Sellers Dorsey Digest

Federal Updates

News

House E&C Subcommittee Holds Hearing on Improper Medicare and Medicaid Payments

• The House Energy & Commerce subcommittee held a hearing on April 16 regarding improper payments in Medicare and Medicaid. During the hearing, key federal officials highlighted artificial intelligence (AI) as a potential way to reduce improper payments by improving data sharing and analytics between states and CMS. The HHS’ Office of the Inspector General is currently piloting various AI projects to test this theory. In March the Government Accountability Office (GAO) estimated that Medicare and Medicaid would spend approximately $51 billion and $50 billion, respectively on improper payments in 2023. Other recommendations coming out of the hearing were aligned with preventing fraud, waste, and abuse such as encouraging more state audits of Medicaid managed care plans. Overall, lawmakers in the subcommittee came to a bipartisan agreement on the need for increased oversight and program integrity (Inside Health Policy, April 17).

Federal Agencies Launch on Healthcare Antitrust Reporting Portal

• The Federal Trade Commission (FTC), and the Departments of Justice (DOJ), Health and Human Services (HHS) have unveiled an online portal, HealthyCompetition.gov, where anyone can submit a healthcare competition complaint for potential investigation. As federal agencies want to hear from the public about monopolistic and anticompetitive behavior within the healthcare industry, these submissions can help agencies ensure that quality healthcare is being provided and employees are being paid a fair wage. Complaints received through the portal will be preliminarily reviewed by FTC and DOJ Antitrust Division staff. Complaints that are deemed of sufficient concern will then be funneled to the most appropriate of the three agencies and might result in formal investigations (Modern Healthcare, April 18; Fierce Healthcare, April 18).

OIG Begins Additional PBM Investigation

• According to an undated post on the HHS Office of the Inspector General’s (OIG) website, OIG is examining the impact of drug prices on previously consolidated pharmacy benefit managers (PBM) and pharmacies. Senators Elizabeth Warren (D-MA) and Mike Braun (R-IN) sent a letter requesting the OIG investigate following a Wall Street Journal report that exhibited some plans being required to pay much more for medications that treat cancer and multiple sclerosis than what was initially charged by manufacturers for generic versions. Additionally, PBM practices are also being investigated by the Federal Trade Commission (FTC) to determine the effect payers’ control has on prices in the PBM industry (Health Payer Specialist, April 19).

Federal Regulation/Guidance

CMS Releases Final Rules

• Managed Care Final Rule
  • On April 22, 2024, CMS released the final rule, “Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality.”  This final rule aims to increase access to care, improve transparency, and strengthen program monitoring and oversight for beneficiaries enrolled in managed care plans. The final rule provides significant revisions to timely access to care standards as well as states’ monitoring and enforcement efforts; introduces quality, fiscal, and program integrity standards for state directed payments; defines the scope of “in-lieu of services” to better address health-related social needs; creates additional specifications for medical loss ratio requirements; and establishes a quality rating system for Medicaid and CHIP managed care plans. This rule is intended to complement the Ensuring Access to Medicaid Services(CMS-2442-F) final rule in increasing access to healthcare coverage and is slated to be officially published in the Federal Register on May 10, 2024. Sellers Dorsey will release full summaries on both the Managed Care and Access final rule soon (CMS, April 22).
• Access Final Rule
  • On April 22, 2024, CMS released the final rule, “Ensuring Access to Medicaid Services.” This final rule seeks to improve access to care across fee-for-service and managed care delivery systems, including access to home- and community-based services (HCBS). The final rule institutes a national minimum threshold standard for HCBS payments to direct care workers; establishes new methods for seeking beneficiary input in policy changes; increases transparency in provider rates, wait lists, and wait times; and strengthens beneficiary protections through required grievance and incident management systems. This rule is intended to work with the Managed Care final rule (described above) in improving access, transparency, and accountability in Medicaid and CHIP. The final rule is slated to be officially published in the Federal Register on May 10, 2024. Sellers Dorsey will release full summaries on both the Managed Care and Access final rule soon (CMS, April 22).
• Long-Term Care Facilities Final Rule
  • On April 22, 2024, CMS released the “Medicare and Medicaid Programs: Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting” final rule. This final rule seeks to align with President Biden’s Action Plan for Nursing Home Reform and State of the Union address reforms to help improve the quality of nursing homes and support care workers, while continuing to understand possible challenges based on geographic location. Key highlights of this final rule include the establishment of national minimum staffing standards in long-term care (LTC) facilities, a requirement to have an RN available 24/7 to provide skilled nursing care, and possible exemptions for eligible facilities. Regarding payment transparency reporting, there are new institutional payment reporting requirements; exclusion of travel, training and personal protective equipment (PPE) from compensation calculations; Indian Health Service program reporting exemptions; and a requirement for both CMS and individual states to make information about institutional payments available on their respective public websites. CMS plans to continue to conduct research to be better informed on structural aspects of these programs and anticipate incentives to be administered in 2025. The final rule is expected to be published in the Federal Register on May 10, 2024 (CMS, April 22).
• Telehealth Accreditation Program from The Joint Commission Set to Begin July 1
  • The Joint Commission is introducing a Telehealth Accreditation Program (Program) for organizations that exclusively offer telehealth services and will replace its current telehealth and technology-based accreditation. The Program, which will open for applications on July 1, aims to standardize the quality of care provided and mitigate risks associated with remote services. Eligible organizations for the Program include those providing virtual primary, specialty, or urgent care services, along with online consultations and remote patient monitoring. Hospitals, behavioral healthcare organizations, and ambulatory care providers that have written agreements to provide services through telehealth to another organization’s patients can also apply for the accreditation. Though some standards may differ by facility depending on the platform used or the service being provided, requirements for the accreditation will include educating providers and patients on telehealth platforms and devices, adjusting emergency protocols for remote care, and ensuring equipment functionality. Other accrediting bodies such as the National Committee for Quality Assurance (NCQA) and Utilization Review Accreditation Committee (URAC) are expanding and updating their telehealth accreditations as well (Modern Healthcare, April 23).

HRSA Issues Final Rule that Revises 340B Administrative Dispute Resolution Process

• On April 18, the Health Resources and Services Administration (HRSA) issued a final rule, effective June 18 that establishes a revised 340B Drug Pricing Program administrative dispute resolution (ADR) process. HRSA previously published an ADR process proposed rule in 2022 which revised the process to be less formal than a rule that was finalized in 2020. The new final rule aims to make the process less formal and more accessible to stakeholders as it will be run by a panel of subject matter experts within the HRSA Office of Pharmacy Affairs (OPA) and offer opportunities for any decisions to be appealed. The final rule allows, among other things, the ADR panel to review claims on issues similar to those pending before a federal court, removes the $25,000 minimum monetary threshold for claims filed through the ADR process, establishes a reconsideration process for appeals, and creates timelines for filing claims (Inside Health Policy, April 22; AAMC, April 19).

Federal Studies and Reports

The Commonwealth Fund Publishes Report on U.S. Health Disparities

• The Commonwealth Fund released a new report on April 18 detailing the racial and ethnic disparities in the U.S. healthcare system within and across states. The report analyzes 25 indicators of health outcomes, access, and quality for five racial and ethnic groups: White, Black, Hispanic, American Indian and Alaskan Native (AIAN), and Asian American, Native Hawaiian, and Pacific Islander (AANHPI). The data was pulled from 2021 and 2022, which includes deaths from COVID-19 in the analysis. The Commonwealth Fund found that racial and ethnic disparities were present in all states, with White and Asian residents having the best overall health outcomes compared to other groups. Even in states with high overall scores such as Rhode Island, Connecticut, Massachusetts, Hawaii, and New York, there were significant disparities for Black, Hispanic, and Indigenous residents. However, health disparities for different racial and ethnic groups varied across states. For example, Indigenous people in North Carolina have better outcomes compared to other states, while Hispanic residents in North Carolina fare worse when compared to other states. The Commonwealth Fund hopes that states and health systems will use this data as a starting point to consider policies and investments to increase health equity (STAT, April 18).

State Updates

News

16 New Mental Health Clinics to Open in NYC Public Schools

• New York Mayor, Eric Adams, announced that 16 new mental health clinics will open in central Brooklyn and south Bronx public schools over the next six months. In March, the Mayor announced his mental health agenda with $20 million in new investments and a three-pillar plan. As part of the three-pillar plan, the clinics will have $3.6 million in funding and be run by NYC Health + Hospitals to provide mental health treatment and referrals to over 6,000 students. Policymakers, like Governor Kathy Hochul, are pledging more funding towards this effort and last year’s state budget included a $20 million investment to raise Medicaid reimbursement rates for the clinics as a part of the Governor’s $1 billion mental health plan (Politico Pro, April 17).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Colorado
    • The state submitted a request to amend its 1115 Demonstration titled, “Colorado Expanding the Substance Use Disorder Continuum of Care.” The amendment will incorporate three new programs into the existing Substance Use Disorder demonstration with an effective date of January 1, 2025. First, prerelease services for adults and youth to transition from correctional facilities; next, reimbursement for acute inpatient and residential stays in institutions for mental disease for individuals diagnosed with a serious mental illness or serious emotional disturbance; and finally, continuous eligibility for children ages 0 to 3 years old and 12 months of continuous coverage for individuals leaving incarceration. The federal public comment period will be open from April 18, 2024, through May 18, 2024.
  • Massachusetts
    • On April 19, CMS approved Massachusetts’ 1115 waiver amendment. The amendment authorizes the Commonwealth to provide additional health-related social needs and infrastructure supports to certain eligible members; expand Marketplace subsidies to individuals with incomes up to 500% of the federal poverty level; provide limited coverage of pre-release services for justice-involved populations; expand continuous eligibility for people experiencing homelessness; increase health-related social needs (HSRN) services integration funding; and remove the waiver authority of retroactive eligibility. This amendment is effective from April 16, 2024, through the current demonstration end date of December 31, 2027.

SPAs

• Eligibility SPAs
  • California (CA-22-0007, effective January 1, 2022): Approves the usage of paper and online streamlined applications to apply for insurance affordability programs.
  • Illinois (IL-22-0035, effective November 30, 2022): Establishes a partial benefit package for individuals whose income is at or below 208% FPL, offering family planning and healthy kids services.
  • Nevada (NV-24-0012, effective January 1, 2024): Revises the personal needs allowance (PNA) amount for nursing facility residents, and provides for an annual cost of living adjustment (COLA) to the PNA.
  • Oklahoma (OK-24-0008, effective January 1, 2024): Provides an attestation that the state has implemented an Electronic Visit Verification (EVV) system and is in compliance with EVV requirements for home health services.
• Service SPAs
  • Arkansas (AR-22-0024, effective January 1, 2023): Establishes Maternal Life 360 Home, a targeted case management Medicaid program for individuals residing in the community who are not currently in an inpatient status and who has a high-risk pregnancy or individuals who have received a high-risk pregnancy diagnosis and have undergone transitional care management services within the past 12 months.
  • Vermont (VT-24-0007, effective January 1, 2024): Establishes coverage of community-based mobile crisis services.
  • Wyoming (WY-24-0001, effective October 1, 2023): Updates coverage of preventative services as recommended by a physician or other licensed practitioner.

• Payment SPAs
  • Alaska (AK-24-0004, effective January 1, 2024): Updates payment methodologies for inpatient and outpatient hospital services, as well as specified clinic services, to reflect the per diem rates published by the Indian Health Services (IHS) in the Federal Register.
  • Colorado (CO-24-0009, effective February 11, 2024): Increases reimbursement rates for Pediatric Behavioral Therapy.
  • Florida (FL-23-0007, effective October 1, 2023): Establishes additional funding for the state’s Quality Incentive Budget for nursing facility providers and adds to the pre-existing Quality Incentive Add-on Calculations regarding long-term care reimbursement.
  • Louisiana (LA-24-0007, effective February 20, 2024):  Establishes reimbursement methodology governing disproportionate share hospital payments and the qualification criteria for uncompensated care costs of inpatient psychiatric hospitals located in the northern part of the state.
  • Maryland (MD-24-0002, effective January 1, 2024): Implements an 8% rate increase for nursing facilities.
  • Maryland (MD-24-0003, effective January 1, 2024): Implements a rate increase for Targeted Case Management (TCM) services, increasing rates to $27.50/unit and to $28.96/unit for individuals living in counties with a higher cost of living.
  • Massachusetts (MA-24-0014, effective January 19, 2024): Updates reimbursement rates for freestanding birthing centers.
  • Minnesota (MN-24-0001, effective January 1, 2024): Updates payment rates for Youth Assertive Community Treatment (ACT) and Adult Residential Crisis Services with an inflation adjustment based on the 12-month period from the midpoint of the previous year to the midpoint of the rate year for which the rate was determined.
  • Minnesota (MN-24-0008, effective January 1, 2024): Establishes a 3% payment change for Behavioral Health Services within the state, including behavioral health homes that serve Native Americans.
  • Minnesota (MN-24-0009, effective February 1, 2024): Updates annual Medicare Relative Value Units for physician administered services: $25.49 for evaluation and management services, $25.40 for obstetric services, $27.50 for mental health services, and $24.79 for all other services.
  • New York (NY-22-0005, effective January 1, 2022): Redefines average county population density to 300 per square mile, with regards to rural hospital designation. Updates per diem operation components by adding an age adjustment payment factor of 1.3597 to children under 17 and an adjustment payment factor of 1 for individuals ages 18 and higher.
  • Ohio (OH-24-0001, effective January 1, 2024): Establishes a reimbursement methodology for nursing facilities providing services to ventilator-dependent individuals.
  • Pennsylvania (PA-24-0008, effective March 1, 2024): Authorizes the continuation of Medical Assistance Day One Incentive (MDOI) payments to nonpublic nursing facilities and provides funding levels for MDOI payments for FY 2023-2024.
  • Pennsylvania (PA-24-0006, effective January 1, 2024): Updates emergency and non-emergency ambulance transportation payment methodologies to reflect each loaded mile.

Private Sector Updates

News

UnitedHealth Group Releases Financial Impact of Change Healthcare Cyberattack

• UnitedHealth Group disclosed the financial impact of the February Change Healthcare cyberattack during a first-quarter earnings call on April 16. Change Healthcare, acquired by UnitedHealth Group in 2022, is responsible for claims processing, prior authorizations, provider payments, benefits verification, and prescription management and processes 15 billion transactions each year. The estimated cost of the cyberattack is between $1.35 billion and $1.60 billion for 2024, with UnitedHealth Group already covering $872 million since the February 21 breach. The payer reported a $1.33 billion loss for the first quarter of 2024, compared to $5.77 billion in profit for the first quarter of 2023. Executives stated that progress in restoring the system is at 80%, with additional recovery efforts expected (Modern Healthcare, April 16).

Sellers Dorsey Updates

Sellers Dorsey Special Coverage of NASBO Spring 2024 Conference

• In case you missed the National Association of State Budget Officers (NASBO) Spring 2024 Conference, Sellers Dorsey summarized everything you need to know regarding federal budget info and trends. Our recap includes insights on post-pandemic economics, artificial intelligence, housing challenges, state of the states, and more. Click here for our exclusive recap.

Upcoming Webinar: Unpacking the New CMS Medicaid Managed Care Rules

• CMS released its final rule, Medicaid Program; Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality on April 22. Are you prepared for its effects? Join Sellers Dorsey experts on May 20 at 1 PM ET for our exclusive webinar. We’ll explore implications for states, managed care organizations, and so much more. Click here to learn more and register, today.