News Briefs: Supreme Court ruling on Chevron makes regulations more vulnerable to legal challenges

The Supreme Court issued a decision June 28 that has dramatic implications for the regulatory infrastructure in healthcare, among many other industries.

Under the Supreme Court’s 1984 Chevron v. Natural Resources Defense Council decision, courts were guided to give deference in their rulings to federal regulatory authorities such as CMS. Such agencies were deemed to have license to use regulations to fill in gaps or ambiguities in legislation.

As analysts had predicted, the Supreme Court overturned that precedent in its 6-3 decision on a pair of cases brought by fisheries seeking to have commerce-related regulations invalidated.

With the long-standing guidance eliminated, potential developments include lawsuits against many existing and future regulations issued by agencies like HHS, CMS and FDA. Some legal analysts anticipate a scenario in which the technical points of Medicare policymaking consistently get thrown to the courts.

A patchwork of regulatory applications may result if some courts rule against the lawfulness of a regulation while others rule for it. Ultimately, such discrepancies likely would be resolved at the Supreme Court, but it can take years for a case to get there.

The massive CrowdStrike crash posed big issues for hospital operations

A global technology crash July 19 had a severe short-term impact on some hospital operations, among many other industries worldwide.

The crash happened after the CrowdStrike cybersecurity company implemented a flawed update that affected Microsoft Windows operating systems.

Whereas the Change Healthcare cyberattack earlier this year was the product of a malicious actor, the latest disruption showed that a basic technical glitch likewise can cause havoc in the digital era. That’s especially the case when an issue affects Windows, which is widely deployed in healthcare and other sectors.

John Riggi, national advisor for cybersecurity and risk with the American Hospital Association, said the impact of the incident appeared to vary widely across the industry.

“Some have experienced little to no impact while others are dealing directly with some disruptions to medical technology, communications and third-party service providers,” Riggi said in a July 19 statement. “These disruptions are resulting in some clinical procedure delays, diversions or cancellations.”

The issues mostly had been resolved by July 22, the following Monday.

Medicare’s proposed 2025 outpatient payment update doesn’t appear to keep pace with hospital costs

Hospital advocates expressed dissatisfaction with the payment update in Medicare’s 2025 proposed rule for hospital outpatient care and ambulatory surgical centers (ASCs). The rule was formally published July 31.

CMS proposes to increase the Medicare rate for outpatient services and ASCs by 2.6%, resulting from a 3% jump in the market basket and a 0.4% statutory reduction based on economywide productivity.

Most recent years have brought a small rate boost from the proposed rule to the final regulations. But with the healthcare sector continuing to experience inflation and tight margins, advocates say the proposed update is nowhere near adequate.

The ability of hospitals “to continue caring for patients and providing essential services for their communities may be in jeopardy, and we urge CMS to provide additional support in the final rule,” Ashley Thompson, senior vice president for public policy analysis and development with the American Hospital Association, said in a written statement.

Providers face Medicare payment-rate penalties for information blocking under a new rule

Healthcare providers will receive a lower Medicare payment update if they are deemed to have engaged in health information blocking, according to a July 1 final rule from CMS.

For hospitals, a violation will render an organization noncompliant with the Promoting Interoperability Program, meaning it will lose out on three-quarters of the annual market-basket update for Medicare inpatient payments based on the performance year in which the infraction was assessed. The payment reduction is levied two years after the relevant performance year.

For critical access hospitals, Medicare payments will be reduced from 101% of reasonable costs to 100% during the year in which the violation is confirmed.

Physicians eligible for the Merit-based Incentive Payment System will have their score zeroed out in the Promoting Interoperability performance category if they commit a violation. Participants in Medicare Shared Savings Program accountable care organizations also face the prospect of penalties.

Hospitals can bring their case on DSH payments to the Supreme Court

The Supreme Court in June granted hospitals’ request that it hear their appeal about the formula for determining Medicare disproportionate share hospital (DSH) payments, landing the case on the docket for the 2024-25 term.

More than 200 hospitals are plaintiffs in the case, Advocate Christ Medical Center, et al., v. Becerra. A federal district court ruled for HHS and against the hospitals in 2022, and the Court of Appeals for the District of Columbia Circuit upheld the decision in 2023.

In those rulings, the courts agreed with HHS on a technical question concerning the DSH payment formula. With respect to the Medicare-fraction component of the formula, patients are to be included in the numerator only if they receive Supplemental Security Income (SSI) cash benefits during the month of their hospitalization. Enrollment in the SSI program is not sufficient for the patient to be counted.

Hospital plaintiffs insist that the interpretation conflicts with HHS’s separate interpretation, as upheld in a 2022 Supreme Court ruling, that patients should be included in the formula’s denominator if they merely are eligible for Medicare Part A.

CMS proposes to hold Medicare ACOs harmless for spending levels stemming from catheter-billing fraud

A proposed rule would mitigate the impact of a Medicare fraud scheme on accountable care organizations (ACOs).

The rule seeks to address “significant, anomalous and highly suspect billing activity for selected intermittent urinary catheters on Medicare Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) claims” as applied to ACOs in the Medicare Shared Savings Program (MSSP) for performance year 2023.

MSSP participants had raised concerns about the impact of a suspicious increase last year in Medicare billings for certain catheters. 

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Medicare’s 2025 proposed rule for physician payments: the impact on specialties

Amid a 2.8% payment reduction for physicians generally, different specialties are projected to receive different updates based on statutory adjustments. Here are the specialties looking at the biggest increases and decreases next year, relative to 2024 (all metrics are tentative).