News

Medicare and Medicaid Plans Can Leverage Utilization Management for Wegovy Heart Disease Coverage

• With the FDA’s approval of Wegovy for cardiovascular treatment, CMS has provided Medicaid and Medicare coverage of the drug for the new indication. However, CMS outlined utilization management tools that Medicare and Medicaid plans can use, such as prior authorization, step therapy, and quantity limits, to limit the financial impact. Although Medicare does not cover Wegovy for weight loss, CMS guidance states that Medicare Part D plans can adjust formularies mid-cycle to accommodate the new indication. Medicaid programs are mandated to cover the drug for cardiovascular prevention in individuals with obesity. Although states have the authority to decide their own approaches to utilization management, the fiscal impact is expected to be significant. The director of federal policy for the National Association of Medicaid Directors, Jack Rollins, explained that the coverage of Wegovy for this purpose will cause states to consider balancing the high short-term cost of treatment with long-term savings (Inside Health Policy, March 27).

Federal Regulation/Guidance

Inpatient Rehab Facilities (IRFs) May See an Influx of $255 Million in the Next Fiscal Year, Based on CMS Proposed Rules

• On March 27, CMS released proposed rules which included a 2.8% pay bump for inpatient rehabilitation facilities (IRFs) for the 2025 fiscal year. IRFs could see an increase of $255 million in fiscal year 2025 as a result of this proposed pay rule. CMS is also requesting public input on possible star rating system measures and consumer-friendly comparison publications for IRFs (Modern Healthcare, March 27; Inside Health Policy, March 27).

HHS Extends Federal Enrollment Period to Assist Individuals Transitioning to the Marketplace, Publishes New Resources for Stakeholders, and Releases Guidance Reinforcing Federal Requirements

• On March 28, HHS announced the extension of the temporary special enrollment period (SEP) to assist individuals who are no longer eligible for Medicaid or CHIP transition to the marketplace using HealthCare.gov. The unwinding SEP will be continued to November 30 from July 31, and individuals will have 60 days from when they apply to select a marketplace plan, with coverage beginning the first day of the month after plan selection. CMS also released additional guidance for stakeholders and published other resources to help individuals maintain insurance coverage. These include the following:
  • Assistance on unwinding processes and tools for states that emphasize federal renewal requirements, created in response to questions and comments from states and community partners.
  • Guidance for Medicaid managed care plans on completing signatures for enrollees so plans can better assist individuals in renewing coverage.
  • New resources for community partners to help individuals and families navigate the Medicaid fair hearing process (Medicaid.gov, March 28; Modern Healthcare, March 28).

CMS Releases Enrollment and Eligibility Final Rule

• CMS released a final rule on April 2, 2024, titled, “Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes.” This final rule is intended to reduce barriers to enrollment and improve retention in Medicaid, CHIP, and the Basic Health Program (BHP). The final rule was first proposed in September 2022 and includes several provisions to streamline enrollment and smooth transitions between these programs in response to President Biden’s Executive Orders from January 2021 and April 2022. Some provisions finalized in the rule include the following:
  • Eliminating annual and lifetime limits on CHIP coverage.
  • Prohibiting lockout periods for CHIP.
  • Removing the state option for a waiting period prior to CHIP enrollment.
  • Improving the transfer process between CHIP and Medicaid.
  • Requiring states to use prepopulated renewal forms, conduct renewals no more than once every 12 months with limited exceptions, accept renewals through multiple modalities, and limit requests for information following a change in circumstances for Aged, Blind, and Disabled individuals.
  • Allowing states to deduct prospective, predictable medical expenses for individuals living in the community and seeking coverage as medically needy.
  • Setting timeframes and protections for determination and redetermination of eligibility for both applicants and beneficiaries facing renewal or a change in circumstance.

CMS Finalizes Medicare Advantage Payment Rates for CY 2025

• On April 1, CMS finalized the CY 2025 payment rates and policies for Medicare Advantage (MA) and Medicare Part D programs. Federal payments are expected to increase by approximately 3.7% ($16 billion) from this year to 2025. In 2025, the projected MA payments from the government will be approximately $500 billion- $600 billion to private health plans. Payers are worried about what the benchmark rate cut might mean for them, as it is set to decline .16% in CY 2025, resulting in lower payments. A few insurance companies have started to speak on possible benefit and reimbursement cuts, and increases in premiums, in response to the rate cut. In alignment with President Biden’s Inflation Reduction Act, CMS will also move forward with creating an annual cap of $2,000 for out-of-pocket prescription drug costs for beneficiaries with Medicare Part D (CMS, April 1; Modern Healthcare, April 1).