Manatt on Health Reform: Weekly Highlights - November 2016 #2

Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP

CMS authorizes Massachusetts waiver supporting transition to a Medicaid ACO model; Oregon CCOs use “flexible service” funds to invest in housing-related services; and enrollment for 2017 Marketplace coverage begins.


Connecticut: Hospitals Jointly Petition CMS, Challenging State Medicaid Reimbursement Rates

The Connecticut Hospital Association (CHA), along with 20 individual hospitals, has filed a petition with CMS challenging the State's Medicaid reimbursement rates and hospital tax; CHA has also asked the State Superior Court to declare the hospital tax unconstitutional. The petition claims that the tax and the low Medicaid reimbursement rates—which, according to the Connecticut Office of Health Care Access, cover approximately 60% of total beneficiary costs—has contributed to 1,390 hospital layoffs and the elimination of 1,700 open positions. The petition proposes several steps that CMS could take, including requiring Connecticut to amend its current Medicaid reimbursement structure, requiring the State to update hospital rates annually, and declining any requests by the State to further reduce hospital reimbursement rates.

Massachusetts: CMS Approves Medicaid Transition to ACO Model

CMS approved Massachusetts's 1115 waiver amendment, providing authorization and funding to transition MassHealth (the State Medicaid program) to a Medicaid ACO model; the agency also approved an extension of the waiver through June 2022. The approved amendment and extension largely mirror the State's proposal, submitted in July 2016, and includes authorization for a $1.8 billion Delivery System Reform Incentive Payment (DSRIP) program to support ACO reform implementation, investments in community-based behavioral health and long-term services and supports organizations (Community Partners), "flexible services" meeting otherwise uncovered social needs, and other statewide investments. CMS also approved an additional $6.1 billion in Safety Net Care Pool funding, which is restructured to increase accountability for funds historically dedicated to safety net providers and to align use of the funds with CMS principles for uncompensated care pool funding applied in other states. An ACO pilot approved under the waiver amendment will launch in December 2016. The full program is slated for implementation in December 2017 after the State has procured ACOs and Community Partners, as well as completed re-procurement of the State’s Medicaid managed care plans.

Oregon: Most CCOs Use Medicaid Dollars to Support Housing-Related Services, Survey Finds

A recent survey by the Oregon Health Authority found that at least 15 of Oregon's 16 coordinated care organizations (CCOs) use Medicaid funds to support housing-related services. Of the 15 CCOs that responded to the survey, 93% supported at least one pre-tenancy service (such as tenant screening and assessment and rental advocacy with landlords); all reported supporting some type of tenancy-sustaining service (such as tenancy rights education and eviction prevention); 93% supported some type of housing-based care coordination service; and 80% supported at least one health or health-related service in housing facilities. The survey also found that less than one-third of CCOs supported all services within each of the above categories, and approximately one-third supported less than half of the pre-tenancy, tenancy-sustaining or housing-based care coordination services that were listed in the survey. Oregon’s 1115 waiver allows CCOs to use Medicaid dollars for non-medical "flexible services" aimed at improving health outcomes and lowering costs.

Tennessee: Annual Medicaid Survey Finds High Satisfaction and Increase in Visits to Doctors’ Offices Before Hospitals

The percentage of Medicaid beneficiary respondents who first sought treatment at a hospital rather than a doctor’s office or a clinic decreased from 6% to 3% between 2015 and 2016, according to a survey conducted by the University of Tennessee Knoxville for the State Department of Finance and Administration. The survey also found that 92% of Medicaid enrollees were satisfied with the Medicaid program. Tennessee's overall uninsured rate dropped to 5.5% in 2016 – the lowest it has been in the past 20 years. Adult uninsured rates dropped from 8.2% in 2015 to 6.6% in 2016, with 85% of uninsured individuals in 2016 citing affordability as the reason they remain uninsured (down from 90% in 2015).

Virginia: $281 Million in New Medicaid Costs Projected Over Two Years

A Department of Planning and Budget report submitted to General Assembly leadership projects an additional $281 million in new Medicaid spending for the 2016-2018 biennium, in addition to the $9.3 billion already budgeted through 2018. Officials attributed the extra costs to rising premiums, rising expenses for mental health services, and additional costs associated with the elderly and disabled. In response, Governor Terry McAuliffe (D) noted that expanding Medicaid would reduce State expenditures by approximately $211 million, offsetting much of the new Medicaid costs.


Open Enrollment for 2017 Marketplace Coverage Launches

The 2017 open enrollment period for Marketplace coverage launched on November 1 and will remain in effect through January 31, 2017. Consumers have until December 15, 2016 to enroll in or change plans for coverage starting January 1, 2017. According to HHS, more than three-quarters of current Marketplace consumers (77%) will be able to purchase coverage for less than $100 per month after tax credits and consumers will have an average of 30 plans from which to choose.

Massachusetts and New Hampshire: Insurer Files Lawsuit Over Unpaid Risk Corridor Payments

Minuteman Health, a Massachusetts-based insurer that sells qualified health plans in Massachusetts and New Hampshire, has filed a lawsuit against the federal government claiming it is owed $5.5 million in unpaid risk corridor payments, a figure that includes payments owed for 2014 and the estimated amount for 2015. Minuteman Health also filed a separate lawsuit against the federal government in July 2016 when it was ordered to pay $16.7 million in risk adjustment payments that it claims were improperly calculated.


Coverage Gains Slow in the First Six Months of 2016

Results from the National Center for Health Statistics for the first six months of 2016 showed small, but not significant, gains in insurance coverage rates since 2015. According to the survey, 200,000 people gained health insurance between 2015 and the second quarter of 2016, leaving 28.4 million people uninsured (8.9% of the population). The percentage of adults aged 18–64 with Marketplace coverage remained steady at 4.8% between the second quarter of 2015 and the second quarter of 2016, though the percentage of people under age 65 enrolled in a high-deductible private plan increased from 36.7% to 38.8%.


Georgia: New Department of Community Health Commissioner Named

Frank Berry will become the State’s next Department of Community Health commissioner beginning on December 1, where he will oversee operations for the Medicaid program, the State Health Benefit Plan and the divisions of Healthcare Facility Regulation and Health Information Technology. Berry currently serves as the commissioner of the Department of Behavioral Health and Developmental Disabilities. Berry replaces Clyde Reese III, who was appointed to the Georgia Court of Appeals.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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