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As the urgent needs of COVID-19 Public Health Emergency (PHE) continue to subside, state Medicaid agencies are exploring pathways and concepts to further address the historic inequities and health disparities laid bare by the pandemic. These efforts are closely aligned with the current Administration’s policy objectives for the Medicaid program, specifically:
Addressing health equity
Improving access and coverage
Promoting whole person care
For several decades, Medicaid Section 1115 demonstration programs have provided a powerful lever for federal and state policymakers to design, implement, and evaluate transformative initiatives. All states administer at least one Section 1115 demonstration program. Some demonstrations are narrowly tailored to address services or populations while others capture broader features pertaining to coverage, benefits, and payment and delivery system innovations.
Notably, a new wave of comprehensive and transformative Medicaid Section 1115 demonstration proposals is emerging.
Working closely with the Centers for Medicare and Medicaid Services (CMS), states are developing proposals that place individuals at the center of health care in an entirely new way – by recognizing their medical needs as well as the complexity of circumstances and environmental factors that shape the individual’s medical, physical, and behavioral care needs and outcomes.
Teams of experts from across the HMA family of companies are supporting state agencies, counties, health plans, providers, community and consumer organizations, and other stakeholders with translating federal goals and parameters into concrete proposals as these move through the stages of concept paper, application and negotiation, and implementation. Demonstrations will reflect each state’s unique political and policy landscapes, but the programs will be grounded in certain federal goals and expectations to enhance accountability and improve outcomes.
Our experts identified three trends in state 1115 demonstration programs. In this and subsequent In Focus posts we will share our team’s initial insights and considerations for stakeholders based on our collective “on the ground” expertise. We include illustrative examples from some states with approved and pending Section 1115 proposals.
Section 1115 Trend #1: States are advancing a new vision for Medicaid’s role in addressing health equity, influenced by social drivers and grounded in a community’s needs.
CMS is strongly encouraging states to consider initiatives that address health inequities and community specific social drivers of health. As evidenced by the current state initiatives, Section 1115 demonstration programs will be a primary — but not the only — pathway states utilize to design strategies to address health inequities driven by non-health systems and circumstances. Based on our work with states and stakeholders, it is critical that states ensure the services are directly linked to factors that impact health outcomes for Medicaid enrollees and that they have mechanisms to evaluate the impact of community and social care services.
Several state proposals already signal CMS’ current vision for using Section 1115 authority to test new types of assistance within service categories to include non-medical services, services tailored to populations, and assistance that is linked to desired outcomes. For example:
North Carolina’s Section 1115 pilot program will provide support to certain groups of consumers for an array of community supports ranging from housing related services and transportation access to interpersonal violence and access to food and nutrition services. The program includes help for consumers related to utility set up and moving costs, and support to connect with community services to address legal issues impacting housing and thereby impacting health.
In December 2021, CMS approved California’s Section 1115 demonstration program and linked this to a separate waiver approval allowing the state to further enhance services and accountability within its managed care program. As part of California’s implementation of its statewide whole person care initiative, the state will be able to pay for housing navigation and tenancy services and assistance with first month deposits for certain populations enrolled in its statewide managed care program. This proposal is grounded in the state’s commitment to ensure that the non-medical services were clearly defined and clinically oriented for the intended population.
CMS’ approval of the North Carolina and California programs is paving the way for conversations in other states, including New York, New Jersey, and Oregon among others. Negotiations on similar initiatives to address health equity in other states, include:
New York, like North Carolina, plans to seek CMS’ approval to offer a range of community services that would be provided through newly established networks of community-based organizations in all regions of the state. The state envisions that the CBO networks will include small neighborhood organizations familiar with their communities’ needs and the capacity to address multiple social risk factors as well as larger county or regionally focused entities. In addition, New York is asking CMS to support a health equity focused proposal which would provide certain “in-reach” services for incarcerated individuals before they are released.
Oregon submitted a request to use federal Medicaid spending authority to address community-based health inequities and to establish statewide health equity investments (HEIs). The state is especially focused on supporting consumers during disruptions in coverage, life transitions, or disruptions caused by climate events. Community-based investments will reflect empirical evidence and community assessments and may include efforts to improve building environments and expand culturally and linguistically. Addressing climate events may be of particular interest as it addresses multiple priorities for Administration.
North Carolina and California offer important insights into what may be possible and as importantly, what may be beyond the bounds of CMS’ Medicaid authority. Chief among the outstanding issues for states and stakeholders is whether additional innovative programs for addressing health disparities among justice-involved populations is possible under Medicaid’s demonstration authority.
CMS may use the experience with initial states to provide more concrete information on these general parameters and expectations. Formal guidance would prove helpful to states and stakeholders seeking to apply new knowledge and experiences with health inequities into practice within the Medicaid programs.
HMA’s interdisciplinary teams of Medicaid, human services, and actuarial experts are assisting states as well as stakeholders as they conceptualize, develop, and implement Section 1115 programs. To learn more about our work and the breadth of our services please contact HMA consultant Andrea Maresca, Principal.
This week, our In Focus section reviews the request for information (RFI) on ways to strengthen the Medicare Advantage (MA) program, released by the Centers for Medicare & Medicaid Services (CMS) on July 28, 2022. CMS’s intent is to better align the MA program with the agency’s Vision for Medicare and the CMS Strategic Pillars. The agency is strongly emphasizing the importance of stakeholder comments for this process. This openness to feedback presents MA plans, providers, and other stakeholders an opportunity to inform the agency’s early thinking as it considers potential regulatory actions impacting supplemental benefits, value-based contracting arrangements, risk adjustment, prior authorization, and marketing among other issues.
The questions are grouped into five categories. Throughout each section CMS seeks to better understand operational issues and insights from past or ongoing experiences tackling health equity issues in states and communities. Below we describe several of the questions and themes within each category:
Advance Health Equity: This extensive set of questions is intended help CMS better understand MA plans’ specific programs, screenings, benefits, and data that are components of addressing health equity and how the agency can better ensure that all MA enrollees receive the care they need. CMS also is seeking to better understand the collaborations and reimbursement arrangements between MA plans and providers that partner with community-based organizations, particularly as these arrangements become more central to efforts to address social drivers of health. The agency continues to focus on the dual eligible population, and asks specifically how it can support efforts by Special Needs Plans to provide targeted, coordinated care for enrollees.
Expand Access: Coverage and Care: In this section CMS explores MA plans’ marketing efforts, including the tools beneficiaries use and how plans differentiate themselves to beneficiaries, as well as factors for building and changing plan networks. Additionally, CMS poses many questions about supplemental benefits, including questions about how MA plans design supplemental benefits, how they inform beneficiaries about these benefits and whether there are evaluations or data elements that are used. CMS also anticipates receiving information on how it can ensure that enrollees have access to the covered behavioral health services they need, access and use of telehealth services.
Drive Innovation to Promote Person-Centered Care: Last year, CMS committed to ensuring that 100 percent of Medicare beneficiaries were in accountable care relationships by 2030. This will require changes for more than 30 percent of Medicare beneficiaries. To date, much of the attention around this goal has been focused on fee-for-services arrangement. With this RFI, CMS is turning its attention to value-based arrangements in MA. Specifically, it asks stakeholders about the factors driving MA plans and providers participating in value-based contracting. The agency wants to better understand the data that is crucial for value-based contracting and the experiences of MA plans in trying to align with value-based contracting in other Medicare programs/models, Medicaid, and the commercial payers. Stakeholders also have an opportunity to provide input on how CMS could better support efforts of MA plans and providers to appropriately and effectively collect, transmit, and use appropriate data as well as potential new tops of payment or service delivery models that could be tested.
Support Affordability and Sustainability: This set of questions turns to payment and competition in the marketplace. Specifically, the agency asks for input on potential methodologies to ensure risk adjustment is accurate and sustainable. CMS also wants to understand how stakeholders are thinking about the relationship between risk adjustment and health equity and addressing social determinants of health SDOH. The agency also wants to consider specific local market barriers to entry and advantages and disadvantages in different markets.
Engage Partners: This group of questions provides an opportunity for stakeholders to address information gaps for Medicare beneficiaries. The agency also is interested in how it could promote collaboration among MA stakeholders.
Why It Matters:
As the urgent issues with the pandemic continue to ease, CMS is turning its attention to proposals that could help refocus the Medicare program, including Medicare Advantage, to address health equity, quality, and affordability.
Stakeholders will want to carefully consider how they could use their RFI responses to shape the agency’s potential future proposals. Health plans, providers, community organizations, and vendors have an opportunity to highlight concepts, tools, and other innovations that have proven successful and scalable.
Specific concrete examples of the impact on Medicare beneficiaries would be highly valued by the agency. It will also be important to focus responses on regulatory policy changes and actions that CMS can advance with its existing authority.
HMA experts can assist stakeholders with their responses on these impactful issues including but not limited to:
Innovations stakeholders have tried, barriers to concepts and needs they have identified, and other ideas on flexibilities for local partnerships and technology.
Approaches to improve the MA experience for the Medicare and Medicaid dually eligible population and rural communities.
New risk adjustment methods.
Potential improvements to the MA quality program.
Strategies for improving the beneficiary enrollment process.
The value and opportunity of using technology and telehealth and how these impact the design of provider networks.
Framing the factors and dynamics around MA plan and provider value-based contracting.
CMS is accepting comments on this RFI until August 31, 2022. The agency could use input it receives to develop proposals for at least the next two regular rulemaking cycles for the Medicare Advantage program, issue policy proposals outside of the normal rulemaking, or both.
HMA experts are available to provide strategic assistance with framing and developing responses as well as analysis to reinforce points and recommendations to the agency for this expedited RFI response timeline.
Meena Seshamani, deputy administrator and director of the Center for Medicare at the Centers for Medicare & Medicaid Services, will deliver a virtual keynote address on The Future of Medicare Value-Based Payments at the HMA conference, October 10-11, 2022, at the Fairmont Chicago, Millennium Park.
The overall theme of this year’s conference is How Medicaid, Medicare, and Other Publicly Sponsored Programs Are Shaping the Future of Healthcare in a Time of Crisis. More than 40 speakers are confirmed, and more than 400 people are expected to attend.
Today’s blog is the next in our series highlighting significant developments in the Medicare program. In our first article we covered the Centers for Medicare and Medicaid Services’ (CMS) calendar year 2023 Medicare Physician Fee Schedule (MPFS) proposed rule. This week we are highlighting a few key policy developments in the proposed rule that governs payment levels and policy updates for hospital outpatient departments and ambulatory surgical centers (ASCs).
As we discussed last week, this is a pivotal moment for the Biden Administration’s Medicare policy agenda. Because the rulemaking cycle takes about 18 months, CMS needs to begin the process of collecting input on new proposals this year if it intends to finalize proposals before the end of the President’s first term. Additionally, the CY2023 rule represents an important transition year for CMS as it navigates the COVID-19 related anomalies in the data used to calculate payment levels.
Health care plans, providers, and facilities are continuing to transition to value based payment strategies, making it increasingly important to assess the entire environment of Medicare payment rules as these payment systems are the basis of financial benchmarks, quality incentives, and other key components of value-based payments. In addition, these payment rules provide insight into the cost pressures, incentives, and areas of misalignment throughout the health care system.
HMA experts are analyzing and closely tracking several issues in the CY 2023 hospital outpatient prospective payment system (OPPS) proposed rule. A brief summary of some of the most important proposed policy changes for the outpatient hospital setting are included below and highlight many of the Administration’s top health care priorities.
Policies to sustain access and address health disparities in rural communities.
Enhancing Medicare’s behavioral health payment and access policies beyond the COVID-19 public health emergency.
Uncertainty in the hospital outpatient prospective payment system (OPPS) rate increase due to future implementation of changes in 340B payment.
Increasing transparency of consolidation and mergers in the marketplace to help advance quality and affordability.
The remainder of our post delves into these issues and other notable proposals. Our post also includes analysis of the implications of these policies for stakeholders deserving.
Key Action Items for Stakeholders
The CY 2023 OPPS Proposed Rule was published on July 15, 2022, and all comments from stakeholders are due to CMS by September 13, 2022. We anticipate CMS will release their Final Rule in late fall 2022, before the new rules are implemented January 1, 2023.
The public comment period is also an important window of opportunity during which stakeholders can analyze the impact of CMS’s proposed policies, assess the proposals against other applicable pending federal and state payment policies, and consider how the proposals may impact business decisions. Further, the public comment period is essential for CMS to deepen its understanding of the impact of its policies on stakeholders. The agency benefits from hearing stakeholder’s perspectives, viewing their quantitative and legal analyses, and understanding the general stakeholder environment.
Rural Emergency Hospitals: Definition and Payment
The Consolidated Appropriations Act of 2021 (CAA) established a new provider type called Rural Emergency Hospitals (REHs) beginning in 2023. REHs are facilities that convert from either a critical access hospital (CAH) or a rural hospital with less than 50 beds, by choosing to close their inpatient capacity. Instead, these facilities provide emergency department services, outpatient services, post-hospital extended care services, and other defined services.
While the statute specifies many foundational aspects of REHs, CMS was given the authority to further define REH eligibility status and to specify the unique reimbursement mechanisms for REHs. All of these components will be vital to a provider or entity’s decision to pursue REH status.
On June 30, CMS released the first component: Conditions of Participation (CoPs) for REHs, which defined REH status within the Medicare program. Within the CY 2023 OPPS Proposed Rule CMS proposed to define reimbursement and several other key components of REHs. Below we detail the key elements of REH reimbursement. In HMA’s blog next week we will offer greater detail on the COP and reimbursement policies.
REH policies proposed in the CY 2023 OPPS Proposed Rule:
REHs will receive a monthly facility payment of approximately $268,000 (or more than $3 million per year) beginning in CY 2023.
REHs will receive a 5 percent payment increase for all services covered under the Medicare OPPS.
REHs may provide outpatient services that are not otherwise paid under the OPPS (e.g., the Clinical Lab Fee Schedule) as well as post-hospital extended care services furnished in a unit of the facility that is a distinct part of the facility licensed as a skilled nursing facility (SNF).
Beneficiaries served at REHs will not be charged a copayment on the additional 5 percent OPPS payments, but standard OPPS cost-sharing requirements would still apply.
REHs must comply with all applicable provider enrollment provisions in order to enroll in Medicare.
REHs will have a unique quality reporting program distinct to REHs, in order to reduce reporting burden on these smaller facilities. CMS seeks feedback from stakeholders on the measures used for the REH quality reporting program.
REHs will be provided an exception from the Physician Self-Referral Law (commonly known as the “Stark Law”).
Takeaway: The creation of REHs is both a significant change for the Medicare program and potentially a unique opportunity for small rural hospitals and health systems which own/operate rural hospitals. The Congress and CMS believe this model will address access to care concerns and health disparities present in rural communities. Many assert that under the REH approach, hospitals and health system providers serving rural communities may have greater flexibility to support the rural communities they serve.
Look for our additional analysis of the set of proposed REH policies next week.
Mental Health Services Furnished Remotely by Hospital Staff
For CY 2023, CMS proposes several updates to its remote services policy to plan for a transition from temporary policies enacted during the PHE to when the PHE is declared over. CMS proposes to:
Allow clinical staff of a hospital to conduct remote mental health and substance abuse services and to designate these services as hospital outpatient department services for purposes of reimbursement. Patients will be permitted to be in the homes and hospital clinical staff must conduct the service from inside the hospital facility. Further, CMS proposes new hospital outpatient codes for these services, and CMS will not permit these outpatient services to be conducted (and billed) in tandem with physician fee schedule services.
The agency will require an in-person service within 6 months prior to the initiation of the remote service and then every 12 months thereafter. CMS will allow exceptions to the in-person visit requirement based on beneficiary circumstances.
The agency is also proposing that audio-only interactive telecommunications systems may be used to furnish these services when the beneficiary is not capable of, or does not consent to, the use of two-way, audio/video technology.
Takeaway: As CMS wrote in the proposed rule, many beneficiaries may be receiving mental health services in their homes from hospital or critical access hospital staff during the COVID-19 PHE. The policy update could help minimize disruptions in continuity of care that might otherwise occur following the end of the PHE. The proposals also reflect CMS’ desire to adapt to changing beneficiary preferences and new methods of providing services that have evolved during the COVID-19 PHE.
Hospitals and health systems may benefit from these proposals because it will maintain and expand patient-provider access points and care coordination after the patient has left the hospital. Stakeholders will need to continue to assess beneficiary utilization of services furnished remotely, potential staffing changes to support these services, and community-specific access needs for remote mental health services. Stakeholders may have important perspectives to offer CMS through the regulatory comment proceed as the agency determines whether to finalize a requirement that hospital clinical staff be physically located in the hospital when furnishing services remotely using communications technology.
CMS is proposing to update OPPS payment rates for hospitals and ASCs that meet their respective applicable quality reporting requirements by 2.7 percent. This update reflects the following factors:
Projected hospital market basket percentage increase of 3.1 percent; and
A 0.4 percentage point reduction for projected multifactor productivity.
In the context of the OPPS, CMS proposes to increase the OPPS conversation factor by 2.7 percent from CY 2022 to CY 2023, from $84.18 to $86.79. CMS estimates this will increase OPPS payments to providers from CY 2022 to CY 2023 by $1.8 billion.
In the context of ASCs, CMS estimates a proposed increase to the ASC conversation factor by 2.7 percent from CY 2022 to CY 2023, from $49.91 to $51.31. CMS estimates this change will increase industry-wide payments from CY 2022 to CY 2023 by $130 million. In addition, CY 2023 is the final year in which CMS will apply the productivity-adjusted hospital market basket update to ASC payment system rates for an interim period of 5 years (CY 2019 through CY 2023).
Consistent with CMS’s methods for updating other Medicare prospective payment systems during the 2023 regulatory cycle, the agency proposes to use claims data from CY 2021 and hospital cost report data from the June 2020 Healthcare Cost Report Information System (HCRIS) to update payment rates for CY 2023. Some stakeholders have expressed concern during this regulatory cycle that claims data continue to include anomalous trends influenced by covid cases and the cost data do not accurately reflect covid-related costs because the data primarily are associated with pre-COVID time period.
340B Payment Policy
CMS’s proposed rule acknowledges the recent Supreme Court decision in American Hospital Association v. Becerra (No. 20-1114, 2022 WL 2135490), which will have a significant impact on the 340B program. However, given the recency of this decision the agency formally proposed to maintain the current payment rate of Average Sale Price (ASP) minus 22.5 percent for drugs and biologics acquired through the 340B program.
In response to the decision, CMS stated that the agency will adjust 340B payment rates within the CY 2023 final rule. In its recent ruling, the Supreme Court held that HHS may not vary payment rates for drugs and biologicals among groups of hospitals without having surveyed hospitals’ acquisition costs. The decision relates to payment rates for CYs 2018 and 2019 but has implications for the CY 2023 rates.
CMS also stated that it anticipates applying a 340B payment rate of ASP plus 6 percent for specified drugs and biologics in the CY 2023 final rule. This would likely result in a budget neutrality reduction approaching 5% in the OPPS conversion factor.
Takeaway: Hospitals and federally qualified health centers (FQHCs) receiving 340B reimbursements will view the court ruling and potential increase to 340B payment rates as positive. However, it remains unclear at what exact level 340B payments will be set. Therefore, stakeholders may want to comment on the CY2023 policy options CMS is considering. Additionally, stakeholders should plan for CMS to conduct a survey of acquisition costs as it considers newly proposing changes to the payment rates. It remains possible that CMS will continue to apply the 340B cut for 2023 in light of a 2020 survey of hospital acquisition cost that it conducted. Future budget neutrality adjustments may also be necessary for any payments that are returned to hospitals due to the overturning of the 340B cut for 2018 and 2019.
Additional Issues for Stakeholder Consideration
In addition to the financing and policy issues discussed above, the wide-ranging rule contains numerous other policy proposals with direct and indirect implications on Medicare providers, beneficiaries, and other stakeholders. Table 1 provides a snapshot of some of the issues that warrant further consideration.
Table 1. Other Notable Proposed Changes Impacting Health Care Providers and Stakeholders
CMS issues a request for information linked to the President’s July 2021 Executive Order (E.O.) on Promoting Competition in the American Economy. CMS currently manages a database of nursing homeowners and operators, and the agency has begun to leverage that data to support hospital and nursing home patients and their families. The agency solicits feedback on whether it should release additional data that is already being collected “to help identify the impact of provider mergers, acquisitions, consolidations, and changes in ownership on the affordability and availability of medical care.” CMS also invites comments on whether the agency should release similar data for other types of providers. The solicitation represents the next phase in CMS’ expansive portfolio of work to address the impact of market consolidation on health care prices, consumer costs, and quality in the healthcare industry writ large. Medicare providers and stakeholders should be tracking how federal health care regulators, including CMS, are working to respond to the E.O. There is a strong likelihood that CMS will begin to include data on other types of providers and stakeholders will need to understand this shifting landscape and how it could impact their current and potential future business decisions.
CMS discusses its desire to address the novel and evolving nature of Software as a medical Service (Saas) procedures. The agency is seeking comments on the specific payment approach we might use for these services under the OPPS as SaaS-type technology becomes more widespread. We are also concerned about the potential for bias in algorithms and predictive modeling, and are seeking comments on how we could encourage software developers to prevent or mitigate the possibility of bias in new applications of this technology.
Inpatient Only List
Removes ten services from the Inpatient Only (IPO) list.While the IPO list has previously been targeted for major reforms, this year’s narrower set of proposed changes signal CMS’ is deprioritizing IPO list reform.
Payment for surgical N95 Respirators
CMS recognizes that hospitals may incur additional costs when purchasing domestic NIOSH-approved surgical N95 respirators. CMS is proposing payment adjustments under the IPPS and OPPS that would reflect, and offset, the additional marginal resource costs that hospitals face in procuring domestically made NIOSH-approved surgical N95 respirators. Under this proposal, these payments would be provided biweekly as interim lump-sum payments to the hospital and would be reconciled at cost report settlement. The rule outlines the information providers need to include on the cost report to determine payments for cost reporting periods beginning on or after January 1, 2023.
Ambulatory Surgery Centers
CMS requests stakeholder feedback on methods that could be implemented to collect cost data from ASCs that minimize reporting burden.This could be the beginning of a process to implement cost reports for ASCs.
The HMA Medicare team will continue to analyze these proposed changes. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support the drafting of comment letters to this rule.
Over the course of three weeks CMS has made a series of Medicare announcements that arguably contain the most sweeping changes to the Medicare program proposed thus far by the Biden Administration. With final Medicare payment rules on the horizon, CMS is poised to further the Biden Administration’s directional imprint on the Medicare program. The recent releases include:
A new opportunity focused on rural hospitals designed to preserve –and likely expand – access to services in rural communities;
A proposed payment and policy rule for outpatient and ambulatory care services also lays the groundwork for new transparency and competition initiatives;
Significant updates to most aspects of Medicare’s accountable care organizations; and
New opportunities to support oncology providers in moving towards a whole person approach to services through the Enhancing Oncology Model.
For this blog our HMA experts focus on the 2,000+ page Calendar Year (CY) 2023 Medicare Physician Fee Schedule (PFS) proposed rule released to the public on July 7, 2022. The Medicare Physician Fee Schedule and its accompanying proposed policy changes is a significant tool CMS uses to advance annual updates in reimbursement policy and to consider other policy changes in traditional Medicare that have implications for the program writ large.
Generally, in the CY 2023 proposed rule the Administration is continuing to broaden and deepen the way it applies its health equity framework to the entirety of the proposals, strengthens access to behavioral health services, and reinvigorates value-based care through the Medicare Shared Savings Program’s (MSSP) Accountable Care Organizations (ACOs) structure.
The rule includes a myriad of other policy proposals. We highlight a few of the key ones below. For example, CMS must make updates to the physician fee schedule conversion factor which has ripple effects throughout the Medicare program. The agency is also proposing updates to reimbursement for certain telehealth services and coverage enhancements for hearing and dental services, among many others proposals.
Key Action Items for Stakeholders
All comments to the rule are due to CMS by September 6, 2022. CMS plans to publish the final rule in late fall 2022.
The public comment opportunity is essential for CMS to deepen its understanding of the impact of the proposals. The agency considers stakeholders’ concerns, questions, and other feedback as it makes decisions on which proposals to finalize, modifications to the proposals, or to defer implementation.
This is also an important window of opportunity during which stakeholders can analyze the impact of the proposals and the business decisions these may require, plan advocacy around the proposed changes, and prepare for implementation which generally will occur on January 1, 2023.
Many leading national provider organizations are making their concerns with the annual payment update a central piece of their advocacy agenda in Congress. These concerns will add to the long list of structural issues that Congress is expected to debate leading up to and well after this year’s mid-term elections. However, providers still need to weigh the inflation pressures and uncertainty surrounding Congress’ ability to intervene with new opportunities in the Medicare program and Medicare Advantage market.
Medicare Shared Savings Program
CMS proposes significant changes to the Medicare Shared Savings Program (MSSP), which aredesigned to accelerate provider and Medicare beneficiary participation in accountable relationships. Last year, CMS established a goal of all Medicare beneficiaries will be in a care relationship with accountability for quality and total cost of care by 2030. These proposals are designed to make further progress on achieving that goal. First, CMS proposes several changes to MSSP which respond to criticisms that the program is not sufficiently flexible to support Medicare providers who may have different levels of sophistication with respect to risk-sharing and available capital for practice transformation. Additionally, it reflects federal officials understanding of the impact social care services can have on Medicare beneficiary health and well-being.
Proposed changes to the MSSP include the following:
Investment in New Accountable Care Organizations (ACOs): CMS proposes to provide a one-time fixed payment of $250,000 and quarterly payments for the first two years of the 5-year agreement period for certain ACOs. Eligible ACOs are those that are low revenue ACOs, inexperienced with performance-based risk Medicare ACO initiatives, new to MSSP and that serve underserved populations.
The initial application cycle to apply for advance investment payments will occur during CY 2023 for a January 1, 2024, start date.
The advance investment payments would increase when more beneficiaries who are dually eligible for Medicare and Medicaid or who live in areas with high deprivation or both, are assigned to the ACO.
The advance investment payments would be recouped once the ACO begins to achieve shared savings in their current agreement period and in their next agreement period, if a balance persists. If the ACO doesn’t achieve shared savings, CMS would not recoup the funding.
Funds would be available to address the social and other needs of people with Medicare.
CMS would also provide greater flexibility in the progression to performance-based risk for new ACOs to ease the transition to and likelihood of success under risk arrangements. Specifically, for ACOs with agreement periods beginning on January 1, 2024, and in subsequent years, ACOs inexperienced with performance-based risk could participate a one-side risk model for up to 7 years.
Current ACO Participants: For performance years beginning January 1, 2023, and in subsequent years, CMS may allow certain currently participating ACOs to elect to continue in their glide path agreement.
CMS intends to incorporate an adjustment for prior savings that would apply in the establishment of benchmarks for renewing ACOs and re-entering ACOs
CMS also is proposing several changes to the benchmark methodology to better support long term participation in MSSP and less capitalized ACOs for agreement periods beginning January 1, 2024. This includes adjusting the benchmark for prior savings and reducing the impact of the negative regional adjustment.
CMS also plans to include a fixed, prospectively projected administrative growth factor (referred to in this proposed rule as the Accountable Care Prospective Trend (ACPT)), into a three-way blend with national and regional growth rates to update an ACO’s historical benchmark for each performance year (PY) in the ACO’s agreement period.
CMS requested comments on alternative benchmarking policies: a) exclude the ACO’s own assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations, b) expand the definition of the ACO regional service area to use a larger geographic area to determine regional FFS expenditures, or c) both.
Beginning on January 1, 2023, and subsequent years, CMS is planning to change the all-or-nothing approach to determining an ACO’s eligibility for shared savings based on quality performance to allow for scaling of shared savings rates for ACOs that fall below the 30th/40th percentile quality standard threshold required to share in savings at the maximum sharing rate. To be eligible ACOs must meet minimum quality reporting and performance requirements.
CMS also plans to update MSSP quality-measurement policies, including a new health equity adjustment that would award bonus points for high quality measure performance and serving higher proportions of underserved or dually eligible beneficiaries.
Behavioral Health Changes
The CY2023 MPFS also seeks to enhance access to behavioral health services and strengthen the behavioral health model within the Medicare program. The proposals include:
Creating an exception to supervision requirements, allowing marriage and family therapists, licensed professional counselors, addiction counselors, certified peer recovery specialists, and others to provide behavioral health services while being under general supervision rather than “direct” supervision.
Paying psychologists and social workers to help manage behavioral health needs as part of the primary care team.
Establishing new payments for team-based, comprehensive management and treatment of chronic pain.
Enhancing the ability of ACOs to address social, behavioral, and physical health care needs, by making advanced shared savings payments to new, smaller ACOs. CMS states these funds could be used to hire behavioral health practitioners and address the social needs, such as food and housing.
Clarifying Opioid Treatment Programs may bill Medicare for services performed by mobile units without obtaining a separate registration and increasing payment rates to Opioid Treatment Programs.
These proposed changes represent a major shift in traditional Medicare’s coverage of behavioral health services. If finalized and in combination with changes to coverage for telehealth services, these could have a meaningful impact for Medicare beneficiaries including those in rural communities. ACOs, health systems, and other providers may have greater opportunities to include behavioral health practitioners in their model of care.
Payments to physicians through the PFS are proposed to decline by roughly 4 percent from CY 2022 to CY 2023. The bulk of this decline stems from CMS’s proposal to reduce the PFS conversion factor (CF) by nearly 4.5 percent. In dollar terms the proposed 2023 CF would be $33.08, which is $1.53 lower than the 2022 CF. This policy change to the CF reflects three dynamics, two of which are changes directly mandated by the U.S. Congress:
Expiration of a statutory one-year 3 percent increase in payments,
A statutory 0 percent payment update for CY 2023, and
A budget neutrality adjustment across all billing codes resulting from modifications to PFS weights which increased the relative value of primary care billing codes.
Payment changes contained within the CY 2023 proposed rule result in differential impacts for individual physician service codes and physician specialties. While payment rates for many codes are proposed to decline uniformly by roughly 4 percent, payment rates for some services codes may decline more, such as for some physician inpatient hospital care codes that may decline more than 10 percent. In the context of physician specialty type, CMS estimates 5 percent payment increases on average for infectious disease and a 3 percent increases on average for internal medicine and geriatrics. By contrast, CMS estimates a 2 percent decline on average for clinical psychology and a 3 percent decline on average for radiology.
Notable Issues for Stakeholder Consideration
In addition to the major structural and financing issues discussed above, the wide-ranging rule contains numerous other policy proposals with direct and indirect implications on Medicare providers, and beneficiaries, and other stakeholders. Table 1 provides a snapshot of some of the issues that warrant further consideration.
Table 1. Other Notable Proposed Changes Impacting Health Care Providers and Stakeholders
The Proposed Rule makes a number of potential changes to telehealth policies: Implements several of the policies mandated by the Consolidated Appropriations Act (CAA) of 2022, which extended telehealth flexibilities CMS adopted during the public health emergency (PHE) for 151 days after the end of the PHE. The rule also confirms Medicare telehealth services performed with dates of service occurring on or after the 152nd day after the end of the PHE will revert to pre-PHE rules and the appropriate place of service (POS) indicator will be required to be included on the claim.Permanently adds three new services to the list of reimbursable telehealth services: prolonged inpatient hospital, prolonged skilled nursing, and prolonged home services. Adds several additional services to the Medicare Telehealth Temporarily (through the end of CY 2023) adds several telehealth services: new therapy services, audiology, and new behavior assessment/treatment services. Temporarily (during PHE plus 151 days) requires practitioners to use billing modifier code ‘95’ and either provider of service code ‘02’ (not in home) or ‘10’ (home) for all telehealth services. At the end of the PHE-plus-151 days, billing requirements will revert to pre-PHE methods. Permanently (beginning in 2023) requires practitioners to use billing modifier ‘93’ for all audio-only services, and requires RHCs, FQHCs, and OTPs to use modifier ‘93’ for eligible mental health services furnished via audio-only services. However, CMS specifically did not propose to extend audio-only evaluation and management visits beyond the 151 days after the PHE.
Medicare pays for a limited number of dental services when the dental care is an integral part of a beneficiary’s medical treatment. CMS is proposing to add to the list of conditions where that may be appropriate such as dental exams and necessary treatments prior to organ transplants, cardiac valve replacements, and valvuloplasty procedures. CMS is also seeking feedback on other clinical conditions where the dental services are linked to the clinical success of the medical services.
CMS is proposing to allow audiologists to perform and bill for certain diagnostic hearing tests for patients with non-acute conditions without a physician order.
CMS is proposing several policies to update payment, coding and billing for skin substitutes which are commonly used in the treatment of diabetic foot ulcers and venous leg ulcers. CMS is proposing to change the terminology of skin substitutes to ‘wound care management products’ in order to reflect how clinicians use these products, to provide a more consistent approach to coding for these products, and to treat and pay for these products as a physician supply instead of a separately paid product under the Average Sales Price methodology beginning on January 1, 2024.
CMS continues to update and refine the quality measures used in the different aspects of the programs under MIPS including the addition of certain health equity related measures. CMS also is proposing five additional MIPS Value Pathways (MVPs) (Advancing Cancer Care, Optimal Care for Kidney Health, Optimal Care for Patients with Episodic Neurological Conditions, Supportive Care for Neurodegenerative Conditions, and Promoting Wellness) CMS also proposed several ways to reduce the burden for physicians participating in advanced alternative payment models (AAPMs) including permanently establishing the 8% minimally Generally Applicable Risk Standard for AAPM qualification and proposing to apply the eligible clinician limit to the entity participating in the medical home model rather than the parent organization.
The HMA Medicare team will continue to analyze these proposed changes. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support the drafting of comment letters to this rule.
This week, our In Focus section reviews the Indiana Medicaid managed long-term services and supports (MLTSS) request for proposals, released by the Indiana Department of Administration on behalf of the Family and Social Services Administration on June 30, 2022. Indiana is seeking three managed care organizations (MCOs) that will serve an estimated 106,000 enrollees, beginning January 1, 2024, for a period of four years, with two one-year renewal options.
Indiana began forming a plan to reform the state’s Medicaid LTSS services in 2019 by holding stakeholder meetings. The state estimated that from 2010 to 2030 the proportion of Hoosiers over age 65 will grow from 13 percent to 20 percent, and that the state’s system would need to be reformed to meet the growing demand. The state set an objective to shift the LTSS program to a managed care model and to move a higher percentage of new LTSS members into home and community-based settings.
The new statewide, risk-based MLTSS program will serve Medicaid beneficiaries who are aged 60 years and older and are classified as aged, blind, or disabled. These beneficiaries will include individuals who are dually eligible for Medicare and Medicaid, those in a nursing facility, and those who are receiving LTSS in a home or community-based setting.
Beneficiaries in this program will receive all traditional Medicaid services, delivered through a capitated managed care arrangement. Those who meet a specified level of care will be eligible to receive home and community-based services (HCBS) waiver services. The Medicaid Rehabilitation Option (MRO), Adult Mental Health Habilitation Services Program (AMHH), and Behavioral and Primary Care Coordination (BPHC) will be carved out of the capitated arrangement. For dually eligible beneficiaries, Medicare will be the first payer for all Medicare covered services, including services that are covered by both Medicare and Medicaid.
Indiana seeks to contract with MCOs that can address complex and chronic health conditions of the program population and integrate care along the continuum and settings of LTSS in the state. Program goals include simplifying access to HCBS and expanding the HCBS provider network, especially in rural areas; using a person-centered approach; improving quality outcomes and consistency of care across the delivery system; promoting caregiver support and skill development; in addition to others.
The first part of the proposals is due September 19, with the second part due September 23. Awards are expected in February 2023.
After ensuring proposals meet the mandatory requirement, proposals will be scored out of a total possible 103 points, as shown in the table below.
Preliminary Capitation Rate Summary
Based on the preliminary calendar year 2024 capitation rate development, contracts are estimated to be worth $3.8 billion annually.
On June 30, 2022, the Centers for Medicare & Medicaid Services (CMS) released a proposed regulation establishing the Conditions of Participation (CoPs) for a new hospital provider type, Rural Emergency Hospitals (REHs). The REH concept was first developed by the Medicare Payment Advisory Commission (MedPAC) and subsequently mandated by Congress through the Consolidated Appropriations Act (CAA) of 2021 to address the growing concern over closures of rural hospitals.
REHs provide an opportunity for Critical Access Hospitals (CAHs) and rural hospitals to improve the way care is delivered in their communities, maintain access, and avert potential closure by choosing to focus on the service offerings that are most essential to their communities, such as emergency services, observation care, and additional medical, behavioral, and maternal outpatient services. Importantly, the REH concept enables facilities to maintain a hospital designation absent inpatient capacity thereby ensuring that rural communities retain access to services. This proposed regulation is a significant milestone in CMS’ work to implement the REH designation and their novel payment methodology by their mandated start date of January 1, 2023.
The REH concept is expected to help address the observed health inequities that arise when rural communities lack access to hospitals and other providers. Obtaining an REH designation could be an opportunity for many independent hospitals and delivery systems to strategically reshape themselves in line with their community’s needs while receiving payments from Medicare for doing so.
Within CMS’ proposed regulation, the agency proposes to establish a novel set of REH CoPs which will define the parameters of the REH designation. The REH CoPs closely align with the current CAH CoPs in most cases, while considering the uniqueness of REHs and the statutory requirements. In some instances, the proposed REH policies closely align to the current hospital and ambulatory surgical center standards, such as the polices for outpatient services’ requirements and life safety code, respectively.
As a part of this proposed regulation, CMS seeks input from the rural community on a few key aspects of the REH designation, including:
The specific proposed REH standards, including the ability of an REH to provide low-risk childbirth-related labor and delivery services and whether the agency should require REHs to provide outpatient surgical services in the event that surgical labor and delivery intervention is necessary.
Whether it is appropriate for an REH to allow a physician, physician assistant, nurse practitioner, or clinical nurse specialist, with training or experience in emergency medicine, to be on call and immediately available by telephone or radio contact and available on site within specified timeframes.
Updates to CoPs for Critical Access Hospitals
Also within this draft regulation CMS proposes to update the CoPs for CAHs by: (1) adding a definition of primary roads to the location and distance requirements; (2) establishing a patient’s rights CoP; and (3) allowing CAHs that are a part of a larger health system (containing other hospitals and/or CAHs) to unify and integrate their infection control and prevention and antibiotic stewardship programs, medical staff, and quality assessment and performance improvement programs (known as QAPI) to ensure consistent and safe care.
CMS is accepting comments on this rule until August 29, 2022. CMS intends to propose additional policies related to Medicare enrollment, payment, and quality reporting in the upcoming Calendar Year 2023 Outpatient Prospective Payment System/Ambulatory Surgery Center proposed rule. CMS will develop final policies for this program later this year.
This week, our In Focus section reviews the new Center for Medicare and Medicaid Innovation (CMMI) model named the Enhancing Oncology Model (EOM), released on June 27, 2022, by the Centers for Medicare & Medicaid Services (CMS). This new physician specialty model builds off the previously implemented Oncology Care Model (OCM). The EOM incentivizes the coordination of care and the improvement of care quality for Medicare patients undergoing cancer treatment. The model also seeks to reduce Medicare fee-for-service spending for oncology services, because oncology services are an area of high spending within the Medicare program. As a part of the EOM model participating physician practices will be held accountable for financial and performance targets during six-month episodes of care for systemic chemotherapy administration to patients with common cancer types. The EOM will run for five years beginning on July 1, 2023. Applications to EOM are currently open and will close on September 30, 2022.
CMS indicated that EOM supports President Biden’s Cancer Moonshot initiative to improve the experience of people and their families living with and surviving cancer. EOM aligns with the Cancer Moonshot pillars and priorities of supporting patients, caregivers, and survivors, learning from all patients, targeting the right treatments for the right patients, and addressing inequities.
Consistent with CMS priorities, EOM also has a strong health equity focus and oncology practices who care for underserved beneficiaries are encouraged to apply.
Design of EOM
EOM is built off the foundation of OCM which ran from July 1, 2016, through June 30, 2022. CMS previously solicited feedback from the oncology community and other interested stakeholders on an OCM successor model. Those lessons plus an alignment with CMMI’s strategy refresh priorities of moving to total cost of care accountable models and making cancer care more affordable and accessible created the foundations for the design of the model.
Under EOM, participating Physician Group Practices (PGPs) will take on accountability for their patients’ health care quality and for total Medicare Parts A and B and certain Part D spending during six-month episodes of care. Eligible Medicare patients are those with certain cancers (breast cancer, chronic leukemia, small intestine/colorectal cancer, lung cancer, lymphoma, multiple myeloma, and prostate cancer) receiving chemotherapy treatment.
Participating practices may bill for a Monthly Enhanced Oncology Services (MEOS) ($70 per month) payment for Enhanced Services provided to eligible beneficiaries. The MEOS payment will be higher ($100 per month) for beneficiaries dually eligible for Medicare and Medicaid.
Enhanced services are
Provide EOM beneficiaries 24/7 access to an appropriate clinician who has real-time access to the EOM participant’s medical records.
Provide patient navigation, as appropriate, to EOM beneficiaries
Document a care plan for each EOM beneficiary that contains the 13 components in the Institute of Medicine (IOM) Care Management Plan applicable to the EOM beneficiary
Treat EOM beneficiaries with therapies in a manner consistent with nationally recognized guidelines
Identify EOM beneficiary social needs using a health-related social needs screening tool
Gradual implementation of electronic Patient Reported Outcomes (ePROs)
Participants will be required to take on downside financial risk from the start of the model (with the potential to owe CMS a performance-based recoupment). If participants successfully meet quality and savings targets, they will have the opportunity to earn a retrospective performance-based payment (PBP). These amounts will be based on actual practice performance.
CMS has not yet specified the quality measures for this model. Instead, the application says the EOM quality strategy will focus on the following domains: patient experience, avoidable acute care utilization, management of symptoms toxicity, management of psychosocial health, and management of end-of-life care. CMS will prioritize measures that; reflect national priorities for quality improvement and patient-centered care, are outcomes-based measures (including those collected from patients), minimize EOM participant burden where possible, and align with CMS and Innovation Center quality strategy.
Health equity provisions of the EOM include requiring oncology practices to screen for health-related social needs (HRSNs), CMS providing data reports on patient expenditures and utilization for to help health care professionals identify and address health disparities, and CMS increasing reimbursement for the provision of Enhanced Services to patients who are dually eligible for Medicare and Medicaid.
CMS also will issue payment waivers and benefit enhancements to provide additional flexibility to practices in the way they deliver care to patients. Expected enhancements include telehealth, post-discharge enhancements, and care management home visits.
CMS has designed EOM as a multi-payer model. Medicare Advantage plans, state Medicaid plans and other payers are invited to apply to enter into a Memorandum of Understanding with CMS to align on incentives for oncologists to improve care to their patients and increase participation in value-based care arrangements.
CMS intends to release additional information about EOM payment methodologies later this summer. CMS also will be hosting several upcoming webinars regarding the payment methodology, quality strategy and general application support office hours before the application due date of September 30, 2022. CMS intends to select participants later this year or early next year and will implement the EOM on July 1, 2023.
Be sure to register for HMA’s 2022 Conference by Monday, July 11, to get the special early bird rate of $1,695 per person. After July 11, the rate is $1,895.
Nearly 40 industry speakers, including health plan executives, state Medicaid directors, and providers, are confirmed for HMA’s The New Normal: How Medicaid, Medicare, and Other Publicly Sponsored Programs Are Shaping the Future of Healthcare in a Time of Crisis conference, October 10-11, at the Fairmont Chicago, Millennium Park.
In addition to keynote sessions featuring some of the nation’s top Medicaid and Medicaid executives, attendees can choose from multiple breakout and plenary sessions on behavioral health, dual eligibles, healthcare investing, technology-enabled integrated care, social determinants of health, eligibility redeterminations, staffing, senior care, and more.
There will also be a Pre-Conference Workshop on The Future of Payment Reform: Delivering Value, Managing Risk in Medicare and Medicaid, on Sunday, October 9.
This week, our In Focus section highlights a presentation from HMA and Wakely, an HMA company, titled “Staying Ahead of the Star Rating Curve – A Case Study,” which was given at the 12th Medicare Stars, HEDIS, Quality Assurance, & Risk Adjustment Summit on June 15, 2022.
The presentation provided an overview of major changes in the Medicare stars program, which will result in both higher ratings and significantly higher revenues for many Medicare Advantage plans in 2023. However, the presentation indicated the higher ratings reflect temporary changes and not necessarily improvements in quality, adding that Medicare Advantage plans should be cautious about enhancing future benefits based on additional 2023 revenues.
Across the healthcare landscape, quality standards are in place to ensure patients are receiving safe, appropriate, evidence-based, and standardized care that is tailored to their individual needs and symptomology.
A significant gap has long existed in the treatment of substance use disorders (SUD), as there was no standardized method to provide treatment based on an individual’s needs at that moment, meaning people seeking treatment often received care that was either too intense or not intense enough, preventing them from attaining sustained recovery.
To create standardized treatment protocols and build additional credibility around programs, the American Society of Addiction Medicine (ASAM) developed criteria based on a holistic, multidimensional assessment to determine what level of care (LOC) an individual needs. This development was revolutionary as it was the first time the field agreed on established criteria. After 35 years of improvement and refinement, the ASAM Criteria has become the national standard.
While many providers have adopted the ASAM criteria, and most regulators and payers require its use to determine the LOC a person may need, a significant gap still persists in ensuring services are delivered with fidelity to the criteria. As a result, those seeking treatment for themselves or a loved one continue to face challenges identifying a setting that provides evidence-based treatment focused on their specific needs.
To close this gap, ASAM partnered with CARF International, the leading accreditor of behavioral health services, to develop criteria that demonstrates providers are, in fact, delivering the LOC for which they are admitting persons. Programs that are providing levels of residential care can be certified for three levels including: 3.7- Medically Monitored Intensive Inpatient Services, 3.5- Clinically Managed High Intensity Residential Services, and 3.1- Clinically Managed Low Intensity Residential Services.
By achieving the ASAM LOC certification, residential treatment programs can establish themselves as high quality SUD providers and ensure future program licensing as well as future funding from states, and private and public payors. This certification demonstrates that facilities are delivering the appropriate care to the appropriate person at the appropriate time.
Preparing for certification is different from preparing for licensure in that a program must take an in-depth look at their clinical practice to ensure alignment with the ASAM criteria.
Because of our long and proven track record of helping clients prepare for, and secure, NCQA, AAAHC and URAC accreditation as well as deep expertise in SUD programs and treatment, HMA was selected by ASAM as a preferred partner to provide technical assistance and usher programs through the certification process as well as help address shortfalls and gaps in programs and care.
Our team has the right mix of clinical and operational knowledge, training, and frontline experience to guide clients through the certification process and help build better systems of care and accountability from the ground up.
HMA has the depth and breadth of services across the healthcare spectrum, and we are uniquely positioned to help organizations address gaps identified in the certification process and improve care by ensuring services are delivered in fidelity to the LOC at which a person presents.
HMA’s Institute on Addiction is also able to provide a full complement of services and support to residential providers including ASAM LOC clinical expertise, developing policies and procedures, building and operationalizing clinical programs, and improving revenue cycle, operations, and as well as payor contracting strategies.
Certification is really step number one. Utilizing HMA’s “Survey Ready Model,” we will identify ways to build quality into everyday practice allowing programs to stay on top of – and ahead of – requirements.
On June 3, 2022, the Centers for Medicare & Medicaid Services (CMS) notified states that they will have an additional year, until March 31, 2025, to use funding from the American Rescue Plan Act (ARPA) to strengthen their Medicaid home and community-based services (HCBS). CMS’ update extends important flexibility to ensure state Medicaid programs and stakeholders, including beneficiaries, realize maximum benefit from federal investments in expanding and enhancing HCBS services.
For over a decade, the Medicaid program has been leading transformations of state long-term services and supports systems (LTSS), including physical and behavioral health services and health-related social needs. These efforts primarily focus on broadening eligibility, making more significant Medicaid investments in HCBS, and improving beneficiaries’ access to HCBS programs. The COVID-19 pandemic heightened attention to beneficiaries’ disparate experiences with accessing HCBS and exacerbated pre-COVID challenges faced by the LTSS workforce.
Section 9817 of ARPA provides an increase for Medicaid-funded HCBS by offering states the option to claim an additional 10 percentage point increase in federal match (FMAP) for the one-year period from April 1, 2021, to March 31, 2022. To receive the higher federal funding, states cannot make changes to the amount, duration, and scope of covered HCBS; they cannot reduce HCBS provider payment rates; and they cannot make eligibility standards for HCBS programs or services stricter until all additional funds are expended. CMS also requires states to submit a spending plan and narrative that describes planned enhancement activities.
Notably, a state must reinvest the higher federal funding in Medicaid HCBS while maintaining the spending levels they had in place on April 1, 2021. According to CMS’s new guidance, states can now use the funds until March 31, 2025, rather than March 31, 2024, under the previous guidance.
Actions Stakeholders Can Take to Maximize the Extra Time
The updated spending deadline is grounded in a better understanding of the level of effort and time necessary for states to identify, build consensus, and implement specific actions to include in a state’s HCBS spending plan. HMA works with states, providers, health plans, and other stakeholders, including consumers, who will benefit from the additional time to make investments. Our work includes supporting states as they align the multitude of needs and priorities with the available funds and supporting robust stakeholder engagement efforts to inform the plans.
The following are some of the most impactful “next steps” that states and stakeholders can pursue to best utilize the additional time to reinvest in Medicaid HCBS programs:
States can communicate with stakeholders, including health plans, providers, community organizations, consumers, and others, to share how the extension impacts the state’s spending plan.
States and stakeholders can renew their engagement to consider potential changes to the spending plan activities, timelines, or both. Stakeholders may have additional opportunities to offer input to refine further and prioritize the design and delivery of augmented or new services, systems, and related initiatives.
State Medicaid, aging, and various other programs and providers have more time to strengthen their collaboration to meet the needs of individuals of all ages who are living with disabilities.
States, vendors, health plans, and providers can evaluate through evidence, analysis and stakeholder feedback, if the projects they are pursuing are effective and/or should be modified. For example, it may be beneficial to provide more flexibility in the deadlines for case management and referral systems builds and implementation of the training for workers on these new systems.
States and their stakeholder partners can refocus on workforce issues, including examining eligible provider types and scopes, evaluating provider network issues, considering the role of virtual services, conducting provider and managed care rate setting studies, and other changes to support the HCBS direct care workforce.
States can develop reasonable timeframes to strengthen existing efforts or pursue new initiatives to develop and implement managed long-term services and supports for certain groups of Medicaid beneficiaries.
Looking ahead, states and all stakeholders need to assess the impact of these investments. ARPA funds are a significant investment in strengthening Medicaid LTSS programs, but these transformative efforts require sustained commitment. There is continued uncertainty around additional federal Medicaid funding over the long term that are necessary to address ongoing needs and make further progress towards high-quality, accessible HCBS services. Understanding the extent to which the funds are achieving the desired structural transformations and the impact on Medicaid beneficiaries can guide future areas of federal and state focus and investments.