Issue #150
Key Updates:
On August 29, the Biden administration released the list of the ten Medicare Part D-covered drugs that will be included in the first cycle of negotiations pursuant to the Inflation Reduction Act. The initial price applicability year is 2026 (CMS, August 29).
On August 28, the Biden administration released the final rule to require states to report children’s health, adult behavioral health, and health home data on an annual basis. CMS believes reporting will help to measure the national quality of care for Medicaid and CHIP beneficiaries to help reduce health disparities (Inside Health Policy, August 28).
On August 24, senior officials from the CDC and FDA held a briefing that detailed the various countermeasures available to combat COVID-19, RSV, and influenza as the fall season approaches. The updated COVID-19 vaccines are expected to be cleared by the FDA soon with the CDC’s vaccine expert panel, the Advisory Committee on Immunization Practices, meeting September 12 to vote on whether to recommend the updated vaccines. New vaccines are available to combat RSV this year as two vaccines for older adults and one for newborns were approved earlier this year (Stat News, August 25).
From August 23 to August 30, CMS approved two Appendix K waivers and eight SPAs.
- Federal Updates
Featured Content
Medicare Drug Price Negotiations
- In August 2022, President Biden signed the Inflation Reduction Act of 2022 into law. The Act included Medicare program improvements such as the expansion of benefits, lowering of drug costs, and improving the sustainability of the program. The Act authorized the Medicare program to directly negotiate the prices of certain high expenditure, single source drugs that do not have a generic or biologically similar competition. On August 29, the Biden administration released the list of the ten Medicare Part D-covered drugs that will be included in the first cycle of negotiations, as follows:
- Eliquis (prevention and treatment of blood clots)
- Jardiance (diabetes; heart failure)
- Xarelto (prevention and treatment of blood clots; reduction of risk for patients with coronary or peripheral artery disease)
- Januvia (diabetes)
- Farxiga (diabetes; heart failure; chronic kidney disease)
- Entresto (heart failure)
- Enbrel (rheumatoid arthritis; psoriasis; psoriatic arthritis)
- Imbruvica (blood cancers)
- Stelara (psoriasis; psoriatic arthritis; Crohn’s disease; ulcerative colitis)
- Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill (diabetes)
CMS also released the negotiation process outline, which includes the following steps:
- Drug companies with a selected drug for the negotiation program and the public can submit data and information on the selected drugs to CMS no later than October 2, 2023.
- During the Fall 2023, each participating drug company with a selected drug can meet with CMS on its data submission. CMS will also hold a public patient-focused listening session for each selected drug with patients and other interested parties. The patient-focused listening sessions will be held between October 30, 2023 and November 15, 2023, but such sessions are subject to change or cancellation.
- CMS will send an initial price offer for each selected drug for which the drug company is participating in the negotiation program no later than February 1, 2024. Drug companies will have 30 days to respond to the initial price offer by accepting the offer or providing a counteroffer.
- If agreement on a price is not reached through the initial offer/counteroffer process, CMS will provide each participating drug company with three negotiation sessions during Spring and Summer 2024 with the negotiation period ending on August 1, 2024.
The initial price applicability year is 2026 (CMS, August 29).
Final Rule on Medicaid and CHIP Quality Reporting Measures
- On August 28, the Biden administration released the final rule to require states to report children’s health, adult behavioral health, and health home data on an annual basis. CMS believes reporting will help to measure the national quality of care for Medicaid and CHIP beneficiaries to help reduce health disparities. The Core Set of Children’s Health Care Quality Measures includes a range of measures that will determine how well the Medicaid program and CHIP provide affordable and high-quality person-centered healthcare. Another set of reporting requirements require states to report on behavioral health metrics for adults in Medicaid and for states that establish health homes. CMS does note that in the final rule there are 90% enhanced Federal Financial Participation (FFP) funds available for states designing, developing, and installing claims processing as well as 75% enhanced FFP for operating those systems. There is also a 50% federal match for staffing and contracting related to implementing core set reporting requirements (Inside Health Policy, August 28).
Fall Respiratory Illness Season
- On August 24, senior officials from the CDC and FDA held a briefing that detailed the various countermeasures available to combat COVID-19, RSV, and influenza as the fall season approaches. The updated COVID-19 vaccines are expected to be cleared by the FDA soon with the CDC’s expert vaccine panel, the Advisory Committee on Immunization Practices, meeting September 12 to vote on whether to recommend the updated vaccines. New vaccines are available to combat RSV this year as two vaccines for older adults and one for newborns were approved earlier this year. On the topic of COVID-19 testing, the Department of Health and Human Services’ Administration for Strategic Preparedness and Response said the federal government still has significant supplies of tests being sent to schools, libraries, long-term care facilities, and other distribution points (Stat News, August 25).
News
- KFF’s Medicaid Enrollment and Unwinding Tracker, which uses publicly available unwinding data, shows that more than 5.48 million individuals have been disenrolled from state and D.C.’s Medicaid programs as of August 28. Approximately 37% of individuals who successfully completed the renewal process were disenrolled, and available data shows that 74% of enrollees who were disenrolled were terminated for procedural reasons. Disenrollment for procedural reasons does not mean that these beneficiaries were not eligible for coverage. Rather, such disenrollment could be the result of individuals not submitting paperwork on time or the Medicaid agency misplacing paperwork, as stated by the Center of Budget and Policy Priorities. Disenrollment rates vary between states, with Texas and Wisconsin seeing the highest rates and Wyoming and Michigan seeing the lowest rates (Health Payer Intelligence, August 25).
- Nearly two-thirds of Medicare Shared Savings Program ACOs earned shared savings in 2022, saving Medicare $1.8 billion, an 8.4% increase from the previous year. Additionally, the proportion of ACOs saving money increased from 58% to 63%. The Medicare Shared Savings Program has achieved spending reductions for six consecutive years, with this latest year recording one of the highest savings since the initiative started in 2012. ACOs led by primary care physicians outperformed hospital-led ACOs in per-member savings. Physicians ACO of Ocala, Florida had the highest savings rate at 18.2% whereas Empire ACO of Brooklyn, New York reported the largest losses at 15.3%. Together, these ACOs generated $2.52 billion in performance bonus payments over the year. Despite this, participation in the program has declined. CMS has proposed technical updates to increase program participation, including eliminating penalties for ACOs not meeting benchmark savings and introducing a new risk-adjustment model. CMS is accepting comments on the proposed rule until September 11 (Modern Healthcare, August 24).
- A new House Budget Committee Health Care Task Force was announced on Friday, August 25 by Chair Jodey Arrington and will be led by Rep. Michael Burgess. This committee aims to gather input on how to reduce health spending, improve patient access, and address regulatory and statutory barriers to reducing costs. The committee has published an RFI for stakeholders which requests their insight into regulatory, statutory, or other implementation barriers that could be addressed; efforts to increase innovation in Medicare and other programs; comments on the Congressional Budget Office’s modeling capabilities; examples of evidence-based, cost-effective preventive health measures or interventions; and recommendations to reduce improper payments in government programs. Comments on this RFI are due by October 15. Other committee members include Reps. Drew Ferguson, Buddy Carter, Lloyd Smucker, Blake Moore, and Rudy Yakym (Inside Health Policy, August 25).
- More than 400 hospices nationwide could face administrative action due to potential fraudulent practices that were discovered during unannounced CMS site visits. CMS has also implemented increased oversight for California, Arizona, Nevada, and Texas while these issues are addressed. The agency is currently conducting visits to every Medicare-enrolled hospice in the country after reports of hospice fraud were discovered. Some of the potentially fraudulent practices include the certification of non-terminally ill patients and the provision of little to no services for patients needing care. In addition to the site visits and administrative action, CMS plans to start a pilot project to review hospice claims after 90 days of care. Additionally, CMS hopes to strengthen hospice oversight through its 2024 home health proposed rule, which includes a 36-month ban on new provider agreements and background checks for hospice owners. The comment period for the home health proposed rule ended August 29 (Inside Health Policy, August 22).
- CMS has launched a national TV ad campaign that informs beneficiaries to update their contact information and respond to health insurance renewal requests and other communications sent from state agencies. The ads will run through mid-2024 and target several key populations during the continuing Medicaid unwinding process (Inside Health Policy, August 25).
- The CDC has released updated guidelines focused on improving patient survival rates from sepsis. The agency released seven “Sepsis Core Elements” that will help hospitals implement effective sepsis management teams as sepsis cases continue to rise nationwide. Each year, 1.7 million Americans develop sepsis and 350,000 of them die during their hospitalization or are discharged to hospice care (Modern Healthcare, August 24).
- According to the CDC’s COVID-19 nursing home dashboard, COVID-19 cases in nursing homes have increased as of August 20 to approximately 7.0 cases per 1,000 residents, the first uptick in cases since January. The cases are increasing as health experts assess how to handle a new variant that could prove to be capable of evading immune system defenses. While nursing homes are committed to following the CDC’s health and safety protocols, some argue nursing homes should preemptively step up their protocols. It is also unclear how impactful the updated fall vaccines will be among healthcare workers and patients. Additionally, beginning in October, Medicaid will only cover vaccinations with no cost-sharing for fully approved COVID-19 vaccines (Inside Health Policy, August 25).
Federal Studies and Reports
- On August 25, recommendations about how Medicaid home-and community-based supports (HCBS) can provide pathways to independence were published in Health Affairs. Each year, Medicaid spends over $200 billion on long-term services and supports (LTSS) for individuals with physical, intellectual, and developmental disabilities, with 60% of spending now being on HCBS. The healthcare system has continued learning what it takes to provide assistance to people to attain independence and integration, but additional recommended areas of focus include the following:
- HCBS delivery system transformation must have as an overarching goal that Medicaid LTSS maximize independence in the most integrated setting appropriate for the individual.
- Systematic and objective identification of the level of independence individuals currently have in performing ADLs and IADLs; providing support to maintain and increase their ability to perform tasks themselves using alternative services and supports; and using paid in-person assistance only when necessary.
- Benefits that support independence must be covered and accessible. Medicaid benefits should be structured to provide streamlined access to services that increase independence and inclusion and offer a more effective and cost-efficient way of meeting individuals’ needs. Payers should simplify and expedite the approval processes for personalized assistive technologies.
- Quality systems must focus on the outcomes that are important to individuals, including employment, independence, and inclusion. One reassuring approach is the use of person-driven outcome measures.
- Medicaid payment for HCBS must ensure it pays for what individuals value, such as– independence, employment, inclusion, and community living (Health Affairs, August 25).
- A study published in JAMA Health Forum reveals challenges in retaining enrollees in the expanding Medicare Advantage (MA) market, with high attrition rates among beneficiaries changing plans within five years, especially among dual-eligible and minority populations. Researchers at Brown University analyzed data from 82.3 million Medicare beneficiaries from 2011 to 2020 and found that within five years, 53.4% of dual-eligible MA enrollees and over 48% of non-duals switched plans. Variations in rates based on ethnicity suggest that there may be potentially inappropriate care provided for certain enrollee needs. Among Black MA enrollees, 14.8% switched plans after one year, rising to 52.6% after five years; both have higher rates than those seen among white MA enrollees. Plans with lower premiums and smaller enrollment numbers saw higher rates of disenrollment whereas plans with higher “star” ratings from CMS saw better retention rates. Despite these figures, disenrollment rates in MA plans are lower than in non-Medicare plans, which generally see a disenrollment rate of more than 80% after five years. The researchers suggest that high disenrollment rates could reflect beneficiaries actively seeking better options, but discontent may still be a factor. The study highlights the need to incentivize plans for consistent patient care and prevent disruptions in care due to frequent disenrollments (Health Payer Specialist, August 28).
- In August 2022, President Biden signed the Inflation Reduction Act of 2022 into law. The Act included Medicare program improvements such as the expansion of benefits, lowering of drug costs, and improving the sustainability of the program. The Act authorized the Medicare program to directly negotiate the prices of certain high expenditure, single source drugs that do not have a generic or biologically similar competition. On August 29, the Biden administration released the list of the ten Medicare Part D-covered drugs that will be included in the first cycle of negotiations, as follows:
- State Updates
Waivers
- 1915(c) Appendix K
- Oklahoma
- Effective January 27, 2020, the state will extend Level of Care (LOC) determinations for up to 12 months after the original due date.
- Colorado
- Effective May 1, 2023, the state has modified the provider qualifications for Dental Service to include the option for Dental Therapists as a provider type and to update the license and other standards for this provider type. The state Medicaid agency plans to amend the base waiver in August 2023 to have this provider modification effective beyond the Appendix K approval period.
- Oklahoma
SPAs
- Payment SPAs
- California (CA-23-0014, effective July 1, 2023): Updates Medi-Cal’s All Patient Refined Diagnosis Related Group (APR-DRG) payments for state fiscal year 2023-2024.
- Colorado (CO-23-0022, effective July 1, 2023): Increases Psychiatric Residential Treatment Facilities (PRTF) reimbursement rates by 3% per the state budget bill.
- Missouri (MO-23-0013, effective July 1, 2023): Updates Medicare fee schedules, MO Healthnet fee schedules, and the National Dental Advisory Service (NDAS) used to determine outpatient reimbursement rates.
- Missouri (MO-23-0008, effective July 1, 2023): Adds language to reimburse Ambulatory Surgery Centers (ASC) on a fee schedule basis on Medicare’s ASC Payment System.
- New Hampshire (NH-23-0004, effective May 24, 2023): Updates the state’s Disproportionate Share Hospital (DSH) payments for the state plan rate year ending 2023.
- New York (NY-18-0057, effective July 1, 2018): Updates the cost base for the non-comparable components of the acute inpatient hospital services rates from the 2010 cost base to 2015, the acute rate statewide base price and service intensity weights.
- Services SPAs
- Indiana (IN-23-0010, effective July 1, 2023): Carves out basic life support and advanced life support ambulance transportation as well as nonemergency medical transportation (NEMT) services for nursing facility residents from the fee-for-service Medicaid NEMT brokerage. Nursing facilities will be responsible for providing transportation services to their residents.
- Montana (MT-23-0013, effective May 12, 2023): Makes permanent telehealth flexibilities for home health services and expands qualified providers to conform with federal regulatory changes.
News
- Madera Community Hospital, which closed last year and filed for bankruptcy this year, is set to receive up to $52 million in interest-free loans from California’s new fund for troubled hospitals. An additional $240.5 million is being offered to 16 other struggling hospitals in the state, including Beverly Community Hospital and Hazel Hawkins Memorial Hospital. Though additional funding may still need to be secured for a solid hospital reopening, local political leaders expressed relief at the news of funding for Madera and Hazel Hawkins hospitals. The distressed hospital loan fund initially had $150 million but was later increased to $300 million, supporting troubled hospitals impacted by many external factors such as the pandemic and low payment rates (Modern Healthcare, August 25).
- Starting October 1, certain groups of immigrants who have been granted green cards will have access to Medicaid in Michigan. The expansion includes pregnant mothers and children with green cards. However, individuals who receive their green cards through family, employment, and a variety of other methods will still be subject to the five-year waiting period before Medicaid benefits can be accessed. Funding for the expansion will be split between federal funding of $20 million and state funding of $6.5 million. Michigan was previously one of 15 states that had not expanded this access. Approximately 3,000 individuals are expected to be impacted by the change (CBS News – Detroit, August 24).
- Based on emails from whistleblowers at the Texas Health and Human Services Commission (HHSC), Democratic Representatives of the U.S. House from the state of Texas sent a letter to CMS over concerns that HHSC is overwhelmingly terminating enrollees during its unwinding process. During the unwinding process, the state has disenrolled 67%; approved 26%; and 7% of enrollee determinations are pending (Yahoo, August 27).
- Florida is the target of the first major unwinding lawsuit brought by Medicaid beneficiary advocates claiming that the state’s renewal termination letters are vague, violate federal requirements, and cannot count as adequate notice for the state’s beneficiaries. The lawsuit specifically contends that Florida’s Medicaid Program is depriving beneficiaries of their due process rights under the 14th Amendment and is violating the Medicaid Act by failing to meet timely and effective notice and fair hearing requirements. The lawsuit was filed by the Florida Health Justice Project and the National Health Law Program representing three Floridians while seeking class action certification by the court (Inside Health Policy, August 22).
- A class-action lawsuit has been filed against the New York Department of Labor after the agency closed a an investigation of home health aides’ complaints of systematic wage theft for 24-hour shifts. The lawsuit, filed by a group representing home health aides, claimed that the agency unlawfully determined that it cannot investigate the complaints because that is the role of the mandatory arbitration agreements in the aides’ union contracts which supersedes the department’s authority (Politico, August 28).
- On August 24, West Virginia federal Judge Robert Chambers ruled that GenBioPro, maker of the generic version of the abortion pill mifepristone, can proceed with a lawsuit concerning the state’s ban on telehealth prescribing of the medication. Judge Chambers, however, did not allow the company to continue its broader challenges of the state’s abortion ban. Judge Chambers concluded that federal drug law allows states to ban a medical procedure but does not let states override FDA prescribing conditions. The issue in that part of the case is whether West Virginia can prohibit telehealth prescribing in situations where its abortion ban doesn’t apply (Inside Health Policy, August 25).
- 1915(c) Appendix K
- Private Sector Updates
News
- According to a Critical Insight report, the healthcare industry has faced fewer data breaches in the first half of 2023, but the number of individuals impacted by the breaches has increased. In the second half of 2022, there were 363 data breaches that affected approximately 31 million people. Alternatively, there were 308 breaches reported in the first half of 2023, but 40 million people were affected. Almost 75% of breaches were tied to hackers, and breaches associated with third-party businesses have jumped to 21%, up from 10% in 2019 (Fierce Healthcare, August 24).
- Cigna announced it will eliminate prior authorization requirements for more than 600 procedures in its commercial plans. This represents 25% of prior authorization requirements for the 16.5 million enrollees in the insurer’s commercial plans. This comes after pressure mounts on the insurer from providers, government agencies, and patients to cut down on prior authorization requirements. According to Cigna, the company has eliminated more than 1,100 prior authorization requirements since 2020, resulting in only 4% of procedures currently subject to prior authorization for commercial policyholders (Modern Healthcare, August 24).
- Nonprofit healthcare systems are adding or expanding facilities to meet the increasing demands of patients despite difficult operating circumstances. Both UPMC and Cleveland Clinic are examples of nonprofit health systems that are investing and expanding despite suffering operating losses in their second-quarter earnings reports (Modern Healthcare, August 24).
- Sellers Dorsey Updates
- For Managing Director of Sellers Dorsey, Justin St. Andre, creating innovative solutions to pressing challenges is not only one of his strengths, it’s what makes his work exciting and impactful. Justin plays a critical role in helping Sellers Dorsey achieve its mission to enhance healthcare quality, equity, and access. Learn more about Justin and his work at Sellers Dorsey in this engaging interview. Click here to read!
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