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Blog

Pennsylvania releases community HealthChoices (CHC) Medicaid managed care RFA

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This In Focus section reviews the request for applications (RFA) that the Commonwealth of Pennsylvania Department of Human Services (DHS) released January 30, for the Community HealthChoices (CHC) Program. CHC is the mandatory managed long-term services and supports (MLTSS) program, which serves five CHC zones that cover all 67 counties in the commonwealth.  

Notably, this procurement, as compared to the original CHC procurement in 2018, has increased emphasis on innovative approaches to address health equity and the Social Determinates of Health (SDOH). The health equity focus goes beyond traditional health-related social needs such as access to housing, transportation, food, and employment, and addresses some SDOHs that have a particular impact on the CHC population, such as environmental conditions and addressing hazardous or unsafe living conditions.  

Behavioral health remains carved-out to separate behavioral health managed care organizations (BH-MCOs). Instead, CHC applicants will need to articulate how they will coordinate with the BH-MCOs to ensure access to appropriate BH services, which continues to be an area of significant interest for state Medicaid officials.  

Background 

The CHC Program serves individuals who are dually eligible for Medicare and Medicaid and people with physical disabilities who receive home and community-based waiver services or nursing facility care.  

Participants may receive LTSS in the community or in a nursing facility.

CHC is the sole program option for fully dual eligible beneficiaries and most nursing facility clinically eligible (NFCE) individuals who reside in the five zones. The regional CHC zones are as follows:  

  • Southwest zone: Allegheny, Armstrong, Beaver, Bedford, Blair, Butler, Cambria, Fayette, Green, Indiana, Lawrence, Somerset, Washington, and Westmoreland counties.  
  • Southeast zone: Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties.  
  • Remaining zones and respective counties, including
    • Lehigh/Capital zone: Adams, Berks, Cumberland, Dauphin, Fulton, Franklin, Huntingdon, Lancaster, Lebanon, Lehigh, Northampton, Perry, York
    • Northeast zone: Bradford, Carbon, Centre, Clinton, Columbia, Juniata, Lackawanna, Luzerne, Lycoming, Mifflin, Monroe, Montour, Northumberland, Pike, Schuylkill, Snyder, Sullivan, Susquehanna, Tioga, Union, Wayne, Wyoming.
    • Northwest zone: Cameron, Clarion, Clearfield, Crawford, Elk, Erie, Forest, Jefferson, McKean, Mercer, Potter, Venango, Warren 

RFA

Medicaid managed care organizations (MCOs) may submit applications for one or more zones. Applications are due March 15, 2024. The department anticipates awarding agreements to three to five CHC-MCOs in each of the five CHC zones. Selected applicants must provide CHC services in all counties in the zone(s) for which they are selected to participate and improve the accessibility, continuity, and quality of services for participants in the CHC program. The contract will run for five years and will have three one-year renewal options.  

DHS indicates that the awarded CHC-MCOs must have an aligned dual-eligible special needs plan (D-SNP) and a current Medicare Improvement for Patients and Providers Act (MIPPA) agreement with the department. The aligned D-SNP must be operational and the MIPPA agreement must be in place by the anticipated implementation date (January 1, 2025).

DHS indicates selected MCOs must be as flexible and adaptable as possible and demonstrate the ability to coordinate services for multiple populations and across multiple programs, including programs with a focus that is broader than the delivery of healthcare services and LTSS. 

Other RFA highlights include the following:  

  • Does not require a cost submittal. 
  • Includes small diverse business (SDB) or veteran business enterprise (VBE) goals of 11 percent and 3 percent respectively. Applicants must include separate SDB and VBE submittals for each zone in its application.  
  • Includes a contractor partnership program (CPP) which requires entities that are awarded a contract or agreement with DHS to establish a hiring target to support Temporary Assistance for Needy Families (TANF) beneficiaries in obtaining employment with the contractor, grantee, or their subcontractors. 

Notably, DHS has provided itself flexibility within the RFA to implement a pay-for-performance incentive to MCOs. Under this policy, DHS could make incentives available to MCOs that help participants successfully complete the financial eligibility redetermination process with their local County Assistance Offices (CAOs). The department may implement additional pay-for-performance incentives in later years. 

Timeline

Evaluation 

For an applicant to be considered responsible for this RFA and eligible for selection of best and final offers (BAFOs) and negotiations:  

  • The total score for the technical submittal of the application must be greater than or equal to 75 percent of the available raw technical points  
  • The applicant’s financial information must demonstrate that the organization possesses the financial capacity to fulfill the good faith performance of the agreement 

The evaluation committee will evaluate technical submittals for each zone separately. For each zone, DHS must select for negotiations the applicants with the highest overall score. The weight for the technical criterion is 100 percent of the total available points. Technical evaluation will be based on soundness of approach, applicant qualifications, personnel qualifications, and understanding the project. 

The final technical scores will be determined by giving the maximum number of technical points available to the application with the highest raw technical score. The remaining applications will be rated by applying the formula located at RFP Scoring Formula

Financial information will not be scored as part of the technical submittal. It will be reviewed only to determine an applicant’s financial responsibility. 

SDB and VBE participation submittals will not be scored, however, if an applicant fails to satisfy the SDB or VBE requirements described, and DHS will reject the application. 

DHS will not score the CPP submittal. Once an applicant has been selected for negotiations, DHS will review the CPP submittal.

Current Market

The CHC incumbents are AmeriHealth Caritas, Centene, and University of Pittsburgh Medical Center (UPMC), serving 411,034 CHC members as of October 2023.

DHS has published a historical data summary for the CHC program along with other DHS reports at: Community HealthChoices Historical Data

Link to solicitation: All files on PA eMarketplace 

Link  to RFP 

Want to know more about how the next phase of Community Health Choices will impact your organization?

HMA’s Pennsylvania-based teams can assist organizations seeking to understand the implications of this important procurement, key program changes and what the outcome may mean for providers, community base organizations, and other stakeholders. Please contact Dianne Bisacky with questions or if you are seeking more detailed analysis of this procurement or the Community Health Choices program generally. 

Nine States to Participate in Children’s Behavioral Health Policy Lab

LANSING, MICH. – Health Management Associates (HMA), in partnership with the Annie E. Casey Foundation, Casey Family Programs, National Association of State Mental Health Program Directors (NASMHPD), the Child Welfare League of America (CWLA), the American Public Human Services Association (APHSA), National Association of Medicaid Directors (NAMD) and the Centene Foundation, will convene a Children’s Behavioral Health (CBH) State Policy Lab, Feb. 7-9 in Baltimore. HMA today announced that Georgia, Kansas, Kentucky, Maryland, Missouri, Pennsylvania, Texas, Utah, and Wisconsin will participate in the policy lab. MITRE, which previously hosted a related federal convening, will also take part in this state convening.

This pioneering effort, made possible by the partner organizations, aims to convene state interagency teams – including child welfare, juvenile justice, behavioral health, Medicaid, and K-12 public education – to collectively strategize, learn from innovators in the sector and promote cross-system alignment to drive outcomes for children, youth, and families.

COVID-19 has exacerbated long-standing system collaboration challenges across state child welfare, behavioral health, and Medicaid that lead to unsatisfactory outcomes for the most vulnerable children in our communities. Most worrisome is the worsening of behavioral and physical health challenges and trauma because of uncoordinated or fragmented care. This lack of coordinated strategy and policy leads to higher costs of treatment and also increasingly exposes states and local jurisdictions to threats or filings of class action lawsuits, and related settlements or those arising from Department of Justice investigations. Fortunately, federal and state efforts and investments to address the youth systems of care – including schools, community, delivery systems, and community-based child placing agencies – are in motion.

In November, a call for applications was released to U.S. states and territories for potential participation in the State Policy Lab. Applicants were required to identify demonstrated need, existing state agency governance structures focused on children and youth, technical assistance needs, and outcomes for attending the policy lab. The applications required demonstrated participation from Medicaid, child welfare and behavioral health agencies; a commitment to creating sustainable interagency solutions for children, youth, and their families and had to certify formal support from the Governor/Cabinet level.

An external independent panel reviewed applications for state agency participation using a standardized rubric that covered four domains:

  • Gaps and opportunities analysis
  • Intent of collaborative partnerships
  • Approach to engagement of youth and adults with lived experience
  • Imminent risks to public agency operations as a result of poor outcomes for children, youth, and their families

This convening is aimed at assisting child welfare, juvenile justice, behavioral health, Medicaid, and K-12 public education where possible to build upon existing efforts to improve outcomes for children, youth, and families, strategically layering on missing components and promoting alignment between them and with other agency priorities. Examples of what could be co-designed with state partners:

  • Build a shared strategic vision for a comprehensive continuum of care that ensures access to the “right service, at the right time based on individual and family need.” This vision can strengthen prevention initiatives and ensure the full array of evidence-based community-based interventions including use of crisis response and stabilization models.
  • Develop policies and strategies for improving the engagement of children, youth, and families with lived experiences to the “right part of the system for the right level of care,” agnostic of the door through which they enter any coordinated child serving system, while ensuring that all aspects of this system are anchored in equity.

Following the event, learnings and findings will be disseminated to help states and counties adopt innovative solutions to improve outcomes for children, youth, and their families.

For more information email: [email protected]

Blog

CMS approves next phase of New York’s Medicaid 1115 waiver journey

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This week, our In Focus section describes New York State’s Medicaid Section 1115 waiver amendment authorizing at least $6.7 billion in funding for new programs and initiatives in the state’s Medicaid program. The Centers for Medicare & Medicaid Services (CMS) approved New York’s application for the amendment January 9, 2024, which is effective retrospectively to April 1, 2022, through March 31, 2027.

New programs and initiatives are intended to improve access to services for Medicaid enrollees and include:

  • Regional social care networks (SCNs) responsible for screening, referring, and providing new health-related social needs (HRSN) services to eligible Medicaid beneficiaries
  • A statewide health equity regional organization (HERO), which will provide data analysis, regional needs planning, stakeholder engagement, value-based payment recommendations; and program analyses
  • Workforce initiatives, including student loan repayment (SLR) and career pathways training (CPT) to recruit and retain healthcare professionals in high-need fields
  • Medicaid hospital global budget initiative (MHGBI) to provide funding to safety-net hospitals with negative operating margins to support their participation in waiver-related services
  • An institution for mental diseases (IMD) waiver for substance use disorder (SUD) services
  • A commitment from the states to sustain and enhance Medicaid provider payment rates to ensure access to services

Funding

CMS authorized at least $6.7 billion in funding. Some waiver components are without specific monetary valuation (i.e., IMD waiver, payment rate increases).

 DY 25 (ends 3/31/24)DY 26 (ends 3/31/25)DY 27 (ends 3/31/26)DY 28 (ends 3/31/27)Total
HRSN Infrastructure$0$260,000,000$190,000,000$50,000,000$500,000,000
HRSN Services$3,173,000,000
HERO$50,000,000$40,000,000$35,000,000$125,000,000
Workforce: Student Loan Repayment$12,080,000$24,150,000$12,080,000$48,310,000
Workforce: Career Pathways Training$175,770,000$310,480,000$159,500,000$645,750,000
Medicaid Hospital Global Budget Initiative$550,000,000$550,000,000$550,000,000$550,000,000$2,200,000,000
 $6,692,060,000

HRSN

  • NY will implement 13 SCNs in nine regions, which are expected to establish networks of community-based organizations (CBOs) that provide HRSN services.
  • Contracted SCNs, which will be awarded pursuant to a recently published request for applications, will receive infrastructure funding to invest in technology, business and/or operational practices, workforce development, and outreach and stakeholder engagement.
  • SCNs will be reimbursed according to a state-published fee schedule for delivering HRSN services on a fee-for-service basis.
  • SCNs are responsible for screening for HRSN and determining Medicaid beneficiaries’ eligibility level for enhanced HRSN services, spanning case management, nutrition supports, housing supports, and transportation.

HERO

  • NY will contract with a single statewide Health Equity Regional Organization (HERO), which is independent of state or other government entities.
  • The HERO will be responsible for five activities:
  • Collect, aggregate, analyze, and report data
  • Conduct regional needs assessments and planning
  • Convene regional stakeholders
  • Make recommendations to support advanced VBP arrangements and develop options for incorporating HRSN into VBP methodologies
  • Conduct program analyses

Workforce

  • The waiver approval identifies two pathways for workforce investment:
  • SLR program for people who will serve in certain healthcare workforce shortage professions
  • CPT program to support recruitment and advancement in healthcare careers

Medicaid Hospital Global Budget Initiative

  • The MHGBI will be available to certain safety-net hospitals that meet governance, solvency, and geographic requirements.
  • The MHGBI provides incentive payments to these hospitals if they:
    • Collect and report data
    • Meet milestones for transitioning to alternative payment models
    • Demonstrate improvement in healthcare quality and equity
  • As a condition of MHGBI, New York will apply for participation in the CMS Innovation Center’s AHEAD model.

IMD Waiver for SUD

  • CMS approved an IMD waiver for SUD services. As a result, NY will be eligible to receive federal financial participation for Medicaid members who are short-term residents in IMDs for services that would not otherwise be matchable
  • The state anticipates 50 providers will enroll within the first year

Curious About What the Waiver Means for Your Organization?

HMA’s New York Team can assist organizations assessing opportunities and understanding implications tied to these new, significant waiver investments. They have been working with key stakeholders to help inform the design of foundational components of the new wavier initiatives. HMA’s team of experts anticipate that the terms and conditions agreed to in the New York amendment provide important policy insight and direction for other states pursuing similar initiatives. Please contact Cara Henley and Josh Rubin with questions or if you are seeking more detailed analysis of the state’s waiver amendment.

Webinar

Webinar replay – Navigating change: exploring the opportunities of New York’s 1115 Medicaid waiver amendment

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This webinar was held on January 24, 2024.

During this webinar, HMA panel guides you through the newly approved key provisions of New York’s 1115 Medicaid waiver amendment. This groundbreaking development opens doors to transformative changes in healthcare delivery, impacting both providers and beneficiaries alike, including enhanced Health Related Social Needs (HRSN) benefits, workforce and hospital investments, and further commitment to Value Based Payment (VBP).

Gain valuable insights into the innovative strategies and opportunities presented by the waiver amendment, paving the way for new social care networking activities, funding opportunities, and regulatory flexibilities that will improve access to vital services.

This webinar shared information on waiver-specific details and what they mean, what potential opportunities will become available, and heard from national experts on similar models implemented nationally.

HMA News

Health Management Associates Successfully Completes SOC 2 Type 2 Examination

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Health Management Associates (HMA), a leading independent, national healthcare consulting firm today announced that it has successfully completed a Service Organization Control Type 2 (SOC 2 Type 2) audit.

The SOC 2 Type 2 audit was developed by the American Institute of Certified Public Accountants to evaluate an organization’s information security controls over a period of time​. It assessed both the suitability of HMA’s controls and its operating effectiveness, covering the HMA organization as a whole, service offerings, resources used to deliver client work, and technical (cybersecurity) and non-technical controls (administrative strengths such as excellent training and a culture that promotes anti-fraud and ethical behaviors).

“Increasingly, completing a SOC 2 Type 2 audit is an important distinction for many of our clients and partners,” said Doug Elwell, chief executive officer. “Achieving this with no material findings across the firm is yet another way to meet client needs and further demonstrates our commitment to our core values of accountability, client commitment and integrity.”

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.

Blog

Rhode Island releases Medicaid managed care program RFP

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This week our In Focus section reviews the Rhode Island statewide, capitated risk-bearing Medicaid managed care program request for proposals (RFP), which the Rhode Island Executive Office of Health and Human Services (EOHHS) released December 15, 2023. New program changes will include carving in long-term services and supports (LTSS) as an in-plan benefit for all populations and expanding managed care to include people who are dually eligible for Medicare and Medicaid. Contracts are expected to be worth $2.3 billion.

Background

Rhode Island’s Medicaid managed care program, which operates under the authority of a Section 1115 waiver and Section 1932(a) state plan amendment, consists of the following programs:

  • RIteCare, which serves children and families, including children with special healthcare needs
  • Rhody Health Partners, which serves aged, blind, or disabled (ABD) adults
  • Medicaid expansion, which serves childless adults ages 19 to 64

At present, full-benefit dual eligible (FBDE) members are not covered through the Medicaid managed care organization (MCO) contracts.

RFP

New contracts will be implemented in three phases, starting with enrollment of core populations and the addition of LTSS in-plan benefits to Medicaid managed care for Medicaid-only enrollees beginning July 1, 2025. In the second phase, current fully dual eligible members will transition to Medicaid managed care plans on January 1, 2026. All bidders will be required to offer an integrated Dual Eligible Special Needs Plan (D-SNP) and managed LTSS (MLTSS) plan to dually eligible members, as Rhode Island transitions from the Financial Alignment Initiative (FAI) Medicare-Medicaid Plan (MMP) Demonstration, which sunsets December 31, 2025. In addition, beginning January 1, 2027, default enrollment will begin for Medicaid members who become newly eligible for Medicare.

EOHHS will award contracts to two or three MCOs.

Other changes in the RFP include increasing oversight and accountability for the use of pharmacy benefit managers (PBMs); requiring that EOHHS approve contracts for MCO major subcontractors; reducing unnecessary prior authorizations, particularly for behavioral health services; increasing financial sanctions for noncompliant MCOs; and increasing investments in population health and health equity with a focus on the identification of health disparities; and other changes.

Timeline

Proposals are due February 23, 2024. The new contracts will take effect July 1, 2025, and will run through June 30, 2030, with an option to extend the agreement for up to five additional years.

Current Market

Neighborhood Health Plan, Tufts Health, and UnitedHealthcare served approximately 313,000 members as of November 2023. These MCOs have signed contract extensions through June 30, 2025.

Evaluation

Rhode Island will not require cost proposals under this procurement, with capitation rates set by EOHHS actuaries. MCOs must meet the passing technical score of 85 points. Technical proposal requirements are shown below:

Link to RFP

Blog

Medicaid Business Transformation DC: recommendations for technical assistance

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HMA was engaged by the Washington, District of Columbia Department of Health Care Finance (DHCF) to lead their Medicaid Business Transformation D.C. Initiative, assessing the technical assistance needs of Medicaid providers and organizations in the areas of legal analysis, budgeting, and business development as they move toward value-based care arrangements. HMA partnered with the D.C. Behavioral Health Association (BHA), Medical Society of the District of Columbia (MSDC), D.C. Primary Care Association (DCPCA), and DHCF to engage, recruit, and collaborate with organizations and stakeholders across the District.

The HMA team implemented a mixed-methods assessment approach that included a literature review of national value-based payment (VBP) best practices, focus groups, interviews, and a technical assistance (TA) survey of District organizations, agencies, and stakeholders. This strategy identified the TA needs of District healthcare providers that informed the design of an intensive 3-month technical assistance program that included a variety of tools, webinars, and trainings. All resources and tools are available on the Integrated Care DC webpage. https://www.integratedcaredc.com/medicaid-business-transformation-dc/  The report and other information about the program were published at https://dhcf.dc.gov/innovation.

Experts from HMA as well as Wakely Consulting Group and Lovell Communications, both HMA subsidiaries, contributed to this report. We offer our clients a wide range of deep technical, analytical, policy, and communications support to providers, state agencies, and recommendations on ways to improve value-based payment models.

Report authors include Caitlin Thomas-Henkel, Suzanne Daub, Art Jones, Hunter Schouweiler, Amanda White Kanaley, and Vicki Loner.

To learn more about this effort, contact Caitlin Thomas-Henkel.

Link to Medicaid Business Transformation DC: Recommendations for Technical Assistance Report

Be sure to block off March 5-6 for HMA’s Spring Workshop in Chicago, IL, where our experts will be continuing the dialogue about value-based care. Early bird registration ends January 26, 2024 – Register Here.

Blog

CMS Transforming Maternal Health Model offers state Medicaid agencies an opportunity to accelerate improvements in quality and outcomes

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This week, our In Focus section reviews the new Transforming Maternal Health (TMaH) Model, which the Centers for Medicare & Medicaid Services (CMS) Center for Medicaid and Medicare Innovation (the Innovation Center) announced on December 15, 2023. TMaH is the fourth major model that the Innovation Center has introduced to its payment portfolio since July.

Pregnancy-related deaths have more than doubled since 1987 to 17.6 deaths per 100,000 live births, with health disparities only worsening outcomes for different racial and ethnic groups. For example, the pregnancy-related mortality rates for Black and Native American and Alaska Native women are approximately two to three times higher than the rate for White women. In recent years, 38 states have extended post-partum coverage and 11 states now offer doula coverage for Medicaid enrollees. This initiative accelerates the focus on maternal outcomes and, with nearly 43 percent of births paid for by Medicaid, has the potential to impact health across generations.

This model is designed exclusively to improve maternal healthcare for people enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). The last Innovation Center maternal health-focused model, Strong Start for Mothers and Newborns, ran from 2012 to 2016 with the goal of reducing preterm births and improving outcomes for newborns and pregnant women. The TMaH model takes a whole-person approach to pregnancy, childbirth, and postpartum care, addressing the physical, mental health, and social needs experienced during pregnancy.

Model Overview

Participating state Medicaid agencies (SMAs) will receive up to $17 million over the 10-year period to develop a value-based alternative payment model for maternity care services, with the intention of improving quality and health outcomes and promoting the long-term sustainability of services. TMaH will focus on three pillars, with a range of solutions outlined for each.

PillarModel Solutions
Access to care, infrastructure, and workforce capacityIncrease access to birth centers and midwives.Increase access to perinatal community health workers and doulasEnhance data collection, exchange, and linkage through improvements in electronic health records and health information exchanges
Quality improvement and safetyImplement patient safety bundles or specific protocols that promote the reduction of avoidable procedures and lead to improved outcomesPromote achieving “birthing friendly” designationIntroduce option to promote shared decision making between mothers and providers
Whole-person care deliveryInstitute evidence-based medical and social risk assessment to drive risk-appropriate careDeliver care consistent with individual preferencesRoutinely screening and follow-up care for perinatal depression, anxiety, tobacco, and substance use during prenatal and postpartum periodsIncorporate home monitoring and telehealth technology for birthing people who have medical conditions, such as gestational diabetes and hypertension, that complicate pregnanciesRoutinely screening and follow-up care for health-related social needs (HSRNs)Establish reliable referral pathways to and from community-based organizations (CBOs) to address HSRNsDevelop and implement health equity plans as well as cultural competency technical assistance for providers

The TMaH model is designed to support birthing persons along their care journey, expanding continuity, and improving outcomes.

The Model will have two phases for participating SMAs:

  • Pre-Implementation: A 3-year period during which states receive targeted technical assistance to achieve pre-implementation milestones prior to the implementation phase.
  • Implementation: A 7-year period where the SMAs (as the awardee) implement the program with critical partners, such as Managed Care Organizations (MCOs), Perinatal Quality Collaboratives, hospitals, birth centers, health centers and rural health clinics, maternity care providers and community-based organizations.

The model also requires a health equity plan, which has been a consistent requirement across models from the Innovation Center. Awardees must develop a plan that addresses disparities among underserved populations, such as racial and ethnic groups and people living in rural areas, who are at higher risk for poor maternal outcomes.

TMaH Opportunities and Considerations

The model offers states resources and technical assistance to develop value-based alternative payment model to support whole-person pregnancy, birth, and post-partum care and improved outcomes. Many SMAs are already working on programs to innovate care and payment, and the TMaH is an opportunity to expand and accelerate those programs.

The model offers an opportunity for states that have not expanded post-partum coverage or added doula benefits to adopt these policies with the funding and technical assistance to support their efforts.

SMAs interested in this opportunity may want to evaluate their application readiness and pre-plan for the application.

What’s next?

CMS is expected to release a Notice of Funding Opportunity (NOFO) in Spring 2024, and the application will be due in Summer 2024.

The HMA team will continue to evaluate the TMaH model as more information becomes available. For more information, contact Amy Bassano ([email protected]), Melissa Mannon ([email protected]), and Andrea Maresca ([email protected]).

Brief & Report

Medicaid Business Transformation DC: Recommendations for Technical Assistance

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HMA was engaged by the Washington, District of Columbia Department of Health Care Finance (DHCF) to lead their Medicaid Business Transformation D.C. Initiative, assessing the technical assistance needs of Medicaid providers and organizations in the areas of legal analysis, budgeting, and business development as they move toward value-based care arrangements. HMA partnered with the D.C. Behavioral Health Association (BHA), Medical Society of the District of Columbia (MSDC), D.C. Primary Care Association (DCPCA), and DHCF to engage, recruit, and collaborate with organizations and stakeholders across the District.

The HMA team implemented a mixed-methods assessment approach that included a literature review of national value-based payment (VBP) best practices, focus groups, interviews, and a technical assistance (TA) survey of District organizations, agencies, and stakeholders. This strategy identified the TA needs of   District healthcare providers that informed the design of an intensive 3-month technical assistance program that included a variety of tools, webinars, and trainings. All resources and tools are available on the Integrated Care DC webpage. https://www.integratedcaredc.com/medicaid-business-transformation-dc/  The report and other information about the program were published this week at https://dhcf.dc.gov/innovation.

Experts from HMA as well as Wakely Consulting Group and Lovell Communications, both HMA subsidiaries, contributed to this report. We offer our clients a wide range of deep technical, analytical, policy, and communications support to providers, state agencies, and recommendations on ways to improve value-based payment models.

Report authors include Caitlin Thomas-Henkel, Suzanne Daub, Art Jones, Hunter Schouweiler, Amanda White Kanaley, and Vicki Loner. It was peer reviewed by Jean Glossa and Sam DiPaolo.

Brief & Report

A Look at Swedish Maternity Care with Medicaid in Mind

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Health Management Associates (HMA) collaborates with state and federal agencies, health service providers, and community-based organizations to enhance access to comprehensive reproductive healthcare and address disparities in birth outcomes, particularly in the context of Medicaid. This involves evaluating and supporting the implementation of perinatal care models, addressing health determinants affecting birth outcomes, and overcoming barriers to reproductive health services. In an effort to inform these initiatives, Diana Rodin, an associate principal at HMA interviewed Swedish experts to understand the country’s universal, publicly funded maternity and reproductive healthcare system. The Swedish model emphasizes universal healthcare, generous socioeconomic supports, and collaborative team-based perinatal care led by midwives. Lessons from Sweden, such as the utilization of “kulturdoulas” for culturally aligned support, a consensus-driven decision-making approach, and a centralized perinatal data system, provide valuable insights for improving birth outcomes for Medicaid recipients in the United States. 

Brief & Report

23rd annual Kaiser Family Foundation state Medicaid budget survey released

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The 23rd annual Medicaid Budget Survey conducted by The Kaiser Family Foundation (KFF) and Health Management Associates (HMA) was released on November 14, 2023 in the report: Amid Unwinding of Pandemic-Era Policies, Medicaid Programs Continue to Focus on Delivery Systems, Benefits, and Reimbursement Rates”.

Survey results show that states expect a sharp increase in Medicaid spending that is a direct result of lower federal spending as Covid relief and enhanced matching declines. This budget pressure is compounded by increasing provider rates, workforce recruitment and compensation challenges, increased spending on behavioral health and maternity care, and spending on programs that improve health related social needs. These budget pressures will create a very challenging environment for state policy makers in the coming years.

The report was prepared by Kathleen Gifford, Aimee Lashbrook, Caprice Knapp, Beth Kidder from HMA and Leavitt Partner’s Bill Snyder; and by Elizabeth HintonElizabeth WilliamsJada RaphaelAnna MudumalaRobin Rudowitz from the Kaiser Family Foundation. The survey was conducted in collaboration with the National Association of Medicaid Directors (NAMD).

 

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:
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]).