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New Data-Sharing and Interoperability Mandates Create New Challenges

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Digital health will continue to be a focus under recently confirmed Secretary Becerra‘s leadership at the Department of Health and Human Services. As the Biden administration looks to enforce compliance across a range of data interoperability and price transparency rules, as well as usher in new Food & Drug Administration (FDA) and Centers for Medicare & Medicaid Services (CMS) coverage policies for medical technologies and digital health tools, the industry is responding with a range of innovations.

Digital health is the use of technology to enable information exchange, automate business processes, enhance clinical decision-making, and engage patients. Even prior to the COVID-19 pandemic, significant investments indicated that development of digital health platforms are poised to grow substantially. Laws and regulations are evolving to reflect the modernization of care delivery and business operations (Table 1).

Table 1: Key Interoperability, Health Information Technology, and Transparency Policies
Policy Summary of Key Requirements Timeline Directly Impacted Stakeholders Select Indirectly Impacted Stakeholders
Hospital Price Transparency Requirements in the CY 2020 Outpatient Prospective Payment System Rule Publicly post prices for 300+ shoppable, standard services performed in the inpatient or outpatient hospital setting. January 1, 2021 Hospitals Digital health solution and technology companies, other providers, patients, manufacturers, payers
CMS Interoperability and Patient Access Final Rule Develop patient-access, provider-directory, and payer-to-payer APIs to increase access to and use of claims and coverage data. Admission, transfer, and discharge data must be shared with community providers. May 1, 2021–January 1, 2022 Government contracting payers, hospitals, HIEs, HINs, HIT developers Digital health solution and technology companies, providers across the care continuum, patients
ONC Information Blocking Final Rule Prohibits information blocking. April 5, 2021 Providers, HIT developers, EHRs, HIEs, HINs Digital health solution and technology companies, patients
Proposed Modifications to the HIPAA Privacy Rule Proposed rule would ease various HIPAA restrictions regarding the disclosure of personal health information. May 6, 2021* Payers, providers, clearinghouses Digital health solution and technology companies, business associates, patients
No Surprises Act Prohibits plans and providers from billing patients for more than in-network cost and require plans to send pre-care cost estimates to patients. January 1, 2022 Payers, providers Digital health solution and technology companies, independent dispute resolution entities, patients
CY 2022 Medicare Advantage and Part D Final Rule Make RTBTs integrate with at least 1 ePrescribing system or EHR by January 1, 2021, and by January 1, 2023, provide an enrollee-facing drug benefit comparison tool. January 1, 2021–January 1, 2023 Part D plans Digital health solution and technology companies, patients
Treasury/HHS/Department of Labor Transparency in Coverage Rule Make cost-sharing information public and disclose information about rates negotiated with providers. January 1, 2023–January 1, 2024 Payers Digital health solution and technology companies, providers, patients, manufacturers, PBMs
CMS Interoperability and Prior Authorization Rule Streamline the prior authorization process, enhances patient data access, and evolves API-enabled data exchange. January 1, 2023–January 1, 2024** Payers, providers Digital health solution and technology companies, patients

Notes: *Comments due on proposed rule. **The Biden administration’s regulatory freeze may impact timeline.

Acronyms: CY: calendar year; EHR: electric health record; HHS: Department of Health & Human Services; HIE: health information exchange; HIN: health information network; HIPAA: Health Insurance Portability and Accountability Act; HIT: health information technology; ONC: Office of the National Coordinator; PBM: pharmacy benefit manager; RTBT: real-time benefit tool.

Key Topics in Digital Health

As the federal regulatory landscape changes to address and drive the availability and use of digital health technologies, organizations seeking to maximize innovation efforts should monitor and consider engaging on the following key topics.

Developing Interoperability Policies

Seamless data sharing between systems is crucial for the success of digital health technologies. Multiple regulatory provisions mandate this necessary data exchange:

  • The ONC’s information blocking rule requires health IT vendors, networks, and providers to remove barriers to electronic health information sharing by April 5, 2021.
  • The CMS’s Interoperability and Patient Access rule requires health plans that contract with federal health programs to allow their members free and fast access to their own claims and clinical information maintained by the plan by July 1, 2021. As part of the interoperability policy, the CMS finalized a separate rule to automate the prior authorization process by mandating Medicaid, CHIP, and Qualified Health Plans to allow electronic access to prior authorization decisions, but this latest rule is under review by the Biden administration, like several others subject to a regulatory freeze.
  • As of May 1, 2021, the CMS will require hospitals to share notifications for admission, transfer, and discharge electronically.

As these rules are enforced and the interoperability of health data continues to develop, stakeholders should consider how to collaborate with the new administration to implement requirements and identify additional reforms necessary to promote the use of digital health technologies.

Expanding Coverage for Digital Health

Coverage pathways within Medicare were not designed to accommodate evolving digital health technologies, creating a barrier to more widespread access to—and appropriate reimbursement for—innovative new software, apps, and other digital health tools. In September 2020, the FDA launched its Digital Health Center of Excellence to modernize its regulation of digital health and develop a new approach to regulating software as a medical device. On April 19, the agency released a final rule excluding certain non-medical software functions from the definition of device. As the FDA updates its approach to digital health, the CMS issued a final rule entitled “Medicare Coverage of Innovative Technology” to create a new coverage pathway for innovative medical devices that the FDA deems “breakthrough.” The CMS may modify its coverage and reimbursement policies to promote closer coordination with the approvals process and to expand access. In particular, the CMS could consider testing new digital health approaches through a Center for Medicare and Medicaid Innovation demonstration under the newly appointed director, Liz Fowler. Stakeholders should consider opportunities to collaborate with the CMS and FDA to ensure any new regulatory and payment flexibilities are well informed and coordinated and reflect the utilization and impacts of these new tools.

Implementing Price Transparency Rules

Increasing healthcare price transparency was a strategic objective of the Trump administration—and is likely to continue to be a priority of the Biden administration—with rules regulating hospitals, health plans, and providers. Effective on January 1, 2021, a CMS hospital price transparency rule requires all hospitals to publish a list of their standard charges and 300 shoppable services, including payer-specific negotiated charges, in a machine-readable and -searchable, consumer-friendly format online. Before that, as part of an interim final rule that was effective November 2, 2020, the CMS required providers of COVID-19 diagnostic tests to publish its cash price for COVID-19 testing. Other rules mandate that electronic health records and Part D plans offer real-time benefits comparison tools to allow physicians—and eventually patients—access to real-time medication pricing information. Beginning in 2022, health plans must implement the tri-agency Transparency in Coverage rule, which will require group and individual market health plan sponsors to disclose negotiated prices for items, services, and prescription drugs. Stakeholders should consider how these transparency initiatives could impact contract negotiations, beneficiary and consumer decision-making, and the development of patient-facing applications and other tools that many seek to analyze and display newly public data.

The rapid evolution of the digital health landscape, combined with a new administration and Congress taking office, will make 2021 a pivotal year for digital health policy. These rules represent a paradigm shift in healthcare business operations and create multiple opportunities for stakeholders to develop tools, apps, and other digital health solutions for healthcare organizations and consumers. As regulatory compliance takes shape and policies evolve, organizations must develop advocacy and public policy strategies and anticipate how opportunities and threats will shape their markets.

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Julie Barnes, an Avalere senior advisor, is the founder and principal of Maverick Health Policy, a strategic consulting firm that advises private sector clients about federal government actions that impact the healthcare system. As a former healthcare attorney, Capitol Hill staffer, and regulatory adviser, Ms. Barnes informs business strategy and investments in several healthcare areas, including health information technology, data privacy and interoperability, value-based care, price transparency, telehealth, and public and private health insurance.

Avalere Health is an Inovalon company, a leading provider of cloud-based platforms empowering data-driven healthcare. We believe in the power of data, informing actionable insights, delivering meaningful impact, and driving stronger patient outcomes and business economics.

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