Healthcare Delivery Development & Redesign

Highlights from Kaiser/HMA 50-state Medicaid Director survey

This week, our In Focus section reviews highlights and shares key takeaways from the 22nd annual Medicaid Budget Survey conducted by The Kaiser Family Foundation (KFF) and Health Management Associates (HMA). Survey results were released on October 25, 2022, in two new reports: How the Pandemic Continues to Shape Medicaid Priorities: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2022 and 2023 and Medicaid Enrollment & Spending Growth: FY 2022 & 2023. The report was prepared by Elizabeth Hinton, Madeline Guth, Jada Raphael, Sweta Haldar, and Robin Rudowitz from the Kaiser Family Foundation and by Kathleen Giff­ordAimee Lashbrook, and Matt Wimmer from HMA; and Mike Nardone. The survey was conducted in collaboration with the National Association of Medicaid Directors (NAMD).

This survey reports on policies in place or planned for FY 2022 and FY 2023, including state experiences with policies adopted in response to the COVID-19 pandemic. The conclusions are based on information provided by the nation’s state Medicaid Directors.

Key Report Highlights

In the following sections, we highlight a few of the major findings from the reports. This is a fraction of what is covered in the 50-state survey reports, which include significant detail and findings on policy changes and initiatives related to delivery systems, health equity, benefits, telehealth, provider rates and taxes, and pharmacy. The reports also look at the opportunities, challenges, and priorities facing Medicaid programs.

Medicaid Enrollment and Spending Growth

The COVID-19 pandemic created significant implications for Medicaid. During this time, Medicaid enrollment has reached record highs due to the Families First Coronavirus Response Act (FFCRA), enacted in March 2020, which authorized a 6.2 percentage point increase in the federal match rate, or Federal Medical Assistance Percentage (FMAP), retroactive to January 1, 2020, and until the Public Health Emergency (PHE) ends. The increase was available to states that meet certain “maintenance of eligibility” (MOE) requirements. Since the survey, the PHE was extended to mid-January 2023, somewhat delaying the anticipated effects described in survey.

Medicaid enrollment growth slowed to 8.4 percent in FY 2022, after a sharp increase in FY 2021 (11.2 percent). Almost all responding states reported that the MOE continuous enrollment requirement was the most significant factor driving FY 2022 enrollment growth. Responding states expect Medicaid enrollment growth to decline (-0.4 percent) in FY 2023, based largely on the assumption that the PHE and the related MOE requirements would end by mid-FY 2023. States anticipate larger declines as Medicaid redeterminations and renewals resume.

In FY 2022, total Medicaid spending is expected to reach a peak growth of 12.5 percent, with enrollment growth as the primary driver. For FY 2023, total spending growth is expected to slow to 4.2 percent, assuming slower enrollment growth after the unwinding of the PHE. State Medicaid spending grew by 9.9 percent in FY 2022 and is projected to increase by 16.3 percent in FY 2023 once enhanced federal fiscal relief expires. If the PHE is extended, state spending increases and enrollment decreases that states anticipated for FY 2023 could occur later.

Figure 1 – Percent Change in Medicaid Spending and Enrollment, FY 1998-23

SOURCE: FY 2022-2023 spending data and FY 2023 enrollment data are derived from the KFF survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2022. 49 states submitted survey responses by Oct. 2022; state response rates varied across questions. Historic data reflects growth across all 50 states and DC and comes from various sources.

Delivery Systems

  • Capitated managed care remains the predominant delivery system for Medicaid in most states. Forty-six states operated some form of Medicaid managed care (managed care organizations (MCOs) and/or primary care case management (PCCM)). Forty-one states contracted with risk-based MCOs. Of these, only Colorado and Nevada did not offer MCOs statewide. Only five states – Alaska, Connecticut, Maine, Vermont, and Wyoming – lacked a comprehensive Medicaid managed care model.
    • Thirty-four states, including Distrct of Columbia, operate MCOs only, five states operate PCCM programs only, and seven states operate both MCOs and a PCCM program.
    • Twenty-seven states contracted with one or more PHPs to provide Medicaid benefits, including behavioral health care, dental care, vision care, non-emergency medical transportation (NEMT), and long-term services and supports (LTSS).
  • Of the forty-one states that contracted with MCOs, 35 reported that 75 percent or more of their Medicaid beneficiaries were enrolled in MCOs as of July 1, 2022.

Figure 2 – MCO Managed Care Penetration Rates for Select Groups of Medicaid Beneficiaries as of July 1, 2022

SOURCE: KFF survey of Medicaid officials in 50 states and DC conducted by HMA, October 2022.

Medicaid Managed Care and Delivery System Changes

  • California, Missouri, Nevada, New Jersey, and New York reported expanding mandatory MCO enrollment for targeted populations.
  • Missouri and Ohio reported introducing specialized managed care programs for children with complex needs.
  • California, Nevada, and Tennessee indicated that they were carving in certain long-term services and supports (LTSS) into their managed care programs.
  • California and Ohio reported carving out pharmacy services in FY 2022 or FY 2023, respectively. The District of Columbia carved out emergency medical transportation from its MCO contracts in FY 2022.
  • Maine, North Carolina, Oregon, and Washington reported changes to their PCCM programs.
  • Virginia plans to implement Cardinal Care in FY 2023, merging the state’s two existing managed care programs: Medallion 4.0 (serving children, pregnant individuals, and adults) and Commonwealth Coordinated Care Plus (CCC Plus) (serving seniors, children and adults with disabilities, and individuals who require LTSS).
  • Forty-one states reported at least one specified delivery system and payment reform initiative (e.g. Patient-Centered Medical Home (PCMH), ACA Health Homes, Accountable Care Organization (ACO), Episode of Care Initiatives, All-Payer Claims Database (APCD)).

Health Equity

  • Twenty-five states reported using at least one specified strategy to improve race, ethnicity, and language (REL) data completeness. Of the 45 responding states, 16 states reported requiring MCOs and other applicable contractors to collect REL data, 12 states reported that eligibility, renewal materials, and/or applications explain how REL data will be used and/or why reporting these data are important, nine states reported linking Medicaid enrollment data with public health department vital records data, and eight states reported partnering with one or more health information exchanges (HIEs) to obtain additional REL data for Medicaid enrollees.
  • Twelve of 44 responding states reported at least one financial incentive tied to health equity in place in FY 2022. The vast majority of these incentives were in place in managed care arrangements (11 of 13). Within managed care arrangements, states most commonly reported linking or planning to link capitation withholds, pay for performance incentives, and/or state-directed provider payments to health equity-related quality measures. Only two states (Connecticut and Minnesota), reported a FFS financial incentive in FY 2022. Five additional states report plans to implement financial incentives linked to health equity in FY 2023.
  • Sixteen of 37 responding MCO states reported at least one specified health equity MCO requirement in place in FY 2022. The number of MCO states with at least one specified health equity MCO requirement in place is expected to grow significantly in FY 2023, from 16 to 25 states. Examples of MCO requirements to address health equity include having a health equity plan, designating a Health Equity Officer, and staff training on health equity and/or implicit bias.

Figure 3 – MCO Requirements to Address Health Equity, FYs 2022-23

SOURCE: KFF survey of Medicaid officials conducted by HMA, October 2022; n=37 states.

Benefits

  • Thirty-three states reported new or enhanced benefits in FY 2022 and 34 states are adding or enhancing benefits in FY 2023. Two states reported benefit cuts or limitations in FY 2022 and no states reported cuts or limitations in FY 2023.

Figure 4 – Select Categories of Benefit Enhancements or Additions, FYs 2022-23

SOURCE: KFF survey of Medicaid officials conducted by HMA, October 2022; Arkansas and Georgia did not respond.

  • Behavioral Health Services. States reported service expansions across the behavioral health care continuum, including institutional, intensive, outpatient, home and community-based, and crisis services. States reported addressing SUD outcomes, including coverage of opioid treatment programs, peer supports, and enhanced care management. At least ten states are expanding coverage of crisis services, which aim to connect Medicaid enrollees experiencing behavioral health crises to appropriate community-based care, including mobile crisis response services and crisis stabilization centers.
  • Pregnancy and Postpartum Services. In April 2022, a temporary option under ARPA to extend Medicaid postpartum coverage from 60 days to 12 months took effect. In addition to the states that took advantage of this eligibility change, some states are enhancing coverage of pregnancy and post-partum services. Nine states (California, District of Columbia, Illinois, Maryland, Michigan, New Mexico, Nevada, Rhode Island, and Virginia) are adding coverage of services provided by doulas and seven states (Alabama, Delaware, Illinois, Maryland, Ohio, Oregon, and Vermont) are investing in the implementation or expansion of home visiting programs.
  • Preventive Services. Sixteen states reported expansions of preventive care in FY 2022 or FY 2023. For example, seven states are expanding services to prevent and/or manage diabetes, such as continuous glucose monitoring. Other reported preventive benefit enhancements relate to asthma services, vaccinations, and genetic testing and/or counseling.
  • Services Targeting Social Determinants of Health. Many states reported new and expanded benefits targeting social determinants of health. Twelve states reported new or expanded housing-related supports, as well as other services and programs tailored for individuals experiencing homelessness or at risk of being homeless.
  • Dental Services. Nine states are adding comprehensive adult dental coverage, while additional states report expanding specific dental services for adults.

Telehealth

  • Most states have or plan to adopt permanent Medicaid FFS telehealth expansions that will remain in place even after the pandemic, though some are considering guardrails on such policies. Nearly all responding states that contract MCOs reported that changes to FFS telehealth policies would also apply to MCOs.

Figure 5 – Changes to FFS Medicaid Telehealth Policy, FY 2022 or FY 2023

SOURCE: KFF survey of Medicaid officials conducted by HMA, October 2022; n=48 states.

  • Nearly all responding states added or expanded audio-only telehealth coverage in Medicaid in response to the COVID-19 pandemic. Twenty-eight states reported that they newly added audio-only coverage while 19 states expanded existing coverage. Nearly all states reported audio-only coverage of mental health and substance use disorder (SUD) services. States least frequently reported audio-only coverage of home and community-based services (HCBS) and dental services. Two states (Mississippi and Wyoming) reported no coverage of audio-only telehealth for the services in question.
  • Telehealth utilization by Medicaid enrollees has been high during the pandemic but has decreased and/or leveled off more recently. States noted that telehealth utilization trends over time correspond to COVID-19 outbreaks, with higher utilization during COVID-19 surges and lower utilization when case counts are lower. In general, states reported that telehealth utilization was projected to continue at higher levels than before the pandemic, at least for some service categories.
  • Thirty-seven states (out of 47 responding) reported that behavioral health services were among those with the highest utilization. Additionally, a majority of states reported high utilization of evaluation and management (E/M) services and/or other physician/qualified health care professional office/outpatient services, including primary care.
  • States reported ACA expansion adults as one of the groups most likely to use telehealth (about one-third of responding states), followed by children and individuals with disabilities (each identified by about one-sixth of responding states).
  • Concerns regarding services delivered via telehealth included the quality of diagnoses, whether audio-only telehealth may be less effective, and inadequate access.
  • Key issues that may influence future Medicaid telehealth policy decisions include analysis of data, state legislation and federal guidance, and cost concerns.

Provider Rates and Taxes

  • In FY 2022, all 49 responding states reported implementing rate increases for at least one category of provider and 19 states reported implementing rate restrictions. In FY 2023, 48 states reported at least one planned rate increase and the number of states planning to restrict rates increased to 25 states.
  • States reported rate increases for nursing facilities and home and community-based services (HCBS) providers more often than other provider categories. The survey also found an increased focus on dental rates with about half of reporting states (20 in FY 2022 and 25 in FY 2023) reporting implementing or plans to implement a dental rate increase

Figure 6 – FFS Provider Rate Changes Implemented in FY 2022 and Adopted for FY 2023

SOURCE: KFF survey of Medicaid officials in 50 states and DC conducted by HMA, October 2022.

  • States continue to rely on provider taxes and fees to fund a portion of the non-federal share of Medicaid costs. All states but Alaska have at least one provider tax or fee in place. Thirty-eight states had three or more provider taxes in place in FY 2022 and eight other states had two provider taxes in place.
  • The most common Medicaid provider taxes in place in FY 2022 were taxes on nursing facilities (46 states), followed by taxes on hospitals (44 states), intermediate care facilities for individuals with intellectual disabilities (33 states), and MCOs (18 states).
  • Three states (Alabama, Mississippi, and Wyoming) reported plans to add new ambulance taxes in FY 2023.

Pharmacy

  • Most states that contract with MCOs report that the pharmacy benefit is carved into managed care (34 out of 41 states that contract with MCOs). Six states (California, Missouri, North Dakota, Tennessee, Wisconsin, and West Virginia) report that pharmacy benefits are carved out of MCO contracts as of July 1, 2022. California was the latest to carve out pharmacy benefits as of January 1, 2022. Two states (New York and Ohio) report plans to carve out pharmacy from MCO contracts in state FY 2023 or later.
  • In FY 2022, Kentucky began contracting with a single PBM for the managed care population. Louisiana and Mississippi report that they will require MCOs to contract with a single PBM designated by the state in FY 2023 and FY 2024, respectively.
  • Seven states (Alabama, Arizona, Colorado, Massachusetts, Michigan, Oklahoma, and Washington) have value-based arrangements (VBAs) in place with one or more drug manufacturers.
  • More than half of responding states reported newly implementing or expanding at least one initiative to contain prescription drug costs in FY 2022 or FY 2023.
  • Six states (Florida, Kentucky, Massachusetts, Maryland, Nebraska, Nevada) reported recently implemented or planned policies to prohibit spread pricing or require pass through pricing in MCO contracts with PBMs.

Key Opportunities, Challenges, and Priorities in FY 2023 and Beyond

When asked to identify the top challenges for FY 2023 and beyond, Medicaid directors listed the following:

  • The unwinding of PHE emergency measures and the resumption of redeterminations.
  • Expiration of emergency authorities.
  • Lasting focus on COVID-19, including vaccinations, long-COVID, decreased utilization of preventive care services, and future emergency preparedness.

Medicaid directors stated that future priorities shaped by COVID-19 include:

  • Health equity.
  • Specific populations and service categories, including behavioral health, long-term services and supports, and maternal and child health.
  • Health care workforce challenges.
  • Payment and delivery system initiatives and operations.
  • IT system modernization.
  • Social determinants of health.

Medicaid directors note that COVID-19 has presented both new opportunities and challenges and has also shifted and shaped ongoing Medicaid priorities.

Links to Kaiser/HMA 50-State Survey Reports

HMA celebrates Native American heritage month

Health Management Associates (HMA) has a rich history of serving the healthcare infrastructure needs of Native American and Alaska Native communities – through healthcare IT support, clinical governance for change management, culturally competent stakeholder engagement, and revenue cycle management that implements an approach that is tailored to the provider and payer entities that deliver care in Native American and Alaska Native communities.

American Indian and Alaska Native (AI/AN) people experience disproportionately poorer health status compared to Americans as a whole. AI/ANs born today have a life expectancy that is 5.5 years less than the national average for all races. HMA has expertise with healthcare issues that uniquely impact American Indian and Alaska Native populations and is experienced in addressing these issues through American Indian and Alaska Native leadership engagement that is culturally sensitive and respectful.

Case Studies

Examples of HMA’s work with tribal health providers include:

Skokomish Tribal Health Center: Policy, Programs, Operations, And Training

HMA provided training and technical assistance to Skokomish Indian Tribal Health Center in Skokomish, Washington. This support includes the provision of clinical oversight services by one of HMA’s clinicians as Interim Medical Director.

HMA: (1) assessed the Tribal Health Center’s billing practices and assisted in the development of a procurement and contract with a new third-party billing vendor; (2) developed a screening and intervention program for medications for addiction treatment (MAT) of opioid and alcohol use disorders, including training for providers and administrative and medical staff; (3) established policies and procedures to support the clinic to move to a primary care medical home model of care, including development of a back office manual and trainings to clinic staff and providers; and (4) provided technical assistance to the Tribal Health Center as it developed telehealth programs for both video visits and remote patient monitoring (RPM), including development of policies and procedures for maintaining operations during emergencies, procedures and workflow approaches for working with IT vendors and potential purchase and implementation of a new electronic health record.

Fort Belknap Tribes: Assessing Behavioral Health Infrastructure

HMA conducted a feasibility assessment to determine how best Fort Belknap Tribal Health Department could take over administration of behavioral health services through a 638 contract with the Indian Health Service (IHS) agency. To do this, HMA conducted a review of select documentation, contracts, and data sets, including clinical and financial data. Through site visits, HMA conducted focus groups and interviews with tribal, IHS, and community stakeholders. HMA also provided research of other tribal behavioral health programs and interviews with tribes successfully delivering comprehensive behavioral health services.

Chickasaw Nation Department of Family Services: Implementing Practice Changes

HMA provided consultation regarding integration of behavioral health into primary care sites, sharing expertise and advice on privacy and confidentiality regulations and integrated care, how to manage during the transition from traditional behavioral health to integrated care, ideas for including medical family therapy more broadly in patient care, and the implementation of patient assessments.

Montana Healthcare Foundation: Identifying and Developing Opportunities with Tribal and Medicaid Leadership:

The Montana Healthcare Foundation (MHCF) convened tribal health care leaders to develop shared priorities to jointly pursue with the Montana Department of Public Health and Human Services (DPHHS) and the Legislature.  HMA was engaged by MHCF to help the group assess implementation options related to the Centers for Medicare and Medicaid Services’ (CMS) revised interpretation of the 100 percent federal match for state Medicaid programs for American Indian Medicaid enrollees for services. HMA proposed options for how DPHHS can use the new match funding to support IHS and tribal health facilities as they implement these new processes and support shared priorities. Priorities identified by the tribal health leaders included operational and policy issues such as improving health information technology capacity; identifying opportunities to compact aspects of health care delivery from IHS; and improving clinic operations through business management training.   

Montana Office of Public Instruction SAMHSA Tribal Systems of Care Grantee: Systems of Care Evaluation

HMA served as the independent evaluator for Montana Office of Public Instruction (OPI) Substance Use and Mental Health Services Administration (SAMHSA) Tribal Systems of Care Evaluation. The five-year evaluation assesses the impact of High-Fidelity Wraparound services being provided to American Indian students in schools on six tribal reservations throughout the state. Evaluation activities include tracking quantitative data to measure progress toward grant goals and tracking qualitative data to assess impact of wraparound activities through key informant interviews, small group listening sessions, and site visits. Evaluation findings are regularly reported to SAMHSA and presented locally to key stakeholders.

Montana Tribally Operated Substance Use Disorder (SUD) Continuum of Care Concept Brief

HMA worked in coordination with the American Indian Health Leaders (AIHL) workgroup, a group made up of leadership from Montana’s seven tribes representing tribal health departments and urban Indian health centers, to develop a SUD Continuum of Care Concept brief, describing potential approaches for design and financing of a jointly tribally operated SUD treatment facilities. This work was conducted through a contract with Montana Healthcare Foundation.

Montana Tribally Operated Substance Use Disorder Continuum of Care

HMA provides technical assistance and facilitation and consulting expertise to support the development of a statewide joint tribally operated SUD Continuum of Care. HMA facilitated discussions with AIHL and Chemical Dependency Center (CD) directors. HMA provided subject matter expertise on the various design options available based on American Society of Addiction Medicine (ASAM) service needs criteria as well as analysis support. HMA is also providing consulting support on financial and operational planning for the development of new facilities. This work could include methods for short-term and long-term forecasting and scenario modeling, identification, and negotiation of capital and operational financing for construction and start-up phase, and technical assistance on revenue cycle best practices to ensure satisfactory patient experience and sustainable revenue. This work is being conducted through a contract with the MHCF.

Health Policy and Advocacy

HMA consultants have worked with the following organizations associated with American Indian health policy and advocacy issues:

American Indian Health Commission of Washington State

A tribally driven non-profit organization with a mission of improving health outcomes for American Indians and Alaska Natives through a health policy focus at the Washington state level. AIHC works on behalf of the 29 federally recognized Indian tribes and two urban Indian health organizations.

Southcentral Foundation

An Alaska Native-owned, nonprofit health care delivery and advocacy organization serving nearly 65,000 Alaska Native and American Indian people living in Anchorage, Matanuska-Susitna Borough and 55 rural villages. Southcentral Foundation and the Alaska Native Tribal Health Consortium own and manage the Alaska Native Medical Center that serves the entire Alaska Native and American Indian population in the state. 

Northwest Portland Area Indian Health Board

Engaged in many areas of Indian health, including legislation, policy analysis, health promotion and disease prevention, as well as data surveillance and research. The Northwest Portland Area Indian Health Board (NPAIHB) is a non-profit tribal advisory organization serving the forty-three federally recognized tribes of Oregon, Washington, and Idaho. 

Messengers for Health

A non-profit organization located on the Apsáalooke (Crow) Reservation in Montana whose mission is to improve the health of individuals on the Crow Indian Reservation and outlying areas through community-based projects that empower communities to assess and address their own unique health-related challenges.

For more information about HMA’s Native American and Alaska Native support services, contact info@healthmanagement.com.

Early bird registration discount expires July 11 for HMA conference on the future of publicly sponsored healthcare, October 10-11 in Chicago

Be sure to register for HMA’s 2022 Conference by Monday, July 11, to get the special early bird rate of $1,695 per person. After July 11, the rate is $1,895.

Nearly 40 industry speakers, including health plan executives, state Medicaid directors, and providers, are confirmed for HMA’s The New Normal: How Medicaid, Medicare, and Other Publicly Sponsored Programs Are Shaping the Future of Healthcare in a Time of Crisis conference, October 10-11, at the Fairmont Chicago, Millennium Park.

In addition to keynote sessions featuring some of the nation’s top Medicaid and Medicaid executives, attendees can choose from multiple breakout and plenary sessions on behavioral health, dual eligibles, healthcare investing, technology-enabled integrated care, social determinants of health, eligibility redeterminations, staffing, senior care, and more.

There will also be a Pre-Conference Workshop on The Future of Payment Reform: Delivering Value, Managing Risk in Medicare and Medicaid, on Sunday, October 9.

Visit our website for complete details: https://conference.healthmanagement.com/ or contact Carl Mercurio at cmercurio@healthmanagement.com.  Group rates and sponsorships are available. The last HMA conference attracted 500 attendees.

State Medicaid Speakers to Date (In alphabetical order)

  • Cristen Bates, Interim Medicaid Director, CO Department of Healthcare Policy & Financing
  • Jacey Cooper, Medicaid Director, Chief Deputy Director, California Department of Health Care Services
  • Kody Kinsley, Secretary, North Carolina Department of Health and Human Services
  • Allison Matters Taylor, Medicaid Director, Indiana
  • Dave Richard, Deputy Secretary, North Carolina Medicaid
  • Debra Sanchez-Torres, Senior Advisor, Centers for Disease Control and Prevention
  • Jami Snyder, Director, Arizona Health Care Cost Containment System
  • Amanda Van Vleet, Associate Director, Innovation, NC Medicaid Strategy Office, North Carolina Department of Health & Human Services

Medicaid Managed Care Speakers to Date (In alphabetical order)

  • John Barger, National VP, Dual Eligible and Medicaid Programs, Humana, Inc.
  • Michael Brodsky, MD, Medical Director, Behavioral Health and Social Services, L.A. Care Health Plan
  • Aimee Dailey, President, Medicaid, Anthem, Inc.
  • Rebecca Engelman, EVP, Medicaid Markets, AmeriHealth Caritas
  • Brent Layton, President, COO, Centene Corporation
  • Andrew Martin, National Director of Business Development (Housing+Health), UnitedHealth Group
  • Kelly Munson, President, Aetna Medicaid
  • Thomas Rim, VP, Product Development, AmeriHealth Caritas
  • Timothy Spilker, CEO, UnitedHealthcare Community & State
  • Courtnay Thompson, Market President, Select Health of SC, an AmeriHealth Caritas Company
  • Ghita Worcester, SVP, Public Affairs & Chief Marketing Officer, UCare
  • Mary Zavala, Director, Enhanced Care Management, L.A. Care Health Plan

Provider Speakers to Date (In alphabetical order)

  • Daniel Elliott, MD, Medical Director, Christiana Care Quality Partners, eBrightHealth ACO, ChristianaCare Health System
  • Taylor Nichols, Director of Social Services, Los Angeles Christian Health Centers
  • Abby Riddle, President, Florida Complete Care; SVP, Medicare Operations, Independent Living Systems
  • David Rogers, President, Independent Living Systems
  • Mark Sasvary, Chief Clinical Officer, CBHS, IPA, LLC
  • Jim Sinkoff, Deputy Executive Officer, CFO, SunRiver Health
  • Tim Skeen, Senior Corporate VP, CIO, Sentara Healthcare
  • Efrain Talamantes, SVP & COO, Health Services, AltaMed Health Services Corporation

Featured Speakers to Date (In alphabetical order)

  • Drew Altman, President and CEO, Kaiser Family Foundation
  • Cindy Cota, Director of Managed Medicaid Growth and Innovation, Volunteers of America
  • Jesse Hunter, Operating Partner, Welsh, Carson, Anderson & Stowe
  • Bryant Hutson, VP, Business Development, MedArrive
  • Martin Lupinetti, President, CEO, HealthShare Exchange (HSX)
  • Todd Rogow, President, CEO, Healthix
  • Joshua Traylor, Senior Director, Health Care Transformation Task Force
  • James Whittenburg, CEO, TenderHeart Health Outcomes
  • Shannon Wilson, VP, Population Health & Health Equity, Priority Health; Executive Director, Total Health Care Foundation

CMS breathes new life into Medicaid HCBS investment opportunities

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 HMA consultants Kevin Hancock, Principal, Andrea Marescaa, Principal, and Aaron Tripp, Principal.

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