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In the newsletter this week is Eligibility and Enrollment rules, guidance on 1115 for former foster youth; prescription drug dashboard; mental health reforms; value-based purchasing.

November 30, 2016
From the NAMD Desk
NAMD Focused on Transition
As we enter a period of transition in Washington, NAMD will be working closely with lawmakers, the administration, and key stakeholders to ensure that the experience and insight of the nation’s Medicaid Directors is influential in the federal policy process. The unparalleled operational and technical expertise of Medicaid Directors will be critical as federal policy discussions advance that may impact Medicaid.
In This Issue

Reg Update


CMS Publishes Final and Proposed Rules on Eligibility and Enrollment
CMS recently issued a  final rule  that implements Medicaid and CHIP eligibility changes under the Affordable Care Act. The final rule addresses modernization of notices and appeals processes, as well as the coordination of eligibility notices and appeals across insurance affordability programs. The rule also further delineates eligibility and enrollment policy under a  final rule from 2012  and finalizes provisions from a
2013 CMS proposed rule. Issues addressed include coverage for former foster care youth, optional eligibility pathways, and financial methodologies for medically needy individuals, and verification of citizenship and immigration status.
CMS also issued a  Notice of Proposed Rulemaking
(companion NPRM) relating to Medicaid and CHIP eligibility appeals processes, which complements the final rule. Both rules were published in the
Federal Register on November 30.
CMS Issues Guidance on 1115 Pathway for Former Foster Youth in Medicaid
On November 21, the Center for Medicaid and CHIP Services (CMCS) issued an Informational Bulletin on how states may use 1115 demonstration waiver authority to provide Medicaid coverage to foster youth who were receiving Medicaid in another state, but aged out of foster care. This guidance is intended to supplement the agency’s rulemaking on Medicaid eligibility and enrollment discussed above.


The Affordable Care Act included a provision allowing foster youth and former foster youth to receive Medicaid coverage until 26 years of age, to mirror the law’s ability for children or dependents to remain on their parents’ or guardian’s health insurance until that age. Currently, 14 states provide Medicaid coverage for foster youth from any state. The bulletin outlines how both expansion and non-expansion states can use an 1115 waiver to provide coverage to this population. It also includes best practices for identifying and enrolling former foster youth.


Read the guidance here.
Federal Judge Blocks DOL White Collar Worker Overtime Rule
On November 22, the U.S. District Court for the Eastern District of Texas issued an injunction halting the implementation of the Department of Labor (DOL)’s
final rule which would increase the salary threshold under which workers would be eligible for overtime benefits. The rule was initially set to become effective on December 1, 2016; it will now remain on hold pending further legal developments.


The rule, commonly referred to as the “white collar worker” overtime rule, would allow workers salaried up to $47,476 to be eligible for time-and-a-half pay if they worked over 40 hours in a week. The rule is expected to have a substantial impact on Medicaid home care service wages, and in recognition of this impact, DOL included a temporary non-enforcement policy of the rule for Medicaid providers of ID/DD services in residential homes or facilities with fewer than 15 beds.


CMS Finalizes Medicare Quality Measures for Value-based Purchasing Programs
Recently, the Centers for Medicare and Medicaid Services (CMS) announced a list of 97 quality measures it is formally considering for incorporation into the Medicare quality and value-based purchasing programs. This year’s list features 39 outcomes-based measures, representing a continued shift away from process measures and towards outcome metrics. The list will be available for formal comment via the National Quality Forum’s Measures Application Partnership (MAP).


Read a blog post discussing the considered measures.


CMS Proposed Rule Codifies Prohibition on Pass-Through Payment Programs in Managed Care
On November 18, CMS published a public inspection version of a Notice of Proposed Rulemaking (NPRM), which seeks to codify in regulation a prohibition on new or expanded Medicaid managed care pass-through payment programs. This NPRM broadly aligns with previous indications in CMS sub-regulatory guidance on pass-through payments that states seeking to create or expand such arrangements during the final managed care rule’s phase-down period would not receive CMS approval.


As a reminder, the managed care rule requires states to phase down and eventually eliminate current pass-through payment programs. Hospital pass-through payments have a ten-year phase-down period, with each year seeing a 10% reduction in payments made compared to current amounts. Physician and nursing facility pass-through payments must be eliminated within five years, though these are not subject to a gradual phase-down.


Specifically, the NPRM seeks to revise section 438.6(d) of the managed care rule to clarify that transition periods are only available to states that can demonstrate they had pass-through payments in place on or before July 5, 2016. It also prohibits retroactive adjustments or amendments to these programs to add or increase pass-through payments beyond the base amount allowed in 438.6(d)(2), and establishes maximum allowable amounts of pass-throughs using a “lesser of” methodology calculated from a base of the current state payment program for each impacted provider category.


View the rule here. The NPRM comment period will close on December 22.


CMS Launches Medicaid Prescription Drug Spending Dashboard
Between 2013 and 2014, price increases accounted for 75% of the increase in Medicaid spending on prescription drugs, with only 25% of the increase stemming from enhanced utilization. In order to provide a better sense of the frequency and pervasiveness of these price increases, CMS recently launched its
2015 Medicaid Drug Spending Dashboard, an online interactive tool presenting information on 70 covered outpatient prescription drugs paid for by State Medicaid agencies. For all 70 drugs included in the tool, CMS displays relevant spending, utilization, and trend data, as well as consumer-friendly information on the product descriptions, manufacturers, and clinical indications. The drugs included in the Dashboard were selected based on the following criteria:
  • The drug is ranked in the top 25 in terms of total program spending;
  • The drug is associated with a high annual per prescription fill based on claims data analyses (greater than $1000 per prescription fill) and is ranked in the top 25 by overall program spending; or
  • The drug is ranked among the top 20 high unit cost increases.
Access the dashboard here.


CMS Issues Guidance on Excluding Abuse-Deterrent Drugs from Line Extension Definition in MDRP
On November 17, CMS Division of Pharmacy issued a Medicaid Drug Rebate Program Notice to drug manufacturers clarifying how CMS will verify a drug’s status as an abuse-deterrent formulation, and thus be excluded from the definition of a line extension drug under the Medicaid drug rebate program (MDRP). The notice indicates it will rely on the Food and Drug Administration’s determinations to allow a drug to be labeled as demonstrating abuse-deterrent properties to determine whether a drug is excluded from the definition of a line-extension drug.


As context, earlier this year the President signed the Comprehensive Addiction and Recovery Act (CARA) into law. One of CARA’s provisions required that abuse-deterrent drug formulations be exempted from the definition of a line extension drug, with the aim of allowing these drugs to receive a lower mandatory MDRP rebate and incentivize their production.


View the program notice here.
CMS Releases Medicaid COB/TPL Handbook
Recently, CMS published a comprehensive handbook on Medicaid Coordination of Benefits and Third Party Liability (COB/TPL). The handbook serves as a comprehensive resource for Medicaid COB/TPL policy and includes detailed policy information, training presentations, and other information for Medicaid agency staff. The handbook is organized by specific topics within COB and TPL and includes specific statutory references and regulations detailing legal obligations for states and CMS for each topic.


Access the handbook here.
HHS Takes Additional Steps to Expand Access to Opioid Treatment
On November 16, the Substance Abuse and Mental Health Services Administration (SAMHSA) made an announcement that nurse practitioners (NPs) and physician assistants (PAs) could begin taking the 24 hours of required training to prescribe buprenorphine, a form of medication-assisted treatment (MAT) for opioid use disorders. Beginning in 2017, NPs and PAs will be able to prescribe buprenorphine to up to 30 patients, a practice only previously granted to physicians. In the following year, those who prescribe at the 30-patient limit will be able to apply for a waiver to prescribe buprenorphine to 100 patients. SAMHSA’s recent announcement serves as follow-up to its July rule, which allowed eligible practitioners to obtain a waiver to prescribe buprenorphine to 275 patients (up from the previously permitted 100).


All training for NPs and PAs will be available at no cost through the SAMHSA-funded Provider’s Clinical Support System; updates on both training information and the waiver application will be available at
this site. A press release on these new measures is available here.
CMS Announces $4 Million in Funding to Enhance AI/AN CHIP Enrollment
The Centers for Medicare & Medicaid Services (CMS) recently announced a funding opportunity to support outreach strategies aimed at increasing the enrollment and retention of eligible American Indian/Alaskan Native (AI/AN) children in Medicaid and CHIP. The opportunity will favor activities tailored to communities where AI/AN children and families reside, as well as activities that enlist tribal/community leaders and tribal health and social services programs that serve eligible AI/AN children and families. The application is open Indian Health Services Providers; Tribes and Tribal organizations operating a health program under the Indian Self-Determination and Education Assistance Act (ISDEAA); and urban Indian organizations receiving funding under the Indian Health Care Improvement Act (IHCIA).


Letter of intent are due December 14, 2016 and proposals are due January 17, 2016. Awards will be in the form of cooperative agreements, ranging in size from $250,000 to $500,000 over a two-year period.

Hill Update


Congress to Consider Revised Bill on Drug Innovation, Mental Health Reforms This Week
As Congress returns to Washington from the Thanksgiving holiday, they are slated to focus on two issues: passing a short-term continuing resolution to fund the government into early next year, and passing drug innovation legislation. Congress is slated to adjourn on December 16.
Last week, key congressional committees released a new version of drug innovation legislation (21st Century Cures), which was coupled with a package of mental health reforms. The House is expected to consider the
revised 21st Century Cures/Mental Health legislation on Wednesday, and the Senate may vote on the bill by the end of this week. It is largely expected that this package will pass. The revised legislation contains Medicaid-related provisions and offsets, including:
  • Accelerating by one year the policy that would limit Medicaid reimbursement for DME to Medicare reimbursement rates. The policy would take effect on January 1, 2018.
  • Addressing state efforts to identify Medicaid providers terminated by Medicare or another states’ Medicaid programs, including requiring providers in managed care to enroll with the state Medicaid program.
  • Requiring provider directors in fee-for-service and PCCM programs.
  • Directing HHS to complete two studies on institutions of mental disease (IMDs) in Medicaid: on the “in lieu of” provision of the managed care regulation and on the Medicaid Emergency Psychiatric Demonstration.
  • Requiring CMS to issue a state Medicaid Director letter on opportunities to design improvements in care delivery for individuals with serious mental illness.
  • Specifying that children receiving Medicaid-covered inpatient psychiatric hospital services are eligible for the full range of EPSDT.
  • Requiring the use of electronic visit verification systems for Medicaid personal care and home health services beginning January 1, 2019.
  • Directing the HHS Office of Civil Rights to clarify when providers can disclose information on substance use disorder treatment.

In the News


Health Affairs Blog on Vermont All-payer ACO Mode
In a recent post, Health Affairs discusses Vermont’s accountable care organization (ACO) model, describing it as a “transformative” opportunity to move all payers toward a prospective, value-based reimbursement system and foster greater accountability for population health outcomes. During the model’s performance period (2017-2022), the state will add Medicaid long-term institutional services and create a plan for the inclusion of Medicaid mental health and substance abuse services; by 2022, its participation will extend to 70% of all Vermonters and 90% of all Medicare beneficiaries. Through the model, Vermont hopes to increase access to primary care, reduce deaths from suicide and drug overdose, and decrease chronic disease prevalence.
Please find link to article  here.
STAT covers Medicaid Opioid Prescription Limits
In this article, STAT reports on state efforts to discourage the prescription of addictive pills to Medicaid beneficiaries – a population that is prescribed opioids at twice the rate of the rest of the population and is 3-6 times more likely to die of an overdose. In the past year, 22 states responded to these trends by either adopting or toughening prescription limits. As of today, a total of 46 Medicaid programs have put in place prescription caps, 45 require prior authorization, 42 need proof that patients meet medical criteria to receive opioids, and 32 allow the drugs only after patients have exhausted other options. The article notes that while these limits have been endorsed by many, other experts worry what these restrictions will mean for patients who require prescription pain medication.
Please find link to article  here.
HHS Highlights CMS Approval of Michigan SPA to Leverage CHIP Funding for Lead Abatement
On November 14, CMS approved a Michigan State Plan Amendment (SPA) that uses federal and state funding to expand lead abatement activities in the impacted areas of Flint and other areas in Michigan. This effort, approved through an existing authority in law called a CHIP “Health Services Initiative” (HSI), will allow Michigan to coordinate and target lead abatement services to eligible homes to ameliorate all lead risks, using approximately $24 million per year. Such risks include:
  • The permanent removal, or enclosure, or encapsulation of lead based paint and lead dust hazards from an eligible home;
  • The removal and replacement of surfaces or fixtures within the eligible home;
  • The removal or covering of soil lead hazards up to the eligible home property line;
  • All preparation, lab sampling analysis, clean up, disposal, and pre and post-abatement paint, dust, soil and clearance testing activities associated with such measures including pre and post-water sampling; and
  • Training to ensure there is a sufficient qualified workforce to complete the lead abatement activities.
Read a press release here.


Seattle News Outlet Covers Washington State Report on Prescription Drug Costs
A new report issued by the Washington Health Care Authority calls for new measures to reign in prescription drugs costs in the state, reports a Seattle local news station. Addressing a request by lawmakers to slow the rising cost of drugs purchased by taxpayer funded programs, the report promises exploration of additional drug rebates (i.e., broader access to the 340B Drug Discount Program), multi-state purchasing consortia/pools, and value-based payment models, as well as increased drug price transparency, strategic use of state consumer protection laws, and drug importations from Canada to the U.S. Well-received by lawmakers, the report represents a step to ameliorate current market failures and build a sustainable budget for the state.


Please find an article here.


Take Note


Kaiser Family Foundation Fact Sheet: What Might a Trump Administration Mean for Medicaid?
This fact sheet from the Kaiser Family Foundation examines key questions around the potential changes President-elect Donald Trump and the next Congress may seek to make in Medicaid. It considers multiple forms a repeal of the ACA could assume and potential structural changes to Medicaid, including through a block grant or a per capita cap. It also reflects on the impact such a repeal could have on coverage, financing, delivery system and payment reform, and access to care, particularly for complex and vulnerable populations. The fact sheet also discusses how executive powers can be used to make changes to Medicaid without congressional action, including new regulations and Medicaid waivers.
Please find link to fact sheet  here.

Commonwealth Fund Report on Supplemental Payments and Value-based Purchasing

This new Commonwealth Fund report reviews state and hospital reliance on supplemental payments, while considering how the funds might be effectively redeployed to support value-based purchasing (VBP). It finds that reforming how supplemental payments are financed and distributed is appropriate given state efforts to move to VBP, managed care growth, and new federal rules and oversight. The report maintains that despite many challenges, several options exist to align payments with states’ efforts to promote high-quality, cost-effective care, ensure fair payment rates, and support safety-net hospitals.


Please find link to report here.


Surgeon General Releases Report on Addiction
Recently, Dr. Vivek Murthy released the first-ever Surgeon General’s report on substance abuse. The report notes that widespread abuse of alcohol and drugs affects a reported 85 million Americans (2015), taking a tremendous toll on individuals, families, and neighborhoods as well as our national economy. It is estimated that the yearly economic impact of substance misuse is $249 billion for alcohol misuse and $193 billion for illicit drug use. The report calls on all actors to seize opportunities created by improved health care affordability, criminal justice reform, and advances in clinical research to secure access to effective prevention and treatment services. In doing so, it aims to galvanize the public, policymakers, and health care systems to combat substance abuse with the same commitment and fervor employed to fight tobacco use, suicide, HIV, and domestic abuse.


Please find the report here.



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