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Blog

Federal policymakers consider current and future spending measures on simultaneous tracks

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This week, our In Focus section covers Congress’s and the Administration’s parallel efforts to finalize fiscal year (FY) 2024 spending bills and begin the budget process for FY 2025.  

Congress approved a bipartisan package for some of the FY 2024 spending bills, and on March 9, 2024, President Biden signed the Consolidated Appropriations Act of 2024 into law (PL 118-42). Programs funded through this measure include the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and other federal nutrition supports, rental assistance for safe and affordable housing, and veterans medical care and benefits.  

Several mandatory funding extensions of public health programs and health-related policies also found their way into the 2024 consolidated appropriations package, including extending the Community Health Center Fund, delaying reductions in the disproportionate share hospital allotments, defining Certified Community Behavioral Health Centers (CCBHCs) as a Medicaid service, extending incentive payments for certain Medicare providers, and mitigating the impact of cuts to the Medicare physician fee schedule.  

These policies, however, addressed a narrower set of issues than the expansive and bipartisan legislation that has been moving through both chambers of Congress. For example, House and Senate members have worked on respective bipartisan policies affecting price transparency, pharmacy benefit managers, and Medicare site-neutral policies, among others.  

Meanwhile, President Biden released the FY 2025 Budget proposal March 11, 2024, kicking off the annual budget process. Like the administration’s FY 2024 budget proposal, the FY 2025 plan emphasizes deficit reduction and continues to make equity and Medicare solvency cornerstones of the budget. Health-related priorities include expanding access to affordable healthcare services, lowering drug costs, improving maternal health, addressing the mental health and substance use disorder crises, and enhancing biodefense and preparedness activities.  

Check out the FY 2025 budget analysis from Leavitt Partners, a Health Management Associates, Inc. (HMA), company, here, and a deeper dive into the Consolidated Appropriations Act of 2024 here

What We’re Watching 

Congress is continuing negotiations on the outstanding spending bills, including the one that funds the Departments of Health and Human Services, Labor, and Education through September 2024. Lawmakers are working to reach an agreement before the next funding deadline of March 22.  

The administration’s FY 2025 budget proposals are generally being characterized as a blueprint for President Biden’s re-election campaign and, if successful, a policy agenda for his second term. Though Congress has already begun holding hearings on the budget request, members on both sides of the aisle will likely focus on issues that resonate in an election year.  

Regardless of the outcome of the November elections, Congress has an opportunity to address unfinished business during the lame duck session later this year.  

HMA and Leavitt Partners collaborate to monitor legislative and regulatory developments in healthcare and adjacent spaces and to assess the impact of policy changes on the healthcare industry. 

Blog

HMA offers a new way to approach grant funding for behavioral health providers

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Grants from both government and foundations can be an essential component of a community behavioral health provider’s growth strategy. Every year billions of dollars are distributed to support program growth, quality improvement, training, and other essential needs. Finding the right opportunities and applying for grants that are aligned with your organization’s strategic growth interests can be an essential catalyst for organizational development, service continuum growth, and quality improvements.

Behavioral health providers often struggle with identifying and applying for the right grant opportunities. It is time consuming and takes resources away from your mission to serve your communities. The deluge of notices of funding opportunities, requests for proposals, requests for applications, and requests for expressions of interest can overwhelm even the most sophisticated and well-resourced provider. Few organizations have the internal capacity to devote to wading through the hundreds of opportunities that are published each week.

That is why we created HMA Grant Prospector. HMA will do the work, so you don’t have to.

The HMA Grant Prospector is a tool that combines HMA’s deep subject matter expertise in community behavioral health care with understanding of the process of grant procurement. We have embedded this expertise in proprietary software that can sift through grant opportunities and pick out the gold nuggets from the mountain of information.

When your organization subscribes to Grant Prospector, we interview you to find out what services you have, the communities you serve, and what gaps in your care continuum you seek funding to fill. We collect information on grant opportunities as they are released, and the Grant Prospector matches your organization’s criteria with funding opportunities. We’ll send you only those opportunities for which your organization is eligible, that are aligned with your strategy and organizational objectives, and targeted to your population. You can rely on HMA to do the legwork so you can focus your efforts on improving lives in your community.

CLICK HERE TO LEARN MORE ABOUT THIS SERVICE

“HMA has helped us quickly and easily identify the best opportunities for grants for Horizon Health Services. With their help, we have been able to find the right opportunities, apply with precision, and expand our service continuum.”

– Erin DiGirolamo, CEO and Brandy Vandermark-Murray, President, Horizon Health Services, Buffalo, NY

Blog

Medicaid Managed Care Spending in 2023

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This week, our In Focus section analyzes preliminary 2023 Medicaid spending data collected in the annual CMS-64 Medicaid expenditure report. After submitting a Freedom of Information Act request to the Centers for Medicare & Medicaid Services (CMS), HMA received a draft version of the CMS-64 report that is based on preliminary estimates of Medicaid spending by state for federal fiscal year (FFY) 2023. Based on the preliminary estimates, Medicaid expenditures on medical services across all 50 states and six territories in FFY 2023 totaled nearly $852.9 billion, with 59.6 percent of that amount now flowing through Medicaid managed care programs. In addition, total Medicaid spending on administrative services was $33.8 billion, bringing total program expenditures to $886.7 billion.

Total Medicaid Managed Care Spending

Total Medicaid managed care spending (including the federal and state share) in FFY 2023 across all 50 states and six territories was $508.1 billion, up from $468.3 billion in FFY 2022. This figure includes spending on comprehensive risk-based managed care programs as well as prepaid inpatient health plans (PIHPs) and prepaid ambulatory health plans (PAHPs). PIHPs and PAHPs refer to prepaid health plans that provide only certain services, such as dental or behavioral health care. Fee-based programs such as primary care case management (PCCM) models are not included in this total. Following are some key observations.

  • Total Medicaid managed care spending grew 8.5 percent in FFY 2023.
  • Managed care spending growth has decreased in since the end of the COVID-19 pandemic, after peaking in FFY 2021.
  • In terms of dollars, the increase in Medicaid managed care spending from FFY 2022 to FFY 2023 was $39.8 billion, compared with $47.8 billion from FFY 2021 to FFY 2022.
  • Medicaid managed care spending has increased at a compounded annual growth rate (CAGR) of 14.2 percent since FFY 2007, compared with a 6.5 percent growth in total Medicaid spending.
  • Compared with FFY 2022, Medicaid managed care spending as a percent of total Medicaid spending in FFY 2023 increased by 0.5 percentage points to 59.6 percent.

Table 1. Medicaid MCO Expenditures as a Percentage of Total Medicaid Expenditures, FFY 2007−2023 ($M)

As the table below indicates, 68.9 percent of FFY 2023 spending came from federal sources, which is 11.5 percentage points higher than the pre-Medicaid expansion share in FFY 2013 and 1.3 percentage points higher than FFY 2020.

Table 2. Federal versus State Share of Medicaid Expenditures, FFY 2013−2023 ($M)

State-Specific Growth Trends

A total of 44 states and territories report managed care organization (MCO) spending in the CMS-64 report. Average MCO spending during FFY 2023 increased 8.5 percent. On a percentage basis, Missouri experienced the highest year-over-year growth in Medicaid managed care spending at 51.7 percent, followed by Washington at 31.4 percent and Georgia at 29.3 percent.

The chart below provides additional detail on Medicaid managed care spending growth in states with risk-based managed care programs in FFY 2023.

Figure 1. Medicaid Managed Care Spending Growth on a Percentage Basis by State, FFY 2022-2023

Source: CMS-64; *Note: Not all states are included in the table.

Looking at year-over-year spending growth in terms of dollars, New York experienced the largest increase in Medicaid managed care spending at $5.9 billion. Other states with significant year-over-year spending increases included Washington ($4.1 billion), Illinois ($2.8 billion), and California ($2.4 billion). The chart below illustrates the year-over-year change in spending across the states.

Figure 2. Medicaid Managed Care Spending Growth on a Dollar Basis by State, FFY 2022−2023 ($M)

Source: CMS-64; *Note: Not all states are included in the table.

The percentage of Medicaid expenditures directed through risk-based Medicaid MCOs increased by more than one percentage point in 15 states from FFY 2022 to FFY 2023. The managed care spending penetration rate rose 6.7 percentage points in Missouri, 6.5 percentage points in Georgia, 6.3 percentage points in Louisiana, and 5.7 percentage points in Puerto Rico. In all, 22 states saw a decrease in managed care penetration from FFY 2022 to FFY 2023.

Table 3. Medicaid MCO Expenditures as a Percentage of Total Medicaid Expenditures in States with a One percent or Greater Increase from FFY 2022 to FFY 2023 ($M)

Source: CMS-64 Note: Washington was excluded from the data table.

The table below ranks the states and territories by the percentage of total Medicaid spending through Medicaid MCOs. Iowa reported the highest percentage at 100 percent, followed by Puerto Rico at 97.5 percent and Kansas at 94.5 percent.

In many states, certain payment mechanisms may never be directed through managed care, such as supplemental funding sources for institutional providers and spending on retroactively eligible beneficiaries. As a result, the maximum achievable penetration rate in each state will vary and may be below the amount achieved in other states. The Medicaid managed care spending penetration rate is greatly influenced by the degree to which states have implemented managed long-term services and supports (MLTSS) programs.

Table 4. Medicaid MCO Expenditures as a Percent of Total Medicaid Expenditures, FFY 2016-2023

Source: CMS-64
Note: Washington was excluded from the data table.

If you’re interested in becoming an HMAIS subscriber and for access to the CMS-64 data, contact Andrea Maresca at [email protected].

Blog

HMA presented at 2024 Opioid & Fentanyl Abuse Management Forum in New Orleans

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HMA Principal Teresa Garate, PhD presents at the 2024 Opioid & Fentanyl Abuse Management Forum sponsored by the World Conference Forum. She is standing at the front of a room next to a screen.

On February 15, 2024, HMA Principals Teresa Garate, PhD and Anika Alvanzo, MD, MS presented at the 2024 Opioid & Fentanyl Abuse Management Forum sponsored by the World Conference Forum. Their presentation focused on enhancing outreach strategies for reaching and engaging people suffering from opioid use disorder in their communities. Participants were able to learn about public health approaches, harm reduction and low-barrier treatment, as well as an understanding of the considerations needed when building community driven strategies that are person-centered.

Dr. Garate also served as chairperson for the two-day event, providing opening remarks on the first day, engaged panelists in provocative conversations, and closed out the gathering with a summary of the presentations. With a deep understanding that addiction is a disease of the brain, the presentations focused on biopsychosocial approaches and highlighted the use of multiple and diverse interventions. The compilation of the event’s presentations resulted in robust discussions on research, model programs, model strategies, and the critical role of policy, funding, innovation, and data sharing. The overarching message was that as a collective group of advocates, we must continue to use every resource we have at our disposal to push the envelope and challenge the status quo so that we can stop the increase in overdoses and overdose deaths.

At HMA, consultants on our opioid team have unique expertise and more than 30 years of experience tackling every part of the substance use disorder system. They have led the development of comprehensive prevention, evidence-based treatment, and recovery solutions at the state, county and community level.  We have experience working with states and community organizations to develop impactful, sustainable responses to opioid crisis issues. Our team is ready to help clients create actionable and sustainable programs to address the opioid epidemic and addiction treatment.

Contact us to learn more about how we can help your organization develop programs to help combat the opioid crisis.

Blog

Announcing HMA’s new value-based payment (VBP) readiness assessment tool for behavioral health providers

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Dollars and Sense: Is Your Organization Positioned to Thrive in the World of Value-Based Payments?

As the healthcare system in the U.S. moves away from the costly and inefficient framework of fee-for-service to patient-centered structures focused on value and quality, every Behavioral Health organization finds itself with challenges ahead. Whether your organization stands at the forefront, poised for a full dive into value-based payment implementation, or is tentatively exploring initial steps, understanding your organization’s readiness on the VBP spectrum is paramount to success. Health Management Associates (HMA) is helping provider organizations in every phase of readiness move forward. We understand the detailed steps to help you focus on value, change payment structures, adapt clinical and operation workflows, and prepare and train your workforce to improve quality. Our tool is not just a promise but a practical solution to assess your current organizational readiness, providing valuable insights to focus your attention toward the next level of value.

VBP Readiness Assessment Tool

HMA’s VBP Readiness Assessment is a free, online survey tool that can help you gauge your organization’s preparedness across six pivotal domains of core functions necessary for successful participation in payment reform models.  Completing the survey will provide a snapshot about a single provider or an entire organization and determine where you stand on the value-based payment spectrum.  The six domains encompass measuring outcomes, evaluating board and leadership readiness, assessing technological capabilities for capturing and sharing data, gauging partnerships, payer engagement strategies, and financial alignment.

Readiness Assessment Results

VBP graphic 1
VBP graphic 2

Example plot of a readiness assessment showing an organization’s scores on the VBP spectrum.
This organization has an overall Intermediate level of readiness with the highest levels demonstrated in
Board & Leadership Readiness and Partnership and lowest levels in Financial Readiness.

The journey toward successfully navigating the realm of value-based payments demands a strategic and informed approach. The crucial first step is a comprehensive assessment of organizational readiness, and the HMA VBP Readiness Assessment Tool stands as a valuable resource for this purpose. The ever-changing landscape of healthcare payments requires organizations to be adaptive and forward-thinking. With HMA’s team of experts offering guidance at every stage, providers, associations, health plans, and states can gain a profound understanding of the necessary organizational efforts required to engage in VBP successfully. The current landscape increasingly emphasizes value, therefore, the importance of transitioning from fee-for-service to value-based models cannot be overstated. As the demand for value continues to grow, organizations that proactively position themselves to meet these evolving expectations will not only thrive but contribute significantly to shaping the future of healthcare delivery. The HMA VBP Readiness Assessment Tool is not just a survey; it’s a compass guiding you through the dynamic terrain of value-based payments, serving as a way to identify meaningful progressive steps you can take to strengthen your organizational position within the VBP space.

Taking the survey and receiving one analyzed response is free, but you may find value in contracting with HMA for a more in-depth analysis of your organization. Click below for more details and to access the survey.

learn more about the Assessment Tool

For more information, please contact Rachel Bembas, PhD, Principal.

Blog

Opportunities for continued certified community behavioral health clinic expansion and enhancement

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Opportunities related to Certified Community Behavioral Health Clinics (CCBHCs) continue to expand for both states and providers. With this increased investment in the model comes the need for continued refinement and improvement. CCBHCs enable government and other payors and providers to increase capacity and move towards a transformed behavioral health system that is responsive to local community needs. This article summarizes a number of new developments that will impact CCBHCs, including a few opportunities for expansion that you may not want to miss.

Background

CCBHCs provide integrated and coordinated community-based care for individuals across the lifespan who are living with and/or at risk for behavioral health conditions. The model is designed to increase access to behavioral health services; provide a comprehensive range of services, including crisis services, that respond to local needs; incorporate evidence-based practices; and establish care coordination as a linchpin for service delivery. To date, CCBHCs have demonstrated positive outcomes, such as: [i]

  • Significant reductions in client hospitalizations
  • Increased access to high quality community-based care, including services like Medication Assisted Treatment and care coordination
  • Mitigation of the challenges related to the national health care workforce shortage
  • Innovative and strengthened partnerships with cross-system partners, such as law enforcement, schools, and hospitals

SAMHSA CCBHC Demonstration Grant Opportunity Releases for States

Earlier this month, SAMHSA released its CCBHC Demonstration Program opportunity for states who currently or have previously held a CCBHC Planning Grant. The Demonstration RFP (request for proposals) will allow selected states to initiate a CCBHC Demonstration Program starting on July 1, 2024. In 2016, Minnesota, Missouri, Nevada, New Jersey, New York, Oklahoma, Oregon, and Pennsylvania were selected by the U.S. Department of Health and Human Services (HHS) to participate in the initial CCBHC Demonstration Program. In August 2020, Kentucky and Michigan were selected as two new CCBHC Demonstration States through the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136). Through this most recent 2024 CCBHC Demonstration opportunity, SAMHSA will select up to 10 additional states to participate in the CCBHC Demonstration, as outlined by the Bipartisan Safer Communities Act of 2022 (P.L. 117-259).

For those interested in this RFP:

  • Eligibility: States selected for the 2016 or 2023 CCBHC Planning Grant (that are not currently participating in the Demonstration Program) are eligible to apply for this RFP.
  • Due Date: Applications are due March 20, 2024, at 11:59pm EST and must be submitted by email to [email protected]. Awarded states will be announced in June 2024.  
  • Evaluation Criteria: As outlined in the Protecting Access to Medicare Act (PAMA) of 2014, state applications will be scored on their ability to:
    • Provide the most complete scope of services
    • Improve availability of, access to, and participation in, CCBHC services
    • Improve availability of, access to, and participation in assisted outpatient mental health treatment in the state
    • Demonstrate the potential to expand available mental health services in a demonstration area and increase the quality of such services without increasing net federal spending

For additional context and background on this opportunity, HMA and the National Council hosted a webinar on October 6, 2022, on “Developing a Strategy for the CCBHC State Demonstration RFP.” During this webinar, we engaged representatives from New York and Michigan to share information about their demonstration program implementation to date.

Other CCBHC Updates of Note

In addition to this state Demonstration RFP, there have been several recent updates to CCBHC-related guidance documents that are worth noting for anyone who is currently participating and/or interested in the CCBHC model:

Updates to the Prospective Payment System (PPS) Guidance

Under the state CCBHC Demonstration Program, CCBHCs are paid a daily or monthly Prospective Payment System (PPS) rate. In 2023, in preparation for issuing an updated guidance, CMS held a forum for states, providers, and other stakeholder input on newly proposed PPS changes. In February 2024, the updated PPS Guidance was released, reflecting gathered feedback incorporating payment flexibilities and alignment with revisions to the CCBHC criteria. One major change was the addition of two PPS options for states, which addresses the high-cost and specialized care delivered through mobile and on-site crisis intervention services provided directly to individuals. Specifically:

  • PPS-3 offers states the option to reimburse CCBHCs on a daily basis, including daily Special Crisis Services rates, which allow states to set separate PPS rates for crisis services provided by CCBHCs.
  • PPS-4 offers states the option to reimburse CCBHCs on a monthly basis, including monthly Special Crisis Services rates. Quality Bonus Payments are also required under this PPS-4 structure.

Additionally, the metrics for Quality Bonus Payments (which are required as part of the PPS-2 and PPS-4 monthly rate structures and optional for the PPS-1 and PPS-3 daily rate structures) have been modified to align with the revised CCBHC Quality Metrics. Additionally, CMS added new guidance related to payments to CCBHCs that are also certified as FQHCs (Federally Qualified Health Centers) and other provider types operating within the Medicaid program.

Overall, this updated PPS Guidance is effective on or after January 1, 2024 for existing CCBHC Demonstration States and on or after July 1, 2024 for newly selected states added to the program under the above CCBHC Demonstration Program RFP.

CCBHC Quality Metrics: Final Specifications Released

Further, when SAMHSA revised the CCBHC criteria in March of last year, they also updated the required and optional quality measures for both CCBHC providers and states operating a Demonstration program. The revised guidance specifies that all CCBHCs, including those participating in a State Demonstration Program as well as providers funded by a SAMHSA CCBHC Grant, must begin collecting and reporting on the required provider-specific measures starting in calendar year 2025. Similarly, states participating in the CCBHC Demonstration Program must transition to reporting on the new state-specific measures as well, with their first measurement year for the new measures running from January 1, 2025 – December 31, 2025.

Earlier this month, SAMHSA released the final specifications for each of the required and optional CCBHC quality measures. Providers and states alike are currently working hard to prepare their quality processes and systems to report on these new measures. With the inclusion of SAMHSA-funded CCBHCs in these quality measure reporting requirements, the hope is that the expanded data will assist us all in better understanding the impact of the CCBHC initiative as it relates to access to care and outcomes.

Guidance for States on CCBHC Criteria Customizations

Finally, SAMHSA recently released updated guidance for states looking to customize the federal CCBHC criteria as part of their CCBHC Demonstration Programs, to align with updates they made to the federal criteria in March of 2023. The guidance outlines, for a variety of criteria, how states may add or customize the requirements. Importantly, all CCBHCs operating either under a SAMHSA CCBHC Grant Program or a state-run CCBHC Demonstration Program must meet all of the revised federal CCBHC Criteria on or before July 1, 2024. Building on the federal criteria, many states are strategically taking advantage of customization opportunities to better align the CCBHC model with their system-wide goals and address gaps within their current behavioral health system’s capacity.

Upcoming opportunities for CCBHC expansion

In addition, there are several upcoming opportunities on the horizon for both states and providers looking to enter the CCBHC space.

New CCBHC-Expansion Grants for Behavioral Health Providers

SAMHSA’s Fiscal YeaGr 2024 budget requested $552.5 million for the CCBHC Expansion Program, which is a $167.5 million increase above the FY 2023 enacted level. The CCBHC-Expansion Grant Program includes both “Improvement and Advancement” grants for existing CCBHCs looking to enhance their programs, as well as “Planning, Development, and Implementation” grants for providers looking to establish a new grant-funded CCBHC.

SAMHSA’s FY24 funding will support 360 continuation grants, as well as award a new cohort of 158 grants, and a technical training assistance center grant to continue the improvement of mental disorder treatment, services, and interventions for children and adults. The budget also proposes to establish “an accreditation process [that] would ensure consistent adherence to the CCBHC model and create capacity to confirm adherence to the criteria and the model.”

While the new CCBHC-Expansion Grant RFPs are not currently posted on SAMHSA’s list of projected RFPs, we can expect (based on prior rounds) they are likely to be released sometime in the spring.

Expected Upcoming CCBHC Planning Grant for States

In addition to seeding the selection of a new cohort of 10 states to participate in the CCBHC Demonstration Program starting through the above Demonstration Program RFP and then every two years thereafter, the 2022 Bipartisan Safer Communities Act also earmarked funding for SAMHSA Planning Grants to support states looking to join the Demonstration. For states who are not selected to participate in the CCBHC Demonstration Program starting on July 1, 2024, we expect another CCBHC Planning Grant RFP to be released in the fourth quarter of this calendar year, with another round of 15 Planning Grants to be awarded to selected states in 2025.

States looking to prepare for the next Planning Gant RFP can review HMA’s summary of the most recent Planning Grant opportunity and watch HMA’s webinar co-hosted with the National Council for Mental Wellbeing that provides an overview of the previous RFP.

Interested in Learning More?

Reach out to our experts! HMA offers a deeply informed yet neutral perspective on CCBHC development, with team members who specialize in operations, quality, and fiscal components of the CCBHC model. We have helped 17 states successfully write their CCBHC Planning Grant applications, and in 2023 alone, we helped behavioral health providers secure approximately $80 million in expansion grant funding they are using to support their communities. Our team of experts brings extensive experience supporting both states and providers to leverage the CCBHC model to support their overall system transformation goals.

Click here to learn more about our work with CCBHCs or contact:

Heidi Arthur, Principal
Kristan McIntosh, Principal
Josh Rubin, Principal


[i] https://www.thenationalcouncil.org/wp-content/uploads/2022/06/22.06.06_HillDayAtHome_CCBHC_FactSheets.pdf

Blog

North Carolina releases foster care specialty plan program RFP

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This week, our In Focus section reviews the statewide North Carolina request for proposals (RFP) for the new Children and Families Specialty Plan (CFSP), which the North Carolina Department of Health and Human Services (DHHS) released on February 7, 2024. The plan will provide physical health, behavioral health, intellectual and developmental disability, long-term care, and pharmacy services to children, youth, and families that the child welfare system serves. Implementation is scheduled for December 1. 

Background 

North Carolina implemented Medicaid managed care on July 1, 2021, after working on a plan to transition individuals from fee-for-service to managed care since 2015. CFSP is one of the four types of integrated Medicaid managed care plans the state will contract with to serve Medicaid beneficiaries. The other three are Standard Plans, the Behavioral Health and Intellectual/Developmental Disability (BH IDD) Tailored Plans, and the Eastern Band of Cherokee Indians Tribal Option.  

Standard Plans are operated by one of two types of Medicaid managed care organizations (MCOs): statewide commercial plans (CPs) or regional provider-led entities (PLEs). The state awarded contracts to four CPs, the maximum allowed under the procurement, and one PLE. AmeriHealth Caritas North Carolina, Blue Cross and Blue Shield of North Carolina, UnitedHealthcare of North Carolina, and WellCare of North Carolina serve beneficiaries across six Medicaid managed care regions. A regional contract with provider-led Carolina Complete Health, a partnership between the North Carolina Medical Society and Centene, covers Regions 3, 4, and 5. The total value of the contracts is approximately $6.4 billion. The plans serve more than 2 million members as of year-end 2023. 

The state plans to implement BH IDD Tailored Plans July 1. Tailored plans will be provided through the awarded local management entity-managed care organizations (LME-MCOs): Alliance Health, Partners Health Management, Trillium Health Resources, and Vaya Health. Implementation has been delayed multiple times since 2022. As a result, the state issued a directive last year to dissolve the Sandhills Center and consolidate Eastpointe and Trillium Health Resources to hasten the delayed rollout. The tailored plans are expected to cover approximately 160,000 beneficiaries. 

Details about the CFSP 

The following populations will be enrolled automatically in CFSP: 

  • Beneficiaries who are in foster care 
  • Beneficiaries who are receiving adoption assistance 
  • Beneficiaries enrolled in the former foster youth eligibility group 
  • The minor children of enrolled parents 

The following populations will be eligible for enrollment in CFSP during contract year two: 

  • Parents, caretaker relatives, guardians and custodians with children in foster care 
  • Minor siblings of beneficiaries in foster care 
  • Adults identified on an open Child Protective Services (CPS) In-Home Family Services Agreement case and any minor children living in the same household 
  • Adults identified in an open Eastern Band of Cherokee Indians Department of Public Health and Human Services Family Safety program case and any children living in the same household 
  • Any other beneficiary that has been involved with the child welfare system who could benefit from enrollment  

RFP 

The state will award the contract to a single statewide managed care plan. Applicant MCOs will need to develop strategies for engaging with historically marginalized populations, addressing health disparities, and incorporating health equity. Technical proposals will be evaluated based on the following criteria: 

  • Medicaid Managed Care Qualifications and Experience 
  • Medicaid Managed Care Program Administration
    • Administration and management 
    • Program operations 
    • Claims and encounter management 
    • Financial requirements 
    • Compliance 
    • Technical specifications 
    • Historically underutilized businesses 
    • Diversity, equity, and inclusion 
  • Integrated and Coordinated Delivery of Services
    • Members and recipients 
    • Benefits and services 
    • Providers 
    • Stakeholder engagement 
  • Comprehensive Care Management
    • Care management 
    • Quality and value 

Timeline 

The CFSP data book and capitation rate methodology will be released March 1, with an overview for presentation at a pre-proposal conference on March 7. Proposals are due May 1 and awards are expected to be announced August 15. Contracts are scheduled to run December 1, 2024, through June 30, 2028, with one additional option year. The RFP indicates that the Department will work with awardee to establish an appropriate launch date. 

Link to RFP 

Blog

Driving change in healthcare delivery: HMA Spring Workshop builds towards policy and strategy frameworks necessary to implement value-based care

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Federal policy frameworks establishing alternative payment models in Medicare and Medicaid have been the kick-starter of value-based care (VBC) innovation in healthcare delivery. However, employers provide health insurance to most Americans, and very few employers – with the exception of jumbo, self-insured employers  – have leaned heavily into VBC. Small- and medium-sized firms rely on brokers to find an affordable health insurance plan, and often lack the resources required to negotiate more. Though the tide has been changing, our fragmented payment system has yielded only a subset voluntarily taking substantial risk for patient outcomes.

It has been said that to truly transform our American healthcare system to pay for value – improved outcomes for lower cost – it would require better alignment across public and commercial payers to support care providers in shifting their business models to take risk.

Quality and cost information are critical to implement VBC payment and delivery systems. Federal initiatives in Medicare and Medicaid have opened the door for providers, payers, and innovators  to use health information to improve outcomes, with patients more engaged and more in control; the “Universal Foundation” announced by the Centers for Medicare and Medicaid Services (CMS) in 2023 seeks to align quality measures across the more than 20 CMS quality initiatives; and policies included in the 21st Century Cures Act and CMS Interoperability and Patient Access rule are creating more transparency on price and quality.

By enabling an infrastructure to measure, digitize, and share cost and quality information, federal and state governments have set the stage for greater collaboration among all purchasers – including employers – and the healthcare delivery system to redesign care that addresses health related social needs and behavioral health, ensuring that healthcare is provided equitably and sustainably. As the care delivery system is better able to deliver high value care, more employers will demand this for their workforce to provide a better benefit to their workers.

These issues, and more, will be a part of the expert-led conversation on VBC at HMA’s 2024 Spring Workshop March 5-6, in Chicago. This workshop offers a unique opportunity for payers, government officials, community organizations, vendors, and providers to have an unvarnished conversation about the challenges, lessons, and opportunities in implementing VBC. The meeting is designed to share insights, change-oriented strategies and actions that advance VBC from top industry experts, health plan executives, state and federal leaders, and policy experts. 

Our working sessions will feature solutions-focused conversations among peers:

  • Care delivery measures that drive outcomes, equity, population health
  • Payment & risk management models for payment, pricing, attribution
  • Data that is interoperable, consumer focused, deploying technology that is aligned to deliver on strategic objectives
  • Policy & Strategy Frameworks at federal, state, and local levels that incentivize VBC

The closing panel will look at ways to take action through policy and collaboration to move our industry toward more sustainable approaches to healthcare payment and delivery.

To learn more and register for this unique event, please visit HMA’s 2024 Spring Workshop page. Act fast – online registration ends Wednesday, February 28!

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HMA keynote speakers preview themes, imperatives for March 5-6 Value Based Care Workshop

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HMA’s Spring Workshop on Value-Based Care, March 5-6 in Chicago, is just a few weeks away. Listen to why our speakers are so excited to engage with attendees on value-based care.

Elizabeth Mitchell, CEO, Purchaser Business Group on Health will deliver the keynote speech on “The Purchaser’s Dilemma: Why Employers Should Demand Value (and Why They Don’t).”

Our March 5 dinner headliner Katie Kaney, CEO of LovEvolve will discuss her “Whole Person Index” and how we can collaborate in new ways to transform the healthcare system to deliver better health at a lower cost for all.

Katie Kaney video

Hurry – online registration ends February 28!

Register here.

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Interoperability and patient access final rule: the next phase in the data exchange journey

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This week, our In Focus section reviews the Centers for Medicare & Medicaid Services (CMS) Interoperability and Prior Authorization Final Rule, published on January 17, 2024. This is CMS’s latest effort to flesh out regulations mandating payer interoperability and fully electronic prior authorization (PA) policies. The 2024 final rule also represents a new phase in the agency’s work to advance interoperability as it moves beyond policymaking focused on building interoperable systems to policies centered on the applications and usage of shared data.

The new requirements affect a large segment of the nation’s public health insurance programs, including Medicare Advantage (MA) organizations, state Medicaid fee-for-service (FFS) programs, state Children’s Health Insurance Program (CHIP) FFS programs, Medicaid managed care plans, CHIP managed care organizations, and qualified health plan (QHP) issuers on the federally facilitated exchanges (FFEs). These payers must implement and adhere to Health Level 7® (HL7®) Fast Healthcare Interoperability Resources® (FHIR®) application programming interfaces (APIs). These APIs were developed by the DaVinci project and the CARIN Alliance which are both HL7 FHIR accelerator programs. Leavitt Partners, an HMA company, leads the work of the CARIN Alliance.

The final rule demonstrates a commitment to information sharing across the industry landscape and confidence in the FHIR standard to support health data exchange across all required APIs. Ultimately, FHIR APIs are creating a more patient-centered data ecosystem that can provide a tangible return on investment.

Following are details about the requirements, opportunities, and next steps for stakeholders.

Prior Authorization API and Process

Payers must build and maintain PA APIs by January 1, 2027, allowing providers to ask payers whether PA is required for a patient’s procedure, what documents must be submitted to attain authorization, and to receive the final decision and reason for denied requests electronically within a specified timeframe (seven days for standard procedures and three days for expedited decisions).

The rule finalizes requirements for the PA process, regardless of whether the payer receives the PA request through the Prior Authorization API. Specifically, CMS is requiring that:

  • Affected payers send notices to providers when they make a prior authorization decision, including a specific reason for denial when they deny a PA request
  • Payers, other than QHP issuers on the FFEs, respond to prior authorization requests within specific timeframes
  • Affected payers publicly report certain metrics about their PA processes

These prior authorization process requirements become effective January 1, 2026. The last 12 months of PA information also must be shared with patient, providers, and other payers when the member switches a plan through the respective APIs.

To promote adoption of electronic prior authorization processes, CMS is adding an Electronic Prior Authorization measure for Medicare clinicians who participate in the Merit-based Incentive Payment System (MIPS) and hospitals and critical access hospitals in the Medicare Promoting Interoperability Program as an attestation measure.

Payer to Payer FHIR API

To support continuity of care and value-based programs, payers must be able to send, receive, and incorporate enrolled member data from previous and concurrent payers if members are dually enrolled.

To comply with the new electronic data sharing, the final rule requires payers to build and use FHIR API by January 1, 2027. Payer-to-payer (P2P) data sharing will include the last five years of claims/encounters, clinical data, and the active and pending PA requests. The data collected through the P2P APIs will need to be available to the other APIs (i.e., provider, patient, and prior authorization). The rule requires payers to request data from previous payers within a week after the patient opts in to sharing data. For dually enrolled members, data sharing will incur at least quarterly.

Patients must opt in and agree to the P2P data sharing. To this end, health plans must adjust their enrollment administrative process to allow members to easily share previous and concurrent payer information and consent to data sharing. CMS allows Medicaid or CHIP agencies to contract with entities, such as Health Information Exchanges (HIEs), for the digital access and transfer of a patient’s medical records, which supports the Payer-to-Payer API.

Provider Access FHIR API

Payers also must build and maintain a Provider Access API to share patient data with in-network providers with whom the patient has a treatment relationship, enabling continuity and coordination of care, by January 1, 2027. Affected payers must maintain an attribution process to associate patients with the appropriate in-network providers responsible for the patient care. The data from the payer via the Provider Access API must be added to a provider’s electronic health record, practice management solution, or any other technology solution that a provider uses for treatment purposes.

The Provider Access API includes the same data covered in the Payer to Payer Access API (claims/encounters, clinical data, and prior authorizations). The payer has one business day to deliver the required information. Payers must offer a mechanism for members to opt out from making their data available to the attributed providers.

Patient Access FHIR API

The final rule further enhances patient access to data to improve their treatment and shopping experience. In addition to claims and clinical data, as of January 1, 2027, payers must make PA data available through the Patient Access API to inform patients on their plan’s PA process and the status of requests.

In addition, affected payers must report annual metrics about Patient Access API usage and data requests to CMS beginning January 1, 2026.

Key Considerations and Early Results

The rule presents a significant opportunity to improve patient experiences and outcomes and to address some of the administrative burden on clinicians. Though CMS made some adjustments to timeframes in the proposed rule, immediate attention is needed to evaluate technological solutions available to payers, assess gaps between current and future required state, and develop policies to comply with new requirements and measures reporting.

Commercial payers may also leverage the improved electronic data sharing but are not required to do so. CMS-funded payers must respond to any inquiries from commercial payers and must require commercial payers to provide the same information as affected payers. Commercial payers, state governments, and other stakeholders have an opportunity to collaborate around the electronic data exchange.

This rule may have positive downstream application to other areas beyond PA, including quality measurements, risk adjustment, and population health. Early adopters who have implemented the prior authorization APIs have, on average, recorded a 150% – 300% return on investment (ROI). The implementation of API-based prior authorization represents a demonstrable increase in efficiency and significantly reduced provider burden. Given the measurable ROI, state-based regional collaboratives being led by Leavitt Partners are forming between payers and providers to implement the core tenants of the CMS rule well in advance of the 2027 deadline.

Similar initiatives are taking place in the technology space, like the Digital Quality Implementers Community, which was recently convened by Leavitt Partners and National Committee for Quality Assurance (NCQA) to build industry readiness for transitioning to FHIR-based digital measurement that hinges on improved electronic data sharing

What to Watch

The HMA team will continue to analyze the CMS’s Interoperability and Patient Access rule in the context of other federal and state policy changes affecting MA organizations, Medicaid FFS programs, state CHIP FFS programs, Medicaid and CHIP managed care programs, and QHPs.

The work and opportunities afforded with the Interoperability and Patient Access final rule will be featured prominently at The HMA Spring Workshop: Getting Real About Transforming Healthcare Quality and Value, March 5-6. In addition to rich discussions, HMA and HMA companies, including Leavitt Partners and Wakely Consulting LLC, are available to support planning and implementation and related system redesign initiatives. If you have questions about these topics, contact Ryan Howells ([email protected]) and Daniela Simpson ([email protected]).

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Substance Use Disorder (SUD) Ecosystem of Care Webinar Series: Pivoting to Save Lives

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Over the coming weeks, HMA is presenting a 4-part webinar series describing a whole person, integrated, solutions-based approach to the ongoing overdose epidemic. It is time to reconsider standard attempts to solve this crisis. Leaders need to be willing to pivot away from approaches that have not yielded the level of impact that this crisis demands, and to be ready to try new ideas and solutions.

“An ideal Ecosystem of Care is person-centered, and parts of the system work together to eliminate stigma, overcome barriers, and prevent people from falling through the cracks that are currently pervasive,” says Dr. Jean Glossa, Managing Director. “Stakeholders participating in SUD care, prevention, and treatment may need to expand their services and work together with other partners in ways they have not before.” 

Each webinar in this series will share HMA’s nuanced understanding of the many paths available for those seeking recovery or a different relationship to addictive behaviors. Experts in the field will share valuable insights, shedding light on the various interventions and strategies that contribute to a holistic and effective approach to supporting individuals on their journey to lasting recovery. Whether you are a healthcare professional, caregiver, or someone personally affected by substance use, this webinar offers a roadmap for navigating the complexities of the Substance Use Care Continuum, fostering hope and resilience in the pursuit of sustained well-being.

By attending this series of webinars, you will learn how to:

  • Describe ongoing overdose crisis as a national public health emergency.
  • Recognize where certain solutions didn’t create the desired impact.
  • Consider new approaches and solutions to overcome ingrained stigma.

Part 1: Thursday, March 14, 2024 12pm ET – Overview and The Role of Health Promotion and Harm Reduction Strategies

Part 2: Wednesday, April 10, 2024 12pm ET – Prevention Screening and Early Intervention Strategies

Part 3: Wednesday, May 1, 2024 12pm ET – Treatment and Long-Term Care Recovery Strategies

Part 4: Tuesday, May 14, 2024 12pm ET – Next Steps for the SUD Ecosystem

HMA expert consultants have deep expertise, and professional on-the-ground lived experience, with supporting efforts nationwide to build an evidence-based, patient-centered, and sustainable addiction treatment ecosystem. No matter the scope or size of the project, HMA has experience working with states, and community organizations to develop impactful, sustainable responses to SUD. Our team is ready to help clients create, disseminate, and implement actionable and sustainable programs, to address substance use, overdose, and addiction.

Please register at the links above.

Check out these related resources:

If you have other questions or want to speak to someone about how HMA can help your organization with some of these ideas, please contact Jean Glossa or Erin Russell.

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CMS releases advance notice of methodological changes for MA capitation rates and Medicare Part C and Part D payment policies

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This week, our In Focus section reviews the Centers for Medicare & Medicaid Services (CMS) Calendar Year (CY) 2025 Advance Notice for the Medicare Advantage (Part C) and Part D Prescription Drug Programs published on January 31, 2024. Alongside the advance notice, CMS published draft CY 2025 Part D Redesign Program Instructions. This guidance includes CY 2025 payment updates as well as additional proposed technical and methodological changes to Medicare Advantage (MA) and Part D. CMS previously released a proposed rule in November 2023 that included proposed policy changes to MA and Part D for CY 2025.

The proposed payment policies signal CMS is working to ensure the stability of MA and Part D programs, while also addressing concerns about the appropriateness of payments to plans. Furthermore, CMS remains highly focused on the impact methodological changes could have on payment to plans that enroll beneficiaries who are dually eligible for Medicare and Medicaid services. Proposals to align quality measures across programs and strengthen the measures used to assess the quality of beneficiary experiences and services provide directional information on CMS’s plans for the forthcoming annual payment rules for 2025.

Following are highlights from the 2025 Advance Notice and Part D Redesign Program Instructions. The deadline for submitting comments is Friday, March 1, 2024. CMS will announce the MA capitation rates and final payment policies for 2025 no later than April 1, 2024.

Payment Impact on MA: CMS is projecting that federal payments to MA plans will increase on average 3.7 percent from 2024 to 2025. The increase reflects multiple factors, including growth rates in underlying costs, change in Star ratings, continued implementation of the new risk adjustment model and fee for service (FFS) normalization, and risk score trends. Actual impacts of the proposed payment policies will vary from plan to plan.

Risk Adjustment: CMS is proposing to continue its three-year phase in of the updated Part C risk adjustment model, first published in the CY 2024 Rate Announcement. In CY 2025, risk scores will be calculated by blending 67 percent of the risk score using the 2024 CMS hierarchical condition categories (HCC) risk adjustment model and 33 percent using the 2020 CMS-HCC risk adjustment model. In addition, the MA risk score trend is being calculated separately under each model, then blended by the respective percentage to determine a CY 2025 risk score trend of 3.86 percent.

CMS is proposing a new methodology for calculating the FFS normalization factor to accurately address the effects of the COVID-19 pandemic without excluding any years of FFS risk scores.

CMS also proposes to apply the statutory minimum MA coding pattern difference adjustment factor of 5.90 percent for CY 2025.

Frailty Adjustment for FIDE SNPs and PACE Organizations. For CY 2025, CMS is proposing to blend the frailty score calculated for fully integrated dual eligible (FIDE) special needs plans (SNPs) consistent with the phase-in of the 2024 CMS-HCC model. The FIDE SNP frailty score is the sum of:

  • 33 percent of the score calculated with the 2020 CMS-HCC model frailty factors
  • 67 percent of the score calculated with the 2024 CMS-HCC model frailty factors

CMS also intends to use only the full Medicaid frailty factors to calculate frailty scores for FIDE SNP enrollees in order to align with the requirement that FIDE SNPs must have exclusively aligned enrollment, meaning that enrollment in FIDE SNPs will be limited to full-benefit dually eligible individuals, beginning in CY 2025. CMS will use the frailty factors associated with the 2017 CMS-HCC model to calculate frailty scores for Program of All-Inclusive Care for the Elderly (PACE) organizations in CY 2025.

Star Ratings: CMS reiterates its plan to further implement the “universal foundation” of quality measures. CMS first announced this subset of metrics in 2023, with the goal of aligning a core set of metrics across the agency’s programs while continuing to allow for program specific measures. CMS reminds plans that beginning with the 2024 measurement year (2026 Star Ratings), the weight of patients’ experience, complaints, and access measures will be reduced from a weight of four to a weight of two.

CMS proposes several updates and refinements to the Star Ratings program, including:

  • Retiring the Care for Older Adults – Pain Assessment (Part C) measure, starting as early as the 2025 measurement year
  • Making changes to the Plan Makes Timely Decisions About Appeals and Reviewing Appeals Decisions (Part C) measures for cases submitted electronically to the independent review entity
  • Adding Social Need Screening and Intervention (Part C) to the display page for the 2025 Star Ratings and giving notice that National Committee on Quality Assurance (NCQA) is evaluating the potential addition of a utilities insecurity screening and intervention rate for this measure in the future
  • Adding Depression Screening and Follow-Up for Adolescents and Adults (Part C) and Adult Immunization Status (Part C) to the display page for the 2026 Star Ratings
  • Updating the Members Choosing to Leave the Plan (Part C and D) measure for the 2026 Star Ratings
  • Possibly adding the Initiation and Engagement of Substance Use Disorder Treatment (Part C) and Initial Opioid Prescribing for Long Duration (IOP-LD) (Part D) measures
  • Revisions to the Care Coordination (Part C) measure, and other changes through future rulemaking

Part D Impact

The advance notice reviews the significant changes to the Part D benefit occurring in 2025 as required in the Inflation Reduction Act (IRA). The IRA’s Part D changes effective in CY 2025 include:

  • Eliminating the coverage gap phase. A newly defined standard Part D benefit will consist of three phases: annual deductible, initial coverage, and catastrophic coverage. There is no initial coverage limit, and the initial coverage phase will extend to the maximum annual out-of-pocket threshold, after which the catastrophic phase begins.
  • Setting the out-of-pocket threshold at $2,000.
  • Sunsetting the Coverage Gap Discount Program and implementing of the Manufacturer Discount Program (Discount Program).
  • Making changes to the liability of enrollees, plans, manufacturers, and CMS.
  • Updating the definition of incurred costs to include, among other categories of costs, supplemental coverage and other health insurance, which was previously excluded. Manufacturer discounts provided under the Discount Program also will be excluded.
  • Premium stabilization will continue to be in effect.

CMS is recalibrating the RxHCC risk adjustment model to account for IRA changes and is proposing to calculate separate normalization factors for risk scores used to pay MA-PD plans versus PDPs.

Key Considerations

The impact of the MA risk score trend on payment will vary across individual MA plans. Plans will want to analyze these effects to inform their comments to CMS.

In the advance notice, CMS emphasized the strong growth in the dual SNP market for 2024. This market continues to present growth opportunities. CMS has sought to ensure that changes to payment accuracy better reflect more recent cost and utilization patterns and the risk profile of the sickest and most complex enrollees. Plans will want to consider payment incentives in the context of major policy, reimbursement, and operational changes required to improve integrated care for dually eligible individuals. MA organizations considering becoming FIDE SNPs and wishing to obtain frailty payments in 2025 will need to understand the specific requirements to be eligible for such payments.

The HMA Medicare team will continue to analyze these proposed changes. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts across the multiple rules, and to support the drafting of comment letters on this notice.

If you have questions about the contents of CMS’s MA Advance Notice and payment policies and how these would affect MA plans, including SNPs, providers, and Medicare beneficiaries, contact Julie Faulhaber ([email protected]), Amy Bassano ([email protected]), or Andrea Maresca ([email protected]).