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Issue #146

Key Updates:

On July 28, CMS published the first round of redetermination data. The early data shows that 80% of terminations were due to paperwork issues. 35 patient advocacy organizations and other stakeholder groups want the Biden Administration to release data on a more frequent basis while using all enforcement authorities granted to CMS during the COVID-19 unwinding period. The released data is from April and only includes 18 states (Inside Health Policy, July 28; Inside Health Policy, July 28).

CMS finalized reimbursement rates for hospice providers for FY 2024, increasing them by 3.1%. However, hospice providers that fail to meet quality reporting requirements will see a 4% pay cut. Additionally, CMS is adding an anti-fraud measure to require all hospice physicians, attending physicians, and medical directors to be enrolled in Medicare or validly opt-out (Inside Health Policy, July 28).

A joint coalition of the American Hospital Association, American Medical Association, AHIP, and BCBS Association sent a letter to CMS urging the agency to clarify the mismatch between two proposed prior authorization-related rules. The coalition indicated that if both proposed rules are finalized, widespread industry confusion will follow, be expensive to implement, and make the process more administratively complex (Inside Health Policy, July 27; Modern Healthcare, July 27).

From July 27 through August 2, CMS approved nine SPAs, two of which are COVID-19 disaster relief SPAs, and has one 1115 waiver out for public comment.

Federal Updates

Featured Content

CMS Releases Post-Pandemic Redetermination Data

  • On July 28, CMS released official post-pandemic Medicaid/Children’s Health Insurance Program (CHIP) eligibility redetermination data. The early data is still incomplete but shows that 80% of redetermination terminations were due to paperwork issues and that approximately 55,000 individuals transitioned from Medicaid/CHIP into an exchange plan. 35 patient advocacy organizations and other stakeholder groups want the Biden Administration to release data on a more frequent basis while using all enforcement authorities granted to CMS during the COVID-19 unwinding period. The information released last week is from April and only includes 18 states. In their joint statement, the 35 organizations asked CMS to improve transparency during the unwinding process and to share the names of states that have violated federal renewal requirements and how CMS addressed those infractions. In his letter to states on Friday, HHS Secretary Xavier Becerra reiterated that the administration is largely concerned about the “high rates of procedural redeterminations due to red tape and other paperwork issues,” and also stressed that they do not yet have data about individuals transitioning out of Medicaid to other sources of coverage. CMS stated they do not expect to have full data on transitions to the marketplace from Medicaid/CHIP until the fall 2023. CMS plans to release data every month in two reports until states stop reporting in June 2024. The first report will show renewal outcomes, call center operations, and initial transitions to marketplace coverage. The second report will contain coverage transition data on individuals who left Medicaid or CHIP in healthcare.gov states (Inside Health Policy, July 28; Inside Health Policy, July 28).

FY24 Medicare Hospice Rates

  • CMS finalized reimbursement rates for hospice providers for FY 2024, increasing them by 3.1%. However, hospice providers that fail to meet quality reporting requirements will see a 4% pay cut. Additionally, CMS is adding an anti-fraud measure to require all hospice physicians, attending physicians, and medical directors to be enrolled in Medicare or validly opt-out. Providers will have until May 1, 2024 to comply before the provisions are effective. With the 3.1% payment increase, CMS estimates that hospice providers will see an additional $780 million in payments in FY 2024 compared to FY 2023. The annual hospice provider aggregate payment cap is $33,494.01 per patient for FY 2024 (Inside Health Policy, July 28).

News

  • On Wednesday, August 2, CMS released a letter to State Medicaid Directors issuing guidance on extending COVID-19 flexibilities for Home and Community Based Services under Appendix K waiver amendments. These amendments were originally set to expire six months after the end of the PHE, which would have been November 11, 2023. However, CMS is now providing an extension allowing states to keep these flexibilities in place for a longer period if they submit an amendment or renewal request by the November 11th date to incorporate their desired Appendix K provisions into their underlying HCBS programs. This extension also applies to states that authorized similar services through 1115 waivers and have corresponding COVID-19 Appendix K (“Attachment K”) flexibilities authorized under those demonstrations. States do not have to amend already approved Appendix K applications to take advantage of this extension. Additionally, extending Appendix K authority also results in extending state obligations to maintain the changes in eligibility, services, and/or payment rates for HCBS. To avoid a lapse in approved amendments, states are encouraged to submit their requests as soon as possible. CMS emphasizes that states are not required to amend their waivers to extend flexibilities but encourages states to consult with stakeholders to determine which policies would be beneficial to continue. Questions about this guidance can be directed to Melissa Harris, Deputy Director, Medicaid Benefits and Health Programs Group, at harris@cms.gov (CMS, August 2).
  • On July 31, the Biden Administration released a plan to establish a Medicare dementia care program to increase coordination and support for caregivers of individuals with Alzheimer’s and other types of dementia. The Guiding and Improved Dementia Experience (GUIDE) model is designed to improve quality of life for individuals with dementia and to help them remain in their home while providing support for caregivers. In 2023, there are an estimated 5 million people living with Alzheimer’s. In the fall, CMS plans to issue an application to participate, and organizations will need to notify CMS by September 15 of their intent to participate. The program is scheduled to begin in July 2024 and run through 2032 (POLITICO Pro, July 31).
  • On July 28, the FDA approved RiVive, the second nonprescription opioid overdose antidote. RiVive is a nasal spray containing naloxone made by Harm Reduction Therapeutics. It reverses opioid overdoses and is administered similarly to over-the-counter allergy medication as an inhaled spray. This approval comes as the opioid crisis persists in the United States with data from the CDC showing that from February 2022 to February 2023, the number of fatal overdoses from opioids remained the same as the year before at approximately 80,000 individuals. RiVive is planned to be available for sale in early 2024 (Politico Pro, July 28).

Federal Regulation

  • The Biden Administration released a proposed rule last week that seeks to strengthen federal mental health parity law and also examine how pandemic-era telehealth flexibilities affected access to mental health and substance use disorder services during the public health emergency (PHE). The proposed rule seeks comment on the impact of relief from group market rules on employers without other employer benefits and the need for additional safeguards for access. The Administration also seeks input on using telehealth or remote care services to address any discrepancies in access to mental health care. The proposed rule is also intended to provide clarity on the classification of telehealth services under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) so that they are categorized the same as their in-person counterparts  (Inside Health Policy, July 26).

Federal Legislation

  • The Senate Finance Committee in a bipartisan 26-1 vote approved a bill that intends to boost transparency of PBM practices. The bill establishes new requirements on contracts between Medicare Part D plan sponsors and PBMs, specifically mandating that payments to PBMs must be for a “bona fide service fee” that is not linked to a drug list price and requires PBMs to annually report drug price data to Part D plans and HHS. For Medicaid, the bill would ban spread pricing, a practice where PBMs charge plans more for a drug than they reimburse pharmacies for dispensing it (Politico, July 26).

Federal Studies and Reports

  • CMS has released the latest enrollment figures for Medicare, Medicaid, and CHIP, showing an increase in enrollment for these key healthcare programs as of April 2023. Medicare saw an increase of 88,441 enrollees, bringing the total to 65,836,738. Of that number, over 31 million are enrolled in Medicare Advantage or other health plans, including plans with and without prescription drug coverage. Medicaid saw an increase of 274,934 enrollees, bringing the total to 94,151,768. A little over 7 million of these enrollees are children in CHIP. Over 12 million individuals are dually eligible for both Medicare and Medicaid and are counted in the numbers for both programs (CMS, July 31).
State Updates

Waivers

  • Section 1115
    • Alabama
      • On July 17, Alabama submitted a request for a new 5-year 1115(a) demonstration titled “Alabama Substance Use Disorder Demonstration.” This demonstration proposes to cover treatment and recovery services provided to Medicaid-enrolled individuals in Institutions for Mental Diseases (IMDs) for opioid use disorder (OUD) and substance use disorder (SUD) services. Additionally, this demonstration proposes to extend limited Medicaid coverage to qualified low-income individuals without health insurance screened as meeting the criteria for SUD in specific areas of the state. The federal public comment period is open until August 31, 2023, and comments can be submitted here.

SPAs

  • COVID-19 SPAs
    • Alaska (AK-23-0007, effective May 12, 2023): Extends the suspension of behavioral health prior/service authorizations for one year after the end of the PHE as originally approved under the 1135 waiver authority in 2020.
    • Louisiana (LA-23-0030, effective May 12, 2023): Extends provisions governing preventive services to reimburse ambulance service providers who provide allowable services on site, without transport, while under the supervision of a licensed physician. Originally approved in Disaster Relief SPA LA-22-0004.
  • Administrative SPAs
    • Hawaii (HI-23-0009, effective May 18, 2023): Waives the provider application fee.
  • Payment SPAs
    • Alaska (AK-23-0004, effective May 1, 2023): Implements a 10% payment rate increase for all HCBS (including waiver) services.
    • Colorado (CO-23-0017, effective July 1, 2023): Updates the Alternative Payment Model (APM) section by increasing the partial prospective payment rate 16% for all Principal Accountable Providers (PAP) that receive 25% or more of their reimbursement through the APM 2. PAP that receive less than 25% of their reimbursement through the APM 2 will receive a pro-rated increase relative to their percentage of APM 2 reimbursement.
    • Mississippi (MS-23-0010, effective May 12, 2023): Authorizes the Division of Medicaid (DOM) to continue the same Private Duty Nursing (PDN) rates in effect January 1, 2023 for dates of service beginning May 12, 2023.
    • Mississippi (MS-23-0019, effective May 12, 2023): Authorizes DOM to continue the 15% increase for Prescribed Pediatric Extended Care (PPEC) facilities that were made effective October 1, 2022 beyond the end of the PHE.
    • South Dakota (SD-23-0013, effective June 1, 2023): Implements as 16% inflationary increase for Community Mental Health Centers and Substance Use Disorder Agencies appropriated by the state legislature.
  • Eligibility SPAs
    • North Carolina (NC-23-0009, effective April 1, 2023): Transitions the state’s separate NC Health Choice Children’s Health Insurance Program into the NC Medicaid Program; adopts a new Medicaid eligibility group for certain children under the age of 19; and aligns the income standard for all children under age 19 at 211% of the FPL.

News

  • On July 26, the North Carolina Department of Health and Human Services under the leadership of Governor Roy Cooper announced the state will be expanding Medicaid on October 1 despite lawmakers having yet to approve the funding to do so. The announcement comes with support from the Biden Administration and puts additional pressure on the state’s legislature to either pass a budget to include Medicaid expansion or fund Medicaid expansion separately by September 1. If lawmakers miss this deadline, expansion will be delayed until December 1. Implementing Medicaid expansion has been a top priority for two-term Governor Cooper who will leave office in 2025. North Carolina lawmakers are currently on a break and won’t return until early August (Health Payer Specialist, July 28; Politico Pro, July 26).
  • The City of Cleveland is suing payers, pharmacy benefit managers (PBMs), and drug makers alleging that they are in collusion to manipulate insulin prices and claiming that this scheme cost the city millions of dollars in drug benefit payouts. The lawsuit was filed in the U.S. District Court of the Northern District of Ohio and names 18 defendants, including Evernorth, ExpressScripts, CVS Health, UnitedHealth Group, and drug manufacturers Eli Lilly, Novo Nordisk, and Sanofi-Aventis. In the lawsuit, the city claims that the PBMs work with drug makers to create benefits for themselves instead of passing cost-savings to enrollees. The lawsuit points out the discrepancy in price, as insulin costs as low as $2 to produce but individual vials can be priced anywhere from $300 to $700. This follows two other lawsuits filed by Ohio and California, which also sought legal action against PBMs and the price of insulin (Health Payer Specialist, July 31).
Private Sector Updates

Associations Urge CMS Action on Prior Authorization Rules

  • A joint coalition of the American Hospital Association, American Medical Association, AHIP, and BCBS Association sent a letter to CMS urging the agency to clarify the mismatch between two proposed prior authorization-related rules. The first proposed rule would require health insurers and providers to follow one specific set of electronic data-sharing standards when forwarding healthcare attachments during payment disputes, claims reviews, and preapproval requests. The second proposed rule would mandate different requirements for how federally regulated insurers can share patient information when processing prior authorization requests. The coalition indicated that if both rules are finalized, widespread industry confusion will follow, be expensive to implement, and make the process more administratively complex (Inside Health Policy, July 27; Modern Healthcare, July 27).

News

  • On July 27, Sanford Health and Fairview Health Services called off their proposed merger. There was limited support from key Minnesota stakeholders, and according to President and CEO, Bill Gassen, Sanford felt it was in their best interest to discontinue the process. This is the second unsuccessful attempt to merge the two health systems in the last ten years. Previously, the Minnesota Attorney General (AG), Keith Ellison, had asked the health systems to postpone the merger amid concerns about the future of the University of Minnesota Medical Center. Minnesota lawmakers had also put together legislation designed to prohibit for-profit or out-of-state entities from owning the University of Minnesota healthcare facilities unless the AG determines it is in the state’s interest. The legislation was signed by Governor Walz (D) in May and became effective immediately (Modern Healthcare, July 27).
  • A potential class-action lawsuit has been filed in California claiming Cigna is using an algorithm that denies enrollee claims within seconds and without the review of a physician. The lawsuit was filed in the U.S. District Court in Sacramento on July 24 with claims that Cigna uses the algorithm to deny coverage for tests or treatment that do not fall under a pre-approved list of services for specific diagnoses. The physicians contracted to review the enrollee claims then reject them in “batches” without conducting an actual full review. The lawsuit seeks damages for breach of implied covenant and fair dealing, violation of California’s unfair business competition law, intentional interference with contractual relations, and unjust enrichment and seeks class-action status for enrollees impacted by the coverage claim rejections (Health Payer Specialist, July 26).
  • A new collaboration between three major healthcare associations – AHIP, American Medical Association, and National Association of Accountable Care Organizations – aims to provide voluntary guidelines for improving value-based healthcare through a playbook titled, “The Future of Sustainable Value-Based Care and Payment: Voluntary Best Practices to Advance Data Sharing.” The first phase of this collaboration focuses on improving data sharing to include goals of adopting standards for consistent content and exchange; ensuring complete and accurate patient and population data; and improving data collection to better identify disparities and barriers to care. The collaboration aims to reshape the healthcare landscape and drive positive change in value-based care. The healthcare associations aim to address other value-based care issues in the future, such as payment methodologies and care coordination for specialty and primary care (Health Payer Specialist, July 26).
Sellers Dorsey Updates
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