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.
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.
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 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.
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.
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.
Recent Congressional hearings have addressed the following health policy issues:
- The House Energy and Commerce Committee has held hearings on Medicaid reform, implementation of the ACA, and reform of drug compounding regulations. An August 1 hearing entitled “PPACA Pulse Check” will feature testimony by CMS Administrator Marilyn Tavenner.
- The Senate Finance Committee held two hearings on health information technology, along with a hearing on repealing the SGR.
- The Senate Judiciary Committee examined “pay for delay” settlements between generic and brand-name drug companies.
- The House Ways and Means Committee held two hearings on the Administration’s delay of the ACA employer insurance mandate, and an August 1 hearing will focus on the status of ACA implementation. The House Education and the Workforce Committee also held a hearing on the ACA employer mandate delay.
- The House Oversight and Government Reform Committee and House Homeland Security Committee are holding a joint hearing on July 30 entitled on “Evaluating Privacy, Security, and Fraud Concerns with ObamaCare's Information Sharing Apparatus.”
- The Senate Budget Committee is holding a July 30, 2013 hearing on containing health care costs.
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.
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 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.
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."
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.
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.
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.
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.
On January 22, 2013, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule designed to provide states with additional flexibility in administering their Medicaid, Children’s Health Insurance Program (CHIP), and Affordable Care Act (ACA) Exchange programs. Among many other things, the rule would enhance the ability of states to coordinate eligibility determinations, appeals processes, beneficiary notifications, and other related administrative procedures for these health programs. The proposed rule also would give states more options with regard to benefits, through policies on the use of benchmark and benchmark-equivalent plans (now known as Alternative Benefit Plans) for newly-eligible low-income adults, and the relationship between Alternative Benefit Plans and Essential Health Benefits under the ACA. In addition, CMS proposes a series of changes to Medicaid premium and cost-sharing requirements to enhance state flexibility, including updating maximum allowable cost-sharing levels and consolidating and streamlining all Medicaid premium and cost sharing rules. The proposed rule also would allow states to establish higher cost sharing for non-preferred drugs and for non-emergency use of emergency departments. The rule also addresses a number of other related policies, including: streamlining eligibility categories; simplifying the citizenship documentation process; and establishing procedures for Exchanges to verify access to employer-sponsored coverage. Note that while the proposed rule states that comments are due February 13, 2013, CMS subsequently issued a correction notice extending the comment period until February 21, 2013.
The OIG has reviewed the extent to which states have improved collection of third-party liability (TPL) payments in situations where Medicaid beneficiaries have additional sources of health insurance that are responsible for payment. According to the OIG report, Medicaid Third-Party Liability Savings Increased, But Challenges Remain, states reported that TPL savings increased from almost $34 billion in 2001 to more than $72 billion in 2011. Nevertheless, states generally were not able to recover all of third-party obligations, leaving an estimated $4 billion at risk of not being recovered. The OIG recommends that CMS: work with states to address longstanding challenges related to identification of insurance coverage and recovery of payments; address states' challenges with 1-year timely filing limits for Medicare and TRICARE; and strengthen enforcement mechanisms designed to deal with uncooperative third parties. CMS concurred with the recommendations.
CMS has posted the September 2012 draft average manufacturer price (AMP)-based Medicaid federal upper limit (FUL) files, along with updated three-month rolling average FUL file consisting of the weighted average of the current and two previous monthly draft AMP-based FULs. CMS continues to accept comments on the monthly and three-month rolling average draft AMP-based FULs and the methodologies used to calculate them.
A recent GAO report, “Medicaid Integrity Program: CMS Should Take Steps to Eliminate Duplication and Improve Efficiency,” points to a number of shortcomings in CMS Medicaid program integrity efforts. Among other things, the GAO found that Medicaid Integrity Group's (MIG) oversight and support activities had mixed results in achieving the goal of enhancing program integrity efforts. Moreover, the MIG’s hiring of separate review and audit contractors for its National Medicaid Audit Program was inefficient and duplicative. The GAO recommends that CMS: eliminate duplication by merging contractor functions, use comprehensive reviews to better target audits; work with states to ensure reliable reporting of their program integrity recoveries; discontinue state program integrity assessments that overlap other, more current data sources; and reevaluate its return on investment methodology.
The Health Information Technology for Economic and Clinical Health (HITECH) Act provided funding to promote the adoption and meaningful use of certified EHR technology, including a Medicaid EHR program. In 2011, the first year of the Medicaid EHR program, 1,964 hospitals and 45,962 professionals were awarded a total of approximately $2.7 billion in Medicaid EHR incentive payments, according to a GAO report describing the characteristics of providers that participated in the program in 2011. Hospitals claimed $1.7 billion in these Medicaid EHR incentive payments, with a median payment amount of $613,512. Almost half of the hospitals (46%) receiving payments were located in the south, while the smallest proportion (15%) were located in the northeast. Also among hospitals receiving payments, 62% were located in urban areas, 80% were acute care hospitals, 57% percent were nonprofits, and 57% were not members of a chain, while hospitals with the highest number of total beds were twice as likely to receive an incentive payment than those with the fewest number of beds. With regard to professionals, who were awarded a total of $967 million in incentive payments, more than three times as many eligible professionals participated in the Medicaid EHR program than in the Medicare EHR program. The largest proportion of professionals who received a Medicaid EHR incentive payment for 2011 were in the south (37%), compared to 20% in the midwest. As with hospitals, most professionals receiving EHR incentive payments (83%) were located in urban areas. Additional details can be found in the full report, “Electronic Health Records: Number and Characteristics of Providers Awarded Medicaid Incentive Payments for 2011."