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This week we cover ACE Kids legislation, all-inclusive care for the elderly, HHS funding to target Zika, home care, and NGA released Medicaid Transformation Toolkit

NAMD Update

August 16, 2016
From the NAMD Desk

NAMD Comments on New Senate Version of the ACE Kids Act

Last week, NAMD sent a letter to the sponsors of the Senate bill, Advancing Care for Exceptional Kids (ACE Kids) Act, which is legislation that would create new delivery structures for children with medically complex conditions in Medicaid. NAMD’s letter responds to the latest version of the bill, which would create an “enhanced pediatric health home option.” Despite revisions to the legislation, the letter conveys Medicaid Directors’ concern that the bill preserves many of the problematic policies of the original bill, which are misaligned with current Medicaid delivery system and payment reform and would create fragmentation in care delivery. The letter also raises concerns with provisions, which would restructure CMS’ role in certain aspects of state operation of the Medicaid program.


This letter follows up on NAMD’s recent
response to the House Energy and Commerce Committee’s ACE Kids discussion draft. NAMD’s letter on the House legislation noted that the House framework is relatively more consistent with the work of a number of states that are designing and implementing new models of care for children with special health care needs.


For more information on the ACE Kids Act, contact Andrea Maresca.


RECAP: NAMD August All-Director Call
On August 4, NAMD convened our monthly All-Director call, a forum for state directors to exchange key updates and discuss various issues/challenges, including:
  • The status of states’ efforts to comply with new provider re-enrollment requirements;
  • Successful models of pediatric payment and delivery system reform;
  • Intersections between federal Medicaid managed care and mental health parity rules;
  • State experiences with the national technical assistance offerings, including the Innovation Accelerator Program (IAP); and
  • Experiences and questions around the modular approach to Medicaid Management Information System (MMIS)

ED/HHS Host First Learning Collaborative Meeting on Medicaid and School-based Care

In late July, the U.S. Department of Education (ED) and Department of Health and Human Services (HHS) held a meeting with teams from nine states and the District of Columbia on the use of school-based services for Medicaid beneficiaries. Participants included staff from state Medicaid agencies, state departments of education, and school districts. The meeting aimed to build a common understanding of Medicaid and school-based care. It also sought to support states that are exploring a broader use of school-based services in Medicaid as a result of a 2014 change in CMS policy that allows Medicaid to cover services that are delivered to other students free of charge.

In This Issue

NAMD Fall Meeting
Nov. 6-8, 2016

Information and registration



Reg Update


CMS Publishes NPRM Overhauling PACE Programs
Last week, the Centers for Medicare and Medicaid Services (CMS) published notice of proposed rulemaking which would update regulations governing Programs of All-Inclusive Care for the Elderly (PACE). Comments are due October 17, 2016.
The NPRM proposes several changes to PACE, including:
  • Clarifying that PACE programs offering prescription drug coverage are required to comply with Medicaid Part D program requirements;
  • Revising PACE application requirements for expanding into new service areas;
  • Requiring PACE program agreements to include Medicaid capitation rates or the Medicaid rate methodology, to align with state practices in Medicaid managed care;
  • Revising available CMS enforcement actions related to PACE;
  • Revising PACE administrative structure requirements, including PACE employee screening requirements to disallow persons with physical, sexual, or drug abuse convictions to not be employed in a capacity that puts a PACE enrollee at risk;
  • Require that any entities providing services to PACE enrollees under contract with a PACE program comply with all current regulations, including the HCBS services rule; and
  • Revising requirements for initial needs assessments, re-assessments, and care plans of PACE enrollees.
Access the NPRM and read a CMS blog post on the rule.
CMS Publishes NPRM on DSH Payment Calculations
Recently, the Centers for Medicare and Medicaid Services (CMS) published a rule on Medicaid disproportionate share hospital (DSH) payments. The NPRM aims to put in regulation CMS’s existing interpretation of DSH payment limits, which it intends to calculate on the basis of uncompensated care costs for Medicaid-eligible individuals that remain after accounting for payments received by hospitals from Medicare and other third-party payers. Hospital-specific DSH payment limits would thus reflect only hospital costs for Medicaid-eligible patients for which the hospital received no payment from any source, barring state and local government payments for indigent patients.


Access a public inspection version of the NPRM.


LAN White Paper Suite on Population-based Payment Models
The Population-Based Payment (PBP) Work Group of the Health Care Payment Learning & Action Network (LAN) released its white paper suite on PBP models, exploring issues of:
  • Patient attribution: Outlines recommendations that payers and providers can use when making decisions on attribution in their PBP models, focusing on active, intentional identification or self-reporting by patients;
  • Financial benchmarking: Provides a blueprint that can help guide the technical work of establishing, updating, and rebasing financial benchmarks in PBP models, while offering an overview of technical issues that must be addressed;
  • Performance measurement: Describes how to evolve from granular measurement systems of the full continuum of care-those which focus on narrow and specific care processes-to macro-level measurement systems that are focused on outcomes; and
  • Data sharing: Outlines examples of data, with the goal of creating an environment where data follows the patient and is available to all stakeholders (patients, providers, purchasers, and payers) in a timely manner.
Find links to four papers here.


Surgeon General Launches Opioid Pledge Website for Clinicians
On August 12, as part of his national campaign on the prescription opioid epidemic, U.S. Surgeon General Vivek Murthy launched The site provides critical information about opioids, including risks, benefits and clear guidance on how best to prescribe these medications. It also provides clinicians with tools for treatment, as well as stories from providers who are on the front lines of fighting the epidemic.
Find link to website here.
HHS Shifts Funding to Target Zika
Recently, the U.S. Department of Health and Human Services (HHS) announced it will redirect $81 million in funds to support Zika prevention and treatment efforts. The funding comes in absence of additional support from Congress, which was unable to pass a Zika funding package before the summer recess. Current U.S.  Zika cases number over 8,500.


HRSA Publishes NPRM on 340B Dispute Resolution
Recently, the Health Resources Services Administration (HRSA) published a noticed of proposed rulemaking (NPRM) outlining a dispute resolution process for manufacturers and covered entities (CEs) under the 340B drug discount program. The rule would:
  • Create a 340B administrative dispute resolution panel (ADR), comprised of federal employees with 340B expertise. HRSA seeks comment on the size and composition of this panel.
  • The ADR would be empowered to resolve claims by CEs believing they were overcharged by manufacturers, and to resolve claims by manufacturers who believe, after conducting an audit of a CE, that the CE violated 340B rules on diversion of 340B drugs to ineligible patients or is claiming duplicate discounts.
  • All claims must be brought before the ADR within three years within the 340B drug date of sale or payment.
  • Proposes a process for CEs to consolidate multiple individual claims. Consolidated claims may also be made by associations or organizations representing CEs. HRSA indicates it does not have statutory authority to allow associations to make consolidated claims on behalf of manufacturers.
  • The ADR will render its decision to the CE and manufacturer via a draft letter, with 20 days for the parties to respond. The ADR will review responses to the draft letter then issue a final decision, which will represent the conclusion of HRSA’s administrative resolution process.
Access the NPRM.


CMCS Bulletin Discusses Registry, Rate Adequacy for Home Care Workers
On August 3, the Center for Medicaid and CHIP Services (CMCS) published an informational bulletin discussing strategies and options available to states for strengthening the Medicaid home care workforce. The bulletin reviews options for identifying the workforce (both under agency and self-directed models), addressing provider qualifications and basic training, conducting wage analyses, and discusses prior CMS guidance.
Notably for states, CMS writes in the “Wage Analyses” section that, “When developing payment rates for home care services, states should also consider business costs incurred by a provider – whether a home care agency or an individually employed worker – associated with the recruitment, skills training, and retention of qualified workers.” Additionally, CMS makes a direct reference to the Department of Labor’s Home Care rule, with the guidance noting that states should take into account geographic differences in wages within a state and keep in mind any joint-employer obligations the state may have.
Access the bulletin here.


CMS Announces CPC+ Payer Regions, Opens Provider Application Period
On August 1, the Centers for Medicare and Medicaid Services (CMS) announced the opening of the application period for provider practices to participate in the Comprehensive Primary Care Plus (CPC+) initiative, a multi-payer primary care medical home model. Selected practices will begin their participation in January 2017. Alongside the announcement of the application period, CMS also announced the 14 CPC+ payer regions. They are:
1. Arkansas: Statewide
2. Colorado: Statewide
3. Hawaii: Statewide
4. Kansas and Missouri: Greater Kansas City Region
5. Michigan: Statewide
6. Montana: Statewide
7. New Jersey: Statewide
8. New York: North Hudson-Capital Region
9. Ohio: Statewide and Northern Kentucky Region
10. Oklahoma: Statewide
11. Oregon: Statewide
12. Pennsylvania: Greater Philadelphia Region
13. Rhode Island: Statewide
14. Tennessee: Statewide
Read a press release about the announcement.


LAN Publishes Report on Clinical Episode Payment Models
A report published by the Health Care Learning and Action Network (LAN) on August 1 provides high-level recommendations for designing clinical episode payment models. A summary description of the design recommendations for each episode can be found on pages 12-14 of the report.
 The findings are based on the research of the LAN’s Clinical Episode Payment (CEP) Work Group, charged with developing operational and design considerations for elective joint replacement, maternity care, and coronary artery disease. A number of cross-cutting themes have emerged across all three clinical episodes, namely that:
  1. Consumer, patient, and family engagement is critical to driving value-based care;
  2. Accountability in episodes with numerous care team members can be variable and complex (both from a fiscal and quality outcomes standpoint);
  3. Certain model designs hinge on whether implementation is mandatory or voluntary;
  4. The use of historical data to determine the episode price can create challenges for payment and care transformation; and
  5. A robust data infrastructure is critical to an episode payment model’s success.
Read the report.

Hill Update


Congress is currently in recess and will return after Labor Day.
Bipartisan Group of Senators Question CMS’ Medicaid IMD Policy
On August 2, a bipartisan group of 29 Senators wrote CMS Acting Administrator Andy Slavitt calling on CMS to take additional steps under its existing authority to provide flexibility to states to ensure patients have access to evidence-based substance use disorder (SUD) treatments. The letter notes the significant progress CMS has made in the SUD arena over the past several years, but expresses concern that recent CMS rulemaking poses barriers to further progress.


The letter specifically cites the Medicaid managed care rule’s 15-day monthly limit on IMD stays, with the understanding that only American Society of Addiction Medicine (ASAM) Level 4 facilities are eligible for FFP. The Senators question the evidence behind the 15-day limit, and asks CMS to clarify whether the limit is justifiable under the mental health parity law. The Senators conclude by calling on CMS to broaden SUD treatment under its existing authority by removing SUD treatment and facilities from the IMD exclusion.


Read the letter here.

In the News
Modern Healthcare Reports on Stakeholder Reactions to CMS Home Care Guidance
In recently released guidance, CMS reiterates its call that states use Medicaid funds to keep elderly and disabled beneficiaries at home and in community-based settings instead of nursing homes. In the latest guidance, the federal agency also encourages states to establish an open registry of home care workers to make it easier for beneficiaries to find them; outlines qualifications these workers should have; and suggests developing adequate payment rates for home care services. Patient advocates and industry stakeholders have responded favorably to the guidance. Of note for states, some industry stakeholders honed in on the language that indicates states need to consider that low payment rates can impede access to care. At the same time, however, stakeholders are keen to encourage CMS not to completely rule out nursing homes when it is the better option – which it can often be.
Please find article here.


HealthDay Reports on Increase in Neonatal Abstinence Syndrome
Triggered by a national epidemic of opioid painkiller abuse, the number of babies born with neonatal abstinence syndrome quadrupled in the United States between 1999 and 2013, according to new research from the Centers for Disease Control and Prevention. Analyzing data from 28 states, the CDC determined that neonatal abstinence syndrome now hovers around 6 cases per 1,000 live births, up from 1.5 cases per 1,000 live births in 1999. The hardest-hit states are Maine, Vermont and West Virginia, which recorded more than 30 such cases per every 1,000 births in 2013. The CDC’s findings accompany other regulatory and legislative efforts to curb the opioid epidemic, currently affecting nearly 2 million Americans. In July, Congress overwhelmingly passed a bill that is intended to bolster efforts at addiction prevention, treatment and recovery, giving health professionals and police more resources to fight the scourge; funding for the bill remains an issue.
Please find article here.


Tennessean Reports on Rural Primary Care
This month the Tennessean highlighted the structure and activities of the Cumberland Center for Healthcare Innovation, a network of affiliated, independent doctors in small towns and rural counties around that state. CCHI is physician-run accountable health care organization that allows doctors to work with insurance companies and Medicare in contracts that reward better savings. The entity provides significant amounts of data, contracting support and ideas on how to comply with increasingly complex quality standards facing physicians. The article describes CCHI’s goals and what is believed to be the behind the $11.7 million savings over about 30 months.


Please find the article here.


Kaiser Health News Reports on Zika’s Impact on Florida OB-GYNs
At least 15 cases of Zika are reported to have been locally-acquired in South Florida. Previously, all of Florida’s Zika cases in pregnant women have been related to travel outside the continental United States. On August 1, Dr. Tom Frieden, head of the Centers for Disease Control and Prevention, recommended Zika testing for all pregnant women who have traveled since June 15 to the one-square-mile zone in Wynwood and Midtown, Florida where mosquitoes have likely spread the virus locally.
At the end of June, the Florida Department of Health announced the state’s first birth of a child with Zika-related microcephaly. The baby’s mother had gotten Zika outside the United States. The state said it would connect the family to Early Steps, a state- and federally-funded program that provides resources – like speech therapy and other developmental interventions – to children up to 3 years old who are at risk for developmental delays.


Read the  article.

Take Note


CMWF Report Examines Changes in Utilization, Health in Medicaid Expansion States
In this study, Commonwealth researchers survey nearly 9,000 low-income adults in three states that made different choices with respect to Medicaid expansion: Kentucky, which expanded Medicaid eligibility to include more low-income adults; Arkansas, which used federal funding to purchase private plans for low-income adults; and Texas, which chose not to expand Medicaid at all. It finds that between 2013 and 2015, there were dramatic drops in the uninsured rates in both Arkansas (41.8% to 14.2%) and Kentucky (40.2% to 8.6%), but much smaller changes in Texas (38.5% to 31.8%). In Arkansas and Kentucky, it finds that increased coverage is linked with an increased likelihood of having a personal physician (12.1 percentage points); a decreased reliance on the emergency department as a usual source of care (-6.1 points); fewer delays obtaining care because of cost (-18.2 points); fewer skipped prescriptions (-11.6 points); less difficulty paying medical bills (-14.0 points); and an increased likelihood of having a checkup (16.1 points) and a glucose check (6.3 points) in the past year. The study carries significant implications for state debates over whether and how to expand health insurance coverage to low-income adults.
Please find report here.


NGA Releases Medicaid Transformation Toolkit
Recently, the National Governors Association (NGA) released its Medicaid Transformation Toolkit. This toolkit is the end product of the Robert Wood Johnson Foundation’s 18-month-long Medicaid Policy Academy. It provides a guide for how states can design statewide transformation proposals that HHS is likely to approve, focusing on how states can consider building their vision to better inform their proposals for either a Section 1115 waiver or a State Plan Amendment (SPA). In the toolkit, NGA identifies the following elements to ensure approval by HHS and successful statewide transformation: Gubernatorial support, the commitment of adequate resources, the effective use of data, early and meaningful stakeholder engagement, and robust preparation for implementation and monitoring.


Access the toolkit.


Health Affairs Publishes Study on ER use in Medicaid Expansion Populations
In this study,  Health Affairs examines the effect of insurance expansion on emergency department (ED) use in 478 hospitals in 36 states during the first year of expansion (2014). It finds that expansion increased Medicaid-paid ED visits by 27.1%, decreased uninsured visits by 31.4%, and decreased privately insured visits by 6.7%. Overall, however, it determines that total ED visits grew by less than 3% in 2014 compared to 2012-13, with no significant difference between expansion and non-expansion states. According to the study authors, this suggests that expansion did not significantly affect overall ED use.
Please find study here.


Altarum’s Health Sector Economic IndicatorsSM

In their August briefs, Altarum reports that national health spending in June 2016 was 5.2% higher than in June 2015, totaling $3.36 trillion (seasonally adjusted annual rate), and that health care prices in June 2016 were 1.6% higher than in June 2015, the highest rate since December 2014. It also finds that health care added 43,200 new jobs in July 2016, above the 12-month average of 39,700 new jobs per month; in particular, hospital hiring amounted to 17,100.
Please find briefs here.


GAO Analyzes Hospital Uncompensated Care Payments
Recently, the Government Accountability Office (GAO) published a report titled Hospital Uncompensated Care: Federal Action Needed to Better Align Payments with Costs. In this report, the GAO examines various elements of federal support for hospital uncompensated care (UC), looking at the key sources and amounts of federal support for hospital UC costs; the basis for determining hospital UC payments made under Medicaid and Medicare; and the extent to which Medicare UC payments align with hospital UC costs.


GAO found that federal support for hospital UC totals about $50 billion annually, including multiple types of Medicaid and Medicare payments. Medicare’s UC payments, the report discovers, are not well aligned with hospital costs, for two main reasons.
First, payments are based on hospitals’ Medicaid workload rather than actual hospital UC costs. CMS officials told GAO this could result in payments not aligned with uncompensated costs, particularly in states that have expanded Medicaid resulting in fewer uninsured individuals and lower uncompensated costs. In an April 2016 proposed rule, the agency announced that it is considering using hospitals’ actual uncompensated care costs as the basis for making Medicare UC payments. CMS also does not account for hospitals’ Medicaid payments that offset UC when making Medicare UC payments.


HHS agreed with GAO’s two recommendations, which are that CMS 1) improve alignment of Medicare UC payments with hospital uncompensated care costs; and 2) account for Medicaid payments made when making Medicare UC payments to individual hospitals.


Read the report.


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