Sellers Dorsey Digest

Federal Updates

News

Moderna and FDA Agree to JN.1 Strain for COVID Vaccine Application

• On June 7, Moderna announced it submitted an application to the FDA for the 2024-2025 formula of the mRNA COVID-19 vaccine. The FDA has had internal disagreements over vaccine targeting strain selection with top officials advocating for the KP.2 strain, which can be produced for the fall respiratory virus season. Many advisors pushed for the JN.1 strain, which as of this time Novavax will only be producing. Ultimately, the FDA and Moderna chose the JN.1 strain based on the evidence that it will provide broad protection against circulating subvariants. Moderna will submit data to regulators worldwide to support the supply of the vaccine ahead of the 2024-2025 fall virus season (Inside Health Policy, June 7).

Federal Litigation

SCOTUS Rules In Favor of San Carlos Apache Tribe in Case Against the HHS

• On June 6, the Supreme Court ruled 5-4 in favor of the tribes in Becerra v. San Carlos Apache Tribe. The majority opinion states that, in accordance with the Indian Self-Determination and Education Assistance Act, the Indian Health Service must pay the overhead and administrative costs for tribes that operate their own healthcare programs. The case was decided jointly with Becerra v. Northern Arapaho Following the ruling, Becerra released a statement recognizing the HHS’ duty to comply with the decision, as well as calling on Congress to act on President Biden’s proposal to shift the Indian Health Service budget from discretionary to mandatory funding to create adequate and stable funding in the future (Inside Health Policy, June 6; HHS, June 6; Justia; June 6).

SCOTUS to Review Medicare DSH Calculations Case Again

• According to the order list, the Supreme Court will once again consider the question of how CMS can calculate Medicare disproportionate share hospital (DSH) payments through hearing the Advocate Christ Medical, et al. v. Becerra. The latest case focuses on HHS’ practice of counting patients who receive Supplementary Security Income (SSI) benefits in DSH calculations. Stakeholders believe HHS’ DSH formula runs counter to the standard determined in the 2022 case, Becerra v. Empire Health Foundation, where the Court decided HHS can exclude patients “who have exhausted their Medicare Part A benefits from hospital’s DSH payments.” Hospitals believe HHS’ interpretation excludes patients who are eligible for cash SSI payments but do not receive them, and patients who are eligible for other SSI benefits besides cash payments. Furthermore, hospitals believe HHS doesn’t share full data on patients’ SSI status and continue to call on the courts to review these challenges to the DSH system. The Supreme Court has now accepted to hear this case after the U.S. Court of Appeals for the District of Columbia Circuit ruled in HHS’ favor (Inside Health Policy, June 10).

Federal Regulation and Guidance

CMS Publishes FAQ on Medicaid and CHIP Coverage for Peer Support Services

• On June 5, CMS published a Frequently Asked Questions (FAQs) document on coverage of peer support services in Medicaid and CHIP. CMS worked with SAMHSA to develop the FAQs and provide clarification of federal policy related to coverage of peer support services initially established in State Medicaid Director (SMD) letter #07-011. CMS urges states to increase availability, accessibility, and utilization of peer support services to serve children, families, and adults who experience mental health conditions and/or substance use disorders (SUDs). These services are believed to be an integral part of the mental health and SUD treatment continuum of care that includes prevention, treatment, harm reduction, and recovery (Medicaid.gov, June 5).

Federal Studies and Reports

Black and Hispanic Enrollees More Likely to be Disenrolled from Medicaid Due To Procedural Issues

• According to a June 2024 study in JAMA, Black and Hispanic people were twice as likely as White people to lose their Medicaid coverage during the unwinding period due to administrative issues. Dr. Jane Zhu of Oregon Health & Science University and her team examined U.S. Census Bureau data from March 29, 2023, to October 2, 2023, to calculate the number of people disenrolled from Medicaid and determine which groups were most impacted. The majority of disenrollments, 75%, were due to procedural reasons such as not receiving a renewal notice, not filing the correct paperwork, or missing another step in the process. Among that 75%, Black and Hispanic enrollees were more likely to experience a procedural termination compared to White enrollees. Zhu and her team discussed creating expedited processes, increased assistance with the renewal process, and prioritizing redeterminations as ways to help eligible beneficiaries retain their coverage (UPI, June 4).

MACPAC Releases June Report to Congress

• On June 11, MACPAC released its June report to Congress, which included chapters covering transparency for the non-federal share of Medicaid and CHIP funding, coordination of care for dual eligibles, Medicare Savings Programs, and collection of demographic data (MACPAC, June 11).
  • Chapter 1
    • Chapter 1 focuses on ways to improve transparency in the financing of the non-federal share of Medicaid and CHIP. The Commission asserts that the main objective of improving transparency efforts is to gain a clearer understanding of current provider payment amounts under allowable financing mechanisms. This identification is the first step in MACPAC’s framework for evaluating whether payments align with statutory goals of efficiency, economy, quality, and access. The Commission recommends to Congress that states should be required to collect and publicly report data on the sources of the non-federal share of Medicaid and CHIP spending. This includes detailing financing methods, state-level financing amounts, and provider-level financing amounts.
  • Chapter 2
    • Chapter 2 provides recommendations for states and CMS to optimize and oversee State Medicaid Agency Contracts (SMACs) with Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs). When benefits between the two programs are not coordinated, beneficiaries often experience fragmented care and poor health outcomes. The chapter underscores the importance of care coordination data in aiding state efforts to evaluate integrated care and monitor D-SNPs. Building on previous work, the Commission recommends that states exercise their contracting authority at 42 CFR 422.107 and require the submission of care coordination data. The Commission also recommends that CMS update SMAC guidance to support states.
  • Chapter 3
    • Chapter 3 focuses on Medicare Savings Programs (MSPs), which provide Medicaid coverage for Medicare premiums and cost-sharing. MACPAC is interested in MSPs as they believe it could aid in improving access to care for low-income Medicare beneficiaries. The Commission delves into its past work in analyzing MSPs participation rates, recommendations for improving participation, and the results of their recent analysis of MSPs, which found that federal and state attempts to increase awareness of the program for low-income Medicare beneficiaries may have made substantial progress.
  • Chapter 4
    • Chapter 4 focuses on the importance of collecting demographic data, specifically on how Medicaid plays a key role in both providing healthcare to historically marginalized populations and allowing for disparities to exist within these groups. The Commission highlights how data collection can help states better understand the experiences of individuals who may identify with multiple characteristics and identities, such as race/ethnicity, language, sexual orientation and gender identity, and disability. MACPAC discusses how the availability of this type of data can aid in addressing existing health disparities within the Medicaid population, as well as key considerations for demographic data collection based on purpose, burden, and data quality.

State Updates

News

Arkansas Names New Director of Division of Developmental Disabilities Services

• The Arkansas Department of Human Services (DHS) has named Jennifer Daniel Breze the new Director of Division of Developmental Disabilities Services (DDS). Breze has a master’s in social work and most recently served as the Senior Director of Operations at CareSource PASSE (Arkansas Department of Human Services, June 10).

Texas Dismisses Protests About Medicaid STAR+CHIP Managed Care Services Contract

• On June 10, Texas rejected protests from Centene’s Superior Health Plan, Amerigroup’s Wellpoint Insurance, CareSource, Baylor Scott & White, Cook Children’s Health Plan, Texas Children’s Health Plan, and Driscoll Health Plan related to the state’s proposed contract awards for the $116 billion (over the full 12-year contract period) STAR/CHIP Medicaid managed care program. While Centene, Elevance, and Baylor Scott & White all won service areas under the new contract, the service areas are small. Many of the protests alleged that the awards were compromised when the state acknowledged it prematurely sent rival bid proposals to Aetna Better Health of Texas. Cook Children’s Health Plan and Driscoll Health Plan have publicly stated they may be forced to shutter operations should the new contract be finalized (Health Payer Specialist, June 10).

Only Five Percent of Disenrolled Medicaid Beneficiaries in Nevada Enrolled in Health Insurance Exchange Plans

• Only 5% of Nevadans who were disenrolled from Medicaid due to excess income have been able to enroll in a separate program through Nevada’s health insurance exchange program. The exchange program is run by Nevada Health Link, which offers government-subsidized health plans for individuals who do not otherwise qualify for Medicaid, Medicare, or employer-covered health insurance. The 5% enrollment rate does not account for individuals who switched to a private health plan or former Medicaid beneficiaries who lost coverage due to not completing a renewal application or who applied for health insurance through their employer. Health Link receives approximately 10,000 to 12,000 referrals per month from the state’s Medicaid program, although this figure includes some duplicate referrals that come from the same household (Nevada Independent, June 7).

U.S. Sees National Increase in Food Insecurity Rates from 2021 to 2022

• Feeding America’s Map the Meal Gap demonstrates that food insecurity rates are increasing across the U.S., and most significantly in the Midwest. North Dakota (+56.8%), South Dakota (+45.6%), and Iowa (+44.6%) saw the most significant increases in the number of individuals facing food insecurity while Washington D.C. (+7.5%), Hawaii (+10.1%), and Nevada (+11.5%) saw the least significant increases. Additionally, the map demonstrates that child food insecurity is present in every county in the U.S. Feeding America explores a combination of factors when researching food insecurity including unemployment, poverty, homeownership, income, and disability status to best understand why individuals are food insecure in the first place. In 2022, the national food budget shortfall was $33.1 billion, an increase of 43% from 2021. Feeding America did note that the COVID-19 pandemic likely impacted food insecurity during the time period reviewed and future reports will address the overall impact of food insecurity in the U.S. (Axios, June 6).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Rhode Island
    • On May 20, Rhode Island submitted an addendum to its extension request for the Rhode Island Comprehensive Demonstration waiver. This addendum aims to address health-related social needs and provide contingency management services to eligible individuals. It also updates the state’s request for pre-release supports for incarcerated individuals and requests 90 days of pre-release coverage and provides additional details about the services included for this population. With this addendum, the state aims to improve health equity, ensure access to stable housing, and increase access to integrated behavioral healthcare services. The federal public comment period is open from June 8, through July 7.
• 1331
  • Oregon
    • On June 7, CMS approved the state’s Basic Health Program (BHP) Blueprint. Beginning July 1, Oregon will provide healthcare coverage to individuals who have an income of 138-200% of the FPL. The BHP provides a comprehensive benefit package, including all Essential Health Benefits, and does not charge premiums or other cost sharing.

SPAs

• Eligibility SPAs
  • Florida (FL-24-0001, effective January 1, 2024): Provides for 12 months of continuous eligibility for children under the age of 19.
  • Georgia (GA-24-0002, effective March 1, 2024): Expands the Express Lane Eligibility option to include Childcare and Parental Services (CAPS), the Refugee Cash Assistance program, and Supplemental Nutrition Program for Women, Infants, and Children (WIC).
  • Wisconsin (WI-24-0003, effective January 1, 2024): Revises the maximum amount allotted for the maintenance of the home of an institutionalized beneficiary, based on the beneficiary’s Social Security cost of living adjustment.
• Payment SPAs
  • Massachusetts (MA-24-0009, effective January 1, 2024): Updates payment methodologies for substance use, clubhouse, and bariatric nursing facility services.
  • Minnesota (MN-24-0010, effective January 1, 2024): Updates payment methodology for Early Intensive Developmental and Behavioral Intervention (EIDBI) services.
  • New Jersey (NJ-24-0001, effective January 1, 2024): Updates FFS payment rate schedules across benefit categories.
  • Utah (UT-24-0006, effective July 1, 2024): Updates payment methodology for medical supplies and durable medical equipment (DME).
• Services SPAs
  • Kansas (KS-24-0006, effective July 1, 2024): Adds doulas as an approved provider type for prenatal, labor/delivery, and postpartum services, and establishes payment rates for doulas.
  • Washington (WA-24-0012, effective July 1, 2024): Adds Substance Use Disorder Professionals, Licensed Independent Clinical Social Worker Associates, Licensed Advance Social Worker Associates, Licensed Marriage & Family Therapist Associates, and Licensed Mental Health Counselor Associates to the list of other licensed practitioners qualified to provide mental health outpatient services.

Private Sector Updates

News

UnitedHealth Group Sells Workers Compensation Business to ExamWorks Compliance Solutions

• UnitedHealth Group sold its workers compensation business, Settlement Solutions, to Georgia-based ExamWorks Compliance Solutions, a division of ExamWorks LLC. Settlement Solutions was situated in UnitedHealth Group’s Optum unit. The acquisition was finalized on June 3, but no press release was made and no financial terms were disclosed (Health Payer Specialist, June 10).

Oscar Health Announces Long-Term Plans

• Oscar Health, an insurance agency based in New York, intends to set their sights on the individual insurance market, moving away from their former focus on ACA coverage. Its executives announced the company’s intention to continue to grow their market share from 13% to 18% by 2027, delve into Individual Coverage Health Reimbursement Arrangements (ICHRA), leverage partnerships in the creation of a private-label MA product, and invest in AI (Modern Healthcare, June 10; Oscar Health, June 7).

Kroger Health to Begin Offering Weight Loss Drugs

• On June 7, Kroger Health announced that it will offer GLP-1 drugs, such as Wegovy or Zepbound, in its in-store clinics. The company operates more than 200 clinics across nine states. Kroger’s Little Clinics plan to provide these weight loss drugs through in-person and telehealth visits and incorporate coaching and nutritional guidance through their weight management program. This new offering will build on Kroger Health’s existing food as medicine program, which the company has operated for more than ten years (Modern Healthcare, June 7).

Sellers Dorsey Updates

Don’t Miss Sellers Dorsey at the AEH VITAL CONFERENCE

• Sellers Dorsey is excited to attend the AEH Vital Conference, where four of our subject matter experts will present in two engaging sessions discussing the importance of developing a Medicaid strategy and how quality focused supplemental payment programs are driving impact for Medicaid beneficiaries in quality, equity, and access. Click here to learn more!

Sellers Dorsey Welcomes Katie Renner Olse

• The Firm is pleased to welcome Katie Renner Olse to the team. Katie’s impactful leadership in child and family well-being for both the public and private sectors has left an indelible mark on communities across the country. Her unique expertise helps the Firm offer new solutions to our clients, and increase our impact on children and families nationwide. Click here to learn more about Katie’s role at Sellers Dorsey.