What to Know Before Getting Back to the Business of Health Care: FY2023 Omnibus Spending Bill

In late December, Congress passed and President Biden signed into law a $1.7 trillion year-end omnibus spending bill to fund the federal government through FY2023. This alert summarizes the notable health policies and provisions included in the package.

Telehealth

Policies that have been extended through the end of 2024:

• The Acute Hospital Care at Home program
• The safe harbor to offer telehealth in High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) pre-deductible
• Medicare telehealth flexibilities, meaning:
• Beneficiaries will continue to be able to receive telehealth services from any geographic location, including from the comfort of their home.
• Physical therapists, occupational therapists, speech therapists and audiologists can provide telehealth services.
• Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) can offer telehealth services.
• Audio-only services are covered.
• The implementation of the Medicare telemental health in-person requirement is delayed.

Telehealth and Medicare Program Integrity Report | The bill appropriated $10M for a telehealth and Medicare program integrity report that will evaluate the impact of telehealth services furnished on future utilization of health care services by Medicare beneficiaries — including emergency room visits, in-person services, etc. The interim report is due October 2024, and the final report is due April 2026.

The Commerce, Justice, Science (CJS) Report | The report included language directing the Drug Enforcement Administration (DEA) to take action on special registration — a regulation that limits the prescribing of controlled substances via telehealth.

Mental Health and Substance Use Disorder

Reauthorizations for Key Mental Health Programs | The bill reauthorizes the National Suicide Prevention Lifeline Program, the Community Mental Health Service Block Grants, and the renamed Substance Use and Prevention, Treatment, and Recovery Block Grants.

Restoring Hope for Mental Health and Well-Being Act of 2022 | The bill expands treatment for opioid-use disorders, promotes behavioral health integration, and reauthorizes critical programs that support mental health and substance use disorder prevention, treatment, and recovery. Some notable inclusions are below or see the list of provisions online from the Committee on Energy and Commerce.

• Removal of the X-waiver to prescribe buprenorphine for opioid use disorder (MAT Act).
• Requiring prescribers of controlled substances to complete training (MATE Act).
• Temporary additional payments for non-opioid treatments for pain relief (NOPAIN Act).
• Extension of the current categorization of fentanyl-related substances in Schedule I of the Controlled Substances Act to December 31, 2024.
• Grants to states with disproportionately high rates of drug overdoses or drug overdose deaths to incentivize those states to build/maintain their prescription drug monitoring programs (PDMPs).

Enforcement Grants to States | States are eligible to receive annual grants from HHS to enforce and ensure compliance with federal mental health and substance use disorder parity laws applicable to health insurance issuers offering group and individual market health insurance coverage, including their comparative analyses relating to nonquantitative treatment limitations. $50 million total in grants over five years will be available.

Pandemic Response

Sections of the Prepare for and Respond to Existing Viruses, Emerging New Threats, and Pandemics Act (PREVENT Pandemics Act) | This bill was passed in Senate HELP Committee earlier this year and parts of it were included in the omnibus. Notable highlights include:

• The Centers for Disease Control and Prevention (CDC) Director will need to be confirmed by the Senate.
• An Office of Pandemic Preparedness and Response will be established within the White House.
• An agency-wide strategic plan will be required to be developed every four years.
• An advisory committee to the Director of CDC will be created to advise and help the CDC Director fulfill its strategic plan and the agency’s mission.
• Additional authority is provided to the Secretary of HHS to coordinate with, and request support from, other departments and agencies in leading the Federal public health and medical response to a PHE.
• The national stockpile will need to be evaluated regularly for capacity and gaps.

Medicare

At-Home IVIG Permanent Benefit for Primary Immunodeficiencies | A Medicare demo, that has been extended multiple times in the past decade, covered the cost of the supplies and the administration of IV Immunoglobulin therapy at home for Medicare beneficiaries with a primary immunodeficiency. This will no longer be temporary under the demo and is now a permanent benefit.

Partial Relief from Medicare Payment Cuts | Physician Fee Schedule (PFS) cuts have been reduced from 4.5% to 2% in 2023 and to 3% in 2024. The 4% statutory Pay-As-You-Go (PAYGO) sequester will be postponed for two years.

Incentive Payments for Advanced Alternative Payment Models | A 3.5% Medicare Part B incentive payment is available through 2025 for clinicians participating in advanced APMs after the 5% incentive payment sunsets in 2024. The current freeze on participation thresholds (50% of payments for covered services attributable to APMs) for qualifying for APM bonuses also is extended through 2025 before increasing to 75% in 2026.

Key Hospital Programs Extensions | The Acute Hospital at Home program, which enables some patients to receive acute-level care in their homes rather than in a hospital, is extended for two years. Two programs that boost Medicare payments to rural hospitals have also been extended for two years — the Medicare low-volume payment adjustment and the Medicare-dependent hospital program.

Additional GME Slots | 200 additional Medicare-funded graduate medical education positions are being made available, half of which will be dedicated to psychiatry residencies. Additionally, at least 10% of positions will be distributed to rural hospitals, hospitals operating above their cap, hospitals in states with new medical schools and hospitals that serve health professional shortage areas.

Payment Methodology Update for Inpatient and Psychiatric Units | Beginning in 2025, HHS is directed to update the methodology for determining payment rates under the Medicare Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) based on new data collection.

Other Medicare provisions related to mental health beginning January 1, 2024:

• Medicare's partial hospitalization benefit now includes coverage of intensive outpatient services.
• Medicare Physician Fee Schedule payment rates for crisis psychotherapy services are being increased by 50% when furnished by a mobile unit.

Medicaid

Early End to the Medicaid Continuous Coverage Requirement | The requirement for states to continuously cover (i.e., maintain the enrollment of) anyone enrolled in Medicaid as of March 2020 in exchange for receiving an enhanced federal matching rate is being delinked from the end of the public health emergency. States will be permitted to begin disenrolling people who are no longer eligible on April 1, 2023. The enhanced federal matching rate is available for the first three months of 2023 and will then phase down over the rest of the calendar year.

12 Months Continuous Medicaid Coverage for Children | All states are required to continuously cover children under age 12 in Medicaid and CHIP for 12 months, regardless of changes in circumstances.

12 Months Postpartum Medicaid Coverage | The American Rescue Plan Act’s state plan option to provide 12 months of postpartum Medicaid coverage (rather than the standard 60 days) has been made permanent.

Additional Funding for the U.S. Territory Medicaid Programs | Unlike state Medicaid programs, territory Medicaid programs operate on a capped allotment financing structure and their federal matching rates are statutorily set. The bill provides Puerto Rico with additional federal Medicaid funding for the next five years and prevents a scheduled reduction in the federal matching rate for all five territories.

Medicaid and CHIP Provider Directories | State Medicaid and CHIP programs (including their managed care programs) are required in 2025 to publish and frequently update searchable provider directories that include information whether the provider is accepting new patients, the provider’s cultural and linguistic capabilities, whether provider offers services via telehealth and other information.

Extension of Key Home-and Community-based Services (HCBS) Policies | Key HCBS spousal impoverishment protections along with the Money Follows the Person Rebalancing Demonstration is extended through FY 2027.

Medicaid Coverage for Juvenile Youth in Public Institutions | States are required to provide medically necessary screening, referrals and case management services for eligible juvenile youth in public institutions in the 30 days prior to release. They also have the option to provide Medicaid and CHIP coverage to juvenile youth in public institutions during the initial period pending disposition of charges.

Accelerated Approval

The omnibus includes provisions related to the FDA’s accelerated approval pathway that were originally considered for, but ultimately not included in, the PDUFA reauthorization in September. This language gives the FDA clearer authority to specify requirements for post-approval studies prior to approving products, to expedite withdrawal of products, and to enforce sponsor completion of post-approval studies. It also establishes an intra-agency coordinating council to ensure consistent and appropriate use of accelerated approval across FDA.

Advanced Research Projects Agency for Health (Arpa-H)

Authorizing language establishes ARPA-H and codifies some of the ways in which ARPA-H is currently operating, e.g., organizationally located within the National Institutes of Health (NIH), with the Director reporting to the HHS Secretary instead of the NIH Director. ARPA-H is intended to advance high-potential, high-impact biomedical and health research that cannot be readily accomplished through traditional research or commercial activity.

Join us on Tuesday, January 10 for an informative session with leaders from Faegre Drinker’s cross-practice health and life sciences team to discuss health-specific provisions included in the 2023 omnibus spending bill. Registration for this webinar is open now.