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SNAP Comments on Proposed Federal Managed Care Reg

The Safety-Net Association of Pennsylvania has submitted formal comments to the Centers for Medicare & Medicaid Services in response to CMS’s proposed changes in federal Medicaid managed care regulations.

Safety-Net Association of Pennsylvania logoSNAP’s letter addressed three aspects of the proposed regulation:  payment rate ranges, directed Medicaid payments, and Medicaid pass-through payments.  The overall theme underlying SNAP’s comments was that the proposed changes represent positive steps but could be taken further to provide additional flexibility for Pennsylvania’s Medicaid program to take stronger steps to ensure the ability of Pennsylvania safety-net hospitals to serve their communities.

SNAP expressed support for CMS’s restoration of the use of actuarial rate ranges in setting Medicaid managed care rates but urged CMS to make those rate ranges even broader or even eliminate them provided that negotiated rates still meet formal criteria for actuarial soundness.

SNAP endorsed CMS’s expanded parameters for the use of Medicaid directed payments through managed care but encouraged CMS to expand those parameters even further than it has proposed.

And SNAP called on CMS to restore the ability of states to use pass-through payments in Medicaid managed care programs, as they can do through Medicaid fee-for-service programs, so long as those payments remain actuarially sound.

Learn more about SNAP’s perspective by reading the association’s comment letter to CMS in response to the proposed Medicaid managed care regulation.

Filed under: Uncategorized

Court Rejects 340B Cuts

A federal court has ruled that the Centers for Medicare & Medicaid Services overstepped its authority in reducing Medicare payments for prescription drugs covered by the section 340B prescription drug discount program.

While the court conceded that CMS has the authority to address 340B payments, it found that CMS’s drastic payment cuts, introduced in FY 2018, “…fundamentally altered the statutory scheme established by Congress…” for determining 340B payment rates.

The court suggested that CMS either change its methodology for determining 340B payments to justify the specific cuts it proposes or raise its objections with Congress, which created the program and has the authority to change it.

According to documents submitted to the court by the parties that filed the suit, eligible hospitals have seen their 340B payments reduced $1.6 billion since the cuts began in FY 2018.  The court asked the federal government and those who filed the suit to suggest remedies for compensating participating hospitals for their losses.

The ruling has major implications for the Pennsylvania safety-net hospitals, most of which participate in the 340B program.

Learn more about the 340B litigation, the court’s ruling, and its impact in the New York Times story “Court Rejects Trump’s Cuts in Payments for Prescription Drugs.”

Filed under: Medicare, Pennsylvania safety-net hospitals

Medicaid MCOs Skimping on Care?

Medicaid MCOs may be skimping on care, according to a recent Kaiser Health News report.

According to Kaiser, for-profit companies that sub-contract with Medicaid managed care organizations to review requests for services often deny care to Medicaid patients to save money for the MCOs that employ them and to benefit themselves financially.

The Kaiser article presents examples of companies that have been identified engaging in such practices, explains how they go about their work, and outlines the dangers to Medicaid recipients posed by such practices.

Because they serve so many more Medicaid patients than the typical hospital, Pennsylvania safety-net hospitals, their patients, and the communities they serve can be greatly affected by such practices.

Learn more in the Kaiser Health News article “Coverage Denied: Medicaid Patients Suffer As Layers Of Private Companies Profit.”

Filed under: Pennsylvania Medicaid, Pennsylvania safety-net hospitals

CMS to Create New Office for Regulatory Reform

In 2019 the Centers for Medicare & Medicaid Services intends to create a new office to address regulatory reform.

CMS administrator Seema Verma recently announced her intention to create this office, but other than saying its priority would be to reduce regulatory burden, offered no details.

See a brief notice about the new office here.

Filed under: Uncategorized

Feds Urge States to Do More for Dually Eligible

In a formal guidance letter to state Medicaid directors, the Centers for Medicare & Medicaid Services has outlined ten ways that states can better serve individuals who are enrolled in both Medicare and Medicaid.

Noting that such dually eligible individuals represent 20 percent of Medicare enrollees but 34 percent of Medicare spending while also constituting 15 percent of Medicaid beneficiaries but 33 percent of Medicaid spending, the letter from CMS administrator Seema Verma to state Medicaid directors explains that

This letter describes ten opportunities – none of which require complex demonstrations or Medicare waivers – to better serve individuals dually eligible for Medicare and Medicaid, including through new developments in managed care, using Medicare data to inform care coordination and program integrity initiatives, and reducing administrative burden for dually  eligible individuals and the providers who serve them. A number of these opportunities are newly available to states through Medicare rulemaking or other CMS burden reduction efforts. We are happy to engage with you and your staff on one, many, or all of the items described in this letter. The CMS Medicare-Medicaid Coordination Office (MMCO) works across CMS and with states to better serve dually eligible individuals, including through efforts to better align the Medicare and Medicaid programs and demonstrations to test new approaches to integrated service delivery and financing.

Those ten ways are:

  • state contracting with dual eligible special needs plans (D-SNPs)
  • default enrollment into a D-SNP
  • passive enrollment to preserve continuity of integrated care
  • integrating care through the Program of All-inclusive Care (PACE)
  • reducing the administrative burden in accessing Medicare data for use in care coordination
  • program integrity opportunities
  • Medicare Modernization Act of 2003 file timing
  • state buy-in file data exchange
  • improving Medicare Part A buy-in
  • opportunities to simplify eligible and enrollment

Pennsylvania safety-net hospitals serve especially large numbers of dually eligible, Medicare-Medicaid patients and will be interested to see whether CMS’s recommendations translate into new policies in Harrisburg.

To see the entire letter, including additional information about these ten opportunities, go here.

Filed under: Federal Medicaid issues, Medicare

Bill Would Overhaul Medicaid DSH

A new Senate proposal would change how the federal government allocates Medicaid disproportionate share money (Medicaid DSH) to the states.

The State Accountability, Flexibility, and Equity (SAFE) for Hospitals Act, introduced by Senator Marco Rubio (R-FL), seeks to

…create equity for all states by updating a metric used to determine how much each state is allotted, which has not been reformed since the early 1990s.

A news release issued by Senator Rubio explains that the bill

  • Gradually changes the DSH allocation formula so states’ allocations are based on the number of low-income earners living in the state, as a percentage, of the total U.S. population earning less than 100% of the Federal Poverty Level (FPL).
  • Prioritizes DSH funding to hospitals providing the most care to vulnerable patients, while providing states with the necessary flexibility to address the unique needs of hospitals in each state.
  • Expands the definition of uncompensated care to include costs incurred by hospitals to provide certain outpatient physician and clinical services, which is a change recommended by MACPAC.
  • Allows states to reserve some of their DSH funding allocations to be used in future years in order to give hospitals more certainty or consistency in the amount of DSH funding they can expect when planning for the future.

The news release also explains that one of the purposes of the bill is to benefit Florida.

SNAP will monitor the bill’s progress closely, evaluate its potential impact on Pennsylvania safety-net hospitals, and reach out to Pennsylvania’s congressional delegation about it, if needed.

Learn more about the new Medicaid DSH bill by reading the news release and this one-page summary of the bill.

Filed under: Federal Medicaid issues, Medicaid supplemental payments, Pennsylvania safety-net hospitals

MACPAC Looks at Medicaid DSH

Last week the federal 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 Pennsylvania 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.  SNAP will monitor MACPAC’s upcoming deliberations, evaluate the potential impact of any MACPAC recommendations on SNAP members, and develop and implement an appropriate legislative strategy for reaching out to Pennsylvania’s congressional delegation, 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.

Filed under: DSH hospitals, Federal Medicaid issues, Medicaid supplemental payments, Pennsylvania safety-net hospitals

PA Making In-roads in Opioids Fight

Pennsylvania is making progress in the fight against opioids, according to a new report.

At the heart of this progress has been improved access to medication-assisted treatment, enforcement of parity laws, enhanced access to naloxone, and better oversight of the care of Medicaid patients, including enhanced coverage of alternatives to opioids for pain management.

The report also cites several areas where Pennsylvania can improve its efforts, including removing more barriers to care for patients with substance use disorders, improving access to alternative pain therapies, further expanding access to naloxone, and evaluating current policies and programs to ensure that they contribute to fighting the opioid challenge.

Learn more in the report Spotlight on Pennsylvania:  Leading-Edge Practices and Next Steps in Ending the Opioid Epidemic, which can be found here.

Filed under: Pennsylvania Medicaid, Pennsylvania Medicaid policy

PA Auditor General Issues Blistering Report on PBMs

Pennsylvania Auditor General Eugene DePasquale has released a report highly critical of pharmacy benefit managers and called for greater oversight of such companies.

Citing PBMs’ lack of transparency, lack of oversight, and reimbursement disparity, DePasquale’s report, compiled after research and public hearings throughout the state that relied heavily on the testimony of independent pharmacies, includes 10 recommendations, among them several that directly address Medicaid in Pennsylvania.  Those Medicaid-related recommendations are:

  • To better control costs, Pennsylvania should consider directly managing its Medicaid prescription drug benefits instead of contracting with managed care organizations to do so.
  • The General Assembly should pass legislation to use the federal Centers for Medicare & Medicaid Services’ National Average drug Acquisition Cost (NADAC) for pricing prescription drugs filled through Medicaid.
  • The General Assembly should grant state oversight of contracts signed between PBMs and pharmacies or pharmacy services administration organization, which are currently shielded from oversight because they are subcontracts.
  • Pennsylvania’s Department of Human Services should use Texas’ Vendor Drug Program as a model to create Pennsylvania’s own universal preferred drug list for Medicaid clients.
  • Pennsylvania’s Department of Human Services should add “good steward” language to all Medicaid-related contracts.

Learn more about the report issued by the Auditor General in this news release or go here to see the report “Bringing Transparency and Accountability to Drug Pricing.”

Filed under: Pennsylvania Medicaid, Pennsylvania Medicaid policy

Ambulances Respond Slower to Low-Income Communities

People living in low-income communities wait about four minutes longer for ambulances to respond to their call for help when they are having a heart attack, a new study has found.

In communities with annual median incomes between $57,000 and $113,000, the study found that ambulances arrive in an average of 37.5 minutes – faster than in communities where the annual median income is between $20,250 and $42,642, where the typical wait time is 43 minutes.

Neither result is anywhere near industry benchmarks of 4, 8, and 15 minutes for delivering specific services in response to heart attack symptoms.

Among the possible reasons for the difference in response times, the study’s authors suggest, are hospital closures in and around low-income areas, EMS protocols that call for emergency response from facilities that specialize in cardiac care that may be farther from low-income communities, and a reduced number of private ambulance services serving lower-income areas.

Such findings have important implications for the communities served by safety-net hospitals.

Learn more about the study, its methodology, and its findings in the report “A US National Study of the Association Between Income and Ambulance Response Time in Cardiac Arrest,” which can be found here, on the JAMA Open Network web site.

Filed under: Pennsylvania safety-net hospitals

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2012 Safety-Net Association of Pennsylvania