Government Programs & The Uninsured

Government Programs & The Uninsured

CMS revitalizes Medicaid HCBS investment opportunities

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On June 3, 2022, the Centers for Medicare & Medicaid Services (CMS) notified states that they will have an additional year, until March 31, 2025, to use funding from the American Rescue Plan Act (ARPA) to strengthen their Medicaid home and community-based services (HCBS). CMS’ update extends important flexibility to ensure state Medicaid programs and stakeholders, including beneficiaries, realize maximum benefit from federal investments in expanding and enhancing HCBS services.

For over a decade, the Medicaid program has been leading transformations of state long-term services and supports systems (LTSS), including physical and behavioral health services and health-related social needs. These efforts primarily focus on broadening eligibility, making more significant Medicaid investments in HCBS, and improving beneficiaries’ access to HCBS programs. The COVID-19 pandemic heightened attention to beneficiaries’ disparate experiences with accessing HCBS and exacerbated pre-COVID challenges faced by the LTSS workforce.

Section 9817 of ARPA provides an increase for Medicaid-funded HCBS by offering states the option to claim an additional 10 percentage point increase in federal match (FMAP) for the one-year period from April 1, 2021, to March 31, 2022. To receive the higher federal funding, states cannot make changes to the amount, duration, and scope of covered HCBS; they cannot reduce HCBS provider payment rates; and they cannot make eligibility standards for HCBS programs or services stricter until all additional funds are expended. CMS also requires states to submit a spending plan and narrative that describes planned enhancement activities.

Notably, a state must reinvest the higher federal funding in Medicaid HCBS while maintaining the spending levels they had in place on April 1, 2021. According to CMS’s new guidance, states can now use the funds until March 31, 2025, rather than March 31, 2024, under the previous guidance.

Actions Stakeholders Can Take to Maximize the Extra Time

The updated spending deadline is grounded in a better understanding of the level of effort and time necessary for states to identify, build consensus, and implement specific actions to include in a state’s HCBS spending plan. HMA works with states, providers, health plans, and other stakeholders, including consumers, who will benefit from the additional time to make investments. Our work includes supporting states as they align the multitude of needs and priorities with the available funds and supporting robust stakeholder engagement efforts to inform the plans.

The following are some of the most impactful “next steps” that states and stakeholders can pursue to best utilize the additional time to reinvest in Medicaid HCBS programs:

  • States can communicate with stakeholders, including health plans, providers, community organizations, consumers, and others, to share how the extension impacts the state’s spending plan.
  • States and stakeholders can renew their engagement to consider potential changes to the spending plan activities, timelines, or both. Stakeholders may have additional opportunities to offer input to refine further and prioritize the design and delivery of augmented or new services, systems, and related initiatives.
  • State Medicaid, aging, and various other programs and providers have more time to strengthen their collaboration to meet the needs of individuals of all ages who are living with disabilities.
  • States, vendors, health plans, and providers can evaluate through evidence, analysis and stakeholder feedback, if the projects they are pursuing are effective and/or should be modified. For example, it may be beneficial to provide more flexibility in the deadlines for case management and referral systems builds and implementation of the training for workers on these new systems.
  • States and their stakeholder partners can refocus on workforce issues, including examining eligible provider types and scopes, evaluating provider network issues, considering the role of virtual services, conducting provider and managed care rate setting studies, and other changes to support the HCBS direct care workforce.
  • States can develop reasonable timeframes to strengthen existing efforts or pursue new initiatives to develop and implement managed long-term services and supports for certain groups of Medicaid beneficiaries.

Looking ahead, states and all stakeholders need to assess the impact of these investments. ARPA funds are a significant investment in strengthening Medicaid LTSS programs, but these transformative efforts require sustained commitment. There is continued uncertainty around additional federal Medicaid funding over the long term that are necessary to address ongoing needs and make further progress towards high-quality, accessible HCBS services. Understanding the extent to which the funds are achieving the desired structural transformations and the impact on Medicaid beneficiaries can guide future areas of federal and state focus and investments.

For more information, please contact our experts below.

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Low-cost carriers in ACA: insights from the 2018-2021 market experience

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This week, our In Focus highlights a white paper from Wakely, an HMA Company, exploring the potential design elements and expected effects of a public option or a low-cost plan being newly introduced in the Affordable Care Act (ACA) individual market.

1332 state innovation waivers have been in place for a number of years and allow states to implement programs that increase access to and the affordability of healthcare coverage, subject to approval by the Department of Health and Human Services (HHS) and Department of Treasury (Treasury). Nearly all waiver programs in effect in 2021 employ a reinsurance program aimed at reducing the overall claim costs and premiums for members by reimbursing issuers for a portion of claim costs over a specified threshold.

A number of states have been exploring other ways to structure a waiver program, including introducing a public option plan into ACA markets (individual and small group plans subject to the ACA market reforms). The definition of a “public option plan” has evolved over time and can vary, but more commonly refers to a privately funded health plan with some level of government oversight or additional requirements established to improve consumer value and facilitate cost containment.

A public option plan aims to further increase access to coverage and affordability by offering a new qualified health plan, typically with a lower premium relative to existing premiums in the market. A public option plan specifically aims to extend a more affordable coverage to individuals who are currently not eligible for ACA subsidies (e.g., family glitch, non-citizens, and those with higher incomes). The plan could be structured in a variety of ways such as a state-sponsored product, state employee health plan buy-in, Medicaid plan buy-in, or a private plan offered by existing issuers. Colorado and Washington will require health plans to offer public option plans with a target premium reduction relative to other plans in the market, with constrained rate increases over time, giving health plans the opportunity to arrive at the lower premiums through their own means, for the 2023 plan year. Lower premiums would likely be achieved through a combination of lower provider reimbursement and lower risk margins.

Given the nature of premium subsidization in the individual ACA market, where premium subsidies are tied to the second lowest cost silver (SLCS) plan in the market, the introduction of a lower cost public option plan has a mixed impact on market growth and the types of member segments that benefit. Since Washington State is the only Exchange that currently offers a public option plan, there is minimal experience available to understand the impact a public option plan may have on the market. As a result, our goal was to look at states where a new issuer has entered a market as a low-cost plan over the last four years, to better understand plan enrollment migration (how many members switch to the low-cost carrier), competitors’ reactions, and the reduction in premium needed to incentivize members to take up coverage. This market dynamic potentially closely mimics a public option plan that offers lower premiums being introduced in a market. Over the last four years (2018-2021), we identified 51 instances of new issuers entering an individual on-Exchange market. Of those 51 new entrances, 25 met our criteria of a low-cost plan.

The analysis showed mixed impacts of a low-cost plan introduction in ACA markets, with minimal impact on the uninsured, but with improved affordability, particularly for the unsubsidized. The detailed observations are discussed further in this paper.

For more information, contact our expert below.

Behavioral health crises drive bipartisan action in Congress

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Agreement about the severity of the nation’s mental health and substance use disorder crises is rising above the partisan politics in Congress. In fact, these are among a handful of issues driving work on bipartisan legislation across all the key House and Senate committees with jurisdiction over behavioral health programs and policies this year.

On May 18, the U.S. House of Representatives Energy and Commerce Committee unanimously approved the “Restoring Hope for Mental Health and Well-Being Act of 2022” (H.R. 7666). This legislation incorporates a collection of bipartisan bills to update and reauthorize over 30 Substance Abuse and Mental Health Services Administration (SAMHSA) and Health Resources and Services Administration (HRSA) programs addressing the mental health and substance use disorder (SUD) crisis. The bill also advances initiatives to strengthen the 9-8-8 National Suicide Prevention Lifeline implementation efforts, invest in the crisis response continuum of care, and support strategic opioid crisis response plans among numerous other policies. Energy and Commerce is one of several House committees planning to advance behavioral health bills this year.

U.S. Senate committee leaders have been similarly engaged in developing bipartisan proposals to address mental health and substance use disorders. Senate Health, Education, Labor and Pensions (HELP) and Finance committee leaders are expected to reveal their proposals as soon as this summer. The Finance Committee’s proposal will focus on Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) policies and could reflect findings from the committee’s report, “Mental Health Care in the United States: The Case for Federal Action.” Similarly, HELP members Sens. Chris Murphy (D-CT) and Bill Cassidy (R-LA) introduced the Mental Health Reform Reauthorization Act to extend several expiring mental health programs, which could be incorporated in that Committee’s comprehensive proposal. Across committees, there has been an interest in strengthening parity, supporting integration of primary and behavioral health care, increasing access to youth mental health screenings, scheduling fentanyl analogues, and easing requirements for prescribing Medication Assisted Treatment.

What To Expect

Congressional leaders have consistently expressed their desire to advance bipartisan legislation to address the urgent needs and gaps in the mental health and SUD care delivery systems, as well as support education and research.  While these are key areas to watch, the diminishing number of legislative days on the congressional calendar and climate surrounding November’s mid-term elections create uncertainty for the timing and scope of Congress’ work. It remains to be seen whether a package of health care proposals, such as reauthorization of the U.S. Food and Drug Administration’s user fee programs, the Cures 2.0 legislation to advance biomedical research, mental health and substance use disorder legislation, and the PREVENT Act could be sent to President Biden’s desk before the end of September.

HMA companies are supporting clients impacted by the policy changes being discussed and the program funding addressed in these legislative proposals. Understanding the landscape for federal change allows state and local governments and stakeholders to plan for and shape these opportunities. For more information, please contact our experts below.

The family glitch and changes to premium tax credit eligibility

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This week, our In Focus section reviews the Biden Administration’s proposed rule revising eligibility standards for premium subsidies for families, released on April 5, 20221. The proposed rule would “fix” the family glitch and, therefore, dramatically increase the number of people eligible for premium tax credits. This brief describes what the regulation would do and the implications for the individual market.

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2022 Michigan State of Reform Health Policy Conference Set for April 21

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Senior healthcare leaders from across Michigan will convene at the Lansing Center for the 2022 Michigan State of Reform Health Policy Conference on April 21 to discuss health policy and topical issues across the spectrum of care. The day-long event, which kicks off at 9 a.m., will feature more than 60 speakers and 19 different sessions.

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President’s budget recommends significant investments in unity agenda issues

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This week, our In Focus section reviews President Biden’s budget proposal for federal fiscal year 2023, released on March 28, 2022. The President’s proposal kicks off the Congressional budget process and negotiations on the annual spending bills for the federal fiscal year that starts October 1, 2022. The budget proposal highlights the Administration’s program initiatives and recommended legislative and regulatory changes. The President’s budget is merely a request of Congress, who drafts the actual budget resolution that will go into effect if passed.

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Issue brief and playbook explore outlook for temporary COVID-19-related changes to Medicare and Medicaid programs

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This week our In Focus section reviews the issue brief and policymaker playbook that explore the outlook for temporary COVID-19-related changes to the Medicare and Medicaid programs, prepared in partnership with Manatt Health for The SCAN Foundation. HMA experts Jennifer Podulka, Yamini Narayan, and Keyan Javadi offer a framework to support policymakers’ decisions on the future of temporary policies and highlight specific flexibilities that are good candidates for consideration. These temporary flexibilities expanded program eligibility and enrollment, enhanced remote service delivery options, authorized care delivery in alternative care sites, and much more.

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The re-envisioned role of primary care in FQHCs: accelerating APMs to drive access, patient experience and outcomes

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In October 2021, the Center for Medicare & Medicaid Innovation (the Innovation Center) published a white paper outlining its strategic vision and direction of the healthcare delivery system for Medicare and Medicaid beneficiaries through 2030. This included a focus on high-quality primary care, which they identify as the foundation of our health system, to achieve equitable, whole-person, integrated care and outcomes.

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HMA experts outline scenarios for transitioning from the COVID-19 PHE

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This week our In Focus section reviews scenarios in which the federal Public Health Emergency (PHE) may expire. In the weeks ahead, the U.S. Secretary of Health and Human Services (HHS), Xavier Becerra, will be faced with the decision of whether to extend the PHE or to allow it to expire. Dozens of critical waivers and coverage flexibilities are currently linked to the federal PHE and have enabled patients, providers, and payors to receive, deliver, and pay for health care for nearly two years. To date, the PHE has been extended eight times, each for the maximum allowed 90 days. However, declining COVID-19 infection rates and actions by state governors to relax COVID-19-related public health measures have renewed pressure on the Biden Administration to signal how they will choose to act on April 16, 2022 when the current federal PHE expires.

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California releases Medi-Cal managed care RFP for three plan models in 21 counties

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This week, our In Focus section reviews the California Medicaid (Medi-Cal) managed care request for proposals (RFP) released by the California Department of Health Care Services (DHCS) on February 9, 2022. DHCS is procuring contracts for commercial plans for three of the Medi-Cal managed care plan models in 21 counties, serving approximately 3 million beneficiaries. Contracts will be awarded to one managed care organization (MCO) in each of the Two-Plan model counties, two MCOs in each of the geographic managed care (GMC) model counties, and two MCOs in each of the Regional model counties. This procurement is the largest released by California, rebidding contracts for commercial plans statewide.

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