Creditable Coverage for Medicare Part D

Admin

by Kristin Rowan | Feb 14, 2025 | Admin, Regulatory

by Kristin Rowan, Editor

CMS 2026 Updates to Prescription Plan

The Centers for Medicare & Medicaid Services (CMS), as part of the Inflation Reduction Act of 2022 (IRA), released a draft of the calendar year 2026 redesign program instructions. The new provisions for Medicare Part D include:

An annual out-of-pocket maximum of $2,100, up from $2,000 in 2025
A selected drug subsidy program
The requirement that Part D plans offer enrollees the option to spread out their out-of-pocket costs over the year
Maximum charge of $35 for insulin regardless of deductible, co-pay, or out-of-pocket spending reached
No out-of-pocket costs for recommended vaccines
New requirements for Creditable Coverage

Current Creditable Coverage Determination

The current simplified determinations method is as follows:

The plan provides coverage for brand and generic prescriptions;
The plan provides reasonable access to retail providers;
The plan is designed to pay on average at least 60% of participants’ prescription drug expenses; and
The plan satisfies at least one of the following:
- The coverage has no annual benefit maximum or maximum annual benefit payable by the plan of at least $25,000;
- The coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare-eligible individual; or
- For employer plan sponsors that have integrated prescription drug and health coverage, the integrated plan has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit of at least $25,000, and has no less than a $1,000,000 lifetime combined benefit maximum.

Creditable Coverage

Medicare beneficiaries must enroll in Medicare Part D, unless they have other prescription coverage. If a beneficiary goes more than 63 days without prescription coverage, they may incur a late enrollment penalty. Creditable coverage has to have a value equal to or greater than the defined coverage for Part D. This requirement is not new. Group health plans have been calculating creditable coverage since the inception of the Part D program. What is new is that CMS has determined that the simplified method of determining creditable coverage is no longer accurate. The revised method must include all of the following:

Provide reasonable coverage for brand name and generic prescription drugs and biological products
Provide reasonable access to retail pharmacies
Is designed to pay on average at least 72% of participants’ prescription drug expenses

Impact

Persons over the age of 65 who qualify for Medicare, but who are still employed may have an employer sponsored or paid health insurance plan. Many of these plans have combined health and drug coverage. These plans will now have to provide creditable coverage, presumably for all beneficiaries, not just those who are eligible for Medicare.

The coverage has no annual benefit maximum or maximum annual benefit payable by the plan of at least $25,000;
The coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare-eligible individual; or
For employer plan sponsors that have integrated prescription drug and health coverage, the integrated plan has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit of at least $25,000, and has no less than a $1,000,000 lifetime combined benefit maximum.

For Additional Information

If you are currently offering an employee sponsored health plan, or need more information on Part D coverage, refer to the CMS Fact Sheet and the Program Instructions.

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Kristin Rowan has been working at The Rowan Report since 2008. She is the owner and Editor-in-chief of The Rowan Report, the industry’s most trusted source for care at home news .She also has a master’s degree in business administration and marketing and runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in content creation, social media management, and event marketing. Connect with Kristin directly kristin@girardmarketinggroup.com or www.girardmarketinggroup.com

©2025 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com

Is Medicaid Down for the Count?

Breaking News

by Kristin Rowan | Feb 6, 2025 | Breaking News, Regulatory

by Kristin Rowan, Editor

Medicaid Payment System Goes Dark

On Monday, January 27, President Trump, through the Office of Management and Budget, announced a temporary freeze on federal spending while his newly designated head of the Department of Government Efficiency ensures all spending follows the executive orders the President has signed. The memo was vague and caused widespread confusion across government departments. Almost immediately after the memo was circulated, Medicaid programs could not access the Payment Management Services web portal, the entity responsible for paying Medicaid claims.

The Memo

The language used in the memo on federal spending was broad and overreaching. As such, many federal organizations were unclear as to whether the memo applied to them. The message in the memo was that the administration intended to curb any spending that does not improve the day-to-day lives of the people. Throughout the day Monday, the White House sent clarifications about what programs would not be impacted. Among them were food assistance programs like SNAP, WIC, and Meals on Wheels, and Medicaid. The medicaid payment portal went down, despite this clarification.

Exclusions

Multiple state and federal agencies reached out to the White House for clarification following the release of the memo. Explicitly excluded from the freeze are direct benefit plans like Social Security and Medicare. In addition to the programs named in the memo, clarification on additional programs that would not be impacted included Medicaid. Despite the temporary website outage, claims were still being processed and payments were still being made.

Immediate Lawsuits

Almost simultaneously with the distribution of the memo, several non-profit organizations filed suit against the federal government. They called Trump’s action an “unlawful and unconstitutional” act, even temporarily. The pause on federal spending was set to go into effect at 5 p.m. ET on Tuesday. Minutes before, U.S. District Judge Loren L. AliKhan put a pause on the pause.

Temporary Freeze on the Temporary Freeze

To allow both sides time to construct an argument, the judge stayed the funding freeze until Monday, February 3. That morning, the judge will hear arguments and consider the issue. After the stay, attorneys general from 22 states and D.C. filed their own lawsuit to permanently block the freeze and prevent any future attempts to cut off already approved federal funding.

Then Comes the Thaw

If the judge allows the freeze to move forward, Trump has given every agency until February 10 to account for and explain all spending programs within their departments. Once the accounting has been reviewed, likely the OMB and the Department of Government Efficiency will determine which federal spending programs can resume operation.

There is no indication yet as to whether Trump will extend the February 10 deadline, given the delay in the courts. By the time the judge rules on Monday, however, we hope the White House will have issued additional details and guidance to avoid additional disruption to essential services like Medicare and Medicaid.

Final? Ruling

Early Monday, Judge AliKhan said she was not convinced by the argument that nonprofit groups have no case against the funding freeze since the OMB rescinded the memo. The administration argued that a brief pause on funding to align federal spending is within the law. The administration also suggests that the courts have no standing to block it. AliKhan has indicated that she will likely grant a longer temporary order to stay the funding freeze.

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Bill Dombi to Continue the Care at Home Fight in D.C.

Advocacy

by Kristin Rowan | Feb 6, 2025 | Advocacy, Regulatory

by Kristin Rowan, Editor

Bill Dombi Key Supporter of Care at Home

The end of 2024 and the official merger of NAHC and NHPCO also brought to a close the extensive service to the care at home industry by former NAHC President Bill Dombi. Dombi served as vice president for law from 1987 to 2017. He was named interim presidnt in 2017 and president in 2018, where he served until 2024.

Bill has been instrumental in the advancement of care at home policies at the federal level, a champion for advocacy for care at home at local, state, and national conferences and organizations, and spearheaded lawsuits and challenges to CMS rulings for year. His retirement, though well-earned, was a great loss to the industry.

Back in Action

On February 4, 2025, Arnall Golden Gregory law firm, of Atlanta and Washington D.C. an Am Law 200 law firm with a client-service model of “business sensibility” announced the additional of Bill Dombi to the firm as senior counsel. With more than 40 years of experience with litigation and policy in the care at home industry, Bill will continue his fight to advance care at home in D.C.

“It’s not a stretch to say that Bill is the face of the home healthcare space and the standard-bearer for advocating on its behalf, whether in state or federal court or through his deep-rooted experience and relationships within Congress and various federal agencies. In addition to tackling major policy issues, Bill has fiercely defended providers and patients in litigation across the country. His broad perspective and exceptional legal acumen will be invaluable to our already outstanding Healthcare practice, particularly in the areas of home health, hospice, and post-acute and long-term care litigation, benefitting both our teams and the clients we serve.”

Jason E. Bring

Healthcare Litigation co-chair, Arnall Golden Gregory LLP

From AGG

Bill has been actively involved with significant litigation matters affecting home health policy since 1976. Notably, he served as lead counsel in the lawsuit that resulted in the expansion of Medicare home health coverage in 1980, and he was pivotal in the creation of the Medicare hospice benefit in 1983, the institution of the Medicare Prospective Payment System (PPS) for home health in 2000, and national healthcare reform legislation in 2010. In 2017, Bill was selected as NAHC’s president and served through 2024, ultimately concluding his tenure as president emeritus and counsel of the National Alliance for Care at Home, the combined organization of NAHC and the National Hospice and Palliative Care Organization.

“To call Bill a major addition to AGG’s Healthcare practice would be an understatement,” said Sean P. Fogarty, AGG’s managing partner. “Bill has been a pillar in the home health industry for years, and I know I speak on behalf of the entire firm when I say we we’re thrilled to have him join our team.”

Bill is renowned for his commitment to advancing care at home through legal, legislative, and regulatory advocacy. His background spans all key advocacy forums, including Congress, regulatory bodies, and the courts, where he has engineered laws and regulations that directly impact home health and hospice providers. This breadth of experience empowers his private practice to offer clients with a practical framework for compliance standards and operational excellence.

“As I look to the next chapter of my career after almost 40 years at NAHC, it’s exciting to join such an impressive firm and group of professionals with a well-established and supportive culture. AGG is so unique in its earnest focus on collegiality and collaboration, and I look forward to continuing my hard work with my new colleagues on behalf of the dedicated home health providers we serve.”

Bill Dombi

Senior Counsel, AGG

A hall of famer among several home care and hospice organizations, Bill has also served as executive director for the Center of Health Care Law and Home Care and Hospice Financial Managers Association at NAHC. He continues to serve the industry as a member of the board of directors of the Research Institute for Home Care and the Hospice and Home Care Foundation of North Carolina. With Medicaid expenditures now exceeding $130 billion annually and Medicare home health services growing from $300 million to over $25 billion, Bill’s work has seen the evolution of home care from a cottage industry to a cornerstone of long-term care in the U.S.

Bill attended the University of Connecticut, where he earned his law degree, as well as a B.A. in political science.

About Arnall Golden Gregory LLP

Arnall Golden Gregory (AGG) is an Am Law 200 law firm with offices in Atlanta and Washington, D.C. Our client-service model is rooted in taking a “business sensibility” approach of fully understanding how our clients’ legal matters fit into their overall business objectives. Our transaction, litigation, regulatory, and privacy counselors serve clients in healthcare, real estate, retail, technology, fintech/payment systems, global commerce/global mobility, life sciences, logistics and transportation, government investigations, and government contracts. With our rich experience and know-how, we don’t ask “if,” we figure out “how.” Visit us at www.agg.com.

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Telemedicine Rules from DEA

Clinical

by Elizabeth E. Hogue, Esq. | Jan 23, 2025 | Clinical, Regulatory, Telehealth

by Elizabeth E. Hogue, Esq.

DEA Issues Three Telemedicine Rules

On January 16, 2025, the United States Drug Enforcement Administration (DEA) announced three new rules to make permanent some temporary flexibilities for telemedicine established during the COVID-19 public health emergency, including new provisions intended to protect patients. The DEA worked with the U.S. Department of Health and Human Services (HHS) to develop the new rules. The DEA made significant revisions to the draft rules proposed on March 1, 2023.

Exemptions

It is important to note that the new rules do not apply to telemedicine visits when patients have already been seen in person by medical providers. After patients have in-person visits with medical providers, any medications may be prescribed through telemedicine indefinitely. Also, if no medications are prescribed during telemedicine visits, the rules about telemedicine do not apply. In other words, patients can always have telemedicine visits with medical practitioners. The rules apply only if patients have never been seen in person by practitioners and controlled medications are prescribed during telemedicine visits.

Rule #1 - Remote Access to Opiod Meds

First, the DEA expanded remote access to buprenorphine, the medication used to treat opioid use disorder, via telemedicine encounters. This change allows patients to receive six-month supplies of buprenorphine through telephone consultations with providers. Additional prescriptions will, however, require an in-person visit to medical practitioners.

Rule #2: Schedule III-V Without In-Person Evaluation

The DEA also issued proposed rules that establish special registrations that allow patients to receive prescribed medications even though they have never had an in-person evaluation from a medical provider. This special registration is available to practitioners who treat patients for whom they will prescribe Schedule III-V controlled substances.

Prescribing Registrations for Schedule II

Advanced Telemedicine Prescribing Registrations are available for Schedule II medications when practitioners are board certified in one of the following specialties:

- Psychiatrists
- Hospice care physicians
- Physicians rendering treatment at long term care facilities
- Pediatricians for the prescribing medications identified as the most addictive and prone to diversion to the illegal drug market
These specialized providers can issue telemedicine prescriptions for Schedule II-V medications.

Call for Public Comment

The DEA seeks public comment on the following issues related to the proposed rules, including whether:

- Additional medical specialists should be authorized to issue Schedule II medications
- Special registrants should be physically located in the same state as patients for whom Schedule II medications are prescribed
- To limit Schedule II medications by telemedicine to practitioners whose practice issues less than 50% of prescriptions by telemedicine.

Online Registration

The DEA will also require online platforms to register with the DEA if they facilitate connections between patients and medical providers that result in prescription of medications. In addition, the DEA will also establish a national prescription drug monitoring program (PDMP) so that pharmacists and medical practitioners can see patients’ prescribed medication histories.

Rule #3: Exemption for Dept of Veterans Affairs

Finally, the DEA will exempt U.S. Department of Veterans Affairs (VA) practitioners from requirements for Special Registrations. After patients receive in-person medical examinations from VA practitioners, the provider-patient relationship is extended to all VA practitioners who engage in telemedicine with the patients.

Final Thoughts

Prescribing controlled substances is essential for some patients, including hospice patients. Practitioners must have the option to prescribe using telehealth.

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Elizabeth Hogue is an attorney in private practice with extensive experience in health care. She represents clients across the U.S., including professional associations, managed care providers, hospitals, long-term care facilities, home health agencies, durable medical equipment companies, and hospices.

No portion of this material may be reproduced in any form without the advance written permission of the author.

Medicare Advantage Increase for Payers, not Providers

Artificial Intelligence

by Kristin Rowan | Jan 23, 2025 | Artificial Intelligence, Breaking News, CMS, Medicare Advantage, Regulatory

by Kristin Rowan, Editor

CMS Announces Medicare Advantage Pay Hike

On January 13, 2025, CMS announced its plans to increase payments to Medicare Advantage plans by 4.33%. Policy changes for Medicare Advantage and Part D include changes in how the agency calculates payments to health plans. A spokesperson from CMS said that the policy change provides access to affordable, high-quality care. The changes, however, don’t increase payments to the people actually providing the care, only to the payers.

Opposition

While major health plans across the U.S. were thrilled with the announcement and saw substantial stock price hikes immediately after, not everyone is on board. The American Medical Association (AMA) outlined how physicians who treat Medicare patients are getting pay cuts from CMS for the fifth year in a row. Meanwhile, HHS OIG released a report finding that MA insurers profited $7.5 billion from risk-adjusted payments in 2023.

“It’s unbelievable they’re giving insurance companies that had record profits an increase while at the same time cutting payment to physician practices that are struggling to survive. This contrast highlights the urgent need for Congress to prioritize linking payment to physician practices to the cost of providing care.”

Bruce Scott, M.D.

President, American Medical Association

Out-of-Pocket Cost Increase

In addition to the higher payments, the advance proposal includes an increase in the Part D deductible from $590 to $615. With this proposal, the out-of-pocket maximum will increase from $2,000 to $2,100 as well. Cost sharing after the deductible is reached but before the out-of-pocket max is reached will also increase. There is no increase for beneficiaries whose income is less than 100% of the Federal Poverty Level.

Coverage Increase

The CMS advance proposal calls for coverage and policy changes. Medicare and Medicaid programs will now cover anti-obesity medications. The plan imposes stricter rules on MA policies to prevent denial of reasonable and necessary services that would be covered under Medicare Part A and B. Finally, imposed guardrails on the use of AI. The guardrails will ensure AI systems are unbiased in patient care decisions. Additionally, the guardrails will ensure they do not perpetuate existing inequity in access to and receipt of medical services. The American Hospital Association appplauded this last change.

“The AHA commends CMS for taking important steps to increase oversight of 2026 Medicare Advantage plans to help ensure enrollees have equal access to medically necessary health care services. The AHA has previously raised concerns about the negative effects of certain Medicare Advantage practices and policies…that are more restrictive than Traditional Medicare and can compromise enrollee access to Medicare-covered services.”

Ashley Thompson

Senior Vice President, American Hospital Association

Changes are not Definite

Even though CMS has announced these changes to start in January, 2026, they are not set in stone. As of January 20, 2025, we are operating under anew administration and the changes under Trump have already started. CMS intends to continue it’s three-year plan to update the MA risk adjustment model and the implementation of the Inflation Reduction Act. However, it seems likely that the Inflation Reduction Act will be replaced with a different plan for inflation.

Jeff Davis, director of health policy at McDermott+ believes it is likely that Trump’s team will throw out the updates to MA and Part D as well as Biden’s proposed staffing mandate for SNFs. In the first 24 hours of his Presidency, Trump revoked both Biden’s “Strengthening Medicaid and the Affordable Care Act” and “Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage” executive orders. He also rescinded the Drug Pricing Model executive order that covered obesity drugs, lowered the price of some drugs, and accelerated FDA approval for drugs that address unmet medical needs.

As Yet Unknown

As was to be expected, many of Trump’s initial 78 executive orders are already facing lawsuits from various entities. There are as of yet no definitive answers to changes in Medicare, Medicare Advantage, or other policies that impact healthcare and care at home. The Rowan Report will continue to follow these stories as they unfold.

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Kristin Rowan has been working at The Rowan Report since 2008. She is the owner and Editor-in-chief of The Rowan Report, the industry’s most trusted source for care at home news. She also has a master’s degree in business administration and marketing and runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in content creation, social media management, and event marketing. Connect with Kristin directly kristin@girardmarketinggroup.com or www.girardmarketinggroup.com

Care at Home Coming to Medicaid?

Advocacy

by Elizabeth E. Hogue, Esq. | Jan 16, 2025 | Advocacy, Regulatory

by Elizabeth E. Hogue, Esq.

Brown v D.C. Decision is Another Boost for Care at Home

In Olmstead v. L.C., the U.S. Supreme Court decided that unjustified segregation of disabled persons constitutes discrimination in violation of Title II of the Americans with Disabilities Act.

The Court said that public entities must provide community-based services to disabled persons when such services are:

- Appropriate;
- Unopposed by disabled persons; and
- Reasonable accommodations taking into account resources available to public entities and the needs of other disabled individuals receiving services from the entity.

This decision gave a tremendous boost to the provision of home and community-based services of all types. Since Olmstead was decided in 1999, there have been more court decisions that require services to be provided at home based on this opinion.

Support for Olmstead

One recent decision is Brown, et al v. District of Columbia (Brown v D.C.) that was decided on December 31, 2024. The Court decided that the District of Columbia violated the rights of D.C. residents with disabilities under the Americans with Disabilities Act (ADA) and the Rehabilitation Act. According to the Court, D.C. failed to inform nursing facility residents who receive Medicaid that they could leave nursing facilities and receive home health services in their communities and failed to assist them to do so. The D.C. government also failed to help them access community-based services and housing options needed to transition back to the community.

The Court recognized that individuals living in nursing facilities often need help learning about and applying for available community services to help them transition out of the institution and into their own homes. Even when residents learn about services, navigating the complicated Medicaid-funded long-term care program can cause confusion and anxiety that sometimes causes facility residents to lose hope that they can live in their own homes again.

Consequently, the decision applies to

“All persons with physical disabilities who, now or during the pendency of this lawsuit: (1) receive DC Medicaid-funded long-term care services in a nursing facility for 90 or more consecutive days; (2) are eligible for Medicaid-covered home and community-based long-term care services that would enable them to live in the community; and (3) would prefer to live in the community instead of a nursing facility but need the District of Columbia to provide transition assistance to facilitate their access to long-term care services in the community.”

Brown v D.C. Says That D.C. Must

- Develop and implement a working system of transition assistance for [nursing home residents that], at a minimum
  - informs DC Medicaid-funded residents, upon admission and at least every three months thereafter, about community-based long-term care alternatives to nursing facilities
  - elicits DC Medicaid-funded nursing facility residents’ preferences for community or nursing facility placement upon admission and at least every three months thereafter
  - begins DC Medicaid-funded nursing facility residents’ discharge planning upon admission and reviews at least every month the progress made on that plan
  - provides DC Medicaid-funded nursing facility residents who do not oppose living in the community with assistance accessing all appropriate resources available in the community
- Ensure sufficient capacity of community-based long-term care services for [residents] under the EPD, MFP, and PCA programs and other long-term care service programs, to serve [residents] in the most integrated setting appropriate to their needs, as measured by enrollment in these long-term care programs.
- …[D]emonstrate [its] ongoing commitment to deinstitutionalization by, at a minimum, publicly reporting on at least a semi-annual basis the total number of DC Medicaid-funded nursing facility residents who do not oppose living in the community; the number of those individuals assisted by [DC] to transition to the community with long-term care services [described above]; and the aggregate dollars [DC] saves (or fails to save) by serving individuals in the community rather than in nursing facilities.

Final Thoughts on Brown v D.C.

As indicated above, there continues to be a clear mandate for Medicaid Programs to provide services to individuals in the community, which is a significant impetus to provide services to patients in their homes. This mandate, however, does not directly address practical aspects of implementation, such as reimbursement at appropriate rates for providers or availability of staff to provide services at home. Nonetheless, the Olmstead and Brown cases provide an important basis for further development of in-home services of all types to meet the needs of disabled persons.

No portion of this material may be reproduced in any form without the advance written permission of the author.

Whistleblower Case Impedes Lawsuits

CMS

by Kristin Rowan | Jan 16, 2025 | CMS, Medicare Advantage, Regulatory

by Kristin Rowan, Editor

Whistleblower Action

A United States District Court in Tampa, Florida ruled against a whistleblower action under the False Claims Act (FCA) against her former employer. In 2019, a family care physician filed a whistleblower, or qui tam, action against her employer for increasing the risk adjustment scores of Medicare Advantage patients in order to receive higher payments.

Whistleblower Protection

When an employee or person with information about a company’s wrongdoing, they can file a lawsuit against that company. Whistleblowers are protected under OSHA, EEOC, and several federal and state regulations against retaliation from their employer. A whistleblower, the person who brings evidence of wrongdoing to the court, is called a “relator.”

Before the Ruling

The False Claims Act is the first and one of the strongest whistleblower laws in the U.S. Under the FCA whistleblower rules, any private citizen can sue any individual, company, or other entity that is defrauding the government and recover damages and penalties on the government’s behalf. Whistleblowers also receive compensation when these suits are settled between 15% and 30% of the total proceeds. As the FCA has expanded since its passing in 1863, the law made it possible for anyone to serve as a whistleblower.

The Ruling

In the case noted above, the court ruled that FCA whistleblowers act as officers of the United States when they sue on behalf of the federal government. The decision reasoned that whistleblowers are appointing themselves as officers of the federal government by bringing these lawsuits.

Article II, Section 2, Clause 2 of the Constitution states that the President can appoint officers and officials to the government and that they require Senate approval for some of these. Cabinet appointments, judicial appointments, and other high ranking positions are often the subject of news stories during Senate hearings to confirm these appointments.

The court ruled that an FCA whistleblower becomes an officer of the federal government through self-appointment, violating the Appointment Clause of the Constitution. The court further ruled that the False Claims Act in itself is a violation of the Constitution, effectively nullifying the FCA, at least in Florida for now.

Widespread Implications

Any company who has lost a False Claims Act suit may now be able to challenge those rulings, using this case as precedent. However, there are some hoops they would need to jump in order to do so, depending on how this case is interpreted. Ironically, this case states that whistleblowers cannot be officers of the government without appointment, but if that’s true, then all False Claims Act decisions become easier to challenge.

If this decision stands and is adopted as precedent across the U.S., it could completely nullify the False Claims Act. It may even be considered for a Supreme Court ruling. In 2023, the U.S. government recouped $2.6 billion from FCA suits, nearly $2.3 billion of which were claims brought by whistleblowers.

Care at Home Implications

Medicare and Medicare Advantage are rife with fraudulent claims, “coding intensity“, upcoding, and predatory marketing. In 2024, CMS announced changes to the risk adjustment model in the Risk Adjustment Validation Final Rule after seeing higher-than-expected risk scores. The changes could help CMS recoup up to $4.7 billion in the next ten years.

MedPAC estimates that Medicare Advantage plans received as much at $88 billion in excess payments in 2024. The lowest share of overpayment reimbursement through the Fraudulent Claims Act would give whistleblowers a combined $13.2 billion. Eliminating the FCA may discourage employees and contractors from reporting fraudulent claims and overbilling through Medicare and Medicare Advantage.

Final Thoughts

A safeguard for people trying to do the right thing, a means to save the federal government billions of dollars that can be spent elsewhere, and ultimately better care for patients are all at risk if the FCA is struck down. A law that has been in place for more than 150 years should carry more weight than the ruling of one district court who applies a new definition to a long-standing term.

Whistleblowers and the federal government have generally been considered co-defendants in these suits. Two parties with separate interests in the same suit, acting independently, not a joint case like a class action suit would be. I anticipate an appeal on this decision and hopefully a panel of judges who better understand the necessity of the False Claims Act and the Whistleblower provisions.

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VitalCaring Pulls Agreement

Breaking News

by Kristin Rowan | Jan 9, 2025 | Breaking News, Regulatory

by Kristin Rowan, Editor

Just as we were setting the article on UnitedHealth Group and Amedisys for publication, we received the following breaking news story:

VitalCaring Divestment Agreement Cancelled

VitalCaring entered into the agreement on June 28, 2024, just after the merger announcement and initial pushback from the Department of Justice. The DOJ approved the divestiture, despite some misgivings about the quality of care. VitalCaring said at the time that it believed the merger and the divestment were in the “best interest of patients and stakeholders.”

VitalCaring has been under its own scrutiny since 2022 when Encompass Health and its home health and hospice arm, Enhabit, Inc. accused VitalCaring CEO April Anthony of using unethical practices to establish the company. Anthony is the founder of Encompass Home Health & Hospice, the previous owner and CEO of Liberty Health Services, and founder and former CEO of Homecare Homebase.

She Who Shall Not be Named

Encompass Health filed an injunction against April Anthony, and her partners Vistria Group and Nautic Partners in 2021 for violation of the terms of her employment agreement, non-competition agreement, non-solicitation, and misappropriation of trade secrets.

Anthony and her partners purchased a small home health agency in Louisiana and started plan for its growth while Anthony was still CEO of Encompass. Additionally, Anthony recruited employees of Encompass to work at her new venture using a fake recruiter to cover her tracks. Anthony used fake names, spouses’ phones, and her personal laptop to remain undetected during this time. Anthony asked her partners and recruits to refer to her as Voldemort.

Judgment Day

In August of 2022, a judge called the actions of Anthony and her partners “willful misconduct” and agreed with almost all of Encompass’s allegations. The judge found that Anthony was in violation of her non-compete agreement and that she was actively running a direct competitor while still serving as CEO of Encompass. The judge stated, “These are not the actions of a person complying with her contractual obligations.” Although Encompass’s injunction asked to have the non-compete agreement extended, the judge only enforced the existing non-compete agreement, and found that that Anthony had violated the covenant.

Pay the Piper

The Delaware Court of Chancery, in December of 2024, agreed with the earlier findings of the court and found that Anthony, two former senior officers of Encompass, and the investment companies were complicit in their miconduct and that VitalCaring was a result of their deceit.

The court awarded an upfront payment for mitigation damages of $1.62 million dollars plus attorneys’ fees. The court also imposed a trust entitling Encompass Health and Enhabit to 43% of al of VitalCaring Group’s future profits, paid quarterly as well as 43% of proceeds if and when the company is sold.

Divorce Proceedings

Depending on the source, each of the companies involved in the divestiture agreement are claiming credit for filing for divorce.

An equity analyst for UnitedHealth Group said, “UNH has abandoned VitalCaring as a divestiture buyer after the Delaware Chancery decision against VitalCaring’s executives.”
An article from a hospice website stated, “Amedisys has halted the divestiture of some of its home health and hospice locations to Texas-based VitalCaring.
A stock market website reported “VitalCaring Group cancelled the acquisition of certain home health care centers from UnitedHealth Group, Inc.”

Regardless of who filed for divorce, UnitedHealth Group and Amedisys are courting new partners to acquire the home health centers that need to be divested before their marriage can be blessed by the DOJ.

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Congress Allows Medicare Advantage to Deny Coverage

Advocacy

by Kristin Rowan | Jan 9, 2025 | Advocacy, Editorial, Medicare Advantage, Regulatory

by Kristin Rowan, Editor

Medicare Advantage Bill Dies in Congress

The 118th United States Congress, ran from January 3, 2023 to January 3, 2025. This Congress’s first law was passed on March 20, 2023, much later than most previous congressional sessions. In its first year, it passed only 34 bills. In the two years of this congressional run, the 118th passed 209 public laws, almost half the average since 1989. Among the many bills that died on the floor before time ran out was the Improving Seniors’ Timely Access to Care Act (H.R. 8702/S. 4532). Senate and House members introduced the bill on June 12, 2024.

Improving Seniors' Timely Access to Care

In June of 2024, senators and representatives introduced bipartisan legislation that would have curbed Medicare Advantage’s ability to deny claims. The bill included language that allowed CMS the authority to establish standard timeframes for electronic prior authorizations requests including expedited requests and real-time decisions for routinely approved services. The bill also included requirements for transparency and reporting, including:

- establishing an electronic prior authorization process
- establishing a process for real-time decisions for routine services
- providing more detailed reports on use of prior authorization including
  - rates of approvals
  - denials
  - average time for approvals
- pressing Medicare Advantage providers to incorporate input from health care providers on their authorization processes and decisions
- adopting prior authorization programs that adhere to evidence-based medical guidelines
- requiring Medicare Advantage providers to report on the percentage of denied claims that were later overturned

Overwhelming Support

At the time this bill was reintroduced to Congress in June, 135 House co-sponsors and 44 Senate co-sponsors signed on. By the end of July, the bill had been read, sent to the House Ways and Means Committee, and passed. Representative Mike Kelly (R-PA) noted that more than 500 organizations had endorsed the act.

Urgent Need for Change

In early 2024, an audit from the Office of the Inspector General (OIG) at the U.S. Department of Health and Human Services (HHS) revealed that Medicare Advantage plans eventually approve 75% of authorization requests for services that were initally denied. More recently, HHS OIG released a report showing that MA plans incorrectly denied services to beneficiaries even though they met the requirements for coverage. Following the report, HHS OIG made the following recommendations to CMS:

- issue new guidance on the use of MAO clinical criteria in medical necessity reviews
- update audit protocols for Medicare Advantage to address the issues of MAO use of clinical critera and examining service types
- direct MAOs to indentify and address the causes for manual review errors and system errors.

CMS agreed with all three recommendations.

Dead in the Field

Despite the bipartisan, bicameral support of this much needed overhaul of Medicare Advantage providers, the bill is currently in pile of unaddressed issues that the 118th Congress just didn’t get to. Despite having it in front of them for five months, and despite passing nearly half the legislation of the 17 most recent congressional sessions, the bill that would keep MA beneficiaries from waiting inordinate amounts of time for routine care will have to wait for the next session to resume. Let’s hope the 119th Congress is more productive.

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Good News for Veterans and Care at Home

Advocacy

by Kristin Rowan | Jan 9, 2025 | Advocacy, Hospice, Regulatory

by Kristin Rowan, Editor

Biden's Final Acts

With only a short number of days left in office, President Joe Biden has been making headlines. Not all of his final decisions have been met with absolute approval, but his latest one will make a difference for our veterans wanting Care at Home. On Thursday, January 3, 2025, President Biden signed into law the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act.

The Dole Act

The Elizabeth Dole Act improves upon much of the benefits, programs, and services provided by the Department of Veterans Affairs (VA). Some of these changes include providing protections for care agreements between veterans and clinicians, modifications to educational assistance programs and benefits, expansion of the Native American Direct Loan program, increases per diem rates for veteran transitional housing, and various administrative and oversight tasks.

Elizabeth Dole Home Care Act

The Elizabeth Dole Home Care Act is a bill within the larger act specific to home- and community-based services (HCBS). The home care act aims to enhance veterans’ access to the Program of All-Inclusive Care for the Elderly (PACE) nationwide. The new law also allows the VA to increase funding for HCBS. Prior to this, the VA was able to allocate 65% of nursing home care to home care services.

Additionally, the home care bill will provide support and benefits to caregivers of some disabled veterans, start a pilot to provide non-medical supportive care at home to veterans with limited access to home health aides, and increase access to HCBS for Native American Veterans.

The Industry Responds

The National Alliance for Care at Home responded to the landmark legislation, specifically siting section 301 of the bill, known as Gerald’s Law. Gerald’s is so named for a Michigan veteran who was denied his non-service related burial and plot benefit after he died at home while under VA hospice care. Gerald’s Law requires the VA to provide a burial and funeral allowance for veterans who were receiving VA hospice care in a home or other setting outside a hospital or nursing home.

“We are deeply grateful for the bipartisan support of Gerald’s Law and its inclusion in the Dole Act. This legislation ensures that Veterans and their families can choose hospice care in the setting that best meets their needs without risking the loss of crucial burial benefits. We thank Senators Moran, Tester, and Hassan, Representatives Ciscomani, Bost, Brownley, and Takano, and many others for their leadership, as well as President Biden for signing this important bill into law.”

Dr. Steve Landers

CEO, The Alliance

HCAOA, Leading Age, National PACE Association (NPA), and many others joined the Alliance in applauding Biden for signing the bill into law. They noted that providing care at home and in the community improves the quality of life for veterans and their caregivers. HCBS also come at a much lower cost than hospital and institutional care.

HCAOA said in a statement that the bill is “…a crucial victory for both veterans and their caregivers.” The President and CEO of NPA said the bill would dramatically increase options for veterans who want to age in place and that Congress can “…easily implement PACE for hundreds of thousands of additional seniors and their families.”

The VA has found that HCBS can delay or remove the need for nursing home or assisted living admission. Care at Home also reduces the risk of preventable rehospitalizations.

Final Thoughts

Once again, it seems the world is “discovering” that which we have known for ages: Home based care is better, cheaper, and more effective than institutional care. In the last few years, doctors and hospitals have figured this out and implemented hospital at home care. Now, the VA has finally figured it out as well. When this law takes effect, we as an industry will breathe a collective sigh when our veterans see better outcomes, their caregivers are better supported, the cost for their care decreases, and especially when our veterans enjoy a better quality of life in their final days without sacrificing the benefits to which they are so richly entitled.

One small step for veterans, one giant leap for Care at Home.

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Proposal to Update HIPAA Security Rule

CMS

by Rowan Report | Jan 9, 2025 | CMS, Partner News, Regulatory

HHS OCR Proposes Updates to the HIPAA Security Rule to Respond to Emerging Threats

by Paul F. Schmeltzer and John F. Howard, Clark Hill PLC

HHS Proposal

On Dec. 27, the Department of Health and Human Services (HHS) issued proposed updates to the HIPAA Security Rule to address evolving cybersecurity threats in healthcare. Introduced through a Notice of Proposed Rulemaking (NPRM) by the Office for Civil Rights (OCR), the substantial updates aim to enhance the protection of electronic protected health information (ePHI) while aligning the two-decade-old regulations with current technological advancements. These changes are especially crucial in a healthcare environment increasingly reliant on electronic health records (EHRs), online patient portals, telehealth platforms, and interconnected medical devices.

Since its adoption in 2003, the HIPAA Security Rule has served as the foundation for safeguarding ePHI. However, the healthcare landscape has changed dramatically with the rise of cyber threats like ransomware, phishing attacks, and hacking incidents that result in data breaches. OCR’s investigations into HIPAA compliance across the healthcare industry have also revealed significant inconsistencies, underscoring the need for updated regulations that provide clarity and enforceability.

Revisiting “Addressable” vs. “Required” Specifications

Among the most significant aspects of the proposed changes in the NPRM is the reconsideration of the distinction between “required” and “addressable” implementation specifications, a hallmark of the original Security Rule that has often caused confusion. Required specifications must be implemented as outlined, with no exceptions. Addressable specifications, on the other hand, give entities the flexibility to evaluate their feasibility and adopt alternative measures if implementing the original specification is deemed unreasonable or inappropriate. This flexibility has often been relied on by mid and small-sized HIPAA-covered entities in their compliance efforts.

The NPRM proposes eliminating the concept of “addressable” implementation specifications and making all implementation specifications required, with limited exceptions. This includes reclassifying encryption of ePHI at rest and in transit as a required specification, reflecting its essential role in mitigating cyber risks and its widespread availability. Previously, entities could justify not using encryption if they documented their rationale and implemented alternative measures. The proposed change eliminates this flexibility, simplifying compliance expectations and reinforcing encryption as a baseline safeguard for ePHI. This same change would follow for other specifications under the rule, highlighting OCR’s desire to strengthen and simplify the Security Rule.

Strengthened Administrative Safeguards

The NPRM introduces several enhancements to administrative safeguards to address modern security risks. Comprehensive risk analysis remains a cornerstone of HIPAA compliance, but the proposed updates add specificity to these requirements. Entities will be required to maintain a detailed inventory of all technology assets that interact with ePHI and map how ePHI flows within their systems. This mapping ensures visibility into where sensitive data resides and how it is accessed, helping organizations proactively identify and address vulnerabilities. The inventory and map would then be required to be reviewed every 12 months as part of an entity’s risk assessment and risk management processes.

Incident response planning is also emphasized. Entities must develop robust written plans that include protocols for detecting, containing, and recovering from cyberattacks or breaches. These plans should be regularly updated to align with emerging threats and best practices. Workforce training requirements are also expanded under the NPRM, with a focus on providing comprehensive and role-specific education. These programs must address unique vulnerabilities tied to specific job functions and be updated regularly to combat threats like phishing and social engineering.

Strengthened Physical and Technical Safeguards

Physical and technical safeguards also receive significant attention in the NPRM. To secure ePHI, physical access to facilities and devices must be tightly controlled through advanced measures such as biometric authentication, badge systems, and video surveillance. These controls aim to protect ePHI from unauthorized access, theft, or tampering.

The NPRM proposes a definition of the term “multi-factor authentication” (MFA) that entities would be required to apply when implementing the proposed rule’s specific requirements for authenticating users’ identities through verification of at least two of three categories of factors of information about the user, such as passwords combined with biometrics, to secure access to systems containing ePHI. Additionally, the NPRM encourages using advanced threat detection tools like intrusion detection systems, AI-powered anomaly detection, and real-time breach alerts to proactively address security risks.

Addressing Challenges for Small and Rural Providers

HHS recognizes the unique challenges faced by smaller healthcare providers, particularly those in rural and tribal areas, where resources for implementing complex security measures are often limited. The NPRM seeks to provide scalability, allowing entities to implement solutions proportional to their size and complexity. Tailored guidance and tools are expected to support these providers, and regional collaborations are encouraged to pool resources and expertise for improved cybersecurity.

Implications for Stakeholders

For healthcare providers and business associates, the proposed updates necessitate significant investment in technology, training, and compliance infrastructure. Allocating budgets for tools like encryption and MFA, revising and drafting policies and procedures, and updating vendor contracts to ensure alignment with new standards are critical steps. Failure to comply with these updated requirements could lead to stricter enforcement actions and penalties. Fortunately, the proposed changes also remove some of the guesswork needed to comply with the Security Rule. Making areas where investment is needed easier to identify.

Patients stand to benefit significantly from the proposed changes, as stronger protections for sensitive health information can help rebuild trust in healthcare systems. By reducing the frequency and severity of breaches, the NPRM supports greater patient engagement and the adoption of digital health technologies. Regulators, equipped with clearer enforcement guidelines, will be better positioned to ensure compliance and address violations effectively.

Alignment with Broader Cybersecurity Efforts

The proposed updates align with national and international cybersecurity frameworks, including the NIST Cybersecurity Framework and the General Data Protection Regulation (GDPR). These alignments position the U.S. healthcare sector as a global leader in data security while promoting best practices like continuous monitoring, risk management, and strong encryption.

Implementation Timeline and Next Steps

The NPRM is to be published in the Federal Register on Jan. 6, 2025, after which a 60-day public comment period will follow. The final rule will take effect 60 days post-publication. Entities will have 180 days to achieve compliance, with additional time provided to update business associate agreements. The NPRM encourages stakeholders to provide feedback on the practicality and cost-effectiveness of the proposed changes during the comment period.

Conclusion: A Necessary Evolution in Cybersecurity

The proposed updates to the HIPAA Security Rule represent a critical step forward in securing ePHI against today’s sophisticated cyber threats. By reclassifying key specifications, enhancing safeguards, and providing greater clarity for compliance, the NPRM builds a robust framework for protecting both patients and providers. While these changes may pose challenges for some organizations, they are an essential evolution in safeguarding sensitive data in an increasingly digital world. As healthcare continues its digital transformation, these updates underscore the importance of cybersecurity as a cornerstone of quality care and public trust. Investment in a strong cybersecurity posture up front will prove valuable and ultimately save the entire healthcare industry in the long run.

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This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.

UnitedHealth Group Amedisys Merger Faces Further Delays

M&A

by Kristin Rowan | Jan 9, 2025 | M&A, Regulatory

by Kristin Rowan, Editor

UHG and Amedisys Waive Termination

The UnitedHealth Group and Amedisys merger has been an ongoing story since the initial merger agreement was signed in June of 2023. The proposed merger came under scrutiny by the Federal Trade Commission (FTC) and the Department of Justice (DOJ). UnitedHealth Group and Amedisys are competitors in the home healthcare market and the merger would hurt patients.

“UnitedHealth’s plan to extinguish Amedisys as a competitor is the result of an intentional, sustained strategy of acquiring, rather than beating, competition.”

Department of Justice

DOJ Pushes Back

Late in 2024, the DOJ filed a lawsuit against the merger, claiming that both companies have acknowledged that their competition helps keep them honest and drive quality both in patient and employee care. The DOJ noted that the acquisition would be presumptively illegal in multiple markets. UHG, Amedisys, and Optum proposed selling off some of its care centers to address the concerns about competition.

Merger Deadline Reached

Under the initial merger agreement, UHG would pay $3.3 billion to acquire Amedisys, which would remain as a subsidiary of UHG. That agreement was set to be finalized on December 27, 2024. There has been no decision made on the DOJ lawsuit, so the merger could not be completed. UHG and Amedisys have mutually agreed to extend the merger and added a break fee of $275 million.

Indefinite Merger Extension Through 2025

The new agreement has an indefinite ending. According to the wording, the merger agreement will now expire either on December 31, 2025 or 10 days after a final court decision in the lawsuit, whichever comes first.

According to the new filing with the SEC, UnitedHealth and Amedisys will be divesting assets to secure the merger and satisfy the DOJ. If not, they will incur a break fee of up to $325 million. Both companies have an agreement with VitalCaring Group to acquire the necessary assets.

What If?

If…The Trump administration is less stringent in antitrust matters, as expected.

The lawsuits currently at the U.S. District Court and five states will likely fail.

If…the U.S. District Court for the District of Maryland either decides to block the merger permanently or does not reach a final order by the end of the year…

The merger agreement will expire.

If…UnitedHealth Group, Optum, and/or Amedisys fails to divest holdings…

The merger agreement will not satisfy the antitrust regulations and the failing party will pay hundreds of millions in damages, and the merger agreement will end.

This is an ongoing story and we will continue to report on updates as they occur. See our accompanying BREAKING NEWS story.

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Kristin Rowan has been working at Healthcare at Home: The Rowan Report since 2008. She has a master’s degree in business administration and marketing and runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in event planning, sales, and marketing strategy. She has recently taken on the role of Editor of The Rowan Report and will add her voice to current Home Care topics as well as marketing tips for home care agencies. Connect with Kristin directly kristin@girardmarketinggroup.com or www.girardmarketinggroup.com

Pharmacy and PBM Separation Pushed by Congress

Advocacy

by Kristin Rowan | Dec 19, 2024 | Advocacy, Regulatory

by Kristin Rowan, Editor

Bi-Partisan Bill Introduced

The final session of this Congress may not be as “lame” as anticipated. On December 11, 2024, Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), with the support of Representatives Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.) introduced the Patients Before Monopolies Act.

The bill, if passed, would prohibit any company from owning both a Pharmacy Benefit Manager and a Pharmacy. Joint ownership of both creates a “gross conflict of interest” that allows companies to increase their own profits at the expense of patients and independent pharmacies.

Pharmacy Benefit Managers

Pharmacy Benefit Managers (PBMs) act as middlemen between consumers, health insurance companies, drug manufacturers, and pharmacies. They were designed to negotiate reimbursement and dispensing fees in pharmacies, negotiate drug prices from manufacturers, and manage drug costs for insurance companies. The PBM Act claims that PBMs have manipulated the market, increased drug costs, and are driving independent smaller pharmacies out of business.

In Their Own Words

“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” said Senator Warren.

“The PBM industry is rife with self-dealing that raises costs for patients and bankrupts independent pharmacists. No PBM should be allowed to own pharmacies, because it poses an unacceptable conflict of interest when it then sets reimbursement rates for its own versus external pharmacies. Independent pharmacies deserve fair play,” said Representative Auchincloss.

“As a life-long pharmacist, I know first-hand how unchecked PBM consolidation and vertical integration have allowed these shadowy middlemen to self-deal and manipulate the system in ways that are driving up drug costs, limiting patient choices, and putting the financial screws to independent community pharmacies,” said Representative Harshbarger. “I’m a proud conservative Republican, but we have antitrust laws for a reason. That’s why I’m joining my colleagues in introducing the bipartisan Patients Before Monopolies Act, which will protect consumers and taxpayers, and ensure fair competition by breaking-up these anticompetitive, conflict-of-interest arrangements. Federal regulators should never have let this excessive concentration of our healthcare industry happen in the first place, and so it’s up to Congress to get the job done.”

Issues Addressed

The PBM Act aims to address the issues of higher drug costs, fewer independent pharmacies, and larger profits for corporations. The PBM Act would:

- Disallow the parent company of any PBM or insurer from owning a pharmacy
- Require any PBM or insurer that also owns a pharmacy to sell the pharmacy business within three years
- Allow the FTC, DHHS, DOJ Anti-Trust Division, and state attorneys general to issue orders requiring the divestiture of pharmacies by owners of PBMs or insurers
- Allow the same to sieze revenue made from the pharmacy business from any owner of a PBM or insurer
- Distribute the funds to communities and consumers who have been overcharged by these pharmacies
- Mandate the reporting of all divestments of pharmacies to the FTC
- Allow the FTC to review any and all future acquisitions

PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen.

Elizabeth Warren

Senator, D-Mass.

Who is Impacted?

CVS Health, Cigna, and UnitedHealth Group, among others, would be required to sell their pharmacy businesses within three years.

Caremark, owned by CVS, Express Scripts, owned by Cigna, and OptumRX, owned by UnitedHealth Group, are three of the largest PBMs in the country. Together, they control about 80% of all prescription drug claims.

Not surprisingly, the Pharmaceutical Care Management Association, a lobbying group for PBMs, has contested the claims made in the bill and by its supporters. They argue that PBMs offer convenient, affordable access to medications.

Similarly, CVS said that its integrated business model, both a PBM and pharmacy, helps connect people to accessible, affordable care. The pharmaceutical giant claims it has lowered out-of-pocket drug costs more than 25% in the last ten years and that it reimburses independent pharmacies at a higher rate than its own CVS pharmacy locations.

A spokesperson for CVS Caremark said that policies designed to limit their ability to negotiate with drug manufacturers and pharmacies would increase the cost of medicine. He also said these policies would be a “handout” to the pharmaceutical industry.

Supporters

The bipartisan, bicameral Act has support from the American Economic Liberties Project (AELP), National Community Pharmacists Association (NCPA), American Pharmacy Cooperative Inc (APCI), Pharmacists United for Truth and Transparency (PUTT), Patients Rising, and AffirmedRx.

Public statements on behalf of the PBM Act harshly criticize PBMs, private health insurers, and the healthcare system as a whole.

Giant PBMs and insurers owning their own pharmacies has driven independent pharmacies out of business and reduced patient access to quality care. The Patients Before Monopolies Act addresses the root cause of this problem — consolidated market power — by eliminating the inherent conflicts of interest within the big three PBM business model. We are thrilled to see Sen. Warren and Sen. Hawley lead this bipartisan effort to lower drug costs, protect independent retail pharmacies, and improve patient access to care.

Morgan Harper

Director of Policy and Advocacy, American Economic Liberties Project

A particularly egregious result of the vertical integration of PBM-insurers with retail and mail-order pharmacies is that the PBM – which competes with independent pharmacies and others – decides what their rival pharmacy will be reimbursed and which patients will be allowed to use them. There are also countless examples of PBMs paying their pharmacies much higher reimbursement than non-affiliated pharmacies and using patient data to steer patients to their own pharmacies. We’re grateful to Sens. Warren and Hawley and Reps. Harshbarger and Auchincloss for introducing the PBM Act, which will go a long way in eliminating the conflicts of interest that currently exist in this space.

Anne Cassity

Senior VP of Government Affairs, National Community Pharmacists Association

The inherent conflicts of interest between PBMs owning their own retail, mail-order, and specialty pharmacies have resulted in higher drug costs, reduced patient choice and access to care, and unsustainable reimbursements to non-PBM affiliated pharmacies. With retail pharmacies closing at an alarming rate and patients fighting life threatening diseases being steered to PBM owned pharmacies and often overcharged thousands of dollars for medications, Senator Warren’s Patients Before Monopolies Act couldn’t come soon enough. This commonsense legislation strikes at the heart of anti-competitive PBM behavior and roots out conflicts of interest by prohibiting ownership of both a PBM and a pharmacy. American Pharmacy Cooperative, Inc, is grateful to Senator Warren for her work and leadership on this issue and looks forward to fighting for this critically important piece of legislation.

Greg Reybold

VP of Healthcare Policy and General Counsel, American Pharmacy Cooperative, Inc.

While there are a variety of conflicts of interest that can compromise the intended role of PBMs to act as counterweights to inflated drug prices, one of the chief areas of system misalignment arises from PBM ownership of pharmacies. As these large vertically integrated companies serve as both price-setter and price-taker for pharmacy transactions, PBM incentives to reduce drug markups and to manage pharmacy reimbursement and network decisions in an unconflicted manner are significantly undermined. In our work advising government programs and commercial plan sponsors, we stress that minimizing or eliminating these areas of misalignment are foundationally critical in order to achieve greater balance for medicine accessibility and affordability.

Antonio Ciaccia

President, 3 Axis Advisors

For too long vertically integrated PBMs have put profits over patients, driving up costs, limiting access to essential medications and forcing countless independent pharmacies to close their doors. The Patients Before Monopolies Act is a step toward breaking these monopolies, restoring fairness and competition and, most importantly, ensuring patients get the care they need at a price they can afford. At the heart of our mission is the belief that transparency and integrity should be the foundation of health care. I congratulate Senators Warren and Hawley, and Representatives Harshbarger and Auchincloss for putting patients first, and urge Congress to pass this bipartisan bill.

Greg Baker

Pharmacist and CEO, Affirmed Rx, a transparent PBM

This bill is the next step in urgently-needed legislation to eliminate the profiteering and other conflicts of interest that exist when private health insurers and their pharmacy benefit managers are allowed to design and sell health benefit plans while also owning pharmacies, clinics and other point-of-care entitiesm Vertical integration among the largest healthcare insurers has only served to saddle Americans with the priciest possible premiums for impossibly high-deductible plans that provide fewer options and ultimately result in poorer health outcomes. We applaud Senators Warren and Hawley for recognizing the need to dismantle the current system, which has failed consumers and taxpayers at just about every level.

Monique Whitney

Executive Director, Pharmacists United for Truth and Transparency

Across the country, patients feel increasingly disenfranchised by the healthcare system. The culprit: a complex web of powerful health conglomerates including health insurers, Pharmacy Benefit Managers (PBMs), and their affiliated pharmacies. Patients Rising applauds Senators Elizabeth Warren and Josh Hawley, along with Representatives Diana Harshbarger and Jake Auchincloss for putting forward bi-partisan legislation to put patients before monopolies. It is critical we crack down on health conglomerate conflicts of interest and encourage businesses to operate in the interest of patients’ long term health and wellbeing.

MacKay Jimeson

Executive Director, Patients Rising

The New York Times stated their uncertainty over whether this bill would gain any traction. With so much support, both across the aisle, across congress, and from outside entities, it seems likely it will move ahead. However, Congress has run out of time to pass any bill during this term and will have to be reintroduced in January.

The Rowan Report will continue to follow the progress of the PBM Act next year.

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©2024 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in Healthcare at Home: The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com

HH Accessibility Report

Partner News

by Rowan Report | Dec 19, 2024 | Partner News, Regulatory

FOR IMMEDIATE RELEASE

Contact: Lauren Corcoran

press@trellahealth.com

Trella Health Launches Special Report on Home Health Accessibility for Medicare Fee-for-Service (FFS) Beneficiaries

An analysis of the key trends shaping access to care for Medicare patients

ATLANTA, Dec. 16, 2024. Trella Health, the leading provider of market intelligence and integrated customer relationship management (CRM) solutions to the post-acute care industry, released its Special Edition Report on Home Health Accessibility Among Medicare Fee-for-Service (FFS) Beneficiaries.

Access to Services

This report investigates trends shaping home health accessibility, revealing how the expanding Medicare-eligible population – and other factors – continues to strain access to home health services.

Below are a few key insights from this special report:

- 49.9% of counties had five or fewer home health agencies per 1,000 square miles in 2023.
- 94.1% of counties experienced either a decrease or no change in the number of skilled home health agencies treating more than 10 FFS patients in the post-pandemic period.
- 83.3% of counties experienced a decrease in the number of FFS home health admissions per 1,000 beneficiaries in the post-pandemic period.
- 87.4% of counties experienced a decrease in the average number of home health visits in the post-pandemic period, and the number of home health visits per patient day decreased by 17.3% between 2017 and 2023.

Urgent Need for Change

“Our analysis of Medicare Fee-for-Service claims indicates a concerning trend: decreasing accessibility to skilled home health care at a time when we are experiencing the largest growth in the Medicare population,” stated Carter Bakkum, Senior Data Analyst at Trella Health. “This report underscores the urgent need for healthcare leaders to address these disparities and ensure that Medicare beneficiaries receive the care they need.”

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About Trella Health

Trella Health‘s unmatched market intelligence and purpose-built CRM allow post-acute providers, HME, and Infusion organizations to drive more effective performance and growth. Trella’s solutions allow post-acute, HME, and Infusion organizations to identify the highest-potential referral targets, evaluate new market opportunities, and monitor performance metrics. Paired with CRM and EHR integrations, business development teams can better manage referral relationships to advance their organizations with certainty by improving their sales and marketing strategy.

This press release was submitted by Trella Health and was reprinted by The Rowan Report with permission. For more information, or to request permission to use this content, please use the press contact above.

Employee vs Independent Contractor

Admin

by Kristin Rowan | Dec 19, 2024 | Admin, Advocacy, Caring for the Caregiver, Regulatory

by Kristin Rowan, Editor

Follow the Rules

The very nature of care at home lends itself to different organizational structures. Hourly vs. per visit compensation. Employee vs. independent contractor. Shift work vs. standard schedules. Each decision can have its own advantages and disadvantages.

Two agencies were in the news this week after the Department of Labor determined they had misclassified employees as independent contractors and failed to pay overtime wages. In addition to back wages, these agencies were ordered to pay damages and civil penalties.

The Rowan Report has researched the 2024 Department of Labor Final Rule: Employee or Independent Contractor Classification Under the Fair Labor Standards Act, RIN 1235-AA43. We’ve provided our synopsis below to help you determine the classification of your workers to avoid similar penalties.

Employee vs Independent Contractor

The Fair Labor Standards Act, from the Department of Labor provides information on how to classify workers. Prior to 2021, the DoL used the economic reality test, used by courts to determine status. This test used economic factors including nature and degree of control over work, and the worker’s opportunity for profit or loss. These two factors weighed more heavily than the remaining three: the amount of skill required, how permanent was the relationship between the worker and the employer, and whether the work is part of an integrated unit of production (meaning all work leads to the same end product that cannot be completed without each person’s part.)

Totality of the Circumstances

Because the courts openly admitted that the final three factors would likely never outweigh the first two, the DoL moved to establish a different rule, using the five factors to determine a “totality of circumstances” without the predetermined weight. It also bent the final factor to include the work being an integral part of the business, not of production. Also included is the discussion of how scheduling, supervision, price setting, and the ability to work for others are considered within the control factor.

This final change is what will impact most care at home agencies. As defined in the Final Rule (795.110(B)(1)), this factor considers whether a worker has control over their own profit or loss, has control over their own schedule, advertises on their own behalf to get more work, and generally engages in managerial tasks such as hiring, purchasing materials, and/or renting space for themselves.

Qualifying as an Employee vs Independent Contractor

In order to qualify as an independent contractor, a worker:

- Must have control over their own profit and loss.
  - - If a worker can choose to accept or deny and job offered through the agency, therefore making more or less money, they may be an IC.
- Should be engaged for short-term projects with identified end dates.
  - - This is vague in relation to care at home. An employer could argue that each home visit is a short-term engagement. However, the worker might say that the opportunity is on-going with no end date.
- Invests in the building of their business.
  - - If a worker uses all their own equipment, is free to take shifts or jobs from other agencies, and promotes their skills in order to attract more work from outside your agency, they are likely an IC.
    - If, however, the worker takes shifts from other agencies and promotes their skills to others because your business has predictable down-times, rather than of the worker’s own choice, they are likely an employee.
- Should have control over multiple aspects of the job.
  - - A common misperception is that if an employee controls their own schedule, they are automatically an IC. Many employees have flexible scheduling, work from home opportunities, and other controls over their schedule. Care at home workers make less money when they choose to change their schedule, indicating economic dependency on the company. Further, many agencies have a minimum hour requirement with disciplinary action or consequences for not meeting that minimum. These factors, regardless of scheduling flexibility, mean the worker is not an IC.
    - Nurses who have control over their own schedules do not control, for example, the rate they are paid for their services. When the employer controls prices for services, workers are likely employees.
    - How a job is performed should be a considerable factor. If the worker is free to determine how they actually do the work once they take a job, then they are likely an IC. This may be possible for non-medical supportive care at home, but is less likely for home health and hospice settings that are highly regulated.
- Should not be supervised either in person or by technology, using a device or other electronic means. Ongoing and continuous supervision is not required to classify a worker as an employee, only that the employer maintains the right to supervise. Supervision in this case is not limited to watching the worker during a shift. Supervision also includes training and standards established during hiring, remote monitoring of a job using an electronic visit verification system, and/or the oversight of completed work in the case of a QA audit of documentation.
  - - For home health and hospice agencies, this almost assuredly makes all nurses employees. However, exceptions may exist in the case of specialties such as wound care, physical or occupational therapy, ostomy care, and respiratory care.
    - For non-medical care at home, this factor should be weighed based on your agency’s protocols.
- Must be able to work for others.
  - - An employer who limits a worker’s ability to work for other agencies and/or put such constraints on a person’s schedule as to make it impossible to work for others has employees, not ICs.
    - Non-compete clauses and fines for taking clients outside of the agency point to employee status.
    - Working part-time and having the ability to work for another company, also part-time, does not necessarily make someone an IC.
- Should not be an integral part of the business.
  - - If the business cannot function without the service performed by the worker, the worker is an employee.
    - Similarly, if the work itself depends on the existence of the business, the worker is an employee.
    - Generally speaking, if a the primary business is to make a product or provide a service, then any worker involved in making that product or providing that service is integral to the business.
      - This final clarification from the DoL may require all care at home workers to be classified as employees.

Implications for the Industry

If most care at home workers should be classified as employees, not independent contractors, you should expect to make significant changes if you currently have your workers classified as ICs.

Higher expenses in the form of taxes and benefits
Negotiations for paid vacation, personal, and sick leave
Potential auditing of prior business structure and classification
Complete overhaul of back-office hiring processes and software needs for onboarding employees instead of independent contractors

Employee vs Independent Contractor Corrective Action

If your workers are misclassified as independent contractors, take steps to correct this effective January 1st so your new tax year is correct.
Plan ahead to incorporate required taxes coming from your budget.
Determine whether you may have workers who are owed back wages, overtime pay, or other benefits and take steps to rectify the situation before you end up on the Department of Labor radar.

Final Thoughts

I’ve heard a lot of conversations from home health and non-medical supportive care agency owners about the policies they have in place for their caregivers. The new laws around non-compete clauses as well as this updated Independent Contractor test leads me to this conclusion:

Most workers in care at home are employees, not independent contractors. If you wish to classify your workers as independent contractors, do your research, reorganize your business, and make sure you are following the totality-of-the-circumstances test.

If organizational change is not possible, look at transitioning your workers to employees before the start of the year and hire a consultant to help you with the changes you need to make.

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