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CMS Rolls Out Guidance to Help States Convert Medicaid Funding into Block Grant
Published in FierceHealthcare, January 30, 2020
The Trump administration has rolled out new guidance to enable states to convert Medicaid funding into a block grant, but only for a limited population.
The Centers for Medicare & Medicaid Services (CMS) released Thursday the Healthy Adult Opportunity Initiative that would enable states to voluntarily apply for a waiver to get a fixed amount to pay for services for adults who aren’t disabled, pregnant or elderly. The initiative is already getting severe pushback from patient advocacy groups, signaling a potential new legal fight for the agency.
“We’ve built in strong protections for our most vulnerable beneficiaries, and included opportunities for states to earn savings that have to be reinvested in strengthening the program so that it can remain a lifeline for our most vulnerable,” said CMS Administrator Seema Verma in a statement.
The initiative will only apply to a limited population: adults under 65 not eligible for Medicaid because of a disability or need for long-term care services. Very low-income parents, children, pregnant women, elderly adults and the disabled are not affected.
A state that gets a waiver from CMS under the initiative can adjust benefits for the limited population or “align benefits more closely to what is available through a commercial insurance benefit package,” according to a fact sheet on the proposal. The states would get a “defined budget target” that is adjusted to either a flat amount or on a per-enrollee basis. “The targets will be negotiated based on the state’s own historic costs and other factors like national and regional trends,” CMS said.
A state has to maintain spending on health services at a “level at least 80% of the target amount,” the fact sheet said. “To the extent they achieve savings and demonstrate no declines in access or quality, CMS will share back a portion of the federal savings for reinvestment in Medicaid.” The state could get a share of between 25-50% of the savings similar to value-based care payment models, Verma said during a briefing on Thursday.
States would also get the power to design a formulary under the initiative similar to those used in commercial insurance markets. The goal is to give states more negotiating power over drugs. However, such formularies can implement tools such as prior authorization or step therapy to steer patients into cost-effective treatments but generate complaints about access to products.
A state that gets a waiver can use any combination of fee-for-service or managed care delivery systems and “will have the flexibility to alter these arrangements over the course of the demonstration, as long as certain guidelines are met,” CMS said in its fact sheet of the demonstration.
Verma said that the states must meet minimum benefit requirements and cannot cap benefits.
However, some physician and patient advocacy groups have long complained that block grants will lead to states cutting eligibility and benefits and warned of the administration’s latest approach.
A transition to block grants could transform Medicaid into a “program with funding limits that drive care rationing for the most vulnerable,” said Howard Burris, president of the American Society of Clinical Oncology, in a statement before the guidance’s release.
Burris added that reducing access to care such as recommended cancer screenings could eventually lead to higher costs for states when patients present a “complex, late-stage illness.”
The American Medical Association charged in a statement that any cap on Medicaid funding will “increase the number of uninsured and undermine Medicaid’s role as an indispensable safety net program.”
The Federation of American Hospitals also lambasted the proposal. “Medicaid block grants have rightly been rejected by Congress,” said President and CEO Chip Kahn. “Rebranding them under the thin veil of a demonstration doesn’t change the fact they would lead to arbitrary cuts that will weaken Medicaid for those most in need.”
Tennessee so far is the only state to apply for a waiver to get a block grant, but it may not be the last. The state’s proposal said it would base the block grant on the historical Medicaid spending through state fiscal years 2016 and 2018.
However, some services would still be covered by the federal-state match. Those services include prescription drugs and uncompensated care to hospitals, some of the sources of higher costs for Medicaid.
Tennessee’s proposal stressed that it won’t lower benefits or eligibility to get savings from the block grant. However, the state does want to be exempt from any new federal mandates on eligibility or covered benefits from Congress or the federal government.
It won’t be the only state. Oklahoma Republican Gov. Kevin Stitt said at an event on Thursday announcing the initiative that the state is considering getting a waiver under the initiative in addition to work requirements.
Block grants have been a popular healthcare policy fixture among conservatives. A 2017 Affordable Care Act (ACA) repeal bill sponsored by Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana would convert all ACA funding into a block grant.
The bill would also have converted Medicaid funding into a per-capita cap system, which would give states a fixed amount per beneficiary for Medicaid.
Graham and Cassidy’s bill was scuttled in the fall of 2017 after insufficient GOP support in the Senate, but the idea of a block grant for Medicaid continues to retain popularity among conservatives eager to cut entitlement spending.
APHA Healthiest Cities & Counties Challenge
The American Public Health Association (APHA) announces a new Healthiest Cities & Counties Challenge. APHA, in partnership with the Aetna Foundation—a private foundation affiliated with CVS Health—and National Association of Counties, will provide $100,000 in funding and nonfinancial support to selected communities to address access to foods that support healthy eating patterns and access to health services through systems-level approaches and resident engagement over a two-year period.
The Challenge invites applications from cities, counties and federally recognized tribes with a population of up to 600,000 in California, Florida, Georgia, Kentucky, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, and West Virginia that are prepared to work across silos in order to advance health equity and prevent chronic diseases. The deadline is end of February!
2021 Proposed Payment Notice Posted and Letter to Issuers Posted
On January 31, 2020, the Centers for Medicare & Medicaid Services (CMS) issued the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the Proposed 2021 Payment Notice. This proposed rule would update regulatory and financial standards applied to issuers and Exchanges, as well as set parameters for the risk adjustment program. Similar to Payment Notices issued in prior years, the Proposed 2021 Payment Notice contains a number of other provisions that support the Trump Administration’s ongoing commitment to lowering premiums, protecting taxpayer dollars and strengthening the health insurance markets to deliver more competition and choice for consumers.
In conjunction with the proposed rule issued today, we are also issuing several guidance documents. Links to those documents are below.
To view the proposed rule, click here: https://www.federalregister.gov/public-inspection/current or the direct link at https://www.federalregister.gov/documents/2020/02/06/2020-02021/benefit-and-payment-parameters-notice-requirement-for-non-federal-governmental-plans
To view the proposed Key Dates for Calendar Year 2020 for QHP Certification, Rate Review, and Risk Adjustment, click here https://www.cms.gov/files/document/proposed-key-dates-tables-cy2020.pdf
To view the Draft ICD-10 Crosswalk for Potential Updates to HHS-HCC Risk Adjustment Model for the 2021 Benefit Year, click here https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/index.html#Premium-Stabilization-Programs
To view the proposed 2021 Letter to Issuers, click here: https://www.cms.gov/files/document/2021-draft-letter-issuers-clearance-version-final-13120.pdf
To view the request from Alabama to decrease the volume of transfers for Risk Adjustment, click here
CLOUD (Curated Library about Opioid Use for Decision-makers) Partnership Activities
In a partnership that includes the National Governor’s Association and the Milbank Memorial Fund, the Center for Evidence-based Policy at Oregon Health & Science University created this searchable library of resources on opioids and the opioid crisis. A search on rural resources includes promising practices for medication-assisted treatment in primary care and a spotlight on Project ECHO, the initiative that connects addiction medicine experts with clinicians in remote areas. The information can be accessed here.
Reach Out PA New Online Feedback Form Seeks Public Input on Mental Health Resource Needs
On January 23, 2020, Governor Tom Wolf today introduced an online form<https://www.governor.pa.gov/reach-out-pa-feedback-form/> for Pennsylvanians to provide feedback on mental health barriers, services and how the state can better support people’s mental health needs. The creation of the form is on the heels of the governor’s Jan. 2 announcement of Reach Out PA: Your Mental Health Matters<https://www.governor.pa.gov/newsroom/pennsylvania-launches-reach-out-pa-your-mental-health-matters/> initiative to reduce stigma and increase access to mental health and well-being services and supports.
“Having a way for all voices to be heard is critical to our goal of increasing access to mental health services, breaking down barriers, and detailing the ways we can meet the mental health needs of all,” Gov. Wolf said. “I encourage every Pennsylvanian to reach out via this online form to let us know their thoughts and suggestions.”
Of note is the first message on the form, which advises site visitors, “If you are in crisis, call the National Suicide Prevention Lifeline at 1-800-273-8255, or text PA to 741741.”
“It’s critical that people in crisis have a way to get immediate help, which is why we included the suicide prevention lifeline first,” Gov. Wolf said. “Our form is intended for feedback and suggestions for the commonwealth as we move forward with breaking down barriers, improving services and reducing mental health stigmas.”
The commonwealth will not share any identifying information without permission of those who submit information. Comments and suggestions will be compiled and reviewed to determine next steps in program and service development or redesign, as well to convey pertinent information to state agencies involved in the initiative. Forms may be submitted anonymously.
“You can help improve the state of mental health in Pennsylvania,” Gov. Wolf said. “Completing this form and sharing your thoughts and ideas is another step in the right direction to make mental health a priority for all.”
The online form<https://www.governor.pa.gov/reach-out-pa-feedback-form/> is available now.
HRSA Solicits Nominations for Membership To Serve on the Advisory Committee on Infant Mortality
The Health Resources and Services Administration (HRSA) is seeking nominations of candidates for consideration to serve on the Advisory Committee on Infant Mortality (ACIM). Written nominations must be received on or before February 24, 2020. Click here for more information.
How One Veteran Rallied His Rural Pennsylvania Community Behind an Important Cause
Read how the McKean County, Pennsylvania Department of Veteran Services in rural Pennsylvania has implemented a “collective impact” model designed to help veterans with federal benefits, employment, and medical care. The department collaborates with state and county representatives, advocates, and even the local airport to ensure veterans have access to necessary services. Access the article here.
HRSA Requests Information Collection Activities on Substance Use Disorder Evaluation
The Health Resources and Services Administration is seeking public comment on the information collection request, Bureau of Health Workforce (BHW) Substance Use Disorder (SUD) Evaluation. The evaluation purpose is to see if five programs aimed at increasing the access to the number of clinicians treating SUD have met their stated goals. Click here to access the information.
Census Bureau: Proposed Information Collection; Comment Request
The Census Bureau is seeking public comment on a new information collection called the Management and Organizational Practices Survey—Hospitals (MOPS-HP). The survey will be used to collect data on management practices from chief nursing officers (CNOs) at general medical and surgical hospitals in an effort to identify factors affecting clinical and financial performance. Comments on the survey are due by March 27, 2020. The information to submit comments can be accessed here.
CDC: Proposed Data Collection Submitted for Public Comment and Recommendations
The Centers for Disease Control and Prevention is seeking public comment on the National Hospital Ambulatory Medicare Care Survey (NHAMCS), which is used to collect information on healthcare facilities and visits for ambulatory care services in non-federal, short stay hospitals. Comments are due by March 30, 2020. The proposed rules can be accessed here.