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Summary of the CMS managed care final rule and its impact on states, managed care organizations and providers

On May 10, 2024, the Centers for Medicare & Medicaid Services (CMS) published the Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality Final Rule (CMS-2439-F).

CMS created a fact sheet which concisely reviews the final rule’s key provisions, as well as an applicability dates chart, which serves as a reference guide to the various applicability dates for different provisions in the final rule. The final rule creates new flexibilities and requirements aimed at enhancing accountability for improving access and quality in Medicaid and CHIP by principally addressing these topic areas:

ILOSs are defined as substitute services or settings for a service or setting covered under the state plan and can be leveraged by Managed Care Organizations (MCOs) to address unmet health-related social needs (HRSNs).
They must be offered to all members and must be voluntary as well as documented in MCO contracts.
ILOSs cannot exceed 5% of total capitation.
If ILOS costs exceed 1.5% of total capitation, states must provide additional documentation to CMS to demonstrate medical appropriateness and cost-effectiveness.
When an ILOS is terminated, states must develop a transition plan to arrange for state plan services and settings to be provided in a timely manner.

States must make available online a “one-stop-shop” where members can learn about and compare MCOs based on quality and other variables.
Mandatory quality measures are established.
The methodology for calculating the quality ratings displayed on each state’s MAC QRS is also established.
Although guidelines exist, states can submit their own version of a MAC QRS to CMS for approval.

Provider incentive payments must be tied to clearly defined, objectively measurable, and well-documented clinical or quality improvement standards to be classified as incurred claims (in alignment with private market MLR regulations).
Prohibits the inclusion of indirect administrative costs that are not directly related to improving quality as QIAs as incurred claims in the numerator (in alignment with private market MLR regulations).
Imposes additional expense allocation methodology requirements (in alignment with private market MLR regulations).
Requires SDPs to be included as both incurred claims (for payments made by MCOs to providers) and premium revenue (for payments made by states to MCOs).

Sets maximum appointment wait time standards of no more than 15 business days for routine primary care (adult and pediatric) and obstetric/gynecological services and 10 business days for mental health and substance use disorder services (adult and pediatric).
Enforces these standards using secret shopper surveys and requires states to contract for the secret shopper surveys.
Requires states to post the appointment wait time standards as well secret shopper survey results.
A remedy plan must be implemented for any MCO that fails to meet these required standards for access.
States must also conduct an annual enrollee experience survey for each MCO.

Codifies ACR payment ceiling, which applies to hospitals, practitioner services at academic medical, and nursing facility services.
Requires “hold harmless” attestation.
Allows for SDPs at 100% of Medicare without prior written approval.
Removes network provider requirement to receive payment.
Prohibits use of interim payments based on prior period data even if ultimately reconciled.
Prohibits use of separate payment term where SDPs are paid separate from capitation rates.
Explicitly states that SDPs must result in “stated goals and objectives.”
Requires states to submit detailed, provider level SDP data to the Transformed Medicaid Statistical Information System.

Implications for States

The final rule creates opportunities for states to leverage new flexibilities to further policy goals but also creates new administrative burdens. MCOs and providers will look to states to comprehensively understand final rule’s requirements and be prepared to manage the steps necessary to achieve compliance over a multiyear implementation process.

Implications for MCOs

As states move to comply with the final rule, MCOs will be immediately downstream from the steps taken by states to do so and MCOs need to prepare accordingly. Proactive actions by MCOs to not only engage with states early but also to prepare financially and operationally for the different provisions of the final rule over time will put them in the best position possible.

Implications for Providers

The most significant implications for providers in the final rule are related to SDPs, where a new level of accountability will be required. All topics covered by the final rule, however, have provider implications.

Looking ahead

The provisions of the final rule range in their effective dates from as early as the final rule’s effective date, July 9, 2024, to as late as the first rating period on or after four years after July 9, 2024.

Because of these variable effective dates, states, MCOs, and providers will need to comply with the final rule immediately in some cases, while having significant lead time to do so in other areas. Sub regulatory guidance is also forthcoming and must be monitored for and digested.

HMA stands ready to support states, MCOs, and providers in analyzing and responding to the strategic, financial, and operational impacts of the final rule’s provisions in specific markets and organizational contexts.

If you have questions or want to connect with our expert team members, e-mail [email protected].

Webinar replay: Medicare physician fee schedule reform – structural topics and recommendations

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This webinar was held on June 13, 2024.

HMA recently released a report on the Medicare Physician Fee Schedule (PFS) with background on the structure of the program, and recommendations for reforms that could be considered. This webinar provided background and context about the PFS for interested parties who may be less familiar with the payment system and why the stakeholder community got to the point of needing to “fix” the fee schedule. We discussed pressing policy and payment concerns, provided an overview of key structural issues within the PFS that should be considered and balanced when making policy changes to the payment system, highlighted different stakeholder perspectives, and offered recommendations within CMS authority.

Learning Objectives:

Understand the background, context and function of the PFS including its relationship to other payment systems.
Highlight key policy developments over time leading to the current focus on “fixing” the payment system.

May 2024

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Federal healthcare quality initiatives: recent developments shaping the landscape

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This week, our In Focus section considers the increasing emphasis on quality at all levels of our healthcare system, especially for work that affects federally funded health insurance programs.

The Universal Foundation Measure Set

The 2024 Centers for Medicare & Medicaid Services (CMS) Quality Conference, April 8−10, in Baltimore, MD, continued to highlight the harmonizing of quality measures across CMS programs and promotion of CMS’s universal foundation measures. These metrics capture quality across six domains for adults and four domains for children. By promoting and integrating these well-established measures across all CMS programs, end users can align priorities across programs and help to reduce burden on providers and health plans being assessed.

Medicaid has long been a leader in incorporating the universal foundation measures, having used many of them in managed care contracts, health homes, and other arrangements that include a quality assessment component for the past 20 years. Earlier this year, many universal foundation measures, including those pertaining to behavioral health, became part of the mandatory core measure set that all states must report to CMS as required in the SUPPORT for Patients and Communities Act—comprehensive federal legislation that addresses the opioid epidemic. Mandatory reporting will allow Congress, the Medicaid and CHIP Payment and Access Commission (MACPAC), and other stakeholders to better understand the impact of federal investments on quality of care for Medicaid and CHIP enrollees.

New Developments in Medicaid’s Approach to Quality

Forward momentum is evident in other areas of healthcare quality as well. A significant federal milestone in quality of care was included in the Medicaid Managed Care Rule released in April 2024, which required states to design a quality rating system (QRS) and submit their methodology to CMS for approval. The QRS is intended to be user-friendly and help Medicaid members to pick a plan and monitor its quality performance. States will be able to use the QRS as a monitoring and oversight tool to compare plan performance. Not only will a QRS help improve Medicaid’s accountability to states, enrollees, and policymakers, but it also promotes transparency for all end users and the public. At present, Medicaid quality measures are reported by state rather than by plan. Plan performance in Medicaid is typically captured in a state’s external quality review organization (EQRO) annual report, which may impede the ability of most users to extract, compare, and digest information.

Another federal initiative is the Medicaid Access Rule, also released in April 2024, to help state Medicaid programs move toward public reporting of quality and compliance measures in home and community-based services (HCBS). In 2022, CMS released more than 90 measures that could be used to assess quality of care in Medicaid HCBS waiver populations. Under the rule, CMS will identify a subset of HCBS quality measures in 2026 and the technical specifications for these measures will be made available publicly and updated as needed. Similar to the CMS Child and Adult Core Sets, states will have an opportunity to implement these measures and CMS can use those outcomes to create HCBS scorecards by state.

Medicare Advantage Star Ratings Program

Finally, CMS is incorporating the health equity index (HEI) into the Medicare Advantage Star Rating system. The HEI contributes to a plan’s potential bonus and helps level the playing field for plans that enroll and provide services to underrepresented or at-risk populations. The HEI will account for enrollees who are dually eligible for Medicare and Medicaid, individuals with disabilities, or members with a low-income subsidy (LIS). The HEI also assesses plan-level performance for these specialized populations. Allowing plans to earn a better bonus for delivering high-quality services to these populations helps to mitigate adverse selection and reward plans for care that may be resource intensive.

What’s Next

Accountability for quality is beginning to emerge in the form of value-based contracting, incentive payments, and other forms of reimbursement focused on reducing disparities and improving outcomes. Health plans, providers, state agencies, vendors and other interested stakeholders need to have a strategy for quality improvement that reflects evolving federal and state quality priorities, reporting systems, and improvement processes.

HMA’s quality and accreditation team includes experts in the quality space from a variety of backgrounds, including National Committee for Quality Assurance (NCQA) surveyors, former HEDIS auditors, health plan and provider senior quality staff (vice presidents and chief quality officers), and former Medicare/Medicaid leaders. To learn more about implementing quality programs or to explore options for leveraging quality measures to maximize your organization’s value-based contracts, win requests for proposals, increase membership, and optimize member experience, contact our featured expert below.

May 29, 2024

Federal Healthcare Quality Initiatives: Recent Developments Reshaping the Landscape

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Crosswalk of 400 recommendations on behavioral health workforce

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The Center for Workforce Solutions (CWS) complied more than 400 recommendations for dealing with behavioral health workforce issues, from publicly available reports by federal and state policymakers, national associations, foundations and other partners and stakeholders. The summary of that report can be found below.

READ THE REPORT SUMMARY

The CWS is a partnership between the National Council for Mental Wellbeing (National Council), Health Management Associates (HMA) and The College for Behavioral Health Leadership (CBHL). The CWS is invested in creating a national platform that supports cross-sector partners working at multiple levels of the system to execute solutions in concert to tackle complex recommendations and achieve meaningful impact. They want to elevate workforce solutions that exist and can scale as well as build the pathways for overcoming barriers to implementation.

In an effort to understand what recommendations exist and what initiatives are suggested as solutions for the workforce crisis, the CWS reviewed recommendations and cross-walked them to the CWS levers of change as a way of building an actionable roadmap for addressing the behavioral health workforce crisis and to support cross-sector action towards creating a stronger, more equitable workforce.

Learn more about HMA’s work with the CWS and on Collective Impact at https://www.healthmanagement.com/blog/advancing-workforce-through-collective-impact/

If you want to learn more about how HMA can help your organization with behavioral health workforce issues, contact our experts below.

Election-driven shifts in healthcare innovation

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Innovation is the source of progress, driving advancements across industries and shaping the way we live, work, and interact. However, the landscape of innovation is not static—it ebbs and flows, influenced by various factors including political leadership. This year’s presidential election may bring forth significant shifts in priorities, policies, and funding that directly impact innovation efforts like Center for Medicare & Medicaid Innovation (CMMI), state waivers and the Advanced Research Projects Agency for Health (ARPA-H).

CMMI serves as a catalyst for testing innovative payment and service delivery models within Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). With a new administration comes the potential for shifts in CMMI’s focus and funding priorities. For instance, a president (or his/her appointees) can direct CMMI to design payment models, reimbursement structures that can lead to higher quality outcomes and more cost-effective healthcare delivery. The policy priorities and values that undergird a president’s healthcare agenda can shape the kinds of innovation that CMMI drives. Current CMMI initiatives have prioritized value-based care approaches linking payment to outcomes, improving equity of care across race, gender, and geography, and patient-centered care models designed to support particularly high cost, complex conditions; the priorities of the previous administration included focus on substance abuse disorders, kidney disease, and diabetes.

CMS also grants waivers to states, such as Section 1115 waivers for Medicaid or 1332 waivers for insurance marketplaces, that offer flexibility to experiment with innovative healthcare solutions. The values and policy approaches of a new president will influence the degree of regulatory flexibility and the types of experimentation that will be approved. For example, several states have recently received approval on Medicaid waivers that encourage community-based approaches to whole person care, wrapping together healthcare coverage, benefits, delivery, with new support services that address upstream barriers to health.

ARPA-H, a new unit within the National Institutes of Health focuses on investments in “break-through technologies and broadly applicable platforms, capabilities, resources, and solutions that have the potential to transform important areas of medicine and health for the benefit of all patients,” holds immense potential for driving breakthroughs in healthcare by funding innovation that “cannot readily be accomplished through traditional research or commercial activity.” The types of projects funded by ARPA-H could be directly impacted by the policy and budget priorities of whomever is president in 2025 and their interest in promoting collaboration between government, academia, and industry to address complex health challenges. A prime example of a potentially impacted area is the emphasis on cancer research by the Biden Administration. This focus may shift drastically with a change in leadership.

For healthcare innovators looking to stay informed and adaptable amidst these potential policy changes, HMA has two opportunities of interest: The HMA Fall conference, and a DC Direct subscription. On October 7-9, healthcare leaders and HMA experts will gather for the 2024 Fall Conference: Unlocking Solutions in Medicaid, Medicare and Marketplace, focused on innovation in public programs. Our keynote speaker Darshak Sanghavi, MD is, a foundational leader at ARPA-H tasked with developing health programs that challenge how we think about healthcare innovation inside and outside government. Conference registration is now open – register today.

Leavitt Partners (LP), an HMA Company, guides clients who need to more closely track federal policy and regulatory activity and know when and how to influence the process. DC Direct, an exclusive offering from LP, provides timely information and insights to elevate your knowledge from simply scratching the surface of understanding to becoming part of the fabric of change.

Texas releases STAR Kids RFP

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This week’s second In Focus reviews the Texas STAR Kids request for proposals (RFP), which the Texas Health and Human Services Commission released on May 10, 2024. The STAR Kids Medicaid managed care program provides coverage to children and youth ages 20 and younger with disabilities. Nine plans currently participate in the program, with contracts worth approximately $4 billion annually.

STAR Kids Overview

The STAR Kids program operates under the Texas Healthcare Transformation and Quality Improvement Program 1115 demonstration project. To be eligible, individuals must receive Supplemental Security Income (SSI) and SSI-related Medicaid, participate in the Medically Dependent Children Program (MDCP) Section 1915(c) waiver, live in a community-based intermediate care facility, or participate in an intellectual or developmental disability (I/DD) waiver program.

Medicaid managed care organizations (MCOs) provide acute, behavioral, and long-term services and supports (LTSS) to children in the MDCP program and acute services only to children covered under the other home and community-based services/IDD waivers.

RFP

Texas plans to award contracts to at least two MCOs for each of the 13 service areas (SAs). Each MCO can be awarded up to six SAs.

MCOs will need to describe reimbursement strategies that incentivize high-quality and cost-effective healthcare while controlling spending and reducing ineffective service utilization in their proposals.

MCOs must demonstrate progress toward advancing alternative payment model (APM) initiatives within an APM performance framework. MCOs will need to provide a proposed APM and a means of tracking its effectiveness, including implementation of processes that support and incentivize providers to apply value-based care models and reward high performers.

Evaluation

Technical questions in the proposals are divided into five broad categories, representing a total of 1,800 points. Plans can score up to 2,000 points, including oral presentations (see table below).

Timeline

Proposals are due July 11, with awards expected to be made between December 2025 and February 2026. The contract start date is anticipated to begin between December 2026 and February 2027. Contracts will run for six years with three two-year renewal options.

Current Market

Incumbents CVS/Aetna, Elevance/WellPoint, Blue Cross Blue Shield of Texas, Centene/Superior Health Plan, Community First Health Plan, Cook Children’s Health Plan, Driscoll Children’s Health Plan, Texas Children’s Health Plan, and UnitedHealthcare served 150,000 beneficiaries as of November 2023.

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Texas has an active Medicaid procurement schedule, with key deadlines and additional developments expected in the coming months. HMA experts in Texas are monitoring these activities as the state works to reprocure all its Medicaid managed care contracts. These programs include the State of Texas Access Reform (STAR) and CHIP for traditional Medicaid members, STAR+PLUS for members who are aged and disabled, and STAR Kids for individuals younger than 20 years old with disabilities.

Through HMA’s Information Services, subscribers gain access to detailed information about the Texas and other state RFP landscapes and procurement documents, as well as historical data about plan contracts, enrollment, and financials.

For more information about HMA’s work in Texas and our HMAIS resources, contact our featured experts.

Minnesota’s initiative to build a stronger substance use disorder ecosystem

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This week, our In Focus section spotlights Minnesota’s innovative efforts to develop a comprehensive ecosystem that addresses substance use disorder (SUD).

Overview

Like many states, Minnesota experienced a significant surge in overdose deaths between 2018 and 2021, magnifying disparities in health outcomes linked to SUD and fatalities. For example, in 2021, Native American Minnesotans were 10 times more likely to succumb to a drug overdose than their white counterparts. Similarly, Black Minnesotans faced over three times the risk of dying from a drug overdose compared with White Minnesotans.

How do you create a more effective SUD prevention and treatment system? By fostering collaboration among the people who are directly affected, service providers, advocates, policymakers, and payors so they can learn from one another, offer support, and collectively commit to advancing change.

The Minnesota Department of Human Services (DHS) Behavioral Health Division has enlisted Health Management Associates, Inc. (HMA), to facilitate the Minnesota SUD Community of Practice (CoP), with the goal of creating a culturally responsive system of care. A CoP has three primary elements:

A common identity, purpose, or value that encourages engagement and mutual exploration
A community that establishes a culture of learning and willingness to share, ask, and listen
The cultivation of practices where the community develops, shares, and maintains frameworks, tools, and ideas that are evidence-based and usedii

HMA understands that a well-established CoP, supported by solid processes, tools, resources, and expertise, is essential to realize and sustain a strong CoP foundation for translating knowledge into action.

Many states, including Minnesota, are using the American Society of Addiction Medicine (ASAM) criteria as the guidepost of their efforts to improve the addiction treatment system. To develop a road map on how to implement the ASAM Fourth Edition Levels of Care in Minnesota, HMA convened workgroups to collect firsthand information about services available in participants’ communities, whether they can deliver services at the ASAM level, and the barriers to providing this level of care.

The Approach

To authentically engage the community, HMA has partnered with three community advisors, each representing communities with the most significant disparities. The community advisors are integral to ensuring all CoP efforts incorporate a cultural lens that is responsive to the needs of communities facing health inequities. They do so by amplifying the voices and experiences of individuals in populations disproportionately affected by SUDs. In addition, the community advisors provide tailored facilitation, training, and resources within their respective CoPs to promote culturally specific and responsive practices. This approach seeks to increase treatment engagement and reduce disparities in treatment outcomes.

HMA is working with the CoP to create a report on SUD treatment gaps, a strategic planning and implementation summary, an ASAM implementation road map, a community advocacy capacity-building report, and an overview of culturally specific and responsive models of care.

Connect with Us

HMA brings experience in helping to build systems of care and expertise in assisting states with assessing ASAM levels of care and developing strategies, plans, and training to bolster these efforts. HMA is committed to empowering individuals with lived experience and people underserved by existing systems to play key roles in shaping new systems aimed at fostering equitable care.

The May 2024 edition of HMA’s Podcast, Vital Viewpoints, features a discussion with HMA Principal Debbi Witham about her insights on the ASAM levels and the impact on systems of care. She shares her in-depth understanding of the complexities of SUD and underscores the crucial need for quality measures and sustainable healthcare funding while warning against investing in ineffective systems. Ms. Witham further emphasizes how states might correct course now to ensure equitable distribution of funding and offers insights into the essential steps for coordinating a community response that enhances outcomes.

For more information about HMA’s work in Minnesota and similar projects in other states, contact our featured experts.

May 22, 2024

Minnesota’s Initiative to Build a Stronger Substance Use Disorder Ecosystem

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How Can States Use Opioid Settlement Funds to Truly Transform Substance Use Disorder Treatment?

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Debbi Witham is a principal in the Health Management Associates behavioral health practice group. She shares her in depth understanding of the complexities of substance use disorder (SUD) treatment systems and highlights the critical need for quality measures and sustainable healthcare funding. Debbi emphasizes the importance of not throwing more money into systems that are not producing outcomes, and that states have an opportunity to course correct. The conversation explores topics such as the impact of reimbursement on care delivery, the urgency of addressing addiction within the larger healthcare ecosystem and provides insights into the necessary steps for coordinating a community response that improves outcomes.

HMA can help develop and operate PACE programs

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The vast majority of hospitalizations are among patients 65 years and older due to their comorbid chronic illnesses and their requirement for age-appropriate care management. While the aging population increases, nursing home availability and state funding for home-and community-based services have decreased. As a result, the Centers for Medicare and Medicaid Services (CMS) care model Program of All-Inclusive Care for the Elderly (PACE), has boosted growth.

A program aimed at keeping low-income older adults living in the community and out of nursing homes, PACE has been a safe haven for many. Currently offered in 32 states, the program provides home care, prescriptions, meals, and transportation to participants.

The local PACE centers also bring enrollees together to socialize and receive a variety of medical services. Many PACE providers have reported high satisfaction rates among participants. Further, a 2021 report by the Health and Human Services Department found PACE enrollees were significantly less likely to be hospitalized, use emergency departments, or be referred to nursing homes compared to Medicare Advantage members.

Our clients

HMA works with national and state associations, managed care organizations, delivery systems, federal and state public health programs, as well as interested and existing PACE programs to support the promotion and continued improvement of the PACE model. Having led PACE programs, managed care organizations, delivery systems, and federal and state public health programs, the HMA team of multidisciplinary experts is skilled in PACE program design, strategy, growth, and operations. We have direct experience working in and with PACE organizations in policy, application processes, and operational readiness, day-to-day operations, and audit preparation and response.

How HMA can help:

HMA’s team can help organizations strategically identify, plan, and implement the development of a new PACE. HMA’s experts are experienced in leading an organization through the strategic planning processes, educating and orientating an interested sponsor organization in their PACE market of interest, and all of the variables, including the desired PACE service areas, federal and state waivers and licensure requirements, and restrictions, the state, and federal application timelines and processes, and pre- and post-implementation processes and as well as ongoing business operations.

The state and federal application process involves multiple steps and can feel daunting. HMA is well versed in these processes and has assisted many PACE programs across the county complete these applications. HMA will work with you side by side to navigate all of the application requirements including completing and submitting the Notification of Intent to Apply (NOIA), Navigating and Working with State Agencies, and completing the CMS Application.

Although many states operate in similar ways, there are nuances that make each a bit different. HMA consultants have worked with many state agencies across the country, both in states with PACE programs and states without. Whether your state(s) have existing PACE programs, or you are looking to be the first one in the state, HMA has the experience and expertise to help navigate those state-by-state differences. Our PACE team includes previous state Medicaid and federal leaders, providing valuable contacts and knowledge within the state systems.

Achieving performance targets requires advanced systems of care delivery and agile information technology tools for real-time monitoring and managing populations and participants. Effective operating and reporting systems are critical to the success of PACE organizations’ operations. HMA has evaluated system requirements for PACE and can help you identify, select, and implement operating processes and systems. To optimize operations efficiency, we also offer solutions for tracking and managing revenue, participant care costs, productivity, and downstream payments. We can also work to implement telehealth and remote patient monitoring technologies.

Contracting with specialty and ancillary healthcare providers along the continuum of care will be increasingly critical for managing participant care, outcomes, and costs under the PACE model. We can assess the scope and effectiveness of current contractual relationships, including contract language review, reimbursement, reporting requirements, and other elements critical to compliance and operational compliance and success, across a wide range of healthcare and social service providers.

HMA has extensive policy experience with the legislative requirements that govern PACE at both the state and federal level. We can help evaluate the impact of new requirements or legislation to inform your position with regulators. In addition, HMA team members have existing relationships with the National PACE Association as well as various state PACE Associations.

HMA experts are experienced and are well versed in providing data analytic services to both prospective and fully operational PACE programs. Using a full analytics suite, our experts can help with Part D needs including Bid preparation and Part D Reconciliations. Additionally, we can assist organizations with risk adjustment operations and support, forecasting, market analysis, vendor auditing, and strategic support.

HMA is available to help organizations develop PACE capabilities from concept to implementation and beyond, including post-implementation and ongoing PACE operations.

Contact our experts: