States may be starting to take aim at prescription automatic refill programs. Automatic refill programs have been proven to increase patient adherence, especially among patients with chronic conditions. However, these programs are not popular among regulators: Medicare Part D and several state boards of pharmacy have prohibited these programs for mail order pharmacies and an increasing number of state Medicaid programs are prohibiting automatic refill programs for both mail and retail pharmacies. Regulators argue that automatic refill programs result in waste to the system, stockpiling, and federal program payment for unneeded prescriptions.

Last week, Wal-Mart and Sam’s Club paid $825,000 to the Minnesota Attorney General and the Department of Justice to settle allegations that they violated the False Claims Act and Minnesota False Claims Act by automatically refilling prescriptions and billing Medicaid without a specific authorization from the patient. These alleged violations appear to be for prescriptions filled at both retail and mail. Continue Reading The Hazards of Prescription Auto-Refill Programs

To date, 34 states (including D.C.) have adopted Medicaid expansion. Of the remaining 17 states, some are considering expanding Medicaid. States with recent activity relating to Medicaid expansion include Florida, Idaho, Maine, Missouri, Nebraska, New Hampshire, North Carolina, Utah, and Virginia.  Last week, Virginia became the latest state to expand Medicaid and also tied a Medicaid work requirement to the expansion. California is also exploring expanding Medicaid to undocumented adults.

Below we have highlighted recent state grassroots, legislative, and executive action to expand Medicaid. Continue Reading A Rundown of Recent State Action Relating to Medicaid Expansion

On January 11, 2018, CMS released a Letter to Medicaid Directors outlining guidance that work requirements can be used as a basis for eligibility for certain adult Medicaid beneficiaries through 1115 waivers. Medicaid beneficiaries that can be subject to work requirements include non-elderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis other than disability. The guidance also outlines that exemptions/protections from work requirements must be made for individuals who are medically frail or have substance use disorders. It also details that states should outline how they would support beneficiaries with limited employment opportunities (economically depressed area, rural area, transportation limitations, etc.). The guidance suggests state could use good cause exemptions similar to those used in SNAP and TANF. Continue Reading CMS Guidance on Work Requirements for Medicaid Eligibility

The release of the House and Senate GOP tax plan this month has left Washington on edge as it comes to grips with the realities of tax reform. However, the elimination of the medical expense tax deduction in the House Republicans’ tax reform package stands out above the rest as misguided. This elimination would not only affect filers using the deduction, but it also stands to have broader implications for our health care system.

ML Strategies has published a new blog post in Health Affairs on the consequences of the deduction’s removal to the Medicaid program. It can be found here.

As Part of an ongoing series, we have previously provided details on the structure, funding, and evaluation of the Maternal, Infant, Early Childhood, Home Visiting (MIECHV) program, Medicare therapy caps, and community health center funding.  This post marks is the first in an exploratory series illuminating the structure, funding, and outlook of the Special Needs Plans (SNPs).  Additionally, drawing on potential riders affected by the current health care minibus, the “minibus” refers to a handful of policy provisions tied together in one piece of legislation. Undoubtedly, this minibus will carry a number of provisions into law. The number of riders who will be on board when the minibus leaves the station remains to be seen. However, as Congress gears up for a mega-package in December – including the debt limit and the budget – there is the potential to incorporate the minibus and/or a health care stabilization package. Continue Reading Special Needs Plans: A Minibus Rider

A court in the Southern District of New York (“SDNY” or the “Court”) recently released an important decision applying the Supreme Court’s landmark Escobar ruling to a qui tam action involving percentage fee arrangements for billing agents.  Among other claims, the City of New York (“the City”) and its billing agent, Computer Sciences Corporation (“CSC”) allegedly used an illegal incentive-based compensation arrangement for CSC’s services when billing New York Medicaid for services provided to eligible children under New York’s Early Intervention Program (“EIP”).   EIP provides “early intervention services” to certain children with development delays using federal funds provided under the Individuals with Disabilities Education Act.  EIP allows municipalities like the City to pay providers directly for EIP services and then seek reimbursement from other payors, like third party payors and New York Medicaid.

Continue Reading Implied False Certification Theory Fails in FCA Case Against Billing Agent

Continuing its annual tradition, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”) announced last week the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force.  As part of the national health care fraud takedown, the government charged 412 defendants with approximately $1.3 billion in alleged fraud. In addition to these charges, HHS Office of Inspector General (“OIG”) is in the process of excluding 295 health care providers from participating in federal health care programs.

Continue Reading DOJ and OIG Announce Largest Ever National Health Care Fraud Takedown; Focus on Opioids

Our colleagues on the Employment Matters blog recently analyzed a budget proposal by the Massachusetts Senate that would authorize the Governor to collect additional funds from employers to offset increasing MassHealth costs.  MassHealth, Massachusetts’s Medicaid program, offers low-cost, benefit rich coverage to low-income individuals.   Eligible individuals sometimes forgo employer coverage in lieu of MassHealth coverage, a trend that is unsustainable for the Commonwealth.

In Governor Baker’s fiscal year 2018 budget, he called on Massachusetts employers to help pay for the increasing Medicaid costs.  To support this initiative, the Senate recently introduced a proposal that would allow the Governor to select from two options to offset these rising costs: (1) a “play-or-pay” option that would impose a per employee assessment on companies that do not offer their workers health plans, or (2) an across the board increase in the Employer Medical Assistance Contribution (or “EMAC”).  The Employment Matters post analyzes how the increase in the EMAC may be more administratively feasible for the Commonwealth, while the “pay-or-play” option is potentially preempted by the Employee Retirement Income Security Act of 1974 (ERISA).

Check out their full analysis here.

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

Health care services cost money.  Often times, a lot of money.  This fundamental truism captures the challenge facing Congressional Republicans as they consider coverage of low income populations as part of their so-called Repeal and Replace effort.

The Medicaid program covers more people than Medicare but spends less on health care services (MACPAC 2016a, MedPAC and MACPAC 2017). Additionally, Medicaid pays substantially less for health care services than private sector insurance plans (MACPAC 2016a). Recent growth in Medicaid spending is primarily due to growth in enrollment (MACPAC 2016b).  State Medicaid programs depend on the altruism of the medical profession to provide health care services at a lower rate, which can be below cost.  This leads to Medicaid beneficiaries often having less access than those covered by private insurance because financial pressures limit the ability of some providers to take Medicaid beneficiaries.

Republicans in Congress are contemplating moving coverage for the “able bodied” from Medicaid to private insurance.  There are many questions to be answered before such a policy change could be implemented, but the threshold question is simple: how could such a policy proposal not cost more than current law?

Medicaid beneficiaries have limited ability to pay for services.  An individual with an income of $15,800 is currently Medicaid eligible.  Assuming that the policy does not increase financial expectations from the beneficiary, it does not seem possible that Congressional Republicans could write a policy that moves coverage of Medicaid beneficiaries into subsidized private insurance coverage without spending more money. This leads us to the real question for Congressional Republicans: what would they have to do to ensure that this change would not result in spending more money?

Demography remains a constant pressure on payments to stakeholders.  While stakeholders might look at movement away from Medicaid to private insurance coverage for any population as positive, there is a very high probability that any shift from Medicaid to private insurance coverage will come with strings to limit provider payments.