Sellers Dorsey Digest

Federal Updates

News

Senate Finance Committee Introduces Draft Bill to Create Medicare Drug Shortage Prevention and Mitigation Program

• On Friday, the Senate Finance Committee published a draft bill that would create a new program in Medicare called the Medicare Drug Shortage Prevention and Mitigation Program. The draft bill would require the Secretary of the Department of Health and Human Services (HHS) to establish the program by January 1, 2027. This program is intended to incentivize hospitals, group purchasing organizations (GPOs), and other prescription drug supply chain stakeholders to create longer-term stable pricing for generic drug manufacturers. This program would structure payments to reward quality, stability, and extended contracts while reducing the continuing problem of drug shortages (Inside Health Policy, May 3; Modern Healthcare; May 6).

Federal Regulation and Guidance

CMS Releases Draft Guidance on Medicare Drug Pricing Negotiations

• CMS released a draft of new guidance on May 3 outlining how CMS intends to implement the next round of Medicare drug negotiations. The draft guidance includes additional policies, requirements, and procedures around the new maximum fair price (MFP) for drug makers and various Part D drug dispensing entities in 2026 and 2027. It also specifies the procedures that may be applicable to pharmacies, mail-order services, Part D plan sponsors, Medicare Advantage prescription drug plans, and other dispensing entities. The draft guidance details how drug makers must ensure that eligible Medicare beneficiaries have access to drugs at the negotiated MFP. Under the draft guidance, participating primary manufacturers of a selected drug will be required to provide access to the drug at the MFP for all dosage forms, strengths, and package sizes. The draft guidance also proposes two options for working with a Medicare Transaction Facilitator (MTF) to facilitate the exchange of data between drug supply chain entities to ensure that the drugs are accurately dispensed to eligible beneficiaries. CMS seeks additional feedback by July 2, 2024, on various program features from stakeholders outlined in the guidance document and intends to issue final guidance later this year (Inside Health Policy, May 3).

CMS Finalizes Rule to Increase Access to Healthcare Coverage for DACA Recipients

• On May 8, CMS published a final rule intended to increase healthcare coverage and access for Deferred Action for Childhood Arrivals (DACA) recipients beginning as early as December 1 of this year. The rule clarifies that DACA recipients (and certain other noncitizens) will be included in the definitions of ‘‘lawfully present’’ that are used in determining an individual’s eligibility to enroll in a Qualified Health Plan (QHP) through the ACA Health Insurance Marketplace, for coverage through a Basic Health Program (BHP) and for Advance Payments of the Premium Tax Credit (APTC) and Cost-Sharing Reductions (CSRs). CMS specified that the rule is not intended to define lawful presence for purposes of any law or program other than these specific Department of Health and Human Services (HHS) healthcare programs. Responding to concerns raised by states and other commentators, CMS chose not to finalize provisions included in the proposed rule that would have similarly altered the definition of “lawfully present” for purposes of Medicaid and Children’s Health Insurance Program (CHIP) in those states covering ‘‘lawfully residing’’ pregnant individuals and children under section 214 of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) (GovInfo.gov, May 8).

State Updates

News

Seven Payers Protest Florida’s Decision to Decrease Number of MCOs

• Aetna Better Health of Florida, AmeriHealth Caritas Florida, Florida Community Care, ImagineCare, Molina Healthcare of Florida, Sentara Care Alliance, and UnitedHealthcare of Florida filed formal protests to challenge Florida’s recent decision to decrease the number of managed care plans providing Medicaid managed care services in the state to five. Florida’s Agency for Health Care Administration is considering settlements with the named plans to avoid going to court (Health Payer Specialist, May 3).

Oregon Using Medicaid Funding for Climate-Related Health Needs

• Oregon has begun a first-in-the-nation experiment to use Medicaid funding to address climate-related healthcare costs as a part of its five-year $1.1 billion demonstration waiver. Under its Medicaid demonstration waiver, which addresses health related social needs within the state, Oregon is providing coverage for air conditioners, air purifiers, and power banks for vulnerable residents to prevent the potentially life-threatening health effects of extreme heat, wildfire smoke, and other climate-related disasters. Oregon will evaluate whether the climate-related benefits result in cost savings for the state’s Medicaid program (The Bulletin, May 5; MSN, April 30).

New York’s Budget for FY2025 Expands Mental Health Services and Requires Commercial Insurers to Pay Higher Rates for In-Network and Out-of-Network Services

• New York’s budget for FY2025 requires commercial insurers to pay rates similar to Medicaid for both in- and out-of-network behavioral health services. The budget aims to expand access for both adults and children who need mental health care services and includes allocations for other programs designed to establish new inpatient psychiatric beds and increase mental health support for first responders (Fingerlakes1, May 6).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Massachusetts
    • On May 3, 2024, Massachusetts submitted a request to amend its 1115 waiver titled, “MassHealth Medicaid and Children’s Health Insurance Plan (CHIP) Section 1115 Demonstration.” This waiver amendment seeks to provide the Commonwealth authority for Designated State Health Programs (DSHP) to support new initiatives and provide federal funding for existing state operated programs that serve low-income and vulnerable populations. The federal public comment period will be open from May 6, 2024, through June 5, 2024.
  • Michigan
    • On April 11, 2024, the state submitted a request to extend its 1115 behavioral health demonstration for an additional five years, through September 30, 2029. Michigan is also seeking authority to implement a new initiative and provide contingency management as part of a comprehensive treatment model. The federal public comment period will be open from May 7, 2024, through June 6, 2024.

SPAs

• Eligibility SPAs
  • Nevada (NV-23-0033, effective January 1, 2024): Provides for 12 months of continuous postpartum coverage for Medicaid-eligible pregnant individuals.
  • Northern Mariana Islands (MP-24-0002, effective January 1, 2024): Provides for 12 months of continuous eligibility for children under the age of 19; including children eligible with a Medically Needy spend down, who would otherwise lose eligibility because of any change in circumstances with noted exceptions.
  • Washington (WA-24-0018-2, effective April 1, 2024): Raises income limits for Medicare Savings Programs (MSPs), QMB and QI-1, from 100% to 110% and 135% to 138% of the FPL, respectively.
  • Wisconsin (WI-24-0003-A, effective January 1, 2024): Updates the income eligibility standards of the Optional State Supplement Beneficiaries to reflect the Social Security Cost of Living Adjustment.
• Payment SPAs
  • Minnesota (MN-24-0012, effective January 1, 2024): Updates Medicaid payment rates for inpatient hospital services with a payment adjustment for hospitals that are providing graduate medical education (GME).
  • Nevada (NV-23-0002, effective May 12, 2023): Updates the payment methodology for Certified Community Behavioral Health Clinics (CCBHCs).
  • Oklahoma (OK-24-0007, effective January 1, 2024): Removes the Potentially Preventable Readmission (PPR) payment policy due to underutilization and shift to managed care.
  • Oregon (OR-24-0004, effective January 1, 2024): Implements supplemental payments for qualifying nursing facilities (NF) participating in the Oregon CareWorks program.
• Services SPAs
  • California (CA-23-0005, effective April 1, 2024): Amends the Community First (CFC) and Self-Directed Personal Service state plan benefits to update language to reflect the state’s In-Home Support Services (IHSS) policy to allow telehealth reassessments and updated practices within the IHSS Quality Assurance (QA).
  • Montana (MT-24-0002, effective July 1, 2024): Shifts the authority for the Tribal Health Improvement Program (T-HIP) from a 1915(b) waiver to a 1932(a) SPA, to align with primary care case management requirements.
  • New York (NY-24-0034, effective January 1, 2024): Makes technical corrections to language that was previously dropped from SPA 19-0003 through SPA 22-0043 for coverage of home health services.
  • Pennsylvania (PA-24-004, effective March 1, 2024): Expands the approved services offered by Federally Qualified Health Centers and Rural Clinics to include licensed professional counselors, licensed marriage and family therapists, pharmacists, licensed dietician-nutritionists, and other ambulatory services.

Private Sector Updates

News

Health Payers Utilizing Tools to Decrease Risks and Costs for Older Mothers

• To account for the rise of women having children at age 35 and older, healthcare payers are implementing strategies to better serve this demographic, while keeping in mind any associated risks and costs that come with pregnancies at an older maternal age. This shift to delayed pregnancies may be caused by various factors such as financial stability and waiting for the best time to start their own family. Older mothers face increased risks of conditions such as gestational diabetes, high blood pressure, pre-eclampsia, and premature birth. Many payers have begun to utilize tools such as telehealth, comprehensive care coordination, specialist care, holistic maternal care, individualized case management, and educational support (Health Payer Specialist, May 6).

Walmart to Close its 51 Health Centers and Telehealth Program

• Walmart is set to close all its health clinics and telehealth program due to rising costs. Walmart Health was launched in 2019 and has 51 centers located next to supercenter stores in Arkansas, Florida, Georgia, Illinois, Missouri, and Texas. The clinics offer primary and urgent care, dental, behavioral health, labs and X-rays. Last year, Walmart announced plans to expand to 75 health centers in more states. The reversal comes with cited challenges in reimbursement and increasing operating costs (Health Payer Specialist, May 1).

Sellers Dorsey Updates

Upcoming Webinar: Unpacking the CMS Medicaid Managed Care Rules

• Are you prepared for the implications of the final rule? May 20 at 1:00 PM ET, Sellers Dorsey experts will utilize their deep expertise to explore the impacts on states, managed care organizations, and other healthcare stakeholders. Click here to learn more and register, today.