Sellers Dorsey Digest

Federal Updates

News

Bipartisan House Lawmakers Seek to Expand Cost-Sharing Protections for Patients in Private Health Plans

• A bipartisan group of lawmakers want the Biden administration to prevent self-insured and large group employer plans from categorizing expensive brand and specialty drugs as “non-essential health benefits.” Without action, millions of beneficiaries on these plans could experience high out-of-pocket costs for certain drugs in 2025. The administration stated that it would seek to extend protections for large group and self-insured plans but has not done so following the April 2024 final rule codifying cost-sharing protections for those in small group and individual plans (Inside Health Policy, November 8).

Federal Studies and Reports

7.6% of Americans Are Uninsured According to New Centers for Disease Control and Prevention (CDC) Report

• A report from the CDC shows that while the number of uninsured Americans remained relatively steady in recent years, there is still concern about the future of health coverage. From April to June 2024, approximately 7.6% of Americans lacked health insurance. This marks a slight increase of 0.4% when compared to the same period in 2023. The increase does not deviate significantly from the historic low uninsured rate of 2023. Private insurance continues to cover most Americans, with approximately 62.1% of the population having private health coverage. This is an increase from 60.2% last year. A key driver of this increase is the ACA marketplace, which has seen record enrollment numbers. Approximately 21.3 million people signed up for 2024 coverage through the ACA, a number that the Biden administration attributes to enhanced subsidies that make coverage more affordable. However, these enhanced subsidies are set to expire at the end of 2024 if not renewed by Congress, raising concerns about whether enrollment will remain high. While the uninsured rate remains low compared to historical figures, ongoing challenges, such as the potential expiration of ACA subsidies, could influence future trends in coverage and access to healthcare (Modern Healthcare, November 11).

Oregon Health and Science University (OHSU) Report Examines Impacts of Medicaid Waivers for Opioid Use Disorder (OUD) Treatment

• An OHSU report published in Health Affairs found that the federal government’s efforts over the past nine years to make Medicaid funding more flexible for drug addiction treatment have not been enough to significantly curb the influx of nonfatal opioid overdoses. The report studied 17 states that participated in the waivers that permitted Institutions for Mental Disease (IMDs) to treat addiction from 2017 to 2019 and compared their outcomes to 18 states that did not. The study included 1.7 million people who were on Medicaid and diagnosed with opioid addiction and approximately two-thirds of them lived in one of the 17 waiver states. Ultimately, researchers found a moderate increase in individuals receiving medication-assisted treatment but no change in rates of nonfatal overdoses (Health Affairs, November 11).

Office of the Inspector General (OIG) Finds Inconsistencies in Price Transparency Compliance

• A recent report from the OIG at HHS reveals that many hospitals are failing to comply with the price transparency law enacted in 2021. The transparency law requires hospitals to publicly disclose their prices for medical services, including negotiated rates with insurers, and to make this information available in a machine-readable format to enable easier comparison by consumers. The OIG examined data from 30 hospitals that are part of the country’s three biggest health systems, and the rest were from a random sample of 5,504 hospital facilities. The report highlighted several key violations, including incorrect or missing data files, metadata and other data errors, failures to disclose insurer negotiated rates, and complete absences of price data. The OIG made three recommendations to CMS including the development of a training program for smaller hospitals, more clearly defining shoppable services, and investing additional resources in compliance reviews (Modern Healthcare, November 8).

State Updates

News

Michigan Cancels D-SNP Contract Awards and Reissues RFP

• Last month, Michigan announced the awarding of nine payers with contracts for its revamped dual eligible special needs program, MI Coordinated Health. On November 8, the state notified the payers that it would be rebidding the contracts, for an unidentified reason. The news was made public following Molina Healthcare disclosing the notification through a regulatory filing on November 12. The other previously chosen plans were Aetna, AmeriHealth Caritas, CareSource, Meridian Health Plan of Michigan, Peninsula Health, UnitedHealthcare, Humana and Priority Health. New bids are due on November 21, and new contracts are expected to be awarded and begin on January 1, 2026 (Health Payer Specialist, November 13; Securities and Exchange Commission, November 12).

South Dakota Voters Approve Medicaid Work Requirements

• Following Election Day, South Dakota voters have approved work requirements for certain Medicaid beneficiaries. Amendment F (Senate Joint Resolution 501) passed with 56% of the vote and will allow the state to establish work requirements for the Medicaid expansion population. However, the amendment does not mandate specific hours or populations, outside of prohibiting work requirements for those who are considered physically or mentally disabled. South Dakota voted to expand Medicaid in 2022 with coverage effective in July of 2023. The addition of work requirements to the Medicaid program will also require federal approval if the state decides to move forward with the policy (USA Today, November 6).

South Carolina Governor Appoints New Medicaid Director

• South Carolina Governor Henry McMaster has appointed Eunice Medina as the new Director of SC Health and Human Services (SCDHHS) following the retirement of Robert Kerr, pending confirmation by the State Senate. Medina is currently the SCDHHS Chief of Staff. She was previously a Medicaid administrator in Florida for twenty years (Charleston City Paper, November 10).

New York’s Health Cost Database Still Unavailable to General Public Despite $159 Million in Financial Support to Date

• New York’s plan to build a healthcare price transparency database is facing significant delays, despite nearly a decade of planning and investment. Initially signed in 2016, the $168 million contract between the New York State Health Department and Optum, the health services arm of UnitedHealth Group, was intended to create a system that would provide patients, policymakers, and healthcare researchers with clear information about the true cost of medical services across different healthcare systems in the state. However, despite the state’s large financial commitment, the project has yet to produce the promised results or become accessible to the general public. The state’s Health Department considers the delays to be a result of both logistical hurdles and struggles of collecting data from hospitals and insurers during the COVID-19 pandemic (Modern Healthcare, November 11).

SPA and Waiver Approvals

SPAs

• Services SPAs
  • South Carolina (SC-24-0011, effective July 1, 2024): Establishes service definitions, limits, and payment methodology for four additional autism spectrum disorder (ASD) services: observational behavioral follow-up assessment, exposure behavior follow-up assessment, adaptive behavior treatment and group adaptive behavior treatment.
  • Utah (UT-24-0015, effective July 1, 2024): Extends coverage to supportive living services.
• Payment SPAs
  • California (CA-24-0004, effective January 1, 2024): Renews current payment methodology for Freestanding Skilled Nursing and Subacute Facilities Level B, allows for rate increases for CY 2024-2026, and authorizes rate increases for the Workforce Standards Program (WSP).
  • California (CA-24-0029, effective April 1, 2024): Updates list of federally operated hospitals that are subject to certain payment methodologies for inpatient services, to align with recent hospital conversions for hospitals owned or operated by University of California systems.
  • Massachusetts (MA-24-0030, effective September 1, 2024): Updates payment methodology for clinical lab services.
  • Michigan (MI-24-0018, effective October 1, 2024): Updates payment methodology for physical therapy, occupational therapy, speech language pathology, and audiology.
  • Michigan (MI-24-0020, effective October 1, 2024): Updates payment methodology for prosthetic orthotics.
  • Oklahoma (OK-24-0013, effective July 1, 2024): Increases annual nursing facility base rates for standard nursing facilities, nursing facilities serving AIDs patients, and acute and standard Intermediate Care Facilities for individuals with intellectual disabilities (ICF/IIDs).
  • South Carolina (SC-24-0012, effective July 1, 2024): Increases reimbursement rates for core Rehabilitative Behavioral Health Services (RBHS) provided by private master’s level providers and licensed psychologists.
  • South Carolina (SC-24-0018, effective July 1, 2024): Aligns payment methodology for physician services to the 2024 Medicare Physician Fee Schedule.
  • Utah (UT-24-0021, effective September 1, 2024): Removes particulars for outpatient drug claim identification within the 340B program to align with future changes within industry standards.

Private Sector Updates

News

Providers and Payers Negotiate Several Deals Across States to Maintain and Expand Access

• Several payers and providers across several states have successfully negotiated their contracts to remain in-network. Duke Health and UnitedHealthcare in Raleigh, North Carolina settled their dispute over reimbursement rates and retained coverage for more than 172,000 patients while expanding access for Medicaid beneficiaries under UnitedHealth plans. UnitedHealth and HealthPartners in Minnesota also resolved their issues and reached an agreement to keep Medicare Advantage (MA) members in-network. In New York, UnitedHealthcare was reinstated at St. Peter’s Health Partners, benefiting patients with employer sponsored, MA, and Medicaid health plans. Anthem Blue Cross and Blue Shield reached a multiyear agreement with NYU Langone Health focused on value-based care. Cigna reached a renewal agreement with Hartford Healthcare in Connecticut, with a focus on affordable, quality care. Finally, Cigna MA members have access to Infirmary Health in south Alabama (Health Payer Specialist, November 11).

Astrana Health Grows Business, Acquires Prospect Health System

• Astrana Health is acquiring the assets and businesses of Prospect Health System for $745 million, the care management and software company’s second public acquisition in a month. The deal includes Prospect’s healthcare service plan in California, other medical groups in California, Texas, Arizona, and Rhode Island, as well as the RightRx pharmacy and an acute care hospital in Orange County, California. Prospect Health System operates its multi-state network with 3,000 primary care providers and 10,000 specialists and serves 610,000 members across public and private health plans. Astrana expects the deal to expand its patient base to around 1.7 million and enhance value-based care. This deal immediately follows Astrana’s acquisition of Centene’s Collaborative Health System and its announcement to join with Scan Health Plan to provide a new MA plan for Asian communities in certain California counties (Health Payer Specialist, November 11).

Kaiser Permanente Reports Investment Gains, Operating Losses in Third Quarter

• Kaiser Permanente reported a mixed third quarter, with high investment increases and some losses. The company’s net income in the quarter increased to $845 million, a 254% increase over last year, but the company reported a capital spend of $922 million, resulting in a -2.1% operating margin. Additionally, despite high investment gains totaling $1.4 billion, operations still showed a loss of $608 million. Revenue from operations in the third quarter rose to $29 billion but also saw increased operating expenses compared to last year. Kaiser stated that it remains focused on enhancing member care despite rising costs and lower reimbursement. The company has deployed some cost-cutting initiatives to control discretionary spending and streamline business operations. Total enrollment for Kaiser was nearly 12.5 million at the end of the third quarter and affiliate Risant Health’s membership was more than 552,000 (Fierce Healthcare, November 11; Health Payer Specialist, November 11).

Cigna Confirms That It Will Not Acquire Humana

• Despite recent renewed discussions, Cigna confirmed that it will not pursue an acquisition with Humana. Last year, both insurance companies were in discussions in an attempt to reach a deal but were unable to agree on a price according to Bloomberg News. Instead, Cigna stated that it is focused on buying back its own shares into 2025, with $6 billion in stock buybacks already completed this year, including $1 billion in the fourth quarter thus far. On Monday, Cigna’s shares were up by about 7% while Humana’s were down by 4.25% (Fierce Healthcare, November 11; Modern Healthcare, November 11).

Sellers Dorsey Updates

News

Senior Director, Katie Renner Olse, Featured in HIT Consultant for Insights on System-Involved Youth

• Sellers Dorsey Senior Director of Child and Family Well-Being, Katie Renner Olse, shared her insights with HIT Consultant on how healthcare can help solve the biggest health equity challenges for system-involved youth. Explore the impacts of system involvement on children’s physical and mental health and uncover three approaches to improve health equity for this vulnerable population.
  Click here for Katie’s article.