Sellers Dorsey Digest

Federal Updates

News

Department of Health and Human Services Awards Grants for LGBT Youth Mental Health and Support Services

• On February 16, HHS announced four Substance Abuse and Mental Health Services Administration (SAMHSA) grant awards totaling $5.1 million to provide counseling and support for LGBT youth and their families. The funding is intended to prevent mental health and substance use disorders and other health conditions, including HIV. The grants will go to Thomas Jefferson University in Philadelphia, PA; the Latino Commission on AIDS in New York, NY; the Arbor Circle Corporation in Grand Rapids, MI; and the New Jersey AIDS Alliance in Newmark, NJ. These grants are among several recent actions from SAMHSA to support the mental and behavioral health of LGBT individuals (Inside Health Policy, February 20).

Associations Suggest CMS Could Improve Medicare Savings by Better Integrating Nursing Homes into Accountable Care Organizations

• A white paper released by the American Health Care Association (AHCA), the National Center for Assisted Living, and the National Association of ACOs (NAACOS) highlighted that better integrating nursing homes into Accountable Care Organizations (ACOs) would result in improved Medicare savings, but would involve changes to ACOs and/or updated value-based care assessments. Currently, approximately 2,000 nursing homes are participating in ACOs. CMS has established a goal for all fee-for-service (FFS) Medicare beneficiaries to enroll in some kind of value-based care arrangement by 2030. Nearly half of FFS Medicare beneficiaries are currently enrolled in ACOs, representing 13.7 million individuals. The recommendations for consideration in better integrating nursing homes into ACOs include:
  • Testing episode-based pay for nursing homes within an ACO. However, bundled payments need to be organized in such a way that both the ACOs and nursing homes will benefit.
  • Removing long-term care residents from ACOs and developing a different model to better demonstrate the “critical component” nursing homes can take part in value-based care arrangements.

Researchers also acknowledged the outstanding complexity of convincing CMS to create a different, innovative ACO model (Modern Healthcare, February 21).

Federal Legislation

Bi-Partisan Group of Attorneys General on Board for Stricter PBM Transparency Rules

• The National Association of Attorneys General (NAAG) has recently joined the effort to require pharmacy benefit managers (PBMs) to be more transparent in their prescription drug price negotiations. A bipartisan coalition of Attorneys General from 38 states and D.C. sent a letter to Congress, on February 20, urging them to pass legislation to address the need for accountability from PBMs (Modern Healthcare, February 22).

Federal Regulation

Final Disproportionate Share Hospital Third-Party Payer Rule

• On February 23, CMS released the final Disproportionate Share Hospital (DSH) Third-Party Payer rule, which implements changes to the methodology for calculating the Medicaid hospital specific DSH limits and establishes new requirements around identifying and addressing DSH overpayments. Specifically, this rule incorporates the Consolidated Appropriations Act (CAA) of 2021 limitations on how the Medicaid portion of hospital specific DSH limits are calculated by requiring states to exclude from its Medicaid DSH shortfall calculations any costs and payments for services provided to Medicaid patients for whom Medicaid is not the primary payer. The rule provides an exception to this DSH calculation limitation for hospitals defined as “97^th Percentile Hospitals” with the highest concentrations of low-income patients based on number and percentage of total inpatient days ranked against hospitals nationally.  Please note that this rule is separate from the proposed DSH allotment reductions of $8 billion that have been delayed as part of the Continuing Resolution, which runs through March 8, 2024 (Modern Healthcare, February 20; GovInfo.gov, February 23).

For a more detailed summary on the final DSH TPP rule by Sellers Dorsey, click here.

State Updates

News

Colorado Could Become the First State to Approve Drug Upper Payment Limit

• On February 23, Colorado’s Prescription Drug Affordability Board (PDAB) voted to establish an upper payment limit (UPL) on Enbrel, a drug used to treat arthritis and psoriasis. While the Arthritis Foundation has not taken a formal position, in their comments to the PDAB, they requested that the panel meet with patients to understand the contributing factors of their inability to access the necessary medications, and that an UPL might not make a difference in affordability. Opponents of UPLs have spoken to how UPLs are not a solution that will help patients better access and afford medication such as Enbrel. UPL supporters counter that this process will work with other policies to significantly lower drug costs for patients (Inside Health Policy, February 23).

Florida Delays Medicaid Managed Care Contract Award Date Again

• Florida was set to announce notices of intent to award their $30 billion Medicaid contract on February 23. However, the state has delayed it to March 25. The Agency for Health Care Administration originally released an invitation to negotiate in April 2023, with the goal of awarding contracts by December 11, 2023. Florida’s existing managed care contract expires at the end of this year. The five-year contract in question has attracted 10 incumbents including Aetna, AmeriHealth Caritas, Centene, Humana, Molina Healthcare, and UnitedHealth Group and two additional first-time bidders, Sentara Care Alliance and ImagineCare (Health Payer Specialist, February 23).

Indiana Medicaid Makes Changes Impacting 1,600 Children

• Indiana has identified 1,622 children with disabilities receiving attendant care services through the Family and Social Services Administration (FSSA) which made up a significant portion of the unexpected costs that created a $1 billion Medicaid shortfall. Within the last year, expenses for the program increased to an unsustainable level and created a significant shortfall in the Medicaid budget. The state didn’t have a maximum limit for the number of hours a legally responsible individual could provide services to a child receiving attendant care services. To address the increasing costs, FSSA is attempting to shift families into the Structured Family Caregiving program, leaving many families seeking clarification on the changes happening and the impact it will have on them and their children (The Republic, February 23).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Arkansas
    • On February 21, 2024, Arkansas submitted a request for a new Medicaid 1115 demonstration titled, “Opportunities to Test Transition-Related Strategies to Support Community Reentry from Incarceration and Institutions for Mental Disease” (Reentry Waiver). The demonstration includes a “reentry” and SUD/SMI Initiative to cover all medically necessary services for the first 90 days at the beginning of incarceration or admission to an IMD and for 90 days immediately prior to release from either setting. The state would also provide a pre-release benefit package of case management and care coordination services, MAT services, and a 30-day supply of prescription drugs to individuals leaving carceral settings. The federal public comment period will be open from February 29, 2024, through March 29, 2024.
  • Montana
    • The Montana Department of Public Health and Human Services (DPHHS) is requesting an amendment to its 1115 waiver demonstration titled, “Healing and Ending Addiction through Recovery and Treatment (HEART).” The amendment would add the authority to receive federal matching funds for stays by children and youth with serious emotional disturbance (SED) at Institutions of Mental Disease (IMDs) that are also Qualified Residential Treatment Programs (QRTPs). DPHHS is seeking an effective term for this amendment from the date of the approval of the Demonstration’s Implementation Plan to June 30, 2027. The federal public comment period will be open from February 23, 2024 through March 25, 2024.

SPAs

• Administrative SPAs
  • District of Columbia (DC-24-0003, effective February 1, 2024): Assures compliance with new third party liability requirements authorized under the Consolidated Appropriations Act of 2022 and provides clarity on the state’s option to adopt a new flexibility on creating liens for injury settlement proceeds attributable to future medical expenses.
  • Iowa (IA-23-0026, effective January 1, 2024): Complies with the federal requirement that the state implement a tracking system that ensures that cost sharing and premiums for a Medicaid beneficiary will not exceed 5% of the family income.
  • Minnesota (MN-23-0028, effective October 1, 2023): Provides attestations for preventive services under the Inflation Reduction Act including any covered clinical preventive services with a rating of A or B by the United State Preventive Services Task Force (USPSTF), and adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), and their administrative costs, without cost sharing to the enrollee.
  • Missouri (MO-22-0009, effective April 1, 2022): Provides a 2-year exception to the recovery audit contractor (RAC) from April 1, 2024 through April 1, 2026.
  • South Dakota (SD-23-0021, effective November 1, 2023): Expands eligibility for individuals under age 21 who are under a state-only funded adoption assistance agreement and clarifies coverage for certain reasonable classifications of children.
• Payment SPAs
  • Hawaii (HI-23-0008, effective January 1, 2024): Increases payment rates up to Medicare benchmark for most medical professional, non-institutional items and services.
  • Hawaii (HI-23-0014, effective January 1, 2024): Rebasing nursing facility (NF) rates and changing the case mix from using the RUGs system to the Patient Driven Model System (PDPM).
  • Indiana (IN-23-0011, effective July 1, 2023): Implements a new prospective payment system for NF services.
  • Indiana (IN-23-0023, effective January 1, 2024): Revises Medicaid reimbursement rates for medical supplies and medical equipment that are not subject to the requirements of the 21^st Century Cures Act of 2016.
  • Massachusetts (MA-23-0063, effective November 1, 2023): Updates the methods and standards used to determine the rates of Hearing Services.
  • New Jersey (NJ-23-0023, effective October 1, 2023): Updates the fee schedules for Family Planning Services.
  • North Dakota (ND-24-0003, effective January 1, 2024): Implements a 3.2% rate increase and updates the base year to June 30, 2023 for NF services.
  • Ohio (OH-23-0042, effective January 1, 2024): Updates provisions for dental services, increases payments for a range of Medicaid-covered services, and incorporates updates to Healthcare Common Procedure Code System (HCPCS) codes effective Jan. 1, 2024.
  • Ohio (OH-23-0044, effective January 1, 2024): Ends the Value-Based Purchasing, Episodes-Based Payments Program.
  • Utah (UT-23-0014, effective January 1, 2024): Adds coverage for services provided by a licensed recreational therapist.
• Services SPAs
  • Alaska (AK-24-0001, effective February 1, 2024): Provides for 12 months of extended postpartum coverage to individuals who were eligible and enrolled under the Medicaid state plan during their pregnancies (including during a period of retroactive eligibility) and increases the income eligibility for pregnant individuals up to 225% of the FPL.
  • Kansas (KS-23-0044, effective January 1, 2024): Adds the Management of Self-Monitoring Blood Pressure (SMBP) treatment plans as a preventive outpatient service for persons using SMBP devices as a part of their care.
  • Nebraska (NE-24-0001, effective January 1, 2024): Eliminates the $750-per-year-adult dental benefit limit, to allow public health licensed dental hygienists to provide certain dental services, and to better align language in the state plan with state regulations.

Private Sector Updates

News

Network Disruptions Remain After Change Healthcare Cyberattack

Change Healthcare is facing major outages after a cyberattack affecting provider and pharmacy operations last week. The provider and pharmacy network disruptions are expected to last through Friday, according to the Optum Solutions’ status page. Change Healthcare is part of UnitedHealth Group’s Optum brand following a merger in 2022. UnitedHealth Group indicated that only Change Healthcare was affected by the network interruption and all its other company systems are unaffected. UnitedHealth Group has attributed the attack to a suspected nation-state threat actor. The firm is working with security experts and law enforcement. Providers and pharmacies are still experiencing ongoing effects and may face issues with transmitting claims to insurance companies. The American Hospital Association advised its member providers to disconnect their operations from Optum until it is deemed safe (Modern Healthcare, February 23).

Sellers Dorsey Updates

The Meaning Behind our Mission: Q&A with SVP of Talent Management

• In case you missed it last week, check out this engaging Q&A with Senior Vice President of Talent Management, Charity Hughes, as she explores the meaning behind our mission to improve quality, equity, and access in the Medicaid program. Explore the Q&A by clicking here.

Enhancing Healthcare Access and Quality for Tennessee Medicaid Beneficiaries

• Two major academic medical centers in Tennessee partnered with the state’s Medicaid agency on a value-based Medicaid managed care supplemental payment initiative. This program—designed and implemented by Sellers Dorsey—has increased care coordination and enhanced access to health services for Tennessee’s Medicaid enrollees. Click here to view the case study.