Sellers Dorsey Digest

Federal Updates

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 aims to strengthen the federal rules for Medicaid and CHIP enrollment and improve access and help qualified individuals remain covered (CMS, and CMS, March 27).

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).

State Updates

News

Nebraska Passes Bill Aimed at Helping At-Risk Mothers

• On March 28, the Nebraska legislature passed and Governor Pillen has signed LB 857 (45-0), which will create the Nebraska Prenatal Plus program. The program aims to expand Medicaid coverage for at-risk mothers to include targeted case management services, six prenatal nutritional counseling visits. The bill also provides Medicaid coverage for continuous glucose monitoring devices for individuals with gestational diabetes who meet local coverage decisions guidelines (Nebraska Examiner, March 28; Nebraska Legislature, April 2).

Louisiana Lawmakers Considering Medicaid Coverage for Menopause and Perimenopause Symptoms

• Louisiana lawmakers are considering HB392, which would mandate Medicaid coverage for menopause and perimenopause treatments. The bill was drafted by Representative Aimee Freeman (D-New Orleans) after a local physician told her that health insurers were refusing to cover the treatments, such as progesterone and estrogen supplements. The Louisiana Committee on Health and Welfare voted 12-0 to progress the bill that now travels to the full Louisiana House of Representatives for consideration (MSN, April 1).

Pennsylvania Governor Expanding Doula Care in Medicaid

• Governor Shapiro’s administration is emphasizing major changes to the Medicaid program by allowing the expansion of doula care in the state. The change will enable Medicaid managed care organizations to enter into network agreements with certified doulas in order to improve the birthing experience and outcomes for mothers and families (MSN, April 1).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Florida
    • On March 20, 2024, Florida submitted a request for a new demonstration titled, “Florida Children’s Health Insurance Program Eligibility Extension.” This demonstration aims to increase access to KidCare, the state’s CHIP, by raising the income eligibility threshold from 200% of the FPL to 300% of the FPL. The waiver will also update and add monthly premium tiers to align with the increase in eligibility for higher income families. The federal public comment period will be open from March 29, 2024, through April 28, 2024.
  • Idaho
    • On March 29, 2024, CMS approved Idaho’s 1115 demonstration amendment titled, “Idaho Behavioral Health Transformation.” This amendment allows Idaho to continue to reimburse legally responsible individuals (LRIs) for providing personal care services (PCS). Under this amendment, LRIs must meet certain provider requirements set by the state and all other criteria established by the demonstration to receive payments for providing PCS. These additional requirements will be phased in by the state. The amendment is effective from March 29, 2024, through March 31, 2025, when the current demonstration is set to expire.

SPAs

• Eligibility SPAs
  • Illinois (IL-23-0021, effective May 12, 2023): Adds a new section, 7.4.B, temporarily extending certain provisions that were previously approved during the COVID-19 PHE and adds Section 4.C, to temporarily apply less restrictive financial methods which increase the asset limit to $17,500 for individuals applying for Medicaid under the aged, blind, and disabled and medically needy  eligibility groups.
  • Illinois (IL-23-0046, effective January 1, 2024): Increases the Monthly Needs Allowance (MNA) for Medicaid individuals or couples receiving institutional care.
• Payment SPAs
  • Colorado (CO-23-0043, effective January 1, 2024): Updates pricing for outpatient hospital services for physician administered drugs based on prior approval from the State Medicaid Agency and certification of the outpatient facility.
  • Idaho (ID-23-0020, effective October 1, 2023): Updates supplemental payment methodologies for nursing facilities owned by private, state, and county-based entities to support the new Patient Driven Payment Methodology Upper Payment Limit (UPL).
  • Illinois (IL-23-0048, effective January 1, 2024): Updates reimbursement methodologies for COVID-19 vaccine and administration of vaccines.
  • Kentucky (KY-24-0002, effective January 9, 2024): Updates the pharmacy vaccination administration rates.
  • Louisiana (LA-24-0009, effective February 20, 2024): Clarifies the methods and standards for inpatient hospital graduate medical education payments for services provided by major and minor teaching hospitals.
  • Massachusetts (MA-23-0062, effective October 1, 2023): Updates reimbursement methodologies and standards for nursing facilities during the 2024 rate year.
  • New York (NY-23-0094, effective November 1, 2023): Authorizes payments for Evidence-Based Practices (EBPs) for children who are eligible for Children and Family Treatment and Support Services (CFTSS) that are designated by the state and have completed the necessary training and certification.
  • New York (NY-24-0003, effective January 1, 2024): Adds coverage and payment for Doula services for categorically and medically needy individuals.
  • North Carolina (NC-33-0022, effective July 1, 2023): Updates payment rates for Federally Qualified Health Centers (FQHC).
  • North Carolina (NC-23-0021, effective July 1, 2023): Updates payment rates for Rural Health Clinics (RHC).
  • Texas (TX-24-0007, effective January 1, 2024): Updates the Early Periodic, Diagnosis, and Treatment (EPSDT) program fee schedule for physician services.
  • Washington (WA-24-0009, effective January 1, 2024): Updates the fee schedule effective dates for various Medicaid providers and services including freestanding ASCs, dental services and dentures, institutional services, and outpatient hospital services.

Private Sector Updates

News

Three Payers Announce Wegovy Coverage under Medicare

• Following CMS’ recent policy allowing Medicare Part D plans to cover prescription weight loss drugs that can also be used to treat cardiovascular diseases, three major payers have decided to cover the drug. Elevance plans to begin to offer Wegovy within its commercial plans and Medicare Part D in a few weeks. Moving forward, Kaiser Permanente will cover the drug under Medicare Part D for beneficiaries with heart disease. Aetna will cover Wegovy under Medicare Advantage and Part D plans (Health Payer Specialist, April 1).

Healthcare Leaders Expect Investments, Focus on Health Equity

• According to a new survey by Ernst & Young (EY), healthcare leaders expect an investment in and an increased focus on health equity over the next year. EY surveyed 500 healthcare leaders across payers, healthcare providers, life sciences, government, along with non-profit and community organizations. More than 90% of respondents expected spending on health equity efforts to increase, and more than 80% said that focusing on equity increases value through improving health outcomes. Technology investments and analytic solutions to increase health equity as well as the design and implementation of health equity initiatives are expected to be top areas of spending across all organizations. Priorities from payers included improving access and quality, reducing disparities, and using advanced technology to address issues (Health Payer Specialist, March 27).

Centene, Kaiser, and Aetna Partner with Organizations to Support Caregivers, Eldercare, and Youth Mental Health

• Three health payers, Centene, Kaiser Permanente, and Aetna, have announced new partnerships with external organizations. Health Net, a subsidiary of Centene, has announced a partnership in California with Canary Health to provide an online peer-to-peer education and support program for caregivers called Building Better Caregivers. More than 500,000 Health Net members are expected to be eligible for the program. Kaiser and Town Hall Ventures are working together to launch Habitat Health, which aims to help eligible participants in Sacramento and Los Angeles age at home starting in 2025. Finally, Aetna has partnered with Kooth Digital Health to provide a mental health and well-being platform for youth (Health Payer Specialist, April 1).

FDA Approves Gene Therapy Treatment for Metachromatic Leukodystrophy (MLD)

• The FDA approved a gene therapy treatment, Lenmeldy, for children with metachromatic leukodystrophy (MLD). The treatment is now considered the most expensive drug in the U.S. at a cost of $4.25 million and requires states to pilot value-based payment contracts with the singular manufacturer, Orchard Therapeutics. The FDA’s press release stated that the drug substantially decreased the risk of severe motor impairment or death when compared to children not taking the treatment (Inside Health Policy, April 1).

Sellers Dorsey Updates

New Report: Summaries of Proposed State Budgets FY2025

• In case you missed it last week, we released our exclusive report where our Sellers Dorsey experts summarized how Governors have been shaping their proposed budgets for the past several months. We capture states’ overall proposed budgets, as well as their specific Medicaid spending plans and program changes for the year ahead. Click here to download the report.