As we entered 2023, we welcomed with relief the ending of the COVID-19 Public Health Emergency, which was in effect for more than three years. The U.S. Department of Health and Human Services declared the PHE will end on May 11. COVID-19 will cost the global economy over $12.5 trillion through 2024, according to a report from The International Monetary Fund. The lasting social and economic effects of the pandemic are still unfolding and will be felt for several years to come.
Many federal health policies, ranging from waivers to certain provisions of the Stark Law, relaxed enforcement of HIPAA privacy and security requirements for tele-health, and mandates for health insurers to cover COVID-19 related services were tied to the PHE and will end when the PHE ends. Healthcare policy and expenditures continue to be quite fluid in the U.S., which included the implementation of several multi-billion relief programs, including the CARES Act and The Coronavirus Relief Package.
The U.S. continues leading the world in healthcare expenditures with more than $4.2 trillion in 2021, or about a 10.5% increase over 2020. Health spending per person was nearly two times higher than in the closest country — Germany, and four times higher than our neighbor, South Korea. Healthcare policy continues to be quite active, with recent cases affecting laws and regulations. Below is a summary of some policies and regulations worth noting, with interesting implications:
• The Supreme Court tackles the False Claims Act
No federal statute brings greater anxiety to the health care industry than the False Claims Act, which imposes damages, civil penalties, and enormous investigation and litigation costs. The US Department of Justice recently intervened in a FCA case with oral arguments set for April 18, 2023. The outcome could be quite impactful.
• Women’s reproductive health has once again become a flashpoint in our country, following the June 2022 Supreme Court decision in Dobbs v. Jackson Women’s Health Organization.
This decision basically overturned Roe v. Wade and created the need to clarify women’s reproductive health in states and jurisdictions that had implemented abortion restrictions previously prohibited by Roe. In Guam, the 36th Guam Legislature passed the “Heartbeat Act,” which was vetoed by Gov. Leon Guerrero. Also, our new Attorney General Doug Moylan, has sought to take action on an abortion ban enacted by Public Law 20-134. This topic will continue to be highly debated locally and nationally.
• Implementation of the “No Surprise Act,” which started on Jan. 1, 2022 and provides protections to insured individuals receiving bills from out of network providers.
Federal litigation concerning the NSA is increasing the uncertainty for payers and providers. Physician groups have challenged the regulation concerning the calculation of the qualified payment. There will be significant action in the months ahead to clarify this act.
• The nursing home industry faced great scrutiny from the Biden Administration and the Centers for Medicare and Medicaid Services in the wake of the COVID-19 pandemic and the scrutiny will continue into 2023, as the administration’s focuses on ensuring that nursing homes have trained staff and they inform the public about nursing home conditions.
• The use of telehealth and other digital health modalities increased dramatically during the pandemic — due, in part, to statutory and regulatory waivers of certain pre-existing telehealth requirements that were barriers to adoption.
The waivers ensured coverage for telehealth services provided to patients in their homes and urban areas broadened the scope of practitioners that could bill for telehealth services, and allowed the use of audio-only technology as a reimbursable treatment modality. The telehealth waivers are scheduled to expire 151 days after the federal PHE ends. Regulators are reviewing the options on allowing telehealth services to continue.
• The Inflation Reduction Act passed into Law Aug. 16, 2022, with wide bi-partisan support.
The drug pricing reform section of the IRA represents a sweeping change regarding how the Medicare program will pay for prescription drugs in the future. Part of the IRA went into effect in January 2023 (specifically, the $35 cap on insulin costs for Medicare patients, the new requirement for drug manufacturers to pay Medicare rebates if certain drug prices rise faster than inflation, and the elimination of all cost sharing and deductibles under Part D for vaccines). The rest of the IRA drug pricing provisions will be phased in by 2029. The industry can expect guidance and proposed regulations concerning the specific parameters of how drugs are selected for negotiation, the negotiation process itself, and related issues.
• Artificial Intelligence will continue making significant gains in 2023.
In the last four years, the U.S. Food & Drug Administration approved more than 520 medical algorithms that were market cleared as of January. The possibilities of AI in health care are significant, but many health policymakers and regulators are worried about the unintended consequences. For instance, in December 2022, the HHS Office for Civil Rights issued a bulletin cautioning the proliferation of tracking technologies and collecting sensitive information.
Interestingly, few changes have been made to ensure that the world is better prepared for future pandemics. This is something that will require most countries to plan and agree on future protocols, but this could be difficult to achieve in a world that is so politically divided and polarized.
The recent boost of the COVID Lab-leak theory may not help the efforts.
– Frank J. Campillo is the health plan administrator for Calvo’s Insurance Underwriters Inc. He can be reached at [email protected].