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Capitol to Capitol | April 29, 2024

April 29, 2024

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Administration Updates

Medicaid Access Rule: New Requirements for States

The Centers for Medicaid & Medicare Services seeks to improve health care access and quality in Medicaid fee-for-service and managed-care home delivery systems, including home- and community-based services. The rule imposes new requirements related to payment adequacy for direct care workers, increases beneficiary engagement through advisory committees, requires states to report on waiting lists and quality measures, and to update their grievance processes and incident management systems. Given the breadth of the new provisions, a staggered timeline has been established, with some provisions going into effect on July 9, 2024 (the rule’s effective date) and others spread out over the next six years.

Key Components of the Rule

Compliance deadlines are noted after each section and are based on the effective date of the rule.

Access and Timeliness: States must report on waiting lists; service delivery timelines for personal care, homemaker, home health aide and habilitation services; and a standardized set of HCBS quality measures (within three years).

Advisory Committees: States must transition their existing Medical Care Advisory Committees to a Medicaid Advisory Committee and a Beneficiary Advisory Council consistent with the composition and meeting frequency established in the rule (within one year).

Grievance Processes: States are required to establish a grievance process for people receiving HCBS services (managed care plans already must have such systems in place), which must include data collection (within two years).

HCBS Payment Adequacy: States must ensure that a minimum of 80% of Medicaid payments for homemaker, home health aide and personal care services are spent on compensation to direct care workers. (States have the option to create a hardship exemption and a separate performance level for small providers. The Indian Health Service and tribal health programs are exempt.) States must also report annually on the percentage of payments for these and habilitation services that are spent on direct care worker wages (within six years).

HCBS Quality Measure Reporting: States must report on standardized quality measure sets, which include both mandatory and voluntary measures specified by CMS. (The HHS secretary will identify quality measures by Dec. 31, 2026, and no more frequently than every other year, with technical updates as needed.)

Incident Management: States must ensure that they operate and maintain an incident management system that identifies, reports, triages, investigates, resolves, tracks and trends critical incidents as defined in the rule (within three years). The rule also requires states to establish a single electronic incident management system that enables collection, tracking and trending (within five years).

Person-Centered Planning: States must demonstrate that a reassessment of need is completed at least once a year for people continuously enrolled in HCBS programs and that service plans are reviewed and revised annually based on that reassessment (within three years).

More information:

Addressing PFAS: Tackling the ‘Forever Chemical’ Across the Nation

The Environmental Protection Agency furthered recent efforts to address per- and polyfluoroalkyl substances by listing perfluorooctanoic acid and perfluorooctane sulfonic acid as Superfund hazardous substances. A new rule enables the EPA to directly address PFOA and PFOS contaminants, considered some of the best-understood PFAS types. Specifically, the agency will be able to enforce polluter cleanup payments and directly conduct cleanup of contaminated sites. This significant action may also result in the cleanup of additional PFAS, a beneficial byproduct of PFOA and PFOS cleanup efforts. The rule also mandates new reporting requirements for PFOA and PFOS releases into the environment and implements new transportation rules for these substances. Industry representatives have called the rule overburdensome and costly. Legal challenges are expected.

To address critics’ concerns about the impacts and potential litigation associated with these rules, the EPA’s assistant administrator for enforcement and compliance assurance released a memorandum clarifying that the rule will target significant polluters such as manufacturers and industrial third parties. However, critics find this measure insufficient as it can be rescinded by a future administration and offers no protection against litigation from third parties. Read more

The FTC Bans Noncompete Clauses

The Federal Trade Commission approved by a vote of 3-2 a final rule banning noncompete clauses for nearly all workers effective by early September. The agency found noncompetes to be an “unfair method of competition” that violates Section 5 of the FTC Act. The decision was based on research and more than 26,000 public comments received after the proposed rule was issued in January 2023. The research used in the decision-making process included changes in how states are governing noncompetes. Currently, four states have bans: California, Minnesota, North Dakota and Oklahoma. Six states—Illinois, Maine, Massachusetts, Michigan, Rhode Island and Wisconsin—plus New York City have pending legislation. Source

Once the rule is fully implemented, existing noncompetes will be unenforceable and new agreements will be banned. There is an exception for senior executives making $151,164 annually in a “policy-making position.” Active noncompete clauses for workers meeting that pay criterion will remain in effect. However, once implemented, the ban will apply to senior executives, who will then no longer be able enter into new agreements. Suggestions for alternatives include trade secret laws, nondisclosure agreements or simply encouraging employee retention with wage and working condition improvements.

The rule had been challenged twice within fewer than 24 hours of publication. Lawsuits filed by Ryan LLC and the U.S. Chamber of Commerce both claim the agency overreached its authority. The rule won’t go into effect for a few months, and more challenges are expected.

Helpful resources:

CMS Issues Final Rule on Nursing Home Staffing Levels

Citing a growing body of evidence about the correlation of staffing to resident health and safety, the Centers for Medicare & Medicaid Services has issued minimum nursing home staffing standards that will affect about 15,000 federally funded Medicaid and Medicare nursing facilities, which serve more than 1 million Americans. The new rule will ultimately require facilities to have a registered nurse on duty 24 hours per day, seven days per week and provide at least 3.48 hours of nursing care per resident per day, including .55 hours from a registered nurse and 2.45 hours from a nurse aide. The remaining .48 hours may be provided by any combination of RNs, NAs or licensed professional nurses. The rule is intended as a floor—with higher staffing levels dictated by the needs of the residents.

The rule also requires states to report on the percentage of payments for certain Medicaid-covered services for people with intellectual disabilities that are spent on compensation for direct care workers and support staff.

Implementation of the new standards is staggered over the next few years, allowing more time for rural facilities:

  • May 11, 2026: Nonrural facilities must have a registered nurse on duty 24 hours per day, seven days per week.
  • May 10, 2027: Nonrural facilities must provide 3.48 total nurse staffing hours per resident per day (HPRD), to include .55 RN HPRD and 2.45 NA HPRD.
  • May 10, 2027: Rural facilities must have a registered nurse on duty 24/7.
  • May 10, 2028: Rural facilities must provide 3.48 total nurse staffing HPRD, to include .55 RN HPRD and 2.45 NA HPRD.
  • May 10, 2028: All states and territories with Medicaid-certified nursing facilities and intermediate care facilities for people with intellectual disabilities must report on the percent of Medicaid payments for certain Medicaid-covered services.

The rule also updates existing facility standards by requiring consideration of behavioral health needs, addressing the individual needs of residents and including the input of the facility’s leadership, staff, residents and family members.

Limited exemptions from the standards are available for facilities that can demonstrate they face workforce shortages that are at least 20% below the national average and have made good-faith attempts to hire and retain staff, among other requirements.

Only 1 in 5 nursing facilities currently meet these staffing requirements. The CMS estimates the total cost over 10 years to be $43 billion—a cost that will be borne primarily by the facilities. Read more

New Regulations for the Nation’s Coal Power Plants

The Environmental Protection Agency has unveiled four major final rules regulating power plants. The first and most anticipated rule addresses greenhouse gas emissions from coal-fired power plants. In a change from the earlier proposed rule, the final rule extends the deadline from 2030 to 2032 for coal-fired power plants to pursue a path toward carbon capture compliance or shuttering. Under the final rule, midterm emission standards may lead to coal plants burning natural gas in addition to coal, while long-term emission standards will require the capture of 90% of greenhouse gas emissions. Plants that close before 2032 will not face regulatory requirements. Compliance costs of $1 billion and a reduction of 1.38 billion metric tons in emissions through 2047 are expected.

The other three rules mandate additional coal-fired power plant compliance. The second rule, concerning emission standards for hazardous air pollutants, increases limits by 67%. Compliance will require most facilities to upgrade equipment and install continuous emissions monitoring systems. Compliance costs are expected to reach $96 million but have an overall public health benefit of $47 million. 

The third rule, addressing effluent from steam electric power plants, mandates a zero-discharge limit of certain wastewater streams. These new requirements will prevent an estimated 660 million pounds of pollution from entering the nation’s waterways. Flexibility is available for coal plants that are retiring or converting to natural gas fuel sources.

The fourth rule, concerning the disposal of coal combustion residuals, mandates the cleanup of coal ash ponds at all closed plants, closes previous regulatory loopholes and ensures compliance with a 2018 appeals court ruling. Specifically, the rule applies similar requirements to currently regulated inactive sites and previously unregulated legacy sites.

The EPA released the four rules simultaneously to help power plant operators plan for the future. Additionally, given the timing of publication, it is unlikely that the rules will be subject to the Congressional Review Act; however, they could be rescinded under a future administration. Court challenges are expected. Read more

Department of Agriculture Releases Final Rule on School Nutrition Standards

The rule places new limits on added sugars and gradually reduces weekly sodium limits in school lunch and breakfast programs and maintains the current milk and whole grain standards. The rule also changes and clarifies certain menu-planning flexibilities and program operations requirements. The rule goes into effect on July 1, but the requirements will be gradually phased in over several years, with program operators not required to change menus until the 2025-26 school year at the earliest. Read more

HHS Issues Final Rule to Protect Abortion Privacy

A new rule prevents the disclosure of protected health information to identify, investigate or punish patients who receive lawfully provided reproductive care in a state where the care is legal. The rule, issued by the Office for Civil Rights within Department of Health and Human Services, also applies to providers in states where abortion is banned but who have patients that received abortion care in a state where such care is legal. The rule does not apply in states where abortion has been banned and modifies provisions of the Health Insurance Portability Act of 1996 privacy rule.

The rule does not prohibit covered health care providers and entities from using or disclosing protected health information for otherwise lawful purposes under the rule. Covered entities must comply with the requirements within 240 days after publication in the Federal Register. Read more

Labor Department Expands Eligibility for Overtime Compensation

The Department of Labor has released a final rule that aims to increase overtime protections for lower-paid salaried workers. Effective July 1, the new rule sets a salary threshold increase to $48,888 annually, with a further increase to $58,656 on Jan. 1, 2025, with regular updates every three years based on wage data. The move seeks to ensure fair pay for those working over 40 hours per week, clarify exempt employee classifications and enhance economic security. The focus is on restoring and extending overtime protections for workers and preventing the erosion of these benefits over time. Read more

DOT Rule Requires Airlines to Issue Passengers Automatic Refunds 

Airlines will be required to promptly issue automatic cash refunds to passengers or credit the original payment method the individual used to make the purchase (within seven days). Refunds must include the “ticket purchase price, minus the value of any portion of transportation already used,” and government- and airline-imposed taxes and fees. The rule aims to simplify the refund process for travelers in cases of flight cancellations, significant flight changes, delayed baggage return, fees paid for additional services like Wi-Fi or seat selection if the airline fails to deliver, or other unfulfilled services. Read more

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