Sellers Dorsey Digest

Federal Updates

Federal Litigation

U.S. Supreme Court Invalidates Chevron Precedent

• On June 28, the U.S. Supreme Court overturned the long-standing Chevron deference precedent in a 6-3 decision, ruling that agencies’ future interpretations of statute will not receive deference over other interpretations in cases where legal text is ambiguous. The dissenting justices’ opinion raised concerns about the effect of the judgement on complicated technical health care regulations, specifically those involving artificial intelligence, CMS reimbursement, and prescription drug approvals. The ruling is expected to lessen the impact of federal agency interpretation and guidance but will not impact previously decided cases that relied on Chevron deference (Inside Health Policy, June 28; Health Payer Specialist, July 1).

Federal Regulation and Guidance

CMS Publishes Notice of Funding Opportunity (NOFO) for Transforming Maternal Health (TMaH) Model

• On June 26, CMS published a NOFO application for the TMaH model that aims to improve health outcomes for mothers and infants enrolled in Medicaid and CHIP through a targeted, state-specific whole-person approach to pregnancy, childbirth, and postpartum care. CMS plans to issue cooperative agreements to up to 15 state Medicaid agencies with funding awards up to $17 million and applications due September 20, 2024. CMS has a model factsheet and FAQ page available for states on the TMaH Model website (Medicaid.gov, June 26).

CMS Releases Proposed Rule That Could Hold ACOs Harmless for Catheter Billing Anomalies

• On June 28, CMS released a proposed rule that would hold harmless Accountable Care Organizations (ACOs) for billing anomalies associated with catheters. In this proposed rule, CMS calls for modifications to the Shared Savings Program financial methodology. The proposed rule follows a meeting in April with National Association of Accountable Care Organizations (NAACOs) and other stakeholder groups, where they requested CMS to hold ACOs harmless and remove expenditures for two catheter procedure codes, A4352 and A42354, from financial calculations. The rule also proposes new factors to calculate revenue status and repayment mechanism amounts and benchmarks for ACOs in 2024 through 2026. CMS will accept comments on the proposed rule through July 29 (Inside Health Policy, June 28).

Proposed Rule Includes 2.2% Pay Increase for End-Stage Renal Disease (ESRD) Facilities

• On June 27, CMS published a proposed rule, “End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, Conditions for Coverage for End-Stage Renal Disease Facilities, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model,” which includes a $2.18, or 2.2% rate increase for end-stage renal disease services for 2025. The rule would also create two different tiers in the low-volume payment adjustment (LVPA), altering the upward adjustment to base rates. CMS believes that these changes will best align payments and resource utilization (Inside Health Policy, June 28).

Federal Studies and Reports

LGBTQI+ Medicaid Data Collection is a Step Toward Health Equity

• Sexual and gender minority adults in the U.S. are more likely than straight and cisgender individuals to face barriers accessing health coverage and care. To better inform states and the federal government, in November 2023, CMS added three optional sexual and gender identity (SOGI) questions to its Medicaid and CHIP applications that states can choose to incorporate. Currently, only seven states include SOGI questions on their Medicaid applications (Connecticut, Maine, Massachusetts, Nevada, New York, Oregon, and Washington). This month, JAMA released an article written by assistant professors from Boston University of Public Health and the University of Illinois Chicago discussing how the federal guidance represents a significant step in improving the data infrastructure necessary to understand potential inequities in health need, access to and quality of care, and health outcomes for LGBTQI+ people served by Medicaid. This data collection could inform policies that inform targeted enrollment outreach as well as increased assistance and resources to SOGI patients (MSN, June 28).

State Updates

News

Cook Children’s Sues Texas Over Potential Medicaid Contract Loss

• On June 26, Cook Children’s Health Plan, the Texas Fort Worth-based health system, announced they filed two lawsuits against the state to stop the Texas Health and Human Services Commission (Commission) from removing them as a longstanding Medicaid contractor. The lawsuits are an attempt to halt the $116 billion Medicaid procurement process that will remove Cook Children’s Health Plan and two other hospital-affiliated children’s health plans from Medicaid STAR and CHIP. Texas Medicaid STAR and CHIP cover the cost of routine, acute, and emergency medical visits, and STAR primarily covers pregnant women, low-income children, and their caretakers. If the Commission’s decision stands, the number of managed care organizations contracted in the state that administer STAR and CHIP will be reduced and enrollees will be moved to new insurers by next year (The Texas Tribune, June 27).

Pennsylvania Medicaid Policy Change Boosts Coverage of Philadelphia Street Medicine

• The city of Philadelphia continues to address its opioid crisis by deploying mobile medical units to provide Medicaid-funded “street medicine” to the unhoused population. This initiative was made possible by a Pennsylvania policy change made last Fall that allows medical providers to bill Medicaid for covered services delivered by mobile medical units to unsheltered or homeless individuals. The opioid epidemic has significantly increased homelessness in Philadelphia and the mobile units aim to offer essential care and dignity to unhoused people. The program has a significant impact on participants, with goals of improving medical outcomes, building trust, and enhancing access to health care and support services with trauma-informed and harm-reduction care (MSN, July 2).

Maryland Pauses Behavioral Health Provider Enrollment Within Its Medicaid Program

• The Maryland Department of Health has made the decision to pause Medicaid provider enrollment into psychiatric rehabilitation, psychiatric health homes, level 2.5 partial hospital programs, and level 2.1 intensive outpatient treatment programs for 6 months in an attempt to address potential fraud and abuse. The state will reportedly take this time to assess and evaluate the current provider landscape after a shift to an accreditation only model for licensing. Individual practitioners, clinics within hospitals, and FQHCs will not be affected, and pre-existing providers will continue to have access to the needed support related to licensure and enrollment (Baltimore Sun, June 29).

Colorado Law Aims to Provide Medicaid Coverage for Housing and Nutrition Services

• Colorado aims to join approximately 20 other states in asking CMS to consider if Medicaid can cover safe housing and nutritious food. HB 1322 requires the Department of Health Care Policy and Financing (HCPF) to conduct a study to determine whether seeking federal authorization to provide services that address Medicaid members’ health-related social needs is viable. The state released a request for public comment earlier in June on a proposal planning to cover three groups: individuals who are homeless or at risk of homelessness, individuals with disabilities who are transitioning out of facilities, and young individuals aging out of foster care (Colorado Sun, July 1).

HHS Authorizes Five Additional States to Provide Medicaid or CHIP Coverage to Justice-Involved Individuals Prior to Reentry

• On July 2, CMS approved five 1115 waiver demonstrations, authorizing Illinois, Kentucky, Oregon, Utah, and Vermont to provide Medicaid or CHIP coverage to individuals prior to their release from incarceration. With the approval of these waivers, CMS believes individuals transitioning from the justice system will have a more seamless transition back into their communities and more continuity of care. These five states join California, Massachusetts, Montana, and Washington in expanding access to high-quality, low-cost health care for a population that has higher incidences of substance use disorder and chronic health conditions and has been historically overlooked. Other states continue to submit requests to CMS through the agency’s standard demonstration application and special terms and conditions to accelerate approval. In our latest white paper, Sellers Dorsey experts analyze the impact of Medicaid supports for those individuals within the justice system on improving healthcare and health equity and identify solutions and promising services and practices for states, providers, and other stakeholders to improve health outcomes. Read it here! (Medicaid.gov, July 2).

SPA and Waiver Approvals

Waivers

• 1115
  • New York
    • On June 10, New York submitted a request to amend its Medicaid Redesign Team (MRT) 1115 waiver to provide continuous eligibility for children up to age six who are enrolled in Medicaid and Child Health Plus (New York’s CHIP) to ensure coverage for the first six years of a child’s life. The federal comment period is open from June 27, 2024, through July 26, 2024.

SPAs

• Eligibility
  • Colorado (CO-24-0010, effective May 12, 2024): Extends the waiver of premiums for the Buy-In programs for Working Adults with Disabilities and Children with Disabilities, for an additional 12 months.
• Payment SPAs
  • Connecticut (CT-23-0012-A, effective May 12, 2023): Updates payment methodology and value-based payment dates for Home and Community-Based Services programs.
  • Nevada (NV-24-0013, effective January 1, 2024): Updates payment methodology for outpatient hospital services provided by Critical Access Hospitals.
  • New York (NY-24-0033, effective January 1, 2024): Adjusts the payment rates for hospice services to reflect statutory, minimum per hour wage rates per region.
• Services SPAs
  • California (CA-24-0005, effective July 1, 2024): Adds group homes for children with special needs as a new provider type under Home and Community Based Services and also adds participant direction as a service delivery method, and telehealth as a service delivery method for specified services.
  • Wyoming (WY-24-0002, effective July 1, 2024): Adds clubhouse services to Psychosocial Rehabilitation services , moves Applied Behavior Analysis services to the ESPSDT section, and updates the scope of work of Certified Social Worker to align with the Wyoming Mental Health Professionals Licensing Board.

Private Sector Updates

News

Chicago Hospital Gets Systems Back Online, Following Cyberattack Impacting Thousands

• Following the cyberattack on January 26, Lurie’s Children Hospital in Chicago, has finally been able to restore all its systems. In a data breach notice, approximately 800,000 individuals have been identified as victims of the cyberattack. Among leaked information are SSN, driver’s license numbers, and patient specific health information. Lurie’s Children Hospital chose to work with law enforcement and not pay the ransom. In March, it was reported that Rhysida, the ransomware group, sold the hospital’s data for $3.4 million (Modern Healthcare, June 28; The Record, March 7).

Sellers Dorsey Updates

New Blog: 5 Underlying Challenges Facing Safety Net Hospitals and How to Overcome Them

• Safety net hospitals play a vital role in the U.S. healthcare system and provide essential care to some of the nation’s most vulnerable populations. Beyond pervasive challenges, there are underlying issues that safety net hospitals need to address. Former hospital CEO, and current Sellers Dorsey Director, Joe Rafferty, explores several factors that safety net hospitals can consider to enhance healthcare quality, equity, and access for underserved populations. Click here for Joe’s insights.

Explore our new FAQs for the Final Medicaid Managed Care Rule

• You had questions, our experts provided answers! Click the link to explore our FAQs regarding the final Medicaid managed care rule including insights on fee-for-service UPL programs, Medicaid GME, SDPs, average commercial rate, and more. Click here for answers to your most important questions.