Welcome to Spring Break! That time of the year where college kids head to a beach somewhere, families pack up for some tourist trap to spend lots of money, and Congress gets out of DC and goes back home. This is also a time to consider where we are and where we are heading in terms of health care policy. We will continue to hear of potential policies aiming to unify Republicans on health care reform, but until we see substantive policy changes that get members to change their votes from the American Health Care Act, this is all talk. However, there is a health care minibus coming. The “minibus” refers to a handful of policy provisions tied together in one piece of legislation. This minibus will carry a number of provisions into law. How many riders will be onboard the minibus remains to be seen. Continue Reading The Health Care Minibus
While we continue to monitor Congressional efforts to repeal and replace the ACA, we are also monitoring CMS’s efforts to implement the administration’s Medicaid program goals without Congressional action. The future of the Medicaid program depends not only on the final outcome of a repeal and replace bill, but also on the Secretary Price’s and CMS Administrator Verma’s strategy and vision for the program. In two recent Letters to Governors from Secretary Price and Administrator Verma, we see how some legislative provisions from the AHCA that are still the subject of debate could be implemented despite the lack of legislative action. Continue Reading Medicaid Reform Beyond the AHCA
This week, in their “Future of the Affordable Care Act” series on our Employment Matters blog, my colleagues Alden Bianchi and Edward Lenz provided an analysis of the major provisions of the American Health Care Act (“AHCA”).
Introduced on March 6, 2017, the AHCA is the first concrete legislative proposal detailing the initial provisions designed to repeal and replace the Affordable Care Act. As Alden and Ed discuss, the bill currently is the subject of widespread media scrutiny and intense criticism. The bill is not final and will likely face numerous changes, including the last minute proposals changes of the past 48 hours. The March 6th version offers an outline of Republican priorities in the regulation of health and health care financing, which include a strong bias in favor of market-based solutions and aversion to most (but not all) government intervention in the health care markets.
Check out their full analysis on The Future of the Affordable Care Act Week 7: The American Health Care Act, here. Continue Reading Future of the Affordable Care Act and the American Health Care Act
A series of recoupment letters from the New York State Medicaid Fraud Control Unit (MFCU) to healthcare providers who have management or billing company arrangements based on a percentage of collections has prompted the Medical Society of the State of New York (MSSNY) to warn its members that such arrangements are fraudulent under Medicaid law. The warning, posted on its blog on February 10, 2017, also urged members to review their billing arrangements to make sure the compensation is based either on time or a fixed, flat fee.
In a redacted MFCU recoupment letter linked to the post, MFCU states that as a result of an audit and investigation, it has determined that the percentage based contract violates state and federal Medicaid regulations, including Section 360.7.5(c), which permits Medicaid providers to contract with billing agents if the compensation paid to the agent is “reasonably related to the cost of the services” and “unrelated, directly or indirectly, to the dollar amounts billed and collected.” The audit period was five years, and MFCU sought to collect the overpayment amount plus an additional nine percent (9%) interest. Continue Reading New York Medical Society Warns Providers to Avoid Percentage-Based Fees
In a February 24th blog post, we described Medicaid block grants and per capita caps in terms of A x B = C to demonstrate how those payment policies work. ‘A’ is the amount a state is paid per beneficiary, ‘B’ is the number of beneficiaries in a given state, and ‘C’ is the total state payment from the federal government. We have since been asked by numerous providers to describe the nuts and bolts of how a per capita cap, the current Medicaid financing structure in the proposed American Health Care Act, would work. For the Medicaid provider, the nuts and bolts of how they are paid would change very little while the amount they are paid might change a lot. Continue Reading Provider Payments Under a Medicaid Per Capita Cap
Earlier this week, the Office of Inspector General for the Department of Health and Human Services (“OIG”) posted its fiscal year (“FY”) 2016 data about Medicaid Fraud Control Units (“MFCUs”) across the country.
Federal law requires each state to operate a MFCU separate and distinct from the state Medicaid Agency. MFCUs are charged with investigating and prosecuting fraud committed by Medicaid providers and in the state’s administration of the Medicaid Program, as well as patient abuse/neglect that occurs in a Medicaid-funded facility or at the hands of Medicaid providers. MFCUs currently operate in 49 states and the District of Columbia (North Dakota presently has a waiver but proposals to create a MFCU have been introduced in the state legislature). They are typically part of a state’s Attorney General’s office and are required to employ investigators, attorneys and auditors. The OIG is responsible for overseeing MFCUs. It annually recertifies MFCUs, assesses their performance and compliance with Federal requirements, and administers a Federal grant award that funds a portion of each MFCU’s operational costs. Continue Reading OIG Releases FY 2016 Statistical Data About Medicaid Fraud Control Units
Currently, state Medicaid programs have flexibility in developing payment policies, including utilizing supplemental payments and non-federal supplemental payment mechanisms. Supplemental payments pay providers above what they receive for an individual service through Medicaid provider rates. Supplemental payments include disproportionate share hospital (DSH) and upper payment limit (UPL) payments and are a critical funding source for many safety net providers. States can fund the non-federal share of these payments through intergovernmental transfers, provider taxes, and certified public expenditures.
However, there is limited transparency and data available on supplemental payments. As a result, states can use these funding structures to increase their total federal Medicaid match. The total percentage of federal funding for each state’s Medicaid program is often referred to as the effective Federal Medical Assistance Percentage (FMAP). However, due to data limitations on supplemental payments, we do not know what any state’s effective FMAP actually is.
The American Health Care Act is the House Republican bill to repeal and replace the Affordable Care Act. Its details became available March 6th. This bill changes the structure of Medicaid supplemental payments, with the exception of DSH payments. States’ reaction to the bill will tell us more about Medicaid supplemental payments than we’ve ever known, and whether the financing system in the proposed bill will provide equivalent federal funding. Continue Reading Medicaid Supplemental Payments under The American Health Care Act
Medicaid expansion in the Affordable Care Act (ACA) required coverage of individuals with incomes from 0% of the federal poverty level (FPL) through 133% of the FPL. The requirement to cover this group was overturned in NFIB v. Sebelius. As a result, it is now up to states to determine whether they will offer Medicaid coverage to these individuals. This new category of eligible Medicaid beneficiaries is often referred to as childless adults.
A number of Republicans, both governors and those in Congress, have taken to using the term “able-bodied” to refer to this group. If you are able-boded, the theory goes, the Medicaid program should reasonably expect you to work. As a result, some Medicaid expansion and Medicaid reform proposals have included work requirements as an eligibility criteria for Medicaid. We can expect this topic to continue to be raised as we get deeper into ACA reform. Continue Reading Who Are the Medicaid Able-Bodied?
The pharmacy industry continues to be under scrutiny from all angles. As legislative, agency, and enforcement priorities take shape under the new administration, the industry is faced with what seems like daily developments in terms of policy updates, legislation, and potential regulation. Our 2017 Pharmacy Industry Summit will bring together stakeholders and thought leaders from across the industry to discuss legal and policy challenges facing manufacturers, PBMs, payors, pharmacies, and providers and to assess the various swirling initiatives and their potential impact on the industry.
The Summit will be held on April 5-6 at the Mintz Levin Washington, DC office. Event details can be found here.
Session topics will include:
- A Keynote Address from Mark Merritt, President and CEO of The Pharmaceutical Care Management Association (PCMA)
- An update on the current state of Affordable Care Act Reform
- Drug Pricing Debate and the Evolving Role of Pharmacy Industry Players
- State Issues Affecting the Pharmaceutical Industry
- Congressional Staffer Panel
- Value-Based and Innovative Contracting and Reimbursement
- FDA’s Impact on the Supply Chain – Evolving Policies and Changing Priorities
- Government Enforcement and the Pharmaceutical Industry
We hope you can join us! Please register by March 29, 2017.
In the coming weeks, it is highly likely that House Republicans will come forward with Medicaid financing reform proposals, such as block grant or a per capita cap proposal, or some combination of both. How should these proposals be evaluated? The best way to understand these proposals is through the equation A x B = C. A is spending per person, B is the number of people, and C is total spending. This equation helps explain the difference between per capita cap proposals and block grant proposals. Essentially, A x B is per capita caps, while C is block grants. Both per capita caps and blocks grants have been touted by Republicans as mechanisms to rein in costs of the Medicaid program. However, the devil is in the details. Republicans will need to not only address these details head on in their Medicaid financing reform proposals, but also understand how these details will affect beneficiaries, states, and providers.