NAMD sends Letter on Duals; HHS Releases Primary Care Payment Rules; Hill News
From the NAMD Desk
NAMD sends letter to Sec. Sebelius on Medicare-Medicaid "duals." On May 9, 2012, NAMD sent a letter to U.S. Department of Health and Human Services Secretary Sebelius in support of HHS' duals demonstration activities and ongoing work with all states to improve care coordination for this population. On May 10th, NAMD convened a "Duals Fly-In," bringing Medicaid directors and project leads from states working on duals demonstration proposals to D.C. to meet with senior CMS Medicare staff and other federal policymakers. Throughout the daylong series of meetings, states shared information about the Medicaid practices they hope to build on to better serve the dually eligible population. For more information, contact Andrea Maresca [email@example.com].
NAMD releases new Medicare data access paper. NAMD recently released a new paper, "Advancing Medicare and Medicaid Integration: An Update on Improving State Access to Medicare Data." This is the second in our Working Paper Series on ways to improve integration between the programs. The recent paper builds on the issues and recommendations included in NAMD's October 2011 working paper, "Advancing Medicare and Medicaid Integration: Policy and Operational Challenges for State Access to Medicare Data. NAMD will use these - and future documents in this Working Paper Series - in our ongoing efforts to address the challenges that states experience in accessing Medicare data for various purposes. For more information, contact Andrea Maresca [firstname.lastname@example.org].
HHS releases Medicaid primary care payment rule. HHS released a proposed rule on "Payments for Services Furnished by Certain Primary Care Physicians. The rule implements provisions of the Affordable Care Act which set a minimum reimbursement level for certain Medicaid primary care services. Beginning January 1, 2013 and ending December 31, 2014, reimbursement for Medicaid primary care services delivered by eligible Medicaid providers must be at least the Medicare rate for such services. The rule describes the 100 percent federal match for the difference between the July 1, 2009 Medicaid rates and Medicare rates in calendar years 2013 and 2014. The proposed regulation discusses several aspects of the payment enhancement process, including:
- Eligible provider types and how that eligibility will be documented;
- Implementing the payment bump in managed care; and
- Reporting requirements and program integrity elements, particularly as they relate to managed care implementation.
CMS estimates the temporary increase would cost $11.2 billion. However, this assumes Medicare physician fee reimbursement reductions will take effect even though historically they have not. There is a 30-day public comment period, which closes June 11th.
HHS announces first Health Care Innovation awards. On May 8th, HHS Secretary Kathleen Sebelius announced the first batch of organizations to receive Health Care Innovation awards. The Center for Medicare and Medicaid Innovation within CMS will administer the $122 million in awards. This first round will support 26 projects nationwide that seek to save money, deliver high quality medical care and enhance the health care workforce. The new projects include collaborations of leading hospitals, doctors, nurses, pharmacists, technology innovators, community-based organizations, and patient advocacy groups, among others, located in urban and rural areas that will begin work this year to address health care issues in local communities. States with awardees include: California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, and Washington.
House passes reconciliation, sequestration. On May 10th, the House approved by a vote of 218-199, the "Sequester Replacement Reconciliation Act," (H.R. 5652). The bill would cut food stamps, federal workers' benefits and other domestic programs to avoid scheduled reductions in defense spending. The measure is designed to cut about $310 billion in spending to replace automatic defense-spending reductions otherwise scheduled to take effect in January. The following are some of the key health-related proposals included in the measure with the estimated 10-year savings:
- Repeal State Exchange Grants, rescinding unobligated funds (~$14 billion);
- Repeal Maintenance of Effort in Medicaid and CHIP currently in place (~$2.1 billion);
- Repeal the increase in the federal Medicaid funding cap and match rate for territories, bringing the match rate back down to 50% (~$6.3 billion);
- Adjust the provider tax threshold down to 5.5% (threshold is 6% under current law) (~$10-11 billion); and
- Rebase Disproportionate Share Hospital (DSH) payments (~$4.1 billion).
While lawmakers from both parties have said the reductions scheduled to take effect January 1, 2013, should not be allowed to take effect, there is widespread disagreement on how to avert it. Senate Majority Leader Harry Reid (D-NV) has said he does not plan to schedule time for consideration of the House-passed bill. However, the House measure offers a window into that chamber's likely position during future discussions about averting the sequestration.
Senators issue call for program integrity ideas. On May 3rd, a bipartisan group of Senate Finance Committee members issued a call for ideas for solutions to improve federal efforts to combat waste, fraud, and abuse in the Medicare and Medicaid programs. The letter, signed by Finance Committee Chairman Max Baucus (D-MT), Ranking Member Orrin Hatch (R-UT) and Senators Charles Grassley (R-IA), Tom Carper (D-DE), Ron Wyden (D-OR), and Tom Coburn (R-OK), went to interested health care stakeholders. It requests a cost-benefit analysis when possible and identifies the following general categories as those for which they seek input:
- Program Integrity Reforms to Protect Beneficiaries and Prevent Fraud and Abuse;
- Payment Integrity Reforms to Ensure Accuracy, Efficiency and Value; and
- Fraud and Abuse Enforcement Reforms to Ensure Tougher Penalties Against Those Who Commit Fraud.
Submissions are due to the committee by June 29th. Committee staff indicated they will then summarize the proposals and issue a public report. NAMD is evaluating this latest request in light of the Association's recent paper on program integrity issues and our ongoing work with federal policymakers.
Lawmakers grill CMS, states on alleged Medicaid fraud issues in MN, TX, & NY. On April 25, a joint hearing of the House Oversight and Government Reform subcommittees on regulatory issues and health care, focused on different situations of alleged fraud in the Medicaid program. Federal and state officials testified about the situations and possible solutions regarding potential fraud in the Minnesota Medicaid managed care program, dental services in Texas Medicaid, and New York's personal care services program.
Lucinda Jesson, commissioner for the Minnesota Department of Human Services, testified about the alleged fraud in her state, focusing specifically on a $30 million payment to the state from a managed care organization in the state. Ms. Jesson said that in recent months, the department is more aggressively pursuing competitive bidding in the Medicaid program, has instituted new disclosure and reporting procedures, and put a cap on contractor earnings in public health care programs.
The potential fraud in the Minnesota Medicaid program is also the subject of an investigation by Senator Charles Grassley (R-IA). In testimony to subcommittee members, Grassley said, "This appears to be another example of the old game of states pushing the bounds to maximize federal dollars received while minimizing state dollars spent." He went on to add that it, "leaves me gravely concerned that accountability is severely lacking..." Grassley suggested that states should be required to know the medical loss ratio (MLR) of all managed care organizations they contract with and it should be specific to Medicaid beneficiaries. According to Grassley, the MLR should be clearly defined by CMS and consistently be implemented across all states. However, he stopped short of advocating for a federally defined minimum threshold for the MLR. Grassley's investigation is ongoing and could lead to proposed legislation on the topic.
Subcommittee members pressed federal and state officials on the lack of oversight and their plans to avert future cases. CMS director of the Center for Medicaid and CHIP Services Cynthia Mann testified that the HHS Inspector General and the Department of Justice are investigating all of the situations discussed at the hearing. Mann also told the Members that anti-fraud efforts have been and are continuing to be strengthened under the health care law and other efforts. She said the agency is working toward "data-driven decision making" with newly expanded data sets. She added that, "CMS is also working to strengthen the program through active engagement with states through initiatives such as our Medicaid Integrity Institute and our Value Based Purchasing Collaboration and the resources provided through the new Medicaid.gov website."
In the News
CA loses attempt to restructure FQHC pay system. Earlier this year California officials said they wanted to introduce a new payment methodology for the state's federally qualified health centers and rural health clinics. The CA Assembly and Senate budget subcommittees rejected the proposal last month. According to Toby Douglas, director of the Department of Health Care Services, the state's community clinics would have come out ahead financially under the plan. "We're proposing a new payment methodology for our clinics that moves to a bundled payment, a capitated amount per member per month for each of the individuals who are enrolled in their clinic. Then all the rules would be waived on how they provide care. So they could now provide care in the most cost-effective manner, whether that is group-based visits or e-consults or phone-based." ("State Loses Bid To Cut FQHC Rates, Restructure Pay System," California Healthline, May 10, 2012).
SC Medicaid joins value-based purchasing group. South Carolina Medicaid became the second Medicaid agency in the nation to participate in Catalyst for Payment Reform's (CPR) efforts. The health care purchaser-led organization provides thought leadership to and coordination among both private and public health care purchasers on health care payment reform issues. South Carolina Medicaid joins Ohio Medicaid, CalPERS (California Public Employees' Retirement System), the Group Insurance Commission of Massachusetts, and Ohio PERS as a CPR purchaser.
OR Launches Coordinated Care Organizations. CMCS has approved parts of Oregon's plan to launch so-called Coordinated Care Organizations (CCOs) modeled off Medicare's Accountable Care Organizations (ACOs). This plan incorporates optional state plan programs that offer enhanced FMAPs and other incentives to reform the state's Medicaid program with the goal of increasing care coordination as well as producing cost savings. "We don't think there's anyone else out there has done this," says Bruce Goldberg, director of the Oregon Health Authority, which oversees the state Medicaid program. "We're going to be held accountable for getting results. And we'll be holding our delivery system accountable." ("White House makes $1.9 billion bet: Oregon can fix health care," Washington Post, May 4, 2012).
VT, MN test delivery system and payment reforms. GovernmentHealthIT recently covered Vermont's plans to move towards a universal single-payer system over the next several years. "It would be publicly administered through our department, and on our back end we would figure out what we charge to Medicaid, what to charge Medicare, and what goes through private financing," said Mark Larson, commissioner of the Vermont Department of Health Access.
GovernmentHealthIT also covered Minnesota's plans to expand Medicaid to more categories of individuals over time and the promotion of medical home models. The states has about 20 percent of clinics certified as medical homes. The state is also examining how to build in an accountable care organization (ACO) with the Medicaid program to improve quality. "It is a way for us to contract more directly with providers than through managed care for the Medicaid program," said Scott Lietz, assistant commissioner for the Minnesota Department of Health. "It is a change from the past and alignment at the provider level to programs in the commercial market." ("Vermont, Minnesota test health delivery, payment reforms," GovernmentHealthIT, May 4, 2012).
OH ramps up Medicaid managed care. The state of Ohio is streamlining its existing Medicaid program to five statewide health plans and three regions starting in January 2013, instead of 38 health plans in 10 regions currently. Ohio Medicaid Director John McCarthy said the state has built measures into the contracts with the five providers with guarantees of access time and that access should be easier in the managed care program. "There's a perception that managed care companies just deny services," he said. "I think that's an old perception. The managed care plans are just an extension of the Medicaid program. They work for me." ("Big changes coming at Ohio Medicaid," Cincinnati.com, May 2, 2012).
KS submits waiver to reshape Medicaid program. Kansas announced April 27 that the state submitted a formal waiver request to CMCS asking permission to begin the KanCare Medicaid reforms. The application is the first of two. It asks CMS to "support implementation of the state's integrated system of care, KanCare, by 2013." A second application to be filed later will ask for flexibility by making the federal government's portion of Medicaid a block grant. ("State seeks Medicaid waiver from feds," Topeka Capital-Journal, April 27, 2012).
NH hospitals call for Medicaid intervention. Several New Hampshire hospitals are requesting federal intervention to halt the state's Medicaid plan. The hospitals claim the plan violates Medicare law by reallocating $130 million in federal Medicaid reimbursement funding to balance the state budget without analyzing the new plan's impact on access to care for Medicaid patients. State Medicaid Director Katie Dunn said that the hospitals have "mischaracterized" the funding plan. She went on to say the state has been working with CMS to document access to care measurements within the state. ("NH hospitals call for Medicaid intervention," The Dartmouth, May 2, 2012).
InsideHealthPolicy highlights NAMD's Medicare data white paper. A story in the health care trade publication InsideHealthPolicy covered the release of NAMD's new white paper, Advancing Medicare and Medicaid Integration: An Update on Improving State Access to Medicare Data. IHP highlighted pieces of the paper, including that, "Despite trends that Medicare beneficiaries are increasingly enrolling in Medicare Advantage plans, to date, CMS' Medicare data sharing efforts with states have focused largely on fee-for-service claims and a limited subset of Medicare Part D prescription drug plan data."
InsideHealthPolicy quotes NAMD response to new 1115 waiver process. NAMD staff spoke to InsideHealthPolicy regarding CMS' recently issued guidance regarding new transparency requirements for Section 1115 waivers. Andrea Maresca, NAMD's Director of Federal Policy and Strategy, told IHP that there were no real surprises in the letter after the final rule was published in February. But Maresca said that although the states now have extra work on their end, the rule has not removed the uncertainty from the process as states still do not know what might arise during the CMS review process.
NAMD's Matt Salo weighs in on CHIP enrollment funds. NAMD's Executive Director Matt Salo recently spoke with Politico about a provision approved by the House Energy and Commerce Committee that would rescind about $400 million earmarked for the CHIP enrollment bonus program. "In Congress and across the country, there are philosophical differences about whether public programs should be available to everyone with as little effort as possible," NAMD's Matt Salo said. "And there are others who believe they should be made available, but don't beat down their doors to force it on them." It's a cost states have to weigh, he said. The provision is part of a $115 billion package of health care savings included in the reconciliation proposal currently moving through that chamber. ("GOP: Cut state bonuses for children's health care," Politico, May 1, 2012).
Other Items of Interest
Article claims cost shifting from Medicaid to Medicare. A recent article in Health Affairs highlighted new research on the variation in state spending on individuals dually eligible for Medicare and Medicaid. Using state-level data on dual eligibles under age sixty-five, this study found support for the hypothesis that some states seek to shift costly health care services for this group out of state-run Medicaid programs and into the federally funded Medicare program -- for example, replacing nursing home care with hospital care. The article concludes by saying more needs to be done to better coordinate care for this population. ("State Spending On Dual Eligibles Under Age 65 Shows Variations, Evidence Of Cost Shifting From Medicaid To Medicare," Health Affairs, May 2012).
NCSL releases state budget update. The National Conference of State Legislatures (NCSL) released "State Budget Update: Spring 2012" report. The 50-state data report shows that revenue performance remains positive, expenditures in most states are stable and few states have faced mid-year budget shortfalls in fiscal year (FY) 2012. Twenty-one states predict by 2013 to bring in the amount of tax revenue that they did before the recession started. However, some states reported it will take at least three years to return to their peak revenue collections. According to NCSL's analysis nine states had to close gaps for their current 2012 budgets as they began work on their 2013 budgets. For 2013, 34 states had no budget gaps at all, while 16 states and Washington, D.C. have projected shortfalls totaling more than $16 billion.
Mark Your Calendar
Save the date for NAMD's 2012 fall meeting: October 28-30, 2012, Crystal City, Marriott, Arlington, VA.