Sellers Dorsey Digest

Federal Updates

News

CMS Releases Final Rule on MDRP Program

• On September 20, CMS released a final rule, Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program. The rule, which aims to enhance and streamline the Medicaid Drug Rebate Program (MDRP), will be officially published in the Federal Register on September 26. The rule implements new statutory authorities to address misreporting and misclassification of drugs by manufacturers with the goal of strengthening integrity in the program. The rule defines situations of drug misclassification in the MDRP, outlines a process and timelines that CMS will use for notifying and correcting misclassifications of covered outpatient drugs (COD), and requires manufacturers to pay unpaid rebate amounts due to misclassification. Additionally, CMS can suspend the National Drug Rebate Agreement for at least 30 days for late reporting, and the rule includes additional options for CMS to enforce these requirements and penalize non-compliance. Other provisions focus on enhancing MDRP operations and improving Pharmacy Benefit Operations in Medicaid managed care. The rule also removes the average manufacturer price cap on Medicaid drug rebates, rescinds regulations related to Pharmacy Benefit Manager (PBM) accumulator programs, and modifies third-party liability rules to align with other statutory changes (CMS, September 20).

FTC Files Complaint Against PBMs for Anticompetitive Practices

• The Federal Trade Commission (FTC) has filed an administrative complaint against CVS Caremark, Express Scripts, and OptumRx alleging the PBMs inflate insulin prices. The FTC has also warned that drug makers may face similar suits if involved in similar anti-competitive practices. The FTC’s focus includes PBMs and their affiliated Group Purchasing Organizations (GPOs). With increasing oversight of PBMs, concerns have been raised over the role of GPOs in negotiating drug rebates and potentially inflating costs for consumers. Although Express Scripts recently filed a suit against the FTC over its interim PBM report, the FTC maintains that there is no overlap between the suit and complaint (Inside Health Policy, September 20).

FDA Approves the First Ever Self-Administered Flu Vaccine

• On September 20, the FDA approved AstraZeneca’s nasal influenza vaccine, FluMist, to be offered online for consumers to buy and self-administer at home. Individuals under the age of 18 must have the vaccine administered by a caregiver. FluMist will require a prescription, which will be available through a third-party online pharmacy to eligible patients (Inside Health Policy, September 20).

MACPAC Holds September 2024 Public Meeting

• The Medicaid and CHIP Payment and Access Commission (MACPAC) met on September 19 and 20 to discuss the following topics:
  • Overview of Recent CMS Final Rules: MACPAC staff started the September meeting with a summary of requirements in the eligibility and enrollment, access to care, managed care, and nursing facility staffing and payment transparency final rules that CMS recently published. For each rule, presenters provided an overview of key provisions along with a breakdown of how CMS responded to MACPAC comments (MACPAC, September 19).
  • Timely Access to Home- and Community-Based Services: MACPAC staff discussed how states can expedite eligibility redeterminations and enrollment into home- and community-based services. The presentation highlights presumptive eligibility and accelerated eligibility for those whose income is not defined by using modified adjusted gross income (MAGI) as key ways individuals can gain access to the services they need in a timely manner (MACPAC, September 19).
  • Section 1915 Home- and Community-Based Services Authorities: Presenters introduced policy options to help ease the administrative burden for states providing HCBS to Medicaid beneficiaries. Section 1915 authorities permit states to provide HCBS, but operationalizing such programs can be particularly difficult. In this session, commissioners discussed two policy options:
    • Increasing the renewal time period for Section 1915(c) waivers from 5 to 10 years.
    • Removing the cost neutrality test requirement for Section 1915(c) waivers and requesting that the HHS Secretary release an annual report demonstrating the cost effectiveness of HCBS (MACPAC, September 19)
  • Understanding the Program of All-Inclusive Care for the Elderly (PACE) Model: Panelists representing state PACE programs and CMS provided an overview of the PACE program and its challenges and benefits. Commissioners selected some priority subjects to address in later interviews with state officials, PACE providers, and other stakeholders (MACPAC, September 19).
  • Introduction to Work on Residential Services for Youth with Behavioral Health Needs: MACPAC staff provided an overview of the Commission’s previous work on Medicaid services for children and youth with behavioral health needs and introduced a new line of research around access to intensive services in residential settings for children and youth with serious behavioral health conditions. MACPAC will engage and assess challenges with states in subsequent sessions (MACPAC, September 20).
  • Managed Care External Quality Review: The Commission’s examination of the managed care external quality review (EQR) process highlighted important aspects of strengthening managed care oversight and accountability and identified areas to explore regarding potential policy options (MACPAC, September 20).
  • Introduction to Work on Justice-Involved Youth: The presentation highlighted the critical intersection of healthcare and the criminal justice system for justice-involved youth, focusing on the health needs of and access to care for justice-involved youth and Medicaid’s ever-changing role in covering services for youth who are detained, imprisoned, or recently released from carceral facilities (MACPAC, September 20).
  • Themes from Hospital Payment Index (HPI) Technical Expert Panel: MACPAC presenters introduced results from a Technical Expert Panel (TEP) with representatives from federal and state government, hospitals, consultants, and researchers to update an earlier published hospital payment index to compare fee-for-service (FFS) inpatient hospital payments across states to Medicare payment rates (MACPAC, September 20).

Hospital Readmission Penalties Will Stabilize in Fiscal Year 2025

• According to preliminary data from CMS, the percentage of hospitals assessed readmission penalties of 1% or more moderated for the third consecutive year. This means that fewer hospitals will face high readmissions penalties in 2025 as rates of reimbursement cuts stabilize for providers. For fiscal year 2025, the number of hospitals included in the Hospital Readmissions Reduction Program is the lowest it has been in five years. Additionally, since CMS did not make significant changes to the measures or penalty calculation formulas, the latest round of penalties is comparable to fiscal year 2024. CMS will release its final data on October 1 (Modern Healthcare, September 23).

CMS Releases Informational Bulletin on State Compliance with Medicaid and CHIP Renewal Requirements

• On September 24, CMS released an informational bulletin with updates on the timing and expectations for states to achieve compliance with federal eligibility renewal requirements. The guidance applies to both states that already implemented CMS-approved mitigation strategies and states that have since identified areas of non-compliance with renewal requirements. According to the bulletin, states are required to complete a compliance assessment and demonstrate compliance with federal requirements at 42 C.F.R. §§ 435.916 and 457.343 and submit a plan outlining steps and milestones for addressing identified areas of non-compliance to CMS by December 31, 2024. Compliance plans will detail how states will achieve compliance with all applicable requirements no later than December 31, 2026 (CMCS, September 20).

Federal Studies and Reports

Contacting Exchange Enrollees Frequently Helps Promote Compliance

• According to a study published in Health Affairs and completed by Rebecca Myerson, a faculty member at the University of Wisconsin, and Andrew Feher, a research scientist at the California Department of Health Care Access and Information, targeted outreach to Covered California exchange (the largest state-run exchange in the U.S.) enrollees led to enhanced compliance because individuals are more likely to complete necessary actions to guarantee access to subsidies. The study relating to 2022 focused on Covered California enrollees who needed to confirm their consent to use personal data to verify eligibility for the subsidies. The study split 22,800 individuals into three groups that received either one, two, or three reminder emails regarding the need to confirm their consent. Approximately 159 more people in the group receiving three reminders renewed their premiums when compared to the other groups. Researchers also found that consents among that group were up 6% overall by Q3 of 2022 possibly due to the potential for enrollees losing their subsidies earlier in the year (Health Payer Specialist, September 23).

State Updates

News

CMS and Oklahoma Working on Pilot Program for QHP Directory

• CMS and the Oklahoma Department of Insurance have announced they are working together to create a statewide directory for ACA plans that would allow providers and insurers to access and update pre-populated data. This pilot program could potentially help influence a CMS National Directory of Healthcare in the future. The CMS Center for Consumer Information & Insurance Oversight and the Office of Burden Reduction & Health Informatics will oversee the pilot. Both agencies hope to improve data accuracy, care coordination, and patient choice as well as reduce administrative burdens. Additional details on the pilot program are expected to be released in the coming weeks (Inside Health Policy, September 20).

Gold Kidney Health Plan Extends Coverage in Florida and Arizona

• Gold Kidney Health Plan, a Medicare Advantage (MA) plan, will expand coverage in Florida and Arizona, the two states where the plan currently offers services. In Florida, the plan will expand to twenty-two markets from nine, and in Arizona, the plan will expand from four to eight markets. Gold Kidney initially entered the Medicare market in 2023 after raising approximately $60M in private equity funds in 2022. Overall, enrollment for the plans remains low, with approximately 860 enrollees in Part D in Arizona, 330 Part D members in Florida, and 17 MA enrollees in Florida (Health Payer Specialist, September 23).

Arizona Health Care Cost Containment Systems (AHCCCS) Extends Deadline for Enrollment for Aged and Disabled Beneficiaries

• Thousands of at-risk Arizonans now have an additional year to modify their health plan choice due to a lengthy dispute over a $15.8B Medicaid contract. Officials from the Arizona Health Care Cost Containment System (AHCCCS) announced that individuals enrolled in the agency’s long-term care program for elderly and physically disabled adults will have until October 1, 2025, to switch plans, rather than the original deadline of October 1, 2024. This one-year extension follows a prolonged dispute regarding a seven-year contract awarded to health plans owned by UnitedHealthcare and Centene Corporation (USA Today, September 19).

Montana Lawmakers to Decide on Renewing Expanded Medicaid Program

• On September 18, Montana lawmakers on the health and human services budget committee heard presentations about Medicaid expansion and its benefits and drawbacks. These presentations come as the legislature sets up for what is expected to be one of the state’s biggest decisions for next year – whether it should continue the expanded Medicaid program or let it expire in June. As of this past June, there were approximately 81,000 individuals covered under expanded Medicaid out of a total of 228,000 enrolled in the Medicaid program overall. Montana first expanded Medicaid in 2015 and renewed the expansion in 2019. The expanded portion of the program, however, will expire in June if lawmakers choose not to renew during the 2025 legislative session that begins in January and runs for 90 days (Daily Montanan, September 20).

SPA and Waiver Approvals

SPAs

• Administration
  • Alabama (AL-24-0005, effective October 1, 2024): Provides for the implementation of a Recovery Audit Contractor to identify underpayments and overpayments of Medicaid claims within the state plan and waivers.
  • New Mexico (NM-24-0003, effective July 1, 2024): Provides for the exclusion of Achieving a Better Life Experience (ABLE) accounts from Medicaid Estate Recovery in accordance with state law.
• Payment
  • Connecticut (CT-24-0010, effective April 1, 2024): Implements coverage and payment methodologies for urgent crisis services provided by licensed behavioral health children’s clinics.
  • Connecticut (CT-24-0012, effective May 1, 2024): Provides for wage and benefit updates for a Personal Care Attendants under a collective bargaining agreement for Community First Choice (CFC) services, including wage increases, longevity bonus, time off, and a stipend for a portion of health insurance premium expenses.
  • Connecticut (CT-24-0013, effective June 12, 2024): Implements a one-time supplemental payment for each of the 17 in-state Federally Qualified Health Centers (FQHCs).
  • Iowa (IA-24-0004, effective July 1, 2024): Eliminates semi-annual nursing facility reimbursement updates for changes in case-mix and updates the case-mix weighting system from RUG-III to the Patient Driven Payment Model (PDPM).
  • New York (NY-24-0031, effective April 1, 2024): Updates payment methodology for Community Health Workers (CHWs) working within FQHCs and Rural Health Clinics (RHCs).
  • New York (NY-24-0057, effective April 1, 2024): Updates payment criteria for FQHCs and RHCs that are eligible for the Alternative Payment Methodology (APM).
  • South Carolina (SC-24-0009, effective April 1, 2024): Updates payment methodology for Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IID), based on the 5% COLA increase during FY July 1, 2023 through June 30, 2024.
  • Washington (WA-24-0030, effective July 1, 2024): Updates Long-Term Civil Commitment per diem rates and adds language regarding per diem rate enhancements for contracted free standing psychiatric hospitals that provide services to long-term civil commitment patients.

Private Sector Updates

News

New Low-Cost Health Insurance Plans Raise Transparency Concerns

• A new type of health insurance plan is on the rise that incentivizes patients to use certain providers. Health Care Service Corp. (HCSC) recently introduced new, deductible-free plans that utilize copays to control costs by steering patients to cheaper, higher-value providers. UnitedHealth Group’s Surest and Aetna’s SimplePay also offer similar plans, and often promote telehealth instead of in-person visits. Beneficiaries of these plans are also less likely to be admitted to the hospital. However, the Surest mobile app directs patients to preferred providers based on undisclosed metrics, raising transparency concerns. Insurers may potentially steer patients to their own clinics and surgery centers. Overall, these plans appeal to young, healthy individuals but may not suit those with more complex needs or those who prefer traditional plans (Health Payer Specialist, September 23).

Cardinal Health to Procure Integrated Oncology Network

• Cardinal Health, an Ohio-based pharmaceutical distributor and medical product manufacturer, plans to acquire the Tennessee-based Integrated Oncology Network (ION) for $1.12B later this year. ION will join Cardinal Health’s oncology practice alliance, Navista, for an integrated approach to practice management, analytics, and AI. The planned acquisition has the potential to further Cardinal Health’s growth strategy in specialty drugs and community oncology care (Modern Healthcare, September 20).

Sellers Dorsey Updates

News

Why We Need a Rebirth of Trust in Health and Human Services

• Strengthening trust in health and human services (HHS) is key to improving healthcare quality, equity, and access for all. In this engaging article, Sellers Dorsey Managing Director, Marko Mijic, alongside co-author Justin Brown, explore transformative approaches that transcend partisan lines, fostering unity and inclusivity to build an HHS system that uplifts every individual to enhance health outcomes and create lasting change.
  Click here to read Marko and Justin’s article.