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November 6, 2024

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This week's roundup:

In Focus

50-State Medicaid Budget Survey Examines FY 2025 Policy Landscape

This week, our In Focus highlights the 24th annual Medicaid Budget Survey conducted by the Kaiser Family Foundation (KFF) and Health Management Associates, Inc. (HMA), in collaboration with the National Association of Medicaid Directors (NAMD). Survey results were released on October 23, 2024, in two new reports: As Pandemic-Era Policies End, Medicaid Programs Focus on Enrollee Access and Reducing Health Disparities Amid Future Uncertainties: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2024 and 2025 and Medicaid Enrollment & Spending Growth: FY 2024 & 2025. 

The sections below review results and share key takeaways. On November 12, during NAMD’s 2024 Fall Conference, KFF experts and state Medicaid directors will delve into survey findings on policies in place or planned for fiscal year (FY) 2024 and FY 2025, including state experiences with reduced state revenues and the unwinding of the pandemic-related continuous enrollment provision.  

Several of HMA’s former Medicaid directors and Medicaid experts will be in attendance at the NAMD meeting to provide additional context and address questions about FY2025 Medicaid policies in the post-election landscape. Visit our Medicaid team at our exhibit hall booth, where we will have executive summaries on hand.

Medicaid Enrollment and Spending Growth 

During the COVID-19 pandemic, Medicaid enrollment reached record highs as a result of the Families First Coronavirus Response Act, which authorized a 6.2 percentage point increase in the federal match rate, also known as the or Federal Medical Assistance Percentage until the public health emergency ended, provided that states did not disenroll people with Medicaid coverage. During this time, Medicaid and Children’s Health Insurance Program (CHIP) enrollment rose to 94 million in April 2023 from 71 million in February 2020. In FY 2024 and into FY 2025, states are concluding their Medicaid unwinding eligibility redeterminations. 

Medicaid enrollment declined by 7.5 percent year over year in FY 2024 and is expected to further decline by 4.4 percent in FY 2025. However, net Medicaid enrollment remained above pre-pandemic levels. Total Medicaid spending growth slowed to 5.5 percent in FY 2024 and is expected to slow further to 3.9 percent in FY 2025. State shares of spending, however, rose by 19.2 percent in FY 2024 and is estimated to slow to 7 percent in FY 2025. According to FY 2025 enacted budgets, most states anticipate revenue growth will continue to flatten and expect state general fund spending growth to slow. More than half of responding states anticipated a state revenue shortfall to some degree (see Figure 1). 

Figure 1. Percent Change in Medicaid Spending and Enrollment, FY 1998−2025 

Source: FY 2024−2025 spending data and FY 2025 enrollment data are derived from the annual KFF survey of state Medicaid officials conducted by HMA, October 2024. All 50 states submitted survey responses by October 2024; state response rates varied across questions. FY 2025 projections based on enacted budgets. Historic data reflects growth across all 50 states and DC and comes from various sources.

Managed Care and Provider Rates 

Capitated managed care remains the predominant delivery system for Medicaid in most states. Specifically: 

  • A total of 46 states operated some form of Medicaid managed care (managed care organizations [MCOs] and/or primary care case management [PCCM]). 
  • 42 states contracted with risk-based MCOs. 

States use a variety of risk mitigation tools to ensure appropriate payment levels for MCOs, including risk-sharing arrangements, risk and acuity adjustments, medical loss ratios, or incentive and withhold arrangements (see Figure 2). 

  • Of the 41 responding MCO states, 25 reported seeking approval from the Centers for Medicare & Medicaid Services (CMS) for a capitation rate amendment to address shifts in the average risk profile of MCO members in FY 2024 and/or FY 2025 because of the unwinding.  
  • Separate from the KFF report, HMA tracks state Medicaid managed care rate certifications. In addition, Wakely, an HMA Company, published a paper summarizing approaches taken by actuaries in 27 states, and considerations for how they relate to the biggest enrollment shift in Medicaid since the implementation of the Affordable Care Act. 

Figure 2. States Seeking Capitation Rate Amendments to Address Acuity Shifts Resulting from the Unwinding for the Rating Periods Beginning in FY 2024 and/or FY 2025 

Source: Annual KFF survey of state Medicaid officials conducted by HMA, October 2024

States also are implementing a range of fee-for-service (FFS) rate increases across provider types. More than half of states reported increasing both inpatient and outpatient hospital FFS base rates in FY 2024. States reported rate increases for nursing facilities and home and community-based service providers more often than for other provider categories, reflecting ongoing staffing challenges for long-term services and supports (LTSS). Most states also reported rate increases for outpatient behavioral health providers, primary care professionals, and dentists. 

Social Determinants of Health and Reducing Health Disparities 

States are increasingly addressing social determinants of health (SDOH) and associated health-related social needs (HRSN) using several types of Medicaid authorities. For example: 

  • A total of 39 states reported leveraging Medicaid MCO contracts to promote at least one strategy to address SDOH, including screening enrollees for behavioral health or social needs, providing referrals to social services, partnering with community-based organizations, and requiring providers to capture SDOH data and employ community health workers. See Figure 3 for details. 

Figure 3. MCO Contract Requirements Related to SDOH, FY 2024−25 

Source: Annual KFF survey of state Medicaid officials conducted by HMA, October 2024
  • Nearly all states also had least one specified MCO requirement related to reducing racial and ethnic health disparities in FY 2025. About one-third of states reported at least one MCO financial incentive tied to reducing racial/ethnic disparities in place in FY 2024, most commonly linking capitation withholds or pay for performance incentives to improving health disparities. 
  • Medicaid Section 1115 demonstrations are also being used to expand flexibilities by adding HRSN services and supports, including coverage of rent/temporary housing, utilities, and meal support. CMS has approved ten states under the new HRSN Section 1115 framework. 

Benefits 

In all, 41 states reported new or enhanced benefits in FY 2024, and 38 states reported plans to add or enhance benefits in FY 2025. Benefit enhancements continue to outpace benefit cuts. 

  • States especially continue to expand behavioral health benefits, particularly for mental health and substance use disorder services. 
  • A total of 11 states reported benefit actions related to the addition or expansion of crisis services, including mobile crisis responses and crisis services for youth. 

Prescription Drugs 

Rising prescription drug costs are an ongoing concern for states and nearly three-quarters of states reported at least one new or expanded initiative to contain prescription drug costs in FY 2024 or FY 2025. 

  • Efforts to implement or expand value-based arrangements with pharmaceutical manufacturers were the most frequently mentioned cost-containment initiative across states. 
  • Weight-loss prescription drugs also are a hot topic in the states; 13 states now cover GLP-1s (glucagon-like peptide-1s) prescribed to treat obesity. Most state Medicaid programs reported that cost was a key factor contributing to their decisions. 

Key Opportunities, Challenges, and Priorities in FY 2025 and Beyond 

Medicaid directors are focused on behavioral health, LTSS, and key initiatives related to SDOH or reentry services for justice-involved populations in FY 2025 and beyond. In addition, state-reported priorities included maternal and child health, rural initiatives, school-based services, continuous coverage for children, value-based payment and quality initiatives, and network monitoring and oversight. 

Budget pressures and workforce shortages are among the main challenges for Medicaid. States noted adequate staffing and systems are obstacles for compliance with recently promulgated federal regulations, particularly the access and managed care rules, which present new reporting, oversight, and beneficiary protection responsibilities for states. Many states also reported a notable increase in per enrollee costs due to the greater healthcare needs of enrollees who retained coverage during the unwinding, adding pressure to budgets. 

Connect with Us 

The KFF Medicaid budget report provides important policy insights for federal and state government decisionmakers and Medicaid stakeholders. HMA’s Medicaid experts know the impact and planning needed to navigate these policies and to inform new decisions in 2025 and beyond. For more information about the key takeaways from the KFF report and HMA’s Medicaid solutions, contact Kathy Gifford, Principal, Medicaid, and Caprice Knapp, Managing Director, Quality and Accreditation Practice Group. 

HMA Roundup

California

California Voters Approve Ballot Measure to Redirect MCO Tax Revenue to Medicaid Program. CalMatters reported on November 5, 2024, that California voters approved Proposition 35, which redirects between $2 billion and $5 billion in revenue from the existing tax on managed care organizations to Medi-Cal providers. Under the Proposition, healthcare providers, including doctors, certain specialists, behavioral health facilities, outpatient clinics, hospitals, ambulances, and doctors-in-training may see increased reimbursement rates for serving Medicaid beneficiaries.

Connecticut

Connecticut Organizations Send Letter to Governor Over Concerns of Bias in Medicaid Landscape Analysis. Inside Investigator reported on November 5, 2024, that twenty-three organizations wrote a letter to Connecticut Governor Ned Lamont and the Department of Developmental Services (DSS) Commissioner expressing concerns over the state selecting Manatt, Phelps & Phillips to conduct a Medicaid landscape analysis due to the firm representing the trade association of Medicaid managed care organizations (MCOs). Concerns outlined include Manatt’s inability to conduct an independent, unbiased evaluation of whether the state should transition out of its current fee-for-service Medicaid model and return to an MCO model. An October 2024 report authored by four members of the Medical Assistance Program Oversight Council who also signed the letter to Lamont recommended the state not return to a system of capitated managed care.

Florida

Florida Names Brian Meyer Medicaid Director. The Florida Phoenix reported on November 1, 2024, that Florida has named Brian Meyer deputy secretary for Medicaid for the Agency for Health Care Administration (AHCA), effective October 7. Meyer succeeds Tom Wallace, AHCA deputy secretary for health care finance and data, who resigned on September 19.

Illinois

Illinois Marketplace Plan Rates to Increase Slightly in 2025. Health News Illinois reported on November 4, 2024, that health plan rates on the Affordable Care Act (ACA) Marketplace will increase slightly in 2025, according to an analysis released by the Illinois Department of Insurance. The lowest cost bronze plan rates will increase five percent on average, the lowest cost silver plans will increase two percent on average, and the lowest cost gold plans will increase about four percent on average. There will also be changes to which plans and payers cover which regions.

Michigan

Michigan Releases Grant Funding Opportunity to Improve SUD Treatment Transportation Services. The Michigan Department of Health and Human Services (MDHHS) announced on October 31, 2024, a competitive Grant Funding Opportunity (GFO) totaling $1.2 million, made available through the Michigan Opioid Healing and Recovery Fund, which aims to increase the availability of transportation services for treatment, harm reduction, or recovery support services for substance use disorder (SUD). The state anticipates issuing up to six awards with maximum funding of $200,000 per grantee. Eligible applicants include SUD treatment providers, recovery community organizations, harm reduction organizations, federally recognized tribes, Indian Health Services, Tribal and Urban Indian Organizations and SUD peer service organizations. Applications are due November 26, and the program period begins February 1, 2025, and ends September 30, 2025.

Minnesota

Minnesota Court Denies UnitedHealthcare Appeal Over Medicaid Program For-profit Insurer Ban. The Minnesota Star Tribune reported on November 5, 2024, that an appellate court denied an appeal by UnitedHealthcare over a bill which bans the Minnesota Department of Human Services (DHS) from awarding or renewing contracts with for-profit health plans, beginning in 2025. UnitedHealthcare is the only for-profit incumbent covering about 32,000 Medicaid enrollees. The litigation extends a 50-year debate in Minnesota over whether for-profit entities should be disqualified from competing as health maintenance organizations in the state’s health insurance market.

Minnesota to Release RFP for Prepaid Medical Assistance Program/MinnesotaCare in 2026, Special Needs BasicCare Program in 2027. The County of Hennepin of Minnesota released on October 31, 2024, a request for proposal (RFP) which includes information stating that the Minnesota Department of Human Services (DHS) will release procurements for the Prepaid Medical Assistance Program (PMAP) and MinnesotaCare together in early 2026. Additionally, the state will release a procurement for the Special Needs BasicCare program in early 2027.

Mississippi

Mississippi Lawmakers Renew Push for Medicaid Expansion with Work Requirements. ABC News reported on October 31, 2024, that Mississippi House Speaker Jason White and Lieutenant Governor Delbert Hosemann have renewed plans to push for Medicaid expansion with work requirements during the next legislative session which begins in January. It is expected that an additional 75,000 working individuals would gain coverage.

Hospitals, FQHCs Form New Coalition Led by Former Medicaid Director. Mississippi Today reported on November 5, 2024, that a coalition of Mississippi healthcare providers have formed a new alliance which brings together hospital systems that have left the state hospital association, along with the state’s 21 Federally Qualified Community Health Centers. The Mississippi Healthcare Collaborative, which will be led by former state Medicaid Director Drew Snyder, aims to provide sustainable solutions to challenges facing access to care. Snyder will lead the Healthcare Collaborative under Health Resources, a newly formed health policy consulting division of Capitol Resources.

Nevada

Nevada to Launch All-payer Claims Database. The Nevada Department of Health and Human Services, Division of Health Care Financing and Policy announced on October 30, 2024, that it is preparing to launch an all-payer claims database (APCD) which will collect and analyze Medicaid, Medicare, and private payer claims to help the state monitor healthcare costs, quality, and utilization; evaluate the impact of different programs; and support certain healthcare and payment policy decisions. Onpoint Health Data is Nevada’s APCD administrator, and it will be responsible for identifying qualifying payers, conducting submitter registration, supporting the data submission process, and providing submitters with initial onboarding training and ongoing data support. Pending finalization of a certain regulation, payers covering more than 1,000 Nevadans will be required to report data to the APCD. The APCD data submission portal is tentatively scheduled to launch December 9, 2024.

New York

New York Submits 1115 MRT Demonstration Amendment for MBI-WPD, CPT Program. The New York State Department of Health announced on November 6, 2024, that it is seeking federal approval to implement a new Medicaid Buy-In Program for Working People with Disabilities (MBI-WPD) through an amendment to its section 1115 Medicaid Redesign Team (MRT) demonstration. The MBI-WPD would help more working individuals with disabilities qualify for Medicaid. The amendment will disregard all funds held in retirement funds or accounts; request an exception to the deeming of income and resources of legally responsible relatives; and expand eligibility requirements to an income limit of 2,250 percent of the FPL and a resource limit of $300,000. The state is also requesting an amendment to the Career Pathways Training Program, which would change language governing the maximum number of allowable days for backfill payments, and is requesting an increase from the current limit of two days per week to up to five days per week. The public comment period will be open through December 6.

Ohio

Ohio Releases Next Generation MyCare Program Awards. The Ohio Department of Medicaid announced on November 1, 2024, its intent to award four plans a contract to serve dual eligible Medicare and Medicaid individuals under the Next Generation MyCare Program. Awardees include incumbents Centene/Buckeye Health Plan, CareSource, Molina Healthcare, and non-incumbent Anthem Blue Cross and Blue Shield. MyCare currently operates under the Centers for Medicare & Medicaid Services’ (CMS) Financial Alignment Initiative demonstration program and is expected to end by December 31, 2025. As part of the new MyCare program, awardees will need to become CMS-approved fully-integrated dual eligible special needs plans (FIDE-SNPs). The FIDE-SNPs will begin coverage in the 29 counties where MyCare currently operates, and will cover more as the remainder of the state is phased into the program. Contracts run from January 1, 2026 through December 31, 2028, with the option for annual renewals. Incumbents Aetna Better Health of Ohio and United Healthcare did not receive awards.

Oklahoma

Oklahoma to Submit Medicaid SPA for Community Health Services. The Oklahoma Health Care Authority (OHCA) announced on November 5, 2024, that it will submit a Medicaid State Plan Amendment (SPA) to the Centers for Medicare & Medicaid Services (CMS) to add community health services to its SoonerCare program. In order to be eligible for services, enrollees must have a chronic diagnosis, unmet health-related social needs, receive a screening, or be pregnant. The services must be ordered by a physician and will be provided by community health workers who work under the Public Health Clinic Services authority. Contingent on CMS approval, community health services will be effective January 1, 2025. OHCA is accepting public comments on the SPA until November 19.

Oregon

Oregon Awards 161 Organizations CCBF Grants Totaling $37 Million. The Oregon Health Plan reported on October 31, 2024, that it has awarded a combined $37 million in Community Capacity Building Fund (CCBF) grants to 161 organizations across the state to connect Medicaid beneficiaries with new health-related social needs services, including housing and nutrition supports. Additionally, the state has set aside $11.9 million for the Nine Federally Recognized Tribes of Oregon. New housing benefits will begin rolling out November 1, 2024, and nutrition benefits will be available starting in January 2025.

Oregon Completes Preliminary Review of OHSU, Legacy Merger. The Oregon Health Authority (OHA) announced on November 4, 2024, that the Health Care Market Oversight (HCMO) program completed a preliminary review of Oregon Health and Science University’s (OHSU) proposed merger with Legacy Health System and will now move to comprehensive review. Legacy Health System is a nonprofit health system that owns and operates six hospitals and 70 outpatient clinics. OHA’s preliminary analysis focused on how the transaction could affect consolidation and competition in Oregon’s health care markets, access to services, health care costs, health equity, and quality of care. The comprehensive review will be completed within 180 days. Public comments are being accepted.

Oregon to Submit SPA for Behavioral Health Provider Supplemental Payments. The Oregon Health Authority announced on November 1, 2024, that it plans to submit a Medicaid State Plan Amendment (SPA) to the Centers for Medicare & Medicaid Services to add supplemental payments for eligible behavioral health providers to help them access apprenticeships, training programs, and other opportunities through United We Heal Oregon. Public comments on the SPA will be accepted until November 26.

South Dakota

South Dakota Voters Approve Medicaid Expansion Work Requirements Consideration. South Dakota Searchlight reported on November 6, 2024, that South Dakotans have voted in favor of ballot measure Amendment F, which would allow state officials to consider implementing work requirements for the adult Medicaid expansion population if the federal government allows it. Work requirements for Medicaid are not allowed under the Biden administration but were approved during the first Trump administration. South Dakota approved Medicaid expansion in 2022.

Texas

Texas to Delay Medicaid STAR, CHIP Contracts Until Summer 2025. The Dallas Morning News reported on October 31, 2024, that the Texas Health and Human Services Commission (HHSC) has agreed to delay signing Medicaid STAR and Children’s Health Insurance Plan (CHIP) contracts until the state’s legislative session ends in June 2025. A judge initially ordered the agency to pause the awards in early October 2024; the state appealed the decision but filed a joint motion to instate the June delay instead. The decision will give lawmakers a chance to reexamine the agency’s decision to drop plans operated by Cook Children’s Hospital, Driscoll Children’s Hospital in Corpus Christi, and Texas Children’s Hospital in Houston from its Medicaid/CHIP program, and drop other plans from certain regions. Awarded plans are expected to protest the delay.

Texas Could Rebid $116 Billion Medicaid Managed Care Contracts. Health Payer Specialist reported on November 6, 2024, that Texas Medicaid managed care organizations are expecting the state to rebid the Medicaid STAR and Children’s Health Insurance Plan (CHIP) contracts, valued at $116 billion. After a judge ordered HHSC to pause the awards, the Texas Health and Human Services Commission (HHSC) filed a motion to delay finalizing the contracts until June 2025, after the state’s legislative session concludes. The decision to delay the awards could allow lawmakers to examine and possibly change the procurement process and issue a request for proposals for a third time.

National

Donald Trump’s Victory Could Put Strain on Medicaid Programs. KFF Health News reported on November 6, 2024, that former president Donald Trump’s election victory is expected to bring changes to the nation’s public health insurance programs, including the possibility of work requirements in Medicaid and federal funding cuts to safety net insurance. Trump has said he will not try again to repeal the Affordable Care Act, although his administration will face an immediate decision next year on whether to back an extension of enhanced premium subsidies for Marketplace insurance plans.

CMS Issues 2025 Outpatient Hospital Final Rule. The Centers for Medicare & Medicaid Services (CMS) released on November 1, 2024, the remaining Medicare rate and policy updates for the 2025 payment cycle, including the calendar year (CY) 2025 Hospital Outpatient Prospective Payment System(OPPS) and Ambulatory Surgical Center (ASC) final rule. The Hospital OPPS rule phases in implementation of new baseline health and safety requirements for hospitals and Critical Access Hospitals (CAHs) providing obstetrical (OB). CMS finalizes its proposal to address barriers to ensure that people with Medicare who are on bail, parole, probation, home detention, or who are required to live in halfway houses, can access Medicare services. CMS is also expanding the eligibility criteria for a special enrollment period for formerly incarcerated individuals to include individuals who have been released from incarceration or who are on bail, parole, probation, home detention, or live in halfway houses. The final rule will expand the clinic services’ benefit for services provided outside the “four walls” of Indian Health Services (IHS) and Tribal clinics, and allows states to cover Medicaid clinic services outside the “four walls” of behavioral health clinics and clinics located in rural areas. The final rule also codifies the requirement of 12 months of continuous eligibility for children enrolled in Medicaid and CHIP, which was enacted as part of the CAA, 2023. This final rule also updates payment rates for hospital outpatient and ASC services for CY 2025 by 2.9 percent (3.4 percent market basket, less 0.5 percentage points for multifactor productivity), which is estimated to increase payments to hospitals by $2.2 billion in CY 2025 compared to CY 2024.

CMS Finalizes CY2025 Medicare Physician Fee Schedule, Home Health and ESRD Payment Updates. The Centers for Medicare & Medicaid Services (CMS) on November 1, released the final Medicare Physician Fee Schedule for the 2025 payment cycle. The Medicare PFS will establish new coding and payment for caregiver training for direct care services and supports and new coding and payment for caregiver behavior management and modification training that can be furnished to the caregiver(s) of an individual patient. The CY 2025 final rule adds services to the Medicare Telehealth Services List, including caregiver training services on a provisional basis and PrEP counseling and safety planning interventions on a permanent basis. CMS also finalizes its proposal that beginning January 1, 2025, an interactive telecommunications system may include two-way, real-time, audio-only communication technology for any Medicare telehealth service furnished to a beneficiary in their home, if the distant site physician or practitioner is technically capable of using an interactive telecommunications system, but the patient is not capable of, or does not consent to the use of video technology. Average PFS payments rates will be reduced by 2.93 percent in CY 2025, compared to the average amount these services were paid for most of CY 2024, unless Congress agrees to statutory changes to the payment methodology. CMS’ Fact Sheet reviews other changes included in the PFS final rule. In addition to this rule, CMS also finalizes the CY 2025 Calendar Year 2025 Home Health Prospective Payment System Rate Update; Quality Reporting Program Requirements; Value-Based Purchasing Expanded Model Requirements as well as the CY 2025 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS).

Medicare Home Health, ESRD Reimbursement Rates to Increase in 2025. Modern Healthcare reported on November 1, 2024, that reimbursement rates for home health and end stage renal disease (ESRD) Medicare providers will see a pay increase in 2025, according to final rules released by the Centers for Medicare & Medicaid Services (CMS). The home health prospective payment system (PPS) final rule indicates that reimbursement will increase by a total of 0.5 percent, and the ESRD PPS final rule estimates reimbursement will increase by 2.7 percent. The home health PPS final rule also highlights the ongoing implementation of the patient-driven groupings model (PDGM), which bases reimbursements on patient characteristics instead of therapy hours, and sets payments based on a 30-day period of care, rather than 60 days.

Wakely Releases Analysis of Acuity Changes During Medicaid Unwinding. Wakely, an HMA Company, released in October 2024, an issue brief on rate adjustment approaches for changing acuity during the Medicaid unwinding, along with a second issue brief focusing on the use of emerging experience and risk mitigation in rate setting. The brief summarizes approaches taken by actuaries in 27 states, and considerations for how these compare to biggest enrollment shift in Medicaid since the implementation of the Affordable Care Act.

CMS Releases FCHIP Demonstration Updates. The Centers for Medicare & Medicaid Services (CMS) released on October 23, 2024, a revised fact sheet for the Frontier Community Health Integration Project (FCHIP) Demonstration, which aims to test new models of healthcare delivery, such as telehealth services, ambulance services, and skilled nursing facility/nursing facility beds, in rural critical access hospitals. The revised fact sheet includes updates to FCHIP details and the participant list.

Medicaid Spending on Weight Loss Drugs Has Increased 500 Percent Since 2019, KFF Finds. Fierce Healthcare reported on November 4, 2024, that Medicaid spending on drugs used for obesity (GLP-1s) increased 500 percent between 2019 and 2023, with spending reaching $900 per prescription before rebates, according to a study from KFF. The study also found that the number of GLP-1 prescriptions increased 400 percent. Novo Nordisk’s Ozempic made up the largest share of prescriptions in 2023. Thirteen states cover GLP-1s for obesity through Medicaid, while four more cover GLP-1s but not for obesity.

Medicare Advantage Plans Received Payments for Veterans Receiving Care Through VHA, Study Finds. Stat News reported on November 4, 2024, that Medicare Advantage (MA) plans did not cover the costs of care for 10 percent of their veteran members in 2020, despite receiving $1.3 billion to cover those members, according to a new Health Affairs study. The study highlighted concerns that the federal government may effectively be paying twice for care for veterans dually-enrolled in an MA plan and through the Veterans Health Administration (VHA). Currently, there are no laws that specify whether the MA plan or the VHA should pay first for dual enrollees, unlike dual enrollees in Medicare and Medicaid.

Medicaid Enrollment Drops by More Than 403,000 in July 2024, CMS Reports. The Centers for Medicare & Medicaid Services (CMS) announced on October 31, 2024, that enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) was 79.6 million in July 2024, reflecting a decrease in Medicaid enrollment of more than 403,000 from June 2024. Medicare enrollment was 67.7 million, up nearly 159,000 from June 2024, including nearly 34.2 million in Medicare Advantage plans. More than 8 million Medicare-Medicaid dual eligible individuals are counted in both programs.

Medicaid HCBS Waiting Lists Exceed 710,000 in 2024, KFF Finds. KFF released on October 31, 2024, a data note highlighting the waiting list trends for Medicaid home and community-based services (HCBS) between 2016 and 2024. The report found that the number of states reporting waiting lists remained mostly the same, fluctuating between 37 and 41 reporting states, and that during most of those years, approximately 700,000 people were on an HCBS waiting list, with that number exceeding 710,000 in 2024. The report also found that most people on HCBS waiting lists have intellectual or developmental disabilities, are living in states that do not screen for eligibility prior to waiting list placement, and are eligible for personal care provided through regular Medicaid programs (versus an HCBS demonstration) or for HCBS provided through specialized state plans. The data provided is not a complete measure of unmet needs and is not always comparable across states or over time, according to KFF.

Industry News

Elevance Sues CMS Over 2025 Medicare Advantage Star Ratings. Modern Healthcare reported on November 1, 2024, that Elevance has filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS), seeking a recalculation of its Medicare star ratings for 2025 due to alleged improper assessment of its quality performance. The suit, filed in U.S. District Court for the Northern District of Texas, requests that CMS provide insurers with the data to validate the 2025 star ratings calculations and future star ratings calculations. Elevance previously won a 2024 star ratings lawsuit under different circumstances. Humana, United, and Centene have filed similar lawsuits challenging their star ratings.

Optum Scales Back Medicare Advantage I-SNPs in Several States. Skilled Nursing News reported on November 6, 2024, that UnitedHealth Group’s subsidiary Optum is shutting down its Medicare Advantage institutional special needs plans (I-SNPs) in several states, including Iowa and Minnesota. I-SNPs make up approximately 2 percent of all Special Needs Plans nationally.

Aetna to Cut Some Medicare Advantage, Part D Broker Commissions. Modern Healthcare reported on October 30, 2024, that Aetna will no longer compensate health insurance brokers for signing up enrollees to 25 Medicare Advantage plans in California, Connecticut, Florida, Maryland, New York, Texas, Utah, Virginia, Washington and the District of Columbia, and has ceased advertising for those 25 plans on certain enrollment platforms. Additionally, the payer will no longer compensate brokers for signing up customers to any Medicare Part D plans.

Walgreens Agrees to Pay $100 Million to Settle Drug Pricing Lawsuit. Reuters reported on November 4, 2024, that Walgreens has agreed to pay $100 million to settle a proposed class action lawsuit over pricing of generic drugs. The lawsuit alleged that Walgreens improperly charged Medicaid, Medicare, and privately insured customers more for generic prescription drugs than they charged members of the company’s Prescription Savings Club, which allowed customers to pay an annual fee for access to low-cost drugs without using insurance. Walgreens denies that the claims have merit.

Pharmaceutical Companies Seek to Reopen Lawsuits Over Medicare Drug Price Negotiation Program. CQ News reported on October 30, 2024, that pharmaceutical companies AstraZeneca, Bristol Myers Squibb Co., and Janssen Pharmaceuticals, are looking to overturn decisions to dismiss their separate lawsuits over the 2022 Centers for Medicare & Medicaid Services (CMS) Medicare drug price negotiation program in the U.S. Court of Appeals for the 3rd Circuit. The companies make similar arguments, claiming that the drug price negotiation program violates their constitutional rights, including First Amendment free speech rights over language in the negotiation contracts, as well as Fifth Amendment due process rights and the Takings Clause of the Constitution. The first round of drug price negotiations for 10 medications began in February 2024, and the lower negotiated prices are scheduled to take effect January 2026.

Novant Health Acquires UCI Medical Affiliates. Modern Healthcare reported on November 4, 2024, that Novant Health has completed its acquisition of BlueCross BlueShield of South Carolina’s UCI Medical Affiliates for an undisclosed amount. UCI Medical manages and provides administrative services for physical therapy and urgent care clinics. The acquisition includes 52 urgent care centers and 20 clinics across South Carolina.

PACS Group Acquires Eight PA Skilled Nursing Facilities. PACS Group announced on November 1, 2024, that it has acquired the operations of eight Pennsylvania-based skilled nursing facilities for an undisclosed amount through independently operated PACS subsidiaries. Four of the facilities will be leased from real estate investment trust CareTrust REIT.

Rural Healthcare Group Acquires Steward Health Physician Group. Modern Healthcare reported on October 31, 2024, that Rural Healthcare Group, a primary care organization, has completed its purchase of Steward Health Care’s physician group Stewardship Health for $245 million. As part of the transaction, Kinderhook Industries, the private equity group that owns Rural Healthcare Group, will combine the companies and rebrand as Revere Medical. The acquisition adds 5,000 physicians across nine states to Revere’s network.

CareTrust REIT to Acquire 31 Skilled Nursing Facilities. Modern Healthcare reported on October 30, 2024, that real estate investment company CareTrust REIT and a joint venture partner will acquire 31 skilled nursing facilities housing 3,290 beds in Tennessee and Alabama for $500 million. The nursing homes will be operated by CareTrust partners, including Utah-based Pacs Group, California-based Ensign Group, and California-based Links Healthcare Group. The deal is expected to close in the fourth quarter of 2024.

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HMA News & Events

HMA Webinars:

2024 Political Checkpoint. Tuesday, November 12, 2024, 12:00 PM ET. In the 2024 Political Checkpoint webinar hosted by Leavitt Partners, an HMA company, we will explore up-to-the-minute insights on the election results, discussing both confirmed outcomes and remaining uncertainties, along with the mandate for change that has emerged. Our expert panelists will provide an overview of what to expect from Congress and the Administration, focusing on key legislative priorities and executive actions, and share their predictions for what to watch over the first 100 days. Register Here

Mastering Star Performance: Strategies from the HMA Stars Accelerator Program. Wednesday, November 13, 2024, 12:00 PM ET. In this webinar, you’ll learn the essential methods and practices to enhance Star Ratings. HMA has developed our Stars Accelerator Solution to help plans improve their operations and attain higher Star Ratings. We’ll explore how to leverage data analytics to effectively track current star performance and identify areas for improvement. Additionally, we’ll dive into stratification techniques that allow for targeted focus on key measure opportunities throughout the year to ensure optimal results. HMA has also developed a playbook that captures the HMA Stars Accelerator Solution with proven strategies for Stars improvement based on our diverse and extensive expertise in managed care plan (MCP) operations, MCP strategy, performance improvement, actuarial science, data analytics, risk adjustment, and federal and state policy. Register Here

The Future of Medicare Advantage: How the Election Results Impact the Program. Tuesday, November 19, 2024, 12:00 PM ET. More than 50 percent of Medicare enrollees now choose Medicare Advantage (MA) as their preferred coverage option. This increased growth has brought with it increase scrutiny, with elected officials, regulators, think tanks, and news organizations all raising questions about the current makeup of the program. With MA reform potentially on the table in 2025, come learn about how the election results impact what policy changes could be considered in the coming year. Register Here

Electoral Consequences: Impact on the ACA Marketplace. Wednesday, November 20, 2024, 12:00 PM ET. The 2024 elections could create dramatic changes in the ACA marketplace. Enhanced ACA subsidies passed during the pandemic are set to expire in 2025, and a new CMS administrator will shape policy and regulatory components that affect marketplace and consumer dynamics. This webinar is designed for health plans currently participating in the ACA marketplaces, plans who are considering attending, as well as state regulators and marketplace leaders who need to understand changes that might be coming their way. The webinar will cover not only what is expected to change (2026 Notice of Benefit and Payment Parameters, AVC) but also what could possibly change that will affect 2025 Marketplaces and beyond. Register Here

NEW THIS WEEK ON HMA INFORMATION SERVICES
(Exclusive Access for HMAIS Subscribers):

HMAIS Reports

  • Updated 2Q24 Medicaid Managed Care Enrollment for 300 Plans
  • Updated Rhode Island State Overview
  • HMA Federal Health Policy Quick Takes

Medicaid Data

Medicaid Enrollment:

  • MLRs Average 80.2% at District of Columbia Medicaid MCOs, 2023 Data
  • MLRs Average 86% at Florida MMA MCOs, 2023 Data
  • North Carolina Medicaid Managed Care Enrollment is Up 6.3%, Jun-24
  • Oregon Medicaid Managed Care Enrollment is Down 2.2%, May-24 Data
  • South Carolina Medicaid Managed Care Enrollment is Down 9.8%, Jun-24 Data
  • South Carolina Dual Demo Enrollment is Down 15.9%, Jun-24 Data
  • Texas Medicaid Managed Care Enrollment is Down 7.7%, May-24 Data
  • Virginia Medicaid Managed Care Enrollment is Down 6.2%, Jun-24 Data
  • Virginia Medicaid MLTSS Enrollment is Down 4.2%, Jun-24 Data

Public Documents: 

Medicaid RFPs, RFIs, and Contracts:

  • Massachusetts Notice of Opportunity to Participate in MassHealth UCA Pilot Program, Oct-24
  • Michigan Transportation for SUD Treatment Services Competitive GFO, Oct-24
  • Minnesota Medicaid HCBS Providers for Culturally Specific, Responsive Services Grant RFP, Nov-24
  • Ohio Next Generation MyCare RFA and Awards, 2024
  • Oklahoma SoonerSelect Managed Care RFP, Proposals, Scoring, Contracts, and Related Documents, 2022-24
  • Oklahoma SoonerSelect Dental Program RFP, Proposals, Scoring, Contracts, and Related Documents, 2022-24

Medicaid Program Reports, Data, and Updates:

  • California Department of Managed Health Care Annual Reports, 2016-23
  • Texas Medicaid CHIP Data Analytics Unit Quarterly Reports, 2018-24
  • Texas Long-term Care Ombudsman Program Report, 2020-24
  • Virginia External Quality Review Technical Reports, CY 2018-23
  • Wyoming Medicaid Care Management Entity EQR Report, SFY 2023

A subscription to HMA Information Services puts a world of Medicaid information at your fingertips, dramatically simplifying market research for strategic planning in healthcare services. An HMAIS subscription includes:

  • State-by-state overviews and analysis of latest data for enrollment, market share, financial performance, utilization metrics and RFPs
  • Downloadable ready-to-use charts and graphs
  • Excel data packages
  • RFP calendar

If you’re interested in becoming an HMAIS subscriber, contact Andrea Maresca at [email protected].

Edited by:

Alona Nenko
Andrea Maresca
Mary Goddeeris
Gabby Palmieri
Maddie McCarthy
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