Managed Care

Proposed rule changes for mental health parity requirements and impacts on local and regional MCOs

Previously, Wakely Consulting Group, an HMA company, reviewed aspects of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requirements proposed rule published by the Internal Revenue Service (IRS), Employee Benefits Security Administration (EBSA), and Centers for Medicare & Medicaid Services (CMS) on August 3, 2023. The agencies accepted comments on the proposed rule through October 17, 2023. Because the proposed rule, if finalized as put forward, will have a significant impact on the compliance obligations of managed care organizations (MCOs) related to mental health parity requirements for the 2025 plan year in the group market and 2026 plan year in the individual market, MCOs will need to ensure, as they enter 2024, that they are in a position undertake any necessary steps to meet such obligations. This blog post outlines three specific requirements in the proposed the rule related to non-quantitative treatment limitations (NQTL) and their implications for a subset of MCOs: regional and local MCOs.

No More Restrictive Requirement

In the proposed rule, the IRS, EBSA, and CMS restate that MCOs may not apply any NQTL to mental health/substance use disorder (MH/SUD) benefits in any classification that is more restrictive, in policy or practice, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. To ensure compliance with this requirement, the proposed rule specifies exactly how an MCO must determine if the requirement is met.

First, the proposed rule outlines in detail how an MCO must complete a quantitative calculation to determine whether an NQTL applies to substantially all medical/surgical benefits in the classification at issue. If the NQTL does apply to substantially all medical/surgical benefits in the classification, the proposed rule then outlines exactly how the MCO must determine what version of the NQTL counts as the predominant one within the classification as well. Finally, once the predominant variation of the NQTL is established for an NQTL that applies to substantially all medical/surgical benefits in the classification, an MCO would have to use the proposed rule’s definition of “restrictive” (i.e., “imposes conditions, terms, or requirements that limit access to benefits under the terms of the plan,”) to determine if the NQTL applied to the relevant MH/SUD benefit is no more restrictive than the applicable medical/surgical benefit NQTL.

For local and regional MCOs, while the no more restrictive standard is not new, the steps required to ensure compliance likely represent—at the very least—an area where materially more intensive and sophisticated capabilities will need to be brought to bear. Completing the steps outlined above will require a cross-functional approach that leverages such areas as actuarial, behavioral health, clinical, compliance, financial analytics, and legal. The necessary people and processes will need to be deployed not only to accomplish the work effort but to do so in a way that is intelligible to federal and state regulators.

Design Requirement

In the proposed rule, the IRS, EBSA, and CMS seek to make explicit a requirement which mandates that MCOs cannot impose an NQTL on MH/SUD benefits in any classification unless the factors used in designing and applying the NQTL to MH/SUD benefits in the classification are comparable to, and are applied no more stringently than, the factors used in designing and applying the NQTL to medical/surgical benefits in the classification. The agencies note that the regulatory revisions offered only seek to codify what has been a longstanding position of the agencies on this issue.

The most notable and innovative provision put forward by the agencies for purposes of determining comparability is one that would prohibit MCOs from relying on any factor in the design or application of an NQTL if the information on which the factor is based discriminates against MH/SUD benefits when compared to medical/surgical benefits. In this context, the proposed rule makes clear that discriminating against MH/SUD benefits means being biased or not objective, in a manner that results in less favorable treatment of MH/SUD benefits, based on all the relevant facts and circumstances.

For local and regional MCOs, it is advisable, given both the prudence of mitigating forthcoming potential compliance risks and likely limitations on the resources that can be devoted to compliance efforts in a discrete time period, to begin to evaluate upon entering 2024, whether NQTLs imposed on MH/SUD benefits have been designed and applied in a way that comports with this proposal by the agencies. For example, an MCO should evaluate whether factors currently employed rely on historical data or other historical information from a time when coverage was not subject to MHPAEA or was in violation of MHPAEA’s requirements where the use of such data results in less favorable treatment of MH/SUD benefits, as this would be prohibited. To this point, the agencies specifically note that MCOs would not be permitted to calculate reimbursement rates based on historical data on total spending for each specialty that is divided between MH/SUD providers and medical/surgical providers, when the total spending was based on a time period when coverage was not subject to MHPAEA or was in violation of MHPAEA, if the data results in less favorable treatment of MH/SUD benefits.

Outcomes Data Use Requirement

In the proposed rule, the IRS, EBSA, and CMS note that substantially disparate results are often a red flag that an MCO may be imposing an NQTL in a manner that does not comply with MHPAEA and so the agencies have included a proposal to add a requirement that, when designing and applying an NQTL, an MCO must collect and evaluate relevant outcome data in a manner reasonably designed to assess the impact of the NQTL on access to MH/SUD benefits and medical/surgical benefits as well as consider the impact as part of the MCO’s analysis of whether such NQTL complies with MHPAEA.

At minimum, MCOs would have to collect and evaluate data for all NQTLs that includes, but is not limited to, the number and percentage of relevant claims denials, as well as any other data relevant to the NQTLs as required by state law or private accreditation standards. Furthermore, due a specific concern of the agencies about network composition, the proposed rule would mandate that MCOs also collect additional applicable data for NQTLs that relate to network composition such as in-network and out-of-network utilization rates, network adequacy metrics (i.e., time and distance data and data on providers accepting new patients), and provider reimbursement rates. To the extent that data collected and analyzed demonstrates significant differences in access to MH/SUD benefits when compared to medical/surgical benefits, the MCO would be required to take reasonable action to address these differences in access as necessary to ensure compliance with MHPAEA.

For local and regional MCOs, beginning in 2024 to inventory readily available data sources that would be able to be leveraged to comply with this proposal is an important step in order to be prepared to comply during the 2025 plan year in the group market and 2026 plan year in the individual market. Additionally, assessing analytic capabilities to determine the level of readiness to be able to complete the evaluation based on the data collected is also an important component of preparing for this proposed new compliance obligation.

For More Information

If you have questions about how HMA can support your efforts related to the proposed rule’s implications for local and regional MCOs, please contact Michael Engelhard, Managing Director or Patrick Tigue, Managing Director.

Michigan releases Medicaid Managed Care RFP

This week, our In Focus section reviews the Michigan Medicaid Managed Care Comprehensive Health Care Program (CHCP) request for proposals (RFP), which the Michigan Department of Health and Human Services released on October 30, 2023. CHCP covers 2.2 million Medicaid members and is worth approximately $15 billion.

MIHealthyLife

The rebid is part of MIHealthyLife, an initiative that the department launched in 2022 to strengthen Medicaid services through new Medicaid health plan contracts. At that time, Michigan Medicaid sought input from nearly 10,000 stakeholders in an effort to strengthen Medicaid managed care contracts and create a more equitable, coordinated, and person-centered system of care. Based on the feedback, the department designed the RFP with a focus on five strategic pillars:

• Serve the Whole Person, Coordinating Health and Health-Related Needs
• Give All Kids a Healthy Start
• Promote Health Equity and Reduce Racial and Ethnic Disparities
• Drive Innovation and Operational Excellence
• Engage Members, Families and Communities

RFP

Medicaid managed care organizations (MCOs) serve 10 regions, each consisting of multiple counties. MCOs will bid on one or more of the regions throughout the state. Each region requires at least two plans, with the exception of Region 1, a rural area that includes Michigan’s Upper Peninsula, where members are enrolled in a single plan.

As part of the MIHealthyLife initiative, the RFP will include the following changes:

• Prioritizing health equity by requiring Medicaid health plans to achieve National Committee for Quality Assurance Health Equity Accreditation
• Addressing social determinants of health through investment in and engagement with community-based organizations
• Increasing childhood immunization rates, including greater provider participation in the Vaccines for Children program
• Adopting a more person-centered approach to mental health coverage
• Ensuring access to health care providers by strengthening network requirements
• Increasing Medicaid Health Plan accountability and clarifying expectations to advance state priorities

Timeline

Proposals are due January 16, 2024, and implementation is anticipated to begin October 1, 2024. Contracts will run through September 30, 2029, with three one-year optional periods.

Current Market

Michigan currently has nine plans, which serve more than 2.2 million Medicaid and expansion members. The table below provides a breakdown of the plan market share by enrollment.

Link to RFP

Florida releases procurement for statewide Medicaid prepaid dental program

This week, our In Focus section reviews the Florida Statewide Medicaid Prepaid Dental Program invitation to negotiate (ITN) released October 6, 2023, by the Florida Agency for Health Care Administration (AHCA). Contracts will serve 4.4 million Statewide Medicaid Managed Care (SMMC) members.

Background

The Florida Statewide Medicaid Prepaid Dental Program is a full-risk capitated dental program, which began rolling out by groups of regions in December 2018. The incumbent statewide Medicaid dental plans are DentaQuest, Liberty, and MCNA Dental.

Florida also is reprocuring its traditional managed medical assistance (MMA) program and managed long-term care program under SMMC. Awards for Medicaid managed care organizations (MCOs) are expected in February 2024.

ITN

Florida intends to award contracts to at least two plans. One of AHCA’s goals is to contract with plans that will support the HOPE Florida: Pathways to Prosperity initiative, which focuses on community collaboration between the private sector, faith-based community, not-for-profits, and government entities to break down traditional community silos. Through this program, AHCA seeks to:

  • Improve oral health outcomes by implementing a quality continuum
  • Enable personalized oral healthcare, particularly for people with special needs
  • Strengthen the network of dental providers
  • Integrate medical and dental care

In addition to the services currently provided, dental plans will cover authorized hospital outpatient and ambulatory surgery center (ASC) services as part of the new contracts. Plans will cover ancillary medical services provided secondarily to dental care in an ASC or outpatient hospital setting when medically necessary.

Dental plans will continue to operate statewide across all regions. Capitation rates for Medicaid and dually eligible members, however, are set regionally. Rates for medically necessary procedures are set at a statewide level. The new contracts will consolidate the 11 regions into nine as shown in the table below.

Timeline

Responses are due January 5, 2024, and notification of intent to award is anticipated to be released on March 29, 2024. Contracts will run from the execution date in 2024 through 2030.

Evaluation

Technical proposals will be scored using a total weighted score of 6,600, as shown in the table below.

Link to RFP

Kansas releases KanCare, CHIP Medicaid managed care RFP

This week, our In Focus section reviews the KanCare Medicaid capitated managed care request for proposals (RFP), released October 2, 2023, by the Kansas Department of Health and Environment and Department for Aging and Disability Services. The program covers approximately 520,000 beneficiaries and is worth $4.1 billion. New contracts would begin January 2025.

KanCare Background

KanCare is the state’s Medicaid managed care program, covering both traditional Medicaid and Children’s Health Insurance Program (CHIP) members. In all, KanCare covers approximately 320,000 children, 79,000 parents and pregnant women, 59,000 individuals with disabilities, and 54,000 individuals ages 65 and older.

Managed care organizations (MCOs) provide statewide integrated physical health, behavioral health, and long-term services and supports. Covered services include nursing facility care and home and community-based services, as well as Medicaid-funded inpatient and outpatient mental health and substance use disorder services and seven Section 1915(c) HCBS waiver programs.

Kansas is not currently an expansion state. While the governor’s 2024 budget plan called for Medicaid expansion, lawmakers rejected the proposal during the last legislative session.

In 2022, the state legislature delayed the procurement until 2023 to ensure that it occurred after the gubernatorial election and extended current MCO contracts through 2024.

RFP

Kansas expects to select three MCOs. The RFP includes a renewed focus on integrated, whole-person care, workforce retention, and accountability measures for the MCOs. The state lists the main goals for the KanCare procurement as:

  • Improve member experience and satisfaction
  • Improve health outcomes by providing integrated, holistic care with a focus on the impacts of social determinants of health
  • Reduce healthcare disparities
  • Expand provider network and direct care workforce capacity and skill sets
  • Improve provider experience and encourage provider participation in Medicaid
  • Increase the use of cost-effective strategies to improve health outcomes and the service delivery system
  • Leverage data to promote continuous quality improvement

Timeline

A mandatory pre-bid conference will take place on October 16, 2023. Proposals are due January 4, 2024, with awards expected April 12, 2024. Contracts will be effective January 1, 2025, through December 31, 2027, with up to two one-year renewal options. Following is the timeline leading up to implementation.

Current Market

Incumbents are Centene, CVS/Aetna, and UnitedHealthcare. A breakdown of market share by enrollment as of June 2023 can be seen in the table below. Other insurers have already cited their interest in bidding for the new contracts.

Link to RFP

Arizona releases Medicaid ALTCS-EPD Program RFP

This week, our In Focus section reviews the Arizona Long Term Care System (ALTCS) Elderly and Physically Disabled (EPD) Program request for proposals (RFP), which the Arizona Health Care Cost Containment System (AHCCCS) released on August 1, 2023. The ALTCS-EPD program covers 26,000 individuals, representing approximately 38 percent of the ALTCS managed care population. The remaining ALTCS members are covered under a state-run model through the Department of Economic Security, Division of Developmental Disabilities (DES/DDD) health plans, which provide long-term care (LTC) to individuals with intellectual/developmental disabilities. Contracts for ALTCS-EPD are worth approximately $1.6 billion and will take effect October 1, 2024.

Background

ALTCS is one of the oldest Medicaid managed long-term services and supports (MLTSS) programs in the country, providing integrated physical health, behavioral health, and LTSS to individuals who are 65 years of age or older or who have a disability and require nursing facility level care. Beneficiaries may live in assisted living facilities or receive in-home services. The ALTCS-EPD program covers nearly all Arizonans who are dually eligible for Medicaid and Medicare statewide. Winning managed care organizations (MCOs) also will be required to implement companion Medicare Advantage Fully Integrated D-SNPs (FIDE SNPs) effective January 1, 2025.

Market

Members receive coverage through Banner-University Family Care, Mercy Care Plan, and UnitedHealthcare, depending on their geographic service area (GSA). MCOs will bid on all three GSAs and indicate their order of preference to be awarded. AHCCCS will not award the South GSA only or the North GSA only. At present, in the South region, Mercy Care Plan serves Pima County only. Under the new RFP, AHCCCS will not make an award specific to Pima County; rather the MCO will serve all seven counties within the South GSA.

Together, the plans cover 25,973 individuals (see below).

(United and Mercy administer DDD plans.)

Timeline

Intent to bid forms are due by August 31. Proposals are due October 2, and awards are expected to be announced December 13. As noted previously, implementation is scheduled to begin October 1, 2024.

RFP Link

Focus on equitable access at 2023 HMA conference

Access to care is not as simple as obtaining an insurance card. Some people find access to care is limited by geography or distance, others are limited by their native language or cultural awareness. In other ways, care can be limited by who is in the insurance network. All of these inequities can cause gaps in care that undermine health outcomes. In a system that is increasingly paying for outcomes, elimination of inequities is a matter of financial performance, as well as a sign of clinical excellence. Finding and reducing inequities in access to care requires an operational commitment to change workflows, leverage technology, and train staff at all levels to align incentives and culture.

Providing equitable access to care is subject to ever-changing policy and regulatory requirements, and it is increasingly tied to funding, work force staffing and many other operational requirements. This topic will thread through several discussions and panels during the 2023 HMA fall conference with federal policy leaders, health system administrators, and other industry leaders all poised to address the pain points of achieving and maintaining equitable access.

Key sessions (full agenda here):

  • Leading the Charge on Value, Equity and Growth: The Future of Publicly Sponsored Health Care – A discussion on how these public programs came to be the industry standard bearers and what this shift means for outcomes, affordability, policy, and the overall direction of U.S. health care. (Monday 8:30am keynote by Alan Weil)
  • Understanding and Meeting New Health-Related Social Needs Requirements – An environmental overview, including a look at what’s driving these demands and how organizations are specifically working to address the new mandates. (Monday 1:30pm breakout session featuring Bryan Buckley of NCQA, Richard Ayoub of Project Angel Food, and Paul Leon of National Healthcare & Housing Advisors)
  • Practical Approaches to Ensuring Equity in Publicly Sponsored Healthcare Programs This session will provide practical approaches to addressing equity, including an overview of efforts by policymakers, health plans, and providers to make equity the central component of all initiatives to improve healthcare outcomes, access, and health-related social needs. (Tuesday 8:30am keynote by Karen Dale of Amerihealth Caritas)
  • Medicaid in a Post-Pandemic World: Challenges, Opportunities, and a Renewed Focus on Equity State Medicaid directors will provide a status report on all this and more, including a special emphasis on how equity plays into planning and policy decisions. (Tuesday 9:15am plenary featuring Jacey Cooper of the California Department of Health Care Services, Kelly Cunningham of the Illinois Department of Healthcare and Family Services, Drew Snyder of the Mississippi Division of Medicaid, and Stacie Weeks of the Nevada Department of Health and Human Services)

HMA consultants and our speakers look forward to engaging with participants as they delve into these topics to gain a better understanding of the gains we are making as industry leaders and where we still need to innovate. 

To learn more about our Equity work, please contact Leticia Reyes-Nash; to learn more about our Managed Care work, please contact Michael Engelhard or Patrick Tigue.

Register for the HMA 2023 fall conference

The CMS managed care proposed rule: three implications for local and regional MCOs

Previously, HMA reviewed the provisions of the Medicaid and Children’s Health Insurance Program (CHIP) managed care access, finance, and quality proposed rule published by the Centers for Medicare & Medicaid Services (CMS) on May 3, 2023. CMS is accepting comments on the proposed rule through July 3, 2023. While the proposed rule, if finalized as put forward, will have a significant impact across Medicaid stakeholders including enrollees, managed care organizations (MCOs), providers, and state Medicaid agencies, this blog post outlines three specific aspects of the proposed the rule and their implications for a subset of MCOs: regional and local MCOs.

Medical Loss Ratio (MLR) Standards

In the proposed rule, CMS outlines three areas for revisions to its existing MLR standards which require MCOs to annually submit MLR reports to states and require states, in turn, to annually provide a summary of those reports to CMS. An MLR is calculated by adding the expenditures for incurred claims to the expenditures for activities that improve health care quality and fraud prevention activities (the numerator) and dividing this by adjusted premium revenue (the denominator). The three areas where CMS proposes revisions include: (1) requirements for clinical or quality improvement standards for provider incentive arrangements, (2) prohibited administrative costs in quality improvement activity (QIA) reporting, and (3) additional requirements for expense allocation methodology reporting.

Related to provider incentive arrangements (which are considered part of incurred claims), CMS proposes to require that contracts between MCOs and providers: (1) have a defined performance period that can be tied to the applicable MLR reporting period(s), (2) include well-defined quality improvement or performance metrics that the provider must meet to receive the incentive payment, and (3) specify a dollar amount that can be clearly linked to successful completion of these metrics as well as a date of payment. Furthermore, MCOs would be required to maintain documentation to support these arrangements and cannot rely upon attestations as documentation of compliance.

Related to QIA reporting, CMS proposes to explicitly prohibit MCOs from including indirect or overhead expenses when reporting QIA costs in the MLR. CMS notes that today, for example, expenditures for facility maintenance, marketing, or utilities may be included in the MLR even though such expenses do not directly improve health care quality. From the perspective of CMS, the inclusion of such expenditures in the MLR numerator may be resulting an inflated MLRs that then provide a distorted view of MCO performance.

Related to expense allocating reporting, CMS proposes to add requirements regarding how MCOs can allocate expenses for the purpose of calculating the MLR. Specifically, MCOs would need to describe in their methodology a detailed description of the methods used to allocate expenses, including incurred claims, quality improvement expenses, federal and state taxes and licensing or regulatory fees, and other non-claims costs. The goal of requiring this additional detail is to give state Medicaid agencies the ability to assess whether MLRs are accurately represented as a result of the methodology employed by an MCO to allocate expenses across lines of business (e.g., Marketplace, Medicaid, and Medicare).

For local and regional MCOs, the changes to MLR standards proposed by CMS will require meaningful efforts to ensure compliance. Provider incentive arrangements, most expansively, may need to be renegotiated to conform to the requirements and, at a minimum, may need to be documented in a more robust fashion to ensure evidence of compliance can be furnished upon request. The impact of QIA expenditures that are no longer able to be included in the MLR numerator will need to be modeled to ensure that a resulting failure to meet any minimum MLR requirements does not occur and, if this is projected to occur, a strategy will need to be developed and executed to ensure it does not. Expense allocation methodologies will need to be documented more extensively and evaluated for reasonability to ensure that they can withstand regulatory scrutiny when additional detail is provided to state Medicaid agencies.

Medicaid and CHIP Quality Rating System (MAC QRS)

In the proposed rule, CMS outlines a MAC QRS framework that includes: (1) mandatory quality measures, (2) a quality rating methodology, and (3) a mandatory website display format. State Medicaid agencies and MCOs will be required to adopt and implement the MAC QRS framework developed by CMS or adopt and implement an alternative managed care quality rating system. CMS will update the mandatory measure set at least every other year. Measures will have public notice through a call letter (or similar guidance) on any planned modifications with measures being based on: (1) value in choosing an MCO, (2) alignment with other CMS programs, (3) the relationship to enrollee experience, access, health outcomes, quality of care, MCO administration, or health equity, (4) MCO performance, (5) data availability, and (6) scientific acceptability.

State Medicaid agencies will be required to collect from MCOs the data necessary to calculate ratings for each measure and ensure that all data collected are validated. Additionally, state Medicaid agencies must calculate each measure and issue ratings to each MCO for each measure. Finally, the mandatory state website will be required to contain the following elements: (1) clear information that is understandable and usable for navigating the website itself, (2) interactive features that allow users to tailor specific information, such as formulary, provider directory, and ratings based on their entered data, (3) standardized information so that users can compare MCOs, (4) information that promotes beneficiary understanding of and trust in the displayed ratings, such as data collection timeframes and validation confirmation, and (5) access to Medicaid and CHIP enrollment and eligibility information, either directly on the website or through external resources.

For local and regional MCOs, the MAC QRS framework proposed by CMS will require assessing their capability to produce the mandated data upon request by state Medicaid agencies. It will also then require ensuring that all mandated data is available to be provided on an annual basis. To the extent possible, at the appropriate time, assessing baseline performance on measures and proactively developing and implementing strategies to improve performance will be prudent. Assessing the impact of the greater transparency around quality performance that the proposed MAC QRS will bring in order to understand the potential impact on competitive position will also be important.

Network Adequacy Requirements

In the proposed rule, CMS outlines important network adequacy requirements meant to further timely access to care for Medicaid and CHIP managed care enrollees. Two of these are focused upon here: (1) appointment wait time standards and (2) secret shopper surveys. Other policies to enhance access are also included in the proposed rule including, for example, a requirement that state Medicaid agencies conduct an annual enrollee experience for each MCO.

For appointment wait time standards, CMS proposes that state Medicaid agencies develop and enforce wait time standards for routine appointments for four types of services: (1) outpatient mental health and substance use disorder (SUD) for adults and children, (2) primary care for adults and children, (3) obstetrics and gynecology (OB/GYN), and (4) an additional service type determined by the state Medicaid agencies in an evidence-based manner (in addition to the previous three noted). The maximum wait times must be no longer than 10 business days for routine outpatient mental health and SUD appointments and no longer than 15 business days for routine primary care and OB/GYN appointments. State Medicaid agencies could impose stricter wait time standards but not more lax ones. The wait time standard for the fourth service type selected by state Medicaid agencies will be determined at the state level.

For secret shopper surveys, state Medicaid agencies will be required to utilize an independent entity to conduct annual secret shopper surveys to validate MCO compliance with appointment wait time standards and the accuracy of provider directories to identify errors as well as providers that do not offer appointments. For an MCO to be compliant with the wait time standards, as assessed through the secret shopper surveys, it would need to demonstrate a rate of appointment availability that meets the wait time standards at least 90% of the time. State Medicaid agencies would be required to develop remedy plans when MCO compliance issues are identified which designate the party responsible for taking action, outline the appropriate steps to be taken to address the issue, and document the intended implementation timeline.

For local and regional MCOs, the wait time standards and secret shopper surveys present opportunities to prepare to ensure compliance and to collaborate with state Medicaid agencies. For preparation, undertaking secret shopper surveys ahead of implementation to determine the current performance relative to maximum wait times may be advisable. Additionally, there is an opportunity to collaborate with state Medicaid agencies regarding the selection of the fourth service type for which wait time standards will be established.

For More Information

If you have questions about how HMA can support your efforts related to the proposed rule’s implications for local and regional MCOs, please contact Michael Engelhard, managing director, Patrick Tigue, managing director, or Sarah Owens, principal.

Takeaways from the early Medicaid unwinding actions

This week, our In Focus checks in on the Medicaid unwinding work and key issues HMA experts are watching as more states resume their normal policies and processes for determining eligibility. A total of 19 states started disenrollments effective for April or May coverage, and 22 additional states plan to start ending coverage this month. States are scheduled to submit the next monthly report by June 8, 2023.

Background

As explained in earlier In Focus articles, (herehere and here) federal COVID-19 relief laws allowed states to receive higher federal funding for Medicaid as long as the state did not terminate Medicaid coverage for anyone enrolled in Medicaid during the public health emergency (PHE). One result of the continuous coverage policy was sustained growth in Medicaid enrollment; more than 21 million additional individuals were continuously enrolled in Medicaid for up to three years between February 2020 and March 2023. In December 2022, Congress ended the Medicaid continuous coverage policy after March 31, 2023. States were allowed to begin processing redeterminations as early as February 2023 and start disenrolling ineligible individuals as early as April 2023.

Preparations for the Medicaid unwinding have been under way for well over two years. The Centers for Medicare & Medicaid Services (CMS), states, Medicaid health plans, providers, beneficiary advocates, and other interested stakeholders have been working to ensure that the policies, outreach, and assistance are in place to support this massive eligibility renewal and redetermination initiative.

What Do We Know… Or Not Know?

Most of the available forecasts project between 10-15 million enrollees will lose Medicaid coverage. The Health Management Associates (HMA) insurance mix model projects that more than 10 million of the approximately 90 million Medicaid enrollees are at risk for disenrollment. HMA’s model illustrates the variety in state approaches to managing the resumption of eligibility redeterminations as well as key insights related to the differential impact by Medicaid eligibility categories.

  • Based on published information, the number of individuals who were disenrolled from Medicaid in April through May is likely to approach 500,000. In these early days of the unwinding period, HMA experts are closely reviewing the reports and engaging with key stakeholders in individual states. Several issues already are garnering more attention, such as the impact on child enrollment, churn and experiences in states using the extended reconsideration period flexibility, among others. Stakeholders will want to monitor how these and other program nuances evolve over the next year.
  • We do not yet have robust or consistent data from the states that have resumed their normal processes for determining eligibility. States must submit disenrollment reports to CMS each month, and CMS must publish this information. The states are not, however, required to publish this information on their website. While some states have chosen to publish the data or plan to do so, there is no consistent approach to the specific data states post. For example, while most states publishing a state data dashboard are sharing the number of renewals they are processing each month, only slightly more than half also are sharing the number of renewals resulting in coverage terminations.
    CMS is not expected to publish the state data before the end of June. Once this information is available, the state unwinding reports may provide a more comprehensive and consistent picture of enrollment over the next year.

In addition, the total number of “procedural terminations” currently is difficult to determine. Lack of consistent public reporting creates gaps in the data about the number of individuals disenrolled because they did not provide a timely response to the state’s request for more information (or for other procedural reasons). As Medicaid stakeholders know, the procedural disenrollment number is critical because these individuals could still be eligible for the program.

  • Early disenrollment numbers should be analyzed carefully and in the context of the state. As noted earlier, the full eligibility renewal and disenrollment reports are unavailable at this time. We do know, however, that the available data is best analyzed in the context of the state’s unwinding plan (e.g., how the state is sequencing its eligibility reviews). The sequencing, pace, staffing, messaging consistency, partner outreach and assistance, and other factors will result in variation in state experiences. States are actively analyzing the data as the information is released and considering course corrections that may be needed, which could affect enrollment.
  • Ongoing federal and state collaboration is improving preparations and allowing partners to address concerns as they arise. CMS and states have been transparent about the magnitude of the Medicaid unwinding and the fact that challenges will be inevitable throughout this process. The experiences reported by the first tranche of states to begin their unwinding period reinforce those points. They also provide important lessons for states that are or will shortly resume normal eligibility operations.

What to Watch

HMA’s experts are working with states, Medicaid health plans and their partners, providers, and advocacy organizations to identify and implement solutions to some of the known challenges. We also are looking ahead to forthcoming data, qualitative input, and other important developments that may inform federal and state policies and operations beyond the unwinding period.

  • Unwinding trends. Though it is too early to definitively identify trends, HMA experts are monitoring the early state data, and we are prepared to analyze the CMS reports once they are published. We anticipate the CMS published data could be more instructive regarding the impact of the unwinding on enrollment, including states or regions that could benefit from additional outreach and assistance strategies, disproportionate impacts on certain demographic groups, new flexibilities that states may want to consider, and steps that health plans, hospitals and health systems, providers, and other partners could advance.
  • State operational plans. As of late May, CMS officials reported they have not asked any state Medicaid agency to develop a corrective action plan related to the unwinding; however, this does not mean that federal officials do not have concerns about the experiences and data being reported out of certain states. States, their business partners, and advocates will all benefit from monitoring shifts in state plans, potential future CMS resources and direction to states such as additional reporting or modifying eligibility processes.
  • Coverage Program Transitions. Significant attention has been appropriately placed on the Medicaid disenrollment numbers. HMA experts also are closely watching for new data on the number of individuals who successfully transition and enroll in qualified health plans offered in the Health Insurance Marketplaces. In the short term, the Medicaid unwinding could have a notable impact on total enrollment in Marketplace plans as well as provider payer mix. This could affect longer-term policy, strategy, and operational decisions for officials at the federal and state levels, managed care organizations, providers, and other stakeholders. For example:
    • Health insurers should assess the opportunity to participate in the Marketplace program. Other insurers may need to develop new strategies to remain competitive in the Marketplace.
    • Providers have similar assessments to conduct related to changes in the number of uninsured people to whom they deliver care, as well as their payer mix and the Marketplace plan networks in which they participate.
    • Policymakers may revisit Marketplace regulations and standards in response to enrollment growth, enrollee demographics, and acuity of enrollees in Marketplace plans.

Medicaid agencies, health plans, all types of Medicaid providers, and advocacy organizations should continue to analyze their immediate needs during the Medicaid unwinding. They should also be planning to identify and incorporate lessons from this transition period, as well as preparing for policy and operations changes in the post-unwinding environment.

Please contact HMA experts Jane LongoAndrea Maresca, and Lora Saunders.

HMA: What We’re Watching

On June 8, 2023, the Health Care Payment Learning & Action Network (LAN) will hold a virtual meeting focused on accountable primary care. The LAN — an initiative supported by the Centers for Medicare & Medicaid Services (CMS) Innovation Center — is a group of public and private health care leaders that provide thought leadership, strategic direction, and ongoing support to accelerate our care system’s adoption of alternative payment models (APMs). During the session, CMS Administrator Chiquita Brooks-LaSure and the Innovation Center’s Deputy Administrator and Director Liz Fowler will share their vision for accountable primary care.

Over the past several months CMS leaders have discussed their intent to accelerate the transition to value-based care and more accountable primary care. They have identified key principals and hinted at certain components of a potential new primary care model. Additionally, the Innovation Centers’ earlier strategy documents have highlighted the imperative to include payers beyond Medicare, importantly Medicaid and commercial insurers, in models to achieve person-centered accountable and equitable care.

This meeting is notable because the Innovation Center’s models can drive transformational shifts in health care delivery and payment across public and private payers at the system and practice levels. Providers, health systems, insurers, and other interested stakeholders will want to closely monitor the LAN discussion for more information about CMS’ evolving thinking and future opportunities related to a potential model for accountable primary care. HMA experts are available to work with health care organizations and stakeholders to interpret and respond to developments flowing from the LAN session.

LAN meeting registration and information is available here.

HMA annual conference on innovations in publicly sponsored healthcare

Innovations in Publicly Sponsored Healthcare: How Medicaid, Medicare, and Marketplaces Are Driving Value, Equity, and Growth

Pre-Conference Workshop: October 29, 2023
Conference: October 30−31, 2023
Location: Fairmont Chicago, Millennium Park

Health Management Associates has announced the preliminary lineup of speakers for its sixth annual conference, Innovations in Publicly Sponsored Healthcare: How Medicaid, Medicare, and Marketplaces Are Driving Value, Equity, and Growth.

Hundreds of executives from health plans, providers, state and federal government, investment firms, and community-based organizations will convene to enjoy top-notch content, make new connections, and garner fresh ideas and best practices.

A pre-conference workshop, Behavioral Health at the Intersection of General Health and Human Services, will take place Sunday, October 29.

Confirmed speakers to date include (in alphabetical order):

  • Jacey Cooper, State Medicaid Director, Chief Deputy Director, California Department of Health Care Services
  • Kelly Cunningham, Administrator, Division of Medical Programs, Illinois Department of Healthcare and Family Services
  • Karen Dale, Chief Diversity, Equity, and Inclusion Officer, AmeriHealth Caritas
  • Mitchell Evans, Market Vice-President, Policy & Strategy, Medicaid & Dual Eligibles, Humana
  • Peter Lee, Health Care Policy Catalyst and former Executive Director, Covered California
  • John Lovelace, President, Government Programs, Individual Advantage, UPMC Health Plan
  • Julie Morita, MD, Executive Vice President, Robert Wood Johnson Foundation
  • Anne Rote, President, Medicaid, Health Care Service Corp.
  • Drew Snyder, Executive Director, Mississippi Division of Medicaid
  • Tim Spilker, CEO, UnitedHealthcare Community & State
  • Stacie Weeks, Administrator/Medicaid Director, Division of Health Care Financing and Policy, Nevada Department of Health and Human Services
  • Lisa Wright, President and CEO, Community Health Choice

Publicly sponsored programs like Medicare, Medicaid, and the Marketplaces are leading the charge in driving value, equity, and growth in the U.S. healthcare system. This year’s event will highlight the innovations, initiatives, emerging models, and growth strategies designed to drive improved patient outcomes, increased affordability, and expanded access.

Conference Agenda

Early bird registration ends July 31. Questions may be directed to Carl Mercurio at [email protected]. Group rates, government discounts, and sponsorships are available.

Register Now

New experts join HMA in April 2023

HMA is pleased to welcome new experts to our family of companies in April 2023.

Jed Abell – Consulting Actuary
Wakely

Jed Abell is a professional health insurance actuary with over 20 years of experience focusing on Medicare Advantage, Part D, and commercial employer group plans.

Surah Alsawaf – Senior Consultant
HMA

Surah Alsawaf is a senior consultant with experience in creating and implementing regulatory strategies and workflows, conducting reviews and audits, and leading cross-functional teams to complete complex deliverables.

Elrycc Berkman – Consulting Actuary
Edrington

Elrycc Berkman is experienced in Medicaid managed care rate development including managed long-term services and supports (MLTSS) and program of all-inclusive care for the elderly (PACE) rate development.

Monica Bonds – Associate Principal
HMA

Monica Bonds is an experienced managed care professional with over 15 years of experience working in large and diverse organizations.

Yucheng Feng – Senior Consulting Actuary
Wakely

Yucheng Feng has over 15 years of experience providing actuarial support for Medicare Advantage clients, including bid preparation, reserve, actuarial analytics and providing strategic recommendations. Read more about Yucheng.

Melanie Hobbs – Associate Principal
HMA

Melanie Hobbs is an accomplished healthcare executive, consultant, and thought leader specializing in Medicare, Medicaid, and Special Needs Plans (SNPs).

Daniel Katzman – Consulting Actuary
Wakely

Daniel Katzman is experienced in Medicare Advantage bid pricing and modeling as well as claims trend analytics and affordability/cost-savings analysis. Read more about Daniel.

Supriya Laknidhi – Principal
HMA

Supriya Laknidhi has over 20 years of experience in the healthcare industry and a proven track record in driving growth and innovation for companies.

Donald Larsen – Principal
HMA

Dr. Donald Larsen is a C-suite physician executive with over 30 years of experience spanning complex academic medical centers, community health systems, acute care hospitals, and research institutes.

Ryan McEntee – Senior Consultant
Wakely

Ryan McEntee is an experienced managed care executive specializing in strategic leadership within Medicare Advantage plans. Read more about Ryan.

Nicole Oishi – Principal
HMA

Nicole Oishi has over 30 years of experience in senior leadership roles as a healthcare clinician and executive.

Read more about our new HMA colleagues

Default stock photo

Surah Alsawaf

Senior Consultant

Elrycc Berkman

Elrycc Berkman

Consulting Actuary

Monica Bonds

Monica Bonds

Associate Principal

Melanie Hobbs

Melanie Hobbs

Associate Principal

Don Larsen

Donald Larsen

Principal