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CMS proposes major changes to Medicare Advantage and Part D for 2025

This week, our In Focus section reviews a wide-ranging proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) on November 6, 2023. The rule would update various policies governing Medicare Advantage (MA, or Part C), the Medicare Prescription Drug Benefit (Part D), Medicare cost plans and Programs of All-Inclusive Care for the Elderly. These proposed policy reforms would implement changes related to Star Ratings, marketing and communications, agent/broker compensation, health equity, dual eligible special needs plans (D-SNPs), utilization management, network adequacy, and other programmatic areas. The proposals reflect the agency’s continuing focus on increasing program transparency, improving health equity, reducing the cost of care for Medicare beneficiaries, and expanding access to behavioral health services.

MA and Part D stakeholders are encouraged to provide CMS with feedback and analysis regarding the potential impact of these changes. Comments on the proposed rule are due by January 5, 2024. The final rule would take effect in contract year 2025.

Improving Access to Behavioral Health Care Providers

CMS proposes regulatory changes intended to improve access to behavioral healthcare by adding certain provider specialties to the MA network adequacy standards as follows.

CMS proposes to add a new facility-specialty type to the existing list of facility-specialty types evaluated as part of its plan network adequacy reviews. The new facility-specialty type, outpatient behavioral health, would be included in network adequacy evaluations, including marriage and family therapists (MFTs), mental health counselors (MHCs), opioid treatment programs, community mental health centers, and/or other behavioral health and addiction medicine specialists and facilities.
MFTs and MHCs will be eligible to enroll in Medicare and start billing for services beginning January 1, 2024, because of the new statutory benefit category established in the Consolidated Appropriations Act (CAA) of 2023. CMS proposes to make corresponding changes to its network adequacy requirements for MA organizations.
For purposes of the network adequacy requirements, the new facility-specialty type would be evaluated using time and distance and minimum number standards in the proposed regulation.

Increased Transparency for Special Supplemental Benefits for the Chronically Ill

In 2018, Congress enacted new authorities pertaining to supplemental benefits for MA members with chronic health conditions. CMS refers to this category of benefits as Special Supplemental Benefits for the Chronically Ill (SSBCI). These services are available only to enrollees with ongoing conditions and who meet certain criteria established in the statute. In contrast to the general policy that MA benefits should be offered uniformly to all plan members, MA plans may offer SSBCI tailored to a qualifying individual’s specific medical diagnosis and needs.

Supplemental benefits, including SSBCI, are generally funded with MA plan rebate dollars. CMS notes that the number of MA plans that offer SSBCI—and the number and scope of SSBCI that individual plans provide—has increased since their introduction in 2019.

Under the proposed rule:

MA organizations would be required to demonstrate, through relevant and acceptable evidence, that an item or service offered as SSBCI has a reasonable likelihood of improving or maintaining the health or overall function of chronically ill beneficiaries. MA plans also must, by the date on which they submit a bid to CMS, include a bibliography of evidence supporting this position. According to CMS, this expectation would shift the burden of proof from the agency to MA organizations, requiring plans to demonstrate compliance with this standard and that SSBCI items and services are evidence-based.
MA plans must follow their written policies based on objective criteria for determining enrollee eligibility for SSBCI when making determinations.
Require that MA plans document denials of SSBCI eligibility rather than its approvals.
CMS would codify its authority to review and deny approval of an MA organization’s bid if the plan cannot demonstrate, through relevant and acceptable evidence, that its proposed SSBCI has a reasonable expectation of improving or maintaining the health or overall function of a chronically ill enrollee.
CMS also would codify its authority to review SSBCI offerings annually for compliance and in light of the available evidence.

According to CMS, these proposals, if implemented, would better ensure that the benefits offered as SSBCI are reasonably expected to positively affect the health and well-being of chronically ill beneficiaries and guard against the use of MA rebate dollars for SSBCI that unsubstantiated.

In addition, CMS is proposing new policies to improve transparency regarding SSBCI so that beneficiaries are aware that SSBCI are only available to enrollees who meet the eligibility criteria. More specifically, CMS proposes to:

Modify the current requirements for the SSBCI disclaimer that MA organizations must use whenever SSBCI are mentioned. The SSBCI disclaimer would have to list the relevant chronic condition(s) that qualify for the benefits that MA organizations offer.
Establish specific font and reading pace parameters for the SSBCI disclaimer in print, television, online, social media, radio, other voice-based ads, and outdoor advertising, including billboards. Finally, it would clarify that MA organizations must include the disclaimer in all marketing and communications materials that mention SSBCI.

Requiring Mid-Year Enrollee Notification of Available Supplemental Benefits

As noted previously, over the past several years, the number of MA plans offering supplemental benefits has increased. The benefits offered are broader in scope and variety, and an increasing amount of MA rebate dollars are being directed toward these benefits. At the same time, plans have reported that the number of enrollees who use many of these benefits is low.

CMS proposes requiring MA plans to notify enrollees mid-year of the unused supplemental benefits available to them. The notice would list any supplemental benefits that a beneficiary does not use during the first six months of the year (January 1−June 30).
At present, MA plans are not required to send any communication specific to an enrollee’s usage of supplemental benefits. This policy is intended to educate enrollees on their access to supplemental benefits and encourage greater use of these benefits.

Enhancing “Guardrails” for Agent and Broker Compensation

For many years, CMS has set upper limits on the compensation that agents and brokers can receive for enrolling Medicare beneficiaries in MA and Part D plans. CMS believes that many MA and prescription drug payment plans, as well as third-party entities with which they contract, make structured payments to agents and brokers that circumvent these compensation caps.

In this regulation, CMS proposes to generally prohibit contract terms between MA organizations and agents, brokers, or other third party marketing organizations (TPMOs) that may interfere with the agent’s or broker’s ability to objectively assess and recommend the plan that best-suited to a beneficiary’s healthcare needs; to set a single reimbursement rate for all plans; to revise the scope of items and services included within agent and broker compensation; and to eliminate the regulatory framework that currently allows for separate payment to agents and brokers for administrative services.
The agency would make conforming changes to the Part D agent broker compensation rules.

Requiring an Annual Health Equity Analysis of Utilization Management Policies and Procedures

CMS proposes several regulatory changes to the composition and responsibilities of an MA organization’s utilization management (UM) committee.

The new rules would require that a member of the UM committee have expertise in health equity and that the UM committee conduct an annual health equity analysis of the use of prior authorization.
The proposed analysis would examine the impact of prior authorization on enrollees with one or both of the following social risk factors (SRFs): receipt of the low-income subsidy, dual eligibility for Medicare and Medicaid (LIS/DE), or a disability.
The proposed analysis must compare metrics related to the use of prior authorization for enrollees with the specified SRFs with enrollees without the specified SRFs. The results of the analysis must be made publicly available on the MA organization’s website in an easily accessed manner.

Enhancing Enrollees’ Right to Appeal an MA Plan’s Decision to Terminate Coverage for Non-Hospital Provider Services

Beneficiaries enrolled in traditional Medicare and MA plans have the right to a fast-track appeal by an independent review entity (IRE) when their covered skilled nursing facility (SNF), home health agency (HHA), or comprehensive outpatient rehabilitation facility (CORF) services are being terminated. At present, quality improvement organizations (QIOs) function as IREs and conduct these reviews.

Furthermore, MA enrollees do not have the same access to QIO review of a fast-track appeal as traditional Medicare beneficiaries.

CMS proposes to:

Require that QIOs, instead of MA plans, review untimely fast-track appeals of an MA plan’s decision to terminate HHA, CORF, or SNF services
Fully eliminate the provision requiring the forfeiture of an enrollee’s right to appeal a termination of services decision when they leave the facility

According to CMS, these proposals would align MA regulations with the parallel reviews available to beneficiaries in traditional Medicare and expand the rights of MA beneficiaries to access the fast-track appeals process.

Increasing the Percentage of Dually Eligible Managed Care Enrollees Who Receive Medicare and Medicaid Services from the Same Organization

In the proposed rule, CMS expresses concern that a significant number of dually eligible enrollees receive Medicare services through one managed care entity and Medicaid services through another (misaligned enrollment), rather than from one organization (aligned enrollment. The proposed rule states that in the long run, “for dually eligible individuals who are in Medicare and Medicaid managed care, we believe that we should continue to drive toward increasing aligned enrollment until it is the normative, if not only, managed care enrollment scenario…. For dually eligible individuals that elect MA plans, we are focused on increasing enrollment in integrated D-SNPs: fully integrated dual eligible special needs plans (FIDE SNPs), highly integrated dual eligible special needs plans (HIDE SNPs), and applicable integrated plans (AIPs) [pages 286-287].”

To move in this direction, CMS offers several interconnected proposals as follows:

Replace the current quarterly special enrollment period (SEP) with a monthly SEP for dually eligible individuals and others enrolled in the Part D low-income subsidy program to elect a standalone PDP
Create a new integrated care SEP to allow dually eligible individuals to elect an integrated D-SNP on a monthly basis
Limit enrollment in certain D-SNPs to individuals who are also enrolled in an affiliated Medicaid managed care organization (MCO)
Limit the number of D-SNP plan benefit packages an MA organization, its parent organization, or an entity that shares a parent company with the MA organization, can offer in the same service area as an affiliated Medicaid MCO

According to CMS, these initiatives would increase the percentage of dually eligible MA enrollees who are in plans that are also contracted to cover Medicaid benefits, thereby expanding access to integrated materials, unified appeal processes across Medicare and Medicaid, and continued Medicare services during an appeal.

Impose New Contracting Standards for Dual Eligible Special Needs Plan (D-SNP) Look-Alikes

Under existing regulations, CMS does not contract with and will not renew the contract of a D-SNP look-alike; that is, an MA plan that is not a SNP but in which dually eligible enrollees account for 80 percent or more of total enrollment. CMS proposes to lower the D-SNP look-alike threshold from 80 percent to 70 percent in 2025 and to 60 percent in 2026. CMS states that this proposal is intended to help address the continued proliferation of MA plans that serve high percentages of dually eligible individuals without meeting D-SNP requirements.

November 15, 2023

CMS Proposes Significant Changes to Medicare Advantage and Medicare Prescription Drug Benefit Programs for 2025

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November is National Adoption Month

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When Love is Not Enough to Preserve a Forever Family for a Child

Families formed by adoption face unique challenges in their lifelong journey as adoptees, parents, and siblings. Adoption-competent mental health is a necessary resource for adoptive families. This November, we are honoring adoption as a vital permanency strategy and the importance of forever families in the lives of children and youth who need this sense of permanency, security, and wellbeing.

The Children’s Bureau, part of the U.S. Department of Health and Human Services Office of the Administration for Children and Families (ACF) created National Adoption month to increase national awareness of adoption issues, encourage the development of permanent relationships, and bring attention to the need for adoptive families to provide placement for teens in the U.S. foster care system. The theme for 2023, “Empowering Youth: Finding Points of Connection,” focuses on ways to provide opportunities and services that connect youth to their identity—including culture, background, interests, and ambitions – to support meaningful permanent relationships with adults.

Adoption Statistics

The following are key data from the fiscal year 2021 report for the Adoption and Foster Care Analysis and Reporting System.

In the U.S., as of September 30, 2021, there were 114,000 children and youth waiting to be adopted who were at risk of aging out of foster care without permanent family connections.

More than one in five children waiting for adoption were 13–17 years old.
The average age of all children waiting to be adopted was 7.5 years old.
The average time in care for all children waiting to be adopted was 33.7 months.
The average time in care for children waiting to be adopted after termination of parental rights was 19 months.

The National Council for Adoption reports an 18 percent decrease in adoptions from FY19-FY21, with over 19,000 children who aged out of foster care without a permanent family. There has been a 24 percent decrease in domestic adoptions from 2019-2020 and 93 percent decline in intercountry adoptions since peaking in 2004.^[1] . These data points reflect the urgency of revitalizing adoption as an important tool for the wellbeing of children who need permanent loving families.

Recognizing that adoption is just the beginning of the family’s journey and the fact that adoptive families need special attention, especially when the children who have been adopted have suffered the trauma of entering the child welfare system, mental health treatment and resources are critical to the wellbeing of these families and the children in them.

Importance of Identity

Research has shown that strong cultural identity can contribute to mental health resilience, higher levels of social well-being, and improved coping skills, greater self-esteem, higher education levels, better psychological adjustment, and improved coping abilities.^[2] But many youth in foster care often have lower cultural identity strength than those who did not experience foster care. This can lead to higher levels of loneliness and depression, lower self-esteem, and difficult psychological adjustments that in turn affect coping skills and learning.^[3]

In her book You Should be Grateful, Angela Tucker offers many practical insights and tools aimed at nurturing identity and helping transracial families and adoptees to center around the cultural norms and experiences of the adoptees themselves.^[4]

A Changing Landscape

Many states now have safe-haven laws where parents can drop off their babies without penalty at hospitals, fire stations or police department if they are not able to care for them knowing their babies will be cared for and placed in families through the child welfare system. At the same time there are many children and youth who languish in foster care waiting for a ‘forever family’ to adopt them. Thousands of teens in foster care are looking for the love, support, and encouragement that families provide throughout their lives—not just until they turn 18. Youth who were adopted from the foster care system when they are 16 or older may be able to access Education and Training Vouchers (ETV) of up to $5,000 per year. Those who were adopted from foster care when they are 13 or older are more likely to qualify for federal financial student aid because they do not have to count family income when applying.^[5]

When it comes to medical and mental health benefits, qualifying families may receive federally funded monthly maintenance payments, and other support, often until a child turns 18 or 21, depending on the state where they live, and medical assistance until age 26 if they were in foster care at a certain age depending on the state. Recognizing the need for adoption competent mental health, the Federal Administration for Children and Families has awarded the Center for Adoption Support and Education the grant to build a national Center to Support Mental Health Services in the Child Welfare System.^[6]

The recent Biden-Harris regulations strengthen services and supports for children and families in the child welfare system. These regulations require additional support for kinship families, and protections for LGBTQI+ youth and expansion of access to legal services for children and families entering the child welfare system. Congress could use the momentum from these regulations to make the Adoption Tax Credit fully refundable and extend it to legal guardians to assist with the financial resources of raising children.

The recent Supreme Court Dobbs decision will likely impact adoption trends, but that trend is still evolving and will need to be monitored before conclusions can be drawn.

How HMA Can Help

HMA assists organizations working in child welfare and adoption, and grounds our work in human-centered design, lived expertise, and change management and leadership principles in state and county program development. We can help support organizations working with children and youth in foster care or with adoption agencies by:

Providing technical assistance to state and local government, and community-based organizations
Developing system redesign and strategic planning
Facilitating stakeholder engagement
Implementing workforce and leadership development strategies

Visit the ACF website to learn more about National Adoption Month and find tools and resources to educate yourself and your community about how we can achieve better outcomes for youth in foster care.

If you have questions on how HMA can support your efforts in Child and Family Wellbeing, please contact our experts below.

[1] Adoption by the Numbers – National Council for Adoption (adoptioncouncil.org)

[2] Anderson, M., & L.O. Linares. “The Role of Cultural Dissimilarity Factors on Child Adjustment Following Foster Placement.” Children and Youth Services Review 34(4), 2012, 597-601.

[3] Children on AdoptUSKids – AdoptUSKids

[4] “You Should Be Grateful” Stories of Race, Identity and Transracial Adoption — Angela Tucker

[5] Teens need families – AdoptUSKids

[6] Adoption Support Center & Services | C.A.S.E

23rd annual Kaiser Family Foundation state Medicaid budget survey released

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

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

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

Preventing Type 2 Diabetes in correctional settings

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Today is World Diabetes Day, a day created to keep the importance of diabetes prevention and management in the public and political spotlight. One in every four U.S. healthcare dollars is spent on individuals diagnosed with diabetes, and more than half of that expenditure is directly attributable to diabetes. An estimated 37 million people in the U.S. have type 2 diabetes, and another 96 million (more than one out of every three people) have prediabetes, meaning they are at risk of developing type 2 diabetes.^[i]

The urgency of preventing and managing type 2 diabetes is as applicable in correctional facilities as it is in populations in the community. Especially as there is an overrepresentation of populations that have a higher burden of prediabetes and type 2 diabetes in correctional facilities including individuals who:

are older,
have serious mental illness,
have poorer physical and mental health than counterparts in the community,
are above recommended body weight,
have reduced access to health insurance, and
are from racial and ethnic minority groups.

Administrators of correctional facilities are responsible for the healthcare costs for individuals in their custody who have type 2 diabetes, and the cost of managing this condition in these settings is particularly high.

Fortunately, type 2 diabetes is preventable. One evidence-based and effective strategy for preventing type 2 diabetes is the National Diabetes Prevention Program (National DPP) lifestyle change program. This program is a year-long evidence-based program delivered over 22 sessions using a CDC-approved curriculum. Program participants are expected to lose 5−7 percent of their weight and engage in physical activity for 150 minutes each week.^[ii]The National DPP lifestyle change program can be offered in person, online, through distance learning, or a combined approach and is led by a trained lifestyle coach.^[iii]The program has been proven to reduce the risk of individuals with prediabetes developing type 2 diabetes by 58 percent (71 percent for people older than age 60).^[iv] Projections in other settings that compare the cost of the National DPP lifestyle change program to the costs of treating type 2 diabetes show that the program is cost-effective.^[v]

HMA recently published a white paper, “Implementing the National Diabetes Prevention Program Lifestyle Change Program in Correctional Settings,” describing how the National DPP lifestyle change program can be used to achieve cost savings and better health for people at risk of developing type 2 diabetes in correctional settings. There have been two successful implementations of the National DPP lifestyle change program to date. The first is described in the study “Prevention in Prison: The Diabetes Prevention Program in a Correctional Setting,” where 47 people from a federal correctional facility participated in a modified version of the National DPP lifestyle change program. Participants who completed the program demonstrated significant reductions in their body mass index and A1C levels. Weight loss in the study was similar to what participants of the National DPP lifestyle change program in the community typically achieve.^[vi]

The second successful implementation is with the Wisconsin Department of Corrections (DOC), which has successfully offered the National DPP lifestyle change program in three correctional facilities. To date, 19 Wisconsin DOC staff have trained as lifestyle coaches and 131 individuals across the three facilities have participated in the program. The Wisconsin National DPP state quality specialist shared the following cohort data in 2018−2019:

16 percent of the participants were Black and 84 percent were White
100 percent of participants were male, with an average age of 45.6 years
58 percent of participants were eligible for the program based on a blood test
100 percent of participants attended 14 or more sessions in months one through six (typically, 16 sessions take place in the first six months)
71 percent of participants attended six or more sessions in months 7−12 (typically, six sessions take place in the second six months)

Overall average weight loss was 8.3 percent during the year-long cohort, well above the National DPP lifestyle change program goal of 5−7 percent weight loss. The response from program participants was positive. Wisconsin DOC plans to scale the National DPP lifestyle change program to all appropriate facilities in the future.

For additional information, consult the white paper “Implementing the National Diabetes Prevention Program Lifestyle Change Program in Correctional Settings.”

If you would like to learn more about how HMA can help your organization implement a DPP program, contact our experts below.

[i] Centers for Disease Control and Prevention. The Facts, Stats, and Impacts of Diabetes. Available at: https://www.cdc.gov/diabetes/data/statistics-report/index.html. Accessed April 18, 2023.

[ii] Centers for Disease Control and Prevention. Research Behind the National DPP. Available at: https://www.cdc.gov/diabetes/prevention/research-behind-ndpp.htm. Accessed on June 15, 2023.

[iii] National DPP Coverage Toolkit. National DPP Coverage Toolkit: Delivery Options. Available at: https://coveragetoolkit.org/medicaid-agencies/medicaid-agencies-delivery/program-delivery-options/. Accessed January 18, 2023.

[iv]Centers for Disease Control and Prevention. National Diabetes Prevention Program. Available at: https://www.cdc.gov/diabetes/prevention/index.html. Accessed December 19, 2022.

[v]National DPP Coverage Toolkit. Cost & Value. Available at: https://coveragetoolkit.org/cost-value-elements/. Accessed June 15, 2023.

[vi]Fine A, Gallaway SM, Dukate A. Prevention in Prison: The Diabetes Prevention Program in a Correctional Setting. Diabetes Spectrum. 2019;32(4):331-337.

Unwinding Medicaid Data: A Real-Time 50-State Assessment as Redeterminations Approach the Midpoint

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The Medicaid program is currently undergoing the largest change in enrollment since the program’s inception in 1965. With millions of individuals transitioning out of the program, a key issue is assessing how redeterminations are going relative to expectations in “real-time.” An assessment is especially relevant since timely and systematic tracking is cumbersome and state approaches vary significantly. In this piece, we review why the current changes to Medicaid are so unprecedented, how enrollment changes compare to expectations at a state level, and what lessons should be learned from this experience to improve coverage for eligible individuals in the future.

Contributions to the report were also made by:

Michael Cohen – Wakely Consulting Group, an HMA Company
Katherine Hempstead – Robert Wood Johnson Foundation
Daniel Nemet – Edrington Health Consulting, an HMA Company

HMA Information Services names Andrea Maresca as Managing Director

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Health Management Associates has named Andrea Maresca as Managing Director of HMA Information Services, one of the nation’s leading subscription-based repositories of data and public documents on publicly sponsored healthcare programs.

Maresca replaces HMAIS founding publisher Carl Mercurio, who will stay on as Senior Advisor until the end of the year when he retires after nearly a decade with HMA and 37 years in business information publishing.

Maresca has more than two decades of healthcare experience, having served in private and public organizations including the Centers for Medicare & Medicaid Services (CMS) and the National Association of Medicaid Directors (NAMD). She joined HMA in 2021.

CMS issues final 2024 provider payment rules

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This week, our In Focus section reviews several calendar year (CY) 2024 Medicare payment final rules that the Centers for Medicare & Medicaid Services (CMS) issued in recent weeks, including those pertaining to:

The Physician Fee Schedule and Other Changes to Medicare Part B Policies
The Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) reimbursement
The Home Health Prospective Payment System Rate Update, Quality Reporting Program Requirements, and Value-Based Purchasing Expanded Model Requirements
The End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)

CMS also announced the OPPS Rule for 340B-Acquired Drug Payment Policy in response to court-invalidated payment rates and on November 6, 2023, released the 2025 Contract Year Policy and Technical Changes to Medicare Advantage. The latter regulation addresses guardrails for brokers, behavioral health expansions, and several dual eligible-related policies. We will analyze these provisions in next week’s In Focus.

These final rules set the payment rates and other Medicare payment policies for services that applicable providers provide under the fee-for-service Medicare program and take effect January 1, 2024. Additionally, the final rules, particularly the Physician Fee Schedule, are expected to further inform Congress’ discussions and, ultimately, any action on healthcare policies in a possible year-end legislative package.

For example, the Senate Finance Committee has released draft language that would mitigate the projected physician payment reduction, among other policy changes. Provider organizations and interested stakeholders will want to analyze the impact of the final policies across the rules, including new codes, payment rates, and opportunities to participate in accountable care organizations (ACOs).

Overall, Health Management Associates (HMA) notes several trends across these three Medicare payment regulations:

Health equity remains a significant focus of CMS under the Biden Administration.
The agency continues to expand its coverage of behavioral health services under Medicare and enhance payment for and access to these services.
Medicare is moving toward incrementally supporting care delivered in accordance with beneficiaries’ preferences, such as moving away from reimbursing largely for in-person services and toward supporting telehealth services.
CMS is creating pathways for reimbursement for a broader range of clinicians and caregivers who are addressing Medicare beneficiaries’ needs.
CMS continues its efforts to improve hospital price transparency with policies aimed at encouraging providers to publicly report data.

2024 Medicare Physician Fee Schedule and Other Part B Payment Policies Final Rule

On November 2, 2023, CMS released the final rule for the Medicare Physician Fee Schedule (MPFS) for CY 2024. CMS finalized an overall 1.25 percent decrease in MPFS payment rates from 2023 to 2024. The final 2024 PFS conversion factor remains largely unchanged ($32.74) from the proposed rule ($32.75) but will result in a 3 percent decrease from the CY 2023 conversion factor ($33.89). Among the most important policy changes in the final rule is the establishment of a new add-on code (G2211) for complex care provided in the primary care setting.

In addition, CMS will begin allowing additional behavioral health providers to participate in Medicare (described further below) and make numerous telehealth policy changes mandated in the Consolidated Appropriations Act of 2023. CMS also finalized changes to the Medicare Shared Savings Program (MSSP), which CMS estimates will increase ACO participation in MSSP by roughly 10−20 percent.

CMS finalized several policies to address health equity, including coding and payment changes focused on providing access to new services and addressing Medicare beneficiaries’ unmet health-related social needs (HRSNs). The final changes affect mental health and substance use disorder (SUD) treatment providers, address payment accuracy for primary care in the context of whole-person care, and expand access to dental care for cancer patients. The changes for 2024 include:

Caregiver training: Medicare will now pay practitioners who train caregivers to support patients with certain diseases (e.g., dementia) in carrying out a treatment plan. Services must be furnished by a physician or a non-physician practitioner or therapist.
Community health integration (CHI) services: The final rule includes separate coding and payment for CHI services, including person-centered planning, health system coordination, and facilitating access to community-based resources to address unmet social needs that interfere with a practitioner’s diagnosis and treatment plan.
Principal illness navigation (PIN) services: The final coding and payment rules for PIN services describe care navigation services for individuals with high-risk conditions. CMS included a subset of PIN services to support individuals with severe mental illness and SUD through use of auxiliary personnel (i.e., peer support specialists). The definition of a serious, high-risk condition is dependent on clinical judgment. CMS will monitor utilization across beneficiaries and specialties to ascertain how PIN services are best used going forward.
Social determinants of health risk assessments: This evaluation can be provided and billed as an add-on service to an annual wellness visit or with an evaluation and management or behavioral health visit.
Marriage and family therapists and mental health counselors, including eligible addiction, alcohol, or drug counselors who meet qualification requirements for mental health counselors: These types of providers may now enroll in Medicare and bill for their services starting January 1, 2024. The rule expands coverage and increases payment for crisis care (including mobile units), SUD treatment, and psychotherapy as well as psychotherapy performed in conjunction with an office visit and for health behavior assessment and intervention services.

2024 Hospital OPPS and ASC Final Rule

On November 2, 2023, CMS released a final rule for hospital OPPS and ASCs. The following policies are included in the final rule:

A 3.1 percent increase in payment rates for hospitals and ASCs that meet certain quality reporting requirements. This amount is based on the projected 3.3 percent increase in the hospital market basket and is consistent with the 2024 payment increase for inpatient services.
No services will be removed from the inpatient-only (IPO) list, but 10 procedures will be added to the IPO.
The list of ASC-covered surgical procedures will be updated to include 37 additional surgical procedures.
Drugs and biologicals acquired through the 340B program will have the same payment rate as those not acquired under the 340B program—the average sales price plus 6 percent.
CMS will pay for intensive outpatient program services. The final rule includes the scope of benefits, physician certification requirements, coding and billing, and payment rates.

340B Rule

Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs or biologicals from manufacturers at discounted prices. Until 2018, the Medicare payment rate for Part B-covered outpatient drugs provided in outpatient hospitals was generally the average sales price (ASP) plus 6 percent. From 2018 through September 2022, CMS paid for these drugs at ASP (22.5 percent). After extensive litigation and a Supreme Court ruling, CMS returned payment for 340B drugs to ASP plus 6 percent in late 2022, and payment has continued at that level since. Consequently, payment for other services was reduced slightly more than 3 percent in 2023 to meet statutory budget neutrality requirements.

In this rule, CMS finalizes a remedy for 2018−22 payments in light of the court rulings. The agency will provide lump sum payments to 340B hospitals to cover the difference between ASP + 6 percent and ASP – 22.5 percent. Lump sum payments to 340B hospitals will result in roughly $9 billion in payouts to these facilities, in addition to the $1.5 billion they already have received through resubmitted claims. CMS had proposed that beginning in 2025, non-drug OPPS payments would be reduced by 0.5 percent to recover the budget neutrality-based payment increases resulting from the rescinded 340B cuts. According to CMS, hospitals received approximately $7.8 billion in additional spending on non-drug items and services because of budget neutrality. Earlier this year, CMS proposed a 0.5 percent pay cut to all hospitals, which would be in place for 16 years to fully adjust for the payment changes. CMS is finalizing the budget neutrality adjustment but will defer implementing these cuts to 2026 based on public comments about hospital budgetary pressures.

CY 2024 Home Health Prospective Payment System Final Rule

On November 1, 2023, CMS issued the CY 2024 Home Health Prospective Payment System (HH PPS) Rate Update final rule, which informs Medicare payment policies and rates for home health agencies (HHAs). This rule includes routine revisions to the Medicare Home Health PPS payment rates for CY 2024 in accordance with existing statutory and regulatory requirements. According to CMS estimates, Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, or $140 million, from CY 2023.

However, CMS also finalized a permanent prospective payment adjustment to the CY 2024 home health 30-day period payment rate that reduces the update. This adjustment is intended to account for any increases or decreases in aggregate expenditures that result from the implementation of the Patient-Driven Groupings Model (PDGM) and 30-day unit of payment as required in the Bipartisan Budget Act of 2018. The finalized −2.890 percent adjustment is half the total projected adjustment of negative 5.779 percent. As a result, CMS estimates that Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, rather than the 2.2 percent decrease as initially proposed.

CMS’ decision to implement only half of the permanent prospective payment adjustment in CY 2024 was in response to concerns from public commenters about the magnitude of implementing the proposed large single-year payment reduction. However, CMS also maintains that it will have to account for the remaining permanent adjustment it chose not to apply in CY 2024 and make other potential adjustments to the base payment rate in future rulemaking.

Other Proposals

CMS also is finalizing proposals to:

Rebase and revise the home health market basket to adopt a 2021-based home health market basket, including proposed changes to the market basket cost weights and price proxies
Reduce the labor-related share of the market basket to 74.9 percent based on the 2021-based home health market basket compensation cost weight (down from 76.1 percent)
Recalibrate the PDGM case-mix weights using CY 2022 data
Update the low utilization payment adjustment thresholds, functional impairment levels, and comorbidity adjustment subgroups for CY 2024
Codify statutory requirements for disposable negative pressure wound therapy
Establish regulations to implement payment for items and services under two new benefits: lymphedema compression treatment items and home intravenous immune globulin
Establish several enrollment provisions for hospices and other provider types and create a new informal dispute resolution process for hospice programs and a special focus program to provide enhanced oversight of the poorest-performing hospices
Implement various changes to the Home Health Quality Reporting Program and Home Health Value-Based Purchasing Model

2024 End-Stage Renal Disease Prospective Payment System Final Rule

On October 27, 2023, CMS issued a final rule that updates payment rates and policies under ESRD PPS for renal dialysis services furnished to Medicare beneficiaries on or after January 1, 2024. This rule also updates the acute kidney injury (AKI) dialysis payment rate for renal dialysis services that ESRD facilities furnish in CY 2024.

For CY 2024, CMS will increase the ESRD PPS base rate to $271.02, upping total payments to ESRD facilities by approximately 2.1 percent. The CY 2024 ESRD PPS final rule also includes several changes related to ESRD PPS payment policies. First, the rule includes a payment adjustment that will increase payment for certain new renal dialysis drugs and biological products after the transitional drug add-on payment adjustment period ends. According to CMS, the increase will ensure payment is not a barrier to accessing innovative treatments for Medicare ESRD beneficiaries.

For more details about the policies described herein, contact our experts below.

November 8, 2023

CMS Issues Final 2024 Provider Payment Rules

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New experts join HMA in September 2023

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HMA is pleased to welcome new experts to our family of companies in September 2023.

Dan Castillo – Managing Principal
HMA

Dan Castillo is a seasoned healthcare executive with over 20 years of experience in health administration. He specializes in health systems strategy, hospital leadership, medical group management, population health and academic medicine.

Laura Brown – Director
Leavitt Partners

Laura Brown is a food and drug attorney who leverages her 10-plus years of legal analytic experience to provide federal policy counsel and analysis to clients and support multi-sector alliances. Read more about Laura.

Teresa Garate – Principal
HMA

Teresa Garate is an experienced and innovative leader with over 30 years of experience leading systems change, innovation and growth in the complex environments of public health, healthcare, public education, higher education and government.

Falon Owen – Principal
HMA

Falon Owen is a healthcare strategist with over 15 years of experience in product development and operations.

Kathleen Cahill – Associate Principal
HMA

Kathleen Cahill is a solutions-driven C-Suite executive with more than 40 years of experience in healthcare operations, working for entities and organizations across the healthcare industry.

Susan Arcidiacono – Principal
HMA

Susan Arcidiacono is an accomplished health plan executive with more than 25 years of experience in Medi-Cal managed care and Medicare D-SNP.

Dena Hasan – Associate Principal
HMA

Dena Hasan is a forward-thinking executive with over 20 years of experience in public and private sector healthcare and social services.

Jeff Wittcoff – Consulting Actuary II
Wakely

Jeff Wittcoff has expertise is in provider contracting and assessment, healthcare program evaluation, digital care initiatives, trend forecasting, and actuarial applications of healthcare modeling. Read more about Jeff.

Patricia Miles – Senior Consultant
HMA

Patricia Miles is a performance-driven managed care leader with over 25 years of experience in the Medicaid and Medicare markets.

Patrick Meadors – Senior Consultant
HMA

Patrick Meadors is a licensed marriage and family therapist with over 15 years of clinical behavioral health and integrated care experience.

Dan Rhodes – Principal
HMA

Dan Rhodes is a results-driven healthcare operations and compliance executive with over 25 years of successful leadership experience with blue-chip companies.

CalAIM Justice-Involved Reentry Initiative Planning and Implementation Services

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Organizations are facing extensive challenges to improve health outcomes and healthcare quality through broad delivery, payment, and program reforms in CalAIM. With proven expertise in CalAIM policy, operations, and implementation, Health Management Associates (HMA) can help you with identifying needs, developing a strategy, and implementing those plans. We actively support clients across California implementing the CalAIM Section 1115 Waiver Demonstration Justice-Involved Initiative. Our team of Medi-Cal, managed care, and correctional healthcare experts – including physical and behavioral health clinicians, healthcare administrators, and former correctional leaders – are uniquely positioned to help clients navigate this delivery system transformation.

California is the first state in the nation to receive approval from the Centers for Medicare and Medicaid Services (CMS) to provide detained and sentenced individuals with 90-day pre-release healthcare services and behavioral health linkages. Through PATH JI grant funding, HMA is helping clients build administrative capacity, information technology, pre-release services, care management models, and Medi-Cal claiming infrastructure to meet their unique needs and leverage this significant opportunity. Our planning and implementation support spans the breadth of the CalAIM Justice-Involved Initiative including: the pre-release Medi-Cal application process, 90-day pre-release services, behavioral health links, Enhanced Care Management (ECM), and Community Supports services.

That’s why sheriffs’ departments, probation authorities, correctional health services agencies, behavioral health agencies, managed care plans, healthcare providers and community-based organizations see HMA as a trusted partner in helping to develop and implement 1115 waiver healthcare programs.

We provide:

Project management

State policy monitoring and compliance tracking

Current and future state process mapping

Partner and stakeholder collaboration and meeting facilitation

Process and quality improvement recommendations

Protocol development

Implementation plan and readiness assessment drafting

Training

Electronic health record recommendations

Contact our experts:

Rebekah Kharrazi

Associate Principal

Rebekah Kharrazi is an accomplished public health professional with a broad range of expertise and skills to help clients navigate … Read more

Julie White

Principal

With more than 25 years of experience in comprehensive healthcare and justice-related service delivery, Julie White has developed policy, strategic … Read more

Health Management Associates Expands Footprint in North Carolina, New Orleans

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Health Management Associates (HMA), a leading independent, national healthcare consulting firm today announced that it is establishing offices in North Carolina and New Orleans.

In North Carolina, HMA will have a presence in Raleigh and Charlotte with plans to continue building out the North Carolina team in the coming months.

The Focus Group, based in New Orleans, joined HMA in 2022, and HMA continues to expand its footprint there adding new colleagues from the area to its roster of experts. They will share office space at The Focus Group’s current Poydras Street location.

“Our firm’s continued growth is designed to support the current and future needs of our clients across the country,” said Doug Elwell, HMA’s chief executive officer. “We are excited to plant roots in North Carolina and expand our talented team in New Orleans as we help clients successfully navigate the toughest challenges facing healthcare and human services.”

About HMA

Founded in 1985, HMA is an independent, national research and consulting firm specializing in publicly funded healthcare and human services policy, programs, financing, and evaluation. Clients include government, public and private providers, health systems, health plans, community-based organizations, institutional investors, foundations, and associations. With offices in more than 30 locations across the country and over 700 multidisciplinary consultants coast to coast, HMA’s expertise, services, and team are always within client reach. Learn more about HMA at healthmanagement.com, or on LinkedIn and X.

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CMS proposes major changes to Medicare Advantage and Part D for 2025

Improving Access to Behavioral Health Care Providers

Increased Transparency for Special Supplemental Benefits for the Chronically Ill

Requiring Mid-Year Enrollee Notification of Available Supplemental Benefits

Enhancing “Guardrails” for Agent and Broker Compensation

Requiring an Annual Health Equity Analysis of Utilization Management Policies and Procedures

Enhancing Enrollees’ Right to Appeal an MA Plan’s Decision to Terminate Coverage for Non-Hospital Provider Services

Increasing the Percentage of Dually Eligible Managed Care Enrollees Who Receive Medicare and Medicaid Services from the Same Organization

Impose New Contracting Standards for Dual Eligible Special Needs Plan (D-SNP) Look-Alikes

Other Topics in the Proposed Rule

November 15, 2023

November is National Adoption Month

23rd annual Kaiser Family Foundation state Medicaid budget survey released

Preventing Type 2 Diabetes in correctional settings

Unwinding Medicaid Data: A Real-Time 50-State Assessment as Redeterminations Approach the Midpoint

HMA Information Services names Andrea Maresca as Managing Director

CMS issues final 2024 provider payment rules

November 8, 2023