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.
This week, our In Focus section reviews the Centers for Medicare & Medicaid Services (CMS) report to Congress on Non-emergency Medical Transportation (NEMT) in Medicaid, released June 20, 2023. CMS found that approximately 3 million to 4 million Medicaid beneficiaries used NEMT services annually between 2018 and 2021 and made recommendations related to Medicaid coverage of NEMT for medically necessary services.
Background
NEMT includes transportation services not limited to public transport, taxis, personal vehicle transport, non-emergency ambulances, air transport, and transportation network companies. Medicaid, unlike private insurers and Medicare, covers NEMT for any covered medical service for beneficiaries with an unmet transportation need. NEMT program administration varies from state to state and can be on a fee-for-service basis, carved out with third-party transportation brokers, or carved into the Medicaid risk-based managed care contracts. Under the Consolidated Appropriations Act, 2021, which made NEMT a statutory requirement, HHS must conduct and submit an analysis of nationwide Medicaid NEMT services to Congress. An initial report was submitted in June 2022.
Table 1. NEMT Service Delivery Models by State, 2018−2021
CMS conducted the analysis using Transformed Medicaid Statistical Information System (T-MSIS) data for calendar years 2018−2021. The analysis covered the number and percentage of Medicaid beneficiaries using NEMT, the average number of NEMT ride days, the types of medical services beneficiaries accessed when using NEMT, monthly trends in use of NEMT versus telehealth services before and during the COVID-19 public health emergency (PHE), and a comparison of the volume of NEMT services used by delivery model and state.
The T-MSIS data has some limitations and may not capture all Medicaid NEMT provided to beneficiaries due to differences in billing practices across states and providers. For example, if states claim certain medical service expenditures as administrative expenditures, T-MSIS will not capture it. Further, the number of ride days undercounts the total number of NEMT rides, as beneficiaries may receive multiple NEMT rides in a day. Because of these and other limitations, the data represents a subset of the NEMT that the Medicaid program covers.
Findings
Approximately 3−4 million Medicaid beneficiaries used NEMT annually in 2018−2021, representing 4−5 percent of Medicaid beneficiaries. Alaska, Minnesota, Arizona, Maine, and Wisconsin had the highest percentage of Medicaid beneficiaries who used NEMT, with up to nearly 11 percent in Alaska in 2021.
States that used a capitated broker model to deliver NEMT saw the highest use of these services. However, on average, states that used in-house NEMT delivery model claimed a relatively high percentage of NEMT expenditures as administrative expenditures, and NEMT administrative expenditures generally are not captured in the T-MSIS data.
Figure 1. Number of NEMT Ride Days per 10,000 Beneficiaries, by Delivery Model and Beneficiary Subgroup, 2021
Source: The Centers for Medicare & Medicaid Services
Medicaid enrollees with the highest NEMT usage rates included individuals in Money Follows the Person, receiving Section 1915c home- and community-based services, dually eligible for Medicare and Medicaid, and aging adults and people with disabilities. In addition, Medicaid members with certain physical and mental health conditions and those with a substance use disorder had higher rates of usage compared with the average Medicaid members. Medicaid enrollees in remote areas also used NEMT at the highest rates.
During the COVID-19 PHE, rates of NEMT dropped from 3.9 million beneficiaries, or 5 percent of all Medicaid members in 2019, to 3.5 million (4 percent) in 2020 and 3.3 million (4 percent) in 2021. In 2019−2020, the total number of annual NEMT ride days dropped by 37 percent, from 81.3 million to 53.1 million, but increased by more than 4 percent (to 55.5 million) in 2021. On average, the monthly number of NEMT ride days in 2021 remained about 30 percent below pre-PHE levels, and the number of beneficiaries using NEMT remained 23 percent below pre-PHE levels. The COVID-19 PHE caused telehealth to sharply increase. Throughout the PHE, telehealth was used more frequently than NEMT to access certain services.
Recommendations
CMS found that public transit was rarely used for NEMT, even though more than one-third of beneficiaries live in large, urban areas. In the report, CMS recommends that states should find opportunities to improve operations between NEMT and public transit networks to better coordinate services for beneficiaries.
CMS also recommends that states further examine the role of NEMT in improving the use of timely preventive care. Beneficiaries used NEMT to access preventive services at the highest rate of all service types examined. The analysis found some evidence that use of NEMT increases access to preventive services and is cost-effective, implying that increasing the uptake of NEMT may confer cost savings to states and the federal government.
Finally, CMS recommends that states increase awareness of the NEMT benefit. Medicaid beneficiaries’ knowledge of the benefit is low. CMS urges states to work with health plans and providers to share information with beneficiaries about the availability of NEMT.
This week, our In Focus section reviews the projected healthcare expenditure and enrollment data from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary, published June 14, 2023. The Office of the Actuary provides annual updates to historical and projected National Health Expenditure data on Medicare, Medicaid, CHIP, and other public insurance programs, as well as commercial healthcare insurance.
CMS projects that the average annual growth for national healthcare spending from now through 2031 will be 5.4 percent. CMS estimated that the number of insured individuals in the United States was projected to reach a high of 92.3 percent in 2022 and would decrease to 90.5 percent by 2031. CMS projects 93.6 million Medicaid and CHIP members will account for more than $1.2 trillion in annual spending in 2031 and that 76.4 million Medicare beneficiaries will account for more than $1.8 trillion in expenditures that year. A summary of other key takeaways from the actuarial report follows.
Enrollment Projections
Approximately 92 million people were enrolled in Medicaid and CHIP programs in 2021. Enrollment is projected to have reached a high of 97.6 million in 2022 and is expected to fall between 2023 and 2026 because of Medicaid redeterminations. CMS projects the largest loss in 2024, with 8 million people leaving Medicaid and CHIP that year alone. By 2026, enrollment is projected to hit a low of 89.7 million and start to rise back up in the subsequent years until reaching 93.6 million enrollees in 2031.
Table 1. Historical and Projected Medicaid/CHIP Enrollment (in Millions)
Figure 1. Historical and Projected Medicaid/CHIP Enrollment (in Millions)
Medicare enrollment is projected to continue growing steadily. CMS estimates that Medicare beneficiaries totaled 63.6 million in 2022. By 2031, Medicare enrollment is expected to climb to 76.4 million.
Expenditure Projections
Medicaid expenditures are expected to grow by 5 percent on average in 2022−2031. In 2022, the Medicaid annual growth rate was projected to be −2.1 percent. Following the public health emergency unwinding, average expenditure growth would pick up to 5.6 percent in 2025−2031.
CMS estimated that total Medicaid and CHIP annual spending in 2022 was $828.4 million; by 2031, it is projected to hit $1.2 trillion. For context, private health insurance is projected to reach nearly $2.1 trillion in 2031.
Table 2. Historical and Projected Medicaid/CHIP Expenditures (in Billions)
Figure 2. Historical and Projected Medicaid/CHIP Expenditures (in Billions)
Medicare spending is projected to grow to more than $1.8 trillion in 2031 from $944.2 million in 2022. During this time, average annual expenditure growth is projected to be 7.5 percent. In 2022, spending growth dropped to 4.8 percent compared with 8.4 percent in 2021 because fee-for-service beneficiaries were using fewer emergency department services and as a result of reinstated payment rate cuts associated with the Medicare Sequester Relief Act of 2022.
Medicaid Expenditure Projections by Category
CMS provides a historical and projected breakdown of expenditures by category for Medicaid only (CHIP is bundled with Department of Defense and other public spending). Table 3 summarizes the projected change in annual expenditures for several categories of services and other expenditures. It also shows each category’s percentage contribution to total Medicaid expenditures and the compounded annual growth rate (CAGR) in 2021−2031 for each category of spending. Hospital spending, personal care/residential/other, and physician/clinical expenditures are projected to continue to be the largest contributors to overall Medicaid expenditures, together equaling approximately 65 percent of total expenditures in 2021 and a projected 66 percent in 2031.
Table 3. Historical and Projected Medicaid-Only Expenditures by Category, 2021-2031 (in Billions)
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, (here, here 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.
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.
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
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.
Early bird registration ends July 31. Questions may be directed to Carl Mercurio at [email protected]. Group rates, government discounts, and sponsorships are available.
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.
This week our In Focus section reviews the Illinois Healthcare Transformation 1115 Waiver Extension request, posted for review on May 12, 2023.
In pursuing this waiver extension, Illinois joins a growing list of states taking advantage of new Centers for Medicare & Medicaid Services (CMS) policy flexibilities to address health-related social needs (HRSNs) through Medicaid and test community-driven initiatives that are focused on improving health equity, improving access to care, and promoting whole-person care.
The Illinois waiver incorporates two of the most significant new opportunities in the CMS demonstration waiver flexibilities by proposing to incorporate housing supports for people who are experiencing or at risk of homelessness. The waiver also would extend community reintegration services for justice-involved adults and youths for up to 90 days before their release from incarceration. For a full list of proposed benefits and demonstrations, see Table 1.
Table 1. Summary of Illinois Medicaid 1115 Waiver Extension
The Illinois waiver represents an unprecedented opportunity to demonstrate the long-term, positive impact of providing HRSN services to achieve health equity and create a sustainable, community-driven system for delivering those services. The demonstration proposes to offer a range of HRSN services that are focused on the unmet needs of people who are homeless and housing insecure, are justice-involved, have behavioral health conditions, are pregnant, are unemployed, are food insecure, and/or have been exposed to violence or are at risk of violence with the goal of eliminating health disparities.
The waiver projects a five-year total of $4.4 billion in HRSN services expenditures and another $800 million in HRSN-related infrastructure, indicating Illinois’ long-term commitment to healthcare transformation and to building an equitable, accessible, and high-quality delivery system.
This week’s In Focus is the second in a two-part look at the Centers for Medicare & Medicaid Services’ (CMS’s) recently proposed changes to the Medicaid program. Last week we covered CMS’s proposed changes to the federal Medicaid managed care regulations (CMS-2439-P). This week we review the Medicaid Access to Care proposed rule (CMS-2442-P).
As we discussed last week, the managed care and access to care rules include significant changes to core structural and financing aspects of the Medicaid program. Though state agencies, providers, health plans, consumer groups, and other stakeholders will want to understand the distinct requirements and expectations in each rule that apply to them, the proposed changes cannot be viewed in isolation.
The Access to Care rule addresses a range of challenges that shape the experience of Medicaid enrollees, regardless of whether they are in managed care programs or traditional fee-for-service (FFS). The proposed policy changes also are designed to create an updated federal framework for Medicaid’s home and community-based services (HCBS) programs. These proposals come at a pivotal time, as states are facing workforce shortages, particularly among HCBS direct care workers (DCWs).
The remainder of this In Focus delves into notable components of the proposed changes and includes analysis of the implications of these policies for stakeholders. CMS will benefit from stakeholder input; the deadline for submitting comments is July 3, 2023.
Table 1. Access to Care Regulations: Overview of Proposed Changes
Key Themes and Considerations
Ensuring Payment Adequacy for Key HCBS Services Experiencing Workforce Shortages. One of the most notable proposed changes that would directly impact DCWs is a requirement that at least 80 percent of Medicaid payments be spent on compensation. The proposed rule would apply to homemaker, home health aide, and personal care services, as they represent a large portion of HCBS services that DCWs provide. The proposal is based on feedback from states that have implemented similar provisions, which have ranged from 75 to 90 percent compensation requirements.
CMS specifically seeks stakeholder feedback on the percentage that should be adopted. This policy provision also is important from an equity perspective, given that 90 percent of DCWs are women and 60 percent are members of racial or ethnic minority populations. However, increased or mandated DCW rates may make it difficult for HCBS providers to sustain their businesses as they manage the increased administrative pressures of electronic visit verification, the complexity of filing claims for managed long-term services and supports (MLTSS), and the additional work that HCBS quality measurement may create. Smaller HCBS providers, some of which may have deep cultural expertise, may struggle to sustain themselves and meet these requirements.
Table 2. Access to Care Regulations: Snapshot of Proposed Rate, Access, and Payment Changes
Payment Alignment. CMS is seeking to align access to care strategies and payment rate transparency more closely across the FFS and managed care delivery systems. The proposed rule includes several changes that CMS has developed achieve this goal. For example:
CMS plans to require that states publish more detailed rate information in a consistent format. States, health plans, providers, and other interested stakeholders will want to consider the implications by delivery system. Additional transparency requirements could create a new opportunity to understand rates across payers and states and use this information in addressing access challenges for services.
The proposed rule also would require extensive comparative analysis of Medicaid FFS rates and Medicare rates. CMS proposes to use Medicare non-facility payment rates as a benchmark to determine if states are meeting federal Medicaid access State analyses will be vital to CMS oversight as well as advocacy efforts within states to monitor and update FFS rates as needed.
Strengthening the Focus on Quality in State HCBS Programs. Over the last several decades, states and Medicaid stakeholders have made significant progress toward increasing participation in HCBS programs and community integration initiatives to counter Medicaid’s institutional bias. CMS is proposing more consistency in the expectations and reporting for HCBS quality measures to further the impact and create a consistent foundation for the recently mandated HCBS quality initiatives starting to take root.
In the short-term, the proposed changes will require states, and likely downstream providers and Medicaid agencies, to immediately change their quality reporting policies and systems. States and their stakeholders will want to map out processes for cyclical updates to HCBS quality measures, including cross-walking the future measures with existing ones, making systems changes, and updating dashboards. Targeted attention and focus will be needed to identify realistic HCBS performance targets that yield successful improvement strategies in the midst of a workforce crisis. Longer term, it will be necessary to map out when updates and reporting will be required to strengthen the rigor and accountability for state performance in the HCBS quality measure set, as well as reinforce the information available to make policy, clinical, and operational improvements to Medicaid programs.
HCBS Access Measurement. CMS is proposing new FFS HCBS payment and access transparency requirements to ensure compliance with Medicaid provider payment rules that require payments to be adequate to enlist at least the same number of providers that the overall geographic population can access. Because the targeted HCBS services do not have a comparable Medicare rate, CMS proposes implementation of a payment rate disclosure approach that would standardize data and monitoring across service delivery systems, with the goal of improving access. In addition to proposed payment transparency changes, CMS proposed new reporting on HCBS waiver waiting lists and timelines for the start of related services once authorized.
These new reporting requirements will provide stakeholders with more information to benchmark their state’s experience with other providers across the nation. This information could be influential to policymakers and legislators and help uncover some of the core contributors to our nation’s HCBS workforce shortage.
Improving Health Equity with Medicaid Beneficiary Input. CMS proposes overhauling the scope and membership of the state Medical Care Advisory Committee. The new Medicaid Advisory Committee (MAC) would continue to advise the state on health and medical matters and play an expanded advisory role on matters of policy development and effective administration of the program. CMS also plans to require that states establish a Beneficiary Advisory Group (BAG) composed of current or past Medicaid beneficiaries. A subset of BAG members would serve on the MAC to ensure their perspectives are integrated into the committee’s recommendations to states.
Under the new federal requirements, MAC representatives could have greater relative input and influence on policies and actions each state Medicaid agency advances. Medicaid stakeholders will want to ensure the MAC’s minimum federal requirements support effective structures and processes in states.
What’s Next
CMS plans to reframe Medicaid access as one of three parts of the continuum of care, along with enrollment and maintenance of coverage. The proposals in the Access to Care rule would have a meaningful impact on the volume and type of data available to evaluate the relationship between Medicaid payment rates and access across all delivery systems.
States, managed care organizations, providers, Medicaid enrollee advocacy organizations, and other interested stakeholders should analyze the proposals and consider submitting comments to CMS on the feasibility, potential impact, and, where applicable, alternatives to the proposed changes. They also can use this time to begin planning and determine which resources and tools they may need to prepare for implementation of changes across delivery systems in the Medicaid program.
HMA’s experts are taking a wholistic approach to reviewing the Access to Care and Managed Care proposed rules in tandem and identifying key points of intersection.
For more information on the access to care proposed rule, contact HMA’s team of experts, Susan McGeehan and Andrea Maresca.
Policy crossroads and the end of the public health emergency due to COVID-19
This is part of a three-part series on significant implications of the end of the Public Health Emergency (PHE).
The end of the Public Health Emergency on May 11, 2023 is likely to mark a transitional point in the rapidly evolving arena of virtual care services and not a dramatic end of coverage. Coverage of virtual care services will continue to evolve significantly over the next five years given the exponential growth in the public’s awareness of, and comfort with, these services — all hastened by the COVID-19 Federal Public Health Emergency.
The U.S. Congress and the Centers for Medicare and Medicaid Services (CMS) used its authority during the PHE to significantly expand Medicare coverage for virtual care services, covering telehealth visits in urban areas and from patient’s homes. In addition, Medicare began covering a wide range of clinical services virtually such as behavioral health and physical therapy; it also expanded coverage for different service delivery modalities to include audio-only visits. As a result of the changes, Medicare became a leading payer for virtual care nationally between 2020 and 2022. Over this same period, private insurers and state Medicaid programs largely followed Medicare’s lead by expanding their own virtual care coverage.
One of the consequences of the PHE is that most payers have embraced Medicare’s basic definitional structure for types of virtual care services. As a part of this typology, virtual care services are divided into two general buckets of services: telehealth visits (physician office visits conducted via audio and video technology), which are typically prohibited by statute in urban areas or a patient’s home; and Communication Technology-Based Services (CTBS) which can be conducted anywhere. CTBSs include: remote patient monitoring (RPM); virtual check-ins (brief patient-to-clinician exchanges); e-visits (online portal or email visits); and e-consults (clinician to clinician interaction).
With the end of the PHE on May 11, Medicare coverage of virtual care services and coverage offered by other payers will change. The details and scope of this change have many stakeholders concerned and confused. HMA has a keen sense for which virtual care services may get a new lease on life in the coming months and which are likely to be hotly debated in the years ahead. The one certainty is that the last 3 years have altered the landscape for virtual care services for years to come.
Shift in Virtual Care Landscape
As a result of the statutory geographic limitations and restrictions placed on traditional fee-for-service (FFS) Medicare coverage, use of telehealth services was minimal most of the last decade, with only one-quarter of 1 percent (0.25%) of beneficiaries in FFS Medicare using virtual care services.[1] Even among Medicare Advantage plans and Medicare Accountable Care Organizations (ACOs), neither of which which face the same restrictions, virtual care was utilized very rarely before 2019.
This sluggish use of telehealth was radically altered when HHS used its PHE authority to relax constraints on the use of use virtual care services by Medicare beneficiaries and providers.[2],[3] Among the most consequential changes made by policymakers at the outset of the PHE were:
Enabling telehealth services to be provided anywhere (e.g., urban areas and patients’ homes);
Allowing Federally Qualified Health Centers (FQHC) and Rural Health Clinics (RHC) to conduct virtual care services;
Granting various types of clinicians permission to deliver virtual care services;
Enabling new patients to receive virtual care services;
Authorizing audio-only services;
Permitting telehealth services for more than 200 different types of clinical services (e.g., mental health, emergency department, physical and occupational therapy, critical care, inpatient care);
Relaxing HIPPA rules to enable the broad use of smartphones for virtual care.
Due to these policy changes, rates of virtual care skyrocketed during the PHE (Figure 1). In April of 2020 the number of Medicare claims for any type of virtual care service exceeded 9 million, while 2019 the number of these services provided monthly never exceeded 100,000 (Figure 1). On an annual basis, from 2019 to 2021 the number of virtual care visits jumped from roughly 1 million to 39 million and the number of unique beneficiaries receiving these services increased from 300,000 to nearly 12 million.
Figure 1: Number of Virtual Care Service Visits, Number of Unique Medicare Fee-For-Service Beneficiaries, and Number of visits per Utilizer by Month, December 2019 to December 2021.
Source: HMA analysis of CMS’s 100 percent Medicare Fee-For-Service Claims data for 2019, 2020, and 2021.
The growth of virtual care services has largely been driven by an increase in telehealth visits, but we observe important trends in the use of CTBSs, as well. In late 2021, more than 90 percent of visits were associated with telehealth, while 10 percent were associated with CTBSs. Early in the PHE, all of these service types experienced an initial, abrupt increase in use (Figure 2). By contrast, the growth in the use of remote patient monitoring (RPM) has been continuous since 2020. The growth in use of RPM reflects the general movement of services into patients’ homes and has been accelerated by specialist such as cardiologists and endocrinologists beginning to leverage the power of RPM. We expect greater diffusion and use of RPM and other CTBSs in the next five years.
Figure 2: Number of Virtual Care Service Visits for Remote Patient Monitoring, Virtual Check-ins, E-visits, and E-Consultations by Month, December 2019 to December 2021.
Source: HMA analysis of CMS’s 100 percent Medicare Fee-For-Service Claims data for 2019, 2020, and 2021.
Policies temporarily in place until the end of 2024
During the PHE, Congress made critical long-term changes to Medicare’s coverage of virtual care services that continued to spur the use of these services and offer access to care for beneficiaries. In 2021, Congress changed the law to permanently allow Medicare beneficiaries to receive behavioral/mental telehealth services regardless of location (urban or rural) and for this care to be available to patients in their own homes.
In 2022, Congress severed the link between the PHE declaration and Medicare coverage policies for virtual care services, extending those benefits through the end of calendar year 2024. We expect that coverage for all telehealth services will receive considerable attention from federal policymakers and stakeholders towards the end of 2024.
Immediate impact of expiring policies
Certain aspects of Medicare’s virtual care policies will, however, terminate May 11, 2023, when the PHE declaration comes to an end. Several of the expiring policies have a broader impact beyond the Medicare program, affecting patients insured by private payers and State Medicaid programs.
Specifically, when the PHE ends, policymakers will need to address the following anticipated changes:
The Office for Civil Rights (OCR) will return to imposing penalties on providers who violate the provisions of the Health Insurance Portability and Accountability Act (HIPAA) by using public-facing remote communication technologies which are not HIPAA-compliant. This may prohibit the use of some of the most common smartphone-based video conferencing tools for health care visits.
Medicare beneficiaries without an existing relationship with a clinician will be unable to receive CTBSs such as RPM, virtual check-ins, and e-visits.
Providers will no longer be allowed to provide virtual care services across state lines, because most state medical licensure boards will return to pre-PHE policy.
Federal rules from the Drug Enforcement Agency (DEA) may revert to the pre-PHE requirement that clinicians establish a patient-provider relationship in-person before being permitted to prescribe controlled substances for substance use disorder treatment.
Potential policy changes occurring before 2025 As explained earlier, Medicare coverage for many virtual care services will remain in place for the next 19 months. Before the end of 2024, Congress will need to address several policy questions, and among the most widely debated are whether to:
Restore Medicare’s statutory prohibition on telehealth services being delivered in urban areas or in home settings;
Allow Federally Qualified Health Centers and Rural Health Clinics to provide telehealth services to Medicare beneficiaries; or
Continue to cover audio-only telehealth visits under Medicare.
Lawmakers will look to payers, patients, and providers for feedback before making these policy decisions. Among the most critical pieces of information they will also consider will be the results of the study Congress has required of HHS regarding trends in the use of virtual care. This study’s final report is due in 2026, which has led some to speculate that Congress will delay action on virtual care coverage policy until then. In the meanwhile, we expect HHS will be assessing the overall volume of virtual care use, who is using which types of services, and the levels of related fraud and abuse.
Looking Ahead
In the United States, our experience during the acute phase of the pandemic demonstrated that patients and providers are more receptive than previously thought to utilizing digital technologies for the delivery of care. This experience may also influence policymakers’ decisions about reimbursement and coverage of wearable devices, as well as other cutting-edge tools that rely on artificial intelligence or machine learning.
HMA believes payers and providers alike can take steps now to strategically prepare for the still evolving and growing landscape of digital health care.
Based on the various changes that have occurred in the virtual care environment over the last 3 years, we are intently watching several areas of potential change in the practice of medicine and the ways payers set coverage policy. Below are some of the trends we anticipate in the years ahead:
Continued use of virtual care services at levels observed in 2021.
An expansion of CMS’s programs to protect against fraud and abuse related to virtual care.
Notable growth in the use of RPM, and related services for physical and occupational therapy services.
The proliferation of innovative home-based screening and testing technologies. We anticipate payers will encourage the use of these at-home tests for things like kidney function, liver function, and colorectal cancer screening in order to limit care delivery in higher cost settings.
Growth in “virtual-first” insurance plans, where patients are encouraged to use virtual care first – prior to being seen in person. As these plan options expand, we anticipate virtual care use will rise, and reimbursement rates will begin to change.
Virtual care services are primed for additional growth and HMA is working with a wide variety of payers, providers, and foundations to develop strategies for adapting to state and federal rules and regulations related to virtual care. Changes in this landscape will hinge on research CMS will complete by the end of 2026, and coverage decisions made by states and commercial payers. HMA is well positioned to assist stakeholders with work in this area and can leverage access to Medicare and Medicaid claims data to conduct health services research to illustrate geographic variations in the use of virtual care.
If you have questions on how HMA can support your agency before or after the end of the PHE, please contact [email protected] or [email protected]
[2] Centers for Medicare & Medicaid Services. Medicare telemedicine health care provider fact sheet. March 17, 2020. https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet
[3] HHS Administration for Strategic Preparedness & Response (ASPR). https://aspr.hhs.gov/legal/PHE/Pages/default.aspx
This week, our In Focus section reviews CMS’s proposed changes to the federal Medicaid managed care access, finance, and quality regulation (CMS-2439-P). A future In Focus will take a closer look at the proposed changes to the federal Medicaid access to care regulation (CMS-2442-P), which also has significant implications for state Medicaid programs.
On April 28, 2023, the Centers for Medicare & Medicaid Services (CMS) unveiled two significant and related proposed rules addressing Medicaid managed care access, finance, and quality requirements. Together these proposed rules signal a new era of accountability and transparency in the Medicaid program. They also strengthen beneficiaries’ role in influencing the policies and administration of state Medicaid programs.
Table 1 identifies a few of the key themes and issues addressed in the Medicaid managed care proposed rule. The deadline for submitting comments to CMS is July 3, 2023.
Table 1. Medicaid Managed Care Proposed Rule: Snapshot of Proposed Changes
Key Themes and Considerations
Payment Ceilings May Accelerate Value-Based Payment Arrangements. Current federal regulations allow states to direct managed care organizations (MCOs) to pay providers according to specific rates or methods. States have used these directed payment arrangements to set minimum payment rates for certain types of providers or to require participation in value-based payment (VBP) initiatives.
In the proposed rule, CMS calls for establishing an upper limit for these payments. Specifically, the agency plans to limit the projected total payment rates to the average commercial rate (ACR) for inpatient and outpatient hospital services, nursing facility services, and qualified practitioner services at academic medical centers that states include in state-directed payment (SDP) arrangements. The ACR limit, in concert with the proposed SDP documentation and reporting, is among the most significant and complex proposed changes in the rule.
Considerations: The proposed changes represent a strong federal regulatory push to accelerate movement to VBP in Medicaid, which provides states with new levers to drive value in their Medicaid delivery systems. It also means that MCOs, providers, and other stakeholders will need to navigate and help inform the policies and contractual arrangements that will flow from the pending changes. For example, states may need to reflect on the following considerations:
Whether the proposals will require them to reduce reimbursement
Whether they will need to develop new value-based arrangements through SDPs and how these policies will be structured
What outcomes they might need to prioritize
How transparency in reporting provider-level payments could affect non-federal funding and SDP initiatives
Updated Approach to in Lieu of Services (ILOS) Facilitates Whole-Person Care. In January 2023, CMS issued a State Medicaid Director Letter (SMDL#23-001) advising states of the option to use the ILOS authority in Medicaid managed care programs to reduce healthcare inequities and address unmet health-related social needs (HRSNs), such as housing, food insecurity, and intimate partner violence. The proposed Medicaid managed care rule would expand upon and codify in regulation that guidance.
Considerations: Although the ILOS proposal adds reporting requirements and guardrails to address fiscal accountability, overall, the updated policy signals CMS’s willingness to support innovative state approaches to meet a continuum of beneficiary needs, including HRSNs that affect the social drivers of health. Notably, CMS advises that the substitution of an ILOS for a state plan service or setting should be cost-effective but does not need to be budget-neutral. States also can specify that an ILOS can be an immediate or longer-term substitute for a state plan service or setting.
States could pursue a variety of options under CMS’s revised ILOS framework. State Medicaid agencies and their partners can collaborate on ILOS strategies that will allow them to make further progress toward reducing healthcare inequities, as well as fulfill their quality strategy goals and objectives.
New Standards for Medical Loss Ratio Strengthen Link to Performance Improvement. Existing federal regulations require Medicaid managed care plans to report their medical loss ratio (MLR) to states annually, and, in turn, states must submit a summary of those reports to CMS. Many state MCO contracts require plans to comply with provider incentive and bonus policies; however, MCOs infrequently make incentive payments contingent on the provider meeting quantitative clinical or quality improvement standards.
Consistent with the healthcare sector’s transition toward value-based care, CMS proposes to strengthen the link between an MCOs incentive payment to a provider and the provider meeting defined quality improvement or performance metrics. Additionally, contractual language between MCOs and providers will need to more explicitly identify the dollar amounts tied to successful completion of these metrics. Only incentive payments based on quality improvement will be considered incurred claims when plans calculate their MLR; administrative costs cannot be included in quality improvement activity reporting.
Considerations. The proposed requirements are expected to add more transparency to negotiations between Medicaid MCOs and providers. MCOs will retain flexibility to determine the quality improvement or quantitative performance metrics, which carry more weight and accountability in CMS’s revised regulatory framework.
Network Adequacy Requirements Strengthen Link to Access and Rates. CMS also proposes policies that the agency believes will help strengthen Medicaid enrollees’ access to services. For example, the rule would require states to develop wait-time standards for adult and pediatric primary care and outpatient mental health, substance use disorder (SUD), and OB/GYN services, with CMS establishing federal minimum appointment wait times. States also will need to develop a quantitative network adequacy standard, beyond wait times, for certain providers.
Notably, CMS also plans to require states to submit an MCO-level analysis of MCO-to-provider payments. This analysis may provide more insights about the relationship between rates and access to certain types of providers and services. It may also improve alignment in access policies across delivery systems.
Considerations: States and MCOs should expect to need more sophisticated analysis of provider capacity at state and local market levels. This information will be critical in developing network adequacy standards and determining where additional provider support may be necessary. Expanded and new strategies may be needed to ensure compliance with the federal rules and resulting changes to state policies.
What’s Next
Many of CMS’s proposals track closely with many recent recommendations from federal commissions and oversight entities, including the Medicaid and CHIP Payment and Access Commission (MACPAC) and Government Accountability Office (GAO), which may indicate a greater likelihood that CMS will finalize those policies. If they are finalized largely as proposed, the rule will further the Biden Administration’s directional imprint on the Medicaid program.
Within the proposed rules described above, CMS identifies numerous areas where stakeholder input would be beneficial. States, MCOs, providers, and other interested stakeholders should analyze the proposals and consider submitting comments to CMS on the feasibility, potential impact, and, where applicable, alternatives to the proposed changes. Stakeholders also may use this time to begin planning for 2024 and determining what resources and tools they may need to prepare for implementation of the final regulations, as well as how their approach may vary based on state-specific factors.
For questions about the rule and how HMA’s team of experts can support your organization’s response, please contact Andrea Maresca, Joe Moser, and Patrick Tigue.
