This week’s highlights in regulatory practice seem to focus on periodic regulations from the Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS). CMS last week submitted an annual batch of Medicare financing regulations for publication this week, with at least one hidden response to a court. Not far behind, the Office of Management and Budget (OMB) completed interagency and executive review of a CMS rule that governs medical facility safety. The Federal Communications Commission (FCC) proposed privacy ruImage may be NSFW.
Clik here to view.
les for internet providers, while on small matters, a court of appeals declined to rehear en banc a splintered jurisdictional decision on the major Waters of the United States (WOTUS) rule. Up soon will be a final drone rule with high expectations and high risks.
Medicare Reimbursements: CMS proposes this week four economically significant rules to reimburse health care providers under the Medicare program during FY 2017.
- Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017, published today;
- Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities Proposed Rule for FY 2017, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, and SNF Payment Models Research, published today also;
- Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2017 Rates, etc., filed on public inspection April 18, to be published on April 27; and
- FY 2017 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements, filed on public inspection April 21, to be published on April 28.
Bear in mind that decisions long ago dictate the annual publication of policies and rates for Medicare reimbursements. The “management by rules” results are then subject to years of administrative and judicial review, leading to the issue encountered again today.
The United States District Court for the District of Columbia remanded without vacatur a portion of the CMS “two midnight” rule in Shands Jacksonville Medical Center v. Burwell. In Shands, hospitals challenged a 0.2% reduction in certain rates to account for the estimated $220 million in additional FY 2014 expenditures resulting from CMS’s requirement that in patient rates be based on a hospital stay that encompassed at least two midnights – the two-midnight policy. “The Court agrees with Plaintiffs that the Secretary did not provide sufficient notice of the actuarial assumptions and methodology she employed and that disclosure of this information was essential to communicate the basis for the proposed adjustments and to permit meaningful public comment.” In short, HHS failed to disclose the keys to its methodology in reaching the 0.2% reduction and deprived the public of the opportunity to comment on that methodology under the Administrative Procedure Act (APA).
CMS published a notice in the Federal Register last December to respond to the court ruling, explaining its assumptions and methodology, along with the unusual degree of uncertainty, and requested public comments. HHS withdrew a free-standing response to the remand from OMB review on April 15, and OMB completed review of this economically significant 1500-page proposed Hospital Inpatient Prospective Payment Systems …, etc. leviathan on the same day.
► HHS’s discusses Shands almost in the middle of the preamble of this proposed rule, but at least HHS admits the error of its ways – somewhat. HHS appears to have responded to the various sets of public comments submitted on its post-Shands notice in part, but, again, this is a proposed rule. Third, HHS argues (and presumes) that these preamble statements fulfill its obligations to the district court in response to the remand order – the Department of Justice (DOJ) will need to make that argument, and the various plaintiffs will have an opportunity to disagree – and it remains unclear how a proposed rule can fulfill any legal requirement. Finally, HHS proposes a remediation of three years of fault 0.2% reductions with a special one-time prospective increase to the FY 2017 rates of 0.6 percent. HHS does not explain how this FY2017 proxy for FY2014, 15, and 16 is supposed to address lost opportunity and other values from the prior shortfalls, or how the cost-reimbursement populations may have changed for each particular hospital over those four years. The proposed rule certainly does not suggest that the preamble statements reflect a negotiated settlement (which should, in any event, be disclosed), so expect further judicial action, but perhaps after a final rule.
Medical Facility Fire Safety: Additionally, the Office of Management and Budget (OMB) completed executive and interagency review of the HHS / CMS draft final Fire Safety Requirements for Certain Health Care Facilities rule last Friday. This periodic revision sets fire safety standards for hospitals, long-term care facilities, some intermediate care facilities, ambulatory surgery centers, elder care facilities, etc. CMS proposed in April 2014 adoption of many of the provisions in the National Fire Protection Association (NFPA) 2012 Life Safety Code (NFPA 101) and Health Care Facilities Code (NFPA 99), and to eliminate grandfathering references in CMS regulations to all earlier editions. The proposed rule would incorporate by reference (IBR) much of the 2012 NFPA codes, but also makes exceptions.
NFPA adopts draft codes through a consensus process by the experts in the field, a process that openly seeks input. Those codes – from building, to electrical, to fire apparatus and personal protective equipment – are widely, though not universally, adopted by the “authority having jurisdiction” – that State or local authority that, under State law, sets building standards.
► A significant downside to this process is that NFPA has already updated the 2012 codes with the 2015 codes, and is accepting comments on the 2018 proposed revisions. CMS can never catch up with NFPA as long as CMS attempts to make regulatory decisions and create exceptions. A better path may be for CMS to adopt the “current code” without specification so that the NFPA code updates will be applicable as NFPA adopts them, with, of course, an implementation time rule.
An inherent downside to adopting any privately developed standards by IBR remains that each facility governed by the regulations must purchase a copy of the private codes – availability at CMS and the Office of the Federal Register is simply impractical – and that cost does not appear to be included in CMS’ regulatory impact analysis. On the other hand, the private organizations must rely on purchases and subscriptions to fund the development of the codes.
CMS’s adoption of exceptions to the NFPA codes can be problematic, at least in part by suggesting that the Federal government knows better than the professionals in the field who develop these standards. The issue is whether CMS knows best.
Adopting the NFPA codes is, on the whole, a very good idea if for no other reason than it creates uniformity across the industry, but CMS could do better by doing less.
Internet Neutrality Privacy: The FCC last Wednesday published a proposed Protecting the Privacy of Customers of Broadband and Other Telecommunications Services rule. The FCC is seeking comments on how to apply the privacy requirements of the Communications Act to its self-expanded jurisdiction over broadband Internet access service (BIAS). Comments are due May 27, 2016, and reply comments are due June 27, 2016.
► Some issues do not appear to be new, but raise interesting questions. Two will suffice here.
First, the FCC may exceed itself, with the United States Court of Appeals for the District of Columbia Circuit yet to resolve whether Congress delegated to the FCC authority to regulate the internet at all by reclassifying it as a telecommunication service. The D.C. Circuit heard more than three hours of oral argument in United States Telecom Assoc. v. FCC, D.C. Cir. 15-1063, on December 4, 2015, and has not yet decided the case.
Second, deep in the weeds, the FCC does not discuss the impact of harmonizing existing voice and data breach rules with these proposed rules for BIAS provider data breaches (or the other way around) will impact the non-FCC recipients of data breach data. The FCC is less than clear on whether discussions have occurred with DOJ’s Federal Bureau of Investigation (FBI) and the Department of Homeland Security (DHS)’s United States Secret Service (USSS). The FCC presents a classic reason for executive and interagency review of rules.
WOTUS on the Ohio River: The United States Court of Appeals for the Sixth Circuit last Thursday denied six petitions for rehearing en banc of its prior decision that it has jurisdiction to hear petitions for review of the Clean Water Act: Definition of “Waters of the United States.” The denial of further review of jurisdictional underpinnings the Environmental Protection Agency (EPA) and United States Army Corps of Engineers final rule merely clears the way for briefing of a multitude of substantive and procedural issues. Recall that the Sixth Circuit previously stayed the final rule nationwide and has split badly on this jurisdictional issue (1-1-1) after the Judicial Panel on Multidistrict Litigation (JPMDL) randomly selected the Sixth Circuit to hear all petitions for review filed in multiple circuit courts and denied the government’s motions to consolidate multiple challenges filed in the United States District Courts. All of these procedural details can be wrung out by simply searching this blog for WOTUS.
► With the procedural issues out of the way, the parties can now focus (as surely they already have) on winnowing a joint appendix out of the 635-page certified index to the administrative record and briefing the substantive issues. The rule remains on hold and some real hard work begins.
Drone Review: And, in a harbinger of things to come, the Department of Transportation (DOT) submitted a final Federal Aviation Administration (FAA) Operation and Certification of Small Unmanned Aircraft Systems (sUAS) rule to OMB on April 20. The FAA published a proposed rule in February 2015, and established its drone registry last December. Before publication, the proposed rule was subject to more than a dozen meetings at OMB, but once published, drew less than 5,000 public comments. The final rule is likely to draw much professional attention at OMB and many private interests are likely to seek to meet and discuss.
► The reality here is that FAA is attempting to catch up with a technology that blossomed far faster than the regulatory process could consider. As noted previously, the proposed rule fell woefully short in addressing critical questions such as privacy and insurance against damages to other property. Some issues may not be remediable within the logical outgrowth of the proposed rule, and that poses much higher risks, both to the agency in attempting to regulate and to the rest of the world if the agency fails. Expect some answers soon as OMB is likely to be pressured to complete review quickly.
The post Monday Morning Regulatory Review – 4/25/16: Medicare Reimbursements; Medical Facility Fire Safety; Internet Neutrality Privacy; WOTUS on the Ohio River & Drone Review appeared first on Federal Regulations Advisor.