to CMS on the percentage of Medicaid payments for services in nursing facilities and intermediate care facilities for individuals with intellectual disabilities that are spent on compensation for direct care workers and support staff. The proposed rule also would require both states and CMS to make the institutional payment information reported by states to CMS available on public-facing websites.

For more information, read the CMS press release here and fact sheet here.

CMS Announces AHEAD Model. On September 5, CMS announced a new voluntary state total-cost-of-care model, the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. While other states such as Maryland, Vermont and Pennsylvania have tested similar approaches, the model aims to promote health equity, increase access to primary care services and decrease healthcare costs.

Under the model, up to eight states will partner with hospitals and primary care practices to redesign care in the following ways:

  • Focus resources and investment on primary care services, giving primary care practices the ability to improve care management and better address chronic disease, behavioral health and other conditions
  • Provide hospitals with a prospective payment stream via hospital global budgets, while including incentives to improve beneficiaries’ population health and equity outcomes
  • Address healthcare disparities through stronger coordination across healthcare providers, payers and community organizations in participating states or region
  • Address the needs of individuals with Medicare and/or Medicaid by increased screening and referrals to community resources like housing and transportation.

CMS will award each state up to $12 million for implementation. The first notice of funding opportunity application period will take place in late fall 2023. States will have 90 calendar days to apply for a cooperative agreement award during this first application period.

For more information, read the CMS frequently asked questions page here and press release here. CMS will also hold a webinar on September 18. Information on how to register will be available later this month.

HHS Releases Proposed Rule on Disability-Based Discrimination in Healthcare. Released on September 7, the proposed rule would update Section 504 of the Rehabilitation Act to prevent disability-based bias in federally funded programs. The proposed rule would include new requirements prohibiting discrimination in the areas of medical treatment; the use of value assessments; web, mobile and kiosk accessibility; and requirements for accessible medical equipment so that persons with disabilities have an opportunity to participate in or benefit from healthcare programs and activities that is equal to the opportunity afforded others. The proposed rule would also add a section on child welfare to expand on and clarify the obligation to provide nondiscriminatory child welfare services. The proposed rule would update the definition of disability and other provisions to ensure consistency with statutory amendments to the Rehabilitation Act, enactment of the Americans with Disabilities Act and the Americans with Disabilities Amendments Act of 2008, the Affordable Care Act, and Supreme Court of the United States rulings and other significant court cases.

Comments on the proposed rule are due by November 7. Read the full proposed rule text here.


  • Applications Open for CMMI Making Care Primary (MCP) Model. Eligibility requirements and additional details can be found in the request for applications. Interested parties should submit their application via web portal by November 30. Applicants are also encouraged to submit an optional, non-binding letter of intent to share feedback with CMS about their interests in MCP or any potential barriers they foresee in applying to or participating in MCP.
  • House Ways and Means Committee Issues RFI on Healthcare in Rural and Underserved Areas. House Ways and Means Committee Chairman Jason Smith (R-MO) released an open letter to healthcare stakeholders seeking feedback on proposals to address chronic disparities in access to healthcare in rural and underserved communities. The letter highlights and requests feedback in five key areas: payment disparities between different geographic areas, long-term financial health of providers and facilities, payments for identical care provided in varying sites of services, bringing new professionals into the healthcare workforce, and innovative care models and technology to improve patient outcomes. Comment letters are limited to 10 pages in length, are due by October 5 and can be submitted to
  • Senate HELP Committee Ranking Member Cassidy Issues RFI on Privacy. The RFI seeks information from stakeholders on ways to improve the privacy protections of health data to safeguard sensitive information while balancing the need to support medical research. Stakeholder feedback is intended to help inform efforts to modernize the Health Insurance Portability and Accountability Act. Stakeholders can submit responses to by September 28. Read the press release here.
  • DOL Releases NPRM on Overtime Protections. The US Department of Labor will update and revise the regulations issued under the Fair Labor Standards Act implementing the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales and computer employees. Revisions include increasing the standard salary level to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region (currently the South), i.e., $1,059 per week ($55,068 annually for a full-year worker), and increasing the highly compensated employee total annual compensation threshold to the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally ($143,988). Read the notice of proposed rulemaking (NPRM) here, the FAQ page here and the press release here.
  • HHS OIG Releases Report on Medicare Drug Pricing.  The US Department of Health and Human Services Office of Inspector General (OIG) released a report titled “Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2021 Average Sales Prices.” The report found that since 2013, Medicare and its enrollees have saved $73.4 million as a result of CMS’s price-substitution policy for Part B covered drugs. In 2021, CMS lowered Medicare payment amounts for 13 drugs, resulting in $273,000 in savings. The report further noted that in 2021, Medicare and its enrollees could have realized an additional $889,000 in Medicare savings if CMS had expanded the price-substitution criteria.
  • MedPAC Hosts September 2023 Meeting. The Medicare Payment and Access Commission (MedPAC) met September 7–8 to discuss Medicare payment policy, Medicare Advantage plans, the Acute Care Hospital at Home program and ambulatory surgical centers. View the full MedPAC agenda and presentation slides here.


Focus will remain on whether lawmakers can negotiate a stopgap continuing resolution prior to September 30 to prevent a government shutdown. Without action, several healthcare programs face looming deadlines.

Healthcare activity will occur at the committee level next week, including a potential House Energy and Commerce Health Subcommittee legislative hearing on drug shortages. Fiscal year 2024 appropriations work is also expected to get back underway as early as next week, as the end of the current fiscal year quickly approaches.

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

To subscribe to the McDermottPlus Check-Up, please CLICK HERE.