Expert Perspective

September 01, 2020

Valuable Insights: September Regulatory Updates

Kathleen Gravelle – CareAllies contributor

Proposed 2021 Physician Fee Schedule

On August 3, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule updating Medicare physician payment policies for calendar year 2021. The proposed policy changes would expand covered Medicare telehealth services, make permanent some Scope of Practice allowances introduced under the COVID-19 public health emergency, and provide flexibility for renewing ACOs.  The proposed rulemaking also updates payment rates for covered services, primarily through the application of a conversion factor.  The proposed CY 2021 physician fee schedule (PFS) conversion factor is $32.26, a $3.83 or 10.6 percent decrease from last year, primarily due to budget neutrality adjustments required by statute.  A number of physician stakeholder groups have released statements opposing the proposed payment reduction.

Proposed policy changes and payment updates are subject to change before the release of the final rule later this year.  Comments are due no later than October 5, 2020.

Executive Branch Action

Public Health Emergency

On July 23, the Secretary of the U.S. Department of Health and Human Services (HHS) signed an extension to the public health emergency.  The initial declaration was set to expire on July 25, and the extension allows it to run through October 23.  The extension allows for the continuation of resources including the telehealth service flexibilities and mitigation of losses for the shared savings program. 

Presidential Executive Orders (EO)

On July 24, the President signed three EOs.  The executive orders direct the Secretary of HHS to take the following actions:

(1) Permit drug importation from Canada and other countries, and authorize the importation of insulin, following a finding that it is required for emergency medical care;

(2) Ensure that prices charged to low income and uninsured patients for insulin and epinephrine at Federally Qualified Health Centers (FQHC) align with the costs at which the FQHC acquired the drugs; and

(3) Ban Medicare drug rebates that are not passed at the point of sale. 

The President also discussed his intention to issue a fourth EO advancing the “most favored nation” rule to lower Medicare drug payments to prices similar to what other countries pay, but he is allowing time for drug manufacturers to propose alternative options to reduce prices.

2020 Presidential Election Spotlight:

A Look at the Vice President (VP) Candidates and Health Care

VP Mike Pence

As VP, Pence is reported to have influenced policy decisions around increased protections for religious health care workers and a restructuring of family planning programs. When he served as Governor of Indiana, Pence was a vocal opponent of the Affordable Care Act (ACA) but expanded Medicaid to cover residents who earn incomes that are 138 percent of the federal poverty level or below, if they contribute to a health savings account.

VP Candidate Kamala Harris

As a 2020 presidential candidate, Harris proposed a modified “Medicare for All” plan. Her plan included a ten year transition from the current system to Medicare for All, as well as a role for private insurers, but at a significantly smaller level than it is through Medicare Advantage today. As a Senator, she co-sponsored Bernie Sanders’ “Medicare for All” bills in 2017 and 2019. As Joe Biden’s running mate, she will likely focus on an incremental expansion of the ACA.

How Do Career Staff Focused on Health Care Policy Prepare for the Election?

As the election nears, staff within agencies, like those at the White House Office of Management and Budget (OMB) or HHS, need to prepare for the potential of a new Administration. In addition to serving the current Administration, staff track campaign promises and work with transition team leads, which also are put in place prior to the election, to be ready to deliver on promises in the event that a new President is elected. As an example, OMB staff need to be ready to put out a budget on behalf of the President in early February, a process that the agency typically focuses on for 6-8 months.


Access the latest resources and information from CareAllies during this uncertain time:

COVID-19 by Numbers (Medicare COVID-19 Data Snapshot)

  • From January 1 to June 20 there were 549,414 cases of COVID-19 among Medicare beneficiaries (863 COVID-19 Cases per 100K)
  • Over the same time period CMS paid $2.8 billion in Medicare fee-for-service claims for COVID-19 related hospitalizations (an average of $25,255 per beneficiary)
  • Beneficiaries who are black continue to be hospitalized at a higher rate than other racial and ethnic groups with 670 hospitalizations per 100,000 beneficiaries
  • Dual eligible beneficiaries were hospitalized at a rate more than 5 times higher than beneficiaries with Medicare only (719 versus 153 per 100,000)
  • Beneficiaries with end-stage renal disease (ESRD) continue to be hospitalized at higher rates than other segments of the Medicare population, with 1,911 hospitalizations per 100,000 beneficiaries, compared with 241 per 100,000 for aged and 226 per 100,000 for disabled

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