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State Health Official (SHO) Letter #23-003

• On June 27, CMS released a State Health Official (SHO) letter, SHO #23-003, that provides guidance on section 11405 of the Inflation Reduction Act (IRA) (Pub. L. 117-169). The IRA revised the Medicaid and Children’s Health Insurance Program (CHIP) statutes to require coverage and payment without cost sharing beginning October 1, 2023, for U.S. Food and Drug Administration (FDA) approved adult vaccines and their administration recommended by the Advisory Committee on Immunization Practices (ACIP). The coverage requirements would exist for approved vaccines identified on the CDC/ACIP adult immunization schedule, such as the shingles and influenza vaccines, as well as approved vaccines recommended for specific populations, such as the mpox vaccines, as long as the beneficiary meets the ACIP criteria. In addition, states that were covering approved, ACIP-recommended adult vaccinations as of August 16, 2022, can claim a one percentage point increase in the FMAP for their Medicaid expenditures on these vaccination services for the first eight fiscal quarters that begin on or after October 1, 2023. At the conclusion of these quarters, September 30, 2025, states’ Medicaid expenditures for vaccines and vaccine administration described in section 1905(a)(13)(B) of the Social Security Act will be matched at the regular FMAP. The new coverage applies to almost all full-benefit beneficiaries aged 19 and older (CMS, June 27; CMS, June 27).

Congress Urges HHS to Tighten Prior Authorization Provisions

• More than 230 Representatives and 61 Senators sent letters to HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure requesting changes to certain requirements proposed by CMS on prior authorization which CMS originally released in December 2022. The requested changes include adding several provisions relating to real-time prior authorization for routine matters, a 24-hour deadline for Medicare Advantage (MA) plans to answer prior authorization requests for urgently needed care, and more detailed transparency metrics. The proposed rule would require MA plans and managed care organizations (MCOs) implement an electronic process for approving treatments. CMS plans to finalize the rule by December 2023 (Health Payer Specialist, June 22).

Next Generation COVID-19 Vaccine Developments

• Efforts to develop the next generation of COVID-19 vaccines in the U.S. are facing bureaucratic hurdles and regulatory uncertainties, potentially hindering the fight against COVID and future pandemics. The $5 billion federal program aimed at expediting the development of advanced vaccines has been delayed and lacks clarity in terms of regulatory requirements, according to vaccine makers. Smaller biotech companies are struggling to advance these next-generation vaccines due to arduous and expensive clinical testing processes and a lack of support from larger pharmaceutical companies. Despite the current uncertainty, regulators plan to publish guidance on their standards in the coming months (New York Times, June 26).

News

• Families USA and CMS hosted a webinar on June 22 to provide information about how to better ensure a smooth Medicaid unwinding process in the coming months. During the webinar, CMS indicated they have had more success in requesting state mitigation plans when there has been identification of federal Medicaid regulatory violations related to renewal requirements versus using the unwinding-related enforcement authorities that Congress granted. CMS has recently increased its oversight efforts and launched an “All Hands-On-Deck” campaign last week. CMS noted that if a state is out of compliance with the federal redetermination requirements, CMS can demand a corrective action plan and impose civil money penalties. However, because mitigation plans are not public, many stakeholders believe this lack of transparency is an issue because they do not know what CMS is saying to each state (Inside Health Policy, June 27).

• The FDA published its first ever draft guidance on conducting clinical trials for psychedelic drugs. The draft guidance comes as research and development on the use of psychedelics to treat mental health conditions like depression and post-traumatic stress disorder are becoming increasingly common. The FDA notes that psychedelic drug development programs will be subject to the same regulations and evidence standards as other drug approvals (Inside Health Policy, June 23).

Federal Regulation

• On June 23, President Biden issued an executive order intended to protect contraceptive access, marking his third executive order pertaining to reproductive health. The order directs HHS to consider actions that would expand access to affordable family planning services and supplies across Medicaid, including sharing best practices for state Medicaid programs on high-quality family planning through managed care. Additionally, the order includes a provision to improve access to over-the-counter contraception, including emergency contraception (Inside Health Policy, June 23).
• On June 22, CMS announced its plan for transitional coverage for breakthrough devices in Medicare, aiming to get patients quicker access to innovative technologies. The voluntary transitional coverage for emerging technologies (TCET) pathway would expedite Medicare coverage of certain FDA-approved breakthrough devices by creating a process where CMS, FDA, and device makers work closely together to reach coverage decisions within six months. Stakeholders in this process have been waiting for the plan to be released since last year. The agency is taking comments for 60 days after the notice is published in the Federal Register (Inside Health Policy, June 22).

Waivers

• Section 1115
  • Illinois
    • On June 23, 2023, Illinois submitted an extension for its Behavioral Health Transformation demonstration, renaming it the “Illinois Healthcare Transformation Demonstration.” This demonstration includes the following benefits: 1) SUD Services in Institutions for Mental Diseases (IMD); 2) SUD Case Management; 3) Housing Supports; 4) Supported Employment Services Pilot; 5) Medical Respite; 6) Food and Nutrition Services; 7) Violence Prevention and Intervention Pilot; 8) Non-Medical Transportation to needed, non-medically related services, supports, or locations; 9) Justice-Involved Community Reintegration: Transitioning from Incarceration; and 10) Community Reintegration: Transitioning from Institutions. The federal public comment period will be open through July 28, 2023.

SPAs

• COVID-19 SPAs
  • Alabama (AL-23-0008, effective May 12, 2023): CMS is approving this time-limited SPA to respond to the COVID-19 national emergency by extending the suspension of Medicaid copayments for all items and services for all eligibility groups until September 30, 2024.
  • Iowa (IA-23-0007, effective March 11, 2021): Authorizes mandatory coverage of COVID-19 vaccine and administration, testing, and treatment benefits as required by Section 9811 of the American Rescue Plan Act.
  • Massachusetts (MA-23-0030, effective May 12, 2023): CMS is approving this time-limited SPA to respond to the COVID-19 national emergency by suspending all pharmacy copays for eligibility groups consistent with 42 CFR 435 Subparts B, C, and D through the duration of the federal public health emergency as originally approved in Disaster Relief SPA 23-0025.
  • New York (NY-21-0063, effective June 24, 2021): CMS is approving this time-limited SPA to respond to the COVID-19 national emergency by providing reimbursement of antibody infusions provided to hospital inpatients.
  • North Carolina (NC-23-0005, effective July 1, 2021): CMS is approving this time-limited SPA to respond to the COVID-19 national emergency by adding coverage for AMH (MCO) medical home services.
  • Ohio (OH-23-0012, effective April 1, 2023): CMS is approving this time-limited SPA to respond to the COVID-19 national emergency by implementing a one-time provider relief payment to dialysis centers.
• Services SPAs
  • North Dakota (ND-23-0010, effective April 1, 2023): Updates provider qualifications for Personal Care Services
  • Virgin Islands (VI-22-0004, effective October 1, 2022): Provides for 12 months of extended postpartum coverage to individuals who were eligible and enrolled under the Medicaid state plan during their pregnancies (including during a period of retroactive eligibility).
  • Washington (WA-17-0027, effective July 23, 2017): Authorizes Dental Health Aide Therapists (DHAT) to be added as a provider type and reimbursed for services in accordance with state Senate Bill 5079.
• Payment SPAs
  • Georgia (GA-22-0014, effective July 1, 2022): Increases the per diem rate from $589.62 to $707.54 for nursing facilities that provide specialized care to ventilator-dependent residents.
  • Indiana (IN-23-0004, effective April 1, 2023): Increases the rate paid to any Medicaid-enrolled Large Private Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/IID) that is licensed as a Comprehensive Management Needs Facility for the Developmentally Disabled (CRFs/DD)
  • Maine (ME-23-0003, effective March 1, 2023): Authorizes Alternative Payment Methodology (APM) for Medicaid Federally Qualified Health Centers (FQHCs)
  • Massachusetts (MA-23-0016, effective January 1, 2023): Updates the methods and standards used to determine the rates of payment for sterilization services.
  • Massachusetts (MA-23-0011, effective February 8, 2023): Authorizes supplemental payments for rate year 2023 to privately-owned psychiatric hospitals for COVID-rated services in DMH-approved dedicated COVID psychiatric units through September 20, 2023.
  • Massachusetts (MA-23-0023, effective January 1, 2023): Updates reimbursement methods and standards for privately owned chronic disease and rehabilitation (CDR) inpatient hospital services
  • Massachusetts (MA-23-0013, effective January 1, 2023): Updates the methods and standards used to set payment rates for acute outpatient hospitals
  • Massachusetts (MA-23-0012, effective January 1, 2023): Revises rate year 2023 reimbursement for privately-owned acute care hospital services. Specifically implements payment for behavioral health crisis evaluation services, acute inpatient discharge add-on, and a Clinical Quality Incentive (CQI) program.
  • Michigan (MI-23-0008, effective January 6, 2023): Establishes policies and methods for payment rates for Rural Emergency Hospitals
  • Nevada (NV-23-0003, effective January 20, 2023): Revises Disproportionate Share Hospital payment methodology to prevent overpayments within the year.
  • New Mexico (NM-23-0001, effective May 12, 2023): Authorizes reimbursement for providers of personal care services (PCS) and private duty nursing (PDN) services under the EPSDT benefit to be at the same rate as 1915(c) provider rates, permanently extending NM-22-0019.
  • New York (NY-23-0020, effective February 1, 2023): Provides supplemental payments to support Adult Day Health Care and AIDS Adult Day Health Care program sites.
  • New York (NY-23-0027, effective January 1, 2023): Updates the minimum wage for Assisted Living Program (ALP) rates.
  • New York (NY-23-0029, effective January 1, 2023): Updates the minimum wage for Hospice Services rates.
  • New York (NY-23-0026, effective January 1, 2023): Updates the minimum wage for Certified Home Health Agency (CHHA) rates.
  • New York (NY-22-0015, effective January 1, 2022): Increases the inpatient hospital minimum wage cost for the remainder of the state region to consider increased labor costs resulting from statutorily required increase in the New York State minimum wage.
  • Texas (TX-23-0005, effective March 1, 2023): Updates the physicians’ and other practitioners’ fee schedules and supersedes TX-22-0025 and TX-22-0036.

News

• Aetna and AvMed have filed challenges to a decision made by the Florida Department of Management Services (FDMS) to award benefits management contracts that cover 168,000 employees and retirees. Aetna received awards to provide some HMO services but was not selected to provide PPO coverage. AvMed has provided coverage to public employees in Florida since the 1980s and received no contracts. The lawsuit alleges that the FDMS violated open meeting laws by purportedly holding some of the discussions surrounding contracts in private. Additionally, Aetna asserts that selecting Florida Blue was wrong because it has a better provider network in many parts of the state (Health Payer Specialist, June 26).
• Judge Melissa Owens of the Teton County District Court provisionally blocked the Wyoming state law that bans the use of pills for abortion. In her ruling, Judge Owens said that the plaintiffs, including four health care providers in the state, “have shown probable success on the merits and that at least some of the plaintiffs will suffer irreparable injury” if the ban were approved. The law was originally scheduled to take effect on July 1. (The New York Times, June 22).
• On June 22, the Michigan Department of Health and Human Services announced that it will extend the deadline for re-enrollment in Medicaid by one month- from June 30 to the end of July for those with a June 30 deadline. Renewals for traditional Medicaid and the Healthy Michigan plan are staggered and take place every month starting in June and continuing through May 2024. As a part of the Medicaid unwinding process, individuals who had their Medicaid coverage automatically renewed annually during the pandemic will have to reapply to continue their coverage. (Yahoo News, June 23)
• On June 22, changes were made to an Assembly bill NJ A2841 in New Jersey that would continue to allow rebates from pharmacy benefit managers (PBMs) to be passed on to health insurers to lower premiums. The bill aims to add regulations and transparency measures for PBMs, and the newest change allows for rebates to either be sent directly to the point of sale for customers or to health insurers to lower overall premium costs (Politico Pro, June 23).
• McLaren Health Plan and Physicians Health Plan (PHP) will no longer provide health coverage to Michigan state employees, retirees, and their dependents starting January 1, 2024. The state Civil Service Commission is informing employees to select a new plan during the open enrollment period. Various alternatives are available for employees. McLaren Health Plan is a subsidiary of McLaren Health Care and was acquired by Hart Medical Equipment in 2021. PHP is owned by the University of Michigan Health and Covenant Healthcare (Health Payer Specialist, June 26).
• The New York Legislature has approved a bill that provides legal protection for doctors in the state to prescribe and send abortion pills to patients in states where abortion is outlawed and is now awaiting signature by Governor Hochul. This move aims to expand access to abortion pills for patients living in states with restrictive abortion laws. New York now joins several other Democrat-led states including Massachusetts, Colorado, Vermont, and Washington with similar shield laws. However, there are still many unknowns as providers begin prescribing abortion pills to patients in restrictive states, including challenges to the FDA’s approval of mifepristone, a widely used abortion pill; and, civil suits and challenges to a provider’s medical license for unauthorized practice of medicine (New York Times, June 20).
• A federal judge blocked Florida’s health code rule and a new state law that would restrict Medicaid coverage for gender dysphoria treatment citing that they violate federal laws on Medicaid, equal protection, and the Affordable Care Act’s prohibition of sex discrimination. The judge further noted that the state is blocking payment for certain treatments “for political reasons” using “biased and unscientific processes.” (CBS News, June 22).
• The state of California and the health care industry have reached an agreement on the renewal of a health care tax that will bring in $19 billion to the state over the next ten years. Combined with federal funds, the state will be able to spend more than $35 billion on health care, the largest investment the state has ever made in Medi-Cal. Because of the deal, the state will be able to spend $240 million to raise 2024 reimbursement rates for primary, OBGYN, and some mental health services to 87.5% of federal Medicare rates (Politico, June 24).