Lawmakers have until Dec. 11 to pass an omnibus bill for fiscal 2016, and with extra money made possible by last month’s budget deal, HHS and the National Institutes of Health could see extra funding.
If they cannot get an omnibus passed, there could be another continuing resolution agreement to keep funding for a period of time. Otherwise, the government will shut down.
Analysts said lawmakers will add riders to the bill that will be the focus of negotiations and familiar disagreements and could impede a final agreement.
The budget deal raised the sequester caps by $80 billion in the next two fiscal years. For fiscal 2016, $50 billion of that is available and half will go to defense spending.
David Reich, senior policy consultant with the Center for Budget and Policy Priorities, said a shutdown is possible but an omnibus agreement is also not an unreasonable hope. A continuing resolution wouldn’t solve much.
“It’s a problem for agency operations to not know what their budget is well into the fiscal year,” he said.
Ellie Dehoney, vice president of policy for Research America, said a path to repealing the medical device tax, although it has received some bipartisan support, has not been forged.
It could be tied in with efforts to repeal the “Cadillac” tax on high-end health insurance plans but nothing concrete is in the works for that yet either, she said.
Reich said the extra money could go to departments throughout HHS, but lawmakers may get stuck on issues such as financing for the Affordable Care Act, some research agencies and Planned Parenthood.
The House appropriations bill calls for rescinding past funding of the ACA and eliminating most new spending. It would get rid of Title X family planning funds and also essentially eliminates the Agency for Healthcare Research and Quality and the Center for Medicare and Medicaid Innovation, he said.
Those provisions would be mostly unpalatable for Democrats and the White House, Reich said.
Dehoney said the NIH is likely to get more money than in previous years and it will probably not be earmarked but be used to bolster ongoing research.
“I think it will lift all boats,” she said
The original House Labor, Health and Human Services Funding Bill would allocate $71.3 billion to HHS, which is a slight increase from the year before but about $4 billion below the president’s budget request for the agency.
It would also give $31.2 billion to the NIH, $7 billion to the Centers for Disease Control and Prevention and $6 billion to the Health Resources and Services Administration. It would provide $3.3 billion for the CMS, which is nearly $1 million below the president’s request.
Dehoney said the budget deal has changed the game, however.
“They’re definitely renegotiating all of this because they have extra money,” she said.
In 2013, a government shutdown over implementation of the ACA stalled medical research and FDA drug approvals.
The CMS says doctors tending to tens of millions of chronically ill Medicare patients aren’t taking advantage of federal dollars aimed at improving chronic care and reducing hospital readmissions and overall costs.
This year, Medicare began paying an average of $42 per patient per month for non-face-to-face chronic-care management services, such as consulting with other doctors caring for the same patient who might be dealing with dementia, heart disease or arthritis.
The CMS estimates 70% of Medicare beneficiaries—roughly 35 million—would be eligible, but CMS has only received reimbursement requests for 100,000 beneficiaries thus far, Kathy Bryant, a senior technical adviser in the Center for Medicare, said last week at an Advisory Panel on Outreach and Education meeting. She added that even that number may be too high as some could be duplicate claims.
One possible reason for the low interest is that doctors have to get permission from patients who are responsible for a 20% copayment each time their provider bills for the services.
“Getting bills for things when they haven’t seen a doctor is not something they are used to,” Bryant said.
Others said the CMS didn’t provide enough information on how to properly bill under the codes.
“Physicians are leery about using them because they don’t know if they are doing so correctly,” said Regina Mixon Bates, founder and CEO of the Physicians Practice S.O.S. Group, a healthcare consulting and education firm. Another reason could be the lengthy process on electronic health-record systems.
“There is a concern all this documentation, along with their regular workload, is not worth it for the money they would receive,” said Diane Calmus, government affairs and policy manager at the National Rural Health Association. “It’s just too many hoops they would have to jump through.”
A study from the Stanford University School of Medicine last month looked at how much chronic-care management could affect the typical primary-care practice.
The study found substantial increases in annual revenue, as much as $77,295 in year one, could be gained if they used registered nurses to conduct annual wellness visits and used other staff to handle more frequent management.
And a study released Tuesday by Smartlink found that less than 20% of 300 physicians interviewed are currently participating in the program. The vast majority of physicians who are participating in the chronic-care management program believe it is improving patient care.
The CMS hopes to raise awareness and interest among providers and beneficiaries, Bryant said.
The APOE suggested targeting nurses and case workers, as they would be the ones who would likely be billing under the codes. The panel also suggested engaging consumers through social media.
Some industry stakeholders believe that could help.
The American Academy of Family Physicians is also performing outreach on the codes, and is highlighting members who have successfully billed under it, according to Dr. Robert Wergin, board chair of the group.
Dr. Andrew Gurman, president-elect of the American Medical Association. said his group is educating medical practices on chronic-care management services, which he calls a “game-changer,” because doctors will be getting reimbursed for services they already provide.
And therein lies another rub, expert say. Many doctors and practices will have to inform patients that the case management they were doing for free will now cost patients a co-pay.
“Some doctors said they were concerned that their patients would be unwilling to pay the cost-sharing,” said Dr. Peter Hollmann, a Pawtucket, R.I., internist and member of the American Geriatric Society Board.
However, he said the biggest likely reason for the slow uptick is that this code is still relatively new.
“There is an expected delay in uptake of new codes, especially when the rules are complicated. This requires that a practice use an electronic record, get patient consent to bill, and have a written care plan in place. Then the practice needs to track the time in a calendar month. None of this is part of a practice routine and Medicare only has data on early months,” Hollmann said.
As expected, the CMS’ sweeping rule to modernize the regulation of Medicaid managed-care plans is drawing flak from state Medicaid directors and insurers who say it would impose heavy-handed federal control and could hurt patient care.
But some consumer advocacy groups responded favorably to the proposed rules, saying they offer guidance to states and Medicaid plans in developing provider networks that offer better access to beneficiaries.
The 653-page rule released in May would cap how much premium revenue private plans could allocate for administration and profits; require states to more rigorously supervise the adequacy of plans’ provider networks; encourage states to establish quality rating systems for plans; allow more behavioral healthcare in institutional settings; and encourage the growth of managed long-term care.
The proposed rule was considered long overdue because Medicaid managed-care enrollment has soared by 48% to 46 million beneficiaries, according to consulting group Avalere Health. By year-end the firm estimates that 73% of beneficiaries will receive services through managed-care plans.
Currently, 37 states and the District of Columbia contract with Medicaid plans, according to Medicaid Health Plans of America.
States have turned to Medicaid managed-care plans hoping to reduce costs and get more budget predictability. Insurers, however, have faced criticism for offering inadequate provider networks and denying needed care to pad their bottom lines. Because of the wide variation in how states run their Medicaid managed-care programs, there have been “inconsistencies” and “less-than-optimal results,” the CMS said when it issued the proposed rule.
Last year, HHS’ Office of Inspector General reported that states were not enforcing their own rules to ensure Medicaid plans had enough providers to care for their patients.
The last federal regulation governing such plans was issued in 2002. The proposed rule received nearly 900 comments by the July 27 comment deadline.
The National Association of Medicaid Directors said in its written comments that the rule would reduce the role of state Medicaid agencies in supervising how Medicaid managed care operates in their states. “The overarching framework of the regulation appears to shift the balance of authority for Medicaid managed care to the federal government, driving a top-down model that runs counter to the goal of a modernized regulatory framework,” the group said.
That approach, the group added, “removes the ability of states to drive innovation in managed-care delivery, to fully leverage the relationship to improve plan performance, or to tailor the approach to reflect the needs and expectations of the local population.”
A CMS representative did not respond to a request for comment for this article.
The Medicaid directors criticized a provision that would require states to offer Medicaid beneficiaries at least 14 days of initial coverage under traditional fee-for-service Medicaid, during which time they could choose a managed-care plan. “This policy fails to recognize that many states no longer have (fee for service) delivery models in their program,” the group complained.
Medicaid plans objected to the CMS’ proposal that they be required to spend 85% of premium revenue on medical care, a threshold known as a medical loss ratio. The Affordable Care Act set minimum medical loss ratios of 80% and 85% for individual and large-group plans in the commercial sector; money spent on administrative costs and profit above those limits must be rebated to consumers or employer purchasers. As of 2015, health plans doing business with Medicaid and the Children’s Health Insurance Program are the only ones that are not subject to such thresholds.
The health insurance industry had lobbied against inclusions of a minimum medical loss ratio, but experts said the proposed Medicaid requirement would not have much effect on large national insurers. About three-quarters of states with Medicaid managed care already require average medical loss ratios of at least 85%, according to the Kaiser Family Foundation.
Still, the Blue Cross and Blue Shield Association argued in its written comments that the benefits and services offered by managed-care organizations do not easily fit into the commercial medical loss ratio calculation. For example, managed-care plans spend significant resources on beneficiary outreach, partnering with local organizations for health promotion activities, and services to enhance patient compliance with treatment plans.
“Accounting for these expenditures in the MLR methodology may be challenging,” the Blues association said. “In addition, federal and state Medicaid reporting requirements require significantly more administrative resources beyond what commercial and Medicare programs require, making meeting an 85% MLR more difficult.”
To ensure that Medicaid beneficiaries have adequate access to care, the CMS is proposing that states establish time and distance standards for enrollees’ access to providers. The agency mostly left the development of these standards to the states.
At a minimum, Medicaid plans’ provider networks must meet such standards for certain types of providers, including hospitals, primary-care physicians and OB-GYNs, according to the proposed rule. The CMS said time and distance more accurately capture whether beneficiaries have adequate access to care than provider-to-enrollee ratios. States must also consider whether plans offer an adequate number of providers who speak languages other than English. In addition, the CMS encouraged states to include pediatric primary, specialty and dental providers in their network rules because of the large number of children covered under Medicaid and CHIP.
But Medicaid plans warned such requirements could hurt care for beneficiaries. “Requiring that states establish access standards based on the travel time and distance to a provider’s office relies on outdated notions of ‘traditional’ models of care delivery and does not take into account the variety of ways in which patients now commonly access healthcare, including via telemedicine,” Kaiser Permanente, which operates Medicaid plans, said in its comments. “Mandating the use of time and distance standards works to preserve the structure of geographically dispersed, disjointed provider networks and would do nothing to improve the quality of care provided to Medicaid beneficiaries.”
Geography-based standards also could discourage integrated delivery systems like ACOs, plans said.
But the National Health Law Program, a consumer advocacy group, praised the network adequacy provisions. “For too long, the Medicaid managed-care program has lacked specific network adequacy standards aimed at ensuring that consumers can access care from their Medicaid plans,” the group said. “These proposed provisions add significant detail to guide states and Medicaid plans in developing their networks to ensure adequacy.”
Medicaid Health Plans of America criticized a proposed provision eliminating the requirement that Medicaid plan enrollees provide written consent for a provider to file an appeal on their behalf following an adverse benefits decision. The CMS said requiring Medicaid enrollees to provide written consent is inconsistent with standards for the Medicare Advantage program.
“The language in the proposed rule may encourage providers to use the appeal process as a way to file claims payment disputes, which is not the intent of the grievance or appeal process,” the health plan group said in its comments.
Anthem wrote that “we believe that the proposed approach could potentially result in providers operating in furtherance of their own self-interest.”
Univita Health, which gained control of the entire Florida Medicaid home-care market a year ago, has suddenly lost all of its HMO contracts.
The Florida Agency for Health Care Administration made the announcement in an e-mail blast late Tuesday afternoon.
Univita, based in Miramar, stopped processing requests for home health-care services, durable medical equipment such as wheelchairs, and intravenous therapy “effective immediately,” AHCA said.
AHCA provided no reasons for its announcement, but released a statement this morning.
“We will continue to focus on ensuring Floridians have access to quality health care – this includes working to prevent any lapses in service for MMA health plan enrollees,” a spokeswoman said.
AHCA released a list of phone numbers for Medicaid providers, physician offices and health plan members to call in order to get authorization for equipment and services.
Earlier, United Healthcare of Florida and Sunshine Health had already announced their contracts with Univita were ending as of Aug. 1.
Several owners of mom-and-pop suppliers, who had regarded Univita as their nemesis, began celebrating as early as Monday, when rumors about what was happening began to leak.
As sole authorizer of home services for most Medicaid plan members, several suppliers said, Univita cut their Medicaid payments in half and redirected some of their business to its own home-care affiliate. Many said they had trouble getting paid at all.
They blamed the health plans for subcontracting with Univita and AHCA for failing to prevent it in the program rules.
“I hope they learned a lesson from what they did,” said Robert Junco of Miami’s Pediatric Suppliers Inc.
While the home-care vendors said they feel sorry for employees of Univita, who are expected to lose their jobs, they reacted to the AHCA announcement with exultation.
“I’m having so much fun!” said Ivonne Gonzalez, president and CEO of Health Medical Equipment Inc. in Miami. “I’m having a couple of margaritas!”
Gonzalez noted that it was almost exactly a year ago that home-care providers learned they were losing a big chunk of their Medicaid income because almost all the HMOs were subcontracting with Univita to handle their home care.
As Health News Florida reported at the time, this created a virtual monopoly in the most fragile sector of Medicaid business. It also raised questions of conflict of interest, as Univita was one of the suppliers competing for the Medicaid business.
State Medicaid Director Justin Senior said at the time that while the situation looked bad, there was nothing in the law to prohibit it. He said his team would warn the health plans to make sure that Univita didn’t take unfair advantage or cause problems for patients.
It is unclear whether the about-face in Florida’s home care contracts this week was instigated by the plans, by Medicaid officials who were tired of complaints, or the company itself deciding it could not make ends meet.
One home-care organization, the Florida Alliance of Home Care Services, sent a notice to its members Tuesday afternoon suggesting that Univita may be preparing to file for bankruptcy. The federal court bankruptcy files in South Florida offered no listing for Univita as of Tuesday.
Most company officials were unavailable. Robert Alonso, Univita marketing director, said at mid-afternoon that the company would release a statement, but nothing had appeared as of 6:30 p.m.
Vendors said their friends who worked at Univita were texting and calling, looking for a job. And it remains unclear who will handle the continued need to authorization services for Medicaid patients and pay the bills – either the plans or a different subcontractor.
The Statewide Medicaid Managed Care program was created by Florida’s legislature in hopes of gaining control of Medicaid costs of its 3.5 million residents by ending fee-for-service payments. Proponents argued it would improve quality of care because the state could hold plans accountable.
AHCA chose among the plans that bid for the business, and phased in the program over 2013 and 2014.
The private health plans that cover Florida’s poorest residents are seeking more money from the state.
The plans say they need a 12 percent rate increase to offset the rising cost of prescription drugs and an uptick in doctor’s visits.
But state officials have been reluctant to approve the rate increase, which could wipe out any savings Florida stands to gain from privatizing Medicaid in 2014.
In a scathing letter to the health plans sent Friday, state Agency for Health Care Administration Secretary Elizabeth Dudek said some of the plans had been paying hospitals more than is legally allowed.
“By setting higher contracting rates for hospitals than what is allowed for in state law, plans are likely jeopardizing their profitability, which could cause them to come back to the agency for higher state rate payments — increasing the cost to taxpayers for providing the same services,” Dudek wrote.
The two sides must reach consensus soon. The new rate year starts Sept. 1.
Florida’s $23 billion Medicaid program serves about 3.5 million low-income residents. Most of the plans are operated by private insurance companies that receive a set amount from the state for each recipient. The amount is adjusted based on age and certain medical conditions.
The push to privatize Medicaid in Florida dates back to 2006, when then Gov. Jeb Bush launched a pilot program in Broward and Duval counties. It went statewide last year.
AHCA used a competitive bidding process to award five-year contracts to health plans across the state. Deputy Secretary for Medicaid Justin Senior said the plans were offering a broad array of services and had increased the number of physicians participating in the program. What’s more, the revamped program was on track to reduce costs by 5.1 percent per member per month.
But earlier this year, the plans raised concerns that the rates were inadequate. They asked AHCA and the Legislature for a midyear adjustment — a request that was denied.
The Florida Association of Health Plans is asking for a 12 percent increase going into the 2015-16 rate year. President Audrey Brown said the increase is needed because prescription drug prices are increasing, and more people are accessing health care services than expected.
“The plans did not expect to make any money the first year of existence,” Brown said. “What was not expected was the substantial losses that the Medicaid plans are seeing.”
Senior said AHCA was surprised by the request, in part because the first-year rates were developed using the plans’ own proposals.
“In a year where the costs are unexpectedly high, if you capitulate to giving more money, what happens when the costs come in significantly lower?” he said.
The state has offered to increase rates by 6.4 percent, but conversations are ongoing, Senior said.
AHCA is exploring other ways the plans can control costs.
In her letter last week, Dudek said “several plans” reported average hospital contracting rates greater than 120 percent of the posted Medicaid rate — a violation of state law.
She has asked the Medicaid health plans and hospitals to certify that none of their contractual arrangements exceed the limit.
“Excessive reimbursement levels in hospital contracts are unsustainable and cannot be maintained,” she wrote.
Several groups have submitted comments on CMS’ proposed meaningful use modifications for 2015 through 2017, Clinical Innovation & Technology reports (Walsh, Clinical Innovation & Technology, 6/15).
Under the 2009 economic stimulus package, providers who demonstrate meaningful use of certified electronic health records can qualify for Medicaid and Medicare incentive payments.
Details of Proposal
In April, CMS released a proposed rule that would shorten Medicare and Medicaid meaningful use attestation for eligible professionals and hospitals to a 90-day period in 2015.
Overall, the proposed rule would:
- Realign the reporting period starting in 2015 to allow hospitals to participate on the calendar year instead of the current fiscal year period;
- Reduce the number of meaningful use objectives to improve advanced use of EHRs; and
- Remove redundant measures and those that have become widely adopted.
In addition, the proposed rule would change Stage 2 meaningful use requirements related to patient engagement. Specifically, CMS proposed reducing the requirement for patients to use technology to electronically download, view and transmit their medical records from 5% of eligible providers’ patients to just one patient (iHealthbeat, 4/13).
Comments on the proposed modifications were due June 15 (iHealthbeat, 5/28).
American Medical Group Association Comments
The American Medical Group Association in its comments praised CMS for easing the program’s reporting requirements, as well as for proposing a shorter 90-day reporting period.
AMGA CEO Donald Fisher said, “This proposed rule reflects that CMS has been sensitive to the struggles that the health care industry has had with meaningful use by simplifying some of the reporting requirements through 2017.”
The group also urged CMS to help strengthen the health IT infrastructure to support future data sharing requirements (AMGA release, 6/15).
College of Healthcare Information Management Executives Comments
Russell Branzell, president of the College of Healthcare Information Management Executives, in his comments called for a middle ground on patient engagement. He wrote that rather than requiring every specialist to demonstrate that patients can “view, download and transmit” their health information, those data should be aggregated into a single location for patients.
He added, “I definitely want patient data made accessible to patients or those taking care of them. But I don’t want to get every note out of some subspecialty office” (Pittman et al., “Morning Health,” Politico, 6/16).
Consumer Partnership for eHealth Comments
Meanwhile, a group of 50 advocacy groups organized by the Consumer Partnership for eHealth and the Consumer-Purchase Alliance in its comments expressed disappointment, saying CMS’ proposal to reduce patient engagement requirements would undermine patient engagement efforts (Clinical Innovation & Technology, 6/15). Specifically, CPeH said, “CMS’ proposed amendments constitute a dramatic retreat from essential efforts to make patients and family caregivers true and equal partners in improving health through shared information, understanding and decision making” (“Morning eHealth,” Politico, 6/16).
Debra Ness — president of the National Partnership for Women & Families, which was part of the coalition — said the groups “urge CMS to keep the existing patient engagement thresholds.”
Meanwhile, Bill Kramer, co-chair of the Consumer-Purchase Alliance, noted that maintaining efforts to give patients and caregivers “electronic access to and use of their health information” is key to achieving interoperability in the U.S. health care system (Clinical Innovation & Technology, 6/15).
Healthcare Information and Management Systems Society Comments
The Healthcare Information and Management Systems Society in a letter to CMS supported the agency’s proposal to ease reporting requirements but urged CMS to be cautious moving forward with other proposals, Health Data Management reports.
Among other things, HIMSS recommended that CMS:
- Phase-in the new thresholds for the Patient Electronic Access Objective;
- Reconsider the “unrealistic goal” of the 2016 hospital electronic prescribing requirement; and
- Take into account the timing of the release of the final rule in terms of the “short turnaround in meeting” its requirements (Slabodkin, Health Data Management, 6/16).
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