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HMA Insights: Your source for healthcare news, ideas and analysis.

HMA Insights – including our new podcast – puts the vast depth of HMA’s expertise at your fingertips, helping you stay informed about the latest healthcare trends and topics. Below, you can easily search based on your topic of interest to find useful information from our podcast, blogs, webinars, case studies, reports and more.

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Brief & Report

Unwinding Medicaid Data: A Real-Time 50-State Assessment as Redeterminations Approach the Midpoint

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The Medicaid program is currently undergoing the largest change in enrollment since the program’s inception in 1965.  With millions of individuals transitioning out of the program, a key issue is assessing how redeterminations are going relative to expectations in “real-time.” An assessment is especially relevant since timely and systematic tracking is cumbersome and state approaches vary significantly. In this piece, we review why the current changes to Medicaid are so unprecedented, how enrollment changes compare to expectations at a state level, and what lessons should be learned from this experience to improve coverage for eligible individuals in the future.
Contributions to the report were also made by:
HMA News

HMA Information Services names Andrea Maresca as Managing Director

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Health Management Associates has named Andrea Maresca as Managing Director of HMA Information Services, one of the nation’s leading subscription-based repositories of data and public documents on publicly sponsored healthcare programs.

Maresca replaces HMAIS founding publisher Carl Mercurio, who will stay on as Senior Advisor until the end of the year when he retires after nearly a decade with HMA and 37 years in business information publishing.

Maresca has more than two decades of healthcare experience, having served in private and public organizations including the Centers for Medicare & Medicaid Services (CMS) and the National Association of Medicaid Directors (NAMD).  She joined HMA in 2021.

Blog

CMS issues final 2024 provider payment rules

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This week, our In Focus section reviews several calendar year (CY) 2024 Medicare payment final rules that the Centers for Medicare & Medicaid Services (CMS) issued in recent weeks, including those pertaining to:

CMS also announced the OPPS Rule for 340B-Acquired Drug Payment Policy in response to court-invalidated payment rates and on November 6, 2023, released the 2025 Contract Year Policy and Technical Changes to Medicare Advantage. The latter regulation addresses guardrails for brokers, behavioral health expansions, and several dual eligible-related policies. We will analyze these provisions in next week’s In Focus.

These final rules set the payment rates and other Medicare payment policies for services that applicable providers provide under the fee-for-service Medicare program and take effect January 1, 2024. Additionally, the final rules, particularly the Physician Fee Schedule, are expected to further inform Congress’ discussions and, ultimately, any action on healthcare policies in a possible year-end legislative package.

For example, the Senate Finance Committee has released draft language that would mitigate the projected physician payment reduction, among other policy changes. Provider organizations and interested stakeholders will want to analyze the impact of the final policies across the rules, including new codes, payment rates, and opportunities to participate in accountable care organizations (ACOs).

Overall, Health Management Associates (HMA) notes several trends across these three Medicare payment regulations:

  • Health equity remains a significant focus of CMS under the Biden Administration.
  • The agency continues to expand its coverage of behavioral health services under Medicare and enhance payment for and access to these services.
  • Medicare is moving toward incrementally supporting care delivered in accordance with beneficiaries’ preferences, such as moving away from reimbursing largely for in-person services and toward supporting telehealth services.
  • CMS is creating pathways for reimbursement for a broader range of clinicians and caregivers who are addressing Medicare beneficiaries’ needs.
  • CMS continues its efforts to improve hospital price transparency with policies aimed at encouraging providers to publicly report data.

2024 Medicare Physician Fee Schedule and Other Part B Payment Policies Final Rule

On November 2, 2023, CMS released the final rule for the Medicare Physician Fee Schedule (MPFS) for CY 2024. CMS finalized an overall 1.25 percent decrease in MPFS payment rates from 2023 to 2024. The final 2024 PFS conversion factor remains largely unchanged ($32.74) from the proposed rule ($32.75) but will result in a 3 percent decrease from the CY 2023 conversion factor ($33.89). Among the most important policy changes in the final rule is the establishment of a new add-on code (G2211) for complex care provided in the primary care setting.

In addition, CMS will begin allowing additional behavioral health providers to participate in Medicare (described further below) and make numerous telehealth policy changes mandated in the Consolidated Appropriations Act of 2023. CMS also finalized changes to the Medicare Shared Savings Program (MSSP), which CMS estimates will increase ACO participation in MSSP by roughly 10−20 percent.

CMS finalized several policies to address health equity, including coding and payment changes focused on providing access to new services and addressing Medicare beneficiaries’ unmet health-related social needs (HRSNs). The final changes affect mental health and substance use disorder (SUD) treatment providers, address payment accuracy for primary care in the context of whole-person care, and expand access to dental care for cancer patients. The changes for 2024 include:

  • Caregiver training: Medicare will now pay practitioners who train caregivers to support patients with certain diseases (e.g., dementia) in carrying out a treatment plan. Services must be furnished by a physician or a non-physician practitioner or therapist.
  • Community health integration (CHI) services: The final rule includes separate coding and payment for CHI services, including person-centered planning, health system coordination, and facilitating access to community-based resources to address unmet social needs that interfere with a practitioner’s diagnosis and treatment plan.
  • Principal illness navigation (PIN) services: The final coding and payment rules for PIN services describe care navigation services for individuals with high-risk conditions. CMS included a subset of PIN services to support individuals with severe mental illness and SUD through use of auxiliary personnel (i.e., peer support specialists). The definition of a serious, high-risk condition is dependent on clinical judgment. CMS will monitor utilization across beneficiaries and specialties to ascertain how PIN services are best used going forward.
  • Social determinants of health risk assessments: This evaluation can be provided and billed as an add-on service to an annual wellness visit or with an evaluation and management or behavioral health visit.
  • Marriage and family therapists and mental health counselors, including eligible addiction, alcohol, or drug counselors who meet qualification requirements for mental health counselors: These types of providers may now enroll in Medicare and bill for their services starting January 1, 2024. The rule expands coverage and increases payment for crisis care (including mobile units), SUD treatment, and psychotherapy as well as psychotherapy performed in conjunction with an office visit and for health behavior assessment and intervention services.

2024 Hospital OPPS and ASC Final Rule

On November 2, 2023, CMS released a final rule for hospital OPPS and ASCs. The following policies are included in the final rule:

  • A 3.1 percent increase in payment rates for hospitals and ASCs that meet certain quality reporting requirements. This amount is based on the projected 3.3 percent increase in the hospital market basket and is consistent with the 2024 payment increase for inpatient services.
  • No services will be removed from the inpatient-only (IPO) list, but 10 procedures will be added to the IPO.
  • The list of ASC-covered surgical procedures will be updated to include 37 additional surgical procedures.
  • Drugs and biologicals acquired through the 340B program will have the same payment rate as those not acquired under the 340B program—the average sales price plus 6 percent.
  • CMS will pay for intensive outpatient program services. The final rule includes the scope of benefits, physician certification requirements, coding and billing, and payment rates.

340B Rule

Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs or biologicals from manufacturers at discounted prices. Until 2018, the Medicare payment rate for Part B-covered outpatient drugs provided in outpatient hospitals was generally the average sales price (ASP) plus 6 percent. From 2018 through September 2022, CMS paid for these drugs at ASP (22.5 percent). After extensive litigation and a Supreme Court ruling, CMS returned payment for 340B drugs to ASP plus 6 percent in late 2022, and payment has continued at that level since. Consequently, payment for other services was reduced slightly more than 3 percent in 2023 to meet statutory budget neutrality requirements.

In this rule, CMS finalizes a remedy for 2018−22 payments in light of the court rulings. The agency will provide lump sum payments to 340B hospitals to cover the difference between ASP + 6 percent and ASP – 22.5 percent. Lump sum payments to 340B hospitals will result in roughly $9 billion in payouts to these facilities, in addition to the $1.5 billion they already have received through resubmitted claims. CMS had proposed that beginning in 2025, non-drug OPPS payments would be reduced by 0.5 percent to recover the budget neutrality-based payment increases resulting from the rescinded 340B cuts. According to CMS, hospitals received approximately $7.8 billion in additional spending on non-drug items and services because of budget neutrality. Earlier this year, CMS proposed a 0.5 percent pay cut to all hospitals, which would be in place for 16 years to fully adjust for the payment changes. CMS is finalizing the budget neutrality adjustment but will defer implementing these cuts to 2026 based on public comments about hospital budgetary pressures.

CY 2024 Home Health Prospective Payment System Final Rule

On November 1, 2023, CMS issued the CY 2024 Home Health Prospective Payment System (HH PPS) Rate Update final rule, which informs Medicare payment policies and rates for home health agencies (HHAs). This rule includes routine revisions to the Medicare Home Health PPS payment rates for CY 2024 in accordance with existing statutory and regulatory requirements. According to CMS estimates, Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, or $140 million, from CY 2023.

However, CMS also finalized a permanent prospective payment adjustment to the CY 2024 home health 30-day period payment rate that reduces the update. This adjustment is intended to account for any increases or decreases in aggregate expenditures that result from the implementation of the Patient-Driven Groupings Model (PDGM) and 30-day unit of payment as required in the Bipartisan Budget Act of 2018. The finalized −2.890 percent adjustment is half the total projected adjustment of negative 5.779 percent. As a result, CMS estimates that Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, rather than the 2.2 percent decrease as initially proposed.

CMS’ decision to implement only half of the permanent prospective payment adjustment in CY 2024 was in response to concerns from public commenters about the magnitude of implementing the proposed large single-year payment reduction. However, CMS also maintains that it will have to account for the remaining permanent adjustment it chose not to apply in CY 2024 and make other potential adjustments to the base payment rate in future rulemaking.

Other Proposals

CMS also is finalizing proposals to:

  • Rebase and revise the home health market basket to adopt a 2021-based home health market basket, including proposed changes to the market basket cost weights and price proxies
  • Reduce the labor-related share of the market basket to 74.9 percent based on the 2021-based home health market basket compensation cost weight (down from 76.1 percent)
  • Recalibrate the PDGM case-mix weights using CY 2022 data
  • Update the low utilization payment adjustment thresholds, functional impairment levels, and comorbidity adjustment subgroups for CY 2024
  • Codify statutory requirements for disposable negative pressure wound therapy
  • Establish regulations to implement payment for items and services under two new benefits: lymphedema compression treatment items and home intravenous immune globulin
  • Establish several enrollment provisions for hospices and other provider types and create a new informal dispute resolution process for hospice programs and a special focus program to provide enhanced oversight of the poorest-performing hospices
  • Implement various changes to the Home Health Quality Reporting Program and Home Health Value-Based Purchasing Model

2024 End-Stage Renal Disease Prospective Payment System Final Rule

On October 27, 2023, CMS issued a final rule that updates payment rates and policies under ESRD PPS for renal dialysis services furnished to Medicare beneficiaries on or after January 1, 2024. This rule also updates the acute kidney injury (AKI) dialysis payment rate for renal dialysis services that ESRD facilities furnish in CY 2024.

For CY 2024, CMS will increase the ESRD PPS base rate to $271.02, upping total payments to ESRD facilities by approximately 2.1 percent. The CY 2024 ESRD PPS final rule also includes several changes related to ESRD PPS payment policies.  First, the rule includes a payment adjustment that will increase payment for certain new renal dialysis drugs and biological products after the transitional drug add-on payment adjustment period ends. According to CMS, the increase will ensure payment is not a barrier to accessing innovative treatments for Medicare ESRD beneficiaries.

For more details about the policies described herein, contact Amy Bassano ([email protected]), Zach Gaumer ([email protected]), Andrea Maresca ([email protected]), John Richardson ([email protected]), Kevin Kirby ([email protected]), or Rachel Kramer ([email protected]).

HMA News

New experts join HMA in September 2023

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

Dan Castillo – Managing Principal
HMA

Dan Castillo is a seasoned healthcare executive with over 20 years of experience in health administration. He specializes in health systems strategy, hospital leadership, medical group management, population health and academic medicine.

Laura Brown – Director
Leavitt Partners

Laura Brown is a food and drug attorney who leverages her 10-plus years of legal analytic experience to provide federal policy counsel and analysis to clients and support multi-sector alliances. Read more about Laura.

Teresa Garate – Principal
HMA

Teresa Garate is an experienced and innovative leader with over 30 years of experience leading systems change, innovation and growth in the complex environments of public health, healthcare, public education, higher education and government.

Falon Owen – Principal
HMA

Falon Owen is a healthcare strategist with over 15 years of experience in product development and operations.

Kathleen Cahill – Associate Principal
HMA

Kathleen Cahill is a solutions-driven C-Suite executive with more than 40 years of experience in healthcare operations, working for entities and organizations across the healthcare industry.

Susan Arcidiacono – Principal
HMA

Susan Arcidiacono is an accomplished health plan executive with more than 25 years of experience in Medi-Cal managed care and Medicare D-SNP.

Dena Hasan – Associate Principal
HMA

Dena Hasan is a forward-thinking executive with over 20 years of experience in public and private sector healthcare and social services.

Jeff Wittcoff – Consulting Actuary II
Wakely

Jeff Wittcoff has expertise is in provider contracting and assessment, healthcare program evaluation, digital care initiatives, trend forecasting, and actuarial applications of healthcare modeling. Read more about Jeff.

Patricia Miles – Senior Consultant
HMA

Patricia Miles is a performance-driven managed care leader with over 25 years of experience in the Medicaid and Medicare markets.

Patrick Meadors – Senior Consultant
HMA

Patrick Meadors is a licensed marriage and family therapist with over 15 years of clinical behavioral health and integrated care experience.

Dan Rhodes – Principal
HMA

Dan Rhodes is a results-driven healthcare operations and compliance executive with over 25 years of successful leadership experience with blue-chip companies.

Read more about our new HMA colleagues

Kathleen Cahill

Kathleen Cahill

Associate Principal

Dan Castillo

Dan Castillo

Managing Principal

Teresa Garate

Teresa Garate

Principal

Dena Hasan

Dena Hasan

Associate Principal

Patrick Meadors

Patrick Meadors

Senior Consultant

Patricia Miles

Patricia Miles

Senior Consultant

Falon Owen

Falon Owen

Principal

Dan Rhodes

Dan Rhodes

Principal

Solutions

CalAIM Justice-Involved Reentry Initiative Planning and Implementation Services

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Organizations are facing extensive challenges to improve health outcomes and healthcare quality through broad delivery, payment, and program reforms in CalAIM. With proven expertise in CalAIM policy, operations, and implementation, Health Management Associates (HMA) can help you with identifying needs, developing a strategy, and implementing those plans. We actively support clients across California implementing the CalAIM Section 1115 Waiver Demonstration Justice-Involved Initiative. Our team of Medi-Cal, managed care, and correctional healthcare experts – including physical and behavioral health clinicians, healthcare administrators, and former correctional leaders – are uniquely positioned to help clients navigate this delivery system transformation.

California is the first state in the nation to receive approval from the Centers for Medicare and Medicaid Services (CMS) to provide detained and sentenced individuals with 90-day pre-release healthcare services and behavioral health linkages. Through PATH JI grant funding, HMA is helping clients build administrative capacity, information technology, pre-release services, care management models, and Medi-Cal claiming infrastructure to meet their unique needs and leverage this significant opportunity. Our planning and implementation support spans the breadth of the CalAIM Justice-Involved Initiative including: the pre-release Medi-Cal application process, 90-day pre-release services, behavioral health links, Enhanced Care Management (ECM), and Community Supports services.

That’s why sheriffs’ departments, probation authorities, correctional health services agencies, behavioral health agencies, managed care plans, healthcare providers and community-based organizations see HMA as a trusted partner in helping to develop and implement 1115 waiver healthcare programs.

We provide:

Project management

State policy monitoring and compliance tracking

Current and future state process mapping

Partner and stakeholder collaboration and meeting facilitation

Process and quality improvement recommendations

Protocol development

Implementation plan and readiness assessment drafting

Training

Electronic health record recommendations

Contact our experts:

Rebekah Kharrazi

Rebekah Kharrazi

Associate Principal

Rebekah Kharrazi is an accomplished public health professional with a broad range of expertise and skills to help clients navigate … Read more
Julie White

Julie White

Principal

With more than 25 years of experience in comprehensive healthcare and justice-related service delivery, Julie White has developed policy, strategic … Read more
HMA News

Health Management Associates Expands Footprint in North Carolina, New Orleans

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Health Management Associates (HMA), a leading independent, national healthcare consulting firm today announced that it is establishing offices in North Carolina and New Orleans.

In North Carolina, HMA will have a presence in Raleigh and Charlotte with plans to continue building out the North Carolina team in the coming months.

The Focus Group, based in New Orleans, joined HMA in 2022, and HMA continues to expand its footprint there adding new colleagues from the area to its roster of experts. They will share office space at The Focus Group’s current Poydras Street location.

“Our firm’s continued growth is designed to support the current and future needs of our clients across the country,” said Doug Elwell, HMA’s chief executive officer. “We are excited to plant roots in North Carolina and expand our talented team in New Orleans as we help clients successfully navigate the toughest challenges facing healthcare and human services.”

About HMA

Founded in 1985, HMA is an independent, national research and consulting firm specializing in publicly funded healthcare and human services policy, programs, financing, and evaluation. Clients include government, public and private providers, health systems, health plans, community-based organizations, institutional investors, foundations, and associations. With offices in more than 30 locations across the country and over 700 multidisciplinary consultants coast to coast, HMA’s expertise, services, and team are always within client reach. Learn more about HMA at healthmanagement.com, or on LinkedIn and X.

Brief & Report

State Policy and Practice Recommendations to Advance Improvements in Children’s Behavioral Health

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Health Management Associates (HMA) has partnered with the National Association of State Mental Health Program Directors (NASMHPD) Technical Assistance Coalition to produce a series of briefs that characterize the opportunities to improve coordination of services for children.

In this brief, “State Policy and Practice Recommendations to Advance Improvements in Children’s Behavioral Health,” the HMA team of Caitlin Thomas-Henkel, Uma Ahluwalia, Heidi Arthur and Annalisa Baker, and Devon Schechinger address key issues and highlighted practice recommendations that are designed to bring forth systems change and raise awareness at the state level. This brief provides state policymakers and behavioral health leaders with a vision for coordinating and optimizing services to promote mental health well-being, prevent behavioral health conditions, and ensure access to a coordinated continuum of behavioral healthcare.

Brief & Report

The Role of Specialized Managed Care in Addressing the Intersection of Child Welfare Reform and Behavioral Health Transformation

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Health Management Associates (HMA) has partnered with the National Association of State Mental Health Program Directors (NASMHPD) Technical Assistance Coalition to produce a series of briefs that characterize the opportunities to improve coordination of services for children with behavioral health needs.

The Role of Specialized Manage Care,” written by HMA experts, Heidi Arthur, Angela Bergefurd, Caitlin Thomas-Henkel and Uma Ahluwalia, focuses on addressing the intersection of child welfare reform and health transformation. This issue brief explains how specialized Medicaid managed care plans can ensure better alignment between child welfare and behavioral healthcare services. The role of special needs plans for the delivery of coordinated care is emphasized and the opportunities to leverage specialty managed care plans by states are highlighted.

Brief & Report

Improving Outcomes for Children in Crisis with Evidence-Based Tools

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Health Management Associates (HMA) has partnered with the National Association of State Mental Health Program Directors (NASMHPD) Technical Assistance Coalition to produce a series of briefs that characterize the opportunities to improve coordination of services for children.

In this brief, “Improving Outcomes for Children in Crisis with Evidence-Based Tools,” the HMA team of experts which include Rachel Bembas, Lauren Niles, Caitlin Thomas-Henkel and Uma Ahluwalia, outline limitations of current pediatric quality measures and several approaches to measure and track goals and objectives while offering a call to action at both the state and local levels. The brief calls on federal, state, and local entities, payers, provider organizations, and community-based organizations to collectively take steps to bolster and improve existing standardized monitoring, evaluation, and quality measurement efforts for youth mental health.

 

Brief & Report

Early Childhood Mental Health: the Importance of Caregiver Support in Promoting Healthy Child Development and Clinical Interventions for Children

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Health Management Associates (HMA) has partnered with the National Association of State Mental Health Program Directors (NASMHPD) Technical Assistance Coalition to produce a series of briefs that characterize the opportunities to improve coordination of services for children.

The significance of caregiver support for healthy early childhood outcomes is highlighted in this brief “Early Childhood Mental Health: The Importance of Caregiver Support in Promoting Healthy Child Development and Clinical Interventions for Children written by HMA experts Christina Altmayer, Caitlin Thomas-Henkel and Uma Ahluwalia. This brief explores the role of Medicaid in advancing early childhood child mental health outcomes, the importance of caregiver support in promoting healthy child development, and innovative practices aimed at increasing access to supports.

Brief & Report

Connecting Schools to the Larger Youth Behavioral Health System: Early Innovations from California

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Health Management Associates (HMA) has partnered with the National Association of State Mental Health Program Directors (NASMHPD) Technical Assistance Coalition to produce a series of briefs that characterize the opportunities to improve coordination of services for children.

Connecting Schools to the Larger Youth Behavioral Health System: Early Innovations from California focuses on the role schools can play in ensuring that children and youth get the behavioral healthcare they need.  Written by HMA experts, Michael Butler, Ilia Rolon, Caitlin Thomas-Henkel and Uma Ahluwalia, this brief outlines California’s innovative approach to expanding access while describing the lessons learned and potential implications for other states.