National, Federal and State Policy Updates: November 2022

Federal Policy Updates

CMS Announces BPCI-A Extension through 2025

• On October 13, CMS stated that the Bundled Payments for Care Improvement Advanced (BPCI-A) Model would be extended for another 2 years, and will now end on December 31, 2025. The model ties Medicare payments to episodes of care to reduce costs while improving care coordination and care quality. The program includes roughly 70,000 physicians in acute care hospitals providing care to 1.2 million beneficiaries.  The extension creates a new application window for providers and accountable care organizations to participate starting in 2023.  CMS will also make certain payment changes such as reducing the discount for clinical episodes, lowering the adjustment cap, and accounting for clinical episodes where the beneficiary has COVID-19 which reduced total patient volume in the model during the last 3 years.

CMS Releases Request for Information (RFI) on a National Directory of Providers and Services

• On October 5, CMS requested input on the development of a directory with information on healthcare providers and services nationwide to improve access to care. These directories allow individuals to locate providers based on their healthcare needs and facilitate care coordination and data reporting, but the information is fragmented across different databases. Inaccurate data, multiple reporting requirements, and barriers to interoperability are some of the main reasons behind CMS’s interest in a new “centralized data hub” for up-to-date contact information for providers. The RFI is open for public comment through December 6.

CMS Outlines Vision for Medicare Coverage of New Technologies

• On October 12, CMS published a viewpoint article in the JAMA research network outlining its vision for approving emerging medical devices and services in a forthcoming rule. This follows final rule published in March 2021 that defined “reasonable and necessary” coverage of innovative technologies newly approved using the FDA’s pathway for breakthrough devices.  However, there were concerns from commenters about the lack of direct clinical evidence needed for device approval and certain limitations in their study designs leading to data not representative of the Medicare population.  A new CMS rule would require coverage with evidence development, similar to the accelerated approval pathway for pharmaceuticals, which would entail an early evidence review, initiation of coverage review before market authorization, and consideration of the balance between the impacts on manufacturers, clinicians, and patients.

State Policy Updates

HHS Approves AR and AZ’s Social Determinants of Health Focused Medicaid Waivers

• On November 1, CMS approved an amendment to Arkansas’ 1115 demonstration waiver to address housing, food insecurity, and other health-related social needs, as well as support services for mental illness, substance abuse, and maternal health. The amendment covers care coordination support programs like Life360 HOMEs that connect beneficiaries with community and health services while emphasizing patient engagement.  Target populations include rural communities, women with high-risk pregnancies, young adults at-risk of poverty, and veterans at-risk of homelessness.  Other similar waivers have been approved in Massachusetts and Oregon.
• On October 14, HHS approved an Arizona Medicaid section 1115 waiver that targets health-related social needs, similar to those other state waivers. Social determinants of health will be addressed through the state’s Housing and Health Opportunities program which will assist beneficiaries with stable housing, transitional housing needs, and housing and rental assistance in various settings.  The program will also deliver case management, outreach, and education, with requirements for monitoring and evaluating the impact of the demonstration. Unstable housing has been shown to negatively impact individual’s ability to enroll in and access healthcare coverage and can perpetuate inequities.

Market Updates

VillageMD to Acquire Summit Health for $8.9 Billion

• On November 7, Walgreens’ owned company VillageMD and Evernorth announced that they would buy Summit Health, a primary care clinic operator. This will increase the number of provider locations to 680 across multiple states and will increase the delivery of coordinated care and urgent care services.  Walgreens previously invested billions into VillageMD in 2021 in order to establish a foothold in the physician-led market of value-based clinics and owns a 60% stake in the company.  The transaction is expected to be completed in Q1 of 2023.

JP Morgan and SEMCAP Health Announce Healthcare and Life Sciences Private Equity Teams

• On November 1, JP Morgan Asset Management launched Life Sciences Private Capital to invest in healthcare companies focused on emerging therapeutics across genetic medicine, oncology, rare diseases, and other emerging areas. The group includes experienced investors who have contributed to building companies including Alexion, Regeneron, and Healthy Ventures.

On November 3, SEMCAP announced a new healthcare investment strategy for technology and services focused on ongoing consumer and demographic trends.  The team will drive growth in businesses with established markets and demonstrated leadership through alignment with stakeholders after the initial investment.  Ongoing investments include SafeRide Health for non-emergency medical transportation aided by AI, and NeuroFlow behavioral health software that triages at-risk patients and connects them with integrated care