News

MACPAC Holds December 2024 Public Meeting

• The Medicaid and CHIP Payment and Access Commission (MACPAC) met on December 12, 2024, and December 13, 2024, to host sessions on and discuss the following topics:
  • State and Federal Tools for Ensuring Accountability of Medicaid Managed Care Organizations (MCOs): The presentation included information on resources available to state and federal regulators to exercise oversight of managed care programs such as procurement, external quality reviews, and denials and appeals. MACPAC conducted a review of federal policy and state MCO contracts. In the state scan, they found that the most common contract sanctions were financial penalties, corrective action plans, contract terminations, administrative/corrective actions, enrollment penalties, and capitation payment penalties. There were fewer incentives within state MCO contracts, with the most common being capitation payment bonuses for meeting or exceeding performance standards. The next steps for this work include stakeholder interviews and an analysis of sanction information from state Managed Care Plan Annual Report (MCPAR) submissions.
  • External Quality Review (EQR) Draft Recommendations: MACPAC staff presented draft recommendations related to EQRs for their March 2025 report to Congress. These recommendations focus on making the findings in annual technical reports clearer and more accessible to stakeholders. The Commission reviewed the proposed recommendations, considering their rationale and the potential impact on various stakeholders, including states, Medicaid MCOs, and beneficiaries. The goal is to improve how Medicaid managed care services are reported and enhance their effectiveness.
  • Transitions of Care for Children and Youth with Special Health Care Needs (CYSHCN): The Commission examined how state Medicaid programs and MCOs operationalize their transitions of care policies for CYSHCN. The Commission found that these transition plans are not often publicly documented, nor did all CYSHCN receive a transition of care plan. It was also noted that state Medicaid and Title V agencies are not required to coordinate on CYSHCN transitions of care. MACPAC staff presented four policy options to the Commissioners to address these issues, which included potential recommendations to Congress, CMS, and HHS.
  • Potential Areas for Comment on CMS Proposed Rule on Medicare Advantage (MA) for CY2026: On December 10, 2024, CMS released a proposed rule impacting Medicare and Medicaid that would, among other things, mandate coverage of certain weight loss drugs, add integration requirements for Dual-Special Needs Plans (D-SNP), and increase awareness of cost-sharing assistance programs. Comments on the proposed rule are due on January 27, 2025. Because this proposed rule impacts Medicaid and dual-eligible beneficiaries, MACPAC felt that it was appropriate to draft a response. They shared potential comments on the topics listed above that align with previous work published by the Commission.
  • Self-Directed Services in Medicaid Home-and Community-Based Services (HCBS): In this session, MACPAC staff discussed self-direction as an HCBS consumer-controlled delivery model. The presentation highlighted program design considerations, enrollment data, evaluation outcomes, and issues to prioritize with stakeholder groups.
  • Panel on Self-Direction for HCBS: MACPAC’s discussion on self-directed care services highlighted key issues related to eligibility and barriers to access with administering self-directed HCBS. The panel explored the benefits, challenges, and design considerations involved, giving Commissioners a chance to hear directly from expert panelists. Commissioners’ engagement with expert panelists provided insights to better understand the perspectives and stakeholder input that states need to consider when developing and running self-direction models.
  • Timely Access to HCBS: Policy Option on Provisional Plans of Care: MACPAC commissioners discussed provisional plans of care that are allowable under Section 1915(c) waivers. Staff recapped relevant themes from stakeholder interviews from five states, including lack of awareness, lack of feasibility, limited capacity, and administrative complexities. MACPAC commissioners opined that CMS should issue guidance regarding states’ Medicaid authority for the adoption of provisional plans of care and relevant policy and operational issues that should be considered when implementing this type of service.
  • HCBS Spending and Utilization: MACPAC partnered with Mathematica to review Medicaid HCBS spending and utilization. As of 2021, more than 2.5 million individuals used HCBS, with a wide variety of subpopulations and intensity of services. 1915(c) waivers accounted for the majority of the $82B spent on HCBS services in 2021. Building from previous work in 2017 using Medicaid Analytic eXtract data, T-MSIS data from 2019 through 2021 was analyzed to identify HCBS and institutional LTSS claims. The resulting data was stratified by beneficiary characteristics and LTSS subpopulation type. The number of HCBS users increased from 2019 to 2021 while institutional LTSS users decreased in the same period. MACPAC provided several graphs that showed the demographic makeup of HCBS users and information on the spending and utilization of HCBS services broken down by subpopulation. Next steps for the Commission include developing an issue brief for high-level findings and utilizing the data set for future work.
  • Findings from a Technical Expert Panel on Medicaid Payment Policies to Support the HCBS Workforce: The MACPAC presentation focused on the impact of workforce shortages in HCBS, emphasizing that these workforce shortages are impacting Medicaid’s ability to support people with long-term care needs in their homes or communities. While some workforce challenges fall outside Medicaid’s scope, many states are exploring ways to use Medicaid payment policies to expand the HCBS workforce and reduce turnover. Previous MACPAC meetings in November 2023 and March 2024 discussed findings from federal and state interviews on strategies to ensure Medicaid payment rates are sufficient to attract and retain workers. Building on these insights, a technical expert panel (TEP) was convened, including federal and state officials, HCBS payment experts, actuaries, beneficiary advocates, and provider groups. The TEP discussion highlighted the importance of aligning rate assumptions and conducting consistent rate reviews to strengthen the HCBS workforce (MACPAC, December 13).

End of Year Health Package That Contains Two-Year Telehealth Extension and Funding for Several Health Care Programs

• On December 17, lawmakers finalized the Continuing Resolution (CR) ahead of the government funding deadline on Friday night. Late on December 18, House Speaker Johnson indicated that the CR package may not be voted on Friday after objections were raised by some House Republican members and President-elect Trump. Included in the CR are extensions for Medicare alternative payment model bonuses and pandemic-era telehealth flexibilities and a 2.5% bonus for Medicare physician payments to offset the anticipated 2.8% cut from CMS as well as PBM reform and other items. The provisions around prior authorizations in Medicare Advantage and site-neutral hospital payment policies were not included in the final text. House Speaker Mike Johnson stated that he intends to follow the House rule that allows members of Congress to review a bill for 72 hours, placing the vote on Friday afternoon. The general funds allocated in the bill will last until March 14. The CR also extends various other key healthcare programs, with pharmacy benefit manager (PBM) and patent reforms used to offset costs. CMS is expected to adjust its fee schedule in line with the new telehealth provisions, likely through an interim final rule that would take effect immediately upon implementation (The Washington Post, December 18; Modern Healthcare, December 17).

Federal Legislation

U.S. Supreme Court Will Not Consider Appeal Challenging Arkansas’ 340B Drug Pricing Law

• On December 13, the U.S. Supreme Court declined to hear an appeal from the Pharmaceutical Research and Manufacturers of America (PhRMA) industry group challenging Arkansas’ 340B drug pricing law. The 340B program, established by Congress 32 years ago, aims to support safety-net healthcare providers by offering discounted outpatient drugs. This decision upholds a lower court’s March ruling that upheld Arkansas’ law, which prohibits drugmakers from limiting 340B drug discounts for providers using contract pharmacies. PhRMA contended that Arkansas’ 340B Drug Pricing Nondiscrimination Act, passed in 2021, conflicts with federal law governing the 340B program, which mandates that drug manufacturers provide discounted drugs to safety-net providers. PhRMA argued in its 2021 complaint that the 340B program is a “completely federal program” and that the state law’s requirements for manufacturers clash with both the federal 340B statute and the agreements drugmakers make with HHS. The case was initially brought before the U.S. District Court for the Eastern District of Arkansas, where the court ruled in favor of the state. PhRMA then appealed to the Eighth Circuit Court of Appeals, which upheld the lower court’s decision. The three-judge panel of the Eighth Circuit ruled that Section 340B of the Public Health Services Act does not preempt Arkansas’ law (Fierce Healthcare, December 13).