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Blog

Virginia releases Cardinal Care Medicaid Managed Care RFP

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This week, our In Focus section reviews the request for proposals (RFP) for the Virginia Cardinal Care Medicaid managed care program, released by the Department of Medical Assistance Services (DMAS) on August 31, 2023. The RFP includes a new foster care specialty plan. Implementation is scheduled to begin July 1, 2024.

Cardinal Care

Cardinal Care launched in January 2023 as a rebranding of the state’s Medicaid program and Children’s Health Insurance Program—Family Access to Medical Insurance Security Plan (FAMIS). Cardinal Care Managed Care (CCMC) will combine the state’s existing Medallion 4.0 managed care program for traditional Medicaid and the Commonwealth Coordinated Care Plus (CCC Plus) managed long-term services and supports (MLTSS) program to serve 1.9 million Medicaid managed care members.

RFP

The state will award statewide fully capitated, risk-based contracts to a maximum of five health plans. A separate foster care specialty plan contract will also be awarded to one of the winners. If none of the plans win the separate foster care specialty program, all plans awarded a CCMC contract will be required to cover all services.

Selected plans will provide acute care, behavioral health, and MLTSS services to all Virginians who are eligible for Medicaid, including children, adults, and pregnant women in low-income households; children and adults with disabilities; low-income older adults; and individuals receiving LTSS, including dual-eligible populations. The foster care plan will cover children in foster care, individuals younger than 26 years old who were formerly in foster care, and children eligible for adoption assistance.

The RFP contains several targeted focus areas and changes to the managed care program. For example, it emphasizes improvements to the state’s behavioral health care system and improved health outcomes through a focus on health-related social needs such as housing stability and food insecurity for CCMC members.

Contracted plans will be required to operate a dual-eligible special needs plan (DSNP) in Virginia.

Market

CVS/Aetna, Elevance/Anthem, Sentara/Optima Health, Molina, and UnitedHealthcare are the current incumbents. Effective with the new RFP, DMAS intends to reassign most CCMC members as part of an enrollment process. At present, Optima holds the largest market share of enrollment at 37 percent, followed by Anthem at 30 percent.

Timeline

Letters of intent are due by September 20 and proposals are due on October 27. As previously mentioned, new contracts will begin July 1, 2024. Contracts will have a six-year initial term, with two two-year renewal options. Award dates have not been announced.

Evaluation

Plans will be awarded up to 1,000 points during the evaluation process based on the categories shown below.

Link to RFP

Solutions

Leading ideas and solutions for long-term services and supports

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Dedicated to supporting the effectiveness of publicly financed healthcare programs, Health Management Associates (HMA) is committed to promoting the design, financing and operation of effective models of person-centered long-term services and supports (LTSS) which:

Support an individual’s ability to receive services in the most integrated setting

Promote successful community living

Improve integration of LTSS with quality physical and behavioral healthcare

Support Medicare and Medicaid integration and coordination

Address the social determinants of health for people with support needs

Support direct care workforce initiatives for states, managed care organizations and long-term care providers

Support strategic planning focused on long-term care

Support managed care readiness initiatives

What we offer

With deep expertise in the field, our colleagues and the work we do help to shape current system trends. In addition, we support improved outcomes for beneficiaries and successful participation for the wide range of LTSS providers including managed care organizations, states offering critical services, and purchasers through:

LTSS Models of Care

Developing and promoting person-centered integrated, and holistic LTSS models of care

LTSS Quality Standards

Supporting the development of LTSS quality standards and metrics, including technical assistance for NCQA and other accreditation and credentialing

LTSS Regulatory Compliance

Facilitating readiness and compliance with federal and state regulations, including home and community-based settings of care, Medicaid managed care, the Fair Labor Standards Act, and the Americans with Disabilities Act

LTSS Integration

Implementing care management and service delivery models that promote integration of services across physical, behavioral, and LTSS providers and between Medicare and Medicaid including those developed under PACE, managed LTSS, and managed fee-for-service

LTSS Stakeholder Engagement

Supporting effective community engagement by public policy makers, and empowering advocacy organizations and other stakeholders in understanding, shaping, and responding to change

LTSS Delivery and Payment Models

Assisting organizations and providers to prepare and respond to payment and structural changes in LTSS (e.g., managed care, accountable care, value-based purchasing)

LTSS and Social Determinants Design

Designing innovative approaches to addressing the social determinants of health, including improved strategies for affordable and accessible housing, competitive employment for persons with disabilities, access to technology, and social equity-based care delivery models

LTSS Market Analysis

Providing expert market analysis for investors relating to LTSS providers, managed care organizations, service vendors, or emerging trends in the LTSS landscape

LTSS Research and Evaluation

Enabling the use of data to uncover opportunities for improvement and to demonstrate value to ACOs, hospital systems, payers, and funders

Our wide-ranging expertise includes:

Medicaid LTSS waiver and state plan authority options

Operation and oversight of managed LTSS

Public procurements

LTSS provider operations

Federal and state compliance

Care management and care coordination

Workforce development

Strategic planning and practice redesign

LTSS policy analysis

Value-based purchasing

Quality monitoring, evaluation and research

Community capacity and network adequacy

Readiness reviews

Our Clients Include:

Federal, state and local governments

For-profit, not-for-profit and public health plans

Institutional and home and community-based services providers and their associations

National, state and local advocacy organizations

National and regional foundations

Direct care workforce representatives

Investment services entities

Contact our experts:

Sharon Lewis

Sharon Lewis

Principal

Sharon Lewis is a nationally lauded expert in federal and state disability policy, including home and community-based services (HCBS), education, … Read more
Susan McGeehan

Susan McGeehan

Associate Principal

Susan McGeehan is a multi-faceted healthcare leader with extensive experience in dual eligible programs, long-term services and supports (LTSS), Medicaid … Read more
Solutions

Rural Health and Challenges with Health Equity

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There are 47 to 60 million people residing in rural areas in the U.S. Many rural residents must navigate healthcare system challenges people living in urban and suburban areas generally do not face. While workforce shortages, lack of consumer choice in health plans and providers, travel distance, transportation issues, social isolation, and increased inequity for people in marginalized communities do impact urban and suburban healthcare services, these issues are exacerbated in most rural communities. Developing and supporting rural health programs requires understanding the unique characteristics of rural settings and how these dynamics influence healthcare policy, providers, payers, consumers, and health equity.

Health Management Associates (HMA) brings together industry-leading policy, program, financial, community, and clinical experts to provide comprehensive solutions that make healthcare and human services work better for people living in rural and frontier areas across the country. We offer a full suite of professional health and human services consulting services to clients serving rural and frontier communities. This includes state agencies, county health departments, critical access and rural hospitals, federally qualified health centers (FQHCs) and rural health clinics, skilled nursing facilities, home and community-based service providers, behavioral health providers, oral health providers, and pharmacies/pharmacists. We also work with human services organizations and public health agencies, supporting their direct services, as well as assisting them in connecting with healthcare systems and providers. Our national, multisector, multisystem experience in healthcare and human services enhances our ability to support rural clients in making sustainable, positive impacts in their local communities.

PROJECT SPOTLIGHT

Health Equity & Access for Rural Dually Eligible Individuals (HEARD) Toolkit

With funding from Arnold Ventures, HMA created the HEARD Toolkit, a robust discussion of the access challenges facing dually eligible individuals in rural areas and a portfolio of actionable solutions to address these challenges. Dually eligible individuals in rural areas reside at the intersection of a major public health crisis and a fragmented Medicaid and Medicare delivery system. They experience poor access to services and to integrated care programs (ICPs) to address their whole person needs.

HMA designed this Toolkit to help policymakers address access issue dually eligible individuals in rural areas have to navigate every day. For example, addressing access must encompass getting to a comprehensive Medicaid and Medicare services continuum that includes home- and community-based services (HBCS), as well as ICPs. A primary focus on equity can help states, local communities, payers, and providers begin to address issues of access for these very vulnerable individuals in rural communities. The Toolkit provides examples and ideas for rural providers and communities to address equity and improve services and supports for dually eligible individuals.

Learn More

For example, HMA can assist rural communities and the organizations that support their needs with:

Rural-specific workforce solutions

Programs addressing Social Determinants of Health/Health-related Social Needs

Payment system reforms

Development of integrated care programs for Dual Eligibles

Substance Use Disorder/Opioid Use Disorder prevention, treatment, and recovery services

Behavioral health services and supports

Justice-involved carceral healthcare and transitions

Long-term services and supports and home and community-based services

HMA understands the multilevel challenges for delivery of quality health care and social services to rural populations. From workforce and care access issues to transportation difficulties and technology barriers, to socio-economic differences, we can help rural providers and organizations overcome challenges and achieve their goals to serve and support their communities’ needs.

Other Rural Health Project Examples:

HMA is supporting review and reform of the primary care payment environment in New Mexico working under a contract with Mercer. New Mexico’s Medicaid program had identified multiple challenges the primary care providers faced across the state, including rural sustainability and fiscal soundness. HMA’s approach includes coupling data analysis with stakeholder engagement. Our work to date includes designing, testing, and evaluating new primary care alternative payment models (APMs); fiscal, policy, and/or programmatic implementation recommendations related to the multi-payor roll-out of a primary care APM; and supporting primary care practitioners related to NM Medicaid APM implementation. Additional project work will include more provider specific analysis, recruitment for pilot testing and provide education, analysis and training for providers, health plans and state regulators.

HMA is working with the Colorado Department of Health Care Policy and Financing (HCPF) to perform a dynamic heat mapping as the first phase of a three-phase project that includes an environmental scan of home and community-based services (HCBS)/Medicaid. HMA is creating a tool that HCPF can leverage to update and track progress to close provider gaps. In subsequent work HMA will identify potential geographic regions which would benefit from reimbursement structure changes, including geographic adjustment factors to apply to preexisting fee-for-service rates or other mechanisms to effectively address identified care gaps. Based on these results, HMA will recommend strategies and best practices to expand the provider network in rural areas to avoid care deserts and assure access to services for all Medicaid members.

Over the past six years, HMA has supported tribal communities in Montana with an array of data and evaluation expertise specific to behavioral health system assessments and evaluation activities. To date, we have conducted feasibility assessments for tribes considering options to 638 their behavioral health services, evaluated high-fidelity wraparound services in tribal communities through the Montana Systems of Care program, supported efforts to discern a concept design for a joint tribally operated Substance Use Disorder (SUD) Continuum of Care, and assisted tribally operated clinics in best practices in opioid prescribing and addiction treatment.

The Georgia Health Policy Center provides technical assistance for grantees of HRSA’s Rural Health Programs. HMA created a primer and additional tools, including a webinar, designed to inform and support rural provider leadership on Value-Based Care. The primer serves as a self-paced guide helping organizations consider national trends and experiences, assess their current state and readiness, understand benefits and barriers of Value-Based Care. The primer and tools are used by the technical assistance team and rural health grantees.

HMA has worked with HSHS for over 10 years, providing a wide range of services including:

Grant surveillance related to strategic plans, project management, grant program development, and narrative writing for multiple state and federal grants including USDA, HRSA, and SAMHSA. 

Expanding access to medication assisted treatment (MAT) in emergency departments by activating a team of HMA experts to implement a global assessment of readiness to adopt MAT, create a comprehensive training curriculum, assist with development of policies, workflows and standardized orders; and provide technical assistance required to address stigma and implement change. HMA also aided in writing the successful proposal for state funding for this project.

Stakeholder engagement for a hub-and-spoke model of telehealth network, assessed strategic priorities across multiple diverse stakeholders, and developed a strategic plan for HSHS’ Wisconsin rural healthcare provider telehealth network.

Development of the Illinois Telehealth network composed of 21 rural healthcare providers across Illinois. HMA provided technical expertise on the adoption of telehealth services and the development of clinical protocols and led strategic planning efforts. The network now functions to support the members in disseminating best practices, implementing telehealth service lines, sharing clinical protocols, removing barriers, and promoting evaluation.

HMA is currently assisting HSHS’ rural behavioral health team in devising new models of community-based withdrawal management processes consistent with recent changes in Wisconsin’s regulations. HMA experts on residential substance use disorder and integrated care provide technical assistance, training, and evidence-based policy development.

HMA supported the Texas Department of Agriculture, State Office of Rural Health (SORH) by leading SORH’s three-year strategic plan and design future programs. For the needs assessment, HMA conducted a systematic assessment that included an environmental scan of rural health key issues and trends, online survey of rural Critical Access Hospitals (CAHs) and prospective payment systems (PPS) hospitals in Texas identify needs and gaps, and an analysis of publicly available data to identify health needs and differences between rural and urban residents. Informed by this assessment and close collaboration with SORH staff, HMA developed a strategic plan to guide the next three years of SORH’s programming, as well as created work and evaluation plans for the SORH and Flex grant programs. Other tasks included assessment of Texas rural hospital telemedicine readiness, recommendations for value-based payment models for rural hospitals, and opportunities to support rural hospitals in reducing health disparities.

Contact our experts:

Ellen Breslin

Ellen Breslin

Principal

A seasoned consultant, Ellen Breslin draws upon her nearly 30 years of experience and expertise in health policy, with a … Read more
Stephanie Denning

Stephanie Denning

Principal

Stephanie Denning has worked in healthcare and human services for more than 25 years. Her experience spans the public, non-profit, … Read more
Rebecca Kellenberger

Rebecca Kellenberg

Principal

Rebecca Kellenberg specializes in assisting public and private health care organizations with Medicaid and CHIP policy analysis and implementation. With … Read more
Jill Kemper

Jill Kemper

Senior Consultant

Jill Kemper has extensive experience improving access to care and care delivery, especially for vulnerable or complex patient populations and … Read more
Blog

CMS Takes Next Major Step in Medicare Drug Price Negotiation Program

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This week’s In Focus centers on the U.S. Department of Health and Human Services (HHS) August 29, 2023, announcement of the first 10 prescription medications that will be subject to price negotiation for Medicare coverage. This week, Health Management Association (HMA) experts offer their perspective on what this change means and what to expect next.

Background

Medicare was granted the authority to negotiate prescription drug prices through the Inflation Reduction Act (IRA), which the president signed into law on August 16, 2022. HHS, acting through the Centers for Medicare & Medicaid Services (CMS), will lead negotiations and enter into agreements with manufacturers for these products, negotiating a maximum fair price (MFP) for each selected drug in the Medicare program. HHS is required to negotiate on a certain number of drugs each year: 10 drugs in 2026, 15 drugs in 2027 and 2028, and 20 drugs in 2029 and subsequent years. Up to 60 drugs could be negotiated by 2029. Manufacturers that are noncompliant will face an excise tax that could far exceed the cost of drugs sold over time and civil monetary penalties.

Medicare Drug Negotiations: The Latest Development

Since passage of the IRA, CMS has been working to establish the regulatory infrastructure and policies to support implementation of Medicare’s new drug price negotiation authority on an expedited timeline. Guidance on the approach the agency will take in negotiating MFPs, along with other provisions of the act, has been issued.

With this week’s action, CMS will begin the first round of negotiations. Table 1 lists the drugs CMS has identified for the first round of negotiations. Products selected for negotiation (with prices effective in 2026) are medications that represent the highest spending in the Part D drug benefit, excluding products with generic or biosimilar competition as well as certain orphan drugs and other products that qualify for a small biotechnology exemption.

Alongside CMS’s announcement, HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE) released its analysis of prescription drug use and out-of-pocket spending for each of the 10 drugs for all Part D enrollees and separately by whether an enrollee receives the low-income subsidy (LIS). The report also examines demographic information about enrollees who use the selected products.

Takeaways

The products selected were largely in line with initial modeling that Moran Company analysts and others performed, but with some surprises. Variation from earlier projections could be expected for a number of reasons, including:

  • The June 2022−May 2023 data CMS used were not generally available to outside analysts, and it is clear that several products had spending increases (whether because of volume or price increases) relative to prior years that moved them up the list.
  • Some higher spending products have seen generic or biosimilar competitors launch, making them ineligible for selection for negotiation.
    • For the top 30 products identified in previous dashboard data, at least 10 have evidence of generic or biosimilar competition.
  • CMS’s decision to treat multiple products together for purposes of negotiations also affected the products included on the list.
  • For a few other products, it is still unclear how CMS decisions were made.

What to Expect Next

The drug negotiation policy is highly controversial and is the subject of litigation that could delay the process. If litigation does not affect the timeline for implementation, manufacturers of selected drugs have until October 1 to agree to negotiate and provide initial information to CMS. If a manufacturer opts out of the negotiations, the company must pay either an excise tax or withdraw all its products from the Medicare and Medicaid programs. CMS and participating companies will then meet to discuss manufacturer submissions, and CMS will receive information from other stakeholders. Several listening sessions will take place.

CMS will make initial price offers by February 1, 2024. After a counteroffer process, negotiations may continue into the summer of 2024, but final determinations will be made by August 1, 2024. CMS plans to publish any agreed-upon negotiated prices for the selected drugs by September 1, 2024. Those prices take effect starting January 1, 2026.

In addition to the short-term impact on prices for specific drugs, several questions about the potential effects of the policy are worth monitoring over the long-term:

  • How will research and development of new products and trends in the type of products prioritized change as a result of these policies?
  • How will the policies affect pricing for competitor products and the launch prices of products in the future?
  • Beyond the Medicare population, for whom the prices are directly applicable, how will MFPs affect negotiations on costs and supplemental rebates for other payers. including state Medicaid programs, state employee programs, drug purchasing pools, and commercial insurers?
  • Will negotiations affect the design of standalone Prescription Drug Plans (PDPs) and Medicare Advantage PDPs.

The IRA included several other changes to the Medicare program, which we discussed in a previous In Focus.

Blog

HMA recognizes unseen populations on International Overdose Awareness Day 2023 

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In honor of International Overdose Awareness Day (IOAD), August 31, 2023, we take time to pause and reflect on this year’s theme of “recognizing those people who go unseen.” HMA stands with those affected by overdose and promotes an ecological approach to addressing substance use, one that acknowledges the many facets of the crisis that leads to approximately 300 overdose deaths every day in the United States.  

We recognize that many Americans experience the repercussions of overdose in ways that are often unseen: friends and family members who act as first responders by reversing an overdose with naloxone; seniors and older adults experiencing addiction; pregnant and parenting people who use drugs and/or medications for opioid use disorder; those who are often unable to access resources due to structural barriers such as homelessness or those living in rural and frontier communities; and, the justice-involved population, who serve as a salient example and often go unseen. Research has confirmed that overdose is the leading cause of death among people leaving carceral settings, as well as the third leading cause of deaths in custody in U.S. jails.  

We also recognize that many of the racial disparities in U.S. overdose deaths are unseen and underrepresented in national dialogue about the crisis. At a time when people of color are dying at a higher rate than non-Hispanic White people, the International Overdose Awareness Day theme of recognizing those unseen is timely, and apt. Non-Hispanic American Indian or Alaskan Native people had the highest drug overdose death rates in both 2020 and 2021. Rates of overdose among Black or African American men outpace other groups. Racial disparities extend beyond overdose fatality rates and into the broader substance use disorder continuum of care. People of color are offered medications for opioid use disorder at a rate almost 50% lower than non-Hispanic White people, and the duration of their treatment tends to be shorter; ultimately leading to increased risk of returning to use. These statistics only reinforce the need for an expanded, comprehensive, and equity-centered approach to care

Finally, we recognize that the overdose landscape is developing unseen changes, as overdose deaths involving psychostimulants such as methamphetamine are increasing with and without synthetic opioid involvement. Polysubstance use is the norm, not the exception. The healthcare sector must broaden and expand services to meet the current needs, including incorporating harm reduction strategies for stimulants, especially in states with high concentrations of deaths such as Nevada, West Virginia, Maine, and among non-Hispanic American Indians or Alaskan Natives.  

HMA honors the often-unseen work and expertise of those leading advances in the field including peers, public health professionals, people who use drugs, and friends and family who become first responders. In remembrance of those impacted by overdose, our call to action is to honor unseen populations affected by this crisis, to elevate existing work by and for these communities, and to continuously seek innovative approaches that ensure we carry everyone forward into a responsive system of care.  

Someone you know or may have seen may be struggling with addiction. Help is always available. The Substance Abuse and Mental Health Services Administration (SAMHSA) offers free, confidential, and 24/7 support in both English and Spanish at 1-800-662-HELP (4357). 

For more information on HMA overdose prevention services visit the HMA Institute on Addiction website.  

Blog

Digital innovation to be a featured topic at 2023 HMA fall conference

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Advancements in digital health and data technology have made for rapid and remarkable transformation of the healthcare landscape. From wearable devices to mobile health apps to telemedicine platforms, the integration of digital solutions and patient data is disrupting every facet of healthcare – to say nothing of the AI revolution that has only just begun. While this innovation is exciting and meaningful, it still has runway to truly deliver “better, cheaper, faster” for patients. These innovations and others will be featured at Health Management Associates annual fall conference, being held October 30-31, 2023.

Digital innovation has graduated from its “experimentation/compliance” phase and is now in its “expectation of results” phase. Healthcare payers and providers should incorporate digital into core payment and delivery strategies to deliver better outcomes and a better care experience at a most efficient cost. Health data management is creating more efficient platforms to provide the right care at the right time to the right patient. Federal policy programs like the 21st Century Cures Act, and CMS Interoperability and Patient Access rule have opened the door for providers, payers, and applications to make better use of health information, with patients more in control. 

While this level of innovation is exciting anywhere, it is particularly exciting to see how it is enabling improvements in publicly funded healthcare programs to deliver more effective care. HMA consultants are leading conversations and presentations on how digital innovation is driving change in Medicare, Medicaid, and state marketplaces. 

Key Sessions (full agenda and panelists here)

The Dynamic World of Publicly Sponsored Health Care: Trends and Innovations: Learn about new payment models, quality and equity initiatives, new products and services, workforce, likely policy initiatives, and new ways of reaching and serving members. (Monday 9:15-10:30am plenary session)

Digital Health, Interoperability, and Information Sharing: From Compliance to Innovation: Discover how early adopters will show how they have moved from compliance to innovation by embracing data sharing, FHIR APIs, and third-party applications using real-time data. (Monday 1:30-3:00pm breakout session)

The Pitch: Innovative and Potentially Disruptive Models in Care DeliveryHear the latest innovations in care delivery models and will also gain an understanding of how to best approach managed care partners when considering value-based contracting or other network arrangements. (Monday 3:30-5:00pm breakout session)

Behavioral Health System Redesign: Learn why federal and state governments and the healthcare delivery system must collaborate in new and innovative ways to meet the rapidly growing demand for a more integrated behavioral health system (Sunday preconference, this session and others running 1pm – 5pm)

To learn more about HMA’s work in the digital innovation space, please contact Stuart Venzke in HMA’s IT Advisory Services, or Ryan Howells who leads digital health work for HMA/Leavitt Partners’ DC practice.

Webinar

Webinar replay: Behavioral health: moving access to care and network adequacy into the 21st century

Watch Now

This webinar was held on September 7, 2023.

States, counties, health plans, and providers are asking how to meet the growing demand for behavioral health (BH) services. HMA teamed with experts to discuss these challenges at our recent Quality Conference where we crowdsourced ideas for how to redefine and measure network adequacy, examining provider selection, community need, and measurement.

This webinar reconvened those panelists to continue this critical conversation, shared feedback on factors that lead to “adequate” provider capacity, and discussed the impact of new federal network adequacy standards.

The conversation won’t stop with this webinar. We’ll use our continuously crowdsourced information and material for our BH workshop on Oct. 29, (the day prior to the start of the 2023 HMA Conference), making the connection between how large system reform in BH will shape how we think about network adequacy. We hope you’ll join us.

Learning Objectives

  • Understand widely varying state standards for BH network adequacy and metrics — and validity concerns about how provider volume is assessed.
  • Consider the true impact of BH provider shortage on care. (Reality check: we do not have enough BH providers and will not catch up at the current rate of training.)
  • Learn about treatment engagement challenges and the need to establish criteria for discharge or discontinuation of treatment.
  • Understand how extending BH workforce capacity with peer networks might ease shortage concerns.
  • Hear about Delaware’s challenges and innovations to build an end-to-end ecosystem of care, shifting toward a journey rather than an episode of care.
  • Learn about recent federal reform and new standards around network adequacy.

Speakers

Nazlim Hagmann, MD, MPH
Senior Vice President and Associate Chief Medical Officer, Commonwealth Care Alliance 

Rhonda Robinson Beale, MD
Senior Vice President and Deputy Chief Medical Officer, UnitedHealth Group

Claire Wang, MD, ScD
Associate Deputy Director, Division of Substance Abuse and Mental Health, Delaware State Department of Health and Social Services

Blog

CMS continues to rollout new initiatives, what to watch for in the fall

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In this week’s In Focus, we continue our review of Medicare developments from this summer and look ahead at Centers for Medicare & Medicaid Services (CMS) activities to watch for this fall.

CMS ACO Strategy Update

In a July 31, 2023, Health Affairs Forefront blog, CMS leaders outlined the agency’s plan to further accelerate the growth and accessibility of accountable care organizations (ACOs), especially for beneficiaries in rural and underserved areas. The article signals the agency’s continued commitment to increasing participation in ACOs and future policy and model initiatives that CMS could undertake to achieve those goals.

In particular, the CMS Innovation Center is considering testing models and features to support Medicare Shared Savings Program (MSSP) ACOs in increasing investments in primary care. This initiative might include piloting ACO-based primary care models that provide prospective payments in an effort to reduce reliance on fee-for-service (FFS), support innovations in care delivery, and increase access to advanced primary care in underserved communities.

CMS leaders point to a second component of its ACO strategy in the calendar year (CY) 2024 proposed Medicare Physician Fee Schedule (PFS) rule. The proposed PFS includes technical updates to the Advance Investment Payment (AIP), which provides financial support for providers who participate in the MSSP. The proposed PFS rule also includes several opportunities for the public to inform CMS’s ongoing ACO work, including considerations for adding higher-risk participation options in the MSSP, ways to better support collaboration between ACOs and community-based organizations to meet health-related social needs, and other initiatives. HMA discussed the PFS changes in an earlier In Focus.

CMS also announced refinements to the ACO Realizing Equity, Access, and Community Health (REACH) Model on August 18. The agency’s three goals in making these changes are to:

  • Increase predictability for model participants (e.g., policies to change certain beneficiary alignment requirements and refinements to eligibility criteria for high-need ACOs
  • Protect against inappropriate risk score growth (e.g., revisions to the risk-adjustment methodology)
  • Advance health equity (e.g., revisions and expansions to the health equity benchmark adjustment)

These topics are of importance to CMS across its model portfolio and are, in part, based on experience the agency has gained in running the ACO REACH model. Below is a summary of several key policy changes that will take effect in 2024. The entire list can be found on the CMS website.

Finally, CMS released the request for applications (RFA) for the Innovation Center’s Making Care Primary (MCP) model previously announced in June. This voluntary model is scheduled to begin in June 2024 and run for 10.5 years. It will have three participation tracks that build upon previous Innovation Center primary care initiatives.

The MCP model is designed to improve care for beneficiaries by supporting the delivery of advanced primary care services. This framework provides a pathway for primary care clinicians who have varying levels of experience with value-based care to gradually adopt prospective, population-based payments while building the infrastructure to improve behavioral health and specialty integration and drive more equitable access to care. CMS is working with Medicaid agencies in eight states—Colorado, North Carolina, New Jersey, New Mexico, New York, Minnesota, Massachusetts, and Washington—to engage in full care transformation across payers, with plans to engage private payers in the coming months.

The RFA provides additional details about the model’s payment, care delivery, quality, and other policies. The application period opens September 4, 2023, and closes November 30, 2023. CMS plans to select participants in winter 2024. Onboarding for participants will take place April−July 2024.

The HMA team continues to review the RFA and is available to assist clients in determining whether this model may be a good fit as well as with assistance in submitting the application.

What to Watch

Comments on the Medicare CY payment rules (home health, end stage renal disease, physician, and outpatient hospital) are due in early fall. CMS will review the comments on each of the proposals and finalize each rule by November 1. Some stakeholders, such as physicians and home health suppliers, may seek congressional action to mitigate payment cuts that CMS has proposed.

In addition, CMS is expected to continue implementing the drug pricing related provisions of the Inflation Reduction Act (IRA). The agency already has released several guidance documents about the process. The list of the first 10 drugs to be negotiated is due to be published September 1, 2023, and manufacturers of selected drugs will have one month to sign agreements to participate in negotiations and provide information for CMS’s consideration in the negotiation process.

The HMA team will continue to evaluate Innovation Center opportunities, CMS payment regulations, and IRA implementation. If you have questions about these topics, contact Amy Bassano ([email protected]), Kevin Kirby ([email protected]), or Andrea Maresca ([email protected]).