• Stakeholders across the country are reviewing CMS’ pay rules for FY 2024, with significant focus on the drop in Medicare Disproportionate Share Hospital pay tied to projections of lower uninsured rates. The White House Office of Management and Budget (OMB) also continues to review six additional CMS regulations, including one addressing nursing home staffing. In a report released by the Kaiser Family Foundation (KFF), researchers found that insurers on the exchanges are asking for a median premium increase of 6% for 2024. Most of the proposed CMS rate changes fall between 2% and 10% but may well change during the review process. CMS also released the last of its Medicare pay rules for FY 2024 for nursing homes and inpatient hospitals and ultimately increased the percentage pay increase for both sectors (Inside Health Policy, August 7).
• On August 1, CMS finalized a hospital inpatient pay rule for FY 2024. The pay rule builds on the agency’s rural health improvement endeavor and Health Equity Framework. CMS was able to establish a pay bump of 3.1% for hospitals, add-on payment updates for COVID-19 and treatments, and updated measures for an Inpatient Quality Reporting Program. CMS is also finalizing recommendations to add 15 new health equity hospital categorizations into its FY 2024 payment impacts for inpatient hospitals. Additionally, the agency has finalized proposals to treat homelessness as an indicator of increased resource use by inpatient hospitals; allow rural emergency hospitals to be designated as graduate medical education training sites; and, update the rural wage index calculation methodology (Inside Health Policy, August 1).
• A proposed rule issued by HHS in May that is aimed to drive down drug costs in the Medicaid Drug Rebate Program (MDRP) will likely face constitutional legal challenges according to various attorneys. The proposed rule attempts to prevent the misclassification of drugs, particularly when brand-name drugs are inaccurately labeled as generic which leads to lower rebate payments for states. Drugmakers object to this provision claiming that it oversteps the agency’s authority and rewrites the rules of engagement for drug companies participating in the MDRP. Drugmakers also oppose another provision of the proposed rule where manufacturers of between 3-10 of the costliest drugs of the MDRP will be required to complete surveys providing proprietary information such as production expenses, research costs, and international pricing. Changes to the proposed rule will be necessary in order to avoid litigation (Bloomberg Law, August 7).

Federal Studies and Reports

• On August 3, HHS published a report showing that the uninsured rate reached an all-time low of 7.7% in the first quarter of 2023. The report, conducted by the Assistant Secretary for Planning and Evaluation (ASPE), analyzed data from the National Health Interview Survey and American Community Survey. According to the report, 6.3 million individuals have obtained coverage since 2020. Additionally, the uninsurance rate for children and young adults also decreased from 2020 to 2023 and nearly 6% of adults aged 18-64 reported having an ACA Marketplace plan in 2023, up from 4.4% in 2020. The administration points to federal policies such as the Inflation Reduction Act with provisions for extended ACA subsidies and investments in enrollment outreach and support for these positive trends. However, Medicaid unwinding will impact rates later in the year, with nearly 3.8 million Americans being removed from Medicaid rolls since April (Inside Health Policy and Axios, August 3).

• Medica, a Minnesota-based regional payer, announced its partnership with Peoria, Illinois-based OSF HealthCare to expand throughout the state. Medica currently has business in Illinois through its affiliate WellFirst Health, but should the new deal obtain regulatory approval, Medica would be able to make Medicare Advantage plans available in the Peoria and Bloomington markets. OSF HealthCare operates more than 150 locations that include 15 hospitals and 49 urgent care centers. If the deal is authorized, WellFirst would be renamed Medica Central Health Plan (Health Payer Specialist, August 4).
• A data breach in Oregon’s Medicaid program exposed the personal information of around 2 million current and former enrollees, leading to concerns about privacy and security. The breach was announced on August 4, by PH Tech, a subcontractor for Oregon’s Medicaid program. The breach occurred in early June and was traced back to a subcontractor, MOVEit, specializing in secure electronic file transfer. MOVEit had a vulnerability allowing unauthorized access to their system, leading to sensitive file downloads confirmed by an FBI investigation. PH Tech is covering credit monitoring costs for affected individuals and sent out letters but is not sending out emails or text messages. Stakeholders have critiqued this, citing the unstable housing situations that many enrollees experience. Similar incidents have occurred recently, Managed Care of North America and CareSource both announced breaches of Medicaid data (Health Payer Specialist, August 4).
• On August 5, the Texas attorney general’s office filed an appeal with the state Supreme Court, effectively blocking a district judge’s order that temporarily lifted a ban on emergency abortions. One day earlier, Texas District Judge Jessica Mangrum ruled in favor of doctors and women who sued the state over the lack of clarity concerning medical exceptions in the state’s abortion law bans. District Judge Mangrum concluded that this lack of clarity “creates a risk that doctors will have no choice but to bar or delay the provision of abortion care to pregnant persons in Texas for whom an abortion would prevent or alleviate a risk of death or risk to their health… for fear of liability under Texas’s abortion bans.” The District Judge issued a temporary injunction to prohibit enforcement of the abortion medical exception laws to alleviate any fear of liability for medical professionals performing emergency abortions (NPR, August 5).

Postpartum Depression Treatment

• The FDA approved its first oral drug intended to treat postpartum depression. The drug, Zurzuvae, by Sage Therapeutics comes in the form of a pill to be taken once a day for 14 days. Postpartum depression affects an estimated 400,000 people a year, and while it often only lasts for a couple weeks, it can continue for months or even years for some individuals. Standard treatment forms include counseling or antidepressants, which can take weeks or longer to work and aren’t effective for everyone (AP, August 4).

News

• Kaiser Permanente reported a net income of $2.08 billion in Q2 of 2023 compared to a $1.3 billion loss a year earlier. Revenue was up 7.2%, or $25.17 billion, and expenses rose to 4.5%, totaling $24.42 billion. Additionally, operating income totaled $741 million, up from $89 million the year prior. Like other health plans, Kaiser continues to deal with staffing shortages, high costs due to inflation, and pandemic-related effects on accessing medical services. Corporate treasurer for Kaiser, Tom Meier, said that the non-profit is working to decrease administrative costs, but that it has not led to layoffs thus far. In addition, Kaiser previously announced its plans to create a non-profit entity with Pennsylvania-based Geisinger Health (Risant Health) to build a national care network. No update has been provided on that endeavor (Modern Healthcare, August 4).
• According to a survey released on August 3^rd by insurer Blue Shield of California and the Harris Poll, 9 out of 10 Gen Z members struggle with mental health issues. Teenage suicide rates have dramatically increased by 39% from 2011 to 2021 and suicides now make up 16% of deaths for ages 18-25 based on research from KFF. David Bond, Director of Behavioral Health for Blue Shield of California, emphasizes the importance of directly understanding young people’s needs. Most of the survey respondents faced barriers to mental health services, including embarrassment, lack of reliability, and cost concerns. The insurer currently has an initiative called “BlueSky” which connects schools, clinicians, and parents to provide resources for youth mental health. BlueSky has a project in collaboration with the public school system in California, aimed at increasing identification and referral of students with issues. Bond also emphasized the importance of addressing the mental health needs of the most vulnerable youths, many from historically marginalized communities and low-income households (Health Payer Specialist, August 7).

• Don’t miss our NEW (free) webinar, “Nourishing Communities: Addressing Food Insecurity for Better Health,” on Thursday, September 7th from 12 pm – 1 pm (EST). Tune in to hear our panel of experts explore the history of nutrition supports and the challenges faced by states, Medicaid agencies, managed care, and community-based organizations in combatting food insecurity. Click here to learn more and register!
• CMS accepted public comments on the proposed rulemaking “Medicaid Program; Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality,” through July 3, 2023. Sellers Dorsey summarized everything you need to know on comments related to access, state directed payments, medical loss ratios, in-lieu of services, and more. Click here to download the summary.