Healthcare providers, payors, and other healthcare organizations should be aware of a recently announced, “first-of-its-kind” settlement between the Texas attorney general and a healthcare generative artificial intelligence (AI) company resolving allegations that the company made a series of false and misleading statements about the accuracy and safety of its AI products. The settlement highlights the potential for enforcement against companies that utilize AI in a healthcare setting under existing laws that are not specific to AI and the importance of exercising caution in developing claims about an AI product’s efficacy or performance.
On September 9, 2024, the US Departments of Health and Human Services , Labor, and the Treasury finalized a rule related to the Mental Health Parity and Addiction Equity Act. This rule introduces significant updates to mental health and substance use disorder benefits, ensuring parity with medical and surgical benefits. Key changes include enhanced protections against restrictive treatment limitations, clarified definitions, and new data evaluation requirements. These updates, effective from January 2025, are crucial for hospitals, health systems, and managed care providers.
The US Departments of the Treasury, Labor, and Health and Human Services recently issued much-anticipated final regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA). The newly issued final regulations update the 2013 final regulations principally to reflect the changes to MHPAEA enacted by the Consolidated Appropriations Act, 2021, which requires plans and issuers to formally analyze and compare nonquantitative treatment limitations as they apply to both mental health and substance use disorder benefits and medical/surgical benefits.
The changes in the final regulations largely take effect in 2025, with the effective date for some provisions delayed until 2026. Although the final regulations may face litigation challenges, considering the recent decision in Loper Bright Enterprises v. Raimondo, health plan sponsors should plan to comply by the quickly approaching deadlines.
On August 12, 2024, the Biden administration launched a new “Time Is Money” initiative, seeking to crack down on time-consuming and burdensome business processes.
The initiative includes a requirement for federal employee health plans to provide an online opportunity to submit claims. It also features an accompanying letter to health insurance CEOs from the heads of the US Department of Health and Human Services and US Department of Labor that challenges the CEOS to offer online claim submissions, deny claims only where appropriate, and provide clear steps to appeal decisions.
In response to evolving market demands, an increasing number of hospitals and health systems are considering creating provider-sponsored health plans (PHSPs), which are health insurance plans owned and operated by healthcare providers. McDermott’s healthcare team recently hosted a webinar exploring how PSHPs may offer hospitals a strategic pathway towards achieving sustainable, patient-centered care delivery by driving improvements in care coordination, health outcomes, and member satisfaction.
In a consequential decision for Health Insurance Portability and Accountability Act (HIPAA)-regulated entities, on June 20, 2024, the US District Court for the Northern District of Texas ruled that the US Department of Health and Human Services Office for Civil Rights exceeded its authority in certain respects in sub-regulatory guidance. The guidance concerned HIPAA’s application to cookies and other online tracking technologies on HIPAA-regulated entities’ unauthenticated webpages.
In California, pending Assembly Bill 3129 could severely limit the ability of digital health companies to grow and operate in the state by prohibiting arrangements between physician, psychiatric, and dental practices and any entity that furnishes business or management services to providers that accept investments from private equity groups and hedge funds. The legislation’s current definition of private equity is arguably broad enough to capture venture capital funds, angel investors, family offices and even the innovation or investment arms of academic and nonprofit medical centers. Digital health companies based in California who provide benefits services should closely monitor the potential impact of this proposed legislation on their businesses.
On June 26, 2024, the US Food and Drug Administration (FDA) released its much-anticipated draft guidance on Diversity Action Plans to Improve Enrollment of Participants from Underrepresented Populations in Clinical Studies. The draft guidance provides valuable information about what steps the FDA will expect sponsors to take to promote adequate representation across demographic characteristics in study populations.
Recent lawsuits filed against the group health plans of two large US employers underscore the importance of implementing formal welfare benefit plan governance structures that include fiduciary committees comparable to the governance structures employer sponsors of retirement plans routinely adopt. Establishing such committees can help employers reduce litigation risk and ensure compliance with Employee Retirement Income Security Act fiduciary standards.
The Biden administration recently released its Spring 2024 Unified Agenda (a few months late), which lists all the regulations that the administration plans to issue by the end of the year and beyond.
In this update, Jeffrey Davis previews new regulations that could impact the health and welfare benefits industry related to the No Surprises Act, new standards for the exchange of health information under the Health Insurance Portability and Accountability Act, the finalization of new Mental Health Parity and Addiction Equity Act rules, and more.
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