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Beth Kidder talks managed care operations

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August 17, 2022

Biden Approves Major Health Care Proposals but the Work Is Just Beginning for CMS and Stakeholders

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Innovative state policy solutions to enhance the youth behavioral health system

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With suicide now the second leading cause of death among children, adolescents, and young adults (aged 15-24 years old) in the United States, it is apparent that the COVID-19 pandemic has not only exacerbated rates of depression and anxiety, but also illuminated the fractures in our youth behavioral health system. In response, states are focusing on ways to advance policies that aim to expand coverage for youth mental health services.

Individuals suffering from mental health conditions or substance use disorders (SUDs) face many challenges accessing care and often do not seek treatment. Even before the COVID-19 pandemic, Centers for Disease Control and Prevention (CDC) data found 1 in 5 children were diagnosed with a mental health disorder, yet only 20% of those children received appropriate care.

In the past two years, over 100 laws in at least 38 states have been enacted with a focus on supporting schools to act as a primary access point for youth behavioral health care. At least half of all states are applying the co-location approach, where both types of care are delivered at the same site, to better integrate physical and behavioral health care. According to the Kaiser Family Foundation report, more than four-fifths of states launched initiatives related to screening for behavioral health needs, an effective strategy for Medicaid to connect those with behavioral health needs to the appropriate services.

Medicaid plays a pivotal role as the largest payer of behavioral health services, including both mental health and SUD services. Efforts to address these issues have been a focus in Medicaid at the federal level, including in the 2018 SUPPORT Act and more recently in the 2021 American Rescue Plan Act (ARPA), which provided enhanced Medicaid funding for certain behavioral health providers and mobile crisis services. The Center for Medicare & Medicaid Services (CMS) under the Biden Administration has highlighted behavioral health policy and investments as a federal Medicaid priority.

During National Mental Health Awareness Month, the Department of Health and Human Services (HHS) called for states to prioritize and maximize efforts to strengthen youth mental health and detailed HHS’ plans to support state-wide coordination across federal funding streams to expand youth mental health services. This blog highlights California’s approach and spotlights other states’ efforts to bolster the children’s behavioral health system.

State Strategies to Strengthen the Youth Behavioral Health System

There has been significant work underway in California for years to address youth behavioral health services, but up until recently it did not include substantial investments to redesign the mental health system for youth, and families. California exemplifies ways to leverage policy levers and make significant state investments to cultivate and strengthen the youth behavioral health system.

In 2021, California enacted groundbreaking legislation by making significant investments to reimagine its youth behavioral health system. The Children and Youth Behavioral Health Initiative is a $4.4B investment intended to enhance, expand, and redesign the systems that support behavioral health for youth, children and families. This initiative, administered by the California Health and Human Services Agency and its departments, aims to evolve California’s behavioral health system in which all children (25 years of age and younger) regardless of payer, are served for new and existing behavioral health needs.

This multi-year strategy seeks to enhance and redesign the current behavioral health system by integrating behavioral health into physical health, education, and other areas that support children and families. With a stronger focus on prevention and early intervention, the Initiative will distribute school-linked partnership, capacity, and infrastructure grants to support implementation of the initiative for behavioral health services in schools and school-linked settings.

The Initiative will also provide incentive payments to qualifying Medi-Cal (Medicaid) managed care plans to establish interventions that expand access to preventive, early intervention, and behavioral health services for children in publicly funded childcare and preschool, as well as pre-K-12 children in public schools. Also included are efforts to submit a State Plan Amendment to incorporate the dyadic services benefit under Medi-Cal, whereby screening for behavioral health problems, interpersonal safety, tobacco and substance misuse and social determinants of health are provided for the child and caregiver or parent during medical visits. A key piece of the Initiative stipulates that every component outlined in the Children and Youth Behavioral Health Initiative Act may only be implemented if the Department of Health Care Services confirms that federal financial participation under the Medi-Cal program will not be jeopardized. Indeed, the intricate design and implementation of the Initiative would not be possible without partnerships from other State agencies, education stakeholders, subject matter experts, and community partners to deliveressential services from prevention to treatment and recovery.

California’s commitment to address youth behavioral health services at a statewide level illustrates the various efforts emerging across the country. California is one state that is advancing multi-faceted strategies through legislation and Medicaid, but other states have used various Medicaid authorities including 1115 demonstrations, State Plan Amendments (SPAs), and 1915(c) Waivers to remove accessibility roadblocks and enhance youth behavioral health services. States have taken a variety of approaches in their commitments to bolster the system of care around the country that include:

New York amended its state plan amendment to expand the EPSDT benefit to enable a greater focus on prevention, early intervention, and expansion of behavioral health services.
New Jersey amended its state plan to make Mobile Response and Stabilization Services (MRSS) for youth up to age 21 reimbursable under Medicaid’s EPSDT benefit.
Ohio RISE (Resilience through Integrated Systems and Excellence) for youth with complex behavioral health needs was enacted through a Medicaid 1915c waiver. Through this program, a single managed care organization provides new, targeted behavioral health services and intensive care coordination
Washington State passed the Behavioral Health Emergency Services legislation E2SHB 1688(Chap. 263, Laws of 2022) to ensure coverage for all emergency behavioral health services (adult and children) to protect consumers from charges for out-of-network health care services by addressing coverage of emergency BH services.

Moving Ahead

States can combine the power of their policy levers along with the cascade of forthcoming federal dollars to strengthen the youth mental health system of care. The Bipartisan Safer Communities legislation includes significant funding for mental health screening, among other critical services. The Bipartisan legislation seeks to foster the tremendous opportunity for states and schools to increase behavioral health capacity for students and mental health professionals, evidenced by the School Based Mental Health Services (SBMHS) Grant Program, the School Based Mental Health Service Professionals Demonstration Grant, and several other investments for supportive services in schools.

Ensuring equitable access to a plethora of high-quality behavioral health services for youth requires the individual and collective commitment of states. The children’s mental health crisis has reached unprecedented levels and the opportunity for states to lead by example has arrived. Fortunately, states have significant tools to address the youth mental health crisis through the design and deployment of innovative policies and mission-aligned collaborations. Federal funds and state policy levers will help advance a robust and accessible children’s behavioral health system. As our communities work to rebuild in a post-pandemic world, states have the unique opportunity to provide today’s youth with compassion, essential behavioral health resources, and integrated systems to meet them where they are.

For additional information, please read our Bolstering the Youth Behavioral Health System: Innovative State Policies to Address Access & Parity brief, which explores state policy levers to advance access and availability of behavioral health services (encompassing mental health and substance use disorders) for youth.

Bolstering the youth behavioral health system: innovative state policies to address access & parity

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With 1 in 5 children experiencing a mental health condition every year and only 54 percent of non-institutionalized youth enrolled in Medicaid or CHIP receiving mental health treatment, the HMA team of Caitlin Thomas-Henkel, Uma Ahluwalia, Devon Schechinger and Debbi Witham have authored the first in a series of briefs focused on enhancing the youth behavioral health system. This brief, Bolstering the Youth Behavioral Health System: Innovative State Policies to Address Access & Parity, explores state policy levers to advance access and availability of behavioral health services (encompassing mental health and substance use disorders) for youth.

Congress approves major healthcare proposals, but work begins for CMS and stakeholders

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On August 7, 2022, the Senate passed the Inflation Reduction Act of 2022 (the IRA). The House approved the bill on August 12, and President Biden is expected to sign the IRA into law in the coming weeks.

The IRA addresses a range of policy topics across health care climate, energy, and taxation. Regarding health care, the IRA makes structural changes to the Medicare Part D prescription drug benefit and provides new authority for the Medicare program to address the pricing of prescription drugs in the Part B and Part D programs. The measure also extends the temporary enhanced assistance for health coverage purchased from Marketplaces, which was first approved in the American Rescue Plan Act (ARPA). In addition, the IRA updates vaccine coverage policies in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

While the IRA provides a critical framework for the structural changes to the nation’s largest public health insurance programs, the U.S. Department of Health and Human Services will be responsible for building out the policy and operational components necessary to support implementation.

Notably, the Centers for Medicare and Medicaid Services (CMS) will lead implementation of the IRA’s Medicare and Marketplace provisions. The changes to the Part D benefit and the development of entirely new processes and policies to support the IRA’s drug pricing provisions require significant resources and consideration of direct as well as indirect impacts for the health care market. The agency can use a variety of regulatory tools to support implementation, including issuing standalone Requests for Information (RFIs), convening stakeholder engagement sessions, updating policy manuals, and undertaking notice and comment via the formal rulemaking process, among others.

CMS’ strategic plan emphasizes the value of stakeholder engagement, and this is likely to lead to multiple opportunities for public input, particularly as CMS implements the new Medicare provisions of the IRA. For example, the agency must develop the policy parameters for reforming the Part D benefit design and is likely to seek input from Medicare Advantage (MA) and MA Prescription Drug Plans (MA-PDPs), providers, vendors, and consumer advocacy groups among others to inform its approach. CMS will also need input from the stakeholder community as it establishes the timelines, reporting, and negotiating mechanisms impacting Part B and D prescription drugs pricing and how it will implement the inflation penalty policies outlined in the IRA.

The IRA’s extension of the American Rescue Plan Act’s (ARPA) enhanced eligibility for premium assistance through 2025 provides more near certainty around eligibility and enrollment for this market. This may led to renewed momentum for CMS to engage with states and stakeholders on Marketplace policies and structures.

Many of the details around how the IRA’s health care policies will be implemented are unknown at this time. Stakeholders will want to monitor CMS’ progress and provide feedback with data-informed analysis and concrete and practical recommendations as these opportunities are announced.

An overview of many of the IRA’s health care provisions follows. Our team of experts can provide tailored analysis and support to clients as they begin to unpack the full breadth of the IRA’s policy changes and implications for Medicare Advantage and Part D plans, providers, vendors, consumer advocacy groups and other stakeholders.

Part B and Part D Drug Pricing. Requires the Secretary of HHS to select a list of drugs eligible for negotiation, and enter into agreements with select manufacturers, negotiating a “maximum fair price” (MFP) for each selected drug in the Medicare program. The Secretary is required to negotiate on a certain number of drugs per year, 10 drugs in 2026; 15 drugs in 2027 and 2028, and 20 drugs in 2029 and subsequent years. The number of drugs negotiated will accumulate over the years, such that up to 60 drugs could be negotiated by 2029. Manufacturers who are not in compliance will face an excise tax that could far exceed the cost of drugs sold over time and civil monetary penalties.

Prescription Drug Inflation Rebates. Requires manufacturers to pay rebates for Medicare Part B and D drugs with prices rising faster than inflation. The rebate calculation would be based on units and pricing in Medicare and would determine an inflation-adjusted payment amount based on the percentage by which the price exceeds the inflation benchmark, as determined by the Consumer Price Index for All Urban Consumers (CPI-U). If a manufacturer fails to pay the rebate, then they would be subject to a civil monetary penalty either equal to or at least 125 percent of the rebate amount for the quarter.
- The Part D inflation rebate takes effect October 2022 for Part D drugs and biologics.
- The Part B inflation rebate begins January 2023 for single-source drugs or biologics and certain biosimilar products. The IRA also includes an inflation growth cap on beneficiary coinsurance in Part B, beginning April 2023.

Part B Payment for Biosimilar Biological Products. Amends Medicare’s Average Sales Price (ASP) payment methodology in cases where the ASP during the first quarter of sales is unavailable to establish a payment rate for biosimilars. The IRA also updates Medicare Part B reimbursement for certain biosimilar products for a five-year period beginning on October 1, 2022, by increasing the add-on payment from six percent of the reference product’s ASP to eight percent of the reference product ASP.

Medicare Part D Assistance for Beneficiaries and Benefit Design. Increases the qualifying income amount (federal poverty level (FPL)) for the full Low-Income Subsidies (LIS) under Part D, from 135 percent of the FPL to 150 percent of the FPL, starting in 2024. The IRA also adjusts the cost-sharing requirements in the Part D benefit by:
- Eliminating cost sharing in the catastrophic phase of the benefit in 2024;
- Setting an annual out-of-pocket (OOP) limit for enrollees at $2,000 beginning in 2025;
- Capping monthly premium increases for a prescription drug plan in 2024 through 2029 at six percent per year. The Secretary may make a one-time adjustment to the beneficiary Part D premium contribution percentage in 2030 to ensure longer-term beneficiary premium reduction; and
- Adjusting the benefit coverage liabilities for the initial coverage phase and catastrophic coverage phase.

Coverage for Insulin. Requires Medicare to cover select insulin products and not apply a deductible or impose cost-sharing more than $35 or 25 percent of the negotiated price (including all discounts) for a 30-day supply. Beginning in July 2023, Medicare must exempt from beneficiary deductibles insulin provided through durable medical equipment (DME) and ensure that coinsurance for a month’s supply of insulin administered through DME does not exceed $35. High-deductible health plans (HDHPs) will be able to cover selected insulin products with no deductible without impacting their status as a HDHP, starting in 2023.

Medicare, Medicaid, and CHIP Coverage for Vaccines. Requires full coverage of Advisory Committee on Immunization Practices (ACIP)-recommended adult vaccines under Medicaid and CHIP without cost-sharing. The IRA also increases the Federal Medical Assistance Percentage (FMAP) by one percentage point, for adult medical assistance for such vaccines and their administration, during the first eight fiscal quarters on or after the date of the IRA’s enactment.
- Requires Medicare Part D provide full coverage without cost sharing of ACIP-recommended adult vaccines for plan years beginning on or after January 1, 2023.

Enhanced Temporary Assistance for Marketplace Coverage. Extends the ARPA’s expansion of Advanced Premium Tax Credit (APTC) eligibility and amounts through 2025. ARPA modified the affordability percentages used for the calculation of APTC to increase subsidy amounts for individuals eligible for assistance.

Experts from HMA and HMA companies are supporting clients as they begin to strategize and formulate initial recommendations for federal agencies and plan for implementation. We will continue to monitor developments in this area and provide additional updates as more information becomes available.

HMA identifies key trends in emerging Medicaid Section 1115 demonstration proposals

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As the urgent needs of COVID-19 Public Health Emergency (PHE) continue to subside, state Medicaid agencies are exploring pathways and concepts to further address the historic inequities and health disparities laid bare by the pandemic. These efforts are closely aligned with the current Administration’s policy objectives for the Medicaid program, specifically:

Addressing health equity
Improving access and coverage
Promoting whole person care

For several decades, Medicaid Section 1115 demonstration programs have provided a powerful lever for federal and state policymakers to design, implement, and evaluate transformative initiatives. All states administer at least one Section 1115 demonstration program. Some demonstrations are narrowly tailored to address services or populations while others capture broader features pertaining to coverage, benefits, and payment and delivery system innovations.

Notably, a new wave of comprehensive and transformative Medicaid Section 1115 demonstration proposals is emerging.

Working closely with the Centers for Medicare and Medicaid Services (CMS), states are developing proposals that place individuals at the center of health care in an entirely new way – by recognizing their medical needs as well as the complexity of circumstances and environmental factors that shape the individual’s medical, physical, and behavioral care needs and outcomes.

Teams of experts from across the HMA family of companies are supporting state agencies, counties, health plans, providers, community and consumer organizations, and other stakeholders with translating federal goals and parameters into concrete proposals as these move through the stages of concept paper, application and negotiation, and implementation. Demonstrations will reflect each state’s unique political and policy landscapes, but the programs will be grounded in certain federal goals and expectations to enhance accountability and improve outcomes.

Our experts identified three trends in state 1115 demonstration programs. In this and subsequent In Focus posts we will share our team’s initial insights and considerations for stakeholders based on our collective “on the ground” expertise. We include illustrative examples from some states with approved and pending Section 1115 proposals.

Section 1115 Trend #1: States are advancing a new vision for Medicaid’s role in addressing health equity, influenced by social drivers and grounded in a community’s needs.

CMS is strongly encouraging states to consider initiatives that address health inequities and community specific social drivers of health. As evidenced by the current state initiatives, Section 1115 demonstration programs will be a primary — but not the only — pathway states utilize to design strategies to address health inequities driven by non-health systems and circumstances. Based on our work with states and stakeholders, it is critical that states ensure the services are directly linked to factors that impact health outcomes for Medicaid enrollees and that they have mechanisms to evaluate the impact of community and social care services.

Several state proposals already signal CMS’ current vision for using Section 1115 authority to test new types of assistance within service categories to include non-medical services, services tailored to populations, and assistance that is linked to desired outcomes. For example:

North Carolina’s Section 1115 pilot program will provide support to certain groups of consumers for an array of community supports ranging from housing related services and transportation access to interpersonal violence and access to food and nutrition services. The program includes help for consumers related to utility set up and moving costs, and support to connect with community services to address legal issues impacting housing and thereby impacting health.

In December 2021, CMS approved California’s Section 1115 demonstration program and linked this to a separate waiver approval allowing the state to further enhance services and accountability within its managed care program. As part of California’s implementation of its statewide whole person care initiative, the state will be able to pay for housing navigation and tenancy services and assistance with first month deposits for certain populations enrolled in its statewide managed care program. This proposal is grounded in the state’s commitment to ensure that the non-medical services were clearly defined and clinically oriented for the intended population.

CMS’ approval of the North Carolina and California programs is paving the way for conversations in other states, including New York, New Jersey, and Oregon among others. Negotiations on similar initiatives to address health equity in other states, include:

New York, like North Carolina, plans to seek CMS’ approval to offer a range of community services that would be provided through newly established networks of community-based organizations in all regions of the state. The state envisions that the CBO networks will include small neighborhood organizations familiar with their communities’ needs and the capacity to address multiple social risk factors as well as larger county or regionally focused entities. In addition, New York is asking CMS to support a health equity focused proposal which would provide certain “in-reach” services for incarcerated individuals before they are released.

Oregon submitted a request to use federal Medicaid spending authority to address community-based health inequities and to establish statewide health equity investments (HEIs). The state is especially focused on supporting consumers during disruptions in coverage, life transitions, or disruptions caused by climate events. Community-based investments will reflect empirical evidence and community assessments and may include efforts to improve building environments and expand culturally and linguistically. Addressing climate events may be of particular interest as it addresses multiple priorities for Administration.

Conclusion

North Carolina and California offer important insights into what may be possible and as importantly, what may be beyond the bounds of CMS’ Medicaid authority. Chief among the outstanding issues for states and stakeholders is whether additional innovative programs for addressing health disparities among justice-involved populations is possible under Medicaid’s demonstration authority.

CMS may use the experience with initial states to provide more concrete information on these general parameters and expectations. Formal guidance would prove helpful to states and stakeholders seeking to apply new knowledge and experiences with health inequities into practice within the Medicaid programs.

HMA’s interdisciplinary teams of Medicaid, human services, and actuarial experts are assisting states as well as stakeholders as they conceptualize, develop, and implement Section 1115 programs. To learn more about our work and the breadth of our service, contact our expert below.

August 10, 2022

HMA Identifies Key Trends for Emerging Medicaid Section 1115 Demonstration Proposals

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HMA series of issue briefs outline Medicare savings proposals

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In a series of issue briefs outlining Medicare savings proposals, Jennifer Podulka examines federal budget pressures and impending insolvency of the Medicare Trust Fund that will require Congress to choose between reducing provider or Medicare Advantage plan payments, increasing dedicated income, modifying beneficiary cost sharing, or some combination of these options.

Successful Centers for Medicare & Medicaid Services Innovation Center models, temporary regulatory flexibilities implemented in response to the COVID-19 public health emergency, and other recent Medicare policy changes inform new savings options for policymakers to consider.

The issue briefs were prepared for Arnold Ventures and will be used to drive discussion and planning. Five novel Medicare savings proposals include:

Expand the Successful Home Health Value-Based Purchasing Model to Providers that Report Similar Quality Measures

Medicare Coverage of Drugs That Receive FDA Accelerated Approval

Ensure that Medicare Beneficiaries have Access to the Successful Diabetes Prevention Program

Options for Adjusting Medicare Advantage Benchmarks and Quality Bonuses to Achieve Program Savings

Addressing Medicare Trust Fund Solvency

CMS seeks input on improving Medicare Advantage: stakeholders have brief window to offer ideas

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This week, our In Focus section reviews the request for information (RFI) on ways to strengthen the Medicare Advantage (MA) program, released by the Centers for Medicare & Medicaid Services (CMS) on July 28, 2022. CMS’s intent is to better align the MA program with the agency’s Vision for Medicare and the CMS Strategic Pillars. The agency is strongly emphasizing the importance of stakeholder comments for this process. This openness to feedback presents MA plans, providers, and other stakeholders an opportunity to inform the agency’s early thinking as it considers potential regulatory actions impacting supplemental benefits, value-based contracting arrangements, risk adjustment, prior authorization, and marketing among other issues.

The questions are grouped into five categories. Throughout each section CMS seeks to better understand operational issues and insights from past or ongoing experiences tackling health equity issues in states and communities. Below we describe several of the questions and themes within each category:

Advance Health Equity: This extensive set of questions is intended help CMS better understand MA plans’ specific programs, screenings, benefits, and data that are components of addressing health equity and how the agency can better ensure that all MA enrollees receive the care they need. CMS also is seeking to better understand the collaborations and reimbursement arrangements between MA plans and providers that partner with community-based organizations, particularly as these arrangements become more central to efforts to address social drivers of health. The agency continues to focus on the dual eligible population, and asks specifically how it can support efforts by Special Needs Plans to provide targeted, coordinated care for enrollees.
Expand Access: Coverage and Care: In this section CMS explores MA plans’ marketing efforts, including the tools beneficiaries use and how plans differentiate themselves to beneficiaries, as well as factors for building and changing plan networks. Additionally, CMS poses many questions about supplemental benefits, including questions about how MA plans design supplemental benefits, how they inform beneficiaries about these benefits and whether there are evaluations or data elements that are used. CMS also anticipates receiving information on how it can ensure that enrollees have access to the covered behavioral health services they need, access and use of telehealth services.
Drive Innovation to Promote Person-Centered Care: Last year, CMS committed to ensuring that 100 percent of Medicare beneficiaries were in accountable care relationships by 2030. This will require changes for more than 30 percent of Medicare beneficiaries. To date, much of the attention around this goal has been focused on fee-for-services arrangement. With this RFI, CMS is turning its attention to value-based arrangements in MA. Specifically, it asks stakeholders about the factors driving MA plans and providers participating in value-based contracting. The agency wants to better understand the data that is crucial for value-based contracting and the experiences of MA plans in trying to align with value-based contracting in other Medicare programs/models, Medicaid, and the commercial payers. Stakeholders also have an opportunity to provide input on how CMS could better support efforts of MA plans and providers to appropriately and effectively collect, transmit, and use appropriate data as well as potential new tops of payment or service delivery models that could be tested.
Support Affordability and Sustainability: This set of questions turns to payment and competition in the marketplace. Specifically, the agency asks for input on potential methodologies to ensure risk adjustment is accurate and sustainable. CMS also wants to understand how stakeholders are thinking about the relationship between risk adjustment and health equity and addressing social determinants of health SDOH. The agency also wants to consider specific local market barriers to entry and advantages and disadvantages in different markets.
Engage Partners: This group of questions provides an opportunity for stakeholders to address information gaps for Medicare beneficiaries. The agency also is interested in how it could promote collaboration among MA stakeholders.

Why It Matters:

As the urgent issues with the pandemic continue to ease, CMS is turning its attention to proposals that could help refocus the Medicare program, including Medicare Advantage, to address health equity, quality, and affordability.

Stakeholders will want to carefully consider how they could use their RFI responses to shape the agency’s potential future proposals. Health plans, providers, community organizations, and vendors have an opportunity to highlight concepts, tools, and other innovations that have proven successful and scalable.

Specific concrete examples of the impact on Medicare beneficiaries would be highly valued by the agency. It will also be important to focus responses on regulatory policy changes and actions that CMS can advance with its existing authority.

HMA experts can assist stakeholders with their responses on these impactful issues including but not limited to:

Innovations stakeholders have tried, barriers to concepts and needs they have identified, and other ideas on flexibilities for local partnerships and technology.
Approaches to improve the MA experience for the Medicare and Medicaid dually eligible population and rural communities.
New risk adjustment methods.
Potential improvements to the MA quality program.
Strategies for improving the beneficiary enrollment process.
The value and opportunity of using technology and telehealth and how these impact the design of provider networks.
Framing the factors and dynamics around MA plan and provider value-based contracting.

What’s Next

CMS is accepting comments on this RFI until August 31, 2022. The agency could use input it receives to develop proposals for at least the next two regular rulemaking cycles for the Medicare Advantage program, issue policy proposals outside of the normal rulemaking, or both.

HMA experts are available to provide strategic assistance with framing and developing responses as well as analysis to reinforce points and recommendations to the agency for this expedited RFI response timeline.

For questions, contact our experts below.