OIG Issues Annual Report on Medicaid Fraud Control Unit (MFCU) Activities

The OIG has released its Medicaid Fraud Control Units Fiscal Year 2013 Annual Report, which highlights achievements from the investigations and prosecutions conducted by the 50 MFCUs along with related OIG oversight activities. In FY 2013, MFCUs nationwide reported a total of 1,341 criminal convictions in cases involving Medicaid fraud and patient abuse and neglect, and nearly $1 billion in criminal recoveries. Criminal convictions involved a variety of provider types, most notably home health agencies. MFCUs also obtained 879 civil settlements and judgments in FY 2013. Civil recoveries totaled over $1.5 billion, with cases involving a variety of provider types, particularly pharmaceutical companies. More than 1,000 Medicaid providers convicted in MFCU cases were excluded from federal health care programs by the OIG in FY 2013. The OIG notes that a lack of fraud referrals to MFCUs from Medicaid managed care organizations (MCOs) presents challenges, and MCFU officials expressed concern that some MCOs may not have incentive to refer providers suspected of fraud. The OIG also determined that ACA provider payment suspension rules require more coordination between MFCUs and State Medicaid agencies.

MACPAC Issues Annual Report to Congress on Medicaid, CHIP Policy

On March 14, 2014, the Medicaid and CHIP Payment and Access Commission (MACPAC) recommended that Congress take steps to promote continuity in Medicaid coverage, such as by providing states with an option for 12-month continuous eligibility for adults and extending the current transitional medical assistance program. Among other things, the report also discusses at length the policy implications of Medicaid non-disproportionate share hospital supplemental payments, and calls for additional data collection related to these payments to promote transparency, support program integrity efforts, and facilitate assessments of Medicaid payment adequacy. In addition, the report includes a statistical supplement containing detailed Medicaid data.

CMS Finalizes Rule to Strengthen Home- and Community-Based Services (HCBS) Options

On January 16, 2014, CMS published a final rule that implements expanded federal support for HCBS offered as an optional benefit through state Medicaid programs, as authorized by the Affordable Care Act (ACA) and the Deficit Reduction Act. Specifically, the rule establishes eligibility requirements for Medicaid HCBS provided under sections 1915(c), 1915(i), and 1915(k) of the Social Security Act. In a fact sheet accompanying the rule, CMS emphasized the important stakeholder input it received during the rulemaking process, which resulted in CMS “moving away from defining home and community-based settings by ‘what they are not,’ and toward defining them by the nature and quality of individuals’ experiences” (although certain institutional facilities, including nursing facilities, institutions for mental diseases, intermediate care facilities for individuals with intellectual disabilities, and hospitals generally are not considered to meet the definition of a home and community-based setting).

Under the rule, CMS intends to promote access to the most integrated settings that provide alternatives to services provided in institutions, using an “outcome-oriented definition” of HCBS settings instead of one based on location, geography, or physical characteristics. Under the rule, home and community-based settings must: be integrated in and support full access to the greater community; be selected by the individual from among setting options; ensure individual rights of privacy, dignity and respect, and freedom from coercion and restraint; optimize autonomy and independence in making life choices; and facilitate choice regarding services and who provides them. Note that the rule includes additional requirements for provider-owned or controlled home and community-based residential settings, including that the individual has a lease or other legally enforceable agreement, and standards related to the individual’s privacy, control over schedule and visitors, and physical accessibility of the setting.

In addition to defining home and community-based settings, the final rule addresses many other aspects of Medicaid HCBS programs, including requirements that services under section 1915(c) and 1915(i) be established through a person-centered planning process that addresses health and long-term services and support needs in a manner that reflects individual preferences and goals. It also implements new flexibility for states to target services to specific populations and to combine multiple target populations in one waiver, while streamlining waiver administration.

The rule is effective March 17, 2014, but CMS is providing transition periods both for states adopting new programs, and for those states with currently-approved waivers and state plans that may need to develop a plan to bring their program into compliance. The text of the rule is available at , and additional materials are posted at http://www.medicaid.gov/HCBS. CMS also stresses that there will be continued opportunities for stakeholder input as it works with states to implement this final rule.

HHS Publishes FY 2015 FMAP Amounts

HHS has published a notice announcing the Federal Medical Assistance Percentages (FMAP), Enhanced Federal Medical Assistance Percentages (eFMAP), and disaster-recovery FMAP adjustments for fiscal year (FY) 2015. The new amounts will be used in the calculation of federal matching for state Medicaid and Children's Health Insurance Program (CHIP) expenditures and other HHS programs, beginning October 1, 2014.

CMS Boosts Provider Enrollment Fee for 2014

CMS has announced the 2014 application fee for institutional providers that are initially enrolling in the Medicare or Medicaid program or the Children's Health Insurance Program (CHIP); revalidating their Medicare, Medicaid or CHIP enrollment; or adding a new Medicare practice location (unless a hardship exemption applies). The fee for 2014 is $542, up from $532 in 2013. CMS uses a broad definition of institutional entities subject to the application fee; it applies to “any provider or supplier that submits a paper Medicare enrollment application using the CMS-855A, CMS-855B (not including physician and non-physician practitioner organizations), CMS-855S or associated Internet-based PECOS enrollment application,” along with additional categories of Medicaid-only and CHIP-only institutional providers.

CMS Letter to States on Quality Considerations for Medicaid and CHIP Integrated Care Models

CMS has posted a November 22, 2013 letter to state health officials on “Quality Considerations for Medicaid and CHIP Programs,” the fourth in a series of guidance documents intended to assist states with designing and implementing integrated care models, such as medical/health homes, accountable care organizations, and managed care. The latest letter provides a framework for quality improvement and measurement as states develop care payment reforms ranging from risk-based shared savings methodologies to performance-based bonus payments to providers. Specifically, the letter describes: key components of state quality improvement strategies (goals, interventions, metrics, targets, transparency, and feedback); the impact of this framework on CMS policies for payment delivery models and accountability; a description of existing quality measurement and improvement efforts that impact Medicaid and CHIP; an example of a measurement matrix; and a description of alignment with existing quality initiatives and funding to support data infrastructure.

Obama Administration Releases Initial Health Insurance Marketplace Enrollment Numbers

On November 13, 2013, HHS issued its first report on ACA Health Insurance Marketplace/Exchange enrollment statistics. According to the Administration, 106,185 individuals have selected health plans during the first 33 days of the open enrollment period (October 1 through November 2, 2013), although this figure also includes individuals who have not yet purchased a policy and who are technically not yet enrolled in a plan. Note that the majority of the individuals who have selected a plan – almost 75% -- have gone through a state-based marketplace, with fewer than 27,000 individuals selecting a plan through the federally-facilitated marketplace (where HHS is running the marketplace alone or in partnership with the state). State numbers vary significantly, with 35,364 individuals in California selecting a plan through the state-run marketplace (about a third of all insurance selections nationwide for the period), compared to only 42 North Dakota residents selecting a plan through the federal marketplace. An additional 396,261 individuals nationwide have been assessed to be eligible for Medicaid or CHIP, representing 26% of the total applicants for coverage through the marketplaces. HHS also reports high volumes of traffic on marketplace websites and call centers, with almost 25 million unique visitors on marketplace websites and more than 3.1 million calls to state and federal marketplace call centers.

OIG Reports Point States to Potential Medicaid DMEPOS Savings

Two recent OIG reports point out the savings that state Medicaid programs could attain if they based reimbursement for DME, prosthetics, orthotics, and supplies (DMEPOS) on Medicare competitive bidding payment amounts – although at least one state is pushing back on this idea. In the first report, “Medicaid DMEPOS Costs May be Exceeding Medicare Costs in Competitive Bidding Areas,” the OIG calculated the potential savings Texas could have achieved in 2011 if it adopted Medicare DMEPOS bidding prices for selected items of DMEPOS. According to the OIG, Texas Medicaid fee-schedule could have saved approximately $2 million (state/federal shares combined) in the Dallas/Fort Worth area if it had based Medicaid rates on the Medicare DMEPOS competitive bidding amounts for 32 DMEPOS items covered under both programs. The OIG states that its report provides “a tangible example of potential State and Federal savings for Medicaid programs if the programs were to use the Medicare Competitive Bidding payment amounts for DMEPOS items.” This report did not include recommendations or state reaction. 

In the second report, “New Jersey Medicaid Program Could Achieve Savings by Reducing Home Blood-Glucose Test Strip Prices,” the OIG estimates that the New Jersey Medicaid program could have saved approximately $1.8 million to $2.7 million in 2011 by reducing home blood-glucose test strip reimbursement rates to retail rates or by establishing a competitive bidding program for test strips. Such policy changes for test strips also could reduce Medicaid managed care organization reimbursement rates by up to 70%. However, the New Jersey Department of Human Services disagreed with the OIG’s recommendations to align state Medicaid reimbursement with average retail price or Medicare competitive bidding pricing, citing, among other things, doubts about the feasibility of attaining such savings and concerns about patient access and the impact on proper diabetes management.

CMS Suspends Medicaid NARP Drug Data Collection

CMS has suspended Part I of its National Average Retail Price (NARP) survey, through which the agency collected prices paid for drugs to retail community pharmacies for individuals with Medicaid, cash paying customers, and those with certain third party insurance. CMS notes that the survey is being suspended, effective July 1, 2013, “pending funding decisions.” While the resulting draft NARPs file will not be published, archive files will remain on the CMS website. CMS also has suspended posting of the monthly draft New Drug Report file that listed newly marketed single-source drugs.

Medicaid Disproportionate Share Hospital Allotments

On July 26, 2013, CMS published a notice announcing the final federal share disproportionate share hospital (DSH) allotments for federal fiscal year (FY) 2012 and the preliminary federal share DSH allotments for FY 2013. CMS also announces the final FY 2012 and the preliminary FY 2013 limits on aggregate DSH payments that states may make to institutions for mental diseases (IMDs) and other mental health facilities.

CMS Issues Final Medicaid Eligibility/Enrollment Rule under the ACA

On July 15, 2013, CMS published a final rule to implement various provisions of the ACA related to Medicaid and CHIP essential health benefits, enrollment, and eligibility rules. Among other things, the rule: finalizes new Medicaid eligibility provisions; streamlines existing Medicaid eligibility, cost-sharing, and premium rules; amends requirements for benchmark and benchmark-equivalent benefit packages to ensure that they include essential health benefits and meet certain other minimum standards; and implements provisions related to authorized representatives, notices, and verification of eligibility for qualifying coverage in an eligible employer-sponsored plan in Affordable Insurance Exchanges. The rule has various effective dates and includes transition policies for 2014. 

July Health Policy Hearings

Recent Congressional hearings have addressed the following health policy issues:

MACPAC Report Addresses Medicaid and CHIP Policies

The Medicaid and CHIP Payment and Access Commission (MACPAC) has released its June 2013 Report to the Congress on Medicaid and CHIP, covering issues such as Medicaid and CHIP eligibility, coverage for maternity services, increased Medicaid payment for primary care physicians services, access to care for persons with disabilities, Medicaid and CHIP data for use in oversight and program monitoring, and program integrity efforts. This report also includes the latest MACStats data supplement.

State DSH Allotments Methodology

CMS has published a proposed rule setting forth a methodology to implement aggregate reductions to state Medicaid Disproportionate Share Hospital (DSH) allotments for FY 2014 and 2015, as required by the ACA. The rule also proposes to add additional DSH reporting requirements for use in implementing the DSH health reform methodology. Comments on the proposed rule will be accepted until July 12, 2013.

CMS Guidance to States on Facilitating 2014 Medicaid, CHIP Enrollment

CMS has issued a memo outlining optional strategies states can use to make progress toward reducing the number of uninsured individuals and transition to new eligibility and enrollment systems and coverage of new Medicaid enrollees. The letter describes how states can adopt (with enhanced federal matching) the following five specific targeted enrollment strategies: accelerating adoption of Modified Adjusted Gross Income (MAGI)-based rules, extending the Medicaid renewal period, enrolling individuals into Medicaid based on Supplemental Nutrition Assistance Program (SNAP) eligibility, enrolling parents into Medicaid based on children’s income eligibility; and adopting 12-month continuous eligibility for parents and other adults. CMS intends to use a streamlined review and approval process for states interested in implementing these approaches.

Health Policy Hearings

Recent Congressional hearings focusing on health policy include the following:

  • The House Energy and Commerce Committee held hearings on health insurance premiums under the ACA and drug compounding. The House Energy and Commerce Health Subcommittee also held a hearing on "Reforming SGR (Sustainable Growth Rate): Prioritizing Quality in a Modernized Physician Payment System," which reviewed draft SGR reform legislative language. A June 12 hearing will focus on the state perspective on the need for Medicaid reform, and a June 14 hearing will examine the federal government's response to the prescription drug abuse crisis.
  • A House Ways and Means Committee Health Subcommittee hearing addressed the “President's and Other Bipartisan Proposals to Reform Medicare," and the panel has scheduled a June 14 hearing to concentrate on proposals to reform Medicare post-acute care payments. 
  • The Homeland Security Committee held a second hearing on “Oversight and Business Practices of Durable Medical Equipment Companies.”
  • The Senate Special Committee on Aging held a hearing entitled “10 Years Later: A Look at the Medicare Prescription Drug Program." 

Updated Draft Medicaid Federal Upper Limit (FUL) Files Posted

CMS has posted the draft February 2013 FULs and Draft February 2013 Three-Month Rolling Average FULs. CMS will continue to accept comments on the draft average manufacturer price-based FULs and the draft three-month rolling average FULs, along with the methodologies used to calculate them.

CMS Issues Final Rule on Federal Funding for Medicaid Expansion under the ACA

On April 2, 2013, CMS published a final rule establishing increased Federal Medical Assistance Percentage (FMAP) rates for certain adult populations under states’ Medicaid programs effective January 1, 2014, as authorized by the Affordable Care Act (ACA). The rule sets forth the method states will use to claim the matching rate that is available for Medicaid expenditures of individuals with incomes up to 133% of the federal poverty level and who are defined as “newly eligible” and are enrolled in the new eligibility group. Under the rule, the federal government will pay 100% percent of the cost of this newly eligible adult population through 2016, and this rate will be phased down to a permanent 90% matching rate by 2020. The rule also describes a temporary general increase in FMAP rates for certain expansion states that meet required statutory criteria. The rule is effective June 3, 2013. Comments will be accepted until June 3, 2013 on a limited number of provisions of the rule, including the threshold methodology states will be required to use to document claims for the increased FMAP rate.

OIG Releases FY 2012 Medicaid Integrity Report

The OIG has released its Medicaid Integrity Program Report for FY 2012, which provides information on the OIG's Medicaid program integrity funding, summarizes significant OIG Medicaid-related reviews and investigations, and highlights Medicaid-related projects included in the OIG’s Work Plan for FY 2013.

MACPAC 2013 Report to Congress on Medicaid/CHIP

The Medicaid and CHIP Payment and Access Commission (MACPAC) has released its “March 2013 Report to the Congress on Medicaid and CHIP,” including both policy recommendations and data updates. The policy recommendations address implementation of ACA provisions designed to expand health insurance coverage. First, MACPAC recommends that Congress create a statutory option for states to implement 12-month continuous eligibility for children enrolled in CHIP and adults enrolled in Medicaid, in conformance with policies in effect for children in Medicaid (the report notes that the option will otherwise be removed under new income-counting eligibility standards). Second, MACPAC recommends that Congress permanently fund Transitional Medical Assistance (TMA), while allowing states to opt out of the program if they expand to the new adult group added by the ACA. The report also includes a discussion of various policy issues involving the dually eligible Medicare and Medicaid population, and it provides an update to its MACStats data supplement.

Older Entries

January 30, 2013 — CMS Proposes Changes to Medicaid Eligibility, Benefits, and Appeals Rules

January 30, 2013 — OIG Assesses State Medicaid Third-Party Liability Collection

January 11, 2013 — CMS Releases Updated Draft Medicaid FUL Files

December 19, 2012 — GAO Reviews Effectiveness of Medicaid Program Integrity Efforts

December 19, 2012 — GAO Examines Characteristics of Providers Receiving Medicaid EHR Incentive Payments

December 17, 2012 — HHS Sets FMAP Amounts for FY 2014

December 17, 2012 — CMS Provides Guidance to States on ACA Medicaid and Insurance Provisions

December 17, 2012 — OIG Releases 2012 Compendium of Unimplemented Recommendations

December 17, 2012 — December Congressional Hearings and Markups

December 5, 2012 — House Panel Schedules Hearing on Implementation of ACA's Exchanges and Medicaid Expansion (Dec. 13)

November 29, 2012 — HHS Proposes Standards for Essential Health Benefits, Actuarial Value, and Accreditation under the ACA

November 29, 2012 — OIG "Portfolio Report" on Personal Care Services

November 28, 2012 — CMS Posts Information on Medicaid Data and the ACA Branded Prescription Drug Fee Program

November 16, 2012 — CMS Final Rule Boosts Medicaid Primary Care Payments, Vaccine Administration Fees

November 12, 2012 — MACPAC Meeting on Medicaid Policy Issues (Nov. 15)

October 30, 2012 — OIG Calls on CMS to Implement Medicaid Drug AMP-Based FUL Payments

October 30, 2012 — CMS Posts Updated Draft Medicaid Drug Pricing Files

October 16, 2012 — OIG Issues FY 2013 Work Plan

October 16, 2012 — CMS Invites Comments on Draft Medicaid Drug Pricing Data (FULs, NARP, NADAC)

October 15, 2012 — OIG Examines Employment of Excluded Individuals by Medicaid Managed Care Entity Providers

September 27, 2012 — Congressional Health Policy Hearings

September 27, 2012 — State Collection of Medicaid Rebates for Drugs Paid Through Medicaid MCOs

September 27, 2012 — GAO Information on States' Use of Medicaid Managed Care

September 12, 2012 — CMS Monthly Calls on ACA Provider Issues - Medicaid Expansion Call on Sept. 13

September 5, 2012 — GAO Report Focuses on Medicaid Supplemental Payments

September 5, 2012 — GAO Examines State Medicaid LTC Eligibility Information

August 17, 2012 — GAO Reviews States' Implementation of ACA Medicaid Provisions

July 31, 2012 — HHS Announces Funding Opportunity for State Innovation Models Initiative

July 31, 2012 — Updated Draft Medicaid Drug Payment FUL Files Released

July 30, 2012 — CMS Announces Updated Medicaid, DSH, and CHIP Allotments for States

July 25, 2012 — CMS Webinar: State Innovation Models Initiative Overview (July 26)

July 25, 2012 — CMS Webinar on Retail Community Pharmacy Consumer Prices Survey (July 26)

July 19, 2012 — CMS Guidance on Medicaid Integrated Care Models

July 18, 2012 — CMS Releases Updated Draft Medicaid Drug Payment FUL Files

June 27, 2012 — MACPAC Report to Congress

June 23, 2012 — CMS Webinar on Medicaid National Average Drug Acquisition Cost Survey (June 28)

June 18, 2012 — June Congressional Health Policy Hearings

June 18, 2012 — OIG Revises State Medicaid Fraud Control Unit (MFCU) Performance Standards

June 13, 2012 — Coverage and Payment for Genetic Laboratory Tests

June 13, 2012 — CMS Posts Updated Draft Medicaid Drug Payment FUL Files

June 8, 2012 — CMS Accepting Comments on Draft Methodology for Calculating National Average Drug Acquisition Cost (NADAC)

May 31, 2012 — CMS Final Rule on Medicaid Disallowances, Overpayment Recoveries, and Technical Corrections

May 14, 2012 — CMS Publishes Two Home & Community-Based Services (HCBS) Rules

May 14, 2012 — CMS Proposes Increased Medicaid Payments for Primary Care Services

May 8, 2012 — CMS Finalizes Changes in Medicare/Medicaid Provider and Supplier Enrollment, Ordering, Documentation Requirements

April 23, 2012 — OIG Finds Limited Benefit of Medicare-Medicaid Data Match Program

April 23, 2012 — OIG Issues FY 2011 Medicaid Integrity Program Report

April 2, 2012 — House Approves GOP Budget with Medicare, Medicaid Provisions

April 2, 2012 — Supreme Court Hears Oral Arguments on ACA Challenges

April 2, 2012 — MACPAC Report to Congress on Medicaid, CHIP Policy

March 30, 2012 — Updated Draft Medicaid Drug Payment FUL Files Posted

March 29, 2012 — Congressional Health Policy Hearings

March 14, 2012 — OIG Report on Excluded Providers in Medicaid Managed Care Plans

February 28, 2012 — CMS Final Rule on Review and Approval Process for Section 1115 Demonstrations

February 28, 2012 — Maximum Medicaid RAC Contingency Fees for DME Overpayments

February 24, 2012 — CMS Posts Draft FUL Files for November 2011

February 13, 2012 — CMS Guidance to States on Capitated Financial Alignment Demonstration Plans

February 13, 2012 — CMS Guidance on Termination of Medicaid Provider Participation

January 31, 2012 — CMS Releases Long-Awaited Proposed Rule to Implement ACA Medicaid Manufacturer Rebate and Pharmacy Reimbursement Provisions

January 25, 2012 — CMS Proposes Changes to Medicaid DSH Rules

January 25, 2012 — CMS Releases Additional Draft ACA Medicaid Drug Pricing/FUL Files

January 5, 2012 — Final Medicaid Core Quality Measures

January 5, 2012 — OIG Focuses on Medicaid Managed Care Fraud and Abuse Concerns

December 13, 2011 — HHS Publishes FY 2013 FMAP Amounts

December 13, 2011 — December Congressional Health Policy Hearings

November 30, 2011 — President Signs Bill to Repeal 3% Government Payment Tax Withholding Provision, Revise Medicaid Eligibility Standard

November 29, 2011 — CMS Posts Third Draft Federal Upper Limit (FUL) Files Under ACA

November 14, 2011 — CMS Announces $523 Medicare, Medicaid, & CHIP Enrollment Application Fee for 2012

November 14, 2011 — GAO Presents Framework for Medicaid Funding Formula Revisions

November 14, 2011 — Senate Approves Legislation to Repeal Government Payment Tax Withholding Provision,Reform Medicaid Eligibility Standard

October 28, 2011 — House Clears Bills on Government Payment Tax Withholding, Medicaid Eligibility Standard

October 28, 2011 — OIG Reviews Medicaid Drug Expenditure Controls

October 28, 2011 — OIG Report Examines Drug Costs to Medicaid Pharmacies

October 28, 2011 — CMS Releases Second Draft Federal Upper Limit (FUL) Files Under ACA

October 14, 2011 — OIG Proposes Revisions to Performance Standards for State Medicaid Fraud Control Units, Posts Interactive MFCU Statistical Map

September 29, 2011 — Medicaid RAC Program

September 29, 2011 — Congressional Hearings Examine Variety of Health Industry Issues

September 28, 2011 — CMS Issues Subregulatory Guidance on ACA Medicaid Drug Pricing Policy

September 1, 2011 — OIG Reports on Medicaid Drug Rebates: Rebate Collections, Impact on Medicaid Prices

August 16, 2011 — Obama Administration Issues Rules on ACA Insurance Exchanges

August 16, 2011 — CMS Proposes Changes to Medicaid FFP & Other Medicaid/CHIP Rules

August 16, 2011 — OIG Follow-Up Report on Medicaid Hospital Outlier Payments

August 5, 2011 — CMS Discusses Details of New "National Average Drug Acquisition Cost" Survey

August 1, 2011 — OIG Report on Medicaid Drug Payment Policy

July 29, 2011 — States' Planned Medicaid Electronic Health Record Incentive Program Oversight

July 29, 2011 — Medicaid Adult Day Health Services

July 27, 2011 — CMS Stakeholder Meeting on Survey of Drug Retail Prices -- August 4

July 18, 2011 — CMS Guidance to States on Opportunities to Coordinate Care for Dual Eligibles

July 18, 2011 — July Congressional Health Policy Hearings/Markups

July 12, 2011 — CMS Awards "Survey of Retail Prices" Contract to Myers and Stauffer - Moves One Step Closer to Average Acquisition Cost

June 27, 2011 — MACPAC Report on Medicaid Managed Care

June 27, 2011 — OIG Examines State 340B Drug Program Policies

June 27, 2011 — OIG Report on Medicaid Rebates for Physician-Administered Drugs

June 14, 2011 — CMS Final Rule on ACA Medicaid Provider-Preventable Condition Policy

June 14, 2011 — CMS Provides Instructions to States on Termination of Provider Participation in Medicaid

June 14, 2011 — OIG Highlights Improper Medicaid Personal Care Services Clams

June 13, 2011 — FMAP Rates for Second & Third Quarter of FY 2011

May 31, 2011 — CMS Guidance to States on the Medicaid EHR Incentive Program

May 13, 2011 — CMS Proposed Rule on Methods for Assuring Access to Covered Medicaid Services

May 13, 2011 — CMS Seeks to Help States Coordinate Care for Dual Eligibles