Legislative Weekly

07/15/2024

1. No Surprises Act (NSA) and Transparency Rules (TinC)
2. Cybersecurity, AI, & Tech 1
3. DC and Federal Update
4. The States
5. The Industry

HIGHLIGHTS: Loper Bright decision brought into NSA lawsuits; CMS’ CPG’s may be basis for future cybersecurity requirements; FTC’s recent noncompete ban partially blocked by TX judge; Physician burnout rates lower to pre-C19 levels.

No Surprises Act & TinC

Both the government and plaintiffs submitted filings in NSA lawsuits (Texas Medical Association – TMA - II and III appeals) regarding the Supreme Court’s Loper Bright decision; i.e., the decision in late June that overturned the Chevron deference standard. In short, the government argued in its filing that gov’t departments “appropriately exercised their rulemaking authority” in writing rules for NSA, citing Loper Bright, while TMA argued in its filing that Loper Bright gave the court the authority to independently judge whether departments did indeed appropriately exercise their authority.

PS: Current status of the TMA lawsuits:

• TMA II: The judge agreed with TMA’s challenge and vacated the provisions of the NSA related to the presumption and weight of the QPA. The gov’t appealed this decision and oral arguments were held before the 5th Circuit Court of Appeals in February. A decision is forthcoming.
• TMA III: The judge agreed with TMA’s challenge and struck the provisions of the NSA related to the methodology for calculating the QPA. This decision was appealed, and oral arguments on the appeal are scheduled for early September, 2024.

Cybersecurity, AI, & Tech

As we’ve reported before, HHS’ recently published, healthcare-specific cybersecurity performance goals (CPGs), while voluntary, will likely be the basis for future cyber mandates in healthcare, according to Health IT Security. Industry experts suggest that the CPGs have laid the foundation for a regulatory baseline/standard in healthcare, but also come with “implementation woes” that must be solved for.

Change Healthcare announced that it will soon begin to notify patients affected by this year’s cyberattack.

DC and Federal Update

A federal judge in TX has partially blocked the FTC’s recent ban on noncompete agreements in employment contracts, noting that the FTC violated the Administrative Procedure Act (APA) and exceeded its statutory authority by issuing the ban.

• However, the ruling is limited in scope to the plaintiffs named in the specific suit overseen by the judge and does not apply nationwide.

As a follow up to our reporting last week on the Supreme Court’s Loper Bright Decision, healthcare implications continue to materialize. Articles here and here discuss the impact on regulating businesses/industries and hospital reimbursement rates respectively.

CMS released plans for a proposed 2.8% cut to the physician fee schedule for the year 2025.

• The AMA and the Medical Group Management Association immediately criticized the move, stating that this was the fifth year in a row of cutting Medicare payments and that this year’s Medicare Economic Index (which measures practice cost inflation) is 3.6% — making the cut even more “short-sighted."

Congress continues to hold up funding that supports community health clinics in training new physicians to treat underserved patients, Zelis’ Gov’t Affairs intern Kate Choi and Sr. Gov’t Affairs Liaison Adam Brenman report in an article published in RacMonitor. Funding for one such program, the Teaching Health Center program, focuses on serving patients at Federally Qualified Health Centers (FQHCs).

 The FTC released a report this week alleging that PBMs disadvantage consumers and independent pharmacies and should be subject to “further scrutiny and potential regulation.”

• The agency plans to file lawsuits against some of the PBMs in the report.

The States

North Carolina’s Governor Cooper announced a “first of its kind nationwide” initiative to pay hospitals that lower medical debt for low-income patients.

• To be eligible for the increased federal funding, hospitals would have to eliminate medical debt dating back to 2014 for a number of patients, as well as offer discounts, cap interest rates on hospital-held debt, and several other conditions.

The Industry

According to a recently published report, hospitals are increasingly threatening to leave healthcare coverage networks when insurers don’t agree to price increases for medical care.

• Authors of the report call this a “hostage-taking strategy,” and allege that hospitals that dominate markets in certain geographic regions have the power to raise prices and demand that insurers accept those prices in contract negotiations, which “suppresses competition.”

Last week, we reported on recent moves by Walmart and Amazon in the “retail health sector,” with Walmart selling off business while Amazon merged and expanded business. Relatedly, the WSJ delves into why Walmart has “pulled away” from the healthcare sector and why its healthcare model allegedly doesn’t work.

Physician burnout has finally dropped back down to pre-C19 levels according to a new survey by the AMA. The all-time high was in 2021 at 62.8%, while this year’s numbers sit at 48.2%.

• The survey also examined provider satisfaction, job stress, intent to leave the profession, and total hours a week spent on work.
• The AMA will be publishing the full results of the study later this year.

This update is solely for informational purposes and should not be relied upon as legal advice.