Weekly Health Care Policy Update – September 3, 2021

September 10, 2021

In this update: 

  • COVID-19 Response
    • CMS Issues Medicaid Guidance on Covid-19 Testing and Vaccination
    • Biden Administration Announces $3 Billion for Vaccine Supply Chain
  • Administration
    • CMS Announces Director of CCIIO, Chief Dental Officer, and Director of Program Integrity
    • Biden Administration Announces Policy Changes to Increase Housing Supply
  • Regulatory
    • MedPAC Holds September Meeting, Discusses MA Spending
    • Medicare Board of Trustees Releases Annual Report
    • HHS Launches Office of Climate Change and Health Equity
    • CMS Reminds States to Comply with Medicaid Third Party Liability Requirements for Prenatal and Other Services
    • CMS Updates APM Performance Pathway Toolkit
    • SAMHSA Awards $74.2 Million to Strengthen Youth Mental Health
  • Other
    • DOJ Settles with Sutter Regarding Submissions of Unsupported Diagnosis Codes to MA
  • Congressional Hearings
  • New York State
    • Governor Hochul Announces Senior Administration and Agency Appointments
    • DOH Adopts Personal Care Services and Consumer Directed Personal Assistance Program Regulations
    • DOH Provides Update on Statewide Formulary for Opioid Treatment Medications

COVID-19 Response

CMS Issues Medicaid Guidance on Covid-19 Testing and Vaccination
On August 30th , the Centers for Medicare & Medicaid Services (CMS) announced the release of two State Health Official letters offering guidance to states on Covid-19 vaccination, testing, and other topics related to the Covid-19 public health emergency (PHE) under Medicaid and the Children’s Health Insurance Program (CHIP).
 
The first letter provides guidance on Medicaid and CHIP coverage and reimbursement of Covid-19 testing and Medicaid coverage of habilitation services. CMS interprets the American Rescue Plan (ARP) to require state Medicaid and CHIP programs to cover all FDA-authorized COVID-19 tests without cost sharing, including “point of care” or “home” tests. However, states must continue to apply third party liability rules and may use utilization management techniques, as described in the letter. In addition, CMS clarifies that during the Covid-19 PHE, states may cover habilitation services to facilitate the delivery of remote learning for children with disabilities who are enrolled in a 1915(c) waiver or 1915(i) program, if such services are not available through the local education agency. This letter is available here.
 
The second letter provides guidance on several temporary increases in the federal medical assistance percentage (FMAP) contained in the ARP: 

  • FMAP of 100% for Covid-19 vaccines and vaccine administration;
  • FMAP increase of 5% for all Medicaid services for two years, for states that newly expand Medicaid as allowed by the Affordable Care Act (only Oklahoma has opted into this opportunity so far); and
  • FMAP of 100% for Medicaid services received through certain Urban Indian Organizations and Native Hawaiian health care entities.

This letter notes that because the federal government is supplying vaccines for free, states will not currently claim matching funds for vaccine doses. However, the FMAP of 100% for Covid-19 vaccines will still apply to vaccine administration reimbursement. States may submit a State Plan Amendment to increase Medicaid reimbursement for Covid-19 vaccine administration to increase access or to provider adequate compensation to providers. CMS notes that this “may be particularly relevant in geographic areas where providers of Covid-19 vaccine administration are not widely available.”
 
The guidance also clarifies that this 100% FMAP may be used to fund certain costs related to vaccine incentive programs for Medicaid beneficaries. Specifically, CMS will apply the 100% FMAP to state administrative costs related to state-funded incentives to encourage vaccinations against Covid-19 and influenza.
 
The letter is available here.
 
Biden Administration Announces $3 Billion for Vaccine Supply Chain
On September 2nd, White House Coronavirus Response Coordinator Jeff Zients announced at a press briefing that the Administration will invest $3 billion to expand U.S.-based manufacturing of Covid-19 vaccine inputs. These funds will be provided to American companies to expand capacity for critical supplies, including vaccine components, syringes and needles, and personal protective equipment (PPE). Zients said that specific companies have not yet been identified, but that awards will go out in the next few weeks.
 
The press briefing transcript is available here.

Administration Updates

CMS Announces Director of CCIIO, Chief Dental Officer, and Director of Program Integrity
On August 30th, CMS announced the following new staff appointments:

  • Dr. Ellen Montz will serve as Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight (CCIIO). Dr. Montz was previously the chief deputy and chief health economist for Virginia’s State Medicaid department and served in several roles at the Department of Health and Human Services (HHS) under the Obama Administration.
  • Dr. Natalia Chalmers will serve as the first-ever Chief Dental Officer. Dr. Chalmers previously served as a Dental Officer at the Food and Drug Administration (FDA).
  • Dara Corrigan will serve as Deputy Administrator and Director of the Center for Program Integrity (CPI). Corrigan previously served as the acting HHS Inspector General and practiced law at the Department of Justice. Most recently, she was Vice President of Government Affairs and Policy at Fresenius Kabi, a large pharmaceutical and medical device supplier.

A press release is available here.
 
Biden Administration Announces Policy Changes to Increase Housing Supply 
On September 1st, the Biden Administration announced several policy changes designed to increase the nationwide supply of affordable housing as part of the Build Back Better Agenda. The changes are designed to add nearly 100,000 affordable homes over the next three years. Specific goals include increasing the supply of quality, affordable rental units, increasing the supply of manufactured housing and 2-4 unit properties, making more single-family homes available to individuals, families, and nonprofits, rather than large investors, and leveraging existing federal funds to work with state and local governments to boost housing supply. A fact sheet is available here.

Regulatory Updates

MedPAC Holds September Meeting, Discusses MA Spending
On September 2nd and 3rd, the Medicare Payment Advisory Committee (MedPAC) met for its September public meeting. Topics covered included:

  • Context for Medicare payment policy;
  • Effects of the Covid-19 PHE and other considerations for MedPAC’s 2022 assessment of Medicare payment adequacy;
  • Potential reforms to Part D’s low-income premium subsidy;
  • A mandated report entitled “Designing a value incentive program for post-acute care”; and
  • A mandated report entitled “Impact of Bipartisan Budget Act 2018 changes to the home health prospective payment system.”

During Thursday’s discussion, members expressed a desire to further investigate the effect of the Medicare Advantage (MA) program on federal spending. Medicare Advantage now accounts for 42% of all Medicare enrollment and 46% of Medicare spending.
 
According to MedPAC’s own analysis, per-beneficiary spending growth in MA is higher than in other private plans, for Medicare fee-for-service (FFS) beneficiaries, or in Part D prescription drug plans. According to MedPAC, MA spending per beneficiary grew 6.9% annually from 2011 to 2019 while Medicare FFS spending grew at only 4%.
For comparison, a Kaiser Family Foundation report on August 17th projected that MA spending will continue to increase at a faster rate than Medicare FFS (5.3% compared to 4.4%) from 2021 to 2029.
 
The full agenda is available here.
 
Medicare Board of Trustees Releases Annual Report
On August 31st, the Medicare Board of Trustees released their annual report for Medicare’s two trust funds, the Hospital Insurance (HI) trust fund and the Supplementary Medical Insurance (SMI) Trust Fund. The report found that the Covid-19 pandemic is not expected to have a large effect on the Medicare program’s financing after 2024. Its projections indicate that the HI Trust fund (for Medicare Part A) will run out of reserves by 2026, which is unchanged from previous reports.
 
Like previous reports, this report finds that Medicare faces a long-term financial shortfall under current benefits and financing, with cost growth substantially higher than projected growth in gross domestic product (GDP) through the mid-2030s. Projected increases in the volume and intensity of services also mean that Medicare will grow as a share of GDP through the late 2070s. The report incorporates the effects of the pandemic, with Trustees projecting elevated mortality rates through 2023, reductions in immigation and childbearing in 2021 and 2022, and worker productivity and GDP permanently lowered by 1 percent, even as they resume pre-pandemic trajectories.
 
Specifically, the report projects that: 

  • The HI Trust fund (Medicare Part A) will pay scheduled benefits only until 2026, at which time the fund’s reserves become depleted and program income will pay 91 percent of scheduled benefits. The HI Trust Fund will pay 78 percent of benefits by 2045.
  • The SMI Trust Fund (Part B and Part D) is adequately financed indefinitely because current law provides financing from general revenues and beneficiary premiums each year to meet the next year’s expected costs. This will mean increasing demands on both taxpayers and beneficiaries.

Finally, for the second year in a row, the report included a determination of projected “excess general revenue Medicare funding,” triggering a Medicare “funding warning.” This requires the President to submit proposed legislation within 15 days of the Fiscal Year 2023 budget, and requires Congress to consider such legislation on an expedited basis. 
 
The report’s Fact Sheet may be found here.
 
HHS Launches Office of Climate Change and Health Equity
On August 30th, HHS announced the creation of a new Office of Climate Change and Health Equity (OCCHE) to “protect the health of people throughout the U.S. in the face of climate change, especially those experiencing a higher share of exposures and impacts.” OCCHE has been established as part of the Office of the Assistant Secretary for Health in the Immediate Office of the Secretary in response to a January 27th Executive Order (available here) issued by President Biden. Among OCCHE’s priorities is to assist “with regulatory efforts to reduce greenhouse gas emissions and criteria air pollution throughout the health care sector, including participating suppliers and providers.”
 
HHS Secretary Becerra has indicated that he intends to use government-run hospitals as laboratories for best practices in reducing carbon footprints. The Secretary also suggested that he could use new regulations to address the health care industry’s carbon emissions. The American Hospital Association has argued that many regulations compel hospitals to “take actions that may not be aligned with efforts to decarbonize.”
 
The press release on the creation of OCCHE is available here.
 
CMS Reminds States to Comply with Medicaid Third Party Liability Requirements for Prenatal and Other Services
On August 27th, the Center for Medicaid and CHIP Services (CMCS) released subregulatory guidance on the need for states to comply with third party liability (TPL) requirements regarding: 

  • Prenatal and postpartum care services, for which states must now use standard coordination of benefits (COB) instead of “pay and chase”;
  • Pediatric preventive services, for which states must make payment regardless of TPL, unless the State has made a determination related to cost-effectiveness and access to care that warrants cost avoidance for 90 days; and
  • Claims related to child support enforcement beneficiaries, for which states must make payments regardless of TPL for up to 100 days.

A recent CMS review found that most states have not yet amended their state plans to comply with these requirements, which arise from statutory changes passed in 2018 and 2019.
 
The bulletin is available here.
 
CMS Updates APM Performance Pathway Toolkit
On August 30th, CMS released an updated version of its Alternative Payment Model (APM) Performance Pathway (APP) Toolkit. The APP is a reporting and scoring pathway under the Merit-based Incentive Payment System (MIPS) for MIPS-eligible clinicians who are also participants in MIPS APMs. It is designed to encourage participation in APMs by streamlining reporting requirements. The APP measures performance in three areas: quality, improvement activities, and promoting interoperability.
 
CMS has updated the toolkit to include: 

  • A new scoring guide;
  • New data aggregation reporting scenarios;
  • A new fact sheet for MIPS APM participants;
  • A new infographic for MIPS APM participants infographic;
  • A new quick start guide;
  • New reporting scenarios; and
  • A new Shared Savings Program Accountable Care Organization (ACO) User Guide.

More information on the APP is available here. The updated toolkit is available here.
 
SAMHSA Awards $74.2 Million to Strengthen Youth Mental Health
On August 27th, the Substance Abuse and Mental Health Services Administration (SAMHSA) awarded $74.2 million in grants to raise awareness of mental health issues for youths, train school personnel, and coordinate treatment for young people who have emotional disorders. Seventeen grantees will receive $54.3 million in first-year funds through Project AWARE (Advancing Wellness and Resilience in Education), $36.5 million of which is funding from the Coronavirus Response and Relief Supplemental Appropriations Act. Twelve grantees will receive $19.8 million in first-year funds through the Comprehensive Community Mental Health Services for Children and their Families Program. These grantees will eventually receive a total of $76.2 million over the four-year grant program. No New York-based entities received funding.

The press release is available here.

Other Updates

DOJ Settles with Sutter Regarding Submissions of Unsupported Diagnosis Codes to MA
On August 30th, the Department of Justice (DOJ) announced that it agreed a settlement with Sutter Health, a large California-based health care provider, and its affiliates, concerning allegations that Sutter knowingly submitted inaccurate information, including unsupported diagnoses, regarding Medicare Advantage (MA) enrollees. DOJ alleged that Sutter submitted unsupported diagnoses codes that caused inflated payments to be made to its MA plans, violating the False Claims Act. Sutter agreed to pay $90 million and to enter a five-year Corporate Integrity Agreement with HHS, but did not admit liability.
 
The press release is available here.

Congressional Hearings

No hearings scheduled next week.

New York State Updates

Governor Hochul Announces Senior Administration and Agency Appointments
This week, Governor Kathy Hochul announced the following appointments to the Office of the Governor (the Executive Chamber):

  • Karen Persichilli Keogh has been appointed Secretary to the Governor. Keogh most recently served as Head of Global Philanthropy at JPMorgan Chase. Previously, she served as the campaign manager and New York State director for Hillary Clinton’s 2006 Senate re-election campaign.
  • Kathryn Garcia has been appointed Director of State Operations (press release here). Garcia previously served as the Commissioner of the New York City Department of Sanitation and the city’s COVID-19 “food czar” during the pandemic. Garcia was a candidate in this year’s New York City Democratic mayoral primary, finishing as runner-up to Eric Adams.
  • Elizabeth Fine has been appointed as Counsel to the Governor. Fine was most recently the Executive Vice President and General Counsel for New York State’s economic development agency, Empire State Development, and previously served as Chief Legal Officer for the New York City Council and Special Counsel to President Clinton.
  • Neysa Alsina has been appointed Special Advisor on Pandemic Relief (press release here). Alsina previously served as Chief Counsel to the New York City Comptroller, a Senior Policy Advisor in Congress, and Counsel to the New York City Bar Association.

The Governor has also announced the following appointments: 

  • Senator Brian Benjamin has been selected as Lieutenant Governor (press release here). Senator Benjamin is currently the New York State Senator for District 30, which includes Harlem, East Harlem, and the Upper West Side. Benjamin currently serves as Senior Assistant Majority Leader in the Senate and is the chairman of the Senate Committee on Revenue and Budget.
  • Adrienne Harris has been nominated as Superintendent of the Department of Financial Services (DFS) (press release here). Harris was a Special Assistant to the President for Economic Policy at the National Economic Council under President Obama, and previously worked at the Department of the Treasury. To assume the position of Superintendent, Harris will require confirmation from the New York State Senate.

DOH Adopts Personal Care Services and Consumer Directed Personal Assistance Program Regulations
The New York State Department of Health (DOH) has adopted revised regulations for Personal Care Services (PCS) and the Consumer Directed Personal Assistance Program (CDPAP). These regulations are in keeping with the reforms to PCS and CDPAP approved by the second Medicaid Redesign Team (MRT II), including a revised assessment process (including parts that may now be conducted through telehealth) and narrower eligibility criteria.
 
Changes in the regulations include, but are not limited to, the following: 

  • Recipients must demonstrate a minimum need for assistance with at least two activities of daily living (ADL), or one ADL for recipients with dementia or Alzheimer’s disease, before services can be authorized.
  • PCS must be ordered by a qualified and independent practitioner and not the individual’s attending physician.
  • The independent assessment and practitioner order processes must be completed at least annually.
  • Local social services departments (LDSS) and Medicaid managed care organizations (MCOs) must evaluate the cost-effectiveness of services relative to other services and supports available, and LDSS and MCOs should disallow the provision of services if they are not found to be cost-effective.
  • LDSS and Medicaid MCOs must review the independent assessment and practitioner order prior to authorizing services. If more than 12 hours of services per day on average would be authorized, they must refer the case to the independent review panel for further consideration.

The revised regulations are available here. The regulations will be effective 60 days after they are published in the New York State Register. Questions may be sent to Katherine Ceroalo at REGSQNA@health.ny.gov.
 
DOH Provides Update on Statewide Formulary for Opioid Treatment Medications
On August 31st, DOH held a webinar to discuss updates on the statewide formulary for opioid dependence agents and opioid antagonists. The New York State 2020-21 Enacted Budget provided that DOH should implement a single statewide formulary for such drugs across Medicaid fee-for-service (FFS) and MCOs by October 1, 2021. As such, Medicaid FFS and MCOs will have a unified set of Prior Authorization (PA) requirements and list of preferred drugs. Preferred drugs will not require PA, unless coverage parameters are exceeded, and non-preferred drugs will. Furthermore, clinical criteria for approval of a non-preferred drug will be uniform across the Medicaid program. A Medicaid Update article will be published later in September with further guidance.
 
The slides from the webinar are available here.