By Peter W. Thomas, JD, Principal, and
Joe Nahra, Director of Government Relations
Powers Law Firm
In the final days of the Trump administration, the Department of Health and Human Services (HHS), in particular, the Centers for Medicare and Medicaid Services (CMS), issued a number of “midnight” final rules impacting health care providers. Many of these final rules had effective dates past January 20, 2021. When President Biden was inaugurated, the new administration announced it was issuing a “freeze” on all regulations not yet in effect, a step which prior incoming administrations have also taken. Agencies including HHS have been directed to postpone the effective dates of these rules for 60 days to allow for the Biden administration to review any questions of fact, law and policy the rules may raise. However, in most cases, the administration will have to put forth a separate proposal via notice-and-comment rulemaking to remove or substantially revise these rules entirely.
The following overview summarizes some of the key rules impacting rehabilitation providers:
On January 8, HHS finalized its proposed rule regarding the “sunset” of regulations issued by the Department. Unless formally reviewed by the agency and approved, regulations more than 10 years old would be withdrawn. This could significantly impact the regulatory framework of the US health care system and could impede the work of HHS by tying up staff time with reviews of thousands of regulations.
The majority of the proposal, which AMRPA opposed through sign-on to the Coalition to Preserve Rehabilitation’s comment letter, was finalized with some minor changes. The final rule extends the period for reviewing rules that are already more than 10 years old from two to five years, and allows for a one-time, one year extension of the review period for an individual regulation. The rule clarifies that the public will be able to comment on individual assessments and reviews via public comment submission.
The final rule also excludes some additional categories of regulations from the review process, including most regulations issued by the Food and Drug Administration and the annual Notice of Benefit and Payment Parameters regulations updating the requirements for Affordable Care Act plans. Annual payment rules for specific settings, including the Inpatient Rehabilitation Facility Prospective Payment System rules, would not be subject to review and potential sunset.
Breakthrough Technologies Rule
On January 12, CMS finalized its proposed rule regarding a new coverage pathway for “breakthrough” technologies – the Medicare Coverage of Innovative Technology (MCIT) pathway. This proposal would allow temporary, nationwide Medicare coverage immediately upon the date of market authorization by the FDA. The rule also included a completely separate proposal to codify the definition of “reasonable and necessary” for the purposes of determining Medicare coverage.
The majority of the proposal, which AMRPA commented on and supported overall, was finalized with some changes.
- CMS is not expanding eligibility for MCIT beyond those items and services designated as “breakthrough” by the FDA at this time, though the agency notes they could consider expansion in the future. AMRPA had advocated for a broader application of this authority to increase the chances of coverage of breakthrough rehabilitation technologies.
- CMS is not extending the MCIT coverage period – items and services will be eligible for up to four years of Medicare coverage beginning on the date of FDA authorization. Manufacturers may “opt in” to MCIT coverage at any time within the first two years of FDA authorization, but the four-year clock begins on the date of authorization no matter when MCIT coverage is selected.
Reasonable and Necessary Definition
- CMS noted comments that the Medicare population is not only comprised of seniors and stated that the agency “agree[s] that it is important to consider the entire Medicare population, including beneficiaries younger than age 65, when deciding whether an item or service is reasonable and necessary.” This explicitly acknowledges Medicare beneficiaries with disabilities under age 65 when determining coverage of benefits, who are often overlooked or sidelined when Medicare policy is written.
- CMS is not making any changes to the requirement that the item or service is used “to improve the function of a malformed body member,” but noted comments from AMRPA and other stakeholders encouraging the agency to consider items that maintain or prevent the deterioration of function as well items that improve function.
- CMS agreed with AMRPA’s position and chose not to finalize proposed language allowing CMS to consider commercial insurance policies as a sole determinant of whether an item is reasonable and necessary for the Medicare population.
- In fact, CMS is including new regulatory language to give the agency “clear authority” to consider coverage by private insurers if the item in question does not meet the rest of the newly codified definition of “appropriate” for Medicare beneficiaries. This offers beneficiaries all of the benefits and none of the risks of this policy.
- CMS notes that the agency will publish a more detailed draft methodology for the consideration of private insurance coverage in the form of sub-regulatory guidance within 12 months of the effective date of the final rule and will allow public comment on this guidance.
AMRPA will continue to monitor developments regarding finalization or revisions to these and other rules in the early months of the Biden administration.