Sellers Dorsey Digest

Federal Updates

News

CMS Approves Coverage of Traditional Healthcare Practices in 1115 Waivers

• On October 16, CMS approved several 1115 demonstration amendments which authorize Medicaid coverage of traditional healthcare practices provided by Indian Health Service (IHS) facilities, Tribal facilities, and urban Indian organizations. Arizona, California, New Mexico, and Oregon now have approval to support these facilities and organizations to provide holistic, culturally appropriate patient care. According to IHS Director Roselyn Tso, IHS is the 17^th largest healthcare system in the country. American Indians and Alaska Natives often experience poor healthcare outcomes for physical and mental health compared to other populations. Studies support the use of traditional healthcare practices to improve health outcomes for conditions like diabetes, cancer, mental health and substance use disorders (CMS, October 16).

Biden Administration Proposes Rule to Expand Contraceptive Coverage

• On October 21, the Biden-Harris Administration proposed a rule that would expand coverage of contraception under the Affordable Care Act (ACA). The proposed rule requires payers to provide no-cost coverage of over-the-counter birth control, emergency contraception, and spermicides. Additionally, private plans will be required to cover these medications unless they currently cover a non-cost sharing therapeutic equivalent. The proposed rule has the potential to increase contraceptive coverage for approximately 52 million women of reproductive age who are on private health insurance. The proposed rule builds on the administration’s previous actions to bolster access to contraception and related services, including growing family planning service within Title X clinics, supporting the coverage of family planning services through Medicaid and Medicare, promoting research and data analysis to tackle access gaps and disparities, and increasing contraception access for federal employees and their families, college students, service members and veterans, and within federal health centers (White House, October 21; Health Payer Specialist, October 21).

Federal Legislation

Bipartisan Group of House Lawmakers Seeks Medicare Reforms in Lame Duck Package

• A bipartisan majority of House lawmakers is seeking to protect physicians from the anticipated 2.8% Medicare pay cut in 2025. Two hundred and thirty-three House lawmakers signed a letter requesting that leadership prevent the 2.8% reduction to payment rates in the expected lame duck package and consider enacting other Medicare reforms that have been brought to Congress. The letter details that Medicare payments have fallen by nearly 30% over the last twenty years, negatively impacting practices, especially in rural and underserved areas. The House lawmakers also addressed other policy reforms in the letter such as tying payment updates to reflect inflationary changes and revising the Medicare physician fee schedule budget neutrality requirements to prevent additional cuts. Additionally, the letter referenced the Merit-based Incentive Payment System and the potential to improve quality measures and bonus payments. Lobbyists anticipate that Congress will mitigate immediate Medicare cuts but that broader reforms will be postponed until the next session (Inside Health Policy, October 17).

Federal Studies and Reports

ASPE Final Report Sheds Light on Medicaid Nursing Facility Payments and Cost Coverage

• On October 11, the Office of the Assistant Secretary for Planning and Evaluations (ASPE) released a final report that studies the relationship between nursing home Medicaid reimbursement rates and the cost of care for the facilities. The survey, which included 13,285 nursing homes, had these key findings: Most nursing homes (52%), had 80 to 100% of their Medicaid per diem costs covered; 40% of nursing homes had 80% or less of estimated Medicaid costs covered; and 8% had Medicaid payments exceeding their per diem costs. Additionally, not-for-profit nursing homes reported the lowest Medicaid payment-to-cost ratio compared to that of for-profits and government owned facilities. On average, Medicaid reimbursement covers 82 cents on the dollar of all reported nursing facility costs. The study also reviewed staffing levels within nursing facilities and found facilities that saw nursing staff levels of 4.0 per resident per day had the lowest Medicaid payment-to-cost ratio at .77, while homes with nursing staff levels below 3.0 per resident per day had the highest Medicaid payment-to-cost ratio of 8.5 (ASPE, October 11; McKnights Long-Term Care News, October 16; Skilled Nursing News, October 18).

State Updates

News

Rhode Island’s Executive Office of Health and Human Services (EOHHS) Rescinds Medicaid Contracts After Protests from BCBS and Tufts Health

• Last week, the Rhode Island announced the decision to “reevaluate the scores and hire a consultant to independently review the proposals and present scoring recommendations for the state’s $15 billion Medicaid contracts after BCBS and Tufts Health filed protests relating to the procurement. In July, the EOHHS issued provisional contract awards to Neighborhood Health Plan of Rhode Island (NHPRI) and UnitedHealthcare of New England (UHC), two of the three health plans currently providing Medicaid services in the state (MSN, October 19).

Kentucky-Based Recovery Care Center to Temporarily Close Facilities Over Medicaid Cuts

• Addiction Recovery Care is temporarily closing four of its facilities because of potential Medicaid reimbursement cuts. The Kentucky-based provider of addiction treatment services operates in more than 30 locations across twenty counties. In its announcement on October 16, the company cited the cuts proposed by managed care organizations (MCOs) as the reason for the closures. A spokesperson for the Kentucky Association of Health Plans released a statement which maintains the MCOs work collaboratively with behavioral health providers and use many tools to ensure that high-performing providers with positive outcomes are rewarded (Louisville Courier-Journal, October 18).

Massachusetts Medicaid ACOs Have Not Yet Improved Asthma Care for Children, Study Shows

• Massachusetts’ primary-care focused Accountable Care Organizations (ACOs) have not improved asthma care for children, research by the University of Massachusetts Amherst and UMass Chan Medical School-Baystate Health shows. The study, published in JAMA Pediatrics, compared asthma care between publicly insured children in a Medicaid ACO and children with private health insurance. Data from the Massachusetts All-Payer Claims Database from January 1, 2014, through December 31, 2020, was used to compare asthma care for 3-year periods before and after ACO implementation in March 2018. The results showed that rates of routine asthma visits did not significantly change between the two groups following the implementation of the Medicaid ACOs. The results also showed emergency department and hospital use for asthma worsened among children in the Medicaid ACOs compared to children with private health insurance. Ultimately, researchers emphasized the need for additional study as the Medicaid ACOs continue to mature and evolve (UMass Amherst, October 17).

Colorado Reinsurance Program to Reduce Premium Increases in 2025

• According to state officials, Colorado’s reinsurance program will provide $493 million in cost savings for consumers who get their health insurance on the individual market. Premiums for 2025 are set to increase on average 5.6% for individuals but would have increased by 24% without the reinsurance program according to a press release from the Polis Administration’s office. Open enrollment for the individual marketplace begins on November 1 and goes through January 15. The state’s reinsurance program began in 2020 to stabilize price increases following efforts at the time to rollback parts of the ACA (Health Payer Specialist, October 21).

SPA and Waiver Approvals

SPAs

• Services SPAs
  • North Dakota (ND-24-0014, effective July 1, 2024): Combines skill restoration with skills integration under the rehabilitative services category and affixes additional practitioners to various related services.
  • North Dakota (ND-24-0015, effective July 1, 2024): Adds coverage for school psychologists under the Other Licensed Practitioner category.
  • Oregon (OR-24-0022, effective November 1, 2024): Expands the Targeted Case Management (TCM) Nurse Home Visiting program to Lane County.
• Payment SPAs
  • Arizona (AZ-24-0014, effective September 14, 2024): Confirms Arizona’s compliance with third party liability requirements as outlined within SSA §1902(a)(25)(I).
  • Illinois (IL-24-0019, effective August 1, 2024): Increases reimbursement rates for 1915(i) Children’s Mental Health Home and Community Based Services (HCBS).
  • Louisiana (LA-24-0018, effective November 20, 2024): Revises provisions for the Pharmacy Benefits Management (PBM) program by aligning vaccine administration language and fees with CMS requirements.
  • Massachusetts (MA-24-0028, effective July 1, 2024): Updates the reimbursement rate for Personal Care Assistants (PCAs).
  • Massachusetts (MA-24-0029, effective September 20, 2024): Updates the payment methodology for adult foster care services, including adult group foster care.
  • Michigan (MI-24-0011, effective July 1, 2024): Removes regular and special pools within the DSH program, aside from the Institute for Mental Disease (IMD) special DSH pool.
  • Michigan (MI-24-0014, effective October 1, 2024): Maintains previously authorized wage increases for in-person care provided by clinical and eligible non-clinical direct care workers within Medicaid-certified skilled nursing facilities.
  • Michigan (MI-24-0017, effective October 1, 2024): Increases reimbursement rates for Private Duty Nursing (PDN).
  • New York (NY-22-0055, effective April 1, 2022): Adds a 5.4% cost-of-living adjustment (COLA) to increase operating reimbursement rates for Office of People with Developmental Disabilities (OPWDD) specialty hospitals.
  • New York (NY-22-0065, effective April 1, 2022): Increases reimbursement rates for NY Article 28 certified inpatient hospital and out-of-state acute hospital services by 1%.
  • New York (NY-23-0081, effective July 1, 2023): As part of the Vital Access Provider (VAP) program, maintains temporary reimbursement rate adjustments for long-term care providers that are experiencing closures, mergers, consolidations, acquisitions or restructuring.
  • Pennsylvania (PA-24-0018, effective July 7, 2024): Funds an additional class of supplemental payments to qualifying hospitals and discontinues certain disproportionate share hospital (DSH) payments and supplemental payments in FY2025.
  • South Dakota (SD-24-0012-A, effective July 1, 2024): Eliminates cost-sharing from medical services.
  • Washington (WA-24-0037, effective July 1, 2024): Clarifies language around mental health services rate determination, but maintains rate setting methodology.

Private Sector Updates

News

Cigna and Humana Resume Merger Talks

• Last November, Cigna and Humana were in talks about a possible merger, but a month later the potential deal was retracted due to pricing and other disagreements. Based on reports from Bloomberg and Seeking Alpha, the payers’ executives resumed informal discussions last week about the merger. If the merger goes through, the two payers would cover a combined total of approximately 37 million enrollees across the nation (Health Payer Specialist, October 21).

Jefferson Health Plans Looking to Expand its Reach in the Medicaid, Medicare and ACA Landscape

• Jefferson Health Plans (Jefferson), the multi-state health system, is continuing to expand into federal health insurance programs. Its CEO, Dr. Joseph Cacchione, has indicated an intent to focus on the potential business from Medicare, Medicaid, and ACA plans. The payer has already made some moves in the Pennsylvania market this year with its recent acquisition of Lehigh Valley Health Network. Jefferson was also selected by the Pennsylvania Department of Human Services for a managed long-term service and supports contract. Additionally, Jefferson expanded its Medicare Advantage (MA) plans in Pennsylvania and New Jersey, now spreading across 20 counties in these two states. The payer saw a slight increase in its premium revenue in FY 2024 with $2.16 million but expects to see considerable growth in FY 2025 (Health Payer Specialist, October 18).

Google Cloud Releases Healthcare Search Engine Tool for General Use

• Google Cloud’s Vertex AI Search for Healthcare is now available for general use, with new features for the Healthcare Data Engine. The tool is designed to enhance search capabilities in healthcare and facilitate quick access to information within medical records and documents. Providers will be able to search through Fast Healthcare Interoperability Resources (FHIR, a standard for electronic health data exchange) data and clinical notes more effectively. To mitigate the risk of inaccurate information, the search tool uses organization-specific data and cites original, internal sources of information in responses. An interoperable, longitudinal record of patient data is available with the Healthcare Data Engine and provides clinical insights in the FHIR format. Meditech, an electronic health record company, has integrated Google’s AI search tool into its’ product. Health systems have also partnered with Google to alleviate administrative burden through generative AI use. According to a survey conducted by Google Cloud and The Harris Poll, the majority of healthcare professionals are open to using generative AI tools to reduce the administrative workload (Fierce Healthcare, October 18).

Elevance Health To Acquire CareBridge

• On Elevance’s third-quarter revenue call last Thursday, CEO Gail Boudreaux announced the acquisition of Nashville, Tennessee-based home health provider CareBridge. CareBridge operates in 17 states and will expand Elevance’s healthcare services brand, Carelon, launched in 2022. A spokesperson for Elevance did not disclose financial terms of the deal, but a 2022 funding round estimated the company’s value at more than $1 billion (Health Payer Specialist, October 18).

Oscar Health To Expand ACA Plans to 504 Markets in 18 States for Plan Year 2025 (PY2025)

• On Monday, Oscar Health announced its plan to expand its ACA plans and provide coverage to 504 markets in 18 states. Oscar Health will introduce new services and benefits, such as Buena Salud, a program designed for Spanish-speaking beneficiaries. The company also intends to introduce updated and innovative plans for enrollees with multiple chronic conditions such as diabetes, pulmonary conditions, and cardiovascular needs which include no cost cardiologist, pulmonologist, and endocrinologist appointments and no cost screenings, lab testing, primary care, behavioral health support, and prescriptions (Fierce Healthcare, October 21).

Sellers Dorsey Updates

Sellers Dorsey Welcomes Director at Ohio State-Based Practice, Emma Esmont

• Emma is an experienced consultant and Medicaid program manager with over a decade of expertise in Medicaid and public health systems transformation. Her previous experience includes more than 10 years with the Ohio Department of Medicaid as an analyst and administrator. Excited to join the Sellers Dorsey team, Emma oversees the Ohio practice’s Medicaid financing and consulting initiatives.

Click here to learn more about Emma.