Sellers Dorsey Digest

Federal Updates

News

CMS Hold Harmless/Tax Arrangement Guidance

• CMS recently provided additional sub-regulatory guidance on new and existing health care-related tax arrangements. The guidance provides additional information on the agency’s enforcement discretion regarding new and existing health care-related tax arrangements following the April 2024 Informational Bulletin and publication of the Managed Care Final Rule (CMS, September 9; AEH, September 16).

CMS Requests Public Comments on the New MHPAEA Compliance Tools

• Following its September 2023 informal request for comments on mental health (MH) and substance use disorder (SUD) parity requirements, CMS has decided to establish a standardized and simplified parity compliance documentation process. CMS developed comprehensive templates and instructional guides for states and plans to document how benefits are provided within managed care in compliance with the requirements set forth in the Medicaid and CHIP Mental Health Parity and Addiction Equity Act. The guides and templates are available for download in an excel and PDF format and include a State Summary Template, an Instruction Guide for Parity State Summary, Parity Plan Reporting, Parity State FFS Reporting, and an Instructional Guide for Parity Plan and State FFS Program Reporting. Notably, the templates include specialized worksheets for each program type, the analysis of aggregate lifetime and annual dollar limits, as well as financial requirements, quantitative treatment limitations, and non-quantitative treatment limitations. CMS seeks informal public comment on the tools to gather feedback on utilization and possible improvements that can be made prior to finalization. Comments should be submitted to MedicaidandCHIP-Parity@cms.hhs.gov by October 29, 2024 (CMS, September 9).

Federal Legislation

U.S. House Energy & Commerce Committee Announces Upcoming Votes on Telehealth Related Bills

• This week, the House is scheduled to convene and vote on a variety of telehealth related bills, including the Supporting Patient Education and Knowledge (SPEAK) Act of 2023, which would establish an HHS run task force to improve access to health-related IT for individuals with Limited English Proficiency (LEP) and individuals who are visually or hearing impaired. A vote will also occur on the Telehealth Enhancement for Mental Health Act of 2024, which would require HHS to create guidelines for the facilitation of tele-mental health services to LEP, visually and hearing-impaired individuals, as well as provide for a Medicare modifier for these services. A vote is scheduled on the Telehealth Modernization Act of 2024, which if fully enacted, would extend the telehealth flexibilities permitted during the pandemic for another two years (Inside Health Policy, September 17).

Federal Litigation

PBM Express Scripts Sues the Federal Trade Commission

• Express Scripts, a major pharmacy benefit manager (PBM), is suing the Federal Trade Commission (FTC) and seeking to retract an agency report released earlier this year that Express Scripts claims is false and defamatory. The report released by the FTC in July found that six PBMs, including Express Scripts, fill 95% of prescriptions in the U.S. and that these dominant PBMs can raise the cost of drugs. The lawsuit comes as the FTC gears up to sue the three largest PBMs in the country over their role in an alleged anticompetitive scheme to steer patients to high-cost drugs. This coincides with PBMs’ business practices facing general bipartisan scrutiny in Congress as lawmakers seek increased transparency (Politico Pro, September 17).

Federal Studies and Reports

Census Bureau Report Finds the Uninsured Rate was Stable in 2023

• The Census Bureau reports that the proportion of Americans without health insurance remained stable in 2023 and close to the record low achieved in 2022 through the expansion of the Affordable Care Act. However, the Census Bureau findings are based on surveys conducted early this year and count individuals as uninsured only if they lacked insurance coverage for all of 2023. Therefore, the report likely does not capture the unwinding of the Public Health Emergency (PHE), during which tens of millions of Americans lost Medicaid coverage after the PHE protections expired. It is not yet clear what effect the unwinding has had on insurance coverage, and the Census Bureau plans to release additional data that looks closer at this information in their 2026 report. The Medicaid unwinding has been completed in most states and over 25 million people have been disenrolled. While many people disenrolled from Medicaid have successfully reenrolled or obtained other coverage, some individuals remain uninsured (Modern Healthcare, September 16).

State Updates

News

Humana Seeking New D-SNP Contracts in Michigan

• Eric Doeh, former leader of Detroit Wayne Integrated Health Network, now leads Humana’s Michigan operations. According to Crain’s Detroit Business, Humana is hoping to secure an agreement with the state for new Dual-Eligible Special Needs Plans (D-SNPs) within two years. Michigan is planning to transition about 3% of MI Health Link pilot program participants to a permanent Highly Integrated Dual Eligible(HIDE) D-SNP by 2026 with a phased-in rollout. There are currently 34,000 residents in the pilot program, while there are over 300,000 residents state-wide who are dually eligible. The RFP for this transition was posted in June of this year. Currently, Humana has around 54,000 customers in D-SNPs and just under 200,000 in Medicare Advantage plans (Health Payer Specialist, September 13).

Colorado Releases Hospital Price Transparency Tool

• Colorado Governor Polis, Lieutenant Governor Primavera, and the Department of Health Care Policy and Financing (HCPF) announced the release of the state’s Hospital Price Transparency Tool. The tool allows employers, municipalities, consumers, advocates, policymakers, and other stakeholders to compare the costs of over 5,000 procedures at 82 state hospitals. Specifically, the tool compares hospital gross charges, cash discounted prices, estimated Medicare costs, and commercially negotiated prices. The transparency tool aims to continue to build upon Colorado’s hospital affordability work that intends to save residents money on healthcare (Pagosa Daily Post, September 13).

Pennsylvania Governor Re-Establishes the Office of Gun Violence Prevention Through an Executive Order

• On September 9, Governor Josh Shapiro signed Executive Order 2024-02, which re-establishes the state’s Office of Gun Violence Prevention (OGVP), under the Pennsylvania Commission on Crime and Delinquency (PCCD). Despite ongoing initiatives to address and prevent gun violence, the state reports that over 1,600 firearm related deaths occur per year. Under OGVP, Pennsylvania will work to utilize evidence-based practices to build upon existing state programs, create an advisory group, and develop a gun violence prevention plan. The OGVP will also collaborate with a multitude of stakeholders such as the state’s Office of Victims Services, PA State Police, and the Departments of Human Services and Education to increase awareness, establish a comprehensive Gun Violence Data Dashboard and increase resources available for victims of these crimes (Fox News, September 11).

SPA and Waiver Approvals

SPAs

• Administrative
  • Oklahoma (OK-24-0016, effective October 1, 2024): Updates state plan assurances to align with the federally mandated quality reporting requirements outlined in the Child Core set and behavioral measures on the Adult Core Set.
  • Oregon (OR-24-0015, effective December 1, 2024): Updates state plan assurances to align with the federally mandated quality reporting requirements outlined in the Child Core set and behavioral measures on the Adult Core Set.
• Services
  • New Hampshire (NH-24-0021, effective April 1, 2024): Aligns community-based mobile crisis intervention services with the requirements set forth in Section 9813 of the American Rescue Plan of 2021.
  • Virginia (VA-24-0021, effective July 1, 2024): Adds Licensed Behavioral Analysts (LBAs) as a qualified provider under the Credentialed Addiction Treatment Professional definition to perform services under the Addiction and Recovery Treatment Services (ARTS) program.
  • Virginia (VA-23-0013, effective August 30, 2024): Removes outdated language regarding case management for residents of assisted living facilities.
• Payment
  • Arkansas (AR-24-0011, effective April 6, 2024): Updates the payment methodology for private hospitals by removing requirements to apply respective Case Mix Indexes (CMI) to Medicare and Medicaid per discharge rates for comparison to the Medicare-related UPL.
  • Colorado (CO-24-0019, effective July 1, 2024): Provides for a 2.0% rate increase for Psychiatric Residential Treatment Facility (PRTF) services.
  • Illinois (IL-24-0014, effective July 1, 2024): Updates reimbursement rates for dental anesthesia and SUD services.
  • Louisiana (LA-24-0012, effective July 1, 2024): Updates the qualifying criteria and the payment methodology for the High Medicaid Utilization Academic Hospitals for the provision of inpatient hospital services.
  • Louisiana (LA-24-0016, effective July 1, 2024): Establishes the qualifying criteria and payment methodology for High Medicaid Utilization Academic Hospitals for the provision of outpatient hospital services.
  • Massachusetts (MA-24-0021, effective June 19, 2024): Establishes a supplemental payment for Mental Health Centers.
  • Michigan (MI-24-0015, effective October 1, 2024): Updates reimbursement rates for COVID-19 vaccine administration.
  • New York (NY-22-0040, effective April 1, 2022): Continues the supplemental upper payment limit payments to state publicly owned and operated inpatient hospitals for FY2022.
  • Utah (UT-24-0011, effective October 1, 2024): Updates the payment methodology for disproportionate share hospital (DSH) payments.
  • Utah (UT-24-0012, effective July 1, 2024): Updates the payment methodology for graduate medical education (GME) pool payments.
  • Washington (WA-24-0022, effective July 1, 2024): Updates the fee schedule effective dates for specific clinic, outpatient, non-institutional, and all other practitioner services.

Private Sector Updates

News

AEH Policy Brief on SDPs

• America’s Essential Hospitals (AEH) recently published a policy brief on the importance of Medicaid state directed payments (SDPs). This brief examines how SDP programs relate to other types of Medicaid payments and illustrates how states are using this authority to begin closing the payment equity gap for essential hospitals and improve access to care for Medicaid beneficiaries. SDPs allow safety net hospitals to deal with low managed care payment rates, which are an increasing threat to the financial stability of safety net providers, who are committed to serving all people, regardless of income or insurance status. The policy brief describes how SDP programs that pay safety net hospitals the same rate as other payers enable these hospitals to invest in initiatives to improve access and quality. The brief features profiles of hospital initiatives in Ohio (Care Innovation and Community Improvement Program (CICIP)), California (Enhanced Payment Program (EPP) and Quality Incentive Pool (QIP)), Georgia (Advancing Innovation to Deliver Equity (GA-AIDE)) and related efforts in Kentucky (University of Kentucky Hospital DPP) to improve care quality, access, and advance health equity (AEH, September 18).

Walgreens Pays $106.8M to Settle DOJ Allegations for Overbilling

• Walgreens Boots Alliance has agreed to pay a $106.8M fine to settle DOJ allegations. The DOJ alleged that Walgreens violated the False Claims Act and other state statutes by filing false claims to Medicare and Medicaid for prescriptions it never dispensed from 2009 to 2020. The DOJ further alleged, that the company restocked and resold those prescriptions to other customers without revising the submitted claim, allowing the company to double the payment collected. A spokesperson from Walgreens stated that the government programs were erroneously billed for a small number of prescriptions but that the error was reported and corrected, and overpayments were refunded. According to the DOJ’s statement, the company has now revised its electronic pharmacy management system to prevent future billing errors. Walgreens will receive a $66.3M credit for the previously refunded overpayments. $91.9M of the fine will go to the federal government while the remaining $14.9M will go to individual state Medicaid programs where lawsuits were filed (Modern Healthcare, September 13; Health Payer Specialist, September 16).

Medicare Advantage Plans Will Receive Less in Quality Bonuses This Year

• According to a KFF report, the federal government will pay less in quality bonuses to Medicare Advantage insurers this year compared to last year. Medicare Advantage insurers will receive an estimated $11.8 billion in bonus payments from CMS, down by approximately 8% from the total bonus amounts CMS distributed last year. KFF reported that bonuses will account for less than 3% of payments made to health plans this year. The decline in bonuses allocated this year reflects the expiration of the pandemic-era policies that eased calculation standards (Modern Healthcare, September 12).

Sellers Dorsey Updates

Summaries of Enacted State Budgets FY2025

• What’s ahead for state budgets in Fiscal Year 2025 (FY2025)? In this comprehensive overview, we lead you through each state’s enacted budget for the year, their Medicaid spending plans, and program changes for FY2025. See where states are looking to allocate funds to best address their most mission-critical challenges and align with the needs of their communities Download the report by clicking here.