Sellers Dorsey Digest

Federal Updates

News

HHS’ Office of Civil Rights Exploring Whether Change Healthcare Cyberattack Breached HIPAA

• The Office of Civil Rights (OCR) is determining whether protected health information was impacted in the Change Healthcare cyberattack. The OCR is investigating because the cyberattack poses a significant risk to critically necessary patient care and vital healthcare industry operations. In a “Dear Colleague” letter, OCR reminds entities involved in the cyberattack that they are focused on UnitedHealth Group and Change Healthcare but that partners of these organizations also have regulatory commitments and obligations to members (Inside Health Policy, March 14).

HHS Encourages Plans and Payers to Suspend Prior Authorization, Consider Interim Payments

• As a result of the Change Healthcare cyberattack on February 21, HHS has encouraged private health plans to suspend prior authorizations and consider making interim payments to providers. However, the health insurance industry is unsupportive of the suggestions, claiming that doing so would open health plans to fraud. AHIP President Mike Tuffin expressed his opposition to a blanket exemption for prior authorizations in a statement issued on March 12. HHS has announced several strategies in addition to the prior authorizations and interim payments to help providers address challenges presented by the cyberattack incident. These strategies include instructing Medicare Administrative Contractors (MACs) to make newly created Change Healthcare/Optum Payment Disruption (CHOPD) accelerated payments to Part A providers and advance payments to Part B suppliers experiencing claims disruptions upon request (Inside Health Policy, March 14).

CMS Releases Report to Congress on Money Follows the Person Best Practices

• CMS has released a new report to Congress that outlines the best practices within the Money Follows the Person (MFP) demonstration based on input from states, providers, and MFP participants and their family members. This could help states improve their home- and community-based services for existing recipients and assist with the transition of institutionalized people back into the community. The best practices include ways states can use their funding to improve health outcomes and offer the easiest transition possible as well as outlining person-centered care, funding flexibilities, and options for housing supports. According to the HHS budget-in-brief, the Consolidations Appropriations Act of 2023 extended the MFP program through FY2027 and appropriated $450M each year for FY2024-FY2027 (Inside Health Policy, March 15).

Federal Legislation

Senate Finance Leaders Seek Prompt PBM Reforms

• On March 14, Senate Finance leaders, Ron Wyden (D-OR) and Mike Crapo (R-ID) sent a letter to Chuck Schumer (D-NY), Mitch McConnell (R-KY) and other finance members, asking that immediate bipartisan action be taken to devise PBM Medicaid and Medicare service reforms to be sent to President Biden. This month’s recent “skinny health package” release did not include PBM reforms. Wyden and Crapo’s letter also addresses the large number of pharmacy closures that were said to be due to low reimbursement, one-sided PBM contracts and restrictive coverage policies and generic drug markups by PBMs (Inside Health Policy, March 14).

Bipartisan Bill Could Coordinate Dual Eligible Plans

• On March 14, the bipartisan bill, Delivering Unified Access to Lifesaving Services Act of 2024, was proposed on Capitol Hill. If passed, the bill will require each state to develop a comprehensive and integrated health plan that manages all medical, behavioral, and long-term care for dual eligible beneficiaries. Currently there are over 12 million Americans that qualify as dual eligibles. It costs nearly twice as much as the average Medicare patient to provide services to this population and their health outcomes tend to be worse. The bipartisan supported bill could enhance the coordination of benefits and simplify health choices for dual eligible beneficiaries. However, some stakeholders are concerned that the bill might restrict the options of Medicare dual special needs plans (MSN, March 14; Health Payer Specialist, March 18).

Federal Regulation/Guidance

Change Healthcare Cybersecurity Incident: CMS Response and State Flexibilities Informational Bulletin

• On March 15, CMS released an Informational Bulletin to Medicaid and CHIP agencies on the Change Healthcare cybersecurity incident and outlined detailed temporary flexibilities that states have to address with impacted providers. CMS is allowing states to provide interim payments to impacted fee-for-service (FFS) providers through State Plan Amendments (SPAs) that are not subject to certain standard requirements through June 30, 2024. States are expected to reconcile payments once data access is restored. CMS also outlined additional flexibilities that states can take advantage of, such as modifying prior authorization requirements, reducing more stringent prompt pay timeframes, and enhancing pharmacy dispensing fees (Medicaid.gov, March 15).

CMS Releases State Medicaid Director Letter on the Health Home Core Quality Measure Sets

• On March 15, CMS released State Medicaid Director (SMD) Letter #24-002 that outlines required state reporting for Health Home benefits based on the Mandatory Medicaid and Children’s Health Insurance Program (CHIP) Core Set Reporting final rule. The letter addressed mandatory reporting and adherence to reporting guidance, applicable populations, stratification categories, and SPA updates. SMD #24-002 also provided updates to the 2025 Health Home Core Quality Measure Sets and discussed CMS’ plans to make technical specification manuals available along with technical assistance webinars to help states in implementing all required regulations. Key highlights of the letter include the following:
  • Authority for Mandatory Reporting and Adherence to Reporting Guidance:
  • Applicable Populations
  • Stratification Categories and Measures Subject to Stratification
  • State Plan Amendment Updates
• In addition, SMD #24-002 informed states of the stakeholder workgroup process, updates to the 2025 Health Home Core Sets, and the effective date of revisions to the core sets (Medicaid.gov, March 15).

CMS Releases Resources About the Permissibility of Certain Practices During Medicaid and CHIP Renewals

• On March 15, CMS released an informational bulletin and slide deck to address questions and concerns about Medicaid and CHIP renewals and provide clarification on permitted practices for Medicaid and CHIP programs. The bulletin summarizes 10 key renewal requirement reminders for states to continue to conduct Medicaid and CHIP renewals during the PHE unwinding period and beyond. CMS urges states to review their processes and ensure compliance (Medicaid.gov, March 15).

Disability Access Rule to be Finalized

• Last September, HHS issued a proposed rule that would require providers to retrofit facilities and medical equipment to meet patients with disabilities’ physical and sensory needs, ensure websites and virtual care programs are user-friendly, and remove disability status as a factor in clinical support tools. The final rule is expected to be issued in the near future, and therefore healthcare providers should start to prepare to comply with new standards for accommodating patients with disabilities. The regulation would dramatically improve access for individuals with disabilities and set clear standards for providers that engage in business with the federal government and protect patients against discrimination (Modern Healthcare, March 14).

State Updates

News

Virginia Rescinds Notice of Intent to Award

• On March 19, the Virginia Department of Medical Assistance Services (DMAS) withdrew their Notice of Intent to Award (NOIA) for Request for Proposal 13330 (RFP13330) originally published on February 28, 2024. RFP 13330 aimed to solicit proposals from qualified managed care organizations to enter into fully capitated, risk-based contract to administer the statewide Medicaid and Family Access to Medical Insurance Security (FAMIS) managed care program for individuals enrolled in Cardinal Care (DMAS e-VA, March 19).

Several States Plan Increased Medicaid Capitation Rates in FY2025

• Several states are boosting pay to health insurance companies that administer Medicaid benefits to address rising medical spending. States including Arizona, California, Missouri and Washington plan to increase Medicaid managed care capitation rates for FY2025. According to state budget proposals, at least seven states aim to raise capitation rates for Medicaid in the next fiscal year while other states are contemplating benefit and rate reductions (Modern Healthcare, March 15).

Mississippi to Allow Earlier Medicaid Coverage for Pregnant Women

• To improve infant mortality and health outcomes for mothers and babies within the state, Mississippi has signed a new law that will allow earlier Medicaid coverage for pregnant women. The presumptive eligibility legislation was signed by Governor Reeves and will become law July 1. The legislation allows Medicaid to pay for a pregnant woman’s outpatient medical care for up to 60 days while her application for Medicaid is being considered, since processing Medicaid applications can take up to several weeks. In 2023, Mississippi extended postpartum Medicaid coverage from two months to a full year (The Associated Press, March 13).

Arkansas Medicaid to Receive Money from Billing Settlement

• The Arkansas Medicaid program will receive $191,050 as part of a $25 million national settlement with Lincare Holdings, Inc. The settlement results from alleged false Medicaid billing for Noninvasive Home Ventilation devices from 2013-2020. Under the settlement agreement, Lincare will pay out to the federal government, the District of Columbia, and 29 states to resolve the false Medicaid billing allegations (MSN, March 14).

UnitedHealth Group to Acquire Oregon Provider System

• The Oregon Health Authority has agreed to allow UnitedHealth Group to acquire the physician-owned clinic system, The Corvallis Clinic (Corvallis). UnitedHealth revealed its intention to buy Corvallis in December but filed an emergency request last week with Oregon’s Health Care Market Oversight program because of Corvallis’ financial situation (Health Payer Specialist, March 15).

SPA and Waiver Approvals

SPAs

• Eligibility SPAs
  • Nevada (NV-24-0007, effective January 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).
• Payment SPAs
  • Arkansas (AR-24-0005, effective April 2, 2024): Extends the Workforce Stabilization Incentive Program that was originally approved in the state’s disaster relief SPA AR-23-0011 through March 31, 2025.
  • New Mexico (NM-23-0013, effective August 18, 2023): Updates rates for Tribal 638 Nursing Facilities to be reimbursed at the Office of Management and Budget (OMB) published rate.
  • New York (NY-18-0012, effective January 1, 2018): Updates rate schedules to reflect changes in the cost of providing services at certified Developmental Disabilities specialty hospitals.
  • Rhode Island (RI-24-0001, effective January 1, 2024): Incorporates estimated hospital state directed payments for the state fiscal year in which the disproportionate share hospital payment is made.
  • South Carolina (SC-24-0007, effective January 1, 2024): Updates the reimbursement methodology for dieticians services to support access to medical nutrition therapy services.
• Services SPAs
  • Colorado (CO-23-0040, effective October 1, 2023): Updates the targeted case management transition coordination service limit from 240 to 360 per client, adds eligible individuals that reside in a hospital and those who are at risk of institutionalization, and changes the name of the service from Transition Services to Transition Coordination Services.
  • Iowa (IA-23-0011, effective July 1, 2023): Eliminates the Dental Healthy Behaviors requirement and removes the basic dental benefit package from the Alternative Benefit Plan (ABP).
  • Minnesota (MN-23-0031, effective January 1, 2024): Adds coverage for seizure detection devices as durable medical equipment, provided that the detection device is medically appropriate, and the recipient’s healthcare provider has identified that a device would assist the recipient experiencing a seizure or provide diagnostic data to the healthcare provider to assist in treatment. It also provides coverage for comprehensive dental coverage for adults.
  • Nebraska (NE-24-0002, effective January 1, 2024): Removes the $750-per-year adult dental benefit limit, allows public health licensed dental hygienists to provide certain services, and aligns state plan language with state regulations in 476 NAC 6.
  • South Carolina (SC-24-0004, effective January 1, 2024): Updates Interprofessional Consultation Services.
  • South Dakota (SD-24-0001, effective April 1, 2024): Establishes a primary care case management program (PCCM) for pregnant individuals.

Private Sector Updates

News

UnitedHealth’s Pharmacy Network is Back Online after Cyberattack

• UnitedHealth Group reports their pharmacy network is back online after the company suffered a major cyberattack that lasted almost three weeks. Most of the payment systems at the nation’s biggest pharmacies are back up, and approximately 99% of pre-incident claim volume has resumed. UnitedHealth has identified the route the hackers took into the system and a full forensic analysis is currently underway (Health Payer Specialist, March 14).

Sellers Dorsey Updates

Navigating the Future of Long-Term Services and Supports

• In case you missed it last week, explore this engaging blog written by Sellers Dorsey Managing Director and former Nevada state Medicaid Director, Suzanne Bierman. In it, she discusses the challenges facing long-term services and supports while sharing her insights on innovative financing models that can serve as solutions. Click here to explore Suzanne’s article.

Coming SOON: Summaries of Proposed State Budgets FY2025

• What are states planning to budget for in Fiscal Year 2025 (FY2025)? Governors have been shaping their proposed budgets over the past several months, and Sellers Dorsey experts summarized everything you need to know. Stay tuned for the release of this exclusive report!