Sellers Dorsey Digest

Federal Updates

News

Genetic Sequencing Finds Tie Between Bird Flu and Dairy Farm Virus

• On July 19, the CDC confirmed a sixth case of H5N1, commonly known as bird flu, among poultry workers in Colorado. This follows the announcement from state officials on July 14 that five workers at an egg farm in Weld County tested positive for the virus. These Colorado cases were reported to be mild, with those infected experiencing traditional flu symptoms, though some infected dairy workers reported conjunctivitis as a symptom. Earlier in the summer, 54 farmworkers in Michigan were exposed to infected cows and had reported flu-like symptoms but only two of them tested positive for H5N1. The CDC has reported that genetic sequencing of the virus infecting one of the poultry workers is related to the first dairy farm case in Michigan. Due to the concentration of dairy farms in Colorado, the state is seeing a “sustained mammal-to-mammal transmission of H5N1 in dairy cows, which is leading to a potential source of continued spillovers into our poultry operations,” said Maggie Baldwin, a Colorado State Veterinarian. Leaders in the field speak on the multitude of unknowns with this virus, including what dairy farm the virus originates from and how farmworkers can effectively protect themselves from the virus during strenuous environmental factors, such as the 104-degree temperatures Weld County workers worked in (Stat News, July 22).

CMS Releases Statement on Broker Access to the Federal Marketplace

• On July 19, CMS released a statement on system changes to stop unauthorized agent and broker marketplace activity. The announcement comes after mounting complaints from consumers, that insurance brokers were switching consumers’ Affordable Care Act (ACA) plans without their consent. In the first six months of the year, over 200,000 people reported to CMS that they were either enrolled in ACA plans or switched from one plan to another without their permission. The Biden administration announced that insurance agents will now be blocked from making changes to ACA enrollments made through the federal marketplace unless the agent is already associated with a consumer’s policy. These changes are effective immediately (Fierce Healthcare, July 22).

Medicare Model for Dementia and Alzheimer’s Care Has Providers Split

• Hospitals and healthcare providers are divided on whether Medicare’s new Guiding an Improved Dementia Experience (GUIDE) model will provide adequate reimbursement for dementia patients who receive care at home. The GUIDE program is set to run for eight years and aims to manage the rising care costs for Alzheimer’s and dementia patients, which are projected to escalate significantly in future years. Providers in the pilot offer home-based healthcare services such as primary care, care navigation, and caregiver support with the goal of reducing hospitalizations. Medicare reimbursements range from $150 to $390 per month, depending on patient complexity. However, monthly rates are reduced by half for patients in the program after a 6-month period. Nearly 100 providers have started enrolling patients in the GUIDE pilot program as of July 1, with an additional 300 providers slated to begin enrolling patients on July 1, 2025. Some providers expressed that the monthly care management payments are sufficient to cover costs that were previously absorbed. However, others remain hesitant that the payments will cover the cost of comprehensive services or support program scalability (Modern Healthcare, July 23).

Federal Regulation and Guidance

CMS Issues SHO Letter on Statutory Requirements in Consolidated Appropriations Act for Incarcerated Youth

• On July 23, CMS issued a State Health Official Letter (SHO# 24-004) to address statutory requirements in the Consolidated Appropriations Act, 2023 (CAA, 2023). Two provisions in the law impact the availability of certain Medicaid state plan services for incarcerated youth. The CAA, 2023, also includes a provision that modifies CHIP eligibility requirements for children who become incarcerated. Starting on January 1, 2025, state Medicaid programs and CHIP are required to have a plan in place regarding services and eligibility for qualified youths who are within 30 days of their scheduled release from incarceration. Under section 5122 of CAA, 2023, states have the option to provide Medicaid coverage to eligible youths who are inmates of a public institution while waiting on disposition of charges and receive federal financial participation (FFP). Additionally, this section provides the option for states to consider children who are inmates of a public institution and waiting on disposition of charges as eligible for CHIP during this time. As a result of these new provisions, states must submit state plan amendments (SPA) with an effective date no later than January 1, 2025, to implement the coverage that is required in section 5121 of the CAA, 2023. If a state wishes to implement the optional coverage provided by the CAA, 2023 for this population, the SPA cannot have an effective date earlier than January 1, 2025 (CMS, July 23).

GOP House Appropriators Request GAO to Issue Report on Federal Government Use of AI on Prior Authorization

• On July 10, the House Appropriations Committee passed their FY 2025 HHS spending bill, which includes an ask for the Government Accountability Office (GAO) to issue a report to Congress outlining current and future AI use within prior authorization, how the federal government evaluates the data to make decisions regarding prior authorization, and existing AI safeguards, along with a preliminary briefing to be held with the Energy & Commerce and Ways & Means committees within 12 months of the enactment of their spending bill (Inside Health Policy, July 16).

State Updates

News

North Carolina Medicaid to Cover Weight Loss Drugs August 1

• On July 17, North Carolina Medicaid announced that it will cover obesity medications for beneficiaries starting on August 1. Under North Carolina Medicaid, beneficiaries aged 12 and older can receive weight-loss drugs to help lose weight and reduce the risk of obesity-related health complications. The state joins fourteen others that offer at least some coverage for weight-loss drugs: California, Connecticut, Delaware, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, Mississippi, New Hampshire, Pennsylvania, Rhode Island, Virginia and Wisconsin. Despite coverage under the state’s Medicaid plan, the North Carolina State Health Plan for state employees recently revoked coverage of these drugs, citing potential premium increases. (Inside Health Policy, July 19).

Florida Announces Another Round of Medicaid Managed Care Contracts

• On July 18, Florida health officials published a notice and announced they are extending Medicaid managed care contracts to three additional companies, Aetna, Molina, and United Healthcare. Aetna and United will maintain their current Medicaid managed care operations while Molina will have a contract for the heavily populated areas of Miami-Dade County and Monroe County and will no longer manage healthcare services in Charlotte, Collier, Desoto, Glades, Hendry, Lee, and Sarasota counties. The notice offers additional contracts to Florida Community Care and allows it to maintain its statewide presence. According to the notice, AmeriHealth Caritas, ImagineCare, and Sentara were not offered any Medicaid contracts in the state (Florida Politics, July 19).

SPA and Waiver Approvals

SPAs

• Services
  • Minnesota (MN-24-0017, effective April 1, 2024): Establishes state authority to engage in value-based purchasing under the pharmacy benefit.
• Payment
  • Colorado (CO-24-0006, effective July 1, 2024): Removes Medicare and other third party ancillary costs from allowable Class I nursing facility Medicaid reimbursement.
  • Colorado (CO-24-0007, effective July 1, 2024): Updates Pay for Performance (P4P) Supplemental Medicaid Payment for Class I nursing facilities to a flat per diem multiplier. Additionally, implements a cap on the total P4P supplemental payments based on the percentage of the total annual provider fee. Nursing facilities with substandard deficiencies will receive one-half of the calculated payment.
  • Louisiana (LA-24-0013, effective July 1, 2024): Amends provisions relating to reimbursement methodology for ICF/IID facilities by allowing for the continuation of the $12 direct care add-on payments to sustain the increase in costs toward retaining and hiring direct care staff.
  • Nevada (NV-24-0017, effective April 1, 2024): Updates payment methodology for licensed pharmacists to align with the payment methodology for physician assistants for the testing, prevention, or treatment of HIV or Hepatitis C.
  • Texas (TX-23-0046, effective October 1, 2023): Updates Disproportionate Share Hospital (DSH) program reimbursement methodology and the way in which the state’s DSH allotment is distributed among eligible hospitals.
  • Utah (UT-24-0009, effective February 21, 2024): Establishes an interim payment methodology for providers affected by the Change Healthcare cybersecurity incident.
  • Virginia (VA-24-0008, effective May 1, 2024): Removes any duplicative language within the school-based services section.

Private Sector Updates

News

Rural Hospitals Hoping for Boosts to Medicare and Medicaid Reimbursements Amidst Service Cuts

• CEOs Darryl Wolfe (Olympic Medical Center, WA), Siri Nelson (Marshal Medical Center, CA), and Sammie Cribbs (North Arkansas Regional Medical Center) are asking lawmakers to boost Medicare and Medicaid reimbursement and streamline pay processes. According to a Chartis Center for Rural Health report from February, half of the nation’s rural hospitals reported financial losses last year. As a result, many rural community providers have reported cutting obstetrical and chemotherapy services. If CMS does not agree to increase reimbursement rates, rural hospitals report they will begin weighing what services to cut in the future to remain solvent (Modern Healthcare, July 22).

Elevance Has Positive Second Quarter, but Reigns in Long-Term Revenue Growth Guidance

• According to second-quarter results posted on July 17, Elevance exceeded expectations on earnings and revenue. Additionally, the company’s medical loss ratio (MLR) was 86.3%, down from 86.4% a year ago. However, the company reduced long-term revenue growth guidance despite the positive reports. The health payer saw a 23% reduction in Medicaid beneficiaries over the past year as a result of redeterminations, from 11.90M to just over 9M. Elevance projects the remaining enrollees to be sicker and have more health needs than those who lost coverage, potentially resulting in issues with rates and higher utilization. However, a spokesperson for the company stated that they expect rates to remain actuarially sound. Elevance is also impacted by the recent changes to Medicare Advantage (MA) star ratings and now expects over 50% of members to be in plans that are at least four stars, helping to offset reductions to MA funding (Healthcare Dive, July 17; Becker’s Payer Issues, July 17).

New President and CEO for the American Health Care Association Set to Start in Fall

• Clifton Porter has been announced as the next president and CEO of the American Health Care Association (AHCA) following Mark Parkinson’s retirement in the Fall. Porter currently serves at the AHCA’s senior vice president of government relations and spearheads lobbying and advocacy work for the association. AHCA is currently in the middle of litigation with CMS over the nursing home minimum staffing mandate from the April final rule. The association and another trade group asked a federal judge to throw out the mandate which is set to phase in over five years starting in August (Modern Healthcare, July 15).

SCAN Group Hires New Executives

• SCAN Group, a nonprofit healthcare company that operates SCAN Health Plan, one of the nation’s largest Medicare Advantage plans, has brought on four new executives to boost growth and diversity. The new hires will fill the chief transformation officer, chief clinical innovation officer, chief marketing officer, and vice president of quality and healthcare services roles. The new hires along with several promotions within the company are designed to propel a new era of growth and diversification for SCAN (Health Payer Specialist, July 16).

Molina To Purchase ConnectiCare in 2025

• Molina Healthcare is set to acquire EmblemHealth’s ConnectiCare for $350M in the first half of 2025. Molina’s purchase price is approximately 25% of ConnectiCare’s expected premium revenue for this year. Currently, ConnectiCare serves approximately 140,000 people within Medicare and other commercial products. This deal follows Molina’s purchases of My Choice Wisconsin and California’s BrightCare (Health Payer Specialist, July 23).

Sellers Dorsey Updates

Suzanne Bierman Shares Insights with MedCityNews on the Rising Role of MLTSS in Medicaid Evolution

• Managed long-term services and supports (MLTSS) are emerging as essential lifelines for transformation, having significant impact on the Medicaid landscape nationwide. Sellers Dorsey Managing Director, Suzanne Bierman, shares her insights with MedCityNews to explore the challenges facing state Medicaid programs and how innovations in MLTSS can help improve health outcomes, reduce costs, and enhance quality of care for Medicaid beneficiaries. Click here to explore Suzanne’s article.