Issue #140

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June 2023 MACPAC Report

• MACPAC released its June 2023 report to Congress highlighting issues and policies around important Medicaid topics that include automatic adjustments to DSH payments, integrating care for dually eligible beneficiaries, access to Medicaid coverage for recently incarcerated individuals, and access barriers to HCBS. The report has four chapters that outline the following:
  • In Chapter 1, MACPAC makes recommendations on disproportionate share hospital (DSH) payments when there are changes in the FMAP. First, to improve the relationship between total DSH funding and measures of need for DSH payments, with consideration of geographical cost adjustment. Second, to change the basis of DSH allotments from impacts of changes in the federal medical assistance percentage fluctuations. Next, to provide an automatic Medicaid countercyclical financing model for DSH payments, allowing this funding to be preserved for future recessions. Finally, the Commission recommends that the requirement for CMS to compare DSH allotments to Medicaid spending be removed so that allotments can be finalized timelier.
  • Chapter 2 builds on the Commission’s work to make integrated care the standard for dually eligible Medicare and Medicaid beneficiaries. The chapter highlighted challenges faced by dual eligibles related to fragmented care and poorer health outcomes and detailed available delivery system mechanisms for integrating care. Lastly, the chapter outlines next steps to improve the care experience and reduce state and federal spending for dually eligible enrollees.
  • In Chapter 3, MACPAC discusses access to Medicaid coverage and care for adults leaving incarceration. In April, CMS issued guidance on a Section 1115 demonstration opportunity through which states can receive federal financial participation for prerelease Medicaid services for eligible adults leaving incarceration. California was the first state to receive CMS approval for such a demonstration and over a dozen other states currently have pending applications. In this chapter, the Commission identified considerations for implementing prerelease Medicaid services that can inform state approaches for operationalizing their 1115 waivers including: collaboration between Medicaid, state, and local carceral authorities; lengths of state and predictability of release dates; data sharing and infrastructure to identify eligible enrollees, support care coordination, and facilitated Medicaid billing, selection of prerelease service providers and provider capacity; and monitoring and evaluation.
  • In Chapter 4, MACPAC discusses policies and issues around access to HCBS. The Commission states that individuals needing HCBS face significant barriers to access which include limited provider availability, state budgetary constraints, waiver waiting lists, and knowledge gaps among beneficiaries on service availability. Furthermore, on the state side, challenges managing multiple HCBS programs and benefit packages creates administrative burdens for states in addition to the existing budgetary constraints and limited staff capacity to manage HCBS programs. There are other disparities in access to HCBS particularly when it comes to race and geography. The Commission stated its plan to identify policies over the next year to streamline and standardize the HCBS delivery system to increase beneficiary access and reduce the administrative burden for states (MACPAC, June 16).

KFF Consumer Experience Survey

• On June 15, KFF released results from their survey of consumer experiences with health insurance. The survey polled over 3,600 Medicare, Medicaid, and individual commercial adult enrollees and found 58% of all plan enrollees are having issues with seeing providers and using their insurance over the past year. Some of the main issues raised by enrollees include insurance paying less than expected, doctors lacking appointments, prescriptions not covered, and services they believed to be covered, were not. Additionally, one-third of Medicaid enrollees reported having difficulties getting a medical appointment. For individuals with mental illness, 43% claimed to not get needed care in the past year. Over 90% of individuals surveyed support requirements for accurate and timely provider directories and 94% support clarification from payers on the reasoning for coverage issues and clear steps on how to file appeals or grievances (Health Payer Specialist, June 16).

Healthcare Spending Data

• Recent data from CMS shows healthcare spending is expected to grow 5.4% annually from 2022 to 2031 and will make up approximately 20%, or $7.2 trillion, of the American economy by 2031. Projections indicate Medicare spending will grow at a rate of 7.5% annually till 2031. CMS data also revealed 92.3% of Americans were insured in 2022, the highest ever recorded (Politico, June 14).

News

• In an 8-1 decision, the Supreme Court rejected a whistleblower’s request to revive a case against an affiliate of UnitedHealth Group. The case involved allegations of thousands of false claims filed by Executive Health Resources and was brought forward by Jesse Polansky. Under current legal interpretations of the False Claims Act, the federal government can intervene and prosecute the case or allow the whistleblower to continue pursuing it without government intervention. The Justice Department had initially declined to participate in Polansky’s case in 2014 and later announced it intended to dismiss the suit in 2019. Under federal law, the government can dismiss a suit provided the plaintiff who brought the suit (called the relator) can respond and try to convince the government not to dismiss the suit. The Supreme Court ruling upheld the previous decision by the U.S. Third Circuit Court of Appeals to dismiss the case. Justice Clarence Thomas was the only dissenter in the decision (Health Payer Specialist, June 20).
• In a webinar on June 14, CMS urged localities, providers, and community advocates to help in their efforts to maintain Medicaid and CHIP beneficiaries coverage during the redetermination process. CMS called for stakeholders to “spread the word” about redeterminations and that beneficiaries’ coverage could be at risk if they fail to submit coverage renewal applications. KFF has estimated that 1 million individuals have lost their Medicaid and CHIP coverage since April 1. CMS estimates that 31% of the coverage renewals due in April led to coverage loss with nearly 80% of coverage losses due to procedural reasons such as not returning a renewal form (Inside Health Policy, June 14).
• The Department of Justice (DOJ) states that the Supreme Court’s recent ruling protecting the False Claims Act (FCA) will allow the government to pursue more civil healthcare fraud cases. The FCA imposes liability on people or companies who defraud government programs and allows third parties to sue when they believe fraud has occurred. In the case United States ex rel. Tracy Schutte v. SuperValue Inc, the Supreme Court unanimously overturned a decision from the District Court of Appeals for the Seventh Circuit that would have hindered FCA liability for certain fraudulent pharmaceutical drug billing practices (Inside Health Policy, June 16).
• On June 14, the Senate Finance Committee introduced the Patients Before Middlemen (PBM) Act that disconnects the compensation of pharmacy benefit managers (PBMs) from drug prices and utilization to better align incentives with the goal of lowering prescription drug costs for Medicare Part D enrollees. The act would also prohibit PBMs from linking compensation to discounts, rebates, and/or other fees. Additionally, the Federal Trade Commission (FTC) launched an inquiry earlier this year which aims to determine if rebates are considered by PBMs when selecting which prescription pharmaceuticals are included in their formulary. A ruling is anticipated by the end of this year (Health Payer Specialist, June 16).
• KFF Health News has now acquired documents detailing the payments that have been allocated to local governments in 2022 and 2023 from the Opioid litigation settlement funds. Approximately 200 spreadsheets document the amounts paid by the companies that made, sold or distributed Opioids that have started making settlement payments, with several other companies set to start making payments later this year. To date, state and local governments have received more than $3 billion (KFF Health News, June 16; KFF Health News, June 16).

Waivers

• Section 1115

• • California
    • On June 6, 2023, California submitted a request for a new 1115(a) demonstration titled California Reproductive Health Access and Demonstration, or CalRHAD. This demonstration seeks to enhance the capacity of and access to sexual and reproductive health providers and services, specifically for Medi-Cal beneficiaries and other individuals who currently face barriers to access. The federal public comment period is open through July 16, 2023.
  • Florida
    • On June 13, 2023, Florida submitted a request to extend its 1115 demonstration, Florida Medicaid Family Planning Waiver. The state is requesting to extend its demonstration to continue to provide family planning services to populations currently not covered by the Medicaid State Plan. The federal public comment period is open through July 16, 2023.

• 1915(c) Appendix K

• • District of Columbia
    • Amends Individuals with Intellectual and Developmental Disabilities (IDD) and Individual and Family Support (IFS) waivers, to phase out flexibilities regarding companion services as part of the return to normal operations and is effective March 11, 2020, through six months after the end of the federal public health emergency (PHE) for COVID-19.

SPAs

• COVID-19 SPAs
  • Kentucky (KY-23-0014, effective May 12, 2023): Provides a temporary extension to increase nursing facility bed hold days and payments authorized in KY-20-0006 and KY-21-0001.
  • Maine (ME-23-0005, effective March 1, 2020): Waives signature requirements for the dispensing of prescription drugs. This time-limited COVID-19 SPA terminated at the end of the PHE.
  • Michigan (MI-23-0012, effective May 12, 2023): Provides a temporary extension for specific glove and incontinence supply competitive bid payments authorized in MI-20-0012and MI-22-0010. This time-limited COVID-19 SPA terminates on September 30, 2024.
  • Michigan (MI-23-0016, effective May 12, 2023): Provides a temporary extension for Care and Recovery Center payments authorized in MI-21-0001. This time-limited COVID-19 SPA terminates on May 11, 2024.
  • Michigan (MI-23-0013, effective May 12, 2023): Provides a temporary extension for drug benefits authorized in MI-20-0005and MI-22-0002. This time-limited COVID-19 SPA terminates on September 30, 2024.
  • Ohio (OH-23-0010, effective April 1, 2023): Increases supplemental payments to Critical Access Hospitals and Rural Hospitals as determined by the state. This time-limited COVID-19 SPA terminated at the end of the PHE.
• Eligibility SPAs
  • Louisiana (LA-23-0004, effective January 1, 2023): Authorizes changes to the eligibility rules for the Former Foster Care Children eligibility group, as enacted by the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act, Pub. L. No 115-217, section 1002.
  • Oregon (OR-23-0012, effective April 1, 2023): Authorizes changes to when benefits are provided by the State to reflect benefit coverage on the first day of the month of application, once the reasonable opportunity is provided.
  • Puerto Rico (PR-23-0002, effective January 1, 2023): Authorizes changes to the eligibility rules for the Former Foster Care Children eligibility group, as enacted by the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act L. No 115-217, section 1002.
  • Ohio (OH-23-0007, effective January 1, 2023): Updates post-eligibility treatment of income exclusions in accordance with the Stephen Beck Jr. Achieving a Better Life Experience (ABLE) and recently passed State legislation.
• Payment SPAs
  • New Jersey (NJ-23-0008, effective January 1, 2023): Authorizes an add-on payment for General Acute Care Critical Service for Pediatric patients who are 20 years old or younger.
• Services SPAs
  • Idaho (ID-23-0007, effective December 27, 2021): Updates non-emergency medical transportation (NEMT) provider qualification requirements per the Consolidation Appropriations Act of 2021.
  • Indiana (IN-23-0003, effective July 1, 2023): Modifies the coverage and reimbursement of opioid treatment services (OTPs) by replacing the per diem reimbursement bundles with reimbursement according to Medicare’s OTP code set.

News

• Cora Steinmetz will be stepping up as Indiana’s new Medicaid Director later this summer as Allison Taylor wraps up her 8-year tenure with the Indiana Family and Social Services Administration. Taylor became Indiana’s Medicaid Director in 2017 and has since led the program through a transformative time, including a 10-year renewal for the Healthy Indiana Plan and expanding a multitude of services, including those for substance use disorders and mental illness treatments. The upcoming Medicaid Director, Steinmetz, has been Governor Holcomb’s senior operations director for health-related state agencies since 2021. She has experience in developing policy and strategy related to healthcare reform and delivery of services (The Journal Gazette, June 20).
• Governor Greg Gianforte (R) of Montana signed the state’s $14.3 billion primary budget biennial bill that will significantly increase the reimbursement rates for Medicaid providers. The state calculated an increase of $339.4 million in combined state and federal funds over the next two fiscal years. The budget bill also includes income and property tax cuts, investments in state infrastructure and boosts to affordable childcare and housing programs (Montana Free Press, June 14).
• As the new fiscal year begins next month, North Carolina’s legislature continues to have challenges with the state budget which may lead to a delay in passing the $30 billion spending plan. Disagreements include proposed income tax cuts, how to spend the $3 billion surplus, and new federal funding attached to Medicaid expansion. Unlike the federal government, North Carolina will not shut down starting July 1 if the budget does not get passed; instead, the current government spending will automatically continue. State agency leaders worry that Medicaid expansion will be delayed since it is tied to the passage of the budget (WUNC, June 15).
• On June 14, the Wisconsin Department of Health Services awarded $5.1 million to 14 nonprofit dental clinics across the state. The three-year grants will help the clinics serve 18% more patients, including 4,700 Medicaid and Badger Care Plus beneficiaries and more than 2,700 individuals who are low-income or underinsured. The grants range from $59,000 to $150,000 per clinic (Milwaukee Journal Sentinel, June 14).