MACPAC Makes DSH, UPL Recommendations

Changes could come in Medicaid DSH and UPL payments if new MACPAC recommendations are adopted.

Last week the Medicaid and CHIP Payment and Access Commission released its annual report to Congress, with most of the report focusing on its analysis and recommendations for policy updates involving Medicaid disproportionate share hospital payments (Medicaid DSH) and Medicaid upper payment limit payments (UPL payments).

With Affordable Care Act-mandated cuts in Medicaid DSH payments scheduled to start in FY 2020 – this coming October – MACPAC recommended that these cuts be reduced and phased in over a longer period of time “…to give states and hospitals more time to respond to the cuts…”

MACPAC also recommended that Congress and the administration revise the current methodology for distributing Medicaid DSH money to the states to “…provide a stronger link between the distribution of those allotments and measures of hospital uncompensated care…”

The commission also addressed UPL payments, expressing concern about “…the discrepancy between reporting by states to show that they are complying with the UPL and the spending data they report to claim federal matching funds” and recommending “…instituting better data and process controls to ensure that state reporting on compliance with UPL lines up with those amounts they are claiming, and existing limits are enforced.

Medicaid DSH and UPL payments are especially important to NASH and private safety-net hospitals because of the significant number of low-income, Medicaid-covered, and uninsured patients they serve.

Learn more from MACPAC’s news release summarizing its recommendations and the entire MACPAC annual report.

“Medicaid Shortfall” Definition Changing?

The Medicaid and CHIP Payment and Access Commission last week discussed possible changes in how “Medicaid shortfall” is defined for the purpose of determining how much Medicaid disproportionate share money (Medicaid DSH) safety-net hospitals should receive.

The discussion came in the wake of a court decision last year that ruled that third-party payments toward Medicaid-covered services could not be included in hospitals’ Medicaid shortfall calculations.

MACPAC commissioners discussed several statutory changes that would seek to minimize the impact of the court ruling:

  • Include third-party payments in the definition of Medicaid shortfall.
  • Exclude from the Medicaid DSH definition of Medicaid shortfall all payments and costs for patients who have third-party coverage.
  • Explore new rules that address different types of third-party coverage.

MACPAC is an advisory body whose recommendations to Congress are not binding but its views are respected and often find their way into future public policy.

This subject is important to private safety-net hospitals because the vast majority of those hospitals receive Medicaid DSH payments.

Learn more about MACPAC’s deliberations on Medicaid shortfalls and Medicaid DSH from the Fierce Healthcare article “MACPAC considers recommending change to definition of ‘Medicaid shortfall’ at safety net hospitals.”

 

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met for two days last week in Washington, D.C.

The following is MACPAC’s own summary of the sessions.

MACPAC looked ahead to its June 2019 report to Congress on the initial day of the March 2019 Commission meeting. In the morning, sessions focused on potential recommendations to create a grace period for states to determine coverage policies for outpatient prescription drugs and removing or raising the rebate cap; a uniform definition of therapeutic foster care; and treatment of third-party payment when determining hospitals’ Medicaid shortfall for disproportionate share hospital payments.

In the afternoon, the Commission turned its attention to Puerto Rico’s Medicaid program, with a new analysis on Puerto Rico’s Medicaid enrollment, spending, available financing, and implications for the future. The Commission also considered potential June recommendations focusing on improving performance and return on investment for state program integrity activities.

Several other important topics were also on the March agenda, including a session on Medicaid coverage of recovery support services for beneficiaries with substance use disorders (SUDs) in the afternoon. On the meeting’s second day, the Commission reviewed a draft letter to the Secretary of the U.S. Department of Health and Human Services, laying out the eligibility groups that should be included in the department’s forthcoming data book on Medicaid beneficiaries with SUDs. MACPAC’s input on eligibility groups was required in the SUPPORT for Patients and Communities Act. A review of the proposed rule affecting safe harbors for prescription drug rebates was the topic of the second session, with the final session presenting findings on how various states have approached care coordination in integrated care models.

Supporting the discussion were the following presentations:

  1. Potential Recommendations on Coverage Grace Period and Rebate Cap
  2. Mandated Report: Therapeutic Foster Care
  3. Treatment of Third-Party Payment in the Definition of Medicaid Shortfall: Potential Recommendations
  4. Medicaid in Puerto Rico: Financing and Spending Data Analysis and Projections
  5. Medicaid Program Integrity: Proposed Recommendations
  6. Recovery Support Services for Medicaid Beneficiaries with Substance Use Disorder
  7. Responding to SUPPORT ACT Requirement: Eligibility Groups for HHS Data Book on Medicaid and Substance Use Disorders
  8. Proposed Rule Affecting Safe Harbors for Prescription Drug Rebates
  9. Analysis of Care Coordination Requirements in Integrated Care Models

Because NASH members and private safety-net hospitals serve so many Medicaid patients, MACPAC’s deliberations are especially relevant to them because its recommendations often find their way into future Medicaid and CHIP policies.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide variety of issues affecting Medicaid and the State Children’s Health Insurance Program.  Find its web site here.

Protections Overlooked as Medicaid Reforms are Implemented

In its eagerness to help states introduce changes in their Medicaid programs and reduce administrative burdens, the Centers for Medicare & Medicaid Services is ignoring regulatory requirements designed to understand and measure the impact of those changes on beneficiaries.

According to an analysis by the Los Angeles Times, many states seeking to implement Medicaid work requirements have not projected how many of their beneficiaries would be affected by those requirements nor have they projected how many beneficiaries who are removed from the Medicaid rolls will gain employment after losing their Medicaid benefits.  Both projections are required under Medicaid regulations adopted in 2012, which call for states to assess the anticipated impact of proposed policy changes when seeking federal permission to implement such changes.

Similarly, many states have not proposed commissioning independent assessments to determine the impact of the Medicaid changes they have implemented with CMS’s approval – another requirement under 2012 regulations.

When pressed to explain its failure to enforce these regulations, according to the Times, CMS said only that regulations “…do not require that states provide precise numerical estimates of coverage impacts…” and that it is developing strategies for states to evaluate the impact of new work requirements.  The Medicaid and CHIP Payment and Access Commission wrote to Health and Human Services Secretary Alex Azar about Medicaid disenrollment in states with new work requirements but after three months, Secretary Azar has not responded to MACPAC’s inquiry.

Medicaid disenrollment is a particular challenge for private safety-net hospitals because they serve more Medicaid patients than most hospitals and patients who lose their Medicaid coverage and need hospital care typically cannot afford to pay for that care, leaving such hospitals with growing amounts of uncompensated care.

Learn more about the process for reviewing state requests to implement Medicaid work requirements and CMS’s enforcement of regulations governing its approval of such requirements in the Los Angeles Times article “In rush to revamp Medicaid, Trump officials bend rules that protect patients.”

 

MACPAC: Slow Medicaid DSH Cuts

Slow the pace of scheduled cuts in Medicaid disproportionate share hospital payments (Medicaid DSH), the non-partisan agency that advises Congress and the administration will tell Congress in its next report of policy recommendations.

The Medicaid and CHIP Payment and Access Commission voted 16-1 recently to recommend to Congress that Medicaid DSH cuts, mandated by the Affordable Care Act but delayed three times by Congress, be reduced in size and spread out over a longer period of time.

Currently, Medicaid DSH allotments to the states are scheduled to be reduced $4 billion in FY 2020 and then $8 billion a year in FY 2021 through FY 2025.  MACPAC recommends that the cuts be reduced to $2 billion in FY 2020, $4 billion in FY 2021, $6 billion in FY 2022, and $8 billion a year from FY 2023 through FY 2029.

MACPAC commissioners also voted to urge Congress to restructure the manner in which Medicaid DSH allotments to the states are calculated based on the number of low-income individuals who reside in the states.

Most private safety-net hospitals receive Medicaid DSH payments and consider them a vital resource in helping to underwrite the uncompensated care they provide to uninsured patients.  NASH supports delaying the implementation of Medicaid DSH cuts and reducing the size of the cuts once implementation begins, doing so most recently in a letter to Senator Marco Rubio in response to Mr. Rubio’s introduction of Medicaid DSH legislation.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide array of issues affecting Medicaid and the State Children’s Health Insurance Program.

Learn more about MACPAC’s actions on Medicaid DSH in the Fierce Healthcare article “MACPAC calls for Congress to delay cuts to safety-net hospitals.”

MACPAC Looks at Medicaid DSH

Last week the Medicaid and CHIP Payment and Access Commission met in Washington, D.C. and one of the subjects on its agenda was Medicaid DSH.

The Affordable Care Act mandated major reductions of Medicaid disproportionate share (Medicaid DSH) allotments to states and those reductions have been delayed by Congress several times but are now scheduled to begin in FY 2020.

At the MACPAC meeting the commission’s staff presented three proposed recommendations that address Medicaid DSH allotments; these recommendations were based on a consensus reached by MACPAC commissioners at their October meeting.  Those recommendations are:

  1. Phase in Medicaid DSH reductions more gradually over a longer period of time.
  2. Apply reductions to unspent DSH funds first.
  3. Distribute reductions in a way that gradually improves the relationship between DSH allotments and the number of non-elderly, low-income individuals in a state.

Current regulations call for Medicaid DSH cuts to begin in FY 2020 and for DSH payments to decrease $4 billion a year in FY 2020, rising to $8 billion the following year.  It appears MACPAC may suggest slowing the pace of these cuts by starting with $2 billion in cuts in FY 2020 and then raising that amount $2 billion a year through 2023, when they would reach $8 billion a year.  MACPAC does not appear to prepared to suggest another delay in beginning the Medicaid DSH cuts.

As the third recommendation suggests, MACPAC is considering recommending a change in how DSH cuts are calculated on a state-by-state basis.  In particular, MACPAC appears to be focusing on how better to target cuts so that Medicaid DSH money continues to reach the hospitals that most need this money.  As a Medicaid expansion state, PEACH needs to pay particular attention to any such change in the methodology for determining how DSH cuts are allocated among the states.

MACPAC is expected to vote on these recommendations during its January 24-25 meetings.

All private safety-net hospitals participate in the Medicaid DSH program and rely heavily on these funds to serve the low-income communities in which they are located.  NAUH will monitor MACPAC’s upcoming deliberations, evaluate the potential impact of any MACPAC recommendations on NAUH members, and develop and implement an appropriate legislative strategy based on that analysis, if needed.

For a closer look at the draft MACPAC recommendations and the rationale underlying each, go here to see the presentations that guided last week’s MACPAC discussion about Medicaid DSH.

MACPAC: Let’s “hit the pause button” on Medicaid Work Requirements

The non-partisan legislative branch agency that advises Congress and the administration on Medicaid issues will ask the administration to delay approving any more state Medicaid work requirements.

That was the decision reached by the Medicaid and CHIP Payment and Access Commission when it met last week.

MACPAC warned that the work requirement currently being implemented in Arkansas, the first state to introduce such a requirement, is flawed and needs further work before moving forward.  The agency also believes the federal government should increase its oversight of new Medicaid work requirements before additional states begin implementing similar, already-approved Medicaid work requirements.

MACPAC plans to convey its concerns in a letter to Department of Health and Human Services Secretary Alex Azar.

Medicaid work requirements pose a potential challenge for private safety-net hospitals because they could leave meaningful numbers of low-income residents of the communities those hospitals serve without health insurance.

Learn more about MACPAC’s objections to the manner in which Medicaid work requirements are being introduced in this Bloomberg Law article.

 

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met for two days last week in Washington, D.C.

The following is MACPAC’s own summary of the sessions.

The October 2018 MACPAC meeting covered a range of front-line issues in Medicaid, leading off with an analysis of disproportionate share hospital (DSH) allotments on Thursday morning. Following the analysis, the Commission discussed options for March recommendations on how to structure DSH allotment reductions that are scheduled to begin in fiscal year 2020. The Commission later resumed the discussion it began in September on work and community engagement requirements, presenting new data from Arkansas on compliance and disenrollments, as well as information gathered since that meeting about Arkansas’s approach to implementation.

On Thursday afternoon, the Commission looked at the Department of Homeland Security’s proposed public charge regulations and their implications for Medicaid and the State Children’s Health Insurance Program (CHIP). A session responding to a congressional request to look at issues facing the Medicaid program in Puerto Rico was next on the agenda. A presentation from an ongoing project on how Medicaid drug coverage compares with Medicare Part D and commercial plans closed out the day.

On Friday, the Commission heard from Tom Betlach, director of the Arizona Health Care Cost Containment System, and Karen Kimsey, chief deputy at the Virginia Department of Medical Assistance Services, on their experiences integrating care for dually eligible beneficiaries.* At the final October session, the Commission reviewed the findings from a study of how six states carried out simplified Medicaid eligibility and enrollment established by the Patient Protection and Affordable Care Act (P.L. 111-148, as amended).

Supporting the discussion were the following presentations:

Because NAUH members serve so many Medicaid patients, MACPAC’s deliberations are especially relevant to them because its recommendations often find their way into future Medicaid and CHIP policies.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide array of issues affecting Medicaid and the State Children’s Health Insurance Program.  Find its web site here.

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met recently in Washington, D.C. to review a number of Medicaid- and CHIP-related issues.

MACPAC members heard presentations on and discussed the following issues:

Find outlines of these subjects and additional materials by clicking the links above and go here for a transcript of the two days of public meetings.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide array of issues affecting Medicaid and the State Children’s Health Insurance Program.  While its recommendations are binding on neither the administration nor Congress, MACPAC’s work is highly influential and often finds its way into future Medicaid and CHIP policy.  Because private safety-net hospitals serve so many Medicaid and CHIP patients, they have an especially major stake in MACPAC deliberations and recommendations.

 

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission, a non-partisan legislative branch agency that advises Congress, the administration, and the states on Medicaid and CHIP issues, met publicly in Washington, D.C. last week.

The following is MACPAC’s own summary of its two days of meetings.

The April 2018 meeting began with session on social determinants of health. Panelists Jocelyn Guyer of Manatt Health Solutions, Arlene Ash of the University of Massachusetts Medical School, and Kevin Moore of UnitedHealthcare Community & State discussed state approaches to financing social interventions through Medicaid. In its second morning session, the Commission reviewed a draft chapter of the June 2018 Report to Congress on Medicaid and CHIP on the adequacy of the care delivery system for substance use disorders (SUDs) with a special focus on opioid use disorders.

In the afternoon, the Commission discussed the Centers for Medicare & Medicaid Services (CMS) March 2018 proposed rule changing the process by which states verify that Medicaid fee-for-service provider payment is sufficient to ensure access to care and agreed to submit comments to the agency. The first day of the meeting concluded with a review of the draft June chapter describing the status of managed long-term services and supports programs across the country. June chapters on Medicaid drug rebate policy and federal regulations governing confidentiality of SUD patient records were approved at the previous Commission meeting in March.

On Friday, the Commission heard from panelists Susan Barnidge, of the U.S. Government Accountability Office (GAO), and Judith Cash of CMS’s Center for Medicaid and CHIP Services, who discussed GAO’s report on Section 1115 demonstration evaluations and CMS’s efforts to improve the evaluation process. In the final session of the day, the Commission examined issues related to upper payment limit (UPL) hospital payments, which included findings from MACPAC’s recent review of state UPL demonstrations.

MACPAC members addressed a number of policy issues during the sessions using the following presentations to guide their discussion:

  1. State Approaches to Financing Social Interventions through Medicaid
  2. Draft Chapter: Access to Substance Use Disorder Treatment in Medicaid
  3. Proposed Rule on Exemptions to Monitoring Access in Fee for Service
  4. Draft Chapter: Managed Long-Term Services and Supports Programs
  5. Panel Discussion on Section 1115 Waiver Evaluations
  6. Uses and Oversight of Upper Payment Limit Supplemental Payments to Hospitals

MACPAC’s deliberations are especially important to private safety-net hospitals because they care for so many Medicaid and CHIP patients.