February 22, 2023
CMS Announces Plans to Pursue New Medicare and Medicaid Drug Payment Models
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Mental health and addiction crises top the federal policy agenda in 2023
This week our In Focus section reviews President Joseph R. Biden鈥檚 2023 (SOTU) to Congress. The President highlighted specific actions that Congress, and the Administration have taken over the last two years to advance his health care priorities.
During his first SOTU address in 2022, President Biden announced the creation of a 鈥淯nity Agenda鈥�, which included priority policy areas with potential for bi-partisan support. The President highlighted several steps the Administration has taken to advance the 鈥淯nity Agenda鈥� including:
- The bipartisan effort to enact the Mainstreaming Addiction Treatment (MAT) Act, which removed the federal requirement for practitioners to have a waiver (known as the X-waiver) to prescribe medications, like buprenorphine, for the treatment of opioid use disorder
- The Cancer Moonshot announcements for almost 30 new programs, policies, and resources to close the screening gap, tackle environmental exposure, decrease preventable cancers, advance cutting-edge research, support patients and caregivers, and more.
- Addressing mental health needs through the expansion of Certified Community Behavioral Health Clinics and launch of the 988-suicide prevention hotline.
In his SOTU and accompanying White House , the President also proposed new policies and initiatives to further advance his health care agenda. These actions include a combination of issues that would require Congressional approval as well as actions regulatory agencies can already advance. Congress and the Administration are expected to build on previous bipartisan achievements to tackle the nation鈥檚 dual crises with addiction and mental health.
Notably, the policies outlined in the SOTU foreshadow an active regulatory agenda over the next 18 months as the Administration seeks to solidify key aspects of the President鈥檚 health care agenda ahead of the next Presidential election.
The Administration鈥檚 planned actions include the following:
Opioids
- Calling on Congress to pass legislation to permanently schedule all illicitly produced fentanyl-related substances into Schedule I.
- SAMHSA will provide enhanced technical assistance to states who have existing State Opioid Response funds, and will host peer learning forums, national policy academies, and convenings with organizations distributing naloxone beginning this spring.
- By this summer, the Federal Bureau of Prisons will ensure that each of their 122 facilities are equipped and trained to provide in-house medication-assisted treatment (MAT).
- This spring CMS will provide guidance to states on the use of federal Medicaid funding to provide health care services鈥攊ncluding treatment for people with substance use disorder鈥攖o individuals in state and local jails and prisons prior to their release. California is the first state to receive approval for a similar initiative.
Mental Health
- CDC plans to launch a new campaign to provide a hub of mental health and resiliency resources to health care organizations in better supporting their workforce.
- The Department of Education (ED) will announce more than $280 million in grants to increase the number of mental health care professionals in high-need districts and strengthen the school-based mental health profession pipeline.
- HHS and ED will issue guidance and propose a rule to make it easier for schools to provide health care to students and more easily bill Medicaid for these services.
- The Administration is scheduled to propose new mental health parity rules this spring.
- HHS will improve the capacity of the 988 Lifeline by investing in an expansion of the crisis care workforce; scaling mobile crisis intervention services; and developing additional guidance on best practices in crisis response.
- HHS also plans to promote interstate license reciprocity for delivery of mental health services across state lines.
- HHS intends to increase funding to recruit future mental health professionals from Historically Black Colleges and Universities and to expand the Minority Fellowship Program.
- The Department of Veterans Affairs (VA), working with HHS and Defense, will launch a program for states, territories, Tribes and Tribal organizations to develop and implement proposals to reduce suicides in the military and among veterans.
- VA will also increase the number of peer specialists working across VA medical centers to meet mental health needs
Cancer Moonshot
- The President called on Congress to reauthorize the National Cancer Act to overhaul cancer research and to extend the funding for biomedical research established in the 21st Century Cures Act.
- The Administration will take steps to ensure that patient navigation services are covered by insurance. This could require legislation depending on which type on insurance an individual has.
Health care costs
- Urging Congress to pass legislation to cap insulin prices in all health care markets. Expanding the $35 insulin cap to commercial markets will require the 60 votes in the Senate.
Home and community services
- Working with Congress to approve legislation to ensure seniors and people with disabilities can access home care services and to provide support to caregivers.
HMA and HMA companies are closely monitoring these federal policy developments. We can assist healthcare stakeholders in responding to the immediate opportunities and challenges that arise and contextualize these actions for longer-term strategic business and operational decisions.
If you have questions about these or other federal policy issues and how they will impact your organization, please contact our experts below.
February 15, 2023
Mental Health and Addiction Crises Top the Federal Policy Agenda in 2023
How will changes to Medicare Part C and D Star Ratings impact your plan?
What are your plans to minimize your risk to avoid dropping in your Star Rating or to plan a head to maintain or improve your Star Rating?
On February 1, 2023, the Center for Medicare and Medicaid Services (CMS) released the and included some key specifics on the upcoming changes to the Medicare Star Rating program. CMS is proposing changes that will align with the recently announced 鈥淯niversal Foundation鈥� of quality measures, a core set of measures that are aligned across CMS quality rating and value-based care programs. The Advance Notice also included information on substantive measure specification updates, new measure concepts, and the addition of measures to align with other CMS programs.
You can learn more about these proposed changes along with a blueprint for improving your Medicare Advantage Star Ratings at the HMA quality conference on March 6 in Chicago. The working session 鈥淢oving the Needle on Medicare Stars Ratings鈥� will feature speakers ; John Myers, BS, M.Eng., VP of Health Quality & Stars, Humana; ; and Dr. Kate Koplan, MD, MPH, FACP, CPPS, Chief Quality Officer & Associate Medical Director Quality and Safety, Kaiser Permanente of Georgia
Moderators of this session are Mary Walter, Managing Director of Quality and Accreditation, and David Wedemeyer, Principal. Both have health plan legacy experience in Stars strategy, execution and getting results.
Objectives of this session:
- Overview of the CMS proposed changes and their impact on the Stars program
- Attendees will obtain a blueprint for improving Medicare Advantage Star Ratings, including the importance of ensuring executive management buy-in
- Discussion of how the use of data analytics can help plans to identify quality gaps, target interventions, and track improvement
- Strategies to avoid the type of siloed initiatives that often fail to achieve lasting results
- Speakers will also address the importance of quality in achieving market viability and financial
sustainability
Stay in the know about the upcoming proposed changes and develop your organization鈥檚 strategy in this interactive impactful working session. This session will allow attendees to integrate any learnings and take-aways into your Stars program to meet your overall Star Rating strategic goal.
Follow #HMAtalksQuality on and for more updates on Stars and quality initiative efforts throughout the year. View the full agenda and register for HMA鈥檚 first annual quality conference on March 6 in Chicago. Registration closes on February 21, 2023.
What is 鈥渁dequate鈥� behavioral health provider capacity?
At HMA, our subject matter experts get questions every day from people working in state agencies, counties, health plans and provider groups about how to 鈥渞ight size鈥� the behavioral health continuum to obtain equitable access for growing behavioral health demand. From legislatures to providers, improving access to mental health services is critical to improving overall health outcomes. It is time for behavioral health to create a specific definition of network adequacy that accounts for the complexity and nuance of access to mental health and substance use care. It is time to identify and define the factors that lead to 鈥渁dequate鈥� provider capacity, to ensure that the right level of care is available to individuals when they need care. Network adequacy in behavioral health needs an overhaul to meet the complexity that is driving access challenges.
Together let鈥檚 re-define what 鈥渁dequate鈥� means in behavioral health to ensure we build systems that meet the needs of communities. At HMA鈥檚 quality conference on March 6 in Chicago, the 鈥淒eveloping a Behavioral Health Quality Strategy鈥� working session will engage participants in an in-depth discussion on identifying factors to inform a more accurate definition of behavioral health network adequacy. Speakers will outline some of the core challenges in network adequacy and innovations they have used.聽 Attendees will work collaboratively in a structured exercise on three knotty challenges within network adequacy to identify factors that could improve measurement for states, plans and providers. The goal is for participants to walk away with tangible actions they can implement in their work on behavioral health access.
Please join our HMA experts and our featured panelists:
And follow #HMAtalksQuality on and for more updates on behavioral health quality efforts throughout the year. View the full agenda and register for HMA鈥檚 first annual quality conference on March 6 in Chicago. Registration closes on February 21, 2023.
CMS creating a ‘Universal Foundation’ to align quality measures
Leaders at the Centers for Medicare and Medicaid Services (CMS) announced in the this month a new initiative called the 鈥淯niversal Foundation,鈥� which seeks to align quality measures across the more than 20 CMS quality initiatives. The implications for the broader healthcare system are immense.
At 黑料网 upcoming quality conference March 6 in Chicago, Dr. Lee Fleisher, one of the authors of the Universal Foundation initiative and, Chief Medical Officer and Director, CMS鈥� Center for Clinical Standards and Quality, will deliver the keynote address 鈥淎 Vision for Healthcare Quality: How Policy Can Drive Improved Outcomes.鈥�
Attendees will hear from industry leaders and policy makers about evolving healthcare quality initiatives and participate in substantive workshops where they will learn about and discuss solutions that are using quality frameworks to create a more equitable health system. In addition to Dr. Fleisher, featured speakers will include executives from American College of Surgeons, ANCOR, CareJourney, CareOregon, Commonwealth Care Alliance, Council on Quality and Leadership, Denver Health, Institute on Public Policy for People with Disabilities, Intermountain Health, NCQA, Reema Health, Kaiser Permanente, Social Interventions Research and Evaluation Network, UnitedHealth Group, United Hospital Fund, 3M, and many other organizations.
The Universal Foundation seeks to align quality measures to 鈥渇ocus providers鈥� attention on measures that are meaningful for the health of broad segments of the population; reduce provider burden by streamlining and aligning measures; advance equity with the use of measures that will help CMS recognize and track disparities in care among and within populations; aid the transition from manual reporting of quality measures to seamless, automatic digital reporting; and permit comparisons among various quality and value-based care programs, to help the agency better understand what drives quality improvement and what does not.鈥�
CMS has established a cross-center working group focused on coordination of these processes and on development and implementation of aligned measures to support a consistent approach. As part of this announcement, the group published a list of Preliminary Adult and Pediatric Universal Foundation Measures. This new quality program will affect clinicians, healthcare settings such as hospitals or skilled nursing facilities, health insurers, and value-based entities such as accountable care organizations.
HMA can help organizations improve their quality efforts in line with the new CMS Universal Foundation initiative. HMA鈥檚 more than 500 consultants include past roles as senior officials in Medicaid and Medicare, directors of large nonprofit and social services organizations, top-level advisors, C-level executives at hospitals, health systems and health plans, and senior-level physicians. Our depth of industry-leading policy expertise and clinical experience provides comprehensive solutions that make healthcare and human services work better for people.
To learn more about HMA and Quality, follow #HMAtalksQuality on and . View the full agenda and register for HMA鈥檚 first annual quality conference on March 6 in Chicago. Registration closes on February 21, 2023.
CMS introduces advance notice of changes to MA capitation rates and Part C/D payment policies
This week, our In Focus section reviews recently announced major policy updates from the Centers for Medicare & Medicaid Services (CMS) that affect the Medicare Advantage (MA) and Part D programs. First, on January 30, CMS released the final Risk Adjustment Data Validation , a highly anticipated and controversial policy that establishes the agency鈥檚 approach to auditing MA Organizations鈥� (MAOs) risk-adjustment payments and collecting overpayments as needed.
Then, on February 1, CMS published the for the MA (Part C) and Part D Prescription Drug Programs. Between these two directives and the CMS announced in December 2022, the Administration continues its efforts to actively manage Medicare Advantage and strengthen quality and oversight of the program. Read HMA鈥檚 summary of the December 2022 proposed rule.
Below are some highlights of the 2024 Advance Notice. By law, CMS must notify the public of planned changes in the MA capitation rate methodology and risk adjustment methodology annually. The deadline for submitting comments to CMS is Friday, March 3, 2023.
Payment Impact in MA: CMS is projecting an average increase in revenue of 1.09 percent in plan payments from last year. This percentage increase is based on a net number that reflects multiple factors including growth rates, change in STAR ratings, and risk score trends.
Risk Adjustment: CMS is seeking to make some refinements to the Part C risk-adjustment model. For example, CMS will begin using the International Classification of Diseases (ICD)-10 classification system (instead of the ICD-9 classification system) and updated underlying fee for service data years. More specifically, diagnoses data years are being updated from 2014 to 2018, and expenditure years are being updated from 2015 to 2019 to reflect changes in costs.
Star Ratings: CMS is proposing updates and refinements to the Star Ratings program, including:
- Retiring the diabetes care-kidney disease monitoring and Medication Reconciliation Post-Discharge
- Expanding the age range for colorectal cancer screening measure to 45鈭�75 years old to align with the preventive task force
- Adding the Care for Older Adults (COA)鈥擣unctional Status Assessment measure back to the Star Ratings, and introducing Kidney Health Evaluation for Patients with Diabetes (KED), Concurrent Use of Opioids and Benzodiazepines (COB), Polypharmacy Use of Multiple Anticholinergic Medications in Older Adults (Poly-ACH), and polypharmacy Use of Multiple Central Nervous System Active Medications in Older Adults (Poly-CNS)
- Introducing a case-mix adjustment to Part D medication adherence measures for diabetes, hypertension, and cholesterol.
CMS also is seeking to potentially align measures with other CMS programs. Specifically, the agency is introducing a 鈥淯niversal Foundation鈥� of quality measures, which is a core set of metrics aligned across programs. Additional information can be found in this 鈥淧别谤蝉辫别肠迟颈惫别鈥�.
Part D Impact
The Advance Notice also notifies plans on the changes to the Part D benefit occurring in 2024 as a result of the Inflation Reduction Act (IRA), including:
- Beginning in CY 2024, CMS will eliminate cost-sharing for Part D drugs prescribed to beneficiaries in the catastrophic phase of coverage.
- Beginning in CY 2024, the Low-Income Subsidy program (LIS) under Part D will be expanded so that beneficiaries who earn 135鈭�150 percent of the federal poverty level and meet statutory resource limit requirements will receive the full LIS subsidies that were available only to beneficiaries earning less than 135 percent of the federal poverty level prior to 2024.
- During CY 2024, CMS will prohibit Part D plans from applying the deductible to any Part D covered insulin product and from charging more than $35 for each month鈥檚 supply of a covered insulin product in the initial coverage phase and the coverage gap phase.
- During CY 2024, CMS will prohibit Part D plans from applying the deductible to an adult vaccine recommended by the Advisory Committee on Immunization Practices and from charging any cost-sharing payments at any point in the benefit for these vaccinations.
- Beginning in CY 2024, CMS will cap the growth in the Base Beneficiary Premium at 6 percent. The Base Beneficiary Premium for Part D is limited to the lesser of a 6 percent annual increase or the amount that would otherwise apply under the prior methodology had the IRA not been enacted.
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鈥檚 MA advance notice and how it will affect MA plans, providers, and patients, contact our experts below.
February 8, 2023
CMS Introduces Advance Notice of Methodological Changes for MA Capitation Rates and Medicare Part C and Part D Payment Policies
California first to receive federal approval for justice-involved reentry demonstration initiative
This week, our In Focus section reviews the California amendment to the Section 1115 Waiver Demonstration titled, 鈥淐alifornia Advancing and Innovating Medi-Cal (CalAIM),鈥� approved by the Centers for Medicare & Medicaid Services (CMS) on January 26, 2023. The amendment will provide targeted Medi-Cal services to individuals in state prisons, county jails, and youth correctional facilities for up to 90 days prior to release. This marks the first time in the nation that Medicaid will pay for a limited set of health care services provided to justice-involved individuals before they are released. The approval is effective through the end of the CalAIM demonstration, ending December 31, 2026, unless extended or amended.
The justice-involved initiative is part of the broader CalAIM demonstration, approved December 29, 2021. For more information on CalAIM, please see HMA鈥檚 write up from March 2021.
Background
California was one of the first of 11 states – Arizona, California, Kentucky, Massachusetts, Montana, New Jersey, New York, Oregon, Utah, Vermont, and Washington 鈥� to propose a demonstration to provide Medicaid-covered healthcare services to justice-involved populations before release. CMS plans to issue guidance on the Reentry Demonstration Opportunity to support community reentry and improvement in care transitions for individuals up to 30 days prior to their scheduled release.
California鈥檚 reentry demonstration initiative aims to address the needs of incarcerated beneficiaries as they near the end of their incarceration and reenter the community by improving connections and coordination between the correctional, health care, and social service systems. Currently, Medi-Cal services are only available after release from incarceration.
In California, more than one million adults and youth enter or are released from prisons and jails annually, with at least 80 percent eligible for Medi-Cal. The justice-involved individuals are disproportionately people of color, compared to the state population. Formerly incarcerated individuals are also more likely to experience poor health outcomes and face disproportionately higher rates of physical and behavioral health diagnoses. These individuals are at higher risk for injury and death as a result of violence, overdose, and suicide compared to people who have never been incarcerated.
Demonstration
California will be required to submit for CMS approval a Reentry Initiative Implementation Plan and Reinvestment Plan documenting how the state will operationalize coverage and provision of pre-release services and how existing state funding for carceral health services will continue to support access to necessary care and achievement of positive health outcomes for the justice-involved population.
The goals of the demonstration are to:
- 鈥�Increase coverage, continuity of coverage, and appropriate service uptake through assessment of eligibility and availability of coverage for benefits in carceral settings just prior to release;
- Improve access to services prior to release and improve transitions and continuity of care into the community upon release;
- Improve coordination and communication between correctional systems, Medicaid and CHIP systems, managed care plans, and community-based providers;
- Increase additional investments in health care and related services, aimed at improving the quality of care for beneficiaries in carceral settings and in the community to maximize successful reentry post-release;
- Improve connections between carceral settings and community services upon release to address physical health, behavioral health, and health-related social needs;
- Provide intervention for certain behavioral health conditions and using stabilizing medications like long-acting injectable anti-psychotics and medications for addiction treatment for SUDs, with the goal of reducing decompensation, suicide-related deaths, overdoses, and overdose-related deaths in the near-term post-release; and
- Reduce post-release acute care utilizations such as emergency department (ED) visits and inpatient hospitalizations and all-cause deaths among recently incarcerated Medicaid beneficiaries and individuals otherwise eligible for CHIP if not for their incarceration status through robust pre-release identification, stabilization, and management of certain serious physical and behavioral health conditions that may respond to ambulatory care and treatment (e.g., diabetes, heart failure, hypertension, schizophrenia, SUDs) as well as increased receipt of preventive and routine physical and behavioral health care.鈥�
Eligible individuals under the demonstration will be assigned a care manager while they are incarcerated, as well as a community-based care manager upon their release. Pre-release services will be anchored in comprehensive care management and include physical and behavioral clinical consultation, lab and radiology, Medication Assisted Treatment (MAT), community health worker services, and medications and durable medical equipment. These services will be available for up to 90 days immediately prior to the individual鈥檚 expected release date. California expects that it will be able to reduce decompensation, suicide-related death, overdose, and overdose-related deaths in the near-term post-release.
As a condition of approval of this demonstration amendment, CMS is also requiring California to make pre-release outreach, along with eligibility and enrollment support, available to all individuals incarcerated in the facilities in which the demonstration is functioning. Effective January 1, 2023, state statute directs all counties implementing Medi-Cal application processes in county jails and youth correctional facilities to 鈥渟uspend鈥� their status while an individual is in jail or prison, and easily 鈥渢urn on鈥� when they enter the community so they can access essential health care services upon release.
The demonstration is expected to begin in April 2024. Correctional facilities can choose their launch date within 24 months of the go-live date and will be subject to a readiness review process before they can launch.
Additional Requirements
Under the amendment, CMS approved the state鈥檚 Designated State Health Program (DSHP) financing plan. Under this DSHP, California will receive federal matching funds to support the Providing Access and Transforming Health (PATH) program. As a condition of receiving this funding and as part of the approval, CMS requires California to increase and sustain Medicaid fee-for-service provider payment rates and Medicaid managed care payment rates for obstetrics, primary care, and behavioral health services. According to the U.S. Department of Health and Human Services (HHS), 鈥渋n obstetrics alone, this represents the potential for $60 million to be invested in the health of pregnant and postpartum women by increasing access to providers and therein improving health outcomes for pregnant women.鈥� The rate increase will close the gap between Medicaid and Medicare rates by at least 2 percentage points, should the state鈥檚 average Medicaid to Medicare provider rate ratio be below 80 percent in any of these categories.
Under this amendment, CMS is also updating the budget neutrality methodology for two previously approved community supports, short-term post-hospitalization services and recuperative care, that address health-related social needs.
February 1, 2023
California First in Nation to Receive Federal Approval for Justice-Involved Reentry Demonstration Initiative