CMS Reinforces Need for Budget Neutrality in Medicaid Waivers

States that seek federal waivers for permission to employ new approaches to serving their Medicaid population will have to pass more rigorous tests to ensure that those new approaches are budget-neutral, the Centers for Medicare & Medicaid Services has announced.

In a detailed letter to state Medicaid directors, CMS outlines some of the current methodologies employed by states to demonstrate the budget neutrality of their waiver requests and details instances in which it will judge those methodologies differently in the future.  A news release accompanying the letter explains that

….this letter marks the first time that CMS has formally outlined how states must calculate budget neutrality for demonstration projects, in order to strengthen fiscal accountability. The guidance also comes a day after Administrator Seema Verma testified before the Senate Homeland Security and Government Accountability Committee on improper payments in the Medicaid program, which often result in higher federal spending.

The news release also states that

“CMS welcomes smart new approaches to coverage and delivering care through Medicaid demonstration projects, but we won’t approve them without a careful analysis of their impact on taxpayers. Federal spending on the program has increased, growing by over $100 billion between 2013 and 2016,” said CMS Administrator Seema Verma. “Today’s guidance is a comprehensive explanation of how CMS and our state partners can ensure that new demonstration projects can simultaneously promote Medicaid’s objectives and keep federal spending under control.”

 See the CMS news release on its revised approach to determining Medicaid waiver budget neutrality and go here to see CMS’s letter to state Medicaid directors on this subject.

Medicaid Expansion Helping Diabetics

The Affordable Care Act’s Medicaid expansion has led to a 40 percent increase in the number of prescriptions for diabetes medicine filled in the 30 states that expanded their Medicaid programs.

Meanwhile, there was no change in the number of diabetes-related prescriptions filled in states that did not expand their Medicaid programs.

This is considered important because it suggests that many low-income people who either could not afford their diabetes medicine or whose illness was undiagnosed are now being treated for the disease – a significant development because every diabetic who is treated for the condition represents a cost savings of $6394 a year, mostly because of fewer hospitalizations.

Because diabetes is especially prevalent in the low-income communities urban safety-net hospitals serve, these hospitals have played a major role in bringing much-needed treatment to their communities, improving their health of their residents, and helping to reduce health care costs.

Learn more about how Medicaid expansion is improving the health of low-income people with diabetes and lowering health care spending in this California Healthline report or go here to see the Health Affairs study “Medicaid Eligibility Expansions May Address Gaps in Access to Diabetes Medications” on which that report is based.

Battle Over Medicaid Work Requirements Not Over

The Secretary of Health and Human Services is not accepting a recent federal court ruling as the final word on Medicaid work requirements.

Although the court ruled against a federally approved plan to permit the state of Kentucky to implement a work requirement for some able-bodied Medicaid recipients, HHS Secretary Alex Azar insists that his department will continue to support work requirements for Medicaid beneficiaries.

Azar told a Heritage Foundation audience that

We suffered one blow in district court in litigation, but we are undeterred.  We’re proceeding forward…We’re fully committed to work requirements and community participation in the Medicaid program…we will continue to litigate, we will continue to approve plans, we will continue to work with states.  We are moving forward.

Learn more about the ruling against Kentucky’s Medicaid work requirement, which was approved by HHS, and the federal government’s determination to enable states to impose such requirements in this Washington Post article.

GAO Looks at Medicaid Managed Care Spending

The federal government should do more to help states ensure the accuracy and integrity of their payments to Medicaid managed care organizations and the payments those Medicaid managed care organizations make to health care providers.

This is the conclusion reached in a new study of Medicaid managed care performed by the U.S. Government Accountability Office at the request of the Permanent Subcommittee on Investigations of the Senate Committee on Homeland Security and Government Affairs.

The GAO study identified six payment risks among various transactions between state governments, Medicaid managed care organizations, and health care providers.  The two biggest risks, the GAO concluded, were:

  1. incorrect fee-for-service payments from MCOs, where the MCO paid providers for improper claims, such as claims for services not provided; and
  2. inaccurate state payments to MCOs resulting from using data that are not accurate or including costs that should be excluded in setting payment rates.

The GAO traces some of these problems to a delay in the Centers for Medicare & Medicaid Services’ planned Medicaid managed care guidance to states; limited implementation of new auditing practices CMS introduced in 2016; and CMS’s failure to account for overpayments to providers when it reviews state capitation rates for Medicaid managed care plans.

To address these shortcomings, the GAO report recommends that CMS:

  1. expedite issuing planned guidance on Medicaid managed care program integrity;
  2. address impediments to managed care audits; and
  3. ensure states account for overpayments in setting future MCO payments.

CMS agrees with these recommendations.

Learn more about the study – why it was undertaken, how it was conducted, what it found, and what it recommended – by going here to see the GAO report Medicaid Managed Care:  Improvements Needed to Better Oversee Payment Risks.

Pay Raise Didn’t Lead More Docs to Participate in Medicaid

The temporary rate increase that the Affordable Care Act provided as means of encouraging more doctors to serve Medicaid patients did not work, according to two new studies published in the journal Health Affairs.

According to the studies, the increase in the number of physicians who decided to begin serving Medicaid patients as a result of the fee increase was negligible.

Among the reasons the studies’ authors offer for the lack of growth in the participation of doctors are the limited nature of the pay raise and the documentation required to receive it.

Despite this, the authors note, access to care did improve as a result of the Affordable Care Act’s Medicaid expansion.

Learn more about the studies, their results, and their significance by going here to see the Health Affairs report “No Association Found Between The Medicaid Primary Care Fee Bump And Physician-Reported Participation In Medicaid and here for the study “Physicians’ Participation In Medicaid Increased Only Slightly Following Expansion.”

CMS: Not Done With Medicaid Work Requirements

Despite the ruling of a federal court that Kentucky’s new Medicaid work requirement violates federal law, the Centers for Medicare & Medicaid Services has not ruled out approving future requests from state governments to impose work requirements on Medicaid recipients.

Or so asserted CMS administrator Seema Verma at a recent health care event in Washington, D.C.

The Washington Examiner reports that at that event, Verma said that

We are looking at what the court said.  We want to be respectful of the court’s decision while trying to push ahead with our policy and our goals.

CMS currently has applications from eight states to establish new Medicaid work requirements.

Learn more about the legal obstacles Medicaid work requirements have encountered and how CMS views those obstacles in this Washington Examiner article.

 

Medicaid Managed Care Plans Suffer High Physician Turnover

The physician networks developed by Medicaid managed care plans suffer from a degree of turnover that threatens continuity of care for their members.

While the number of Medicaid managed care plans using so-called narrow networks of providers declined by more than a third between 2010 and 2015, physician turnover is higher in those narrow network plans:  three percentage points higher after one year and 20 percentage points higher after five years than the networks of plans that do not employ narrow networks.

Collectively, Medicaid managed care plans experienced physician turnover of 12 percent a year from 2010 to 2015.

Learn more about physician turnover in Medicaid managed care plans in the Health Affairs study “Network Optimization And The Continuity Of Physicians In Medicaid Managed Care,” which can be found here.

 

CMS Unveils Medicaid “Scorecard”

The Centers for Medicare & Medicaid Services had introduced a new “Medicaid scorecard” that the agency says it hopes will “…increase public transparency about the programs’ administration and outcomes.”

The scorecard, now posted on the Medicaid web site, presents information and data from the federal government, and reported voluntarily by the states, in three areas:  state health system performance, state administrative accountability, and federal administrative accountability.

The scorecard currently offers information on selected health and program indicators.  Visitors can see comparative data between states and also extensive information about individual state Medicaid programs, including eligibility criteria, enrollment, quality performance, and key state documents such as state plan amendments, waivers, and managed care program overviews.  The site also presents individual state and comparative state performance based on a variety of metrics while also reporting on federal turnaround time on matters such as waiver requests and rate reviews.  CMS envisions the scorecard evolving from year to year by offering more and different information.

Go here to see a CMS fact sheet on the new Medicaid scorecard and go here to visit the scorecard’s home page.

Proposed Federal Reorganization Could Affect Health Care

Aspects of a proposed reorganization of the federal government could affect the agencies that administer key health care programs.

In its 132-page Delivering Government Solutions in the 21st Century:  Reform Plan and Reorganization Recommendations proposal, the White House calls for consolidating many social safety-net programs in a new Department of Health and Public Welfare.  This department would retain responsibility for Medicare and Medicaid but also would assume responsibility for some food aid programs, including food stamps (now the Supplemental Food Assistance Program, or SNAP).

In addition, the proposal would:

  • consolidate all health research programs in the National Institutes of Health, including the Agency for Healthcare Research and Quality, the National Institute for Occupational Safety and Health, and the National Institute on Disability, Independent Living, and Rehabilitation Research;
  • reduce the U.S. Public Health Service Commissioned Corps from 6500 to no more than 4000 officers; and
  • remove food safety responsibilities from the Food and Drug Administration, change that agency’s name to the Federal Drug Administration, and shift food safety responsibilities to the Department of Agriculture.

Also part of this Department of Health and Public Welfare would be a new Council on Public Assistance that would ostensibly become the executive branch’s welfare policy-making body.  Serving on this council would be the heads or representatives of the heads of the Department of Agriculture, Department of Housing and Urban Development, the new Department of Education and the Workforce, and the Office of Management and Budget, with the council to be headed by the secretary or secretary’s designee from the Department of Health and Public Welfare.

While some of the White House’s recommendations can be implemented via executive action, others require congressional action.

Find the White House’s brief summary of its recommendations here and find the full report here.

 

Hospital Government Payment Losses Could Reach $218 Billion by 2028

A recent study concluded that hospitals can expect to lose about $218 billion in federal Medicare and Medicaid payments between 2010, when the latest round of major cuts began, and 2028.

Among those cuts cited in the study, which was commissioned by the American Hospital Association and the Federation of American Hospitals, are:

  • $79 billion for DRG documentation and coding adjustments
  • $73 billion for Medicare sequestration
  • $26 billion for Medicaid disproportionate share payments (Medicaid DSH)
  • $11 billion in cuts associated with the American Taxpayer Relief Act of 2012

Other cuts came, or will be coming, through regulatory changes, the introduction of value-based payment programs, and other means.

Learn more about these cuts and their potential implications in this Healthcare Dive story.