Public Health

Public Health

Cross-Sector Collaboration: Unlocking the Full Potential of Community-Based Services in a Challenging Funding Climate

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Lessons Learned from State-Led Transformation Efforts

As federal and state healthcare policy continues to evolve, the need for cross-sector collaboration has never been more urgent. The 2025 budget reconciliation act (OBBBA, P.L. 119-21) introduces significant changes to Medicaid eligibility and financing, prompting a shift in strategy for policymakers and advocates working to advance whole-person care and address social determinants of health (SDOH). The new policies reflect a reorientation of Medicaid financing, with a greater emphasis on state flexibility, targeted benefits, and value-based care.

In this environment, enhanced partnerships and strategic alignment across sectors will be essential to sustain community-based services and workforce investments. In this article, Health Management Associates (HMA), experts highlight key observations from multiple state transformation programs, including actionable strategies for leveraging these assets and meeting the needs of at-risk populations.

Revisiting SDOH Initiatives in a New Policy Context

Whole-person care models have long called for integrated, multidisciplinary approaches. These models—once buoyed by COVID-19 pandemic-era funding and broad federal support—must now be recalibrated to align with new federal priorities. Current federal priorities emphasize streamlined benefits, fiscal discipline, and state-led innovation, which presents both challenges and opportunities for advancing integrated care. This shift has heightened the need to clarify roles and responsibilities across clinical and community settings, focusing on how to maintain essential linkages to primary and preventive care, especially for individuals for whom access remains fragile.

In addition, the ongoing healthcare workforce crisis intensifies the need for creative approaches to whole-person care models. Solutions must go beyond traditional payment models, leveraging existing social care networks, shared hub functions, alternative payment strategies above base rates, and braided funding streams.

State and federal initiatives can be used to sustain momentum and test emerging models. For example, the Rural Health Transformation Program (RHTP) offers a critical opportunity to support these efforts. With $50 billion in funding over five years, RHTP is designed to help states implement innovative models that improve rural health outcomes, strengthen workforce capacity, and address SDOH. States will be finalizing their applications to meet the November 5 deadline. HMA is tracking how these applications align with the strategies outlined below, using the program’s baseline and performance-based funding to invest in infrastructure, workforce development, and cross-sector partnerships.

Key Lessons from State Transformation Programs

Drawing on recent transformation programs, HMA experts identified several key lessons, including:

  • Prioritize Intensive, Community-Based Outreach: States and health plans should invest in community-based outreach strategies that reach populations facing the greatest SDOH barriers, including funding models that support navigation and engagement beyond traditional clinical settings and leveraging shared infrastructure to extend reach.
  • Update Community Health Worker (CHW) Benefit Structure to Maximize Impact: States, in collaboration with their partners, should revisit CHW benefit design to allow for greater flexibility. Reducing reliance on clinical supervision and referral-only pathways can help CHWs operate more effectively in terms of outreach, education, and engagement.
  • Strengthen Workforce Retention through Flexible Financing: Healthcare stakeholders should explore braided funding, shared hub models, and alternative payment models that go beyond base rates. These approaches can sustain staff and morale amid shifting demands and constrained budgets.

Connect with Us

The strategies in HMA’s recent report for Illinois, Medicaid Financing for Social Health: A Resource Compendium for Illinois Community-Based Organizations & Networks, can be adapted to other states and communities. By sharing lessons and adopting best practices from transformation programs nationwide, we can reinforce pathways to integrated care and ensure that populations continue to receive the support they need—even in the face of unprecedented challenges.

HMA experts are helping states, healthcare plans, and community partners adapt and thrive as federal and state policy landscapes continue evolving. HMA teams are applying their cross-sector expertise in SDOH, workforce development, and state-specific knowledge to help organizations better plan, implement, and develop programs to solve healthcare challenges in their community. For questions about the report or opportunities for your organization, reach out to our experts below.

The Rural Health Transformation Program: Options to Address the Maternity Care Crisis

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This article is part of HMA’s Weekly Roundup series on the RHT Program, highlighting key opportunities and considerations for states and healthcare organizations.

The Centers for Medicare & Medicaid Services (CMS) recently launched the Rural Health Transformation (RHT) Program, which is intended to help states reimagine and rebuild rural healthcare delivery. As outlined in our earlier In Focus article, Rural Health Transformation Program Represents a One-Time Opportunity to Reshape Rural Care, this historic $50 billion federal investment provides states with flexibility to design and implement strategies that improve access, quality, and outcomes in rural communities.

As states develop their RHT applications, they can consider a range of approaches to address persistent gaps in care particularly in maternal health, where rural residents often face limited access to local services. A range of solutions is needed to expand and stabilize access to maternal care, given the shortage of close-to-home birthing care. This article explains one such option: investing in midwifery.

Maternity Care in Rural Communities

Maternity Care Deserts Driving a National Maternal Health Crisis

Families in rural communities—and some urban communities—face “maternity care deserts,” meaning they do not have access to a birthing facility or obstetric clinician. Hospital closures are another reality in rural communities, with additional closures projected. Even in larger communities where a hospital is open, obstetric services could be shut down. These deserts are a key driver of the national maternal health crisis. In Nowhere to Go: Maternity Care Deserts in the US, the March of Dimes (MOD) reported that “two in three maternity care deserts are rural counties (61.5%)” and that “counties with low access to telehealth were 30% more likely to be maternity care deserts.” 

Midwifery as an Option for Rural Communities

Midwives are trained healthcare professionals who specialize in supporting women through typical, low-risk pregnancies. They provide care during pregnancy, labor, and the postpartum period. There are several types of midwives, each with different training and credentials. States determine which types of midwives may practice and under what conditions.

Expanding the midwifery workforce can be part of a broader strategy to improve access, particularly in rural areas where hospitals and obstetric providers are scarce. In some places, midwives already serve as a critical access point for maternal care in rural communities, with midwives attending to 30 percent of deliveries in rural hospitals.

The Rural Health Transformation Program Can Help Address the Crisis

The strategic goals of the RHT, as outlined in the CMS application materials and Notice of Funding Opportunity (NOFO), are designed to guide states in transforming rural healthcare delivery. These goals are grounded in the statutorily approved uses of funds and must be explicitly addressed in each state’s RHT application.

Midwives have long contributed to expanding access to maternal care across diverse settings. For example, midwives can support preventive health by providing prenatal and postpartum care in community settings. Their integration into rural care teams may help sustain access to maternity services where hospitals and obstetric providers are limited. States may also consider workforce development strategies, such as expanding midwifery training and retention programs, and innovative care models—including hub-and-spoke systems—that incorporate midwives to improve coordination and person-centered experiences (Figure 1).

According to Ginger Breedlove, PhD, CNM, founder of Grow Midwives, one of the nation’s leading midwifery organizations, “midwifery aligns with all strategic goals of the RHT program.”

States may consider midwifery as one of many options to help build sustainable, community-centered maternity care systems that reflect the RHT Program’s vision for rural health transformation.

Figure 1. Midwifery Alignment with RHT Strategic Goals

RHT Strategic GoalsMidwifery Alignment
Make Rural America Healthy AgainMidwives support preventive, community-based maternal care and contribute to improved outcomes, such as higher rates of spontaneous vaginal delivery and breastfeeding and lower rates of preterm birth and low birthweight.
Sustainable AccessMidwives can serve as consistent local access points for maternity care, particularly in areas with limited obstetric services. States with midwifery care more fully integrated have better maternal and infant health outcomes.
Workforce DevelopmentMidwifery workforce initiatives expand the pool of high-skilled providers practicing at the top of their license, aligning with goals to strengthen recruitment, retention, and licensure flexibility in rural areas.
Innovative CareMidwives can be integrated into flexible care arrangements—hub-and-spoke or CMS’ Transforming Maternal Health model—alongside doulas and community health workers, improving care coordination and patient experience.
Tech InnovationMidwives can leverage telehealth, remote monitoring, and data-sharing and digital care platforms to extend the reach of maternal care in rural communities and connect patients to the broader maternal care system, including remote specialist consultations. Tech innovations ensure that women receive the appropriate level of care for their risk and needs.

Connect with Us

Health Management Associates (HMA) has deep expertise in supporting states and healthcare organizations across all phases of rural health transformation. Our team can assist with strategy and writing grants, program design, and implementation plans tailored to specific state goals and approaches. Whether states choose to explore midwifery or other care delivery models, HMA can help define the approach that best fits the needs of rural communities and support organizations in transforming workflows and operations, implementing new initiatives, and enhancing the systems and IT enhancements that sustains them.

HMA brings together experts in maternal health, finance, rural communities, and delivery systems, contact our experts below.

MAHA Children’s Health Strategy Report: Driving a New Era for Child Health Policy

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The September 2025 release of the “Make Our Children Healthy Again Strategy Report” marks a pivotal moment in the Trump Administration’s effort to address childhood chronic disease. Building on the work of the Make America Healthy Again (MAHA) Commission—established by executive order in February 2025 and led by US Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr.—the Strategy Report provides a proposed road map for federal, state, and local action.

The MAHA child-focused Strategy Report is already driving the Trump Administration’s healthcare agenda. Though the report sets ambitious goals, public health entities, state governments, and other experts have raised concerns that several recommendations run counter to established scientific research or lack sufficient evidence.

In this article, Health Management Associates (HMA) experts highlight the areas of focus in the Make Our Children Healthy Again Strategy Report and offer specific recommendations, initiatives, and considerations for stakeholders. Earlier editions of In Focus have addressed the commission’s formation, initial assessment, and the administration’s growing focus on childhood health (Spotlight on Development of President Trump’s Children’s Health Strategy).

Key Components of the MAHA Strategy

Advancing Critical Research to Drive Innovation

The strategy identifies broad areas of research to inform healthy outcomes and positions HHS to direct initiatives in collaboration with the US Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), and other agencies. Examples include:

  • Support the MAHA Chronic Disease Initiative, advance the Real-World Data Platform linking data from claims, electronic health records (EHRs), and wearables
  • Establish a working group on mental health diagnosis and prescription, led by several HHS agencies, to focus on SSRIs (selective serotonin reuptake inhibitors), antipsychotics, mood stabilizers, and stimulants
  • Study food for health, with the National Institutes of Health (NIH) Office of Nutrition coordinating research initiatives across HHS and the US Departments of Agriculture and Veterans Affairs (VA)
  • Identify opportunities to strengthen the use of repurposed drugs for chronic disease
  • Address vaccine injury data collection and analysis, as well as mental health research focused on screen time and prescription practices

Realigning Incentives and Systems to Drive Health Outcomes

The report recommends improvements to transparency and efficiency in regulatory processes to address nutrition, fitness, pharmaceuticals and vaccines, and care delivery and payment to address chronic disease. Specific initiatives include:

  • Updating the Dietary Guidelines for Americans and developing an “ultra-processed food” definition
  • Promote breastfeeding through the Special Supplemental Nutrition Program for Women, Infants, and Children
  • Updating hospital food service nutrition guidance
  • Developing options to get “MAHA boxes” of healthy food to Supplemental Nutrition Assistance Program (SNAP) enrollees
  • Support states with SNAP waivers to encourage healthy food purchases among SNAP participants
  • Enhance oversight of direct-to-consumer pharmaceutical advertising and develop a new vaccine framework
  • Establish Medicaid managed care quality metrics for nutrition coaching and fitness, and work with states to develop prescribing safeguards for school-age children
  • Promote evidence-based prevention and wellness initiatives and restructure agencies to reduce conflicts of interest

Increasing Public Awareness and Knowledge

Major campaigns will involve:

  • Launching the “Make American Schools Healthy Again” initiative to assist states with promoting physical activity and nutrition in schools
  • Expanding education on environmental exposures, fluoride, and pesticide safety
  • Increasing awareness of opioid dangers, vaping, and screen time impacts
  • Training school and library staff to respond to opioid overdoses

Fostering Private Sector Collaboration

The strategy emphasizes the administration’s work to advance private sector partnerships aligned with MAHA priorities, including partnerships to achieve the following:

  • Improve nutrition in government-funded programs (schools, VA hospitals, prisons)
  • Support community-led initiatives to reduce chronic disease in children

Key Considerations for Partners and Stakeholders

Early engagement is critical as federal agencies begin implementing over 120 recommended actions.

States, providers, health plans, and community organizations should identify how their current approaches to children’s health could align with the MAHA initiative and strategy report, as well as where these new ideas might conflict with present policies. This assessment will identify opportunities to maximize new federal funding opportunities and additional resources.

Progress toward the Strategy Report’s specific goals will require coordinated efforts across agencies, sectors, and communities. Stakeholders should consider how and when to engage in research, policy development, and public awareness campaigns outlined in the report.

Connections to Trump Administration Priorities and Broader Opportunities

The report’s recommendations are already influencing federal agency actions and are driving congressional hearings and new legislation at the federal and state levels.

The US Department of Agriculture’s (USDA), for example, is working with states to approve SNAP waivers to restrict the purchase of junk food with federal benefits. HMA experts are tracking the SNAP waiver actions, and as of September 2025, a total of 12 states have received USDA approval for waivers that restrict the purchase of soda, candy, and other unhealthy foods with SNAP benefits. Other states are considering similar waivers, and the USDA is providing technical assistance to support these efforts.

The FDA has enhanced oversight of direct-to-consumer pharmaceutical advertising, including new enforcement activities and rulemaking on drug safety disclosures in ads. This approach aligns with MAHA recommendations and Trump Administration priorities for transparency and consumer protection.

HHS is also pursuing a new vaccine framework; however, states retain significant authority over school-based immunization requirements, and several are considering alternative approaches or maintaining broader vaccine recommendations than those outlined in the MAHA report. Recent legislative actions in some states seek to shift authority for determining school-based immunization requirements solely to the legislature, reflecting ongoing debate and federal-state dynamics.

Connect with Us

As implementation of the Make Our Children Healthy Again Strategy Report advances, all stakeholders must be ready to engage, partner, innovate, and drive change that will shape the future of child health.

HMA guides state and local government, providers, plans and other partners through the multi-pronged strategies and recommendations in the report as well as the complexities of federal funding opportunities, such as the new Rural Health Transformation Program. We are helping state and local policymakers plan for MAHA and Trump Administration priorities, which includes guidance on how to leverage innovative approaches like SNAP waivers to promote healthy food access for children and families.

With deep expertise in policymaking and operational management, HMA consultants are enabling states and their partners to accelerate their work, build sustainable models for child health improvement, and position themselves to take advantage of new federal, state, and local policy opportunities driven by the MAHA report. To discuss questions about the impact of the report contact our experts below.

Unlocking Solutions in the Medicaid, Medicare, and Marketplace programs

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HMA is hosting its 2024 Fall Conference October 7−9 in Chicago, IL. Unlocking Solutions in Medicaid, Medicare, and Marketplace Programs promises to enhance your ability to navigate and shape healthcare programs and systems, focusing on improving health and well-being. 

In a landscape dominated by endless video meetings, the HMA Fall Conference offers a refreshing change. Join us for an enriching experience featuring: 

  • Engagement with healthcare experts and thought leaders who are actively collaborating with stakeholders 
  • Participation in face-to-face discussions to exchange ideas and receive valuable feedback 
  • Opportunities to connect with peers who are committed to strengthening public programs and enhancing health outcomes 

Keynote Address and Sessions 

Darshak Sanghavi, MD, from the Advanced Research Projects Agency for Health (ARPA-H), will deliver the Keynote Address. He and other speakers will inspire attendees to explore innovative healthcare programs and their potential impacts on healthcare delivery, reimbursement, and health outcomes. 

The conference will feature a diverse array of speakers and participants, including C-suite executives from national, regional, and local health plans. Federal and state leaders joining panels will include: 

  • State Medicaid directors from New York, Iowa, New Mexico and Alabama  
  • State insurance commissioners  
  • Behavioral health agency officials 
  • State housing agencies 
  • Leaders from the US Interagency Council on Homelessness  

The conference will include a revamped pre-conference workshop on October 7, featuring hands-on exercises and interactive sessions led by HMA leaders. Sessions will include a value-based care contracting exercise, a value-based purchasing assessment discussion for providers, tips and tricks on navigating Medicaid section 1115 demonstrations, AI applications in healthcare, and more. 

View the agenda and event details, including speakers confirmed to date.

Registration 

Early bird registration is open until July 31. Don’t miss this opportunity to gain actionable knowledge, forge valuable connections, and discover fresh insights and best practices. Register now to secure your spot at the forefront of healthcare innovation. 

The Health Equity & Access for Rural Dually Eligible Individuals Toolkit: Raising Rural Voices

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Download the Toolkit

A public health crisis is growing more acute in rural America, disproportionately impacting individuals with both Medicaid and Medicare (the “dually eligible”). Dually eligible individuals residing in rural areas represent about 5 percent of all rural residents. They reside at the intersection of a public health crisis and a fragmented Medicaid and Medicare care delivery system. As HMA wrote in Health Affairs, this small population is at risk of falling through the cracks of this crisis and suffering a steep rural mortality penalty.

With support from Arnold Ventures, HMA prepared “The Health Equity & Access for Rural Dually Eligible Individuals (HEARD) Toolkit: Raising Rural Voices from New Mexico, North Dakota, and Tennessee to Create Action. The toolkit contains eight actionable solutions for federal and state policymakers to use and tailor to states’ needs. Ellen Breslin, Samantha Di Paola, and Susan McGeehan authored the toolkit, with research contributions from Rebecca Kellenberg and Andrea Maresca.

HMA toolkit and webinar to advance health equity & access for rural dually eligible individuals

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In 2022, HMA convened stakeholder roundtables in three states – including New Mexico, North Dakota, and Tennessee to identify the challenges facing dually eligible individuals living in rural areas and to propose solutions to these challenges. Informed by this process, HMA developed the Health Equity & Access for Rural Dually Eligible Individuals (HEARD) Toolkit.

The toolkit is structured around three domains used to organize eight solutions. For each solution, HMA provides a description of the rural access challenge, the proposed solution, and the proposed tool. Each tool is powered by some type of lever available to the federal and state government. We anticipate that policymakers will build upon this toolkit through continued dialogue with rural communities. The toolkit’s framework, goals, and actionable solutions are summarized in the figure below.

HEARD Toolkit framework domains

HMA Principal Ellen Breslin, Consultant Samantha Di Paola, and Senior Consultant Susan McGeehan authored the toolkit, with research contributions from HMA Principals Rebecca Kellenberg and Andrea Maresca. Download the toolkit.

On February 2, 2023, HMA will hosted a webinar on the HEARD toolkit. During this webinar, HMA experts and panelists including Dr. Kevin Bennett (USC-SOM Columbia, SC CRPH), Dennis Heaphy (DPC), Pam Parker (SNP Alliance), and Tallie Tolen (New Mexico Medicaid) will summarized and discussed the toolkit’s actionable solutions for improving rural dually eligible individuals’ health and social outcomes.

Analysis of five key proposals in CMS’s FY2025 Medicare hospital IPPS rule

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Our second In Focus section reviews the policy changes proposed by the Centers for Medicare & Medicaid Services (CMS) on April 10, 2024, for the Fiscal Year (FY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Proposed Rule (CMS-1808-P). This year’s IPPS Proposed Rule includes several policy changes that will alter hospital margins and change administrative procedures, beginning as soon as October 1, 2024. 

We highlight five proposed policies that are likely to have the greatest impact on Medicare beneficiaries, hospitals and health systems, payors, and manufacturers:  

  • Annual inpatient market basket update  
  • New technology add-on payments (NTAP) policy changes  
  • Transforming Episode Accountability Model (TEAM) 
  • Hospital wage index and labor market adjustments 
  • Revision to housing-related diagnosis coding  

Stakeholders have until June 10, 2024, to submit comments to CMS on the contents of this regulation and request for information. 

Market Basket Update  

Proposed rule: Overall CMS’s Medicare 2025 Hospital Inpatient Proposed Rule will increase payments to acute care hospitals by an estimated $3.2 billion in 2024−2025; however, recent trends in economy-wide inflation may alter this estimate by the time the agency releases the final regulation in August 2024.  

HMA/Moran analysis: CMS’s 2.6 percent increase is based largely on an estimate of the rate of increase in the cost of a standard basket of hospital goods—the hospital market basket. For beneficiaries, this payment rate increase will lead to a higher standard Medicare inpatient deductible and increase out-of-pocket costs. For hospitals and health systems, payors, and manufacturers the proposed payment increase (2.6%) falls below economywide inflation over the past year (3.5%) and below what Medicare Advantage plans will receive for 2025 (3.7%).1,2 Importantly, based on our expertise with the calculation of the hospital market basket, we anticipate the proposed 2.6 percent increase will increase slightly by the time rates are finalized later this year.  

New Technology Add-on Payments (NTAPs)  

Proposed Rule: CMS proposes three changes to the NTAP program and discusses NTAP applications for FY 2025: 

  • CMS proposes to shift the date used to determine whether an otherwise qualifying product is within its newness period. As proposed, if the product’s three-year anniversary occurs after the beginning of the fiscal year on October 1, the product will receive NTAP payments that year. 
  • CMS proposes to allow products with a hold on their FDA marketing authorization application to be considered eligible for NTAP. 
  • Beginning with applications approved in the current FY 2025 cycle, the NTAP add-on percentage for gene therapies treating sickle cell disease would increase to 75 percent.  

HMA/Moran Analysis: The first two proposed changes are in response to concerns about more restrictive application requirements finalized last year. When CMS shifted the FDA approval deadline to May 1 last year, commenters noted that fewer products would be eligible to receive NTAPs in their third year of the newness period. Allowing all products with a third anniversary that falls within a fiscal year (rather than only those with expirations in the second half of the fiscal year) to receive NTAPs narrowly addresses this concern. More products will qualify for NTAPs during their third year of newness, but that does not necessarily mean that more products will receive three years of NTAPs.   

The second proposal tweaks last year’s change requiring a “complete and active” FDA application at the time an NTAP application is submitted to ensure that NTAP applications were far enough along in the FDA review process that information about the product would be available to the public and for CMS staff review. CMS proposal acknowledges that the original bright line rule may have inappropriately excluded potential applicants.   

Finally, CMS’s proposal to increase the NTAP percentage for gene therapies treating sickle cell disease aligns with the Cell and Gene Therapy Access Model’s focus on sickle cell therapies. Of note, CMS seeks comment on whether the increased NTAP percentage should be applied only to applicants that have entered value-based purchasing agreements or are “otherwise engaging in behaviors that promote access to these therapies at lower cost.” CMS seems willing to increase NTAP payments in limited situations to boost selected policy goals, but the proposals in this regulation do not represent widespread NTAP payment increases. 

Transforming Episode Accountability Model (TEAM) 

Proposed Rule: CMS proposes to establish a new mandatory episode-based CMS Innovation Center model, Transforming Episode Accountability Model (TEAM). In the TEAM model, selected acute care hospitals would coordinate care for people with traditional Medicare who undergo one of the five specified surgical procedures: 

  • Lower extremity joint replacement 
  • Surgical hip femur fracture treatment 
  • Spinal fusion 
  • Coronary artery bypass graft 
  • Major bowel procedure 

Hospitals in the model will assume responsibility for the cost and quality of care from surgery through the first 30 days after the Medicare beneficiary leaves the hospital. Hospitals also must refer patients to primary care services to support optimal long-term health outcomes.  

In a first of its kind program, CMS has created a voluntary decarbonization and resilience initiative through which participating hospitals can report metrics related to greenhouse gas emissions to CMS. CMS will provide individualized feedback reports and public recognition of participation and potential performance in the initiative. 

HMA/Moran Analysis: The critical aspect of the TEAM model that stakeholders need to understand is that it will be mandatory. TEAM will begin in 2026 and continue for five years. The TEAM model builds on and combines previous models such as the Bundled Payment for Care Improvement (BPCI) model and the Comprehensive Care for Joint Replacement (CJR) model. Hospitals will be required to report various quality measures, and payment will be based on spending targets and include retroactive reconciliation. TEAM also seeks to integrate specialty and primary care. The model complements existing accountable care organization (ACO) models such as ACO REACH or the Medicare Shared Savings Program as beneficiaries would be able to be assigned to both TEAM and ACO programs.  

Hospital Wage Index Adjustments and Labor Market Changes:  

Proposed Rule: CMS proposes two wage index policies for FY 2025. First, CMS proposes to extend the temporary policy finalized in the FY 2020 IPPS/LTCH PPS final rule for three additional years to address wage index disparities affecting low-wage index hospitals, which includes many rural hospitals. Second, as required by law, CMS proposes to revise the labor market areas used for the wage index based on the most recent core-based statistical area delineations issued by the Office of Management and Budget (OMB) based on 2020 Census data. 

HMA/Moran analysis: The two wage index policies that CMS proposes for FY 2025 will have important positive and potentially negative consequences for hospital payment. The policy to extend the low-wage index policy for three additional years will allow many hospitals with low wage indexes to increase their wage index and their payment rates across all MS-DRGs. This policy will bring millions of additional dollars to rural hospitals in FY 2025.  

The second policy is a statutorily required update to the labor markets used to establish CMS’s hospital wage indexes. CMS will redefine 53 counties from urban to rural and 54 counties from rural to urban, which will disrupt various hospital payment policies for hospitals in the affected counties. The overall impact of both proposed geographic policy changes for FY 2025 will be to increase inpatient payment rates for rural hospitals.  

Revision to Housing-Related Diagnosis Coding  

Proposed Rule: CMS proposes to change the severity designation of the seven ICD-10-CM diagnosis codes that describe inadequate housing and housing instability from non-complication or comorbidity (non-CC) to complication or comorbidity (CC).  

HMA/Moran Analysis: In proposing this change, CMS is building on its previous policy of including diagnosis codes for describing when a beneficiary is homeless (e.g., unspecified, sheltered, unsheltered). Importantly, this new policy proposal will enable hospitals to be paid higher inpatient payment rates when patients with inadequate or unstable housing are served. Specifically, this proposal would result in cases involving patients to whom these codes apply to be coded in a higher-level MS-DRG within a given family of MS-DRG codes. If finalized, this change in coding policy will result in higher payment rates for hospital patients who are experiencing housing insecurity.  

Connect with Us 

HMA’s Medicare Practice Group, including consultants from The Moran Company, works to monitor legislative and regulatory developments in the inpatient hospital space and to assess the impact of inpatient payment, quality, and policy changes on the hospital sector. Our Medicare experts interpret and model inpatient policy proposals and use these analyses to assist clients in developing their strategic plans and commenting on proposed regulations. We replicate the methodologies CMS uses in setting hospital payments and model alternative payment policies using the most current Medicare (100%) claims data. We assist clients with modeling for DRG reassignment requests and to support NTAP applications.  We also support clients in analyzing CMS Innovation Center alternative payment models.  

For more information or questions about the policies described above, contact our featured experts.

Five takeaways from the CMS Medicaid managed care final rule

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This week, our In Focus section reviews significant Medicaid policy announcements from the Centers for Medicare & Medicaid Services (CMS). For example, both the Medicaid and Children’s Health Insurance Program Managed Care Access, Finance, and Quality Final Rule (CMS-2439-F) (view the CMS fact sheet available) and the separate Ensuring Access to Medicaid Services Final Rule (CMS-2442-F) (view the CMS fact sheet) were released April 22, 2024. 

Taken together, these two final rules create new flexibilities and requirements aimed at enhancing accountability for improving access and quality in Medicaid and the Children’s Health Insurance Program (CHIP) across the fee-for-service and managed care delivery systems and provide targeted regulatory flexibility in support of this goal.  

HMA’s April 11, 2024, “What to Watch For” article outlined several proposed changes that CMS was poised to advance in the Medicaid managed care program. We focus today on the approved changes, including:  

  • In lieu of services and settings (ILOSs)  
  • The Medicaid and CHIP quality rating system (MAC QRS)  
  • Medical loss ratios (MLRs)  
  • Network adequacy 
  • State directed payments (SDPs) 

Following are HMA’s insights on the key takeaways in each of these major areas for states, managed care organizations (MCOs), providers, and other stakeholders. In addition, HMA experts will discuss the final rule during a LinkedIn Live on event at 2:00 pm (EDT) April 25, 2024. Go to the HMA LinkedIn feed to watch. 

In future weeks, HMA will review the Ensuring Access to Care final rule. 

ILOSs 

The final rule makes clear that CMS remains committed to the conviction that ILOSs can play an important role in supporting state and MCO efforts to address many of the unmet physical, behavioral, developmental, long-term care, and other enrollee needs. At the same time, CMS continues to put forward requirements in this area to ensure adequate assessment of these substitute services and settings in advance of approval, ongoing monitoring for sufficient beneficiary protections, and financial accountability for related expenditures. 

The final rule presents an opportunity to leverage ILOSs to improve population health, reduce health inequities, and lower total healthcare costs in Medicaid and CHIP, including by addressing unmet health-related social needs as well as through other avenues. To take full advantage of this opportunity, states and MCOs must ensure that that they are prepared to meet the accountability measures outlined in the final rule and partner with existing providers and community-based organizations that already provide such services and settings. 

Medicaid and CHIP Quality Rating System  

CMS finalized most proposed provisions related to mandatory quality measures, the process used to update these measures, the ability of states to include additional measures, and the ability of states to apply an alternative QRS if desired. On this last point, CMS is making several modifications to its MAC QRS proposal to clarify the scope of and to reduce the implementation resources needed for an alternative MAC QRS if a state elects to implement one. 

States will be required to collect from MCOs the data necessary to calculate ratings for each measure and ensure that all data collected are validated. This will require MCOs to assess their capability to produce the mandated data upon request by states and, to the extent possible, to assess baseline performance on measures and proactively operationalize strategies to improve performance where necessary. 

Medical Loss Ratios 

The final rule aligns Medicaid and CHIP MLR QIA reporting requirements with the private market to ensure that only those expenses that are directly related to healthcare QIAs are included in the MLR numerator. CMS notes that this provision will allow for better MLR data comparisons between the private market and Medicaid and CHIP markets as well as reduce administrative burden for MCOs participating across these markets.  

MCOs will need to model the impact of QIA expenditures that are no longer available for inclusion in the MLR numerator to ensure that a resulting failure to meet any minimum MLR requirements can be avoided, and, if it is projected to occur, a strategy can be developed and executed to avert the problem. CMS made this requirement effective as of the effective date of the final rule with no delay because it believes it is critical to the fiscal integrity of Medicaid and CHIP, adding urgency to MCO compliance action here. 

Network Adequacy 

The final rule makes clear that CMS has been persuaded that it needs to increase oversight of network adequacy and overall access to care through a new quantitative network adequacy standard. To measure network adequacy, the agency intends to implement wait time standards, complemented by secret shopper surveys to support enforcement. 

Wait time standards and secret shopper surveys present opportunities for states, MCOs, and providers to collaborate to enhance access where needed and ensure compliance with the final rule. Undertaking secret shopper surveys ahead of implementation of the wait time standards (effective the first rating period beginning on or after three years after the effective date of the final rule) to determine the current performance relative to maximum wait times is a proactive step that is worth consideration by states and MCOs and can also be employed to foster dialogue with providers to address any areas of concern identified. 

State Directed Payments 

CMS is adopting its proposal in the final rule to use the average commercial rate as a limit for SDPs for inpatient and outpatient hospital services, nursing facility services, and professional services at academic medical centers. CMS believes that this approach represents a reasonable limit that is supportive of appropriate fiscal guardrails, while still affording states the flexibility to achieve SDP policy goals. States and providers will need to account for this requirement, along with others, as SDPs are developed going forward.  

Connect with Us 

HMA is ready to support your efforts to understand and take action to account for the managed care final rule’s effects on your state or organization’s strategy and operations. Please reach out to [email protected] to connect with our expert team members on this vital set of issues. 

Child and family wellbeing: family resilience

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This is part of an ongoing series highlighting efforts in human services and family wellbeing. 

For decades, practitioners have recognized that child neglect was often interconnected in some families with stressors associated with familial poverty. Poverty is often a stressor in cases of child neglect, poor health, and even youth incarceration. Food insecurity, housing instability, and family stressors often related to unemployment, incarceration, and domestic violence can in some circumstances, result in parental burnout and lead to poor parenting decisions. There is also a perverse disincentive for families to experience career and wage progression which often results in steep fiscal cliffs with benefits that are needed to stabilize families and guide them towards economic self-sufficiency[1]. There is advocacy and increasing recognition through efforts such as Universal Basic Income Pilot programs and experiments with expanding Earned Income Tax Credits and Child Tax Credits attempting to mitigate catastrophic benefits cliffs that impact child and family wellbeing and economic self-sufficiency.

Public Safety Net programs such as Temporary Assistance to Needy Families, Supplemental Nutrition Assistance Program, WIC, Free and Reduced School Meals, Child Care Subsidies, Earned Income Tax Credit, Eviction Prevention Grants, and a host of other federal, state, and local programs are intended to support and strengthen families and increase protective factors for children[2].   

Recent investments in the safety net including the childcare tax credit and the Pandemic Electronic Benefit Card (P-EBT) have shown that when concrete supports are provided to families, child maltreatment rates significantly decrease.[3]  

During the height of the COVID-19 pandemic, the federal government implemented a One-Year Expansion of the Child Tax Credit which extended the eligibility to families with little to no income. It helped increase the credit amount families received from $3,600 per qualifying child younger than six years old and $3,000 for qualifying child between the ages of 6 and 17. It also provided monthly payments of $250 to $300 per qualifying child as opposed to an annual payment which aligned with monthly living expenses. According to the US Census Bureau, 2021 saw a historic decline in child poverty which lifted one million children under the age of six out of poverty, and 1.9 million for children between the ages of six and 17.  

More recently States are experimenting with Universal Basic Income projects aimed at reducing child poverty, improving protective factors in families and reducing child maltreatment.[4] These experiments are currently being evaluated, but early research is showing promising signs of reduced child poverty in jurisdictions where these projects have gone live. 

There is considerable literature that shows that changes in income alone, holding all other factors constant, have a major impact on the numbers of children being maltreated. Conversely, reduction in income or other economic shocks to the family increase incidents of child maltreatment. 

A study performed by the Nuffield Foundation noted that internationally, evidence has shown a much stronger relationship between poverty and child abuse and neglect. Research has shown that without government and service providers responding to increased pressures on family life will lead to the risk of more children suffering harm, abuse and neglect.[5]

 Another study by Casey Family Programs on predicting chronic neglect, found that the strongest predictors of chronic neglect were parent cognitive impairment, history of substitute care, parent mental health problems, and a higher number of substantiated allegations in the first CPS report[6]. This suggests that families at risk for chronic neglect face multiple challenges and significant financial insecurity that require significant support.

  • Other significant predictors include:
    • Younger parents
    • Families with a higher number of children
    • Families with a child under age 1

Recognizing these challenges to strengthening the protective factors for young moms, there have been several successful efforts around the country to focus on pregnant and parenting teen and young adult moms. From Health Families America, Nurse Home Visiting Programs, there has been a body of evidence created that shows the strengths of providing wrap around services and home-based interventions for moms and babies. These supports strengthen the mom-baby nurturing relationship and reduce risk of maltreatment and increase protective factors. 

One such organization that has demonstrated significant success in disrupting the cycle of generational poverty is The Jeremiah Program. This is a national organization that aids single mothers and their children to provide coaching and assistance in navigating barriers to education, college access and career support, safe and affordable housing, early childhood education and childcare, and empowerment, leadership, and career training. This supportive program helps build up single mothers to achieve their educational and career goals and gain long-term economic prosperity. 

As child welfare and poverty policies intersect, the current thought leadership is focused on recognizing that economic and concrete supports reduce involvement in child welfare.[7] As the science and voices of children and families with lived experience intersect and rise up, the federal and state policy landscape around alleviating poverty to improve child wellbeing will continue to gain momentum. Family and Child Well-Being indicators significantly reflect racial and ethnic inequalities both in child welfare and across the poverty landscape. Economic stability is also a key strategy to address racial and ethnic inequalities and closing the opportunity gap for all. Over the next 3-5 years we believe there will be a fundamental shift in policy, financing, and outcomes tracking that reflect our commitment to our society’s most vulnerable children and families. That is why it is crucial for States and Local governments to enact policies that would support programming to alleviate poverty and improve child and family resilience and protective factors.

HMA consultants have decades of experience working hand-in-hand with public health, social services, behavioral health, Medicaid, and human services agencies. We help strengthen relationships surrounding policy, practice and revenue maximization in the human services space. Our experts work to help support programs in areas of Nutrition: Women, Infants & Children (WIC), Supplemental Nutrition Assistance Program (SNAP); Financial Support: Child Support, Temporary Assistance for Needy Families (TANF); Child and Adult Welfare Services; Medicaid; Housing and Weatherization; Early Education: Childcare Subsidy, Child Care and Development Block Grant (CCBDG) programs; and Workforce Development and Workforce Innovation and Opportunity Act (WIOA) programs.

If you have questions on how HMA can support your efforts in Child and Family Wellbeing, please contact our experts below.

[1] What Are Benefits Cliffs? – Federal Reserve Bank of Atlanta (atlantafed.org)

[2] Economic Supports Chapin Anderson Nov 2020b (chapinhall.org)

[3] Research Reinforces: Providing Cash to Families in Poverty Reduces Risk of Family Involvement in Child Welfare | Center on Budget and Policy Priorities (cbpp.org)

[4] Understanding The Difference Between Guaranteed Basic Income Vs Universal Basic Income – Orange and Blue Press

[5] New evidence on the relationship between poverty and child abuse and neglect

[6] Predicting Chronic Neglect – Casey Family Programs

[7] Economic Supports Chapin Anderson Nov 2020b (chapinhall.org)

Supporting state and local public health collaborative efforts with communities to improve birth outcomes and end racial disparities

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HMA has valued recent opportunities to support public health departments to collaborate with communities working to identify and address root causes and ultimately reduce maternal and infant mortality and racial disparities in birth outcomes in Delaware and Maryland.

In partnership with the Delaware Department of Health and Social Services’ Division of Public Health, HMA is in its fourth year of administering a mini-grant program and providing backbone services to community-based organizations. These entities provide wraparound services and a variety of other supports to pregnant and parenting people and their families, with the goal of improving maternal and infant health and reducing racial disparities. We also lead a collective impact evaluation of the programs, working closely with the participating organizations to help them build their capacity to collect and analyze data, developing interim and annual reports, and providing frequent updates to the Division of Public Health and other stakeholders in the state that are collaborating to improve health and wellbeing. HMA provides fiscal and administrative oversight, coaching and evaluation, and convenes the participating organizations for quarterly learning collaboratives, which have contributed to stronger relationships and collaboration among the mini-grantees. In addition, we are implementing and evaluating a guaranteed basic income program as part of the Social Determinants of Health committee of the Delaware Healthy Maternal Infant Consortium (DHMIC). This project is a long-term commitment to collaborating with community-based organizations to build their capacity to address racial disparities and support their work, which is driven by the needs of the people they serve and know best. Grantees are selected through a streamlined process with low administrative burden, prioritizing community input on needed services. Through a collective impact evaluation, the participating organizations are finding positive effects on the self-reported health and wellbeing of program participants.

Launch of the first cohort of Healthy Women Healthy Babies Zones Mini-grantees in 2019. Photo Credit: Division of Public Health – Delaware Health and Social Services

With the Frederick County, Maryland Health Department, HMA conducted a study in 2022 using a community-based participatory research (CBPR) approach to understand and articulate drivers of maternal and infant health disparities experienced by Black women in Frederick County. In collaboration with the health department and newly formed Community Advisory Board (CAB), we facilitated a series of in-person retreats to: collect, analyze, and share quantitative and qualitative data regarding disparities and the drivers of those disparities with stakeholders; understand the data and the story behind the health disparity numbers; and develop and deploy additional research methods, such as surveys, key informant interviews, and focus groups, to further explore the lived experience of Black Frederick County mothers. This iterative approach to conducting mixed-methods research uses the CBPR framework to ensure sustained and meaningful community engagement from project start to end. HMA also developed a driver diagram to illustrate how the root cause, systemic racism, directly influences other drivers of Black maternal health disparities such as historic disinvestment in Black maternal health, historical trauma navigating healthcare, low social capital, health insurance availability, and a perceived lack of emotional and physical safety in clinical settings. The diagram will be shared with relevant stakeholders and inform next steps.

In our reproductive health-related work, HMA has guided groups through decision-making processes, with transparency and without bias, and we understand the importance of group dynamics. Bringing decades of real-world public policy and community and key stakeholder facilitation experience, HMA collaborates with a variety of stakeholders and community members to develop and implement public policy at the local and state levels, as well as to evaluate these efforts. Our experience ranges from national, state, and county agencies, to private sector and community-based organizations that partner with governments to implement policy. Our team has extensive experience working with and within organizations to facilitate discussions, listen to and build consensus across sectors, develop strategic plans, and bring diverse perspectives together to promote health and wellness for communities.

See below for the HMA colleagues participating in these projects.

As part of recognizing Women’s History Month, HMA colleagues reflected on recent work to support maternal and infant health and reduce racial disparities in birth outcomes in collaboration with health departments and communities in Delaware and Maryland. More information on our recent projects supporting reproductive health can be found here.

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