The NAMD Fall Conference is scheduled November 6-8 at the Hyatt Regency Crystal City in Arlington, VA. Full conference details, an updated agenda, and registration information can be found here. If you have any questions, please feel free to contact Tess Moore.
NAMD Highlights Impact to States from Pending Medicare Part B Increase
On October 5, NAMD released a statement calling for swift resolution to mitigate the impact of pending Medicare Part B premium increases on Medicaid programs. In the statement, NAMD notes that Medicare part B premiums could increase again this year and, like last year, a combination of factors will result in state Medicaid programs paying more than $2.5 billion to cover this cost for those dually eligible for the Medicare and Medicaid programs. NAMD’s Executive Director Matt Salo participated in a Congressional briefing on October 6 on the Part B issue, where he reiterated the points made in NAMD’s statement.
Read the NAMD statement here; and view the Congressional briefing here.
RECAP: October All-Director Call
On Thursday October 6, NAMD hosted its monthly All-Director call. The main issues discussed included:
State policy and operational responses to the U.S. Department of Labor regulations applying minimum wage and overtime protections to home care workers;
Approaches for states’ access monitoring plans and experiences with CMS to advance rate adjustments under the final access monitoring rule;
The types of support states utilized to advance their State Innovation Model (SIM) grant work;
The EpiPen pricing controversy;
Operational challenges with the IMD provisions in the managed care rule;
IRS requirements pertaining to safeguarding federal tax information;
State responses to a new HHS OIG advisory regarding personal care services; and
The impact to state Medicaid agencies from CMS’s final emergency preparedness rule.
NAMD Memo Provides Update on Access Monitoring Rule
NAMD recently published a memo to Medicaid Directors describing the association’s current understanding of CMS’s expectations for states under the final access monitoring rule. The memo describes NAMD’s communications with CMS on the rule, which reveals the following:
CMS is using a standardized question set for states submitting rate adjustments or restructuring SPAs.
CMS is using an informal triaging process for rate adjustment SPAs.
CMS will require states to set specific dates for their fee schedules, even for currently approved rate methodologies, in order to allow for CMS review of rate methodologies, which represents a change in practice for most states.
The memo also outlines state-identified concerns with CMS’s strategy for implementing the access rule, including:
Potential slowdown in routine program administration;
Incongruent expectations for rate adjustment and the access monitoring review plans;
Unfeasible expectations for access analysis for rate adjustment SPAs;
Inequitable standards applied to states and providers around access issues; and
Burdensome requirements for access analysis of federally-mandated rate reductions.
NAMD Memo to Congress Highlights Impact of EpiPen Price Increases on Medicaid
Early last month, NAMD sent a memo to congressional stakeholders providing information on the impact of price increases for the EpiPen allergic reaction medication. EpiPen’s manufacturer Mylan steadily increased the price of the product since acquiring it in 2007, which garnered significant attention from the public earlier this year.
The memo reviews the dramatic price increases for EpiPen and the structure of the Medicaid drug rebate program (MDRP). It then notes that Mylan successfully classified EpiPen as a generic product in the MDRP, despite the product’s approval as a brand drug by the Food and Drug Administration. This classification allowed Mylan to pay lower rebates under the MDRP and avoid the mandatory rebate for price increases outpacing inflation, which applies only to brand products. Legislation extending this rebate to generics was passed in December 2015 and will be implemented by CMS in April 2017. The change will be retroactive to September 2014. As such, Myan’s price increases, which took place from 2007 on, will lock in EpiPen’s price at the September 2014 level for the MDRP.
Recently, CMS announced the availability of an HCBS CAHPS survey. The first of its kind, the home and community-based service (HCBS) CAHPS survey is designed to facilitate comparisons across the hundreds of state Medicaid HCBS programs throughout the country that target different adults with disabilities, including frail elderly, individuals with physical disabilities, persons with developmental or intellectual disabilities, those with acquired brain injury, and persons with severe mental illness. Available for voluntary use as part of quality assurance and improvement activities, the survey includes 3 cognitive screening questions, 9 questions to identify the relevant HCBS services to be asked about, and 15 demographic questions; a 21-item module on experience with employment services is also offered as a separate supplement. The survey can be administered by an interviewer in person or by telephone, and English and Spanish versions of the instrument are available.
HHS OIG Issues New Fraud Advisory on Medicaid Personal Care Services
On October 3, the Health and Human Services Office of the Inspector General (OIG) published an investigative advisory providing detailed anecdotes of beneficiary harm resulting from fraud and abuse in Medicaid personal care services (PCS). The advisory also provides OIG recommendations to CMS to alleviate the situations discussed, including:
Establish minimum Federal qualifications and screening standards for PCS workers, including background checks;
Require states to enroll or register all PCS attendants and assign them unique identifiers;
Require that PCS claims identify the dates of service and the PCS attendant who provided the service; and
Consider whether additional controls are needed to ensure that PCS are allowed under program rules and are provided.
The Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation is announcing refinements to the design of the second year of the Medicare Advantage Value-Based Insurance Design (MA-VBID) model, created to offer clinically nuanced benefit packages aimed at improving quality of care and reducing costs for enrollee populations that fall within certain clinical categories. Beginning January 1, 2018, CMS will open the model test to new applicants and conduct the model test in three new states (Alabama, Michigan, and Texas). With the new refinements to the model, CMS will also:
Add rheumatoid arthritis and dementia to the clinical categories for which participants may offer benefits;
Modify existing clinical categories; and
Change the minimum enrollment size for some MA and MA-PD plan participants.
For each of the selected enrollee groups, participating plans may select one or more plan design modifications from a menu of four general approaches: 1). Reduced cost-sharing for high-value services; 2). Reduced cost-sharing for high-value providers; 3). Reduced cost sharing for enrollees participating in disease management or related programs; and 4). Coverage of additional supplemental benefits.
CMS Clarifies Terminology under Medicaid Drug Rebate Program
On October 5, CMS Division of Pharmacy issued a Medicaid drug rebate program (MDRP) program notice providing clarity on the MDRP’s definitions of “prescribed drug” and “covered outpatient drug.” Notably, a prescribed drug is any drug covered by a Medicaid program and claimed for federal financial participation (FFP), and is not required to meet the definition of a covered outpatient drug. In contrast, a drug which meets the MDRP’s definition of a covered outpatient drug but whose manufacturer does not enter into the MDRP rebate agreement is not eligible for FFP, even if the drug meets the definition of a prescribed drug.
In practice, a prescribed drug which is an over-the-counter product prescribed by a physician, such as insect repellant, compounded product, or a vitamin, would be eligible for FFP if covered by a Medicaid pharmacy benefit, even though these types of products would not be considered covered outpatient drugs.
CMS, AHRQ Announce Awards to Test, Implement New Children’s Quality Measures
Recently, the Centers for Medicare and Medicaid Services (CMS) and the Agency for Healthcare Research and Quality (AHRQ) jointly announced the awarding of $13.4 million in federal funds to six Pediatric Quality Measures Program (PQMP) grantees. These funds are aimed at allowing the grantees to implement and test new PQMP measures, with an aim to assess their feasibility in wider use in the Medicaid program and CHIP.
CMS Issues Evaluation of Medicaid Emergency Psychiatric Demonstration
Recently, CMS released its contractor’s evaluation of the Medicaid Emergency Psychiatric Demonstration (MEPD). This demonstration was designed to test the effects of providing Medicaid reimbursement to adults aged 21 to 64 receiving services in psychiatric hospitals, which would otherwise meet the definition of an Institution for Mental Disease (IMD). Twelve states and 28 private IMDs participated in the demonstration, which lasted from July 1, 2012 to June 30, 2015.
The evaluation found that the MEPD demonstration funded 16,731 admissions of 11,850 Medicaid beneficiaries, with 77 percent of beneficiaries admitted a single time over the course of the demonstration. The average IMD stay was 8.6 days, though the distribution was skewed with some stays lasting several months. Ninety percent of beneficiaries were discharged to their homes.
In general, the evaluation was inconclusive about the effect of the demonstration on key metrics, such as its impact on inpatient IMD admissions and length of stay, general hospital scatter bed admissions and length of stay, ER visits, and ER boarding time. The report also notes serious data limitations which may impact the analysis, and also notes significant policy changes being debated regarding the IMD exclusion, which go beyond the parameters of the MEPD demonstration. The report cautions that the evaluation findings may not be generalizable to this broader context.
CMS Issues Final Rule on Requirements for LTC Facilities
On September 28, the Centers for Medicare and Medicaid Services (CMS) published a final rule reforming the requirements for long-term care facilities participating in Medicare and Medicaid. The rule’s goal is to reduce unnecessary hospital readmissions, improve the quality of care, and strengthen resident safety measures. Changes in the rule include:
Prohibiting the use of pre-dispute binding arbitration agreements for LTC facility residents;
Requiring training of LTC facility staff on caring for residents with dementia;
Ensuring staff members have skill sets and competencies to provide person-centered care;
Improving care planning, in particular discharge planning; and
Updating LTC facility infection prevention and control programs.
CMS Identifies Strategies to Facilitate Transitions from Medicaid to Marketplace
On September 29, the Center for Medicaid and CHIP Services (CMCS) issued an Informational Bulletin (CIB) on ways to facilitate Marketplace enrollment for individuals who are determined ineligible for Medicaid or CHIP. The CIB highlights new enhancements states (both states with federally-facilitated or state-based Marketplaces) can make to the application and collection of data to help with successful enrollment in the Marketplace, particularly for young adults who have high rates of uninsurance. CMCS maintains that improving transitions between insurance affordability programs will help young adults continue to receive the benefits of health coverage into adulthood. To achieve this aim, it recommends that states:
Improve eligibility determination notice language for individuals found ineligible for Medicaid/CHIP. This will make them aware that the Medicaid/CHIP agency will be transferring their application to the FFM, and that the FFM will be sending them a notice with information on applying for coverage and financial assistance through the Marketplace;
Revise the manner by which states collect email addresses on the single streamlined application; and
Gather information from multiple trusted data sources to populate the individual’s application and transmit all information the state has on an individual in the account transfer to the FFM.
CMS Awards Focus on Transitions to Safer Health Care System
Last week, the Centers for Medicare & Medicaid Services (CMS) announced that $347 million would be awarded to 16 national, regional, or state hospital associations, Quality Improvement Organizations, and health system organizations to continue efforts in reducing hospital-acquired conditions and readmissions in the Medicare program. Leveraging the momentum of the Hospital Engagement Networks and Quality Improvement Organizations’ efforts to reduce patient harm and readmissions, the funding announcement coincides with new goals to achieve a 20 percent decrease in overall patient harm and a 12 percent reduction in 30-day hospital readmissions as a population-based measure (readmissions per 1,000 people) from 2014 to 2019. As they expand their focus to include a reduction in all-cause patient harm, these Networks will accordingly develop learning collaboratives for hospitals across a wide variety of issues and reform-areas, such as adverse drug events, catheter-associated urinary tract infections, septic shock, and pressure ulcers.
EpiPen Maker Announces Settlement with Federal Government
On October 7, 2016, Mylan Inc., agreed to the terms of a $465 million settlement with the U.S. Department of Justice (DOJ) and other government agencies that will resolve questions that have been raised about the classification of EpiPen® Auto-Injector and EpiPen Jr® Auto-Injector for purposes of the Medicaid Drug Rebate Program.
The terms of the settlement do not provide for any finding of wrongdoing on the part of Mylan or any of its affiliated entities or personnel. The question in the underlying matter was whether EpiPen Auto-Injector was properly classified with the Centers for Medicaid and Medicare Services (“CMS”) as a non-innovator drug under the applicable definition in the Medicaid Rebate statute and subject to the formula that is used to calculate rebates to Medicaid for such drugs. EpiPen Auto-Injector has been classified with CMS as a non-innovator drug since before Mylan acquired the product in 2007 based on longstanding written guidance from the federal government.
The deal allows Mylan to resolve all potential rebate liability claims by federal and state governments as to whether the product should have been classified as an innovator drug for CMS purposes and subject to a higher rebate formula. In connection with the settlement, Mylan reportedly expects to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. Additional details about the agreement are still be worked out by the federal government and Mylan.
Last week the Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt notified Members of Congress that Mylan Pharmaceuticals increased government charges for EpiPens by 453 percent between 2011 and 2015, not counting rebates. According to the CMS letter, EpiPen unit sales increased only 51 percent over the same time period.
Members of Congress and other stakeholders have focused in recent weeks on Mylan’s misclassification of the EpiPen under Medicaid, allowing the company to offer less rebates. Administrator Slavitt also wrote that the agency is reviewing exception requests and supporting documentation before it can determine whether other drugs have qualified for the narrow exception applied to EpiPen.
Further analysis by the office of Sen. Chuck Grassley (R-IA) shows that the share of Mylan’s EpiPen revenue that came from the government increased from 23.3 percent in 2011 to 53.4 percent in 2015 ($66 million in 2011 to $365 million in 2015). Total Medicaid spending on the pen increased from. Medicare spending increased from $20 million to nearly $122 million over the same period. The Grassley analysis was conducted by comparing newly released information about Medicare and Medicaid costs with the company’s filings with the Securities and Exchange Commission.
House Passes Short-Term CR Funding Federal Government through Early December
On September 28, the House voted 342 – 85 to pass a 10-week continuing resolution (CR) to fund the federal government through December 9. The House vote, which follows a Senate vote of 72 – 26 passing the same measure, averted a government shutdown. Notably, the CR includes $1.1 billion in federal funding to address the Zika virus, along with $500 million to provide flood relief to Louisiana and $170 million to address the ongoing lead contamination of the water supply in Flint, Michigan.
Medical Innovation a Priority for Congressional Leadership in the Lame Duck Session
Comments from both Senate Majority Leader Mitch McConnell (R-KY) and Speaker of the House Paul Ryan (R-WI) indicate that advancing medical innovation legislation under the 21st Century Cures initiative is a policy priority for the remainder of the 114th Congress. Senator McConnell’s comments ranked 21st Century Cures just behind funding the government on his list of priorities for the lame duck session, linking the legislation to President Obama’s precision medicine initiative and Vice President Biden’s “cancer moonshot.” NAMD will keep Medicaid Directors apprised of legislative developments in this area over the coming months.
Stakeholders Write Committees of Jurisdiction on Medicare Part B Premium, Deductible Increases
On September 27, a broad array of stakeholders wrote the leadership and ranking members of Medicare committees of jurisdiction in the House and Senate raising concerns with proposed premium and deductible increases for Medicare Part B in 2017. The letter cites the 2016 Medicare Trustees Report, which projects Part B premiums will increase from $121 per month to $149 per month for 30 percent of Part B beneficiaries, and that Part B deductibles will increase from $166 to $204 for all beneficiaries. The letter expresses concern at the impact of these increases on new and economically vulnerable beneficiaries, and calls on Congress to mitigate the increases.
Arizona Secures CMS Approval of 1115 Waiver Creating AHCCCS CARE Program
On September 30, 2016, CMS approved Arizona’s request to modernize its Medicaid program and continue many of the existing authorities that allows AHCCCS to maintain its managed care model, use home and community based services for members with long term care needs, and keep/pursue other innovations that make AHCCCS a cost effective Medicaid program.
Links to the Waiver Press Release, Waiver Fact Sheet, the CARE Fact Sheet, the CMS Approval Letter, and other documents can be found here.
The Hill Reports on the Federal Government’s Control of Drug Cost Negotiation
Congressional scrutiny of the skyrocketing costs of life-saving EpiPen devices has prompted the question as to whether the federal government should have the power to negotiate the costs of drugs. Top HHS officials, namely Secretary Sylvia Matthews Burwell, maintain that costs could be controlled if Medicare and Medicaid had the authority to compel pharmaceutical companies to lower costs. In Burwell’s words, “One of the most important tools that we could gain would be an ability to negotiate.” In 2014, Medicare spent $87 million on EpiPens, up 1,151 percent since 2007.
Modern Healthcare Reports on Preliminary Approvals for Vermont’s All-payer System
Vermont has received tentative approval from the Obama Administration to establish an all-payer reimbursement system for healthcare providers in the state, beginning January 2017. Under the state’s all-payer proposal, modeled on Medicare ACOs, providers would be paid a global rate based on the patient populations and health outcomes, while fee-for-service (FFS) arrangements would be effectively eliminated. Diverging from Vermont’s previously considered single-payer system (abandoned in 2014 due to cost concerns), this system is expected to resemble that of Maryland, which has an all-payer model covering hospitals; in 2014, Maryland received federal approval to set a budget for each hospital for all patients.
NGA Releases “Housing as Healthcare” Resource for States
On October 3, 2016, the National Governors Association’s Center for Best Practices (NGA Center) released its “Housing as Healthcare” roadmap for states. Developed by the NGA Center through extensive consultation with senior state officials and other national experts, the instrument offers a step-by-step guide for both the immediate need to support those providing housing to high-need, high-cost patients, and the need to support governors interested in the promising of housing as an essential element of improved health and reduced utilization of costly health care services.
NASMHPD Sends Letter to CMS RequestingReconsideration of IMD Demo Extension Decision
On September 30, the National Association of State Mental Health Program Directors (NASMHPD) sent a letter to Acting CMS Administrator Andy Slavitt requesting reconsideration of CMS’s decision not to extend the Medicaid Emergency Psychiatric Demonstration (MEPD). CMS’s Office of the Actuary (OACT) earlier this year indicated the MEPD could not demonstrate budget neutrality, and thus could not be extended.
The letter raises concerns with CMS’s stance on budget neutrality, noting CMS did not initially require participating MEPD states to collect this information. Once budget neutrality information was requested, NASMHPD argues states had insufficient time to respond to the request, resulting in only 5 of the participating 12 states providing this information. Further, one state’s budget neutrality analysis was rejected by OACT for reasons not specified within the informational request.
NASMHPD requests that CMS take a more data-driven and intensive evaluation of the MEPD to more accurately assess its impact on budget neutrality.
NASMHPD Issue Brief: Analysis of Behavioral Health in ACOs
In a recent assessment, the National Association of State Mental Health Program Directors (NASMHPD) investigates the current status and future challenges of integrating behavioral health in accountable care organizations (ACOs). Focusing on 10 states (Oregon, Minnesota, Vermont, Colorado, Utah, Maine, New Jersey, Illinois, Rhode Island, and Massachusetts), it finds that the concept of the ACO model as a means of integrating behavioral and medical services in both the Medicare and Medicaid programs continues to evolve. While interest remains high, the challenges posed by behavioral health workforce shortages, the slow adoption of costly health information technology, the lack of a sustainable funding model for behavioral health services, and challenges around behavioral health measures continue to impact this work.
NASMHPD Compilation of State Behavioral Health Privacy Laws and Regulations
NASMHPD recently compiled state laws and regulations impacting disclosure of confidential alcohol and substance use treatment patient records, as well as Health Insurance Portability and Accountability Act (HIPAA)-related disclosures. NASMHPD believes this resource will prove helpful in legal analyses determining whether state law might be more restrictive than federal law and regulations. In general, the Association finds that that states almost universally either defer within their own laws to 42 CFR Part 2 and HIPAA regulations by incorporation by reference, or have laws less comprehensive than the restrictions on disclosure imposed by 42 CFR Part 2 and HIPAA.
Large Health Plans Announce Creation of National MLTSS Health Plan Association
The MLTSS Health Plan Association was recently formed as an association of managed care organizations (MCOs) that have Medicaid managed care contracts with one or more states and take risk for long-term services and supports (LTSS) provided under Medicaid. Bringing together the knowledge and experience of integrated health plans, the unique understanding of LTSS, and various regulatory changes in Medicaid and Medicare, the new Association’s constituents represent most of the plans receiving capitation from one or more states to provide managed LTSS. Many of these plans also participate in the CMS Financial Alignment demonstration, which aims to align Medicare and Medicaid financing for beneficiaries eligible for both programs.
More information on the new Association, including its board and staff members, can be found here.
GAO Report on State Methods to Link Beneficiaries to Providers
This new report from GAO examines 1) the proportion and characteristics of Medicaid beneficiaries served in fee-for-service (FFS) arrangements, and 2) the federal and state resources available to help Medicaid beneficiaries in FFS arrangements find participating providers and report related challenges. Of the 23 states it reviewed, GAO finds that in 2014:
17 states had online, searchable provider directories; 16 of these included provider information on specialty care physicians and 4 indicated whether primary or specialty care providers were accepting new patients;
23 states operated a helpline; 6 operated these outside of regular business hours; and
9 states included a mapping or location feature with their directories or lists.
These findings carry significant implications for the nearly 40 percent of all Medicaid beneficiaries who receive care through traditional FFS arrangements, particularly aged and disabled beneficiaries and children with special needs who are less likely to be in managed care arrangements.
NASHP Brief on Medicaid-Safety Net Collaborations to Address Opioid Epidemic in Rural Areas
This new brief, which was developed by the Health Resources and Services Administration (HRSA) and the National Academy for State Health Policy (NASHP), details the role HRSA-supported safety net providers play in improving emergency medical intervention. It also explores how healthcare providers and insurers can improve addiction treatment for rural Medicaid enrollees and low-income and vulnerable populations. Informed by key state Medicaid and health safety net leader perspectives, it investigates how states are dismantling barriers to care, while identifying effective strategies to deploy emergency intervention and high-quality treatment services in remote areas. It also examines steps to building sustainable financing structures to support treatment services.
Two Financial Positons Open in Arkansas Department of Human Services
The first is, Deputy Chief Financial Officer (CFO) reports to the DHS CFO and serves on the executive leadership team of the Office of the CFO. The Deputy CFO is responsible for overseeing all financial activities occurring within assigned areas within the department as well as financial policy and long-term financial planning for the divisional or population driven components of DHS within their assigned purview. It is governed by state and federal laws and agency/institution policies.
The second is, an Assistant Deputy Chief Financial Officer. The DHS Assistant Deputy Chief Financial Officer (CFO) reports to the DHS CFO and serves on the executive leadership team of the Office of the CFO. The Deputy CFO is responsible for overseeing all financial activities occurring within assigned areas within the department as well as financial policy and long-term financial planning for the divisional or population driven components of DHS within their assigned purview. It is governed by state and federal laws and agency/institution policies.