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In this week’s newsletter we cover ACE Kids legislation, Managed Care Issues, Zika, Opioid legislation, and Value-based purchasing.

August 2, 2016
From the NAMD Desk

NAMD Weighs in on House ACE Kids Legislation

Today, NAMD provided comments to the House Energy and Commerce Committee on its updated version of the ACE Kids Act, which would create a new health home state option in Medicaid for children with medical complexity. The letter identifies how the pediatric health home approach proposed in this latest Energy and Commerce Committee’s discussion draft has greater potential for aligning with state Medicaid delivery system and payment reforms that are underway as compared to the previous version and related proposals under consideration. Previous versions of the ACE Kids Act would have created a separate and new delivery system for children with medical complexity in Medicaid that placed children’s hospitals at the center of their care.


View the letter here.


NAMD Engaging on Medicaid Managed Care Issues
Over the past several weeks, NAMD has worked with Directors and their senior staff to elevate with CMS key implementation issues posed by the final Medicaid managed care rule, particularly related to the rule’s Institutions for Mental Diseases (IMD) and “in lieu of” services provisions and its network adequacy and access to services requirements. In particular states identified operational challenges with the rule’s policy to limit the permissible monthly payment for stays in an IMD facility. States also remain highly engaged in learning how their peers are evolving their network adequacy reviews and the contracting requirements with their health plans as well as how to set appropriate expectations based on the provider type and service category.


In This Issue

NAMD Fall Meeting
Nov. 6-8, 2016

Information and registration



Reg Update


CMCS Issues IB on Managed Care Pass-Through Payments

On July 29, the Centers for Medicare and CHIP Services (CMCS) issued an informational bulletin providing guidance on the use of new or increased pass-through payments in Medicaid managed care. In the bulletin, CMCS reiterates provisions in the final Medicaid managed care rule at 438.6(c) and (d) prohibiting directed payments in managed care, barring three exceptions, as well as the rule’s requirements that pass-through payments to hospitals be phased down over the next decade and that such payments to physicians and nursing facilities cease after five years. CMCS provides its rationale for this policy in the bulletin, as well.

CMCS goes on to note that states which seek to create new pass-through payments or increase existing payments after July 5, 2016 are behaving in a manner inconsistent with regulatory and statutory requirements. CMCS states that it plans to address this issue in future rulemaking, such that pass-through payments throughout the transition period of 5 years (for physicians and nursing facilities) or 10 years (for hospitals) are linked to the amounts in place on July 5, 2016.
Additionally, CMCS outlines its planned process for monitoring pass-through payments throughout the transition period, specifically the requirement that states detail their pass-through payments in the rate review and certification process. CMCS expects states to include:
  • A description of the pass-through payment;
  • The amount of the pass-through payments, both in total and on a PMPM basis;
  • The network providers receiving pass-through payments;
  • The financing mechanism for the pass-through payments; and
  • The amount of pass-through payments made to providers in previous years.
CMS will also work to verify that pass-through payments comply with specific sections of the rule, including 438.4(a), 438.6(d) regarding the phase-down of hospital payments, and 433.53(c)(2) regarding receipt of payment not being conditioned on providers entering into or adhering to IGT agreements.
Read the guidance here.


CDC Issues New Zika Screening Guidance for Pregnant Women
On July 25th, the CDC released modified guidance on Zika, urging providers to more aggressively screen pregnant women for the virus. Whereas before Zika testing was recommended for pregnant women only if they or their sexual partner had traveled to an area where the virus was actively spreading and/or they demonstrated symptoms, the CDC now recommends that all pregnant women be tested to account for the possibility of asymptomatic transmission. The recommendations coincide with growing concerns that Zika could reach the continental United States by summer’s end, as well as new evidence surrounding the applicative potential of DNA testing technology: According to the CDC, physicians now have a two-week window to screen for possible Zika exposure through a DNA-based test known as PCR, as opposed to the previously believed seven days.


CMS Announces Mailbox for Medicaid Mental Health Parity Rule Questions
On July 21, the Centers for Medicare and Medicaid Services (CMS) announced the availability of a mailbox dedicated to collecting questions from states, providers, and other stakeholders around implementation of the final Medicaid mental health parity rule. Submitted questions will help inform the types of technical assistance resources CMS will make available beginning fall of this year.


Submit your parity questions to the CMS mailbox at


CMCS Bulletin Addresses Medicaid, FFM Coordination
On July 25, the Center for Medicaid and CHIP Services (CMCS) published an informational bulletin on federal requirements around coordinated eligibility and enrollment determinations across Medicaid, CHIP, and the Federally Facilitated Marketplace (FFM). The bulletin reiterates existing policy on Medicaid-FFM interactions, including the delineation of state and federal responsibilities in FFM assessment vs. determination states under various eligibility scenarios. The bulletin also makes suggestions for states on methods to streamline these processes and interactions to reduce administrative burden on both the states and their federal partners.


CMS Pharmacy Notices Address Managed Care Utilization Reporting Issues
On July 21, the Centers for Medicare and Medicaid Services Division of Pharmacy (CMS DOP) issued a
state technical contact program notice and a
participating manufacturer program notice discussing managed care drug utilization reporting for purposes of the Medicaid drug rebate program (MDRP). The notices review statutory changes made by the ACA requiring that states collect MDRP rebates for drugs dispensed to beneficiaries enrolled in Medicaid managed care plans – thought the statute does not require the plan make a payment for the drug prior to the rebate accruing.


To reflect this statutory change, CMS in the preamble to both the final Medicaid covered outpatient drug rule and the final Medicaid managed care rule that states and plans should report drug utilization data based on the quarter in which the drug is dispensed (the date of service) rather than the quarter in which the plan pays the claim (the paid date). States have indicated to CMS that such a distinction is administratively complex to implement, but CMS clarifies in the program notice that statutory requirements mandate this distinction. However, in light of the operational concerns, CMS indicates it will not enforce the date of service reporting requirement until
July 1, 2017.


CMS goes on to discuss persistent problems in states verifying the accuracy of reported quarterly drug utilization data, which can lead to rebate disputes with manufacturers. CMS encourages states to put systems in place to improve the validation of their drug utilization data.


CMS Announces $42 Billion in Program Integrity Savings
On July 20, the CMS Center for Program Integrity (CPI) announced that CMS’s work on reducing fraud and improper payments in Medicare and Medicaid saved nearly $42 billion from October 1, 2012 through September 30, 2014. CPI’s analysis indicated that each dollar invested in Medicare program integrity activities over this period generated a return of $12.40 for the program, as well. The bulk of these savings, roughly 74%, were generated via preventive measures rather than the “pay-and-chase” retroactive program integrity activities model.


Read a CMS blog post discussing this topic here.

Hill Update


Congress is currently in recess and will return after Labor Day.
President Signs Opioid Legislation into Law
On July 22, President Obama signed S. 524, the Comprehensive Addiction and Recovery Act, into law. The legislation passed Congress without dedicated funding, which will be left to the budget process that will be taken up upon the return from summer recess.

In the News


NAMD Director Validates State Medicaid Focus on LTC Financing Issues
Kaiser Health News on August 1 honed in on the pressures presented by the growing demand and need for Medicaid long term services and supports. The KHN article discusses that as the increasingly higher proportion of the U.S. population become senior-age, the costs imposed by elderly care on the program are reaching unprecedented heights: by 2026, it is anticipated that as much as 50% of federal Medicaid spending could be spent long-term services and supports. Intensifying the problem is the growing number of middle-class seniors who deplete their savings or transfer their assets to others so they can qualify for Medicaid, as they find they can no longer afford policies they purchased long ago.


NAMD’s Executive Director Matt Salo told KHN that, “State Medicaid directors are closely watching as long-term care spending takes up larger shares of their budgets and squeezes out other programs…It makes up a huge portion of the entire budget and it’s growing … It is absolutely not sustainable.”


Please find the article  here.


Stateline Reports on Financial, Consumer Choice Trends Impacting Medicaid LTSS
On July 18, Stateline published a blog post titled “Money, Personal Preferences Push States on Long-Term Care.” The post discusses a variety of strategies states employ to allow Medicaid beneficiaries to remain in their homes and communities while receiving long-term services and supports. Highlighted approaches include Miller Trusts, which allow beneficiaries to set aside funds for certain expenses and are not counted towards Medicaid income eligibility requirements, as well as state resource centers on aging and compensation for family members providing beneficiary care.


Demographic trends throughout the nation and the aging Baby Boomer population pose a substantial challenge for state Medicaid programs which offer LTSS. NAMD Executive Director Matt Salo is quoted on this topic. “The impact is going to be huge,” he said. “While the face of Medicaid is pregnant women, kids and low-income working families, that’s not where most of the money is going.”

Read the post.

Take Note


Foundations Support Roadmap for States on Medicaid Coverage for Social Interventions
The Milbank Memorial Fund and the New York Health Foundation jointly supported the development and issuance of a roadmap to provide guidance to state policymakers about when and how states can use Medicaid to facilitate access to social services. The roadmap examines the legal authorities upon which policymakers can rely to extend Medicaid coverage to social interventions, while providing examples of how Medicaid can be an important component in the critical work of improving the health of populations. The four specific areas of social support services that are covered in the brief include: 1) Linkages to social support programs that can provide assistance with food, rent, child care, etc.; 2) Stable housing services, including assistance buying a home, making home repairs, etc.; 3) Employment and job security services; and 4) Peer and community supports.


Please find the brief here.


Report Examines Usability of Commercially Available Mobile Applications
Studying patients who use popular and well-rated mobile apps to manage diabetes, depression, and caregiving, the Commonwealth Fund’s new report explores the potential of new technologies to help patients with chronic conditions, as well as general challenges posed by connecting vulnerable patients with the information and tools they need. The report uncovers that while the apps provided patients with reminders and education about caring for their conditions, the manual data entry requirements were too cumbersome, and none of the apps had simple interfaces with large buttons and easy-to-follow instructions and navigation. With this evidence, Commonwealth recommends that app developers engage a more diverse set of patients in the design and testing of their products (especially individuals with low levels of health literacy).


Please find report here.


National Academies Report Analyzes Incorporation of Social Risk Factors into Medicare Payment
Recently, the National Academies of Sciences, Engineering, and Medicine, on behalf of the HHS Office of the Assistant Secretary for Planning and Evaluation, published the third in a series of five reports on the identification of social risk factors in Medicare beneficiaries and how to account for these risk factors in making payment policy. This third report focuses on this payment aspect. The report identifies five domains of risk factors that could be applied to Medicare’s payment programs:
  • Socioeconomic position, with key indicators including income, education, and dually eligible Medicare-Medicaid status;
  • Race, ethnicity, and cultural context, with key indicators including race and ethnicity, language, and nativity;
  • Gender;
  • Social relationships, with key indicators including marital and partnership status and living alone; and
  • Residential and community context, with key indicators of neighborhood deprivation, urbanicity, and housing.
The report suggests that these indicators could be incorporated into Medicare’s value-based purchasing (VBP) initiatives in the relatively short term.


Access the report here.

Medicaid Director Position in New Hampshire
The New Hampshire Department of Health and Human Services’ Office of Medicaid Services is undergoing a period of significant transformation through the implementation of a new delivery system reform incentive payment waiver to promote capacity building and integration of the state’s behavioral health system, planning for the integration of long-term supports and services into its existing managed car program and the eventual re-procurement of the managed care program, modernizing a certified Medicaid Management Information System, implementing a new substance misuse disorder benefit for the entire Medicaid population, and developing population health programs with senior management across the department.
There is now an exciting opportunity for a highly motivated and energetic individual to join the executive leadership team as the Director of the Office of Medicaid Services to lead and sustain this transformation by managing the Office’s programs and services, including Medicaid Policy, Clinical Operations, Dental Services, Long Term Supports and Services, Managed Care, and certain designated receiving facilities.


To view full description and apply, please visit  state jobs.



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