Medicare Advantage Updates And Other Issues
I. MEDICARE ADVANTAGE UPDATES
Advance Rate Notice CY2025
As noted in a recent CMA Alert (Feb. 1, 2024), the Centers for Medicare & Medicaid Services (CMS) released an Advance Rate Notice for Medicare Advantage (MA) and Part D plans proposing an overall pay increase to MA plans of 3.7% in 2025 (see CMS fact sheet here). Comments to the Rate Notice are due March 1, 2024. The final 2025 Rate Notice will be published no later than April 1, 2024.
According to CMS, “This is over a $16 billion increase in expected MA payments for next year.” On one hand, CMS appears to continue to phase-in risk adjustment model updates implemented last year (which the insurance industry opposed); on the other hand, if finalized, this will be a payment increase at a time when MA plans are already significantly overpaid (between $88 billion this year, according to MedPAC, and $140 billion annually, according to Physicians for a National Health Program).
MA RFI – Request for Information on Medicare Advantage Data
In January 2024, CMS published a Request for Information (RFI) seeking public input concerning MA data. Fed Reg – 89 Fed Reg 5907 (Jan. 30, 2024); also see CMS Fact Sheet (Jan. 25, 2024). According to CMS’ Fact Sheet, “The information solicited by this RFI will support efforts for MA plans to best meet the needs of people with Medicare, for people with Medicare to have timely access to care, to ensure that MA plans appropriately use taxpayer funds, and for the market to have healthy competition.” Comments are due May 29, 2024.
CMS Issues FAQ on 2024 MA Prior Authorization Provisions
On April 12, 2023, CMS published a final rule for 2024 regarding Medicare Advantage (MA) and Part D. The final rule is available in the Federal Register at 88 Fed Reg 22120 (April 12, 2023) here, and is summarized in a CMS Fact Sheet available here. The Center for Medicare Advocacy drafted a summary of many of the provisions of the rule, focusing on improvements to the MA prior authorization process, as well as additional consumer protections applicable to MA and Part D marketing. The Center’s May 2023 Special Report is available here.
As discussed in our Special Report, the final rule included a number of significant improvements to the rules surrounding MA plans’ use of prior authorization to restrict access to services. The rule indicates a clear intent by CMS to limit plans’ ability to inappropriately deny care to enrollees.
In summary, the new rules include the following requirements:
- Prior authorization may only be used for one or more the following purposes:
- To confirm the presence of diagnoses or other medical criteria that are the basis for coverage determinations for the specific item or service; orFor basic benefits, to ensure an item or service is medically necessary based on standards specified in § 422.101(c)(1), or
- When Medicare coverage rules are clearly established, plans cannot deny coverage of the item or service on the basis of internal, proprietary, or external clinical criteria that are not found in traditional Medicare coverage policies.
- Continuity of care and course of treatment guidelines: Approval granted through prior authorization processes must be valid for as long as medically necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history, and the treating provider’s recommendation.
- Further, plans must provide a minimum 90-day transition period when an enrollee who is currently undergoing an active course of treatment switches to a new MA plan.
- Plans must disclose internal criteria they rely upon to make decisions.
If appropriately followed and implemented, these rules could go a long way towards curbing some of the worst MA plan behavior. Our Special Report also noted that, as with most consumer protections, the efficacy of these new rules will depend on plan compliance and CMS oversight and enforcement.
As discussed further in a CMA Alert (Dec. 7, 2023), many provider groups have expressed concerns that MA plans do not intend to follow these new rules. In addition to hospital groups, associations of providers in the nursing home, home health, long-term care hospital and other settings have expressed concern with MA plans’ coverage in these areas, and the need to ensure that plans follow the new prior authorization rules. The Center for Medicare Advocacy joined several provider organizations, including LeadingAge, American Health Care Association (AHCA), National Association for Home Care & Hospice (NAHC), American Medical Rehabilitation Providers Association (AMPRA) and The National Association of Long-Term Care Hospitals (NALTH) in sending a letter (dated November 29, 2023) to CMS requesting additional sub-regulatory guidance to clarify provisions of the final 2024 Part C &D rule.
In response to these concerns, in part, on February 6, 2024, CMS issued a memo to MA plans titled “Frequently Asked Questions related to Coverage Criteria and Utilization Management Requirements in CMS Final Rule (CMS-4201-F)”. The memo states: “Since the issuance of this [final 2024 Part C & D] rule, CMS has received questions about the application of these rules once they are effective. In this memo, we provide clarification about how we expect MA plans to comply with these new rules.”
Among other things, the memo highlights:
- With respect to MA plans using algorithms or artificial intelligence to make coverage decisions, “an algorithm that determines coverage based on a larger data set instead of the individual patient’s medical history, the physician’s recommendations, or clinical notes would not be compliant with § 422.101(c). In an example involving a decision to terminate post-acute care services, an algorithm or software tool can be used to assist providers or MA plans in predicting a potential length of stay, but that prediction alone cannot be used as the basis to terminate post-acute care services.”
- With respect to public availability of internal coverage criteria used by an MA plan, “the internal coverage criteria used by plans must be accessible via a website and cannot be behind a paywall or require a subscription for access. The information must be available to all in the public (not just enrollees and/or contracted providers of the MA plan) and may be hosted on the MA plan’s website or a delegated vendor’s website that is accessible from the MA plan’s website.”
- And, concerning how CMS will enforce these new rules, the agency “will conduct both routine and focused program audits of organizations in 2024 to assess compliance” and “Through this combination of routine and focused audits in 2024, CMS expects to evaluate the UM-related performance of plans serving approximately 88% of people with MA.” CMS adds: “CMS has increased its scheduled program audit activities to help make sure that MA beneficiaries get the care they need without excessive burden or delays and have access to the benefits and services to which they are entitled. We will be monitoring closely whether MA plans are utilizing and applying internal coverage criteria that are not found in Medicare laws, NCDs, or LCDs, and whether the internal coverage criteria are publicly accessible and coverage policies meet the regulatory requirements.”
New Prior Authorization Rule
In January 2024, CMS issued an Interoperability and Prior Authorization Final Rule (CMS-0057-F) aimed at improving the electronic exchange of health information and prior authorization processes for medical items and services related to Medicare Advantage (MA) organizations, Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service (FFS) programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans (QHPs) offered on the Federally-Facilitated Exchanges (FFEs). The final rule is available here (89 Fed Reg 8758, Feb. 8, 2024); also see a related CMS Fact Sheet (Jan 17, 2024). Note that the final rule does not apply to prior authorization decisions relating to prescription drugs.
Among other things, as noted in the Fact Sheet, primarily beginning in 2026, MA plans:
- “[W]ill be required to send prior authorization decisions within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests for medical items and services.” (Note that current rules require MA plans to issue expedited organization determinations within 72 hours (or 24 hours for Part B drugs) – see 42 C.F.R. §422.572; MA plan must issue standard organization determinations within 14 days – see §422.568.)
- “[I]include a specific reason for denying a prior authorization request, which will help facilitate resubmission of the request or an appeal when needed.” and
- “[P]ublicly report prior authorization metrics, similar to the metrics Medicare FFS already makes available.”
II. IMPLEMENTATION of the INFLATION REDUCTION ACT (IRA) PRESCRIPTION DRUG PROVISIONS
The Inflation Reduction Act of 2022 (IRA), signed into law by President Biden on August 16, 2022, has already provided cost-savings for Medicare beneficiaries through provisions that took effect last year in 2023, including a monthly cap of $35 for covered insulin and free vaccines for certain conditions, as outlined in previous CMA Alerts (e.g., here and here).
As outlined in a recent CMA Alert (Oct. 26, 2023), additional changes are now in effect as of January 1, 2024. As noted on the www.medicare.gov website:
- If you have drug costs high enough to reach the catastrophic coverage phase in your Medicare drug coverage, you won’t have to pay a copayment or coinsurance, starting in 2024. (Note that according to KFF, this provision will effectively cap out-of-pocket costs at approximately $3,300 for brand name drugs in 2024).
- Extra Help affording prescription drug coverage (the Part D Low-Income Subsidy (LIS) program) has expanded to cover more drug costs for people with limited resources who earn less than 150% of the federal poverty level, starting in 2024. People who qualify for Extra Help generally will pay no more than $4.50 for each generic drug and $11.20 for each brand-name drug.
In 2025, the annual Part D out-of-pocket cap will be lowered to $2,000. Individuals will also have the option to pay out-of-pocket costs in monthly amounts over the plan year, instead of when they happen. As outlined in a KFF report “Millions of People with Medicare Will Benefit from the New Out-of-Pocket Drug Spending Cap Over Time” (Feb. 2024), while a smaller number of beneficiaries with high drug costs will benefit from this cap in a given year, “[o]ver the course of several years […] far more Part D enrollees will stand to see savings from this new out-of-pocket spending cap than in any single year.” Further, “[a]lthough KFF polling shows that a relatively small share of older adults is aware of the Inflation Reduction Act’s $2,000 cap on out-of-pocket drug costs for Part D enrollees that takes effect in 2025, millions of them will benefit from this cap in the years to come.”
In addition, the drug price negotiation program created by the Inflation Reduction Act allows Medicare to use its bargaining power to negotiate the prices of certain prescription drugs for the first time. As noted in a Department of Health & Human Services (HHS) press release (Feb. 1, 2024), the first group of ten drugs subject to negotiation have been announced, and initial offers were sent to manufacturers of those drugs on February 1., 2024. Negotiations regarding prices for this first batch of drugs will continue until August 2024, with the negotiated prices effective in January 2026. See KFF’s “FAQs about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program” (Jan. 2024).
As noted in the HHS press release, HHS’ Office of the Assistant Secretary for Planning and Evaluation (ASPE) recently released several reports detailing the cost comparison of prescription drugs in U.S. and certain other countries, as well as detailing the financial protections available through the LIS. These reports, and other information about the IRA prescription drug provisions are available at a new HHS website at: https://www.hhs.gov/inflation-reduction-act/index.html.
III. MEDICALLY NECESSARY ORAL HEALTH COVERAGE IN MEDICARE
A clarification in the 2023 Physician Fee Schedule (PFS) recognized Medicare payment for dental services that are essential to certain covered medical services. In the PFS for 2023 Medicare payment policy was clarified for dental treatment related to organ transplant surgery, cardiac valve replacement, valvuloplasty procedures, and head and neck cancers. The Physician Fee Schedule for 2024 further clarified payment policy for dental and oral care required by Medicare beneficiaries with cancer prior to the administration of chemotherapy, chimeric antigen receptor (CAR) T-cell therapy, high-dose bone-modifying agents (antiresorptive therapy), and treatment of head and neck cancer.
The 2023 PFS also established an annual process for stakeholders to nominate additional clinical scenarios for Medicare payment of oral health care. This nominations process takes place annually. This process allows for clinical data to be presented to CMS in order to support including additional conditions in future clarifications of dental services. This year, the Consortium for Medically Necessary Oral Health Coverage, a group of more than 240 organizations, of which the Center for Medicare Advocacy is a member, expressed support for a nomination to clarify Medicare payment policy for dental services that are inextricably linked and substantially related and integral to the clinical success of covered medical services on which Medicare beneficiaries with diabetes depend from the Santa Fe Group. The Consortium recognizes that overall health is inextricably linked to oral health and are among many concerned that dental care has long been inaccessible to millions of Medicare beneficiaries.
Please note, the Center for Medicare Advocacy will host a webinar March 6, 2024, 2PM-3PM EST to discuss oral health topics, which will include a discussion of the nominations process.
LITIGATION UPDATE
IV. Litigation Update
Organizational Sign-On Letter Commenting on Proposed Rule on Observation Status Appeals
The Center for Medicare Advocacy and Justice in Aging invite organizations to sign on to a comment letter responding to CMS’s proposed rule implementing appeal rights for Medicare beneficiaries who are admitted to hospitals as inpatients and subsequently reclassified as outpatients receiving observation services. The letter supports the general approach to the retrospective and prospective appeals processes and urges CMS to finalize and implement the rule as soon as possible. We also recommend allowing more time to request retrospective appeals, providing additional guidance around submitting medical records, and engaging in more education to beneficiaries about the new appeals process.
The comment letter can be viewed here.
Sign on by filling out this form by Friday, February 23.
Background information:
This rulemaking implements the Court’s order in the nationwide class action, Alexander v. Azar, 613 F. Supp. 3d 339 (D. Conn. 2020), aff’d sub nom. Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022). In March 2020, the U.S. District Court in Hartford, Connecticut issued a decision concluding that Medicare beneficiaries whose hospital classification is changed from inpatient to outpatient receiving observation services have the right to appeal that decision to Medicare and a chance to receive certain types of coverage, or to receive reimbursement for certain noncovered services resulting from that change. Although the actual hospital services received are typically indistinguishable to beneficiaries under either classification, the distinction between designation as an inpatient (Part A coverage) versus outpatient (Part B coverage) can and has resulted in devastating financial consequences for Medicare beneficiaries. For example, many Medicare beneficiaries who were reclassified as outpatient have had to either pay thousands of dollars out of pocket for required skilled nursing facility (SNF) care or forgo it altogether. The Center for Medicare Advocacy, Justice in Aging, and pro bono partner Wilson Sonsini Goodrich & Rosati represented the plaintiffs in this lengthy litigation. See the Center for Medicare Advocacy’s Frequently Asked Questions webpage for more information about the case and outpatient observation status.
Drug Price Negotiation Lawsuits – Inflation Reduction Act
The Center has joined a coalition of advocacy organizations, led by AARP, that is urging federal courts to uphold Medicare’s drug price negotiation program. The program, created by the Inflation Reduction Act, allows Medicare to use its bargaining power to negotiate prices and reduce the cost of expensive drugs for the first time. Drug companies and their allies have filed multiple lawsuits around the country attempting to strike down or limit the program.
The coalition has filed amicus briefs supporting the government in these lawsuits, explaining that the negotiation program is urgently needed because it will help older adults and people with disabilities afford life-saving prescription drugs. Medicare Many Medicare beneficiaries are directly affected by high drug prices because they are responsible for Part D “coinsurance” amounts, based on a percentage of the drug’s price. Sadly, many beneficiaries still leave drugs at the pharmacy, skip doses, or forgo other necessities due to drug costs. Non-adherence to prescribed treatments can endanger beneficiaries’ health, result in costly hospitalizations, and even cause premature deaths. All Medicare beneficiaries are affected by high drug prices to some degree because monthly premiums for Medicare drug plans take prices into consideration.
The amicus briefs also explain that the drug price negotiation program will protect the financial integrity of Medicare and save taxpayers billions of dollars. Before the IRA, Medicare was prohibited by law from negotiating the price of drugs directly with manufacturers. This amounted to a special exemption for drug companies that other medical providers and suppliers do not have. Hospitals, nursing facilities, and physicians participating in Medicare have all faced limits on payments for decades, ensuring that their services are affordable for beneficiaries and taxpayers. But drug companies received a special carve-out. The Medicare negotiation program begins to bring payment for prescription drugs in line with Medicare’s payment for other items and services.
- Read an amicus brief filed in a case brought by a Connecticut drug manufacturer here. This brief features stories the Center collected from Connecticut residents about their experiences with prescription drug prices.
CENTER FOR MEDICARE ADVOCACY CASES
Beitzel v. Becerra, No. 2:23-cv-01932 (E.D. Cal.) (Self-Administered Drug List). The Center for Medicare Advocacy and Community Legal Services at the McGeorge School of Law filed this class action on September 8, 2023, on behalf of beneficiaries who have lost coverage for medically necessary, very expensive drugs with no warning. The lead named plaintiff requires an injectable drug that – for years – was administered to him in a clinic by health care professionals to treat symptoms of Crohn’s disease. He also has Parkinson’s disease and cannot administer the drug himself due to his disability. The drug was covered under a provision that allows Medicare Part B to pay for drugs that are furnished “incident to the services of a physician.” Then, unbeknownst to the plaintiff, Medicare deemed the drug to be “usually self-administered by the patient,” meaning it would no longer be covered for him as it had been, under Part B.
Medicare provided no notice of this change in coverage and does not require medical practitioners to provide notice. Only after the plaintiff received several additional scheduled injections from the clinic did he learn that the drug was no longer covered by Part B and that Medicare held him responsible for its full cost, which was over $40,000 per injection. The plaintiffs challenge Medicare’s policy of providing no notice when a drug that was excluded by Part B is added to the “self-administered drug list” (SAD List) and thus excluded from such coverage. They raise due process and statutory claims to ensure that beneficiaries can make informed decisions about how to receive these medications when there has been a change in Medicare’s coverage terms. The plaintiffs also seek to ensure that beneficiaries who cannot self-administer do not face greater barriers to accessing these drugs because of their disabilities.
UPDATE: Plaintiffs filed an amended complaint with an additional plaintiff on December 26, 2023, and a motion to certify a nationwide class on January 30, 2024. The government filed a motion to dismiss the amended complaint on January 31, 2024, challenging the court’s jurisdiction and arguing that the plaintiffs had failed to state a claim for which relief could be granted. The motion to dismiss will be fully briefed by March 1 and is scheduled to be heard by the court in April 2024. Briefing on the class motion is stayed until the motion to dismiss is resolved.
Read the News Release
Read the Complaint
Johnson v. Becerra, No. 1:22-cv-03024 (D.D.C.) (Challenge to Deprivation of Home Health Aide Services by Disabled Medicare Beneficiaries). The Center filed this proposed class action on October 6, 2022, on behalf of two individuals and two organizations. The named plaintiffs seek to represent a nationwide class of Medicare beneficiaries who rely on home health aide services to live safely in their homes and communities. They challenge the Secretary’s policies and practices that impede and restrict the availability, accessibility, and coverage of home health aide services for individuals with chronic, disabling conditions who qualify for such services under Medicare law. These practices include the failure to properly oversee and enforce Conditions of Participation for Medicare-certified home health agencies. They also include auditing and reviewing systems and quality rating systems that discourage the provision of aide services for plaintiffs and proposed class members. The case cites violations of the Medicare statute and regulations, as well as Section 504 of the Rehabilitation Act, which prohibits discrimination on the basis of disability. Section 504 imposes a duty on federal agencies to administer programs in the most integrated setting appropriate to the needs of people with disabilities and to avoid unjustified institutionalization of disabled people. The named plaintiffs and class members they seek to represent are at risk of institutionalization for necessary care without the Medicare-covered home health aide services they require. The plaintiffs seek declaratory and injunctive relief that would remove barriers to Medicare-covered home health aide services.
On April 5, 2023, the court granted the government’s motion to dismiss and denied plaintiffs’ class certification motion as moot. Johnson v. Becerra, — F. Supp. 3d –, 2023 WL 2784874 (D.D.C. Apr. 5, 2023). The court found that all plaintiffs had adequately presented their claims to the Secretary, and it waived the requirement of exhaustion of administrative remedies. However, the court held that the plaintiffs lack standing to challenge the Secretary’s policies because they failed to plausibly allege redressability. Assuming that plaintiffs’ injuries were caused by the Secretary, the court found that it is “purely speculative” that their injuries would be redressed by a favorable court decision. It emphasized that Medicare-certified home health agencies are “third parties,” and doubted that the requested policy changes would alter the home health agencies’ behavior with regard to provision of aide services. The plaintiffs appealed the district court’s dismissal of the case to the U.S. Court of Appeals for the D.C. Circuit in June 2023.
UPDATE: Appellate briefing was complete as of December 21, 2023 and oral argument is scheduled for March 14, 2024.
Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022) (Beneficiary Appeals of Observation Status). In November 2011, the Center for Medicare Advocacy and Justice in Aging filed a class action lawsuit on behalf of individuals who have been denied Medicare Part A coverage of hospital and nursing home stays because their care in the hospital was considered “outpatient observation” rather than an inpatient admission. When hospital patients are placed on observation status, they are labeled “outpatients,” even though they are often on a regular hospital floor for many days, receiving the same care as inpatients. Because patients must be hospitalized as inpatients for three consecutive days to receive Medicare Part A coverage of post-hospital nursing home care, people on observation status do not have access to nursing home coverage. They must either privately pay the high cost of nursing care or forgo that skilled care. The number of people placed on observation status has greatly increased as CMS has strictly enforced its definition of which services hospitals should bill as inpatient/Part A and which services they should bill as observation/Part B. However, CMS has not allowed beneficiaries to appeal the issue of whether their hospitalizations should be classified as observation or as inpatient for Medicare coverage purposes.
After a dismissal by the district court, a remand by the Second Circuit, substantial motion practice and discovery, a bench trial on the merits of the due process claim was held in August 2019. In March 2020, the trial court issued a decision. Alexander v. Azar, 613 F. Supp. 3d 559 (D. Conn. 2020). It held that the Secretary of Health and Human Services violates the Fifth Amendment Due Process Clause by not allowing certain patients to appeal their placement on observation status. Thus, as matter of constitutional due process, patients who are admitted as inpatients by a physician, but whose status is changed to observation by their hospital, have the right to appeal to Medicare and argue for coverage as hospital inpatients. In this ruling, the court held that there is a protected property interest in Medicare Part A coverage. The court did not, however, find a due process violation for patients whose doctors never order inpatient status, or whose status is switched only from observation to inpatient. It drew a distinction between the actions of doctors and the actions of hospital utilization review staff. The court modified the existing class definition accordingly.
The court ordered that the agency establish an appeals process for class members, under which they can argue that their inpatient admission satisfied the relevant criteria for Part A coverage—for example, that the medical record supported a reasonable expectation of a medically necessary two-midnight stay at the time of the physician’s inpatient order. Certain patients will be able to pursue these appeals in an expedited manner while still hospitalized. The court also ordered the agency to provide notice of these procedural rights.
In May 2020, the government appealed the district court’s trial decision to the Second Circuit. On January 25, 2022 the Second Circuit affirmed the trial court’s decision in full. Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022). The court found that one of the named plaintiffs who paid over $10,000 for nursing home care after an observation stay had standing to sue. It found that decisions by hospital personnel to reclassify a patient from inpatient to an outpatient receiving observation services constituted state action. Finally, it conducted an analysis under Mathews v. Eldridge and agreed with the trial court that the Secretary violates Due Process by offering no procedural protections for beneficiaries whose status is reclassified from inpatient to observation through the hospital utilization review process.
In October 2022, the parties jointly requested a clarification of the judgment in the interest of facilitating and streamlining certain retrospective appeals and reducing administrative burden. The parties asked the court to clarify that if a class member who was enrolled in Part B at the time of their hospitalization prevails in appealing a retrospective claim, Medicare is not required to “unwind” and readjust the hospital claim, but may make Part A payment for the covered nursing home services without adjusting the underlying claim. On December 9, 2022, after a class notification process, the court issued an order clarifying the judgment as the parties had requested. Information about the clarification can be found here.
The government is implementing the court’s injunction via a Notice of Proposed Rulemaking. After substantial delays, class counsel requested a status conference with the court, which was held on August 9, 2023. In light of the significant delays in implementation and ongoing harm to class members, the judge ordered the government to take the next step in the rulemaking process (submission of a draft rule to the Office of Management and Budget (“OMB”)) by October 1, 2023. It also ordered the government to submit monthly status reports on the progress of the implementation process.
UPDATE: The government reported to the court that CMS had issued a Notice of Proposed Rulemaking on December 21, 2023, which was published in the Federal Register on December 27, 2023 (see first litigation item above for information on sign-on comment letter). The court issued an order stating that the government may submit its final status report on May 1, 2024.
For answers to frequently asked questions from people who think they may be class members, please see the Center’s website here.
Chinatown Service Center v. U.S. Dep’t of Health & Human Servs., No. 1:21-cv-00331 (D.D.C.) (LEP Protections Under Section 1557 of the ACA). Justice in Aging and the Center for Medicare Advocacy, along with pro bono firm Stinson LLP, filed this case on February 5, 2021 on behalf of two community-based organizations that provide social services to Limited English Proficient (LEP) older adults. In the waning days of the Trump Administration, the federal government eliminated protections for LEP individuals in health care by rolling back regulations that were put in place as part of Section 1557 of the Affordable Care Act. The protections were intended to target health disparities by requiring health plans and other entities to inform patients both of their right to interpretation, and their right to legally challenge discrimination based on language ability. But, in 2020, the Trump Administration issued a rule that eliminated these language access protections (as well as many others affecting LGBTQ people, immigrants, and women). The plaintiffs are asking the court to vacate the 2020 rule and enjoin its implementation.
On October 13, 2021, the court issued an order staying the case until further notice while the Department of Health and Human Services revises the current Section 1557 rule. The court decided to follow the same approach it had followed in a related case, Whitman-Walker Clinic, Inc. v. HHS, No. 20-1630, 2021 WL 4033072 (D.D.C. Sept. 3, 2021), which challenges several aspects of the 2020 rule, and in which the court had found that a stay was appropriate. The court also ordered HHS to provide bi-monthly updates on its proposed rulemaking. On July 25, 2022, HHS publicly released a proposed rule implementing Section 1557 of the Affordable Care Act. The proposed regulation was published in the Federal Register on August 4, 2022. On November 20, 2022, the government filed a status report noting that the public comment period on the proposed regulation closed on October 3, 2022, and that HHS had received more than 85,000 comments.
During a status conference held in June 2023, the government clarified that it expects the new Section 1557 rule to issue not later than “this winter.” The court ordered the government to continue filing monthly status reports. In the filing from July 31, 2023, the government indicated that the agency “aspires to the submit the rule to the Office of Information and Regulatory Affairs for final clearance before the end of this calendar year.”
UPDATE: In its latest status report filed with the court on January 31, 2024, the government stated that HHS has submitted a draft of the final rule to the Office of Management and Budget Office, Office of Information and Regulatory Affairs.