Sellers Dorsey Digest

Federal Updates

News

CMS Launches Cell and Gene Therapy Model for Sickle Cell

• The Centers for Medicare and Medicaid Services (CMS) has reached agreements with Vertex Pharmaceuticals and Bluebird Bio to include newly approved treatments, Casgevy and Lyfgenia, in a new model aimed at improving access to cell and gene therapies for Medicaid patients. These therapies, which treat sickle cell disease, are a breakthrough for a condition that affects 100,000 people in the U.S., predominantly in the Black and Hispanic communities. The model, designed to help manage the high cost of these therapies, allows states to tie payments to patient outcomes, making it easier for Medicaid to cover treatments without breaking the budget. States can start applying to participate this month, with an optional funding application due by the end of February 2025. With the new model, CMS hopes to improve both access and affordability for Medicaid patients, who often face barriers to cutting edge treatment (Fierce Healthcare, December 4).

Federal Legislation

Congressional Budget Office Scores Bipartisan Safe Step Act Aimed at Increasing Prescription Drug Access

• The Congressional Budget Office (CBO) has released its score for the Safe Step Act, estimating that the legislation would likely increase premiums and reduce federal revenue by $2B over ten years. The Safe Step Act is a bipartisan, bicameral bill that would require employer plans to create a clear exceptions process for medication step therapy and increase access to prescription drugs. The National Psoriasis Foundation has been leading efforts to curtail step therapy and maintains that the bill would be cost neutral, citing similar policies in states and Medicare that have not impacted premiums. The legislation was first introduced in the 116^th Congress and has changed over time. It was included in the bipartisan Pharmacy Benefit Manager Reform Act that passed the Senate health committee in Spring 2023 and received a favorable report from the CBO that indicates cost savings. However, despite considerable stakeholder support, it does not appear that Democratic offers in Congress mention the Safe Step Act by name during this lame duck session (Inside Health Policy, December 6).

Federal Regulation and Guidance

CMS Releases State Medicaid Director Letter on Beneficiary Protections from Impermissible Sanctions and Penalties

• CMS released a State Medicaid Director Letter (SMD #24-005) on December 5, 2024. Building upon guidance from October 2022, the agency provided information to states on ensuring Medicaid beneficiary protections from impermissible sanctions and penalties related to eligibility fraud, waste, and abuse. CMS stated that it expects states to immediately cease any unallowable sanctions or penalties like administrative recoupments, early termination of eligibility, and lockouts. States that continue these actions may be subject to compliance actions like the withholding of federal financial participation. The agency emphasized that it is available for technical assistance in determining whether additional sanctions are permissible and reiterated that beneficiaries must be afforded due process during an investigation of suspected Medicaid beneficiary fraud (CMS, December 5).

HHS Sets Deadline for Providers to Meet Language Access Requirements

• Hospitals, clinics, and other providers subject to Section 1557 of the Affordable Care Act must comply with the new federal requirement for language access by July 5, 2025, according to a letter issued by the Department of Health and Human Services (HHS) Office of Civil Rights (OCR). The letter also directs providers using artificial intelligence to translate communications into other languages to have qualified interpreters review the translations for accuracy in cases critical to patient rights or safety. OCR stated that while machine translation may be a low-risk situation, providers must inform patients that the translations might contain errors. The letter follows continued concerns about compliance with Section 1557’s nondiscrimination rules, finalized in April, which require federally funded providers to ensure patients with limited English proficiency or disabilities, can access free language assistance. OCR Director Melanie Fontes Rainer emphasized the importance of these services, stating, “Healthcare is a right – and providing language assistance is a critical component to help ensure equitable outcomes and quality care for every person.” The requirements also call for cultural competency, accounting for differences in dialects and expressions, and ensuring that patients with disabilities receive communications in accessible formats such as Braille, large print, and sign language interpretation at no cost (Inside Health Policy, December 10).

CMS Releases New CMCS Information Bulletin  and Framework to Address Health-Related Social Needs

• CMS released an updated CMCS Information Bulletin (CIB) on December 10, which discusses opportunities that states have under Medicaid and CHIP to cover clinically appropriate and evidence-based services and supports to address health-related social needs. This new guidance clarifies, updates, and supersedes the CIB and Health-Related Social Needs (HRSN) Framework released in November 2023. A new HRSN Framework table is included in the December 10 CIB. CMS covers housing, intervention services, and nutrition services and indicates what is allowed through the various authorities available to states. The agency encouraged states to help enrollees maintain coverage and access to healthcare services by addressing HRSN (CMS, December 10).

CMS Releases Accompanying Slide Deck for Ex Parte Renewal Basic Requirements

• On December 5, CMS released a slide deck highlighting the basic requirements for states to follow regarding ex parte renewals of Medicaid and CHIP eligibility. The slide deck accompanies the CMCS Information Bulletin (CIB) brief that was released on November 26. The deck serves as a resource to remind states of the current requirements and expectations for renewal of eligibility to ensure that they are properly complying with federal standards (42 C.F.R. §§ 435.916 and 457.343), special considerations, and resources available to them. The CIB also includes actionable strategies that states can leverage to increase efficiency and effectiveness of the ex-parte system, including obtaining SSNs for non-applicant household members that are applying for their children’s coverage to verify household income, relying on findings from express lane agencies for eligibility, and continued usage of previously proven effective unwinding strategies (CMS, December 5; CMCS, November 26).

Key Findings From the 2021 Medicaid Maternal Health Equity Report: Disparities and Progress

• On December 5, 2024, CMS released the 2021 Medicaid Maternal Health Equity Brief slide deck, which highlights the critical role that Medicaid and CHIP play in addressing maternal health disparities, particularly among Black, Hispanic, and Indigenous populations. These populations experience significantly higher risks of pregnancy-related complications, with Black women being three times more likely to experience pregnancy-related complications compared to White women. Since Medicaid and CHIP cover nearly half of all births in the U.S., they have an opportunity to reduce these disparities. One of the key takeaways from the brief is the importance of expanding access to services that go beyond traditional medical care. The brief notes that integrating doula services is an area Medicaid has begun to expand in several states. The report also stresses the need for Medicaid to address social determinants of health. This includes services like transportation, housing, and food assistance that can significantly impact maternal health. Furthermore, there is an emphasis on combating implicit bias in healthcare settings and promoting culturally competent care to foster better communication and trust, especially with marginalized communities. Despite these efforts, there are still barriers to improving maternal health outcomes especially in rural areas and low-income populations. The brief recommends expanding Medicaid’s coverage to include a wider variety of maternal health services and ensuring that care is accessible, affordable, and tailored to meet the needs of all mothers (Medicaid.gov, December 5).

Federal Studies and Reports

Gallup Poll Shows that Most U.S. Adults are Dissatisfied with Healthcare Costs

• On December 6, Gallup released a Health and Healthcare poll, consisting of telephone interviews with a random sample of adults across the nation. The poll found that regardless of political affiliation, the majority of Americans are unhappy about the cost of healthcare, with only 15% of Republicans or Republican leaning, 19% of Democrats, and 19% of adults overall, having satisfaction toward the cost of healthcare. The poll also showed that in terms of healthcare quality, 33% rated it as good and 11% as excellent. Poll respondents also indicated that the most urgent health problems facing Americans are cost, access, and obesity. The Peterson-KFF Health System Tracker shows that since 2022, healthcare costs have increased by 119.2% and are expected to rise by 8% in 2025, based on a PwC annual report. Additionally, the CMS Office of the Actuary estimates that healthcare spending will increase by about 5.6% per year, rising to $7.7T by 2032 (Modern Healthcare, December 6).

State Updates

News

Medicaid Expansion Reaches 1-Year Anniversary in North Carolina

• Medicaid Expansion in North Carolina reached its one-year anniversary on December 1 with nearly 600,000 enrollees. Last year, Governor Cooper’s administration estimated that the state would serve 600,000 enrollees within two years. The governor’s office also highlighted that nearly 230,000 people were eligible on the first day of Medicaid expansion and that many of the expansion enrollees live in rural areas. Overall, North Carolina’s Medicaid enrollment sits at 3M as of December 2024. Speaking to leaders of a state university health system and medical school, Cooper celebrated reaching his expansion goal ahead of time and other healthcare accomplishments achieved during his two terms as governor that started in 2017. Governor Cooper is term-limited and will be leaving office at the end of December (ABC News, December 4).

Michigan Releases Awards for MI Coordinated Care Program

• Michigan re-released its notice of award for MI Coordinated Care, its new Highly Integrated Dual Eligible Special Needs Program set to begin on January 1, 2026, and expand statewide in 2027. Michigan awarded nine contracts to Aetna Better Health of Michigan, AmeriHealth Michigan, HAP CareSource, Humana Medical Plan of Michigan, Meridian Health Plan of Michigan, Molina Healthcare of Michigan, Priority Health Choice, UnitedHealthcare Community Plan, and Upper Peninsula Health Plan. The startup Zing Health was not awarded a contract. UnitedHealthcare, Humana, and Priority Health are new entrants to Michigan’s Medicaid managed care program (Soo Leader, December 8).

Georgia Releases Awards for Georgia Families, Georgia Families 360 Contracts

• Georgia announced its awards for Georgia Families contracts, the state’s general Medicaid managed care program. Known as Care Management Organizations (CMOs) in the state, four contracts have been awarded to Humana, CareSource, Molina, and UnitedHealthcare. Georgia awarded UnitedHealthcare its Georgia Families 360 contract, providing coverage to children in foster care or juvenile incarceration or those receiving adoption assistance from the state (Becker’s Payer Issues, December 5; Georgia.gov, December 2).

Colorado Expands Medicaid Coverage to Immigrant Mothers and Children

• Beginning January 1, the “Cover All Coloradans” program will provide prenatal and postpartum care to expectant mothers and comprehensive healthcare to children, regardless of their immigration status. The program began in 2022, and since then the state has seen an influx in immigration. Possible implications of the program’s expansion remain unknown, but some opposing legislators believe that due to the state’s $1B budget shortfall, Medicaid access may be cut for some Coloradans going forward. It remains unclear how the program will change with the new presidential administration beginning next year (CBS Colorado, December 6).

Colorado Budget Writers and Legislators Worried About the State’s Long-Term Future

• Following the implementation of SB 236 in 2022, which created a timeline to review Medicaid provider payments more frequently, with the aim of boosting pay for certain healthcare workers during the staffing shortage, state budget writers are concerned that Colorado is falling behind in terms of provider reimbursement. Colorado’s Medicaid Provider Rate Review Advisory Committee recommends a $585M payment bump for 19 health services, including home-based workers and private duty nurses. In the proposed budget, Governor Polis calls for $140K in GF to increase HCBS payments, but cuts to other providers, such as those who provide autism treatment. Legislators have expressed concern over the potential for deeper cuts that may be needed in order to increase Medicaid provider pay (Colorado Sun, December 5).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Massachusetts
    • On December 9, CMS approved Massachusetts’ amendment to its 1115 demonstration for Medicaid and CHIP. The agency approved the amendment to eliminate unnecessary administrative burden to the state and ease implementation of Section 5121 of the Consolidated Appropriations Act, 2023, to provide mandatory coverage for eligible juveniles and targeted low-income children. Massachusetts’ waiver is approved through December 31, 2027.
  • Massachusetts
    • On November 21, Massachusetts submitted a request to amend its 1115 demonstration, “MassHealth.” The state requests authority to expand services for members enrolled in One Care and Senior Care Options (SCO) plans to allow people with disabilities and older adults to continue to live in their communities; implement enrollment flexibilities to maximize alignment with Medicare enrollment and prevent or minimize the disruption of individuals managed care enrollments; and allow eligible people who have MassHealth CommonHealth to enroll in SCO if they meet SCO participation requirements. The federal public comment period is open from December 6, 2024, through January 5, 2025.
  • Montana
    • On December 9, CMS approved Montana’s amendment to its 1115 demonstration for Medicaid only. The agency approved the amendment to eliminate unnecessary administrative burden to the state and ease implementation of Section 5121 of the Consolidated Appropriations Act, 2023, to provide mandatory coverage for eligible juveniles and targeted low-income children. Montana’s waiver is approved through June 30, 2027.
  • North Carolina
    • On December 10, CMS approved a five-year extension of North Carolina’s 1115 waiver, “North Carolina Medicaid Reform Demonstration.” The state received renewed authority for mandatory managed care and substance use disorder treatment for individuals in Institutions for Mental Disease. This waiver renewed and aligned the Healthy Opportunity Pilots with the CMS framework for health-related social needs. The waiver extension granted the state new authority to provide continuous eligibility for children, an enhanced home and community-based benefit, health information technology incentive-based programs, workforce initiatives, coverage for out-of-state former foster care youth, designated state health programs, and a reentry demonstration initiative. The demonstration period will be effective through December 9, 2029.

SPAs

• Administrative
  • Kansas (KS-24-0032, effective January 1, 2025): Renews the state’s exemption from the Recovery Audit Contractor (RAC) program for another two years, through December 31, 2026.
  • Mississippi (MS-24-0011, effective October 1, 2024): Requires new and re-validating providers to disclose any information regarding affiliation.
  • Missouri (MO-24-0030, effective October 1, 2024): Updates 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 SPAs
  • Kansas (KS-24-0027, effective January 1, 2025): Discontinues the OneCare Kansas (OCK), Health Homes Asthma program.
  • Kansas (KS-24-0028, effective January 1, 2025): Discontinues the OneCare Kansas (OCK), Health Home Serious Mental Illness (SMI) program.
  • New Mexico (NM-24-0004, effective October 1, 2024): Establishes coverage for doula services as a reimbursable preventative service for pregnant individuals. Additionally, the SPA adds coverage for lactation support services to encourage mothers to breastfeed and alleviate breastfeeding problems.
• Payment SPAs
  • Maine (ME-24-0012, effective July 1, 2024): Updates the payment methodology for Family Planning and Long-Acting Reversible Contraceptives (LARCs).
  • Minnesota (MN-24-0040, effective January 1, 2025): Updates the payment methodology for Adult Residential Services by adding American Society of Addiction Medicine (ASAM) outpatient levels and applies one set of existing uniform rates.
  • Minnesota (MN-24-0041, effective January 1, 2025): Establishes the payment methodology and reimbursement rates for Medication Assisted Treatment (MAT) for Opioid Treatment Programs (OTP).
  • Missouri (MO-24-0019, effective July 1, 2024): Rebases Nursing Facility and HIV Nursing Facility per diem rates. Additionally, the SPA the changes service payment methodology relating to case mix index (CMI), updates value-based purchasing (VBP) requirements, makes rate adjustments for facility size and occupancy, and provides a process for reviews of Minimum Data Set (MDS), Mental Illness (MI) and CMI submissions and information.
  • Wisconsin (WI-24-0016, effective July 1, 2024): Requires that hospitals must be located within the state to qualify for Wisconsin standard Disproportionate Share Hospital (DSH) payments.
  • Wisconsin (WI-24-0018, effective July 1, 2024): Updates reimbursement rates and payment methodology for nursing facility services.

Private Sector Updates

News

Amazon Adds Hinge Health to its Lineup

• On December 5, Amazon announced that it will be partnering with Hinge Health and adding its digital musculoskeletal (MSK) platform to their health conditions program lineup, which aims to streamline access to virtual health benefits. With about 40% of adults in the US suffering from an MSK-related condition, Hinge Health’s approach is to provide patients with individualized, accessible, and affordable care (Fierce Healthcare, December 5; Hinge Health, December 5).

D.C. Ride-Share Program for Pregnant Women Shows Success

• Babyscripts has partnered with Lyft, MedStar Health, and George Washington University to provide patients with free rides to and from participating clinics for maternity care in Washington, D.C. Babyscripts, a virtual maternity care program, provides services like virtual maternity care, education, mental health support, and remote monitoring. Since April, Babyscripts has provided 700 rides to 117 individuals, creating an average cost savings of $173 for the individual. Additionally, providers have reported that follow-up visits have increased with the service. With approximately 70% of Babyscripts patients claiming the benefit, the company has plans to continue past the pilot phase and potentially expand into other cities. Babyscripts currently operates in 28 states (Fierce Healthcare, December 5).

L.A. Care Health Plan Names Martha Santana-Chin as New CEO

• LA Care Health Plan has appointed Martha Santana- Chin as its new CEO, effective January 6, 2025. Santana-Chin previously served as president of Health Net’s Medi-Cal program under Centene and will be replacing John Baackes, who announced his retirement earlier this year. With seven years of experience at Health Net, Santana-Chin was named Insurance Executive of the Year in 2021 by the Los Angeles Business Journal for her leadership during the COVID-19 pandemic. Santana-Chin brings a wealth of experience in managed care, operations, value-based care, and provider relations to her new role. L.A. Care expressed confidence in her ability to drive the health plan’s continued growth and success (Healthcare Finance News, December 10; Modern Healthcare, December 6; Beckers, December 6).

Sellers Dorsey Updates

Sellers Dorsey Announces Leadership Transition: Kevin Seabaugh Steps into CEO Role

• Sellers Dorsey has announced that Co-Founder and Chief Executive Officer, Martin Sellers, retired from his role on December 2, 2024. To succeed him, the Firm has named national healthcare innovation leader, Kevin Seabaugh, as the new Chief Executive Officer. Martin Sellers, who has led Sellers Dorsey since its founding in 2000, will transition to Executive Chairman of the Board, ensuring a continued focus on the firm’s mission and future growth. Click here to learn more.

EDITORS’ NOTE 

With every Presidential Administration transition, change is certain to occur. The Sellers Dorsey Digest remains committed to providing subscribers with the industry’s most current healthcare and Medicaid updates on a federal, state, and private sector level. While many media sources report on a variety of topics that may include predictions about what changes will occur with the new Presidential Administration, the Sellers Dorsey Digest stays true to its mission by providing current information from primary sources. Subscribers can feel confident that the Sellers Dorsey Digest is a source that helps stakeholders navigate change through information and education. We are grateful for your continued readership and look forward to bringing you the latest insights.

Kind regards,

Your Editors of the Sellers Dorsey Digest