Sellers Dorsey Digest

Federal Updates

NEWS

MACPAC holds January 2024 Public Meeting

• The Medicaid and CHIP Payment and Access Commission (MACPAC) met on January 24-25 to discuss the following topics:
  • Denials and appeals in Medicaid managed care – MACPAC staff presented the draft chapter for the March 2024 report to Congress with seven recommendations intended to improve the beneficiary experience with the appeals process generally along with the monitoring, oversight, and transparency of denials and appeals. The Commission voted in favor of all seven recommendations.
  • Self-reported disability data collection in Medicaid populations – MACPAC staff discussed findings related to self-reported disability data collection. The Commission reviewed federal priorities for collecting data, how Medicaid disability data are currently collected, and essential considerations for disability data collection.
  • Policy options for improving the transparency of Medicaid financing –- The Commission reviewed policy options for improving transparency of financing methods and amounts. Since Medicaid is jointly financed by states and the federal government, MACPAC considered the policy options using a framework that explored the usefulness, comprehensiveness, and administrative burden for states, providers, and CMS in collecting new data.
  • Interviews with key stakeholders about state Medicaid agency contracts – MACPAC staff reviewed important themes from interviews with state Medicaid officials in five case study states, federal officials at CMS, and health plan representatives for Medicare Advantage dual eligible special needs plans (D-SNPs).
  • Evaluating effectiveness of Medicaid payment changes on access to physician services – MACPAC staff discussed the relationship between Medicaid physician payment rates and beneficiary access. MACPAC partnered with Mathematica to conduct a review of the literature between 2013 and 2023. Mathematica also convened an expert roundtable and MACPAC staff shared themes from the roundtable and focused on certain areas that MACPAC may examine in the future.
  • Medicaid coverage of physician-administered drugs (PADs) – MACPAC staff discussed challenges related to managing PADs through the medical benefit and summarized findings from their analysis on Medicaid utilization and spending on PADs using data from the Transformed Medicaid Statistical Information System.
  • Highlights from the duals data book – MACPAC staff reviewed the Beneficiaries Dually Eligible for Medicare and Medicaid data book, which includes information on individuals who were dually eligible for Medicare and Medicaid in 2021. This edition includes information about the dually eligible community’s demographics and characteristics, eligibility pathways and enrollment, service utilization and spending, and use of long-term services and supports.
  • Enrollment trends in Medicare savings programs (MSPs) – MACPAC staff provided enrollment information from 2010 through 2021 and focused mainly on the Qualified Medicare Beneficiary (QMB) and Specified Low-Income Beneficiary (SLIB) programs since they account for more than 90% of MSP enrollees. (MACPAC, January 24-25).

Cell and Gene Therapy Model will Focus on Sickle Cell Disease

• The Biden Administration has announced that sickle cell disease (SCD) will be the top priority of the Cell and Gene Therapy (CGT) Access Model which aims to improve health outcomes, increase access to CGT care, and lower healthcare costs for vulnerable populations. This model will begin in January 2025 and may expand to include other types of CGTs. CMS plans to negotiate outcomes-based agreements (OBAs) with manufacturers to tie pricing with positive health outcomes for people with SCD under Medicaid. Around 50-60% of people with SCD are Medicaid beneficiaries. Participating states will have the opportunity to enter into an agreement with manufacturers based on the previously negotiated terms from CMS to offer the agreed-upon standard access policy in exchange for rebates. States can choose to participate in the model between January 2025 and January 2026. Additionally, CMS plans to offer extra funding to states that increase equitable access to CGTs and promote comprehensive care for Medicaid beneficiaries with SCD receiving gene therapy (CMCS, January 30).

$50 Million to Provide Essential School-Based Health Services to Children

• On January 24, CMS announced $50 million in grant funding for states to connect millions more children to mental and physical health services while at school. The funding will provide 20 states with up to $2.5 million each to help implement, enhance, and expand the use of school-based health services through Medicaid and the Children’s Health Insurance Program (CHIP). HHS Secretary, Xavier Becerra, and Department of Education Secretary, Miguel Cardona, issued a letter to governors, highlighting that the funding will make it easier to support schools in providing critical physical and mental health services. Sixteen states currently cover school-based health services provided to children covered by Medicaid or CHIP outside of special education needs demonstrated in an Individualized Education Program (IEP) or an Individual Family Service Plan (IFSP). These states are Arizona, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Nevada, New Mexico, North Carolina, Oregon, and Virginia. A minimum of 10 awards will be provided to states that do not yet cover school-based health services (Medicaid.gov, January 24).

Enrollment in ACA Hits Record High

• Enrollment in Affordable Care Act (ACA) plans has officially reached beyond 21 million this year, crossing the 20 million line for the first time since the ACA began in 2014. When signups closed on January 16, 21.3 million people (about the population of New York) had enrolled in marketplace plans. Four states and the District of Columbia allow enrollment to remain open through January 31. Florida outpaced other states with over 4.2 million residents signed up for ACA coverage, followed by Texas with almost 3.5 million and California with 1.7 million (Health Payer Specialist, January 26).

Health Resources and Services Administration Announces New Enhancing Maternal Health Initiative

• On January 25, the Health Resources and Services Administration (HRSA) announced a year-long Enhancing Maternal Health Initiative aimed at facilitating partnerships for maternal health. The announcement came at a White House event held on Maternal Health Awareness Day, which highlighted HHS initiatives that improve maternal and infant health outcomes. The Biden administration has been emphasizing its work on maternal and reproductive health ahead of the 2024 presidential election. The initiative will bring together HRSA grantees from high-need states to collaborate on projects directed at making maternal health progress. These states include Alabama, Arizona, Georgia, Illinois, Kentucky, Maryland, Michigan, Missouri, Montana, North Carolina, Oregon, and the District of Columbia (Inside Health Policy, January 26).

Nursing Home Residents Continue to be a Population Vulnerable to COVID-19

• As COVID-19 cases dwindle, nursing home residents continue to be a population vulnerable to the virus, with fewer than 4 in 10 of these individuals receiving the latest vaccine. Over the course of the pandemic, over 170,000 nursing home residents passed away. Katie Smith Sloan, the president of LeadingAge, wrote a letter to the HHS Secretary, Xavier Becerra, highlighting the low vaccination rate issue and requesting additional federal assistance. Becerra stated that facilities need to continue to offer residents the shots, but stopped short of promising additional aid (Politico Pro, January 26).

HHS Aims to Maintain Low-Cost Access to COVID Oral Antivirals

• HHS has reminded provider groups that patients should not pay the full out-of-pocket cost for oral antivirals that treat COVID-19, such as Paxlovid, during the transition of the antivirals to the commercial market. HHS, Pfizer, and other groups such as the American Nurses Association and the American Academy of Family Physicians discussed the transition during a virtual meeting held on January 22. Pfizer signed an agreement with HHS to allow free Paxlovid access for Medicare and Medicaid patients until the end of 2024 and until the end of 2028 for uninsured patients. On January 4, CMS released guidance for Medicare Part D programs to cover these medicines and anticipates that plans may allow enrollees to access Paxlovid for free through the Pfizer-HHS agreement (Inside Health Policy, January 23).

State Updates

NEWS

Proposed Cuts to New York Medicaid in Governor Hochul’s FY2025 Executive Budget

• In her budget address, Governor Hochul highlighted the 40% increase in Medicaid spending over the past three fiscal years and announced the need to save more than $1 billion in the Medicaid budget. Her $233 billion executive budget includes $35.50 billion in state funding for the Medicaid program. Governor Hochul plans to partner with the legislature to find appropriate decreases in spending that won’t negatively impact those covered by Medicaid in the state. One option proposed includes ending wage parity for a program that provides services for individuals needing help with everyday activities. Reducing supplemental pay benefits or home care aids could save the state an estimated $200 million alone (MSN, January 27).

Lieutenant Governor and Other Lawmakers in Indiana Request Pause on Proposed Attendant Care Program Cuts

• On January 29, Lieutenant Governor Suzanne Crouch, and three Indiana legislators requested that the Family and Social Services Administration (FSSA) halt proposed cuts to the Attendant Care pay for Legally Responsible Individuals (LRIs) program after a $1 billion shortfall in the state’s Medicaid budget was announced earlier this month. The FSSA was unable to provide information about the number of families impacted and total projected savings of that program specifically (The Republic News, January 29).

The Need for Medicaid Reimbursement in Autism Care Remains Urgent in Colorado

• As numerous critical child autism care providers in Colorado are closing down and leaving the state, professionals in the field are worried about the imminent care crisis. Providers attribute these closures to inadequate Medicaid reimbursement rates. A Medicaid review board has stated that reimbursement for providers was about 20% below the benchmark, for which officials are calling for immediate action as providers need a sustainable rate to properly function and serve. The joint budget committee is proposing to move about $5M that was previously appropriated for the Colorado Department of Healthcare Policy & Financing to be used to increase autism care provider rates. With the federal match, the amount will be about $10M. The proposal has been approved by the budget committee and is being moved to the General Assembly for further consideration (CBS News Colorado, January 27).

South Dakota Lawmakers Call for a Medicaid Work Requirement

• Republican lawmakers in South Dakota are calling for a new Medicaid requirement where those who do not have a disability, must meet a work requirement. So far, the resolution has passed in the State’s Senate (28-4) and is heading to the House. It will need to also be approved by voters and the federal government later this year. Further exemptions to this requirement remain unknown (The Associated Press, January 26).

Wisconsin Governor Expands Access to Contraception

• On January 24, Wisconsin Governor, Tony Evers, delivered the State of the State address where he announced that he is expanding access to contraception as part of a plan to bolster healthcare services for women in the state. Those with Medicaid in Wisconsin are now able to obtain free emergency contraception without a prescription in all state pharmacies (Yahoo News, January 25).

Pennsylvania Launches Website to Connect Healthcare and Social Services

• Pennsylvania has launched a new website, PA Navigate, to help connect Pennsylvanians to healthcare and social services. This website is a collaboration between state agencies, counties, and local community-based organizations. PA Navigate is intended to streamline the referral process for health-related social needs and help people find needed resources. Notably, with PA Navigate, providers and social service organizations can make a referral for services and track the follow up on the referral, making this the first “closed loop referral system” in the state according to the Department of Human Services Director, Dr. Val Arkoosh. Currently, nearly 8,000 organizations are participating on the platform, which is supported by the Findhelp platform, a national online social care network (WPSU, January 25).

Pennsylvania Supreme Court Opens Door to Challenge Medicaid Coverage Ban on Abortions

• On January 29, the Pennsylvania Supreme Court determined that the state’s 1982 Abortion Control Act can be challenged in court years after dismissal of the initial filed petition. Pennsylvania’s 1982 Abortion Control Act bans Medicaid from covering abortions with exceptions for rape, incest, or life-threatening complications. In 2019, a group of seven abortion providers in the state filed a petition challenging the ban under Pennsylvania’s Equal Rights Amendment, alleging that the ban discriminates on the basis of sex. In 2021, the Commonwealth Court dismissed the petition and the providers appealed to the Pennsylvania Supreme Court. In its 3-2 decision remanding the case to the Commonwealth Court, the Pennsylvania Supreme Court overturned a 1985 case (Fischer) which concluded the Medicaid abortion ban was not based on sex and therefore did not discriminate against women. The Commonwealth Court must now decide whether the Medicaid coverage ban serves a compelling state interest and is narrowly tailored enough to achieve that interest (TRIB Live and The Hill, January 29).

SPA and Waiver Approvals

SPAS

• Payment Services
  • Arizona (AZ-21-0011, effective October 1, 2021): Updates the state plan to reflect DSH Pool 5 funding and participating hospitals for the DSH state plan rate year ending 2022.
  • Arizona (AZ-23-0019, effective October 1, 2023): Updates the inpatient hospital differential adjusted payment (DAP) program for contract year ending 2024.
  • Arizona (AZ-23-0020, effective October 1, 2023): Updates the nursing facility DAP program for contract year ending 2024.
  • Arizona (AZ-23-0021, effective October 1, 2023): Updates the outpatient DAP program.
  • District of Columbia (DC-23-0011, effective October 1, 2023): Revises the rate rebasing schedules for Specialty Hospitals.
  • Louisiana (LA-23-0034, effective October 1, 2023): Adjusts payments for well baby and transplant services within the inpatient hospital services program in order to align with current practices.
  • Missouri (MO-23-0031, effective November 8, 2023): Updates provisions related to final DSH redistributions and unspent allotment payments to bankrupt-liquidation and closed hospitals.
  • New York (NY-23-0099, effective October 1, 2023): Provides for the continuation of a zero-trend factor in the Medicaid reimbursement rates for Medicaid residential healthcare facilities caring for non-pediatric populations.
  • Ohio (OH-23-0035, effective January 1, 2024): Provides for Inpatient Hospital Services Cost Coverage add-on.
  • Ohio (OH-23-0032, effective October 1, 2023): Updates nursing facility services case mix reimbursement provisions.
  • Pennsylvania (PA-23-0019, effective November 1, 2023): Authorizes a one-time supplemental payment to eligible public and non-public nursing facilities.
  • South Dakota (SD-23-0012, effective July 1, 2023): Updates the nursing facility services reimbursement model by replacing the Resource Utilization Group III (RUG III) reimbursement model with  the Patient Driven Model (PDPM). In addition, nursing facility reimbursement rates are updated to the provider fiscal year 2021 cost report period and PDPM case mix data.
• Services SPAs
  • Arkansas (AR-24-0004, effective January 1, 2024): Updates to clarify the coordination of triage, treatment, and transport to an alternative destination.
  • District of Columbia (DC-23-0014, effective October 1, 2023): Carves out emergency transportation services from 1932(a) managed care contracts.
  • Iowa (IA-23-0027, effective December 31, 2023): Phases out the Health Home Program as part of the transition plan.
  • Kansas (KS-24-0001, effective January 1, 2024): Updates provisions to indicate compliance with the Electronic Visit Verification System (EVV) requirements for home health services.
  • Missouri (MO-23-0033, effective October 1, 2023): Annual assurance of the pharmacy program’s adherence to the FULs requirement of federal regulation regarding expenditures for multiple source drugs.
  • New Mexico (NM-23-0016, effective November 1, 2023): Provides for Opioid Treatment Center compliance with  provisional certification/accreditation and certification standards specified in 42 CFR part 8, subparts A and B.
  • North Carolina (NC-23-0044, effective October 1, 2023): Adds provisions relating to Early and Periodic Screening Diagnosis and Treatment (EPSDT) to the Private Duty Nursing (PDN) section.
  • North Dakota (ND-23-00029, effective October 1, 2023): Authorizes coverage of adult vaccines and requires updates to vaccine rates on a quarterly basis.
  • South Dakota (SD-23-0019, effective October 1, 2023): Provides coverage for adult vaccinations and their administration without cost sharing.
  • Utah (UT-23-0011, effective July 1, 2023): Provides coverage for services provided by a licensed behavioral analyst.
• Eligibility SPAs
  • Maine (ME-23-0026, effective January 1, 2024): Authorizes the new income standards for the optional state supplement program.
  • Texas (TX-23-0015, effective January 1, 2023): Adopts changes to the eligibility rules for the Former Foster Care Children eligibility group, as enacted by the SUPPORT Act, Pub. L. No. 115-217, section 1002.

Private Sector Updates

News

Healthcare Bankruptcies Hit Their Highest Level in Five Years

• According to a report released by Gibbins Advisors, healthcare company bankruptcies increased in 2023 to their highest level in the last five years. The advisory firm’s report looked at Chapter 11 bankruptcy case filings from 2019 to 2023 and discovered 79 healthcare companies with more than $10 million in liabilities that filed for bankruptcy protection last year. Pharmaceutical and senior care companies account for almost half of the bankruptcy filings on the list. Financial pressures are expected to continue this year as companies continue to struggle with high labor and supply costs, increased payer denials, low reimbursement rates, additional federal scrutiny on mergers and acquisitions and ongoing Medicaid disenrollments (Modern Healthcare, January 25).

CVS and Columbus-Based Medical Center Partner Form ACO

• On January 1, CVS Health and the Ohio State University Wexner Medical Center partnered to launch a Medicare Shared Savings Program enhanced track accountable care organization (ACO). The ACO will assist patients with transitions after hospitalizations, offer support services for high-risk individuals, and provide comprehensive care management which includes connecting patients to community resources. The Ohio ACO is expected to reach 12,500 Medicare beneficiaries receiving care in the health system and aims to address both clinical needs and health-related social needs. CVS Accountable Care has more than 65,000 providers coordinating care for about 1 million Medicare beneficiaries throughout the country (Modern Healthcare, January 25).

Cleveland Clinic to Explore Use of Artificial Intelligence

• Cleveland Clinic CEO and President, Dr. Tom Mihaljevic, discussed the use of artificial intelligence (AI) during his State of the Clinic Address as the health system looks for ways to use AI. The clinic is piloting an AI scribe, powered by Nuance, to capture conversations between patients and providers and summarize them in a digital medical note. Additionally, the clinic is piloting an AI interface that answers questions for patients, focusing first on patients with chronic diseases. Blind surveys have revealed that patients often find the AI-generated responses to be more compassionate, detailed, and timely compared to those from caregivers. Finally, the clinic is partnering with Palantir to use AI as a business tool to forecast surgeries and patient influx and optimize staff and resources. Though exercising caution in deploying clinical AI applications, the clinic is optimistic about the future of AI in healthcare (Modern Healthcare, January 24).

Sellers Dorsey Updates

New Video: Our Focus on Impact

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Case Study: Improving Health Outcomes through Maryland Quality Innovation Program (M-QIP)

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Sellers Dorsey Welcomes New SVP of Product Development

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