Health Policy Update: What Our Policy Experts Are Tracking

We are officially approaching the halfway point for 2024 and that means a flurry of policy activity as Congress and state legislatures prepare for summer recess and the start of a new fiscal year. As opposed to recent years – particularly during the COVID-19 public health emergency (PHE) – 2024 has thus far not turned out to be less active major healthcare and health information technology (HIT) legislation at the state and federal levels.

Why the sudden shift? For one, legislative priorities usually pivot after a transfer of power and that’s exactly what happened in Congress and several state legislatures after 2023’s midterm elections. So, in many ways, this shift wasn’t completely unexpected. Additionally, pandemic-related initiatives took priority over funding and innovation. However, as we started to see the light at the end of the tunnel with COVID, a refocus on more transformative work began to re-emerge.

Still, there are three notable policy trends we’re monitoring this year with implications for HIT and health information exchange:

Federal Regulations: A handful of important, long overdue federal regulatory changes have gone into effect thus far in 2024 or will go into effect before the end of the year. Many of these changes address long-standing health information privacy rules that have severely hindered the exchange of certain types of health data (e.g., HIPAA, 42 CFR Part 2).

Section 1115 Waiver Demonstrations: States like New York, California, Maryland, and Pennsylvania continue to move forward with innovative waiver demonstrations that test alternate service delivery models or expand eligibility to new populations. Two notable trends from these waivers are (1) the integration of social determinants of health (SDOH) or non-medical services into Medicaid service delivery ecosystems and (2) investing in pre-release and reentry services for individuals leaving incarceration[1].

Fiscal Uncertainty: Many states are experiencing fiscal uncertainty.[1] In California, declining state revenues threaten to upend Governor Gavin Newsom’s ambitious reforms to the state’s Medi-Cal program and behavioral health system.

Below, Intrepid’s policy team outlines the critical policy updates we’re closely monitoring through spring 2024 with implications for discussion.

Governor Newsom’s May Revise: On January 10, 2024, Governor Newsom released his budget for the 2024-25 fiscal year. The proposal initially outlined a $291.5 billion spending plan for the biennium supported by spending cuts or delays to safety net programs like CalWORKs and new housing programs to address an estimated $38 billion budget shortfall. However, the May revise to the initial budget proposal included additional cuts totaling $32.8 billion to address a larger-than-expected budget shortfall. While several high-profile Medi-Cal system redesign efforts are untouched in May’s revised proposal – namely CalAIM – the current proposal would, if passed, make drastic cuts to other Department of Health Care Services (DHCS) programs like the Children and Youth Behavioral Health Initiative (CYBHI) and Behavioral Health Continuum Infrastructure Program (BHCIP), programs designed to modernize the state’s behavioral health system in concert with CalAIM. The May revise also proposes to eliminate $280 million in funding for the Equity and Practice Transformation Payments (EPT) program designed to help safety net primary care providers build capacity, including through HIT investments and the implementation of electronic health record (EHR) systems.[2]

Legislation and Federal Rules

The table below includes key items that Intrepid Ascent has been tracking, which provides context on the importance of each item and its current status.

Policy Scope Implications Status
Assembly Bill (AB) 1331 Makes the Center for Data Insights and Innovation (CDII) responsible for all functions and oversight of the CalHHS Data Exchange Framework CDII would be required to create a board to develop new recommendations for the data sharing agreement (DSA), create a process for designating Quality Health Information Organizations (QHIO), and submit an annual compliance report Currently in the Senate Appropriations Committee
Assembly Bill (AB) 1948 Amends Section 18999.81 of the WIC to allow members of homeless adult and family multidisciplinary personnel teams to share confidential information to coordinate housing services Proposes to add San Mateo County to authorized county list and extends MDT provisions indefinitely Under committee review in the Senate
Senate Bill (SB) 957 Requires California Department of Public Health (CDPH) to collect sexual orientation and gender identity (SOGI) data from third-party entities on electronic data systems unless prohibited by law Requires CDPH to provide an annual report to the legislature on attempts to collect, analyze, and report SOGI data; allows any SOGI data provided voluntarily to be included in the statewide immunization registry Under committee review in the Senate
HIPAA Privacy Rule Final Rule Aligns HIPAA with 42 CFR Part 2 and clarifies part 2 permissions and restrictions Permits a single Part 2 compliant consent to be used for future use and disclosures, permits covered entities to redisclose records, establishes new definitions for SUD counseling notes, permits disclosure of deidentified patient records to public health authorities Effective April 16, 2024; compliance required by February 16, 2026
42 CFR Part 2 Aligns patient consent, use/disclosures, and other major provisions with the HIPAA Privacy Rule Streamline consent for SUD services and improve data exchange and care coordination efforts between SUD/behavioral health providers and other providers Effective April 16, 2024
HIPAA Privacy Final Rule to Support Reproductive Health Care Privacy Prohibits the use or disclose of reproductive health PHI by covered entities for the purposes of conducting a criminal, civil, or administrative investigation Requires covered entities to attest that the use or disclosure of PHI is not for a prohibited purpose and to update existing Notice of Privacy Practices (NPP) to support reproductive health care privacy; protect individuals seeking reproductive or sexual health services from prosecution Effective June 25, 2024; compliance required by December 23, 2024