The Centers for Medicare & Medicaid Services (CMS) is proposing to rescind the authority of states to make Medicaid payments to a third party on behalf of an individual provider, rather than directly to the provider, “for benefits such as health insurance, skills training, and other benefits customary for employees,” under certain circumstances.  This authority,

The Centers for Medicare & Medicaid Services (CMS) is proposing to exempt states with high rates of Medicaid managed care enrollment from current requirements to analyze and monitor access in fee-for-service (FFS) delivery systems. The proposed rule also would loosen current state access analysis requirements when states make what CMS contends are “nominal” reductions in

The Medicaid and CHIP Payment and Access Commission’s (MACPAC) March 2018 Report to Congress examines three aspects of Medicaid policy:  managed care, telehealth, and disproportionate share hospital (DSH) payments.  First, MACPAC proposes statutory changes to allow states to require all beneficiaries to enroll in Medicaid managed care programs, along with changes to Section 1915(b) waiver

CMS has announced a new initiative allowing states to propose demonstrations to “improve Medicaid enrollee health and well-being through incentivizing work and community engagement.” Specifically, states may propose Section 1115 waivers to make participation in work or other community engagement a requirement for continued Medicaid eligibility or coverage for non-elderly, non-pregnant adult Medicaid beneficiaries who

CMS is hosting a call on January 23, 2018 to brief state Medicaid agencies, Medicaid providers, managed care organizations, and other Medicaid stakeholders about the new Medicare card project. Under this initiative, CMS is moving away from Social Security Number-based Health Insurance Claim Numbers to new Medicare Beneficiary Identifiers (MBIs).

1/22 update:  this call

CMS has published a final rule intended to codify its existing interpretation of how third-party payments are considered in the calculation of Medicaid uncompensated care costs for the purpose of making Medicaid disproportionate share hospital (DSH) payments. Under the final rule, CMS specifies that uncompensated care costs for purposes of calculating hospital-specific DSH limits are

The House of Representatives is moving ahead on the Republican plan -– the American Health Care Act (AHCA) – that would repeal and replace major provisions of the Affordable Care Act (ACA). On March 16, 2017, the House Budget Committee approved sending the bill to the full House as part of fiscal year 2017 budget reconciliation bill, and a vote is expected later this week. The fate of the bill is uncertain in the face of united Democratic opposition to the plan and the objections of various ideological and regional factions within the Republican party. The political challenge has been complicated by a Congressional Budget Office (CBO)/Joint Committee on Taxation (JCT) estimate that the AHCA would result in 14 million more uninsured individuals in 2018, rising to 24 million by 2026. The CBO and JCT project that more of half of the coverage loss would be a result of the steep –$880 billion – proposed cut in federal Medicaid outlays, which would result in 14 million fewer Medicaid enrollees by 2026. And yet one of the fundamental disputes among Republican lawmakers is whether the ACA’s Medicaid expansion should be phased out sooner than the legislation now contemplates (2020), or whether additional protections should be provided in Medicaid expansion states.

Due to complex budget reconciliation rules, the AHCA concentrates on tax and Medicaid spending provisions. The AHCA would repeal the tax penalties enforcing the ACA mandates that most individuals obtain health insurance coverage and that certain employers offer employees coverage meeting minimum essential coverage standards, retroactive to those impacted by the penalty in 2016. Instead, to encourage healthier people to purchase insurance, the AHCA would require insurers to impose a 30% premium penalty for individuals who have not maintained continuous insurance coverage. Insurers also generally would be permitted to charge older individuals five times more than younger individuals (instead of the current 3 to 1 cap), beginning in 2018. Furthermore, the AHCA also would replace ACA insurance premium subsidies with refundable tax credits beginning in 2020 and establish a Patient and State Stability Fund intended to lower patient costs and stabilize state markets. The CBO/JCT estimate that, by 2026, the average subsidy under the AHCA would be about half of the average subsidy under current law. As noted, the AHCA also includes significant Medicaid cuts in the form of reduced enhanced federal matching and limits on growth in per-enrollee payments starting in 2020. In light of the expected decrease in the number of individuals with Medicaid coverage, the AHCA would eliminate cuts in disproportionate share hospital spending imposed under the ACA, and thus increase outlays by $31 billion. The AHCA also would repeal various ACA taxes, including the medical device tax, the prescription drug manufacturers’ tax, the health insurance provider fee, and the surtax on high-income taxpayer’s net investment income. Overall, CBO/JCT estimate that the AHCA would decrease federal spending by $1.2 trillion and reduce federal revenues by $883 billion, resulting in a $337 billion reduction to federal deficits, over the 2017-2026 period.
Continue Reading House GOP Moving Ahead on Controversial ACA Repeal & Replace Bill; First of Three Planned Phases of Health Reform

In her first act as CMS Administrator, Seema Verma joined HHS Secretary Tom Price in writing to the nation’s Governors to urge collaboration on improving the Medicaid program, with an emphasis on services for “truly vulnerable” populations. Price and Verma contend that the “expansion of Medicaid through the Affordable Care Act (ACA) to non-disabled, working-age

The House Energy and Commerce Subcommittee on Health has approved two bills that would modify Medicaid eligibility rules to consider additional sources of income. First, HR 829 would establish standards for states to consider lottery winnings and other lump sum payments for purposes of determining Modified Adjusted Gross Income (MAGI) for Medicaid and CHIP eligibility. 

CMS has finalized without change its proposed rule to block states from adopting or increasing Medicaid managed care “pass-through” payments to hospitals, nursing facilities, and physicians beyond those in place when pass-through payment transition periods were established in a May 6, 2016 final Medicaid managed care rule.  As we previously reported, CMS considers

Included in the 21st Century Cures Act are numerous changes to Medicare and Medicaid policies, including provisions with significant reimbursement impacts for certain types of Medicare providers and suppliers, along with changes intended to reduce the regulatory and administrative burdens associated with the use of electronic health records.  Furthermore, the law once again expands the

CMS has published a final rule that implements various Medicaid and Children’s Health Insurance Program (CHIP) eligibility, appeals, and related administrative changes under the Affordable Care Act (ACA) that were proposed in January 22, 2013 but not included in a July 15, 2013 rule finalizing selected provisions. According to CMS, the rule will support “modernization

CMS is proposing to prohibit states from adopting new or increased “pass-through” payments to hospitals, nursing facilities, and physicians under their Medicaid managed care contracts beyond those in place when the pass-through payment transition periods were established in a May 6, 2016 final Medicaid managed care rule. CMS considers pass-through payments to be amounts

The Department of Health and Human Services (HHS) has published the FY 2018 Federal Medical Assistance Percentages (FMAP), Enhanced FMAP, and disaster-recovery FMAP adjustments.  These amounts will be used to determine federal matching amounts for state expenditures for Medicaid, the Children’s Health Insurance Program, and certain other medical and other social services, applicable from October

Observers are digesting what the Trump Administration will mean for the health care and life sciences industry.  Forecasting is more challenging for this incoming Administration than most given the relatively sparse policy details released during the campaign and the lack of a government service record to examine for clues.  Today President-elect Trump’s transition team released a one-page statement on health care policy, but many questions remain.  Nevertheless, we offer below our initial observations and issues to watch in the months to come.

  • Potential Sea Change. Uncertainty is, as some like to say, the “obvious comment” that characterizes the whole prospective Trump Administration.  Other than an intended “repeal and replacement” of the Affordable Care Act (ACA), President-elect Trump has provided relatively few details on a proposed health care agenda.  Until these policies are fleshed-out, expect an environment where some business decisions and investments may be delayed, with a resulting impact on merger and acquisition activity. That said, other transactions may become more likely, as the threat of new restrictions under a Clinton administration are removed, along with the prospect of potential regulatory relief under a Republican-controlled federal government.
  • Affordable Care Act Repeal and Replacement.  Trump has repeatedly indicated his desire to repeal and replace the ACA, including a vow to summon Congress into a special session for this task.  If the law is repealed, however, what would take its place, and how would Congress address the roughly 20 million Americans currently covered in some way under the ACA (and the potential rise in uncompensated care costs that also would result)?  Despite the call for repeal, certain parts of the law are popular. For instance, President-elect Trump noted on the campaign trail that he was in support of the ACA’s prohibition against the use of pre-existing health conditions to deny coverage (or as a basis for premium-setting).  Other proposals offered by Trump as candidate include allowing for the sale of health insurance across state lines as long as plans comply with state requirements, various tax benefits, and more transparency in health care pricing.  In today’s policy statement, President-elect Trump added support for high-risk pools, which he characterizes as “a proven approach to ensuring access to health insurance coverage for individuals who have significant medical expenses and who have not maintained continuous coverage.”  Congressional Republicans have offered a number of alternatives that are likely to be a springboard for reform, most notably the “Better Way” plan proposed by House Speaker Paul Ryan.  In fact, according to the Speaker’s office, “in the 114th Congress alone, House Republicans have introduced more than 400 individual bills that would improve our nation’s health care system” – demonstrating that Congress is not reticent about legislating on health care issues.  The new Senate’s Republican majority will not have the 60 votes required to override a potential Democratic filibuster of legislation to fully repeal the law. While Congress could use budget reconciliation authority (which requires only 50 votes in the Senate) to make significant changes, the drawn-out pace of the budget process may not satisfy those who want quick action in this area.  Regardless of the legislative vehicle, after years of calling for Obamacare repeal while President Obama was in office, the Republican Congress will be under tremendous pressure to act quickly – even if it is a “down-payment” on reform — now that Republicans will control the presidency and the Congress.

Continue Reading Looking Ahead to a Trump Administration: Health Care and Life Sciences Industry Perspectives

The OIG has issued an “Investigative Advisory on Medicaid Fraud and Patient Harm Involving Personal Care Services” that identifies various “fraud schemes” it has encountered involving personal care services (PCS) — nonmedical assistance typically provided by an attendant working for a personal care agency.  PCS is an optional Medicaid benefit offered in certain