Kentucky has become the first state to win federal approval for a Medicaid waiver that includes work requirements for beneficiaries.
The state’s demonstration project, which the Trump administration approved on Friday, would require able-bodied, nonelderly enrollees to complete 80 hours per month of “community engagement activities” to remain eligible for Medicaid. Those activities could include employment, education, job skills training and community service, according to a fact sheet.
Certain beneficiaries would be exempt from the community engagement requirements, such as pregnant women, full-time students and those considered medically frail.
The waiver also gives the state the authority to require beneficiaries to pay monthly premiums based on their income. Premiums could be as low as $1 per month or as high as 4% of household income. If people who are above the poverty line fail to pay the required premiums, they could be locked out of the Medicaid program for six months.
In addition, the state will implement a tool called My Rewards Account, which provides incentives for beneficiaries to engage in healthy behaviors and community engagement, plus a tool called the Deductible Account, which aims to inform beneficiaries about the cost of healthcare.
The Trump administration’s approval of Kentucky’s waiver comes in the same week that it issued new guidance for states looking to test programs that include work requirements for beneficiaries.
Indeed, the Centers for Medicare & Medicaid Services said in its approval letter to Kentucky officials that other states should emulate its program.
“Your substantial work will help inform future state demonstrations seeking to draw on Kentucky’s novel approaches to Medicaid reform, and CMS also looks forward to learning from the outcomes of your demonstration project,” the letter said.
A new report by HHS’ Office of Inspector General gives CMS points for making significant efforts to implement the Quality Payment Program (QPP) but says challenges remain that could undermine the program’s success.
Without sufficient technical assistance, participating clinicians could struggle to succeed, while others may opt out of the program altogether, the report warns.
CMS also needs to develop a comprehensive program integrity plan to guard against fraud and improper payments, according to OIG.
In terms of implementing QPP, CMS has focused heavily on clinician readiness and acceptance of the program. The report cites outreach efforts, eligibility information, subregulatory guidance and a service center to field questions.
While CMS has awarded some technical assistance contracts, the assistance has tended to be general in nature rather than specialized to address practice-specific needs, the report says. “Clinician feedback collected by CMS demonstrates widespread awareness of the QPP, but also uncertainty about eligibility, data submission, and other key elements of the program,” the report stated.
OIG’s concerns are not new. In a December 2016 report, the HHS watchdog urged CMS to quickly ramp up technical assistance programs to ensure providers’ success, noting effective IT systems are critical to data submission, MIPS scores and payment adjustments.
The new report seems to underscore what recent surveys have found: that many clinicians are still not ready for QPP, the program that implements MACRA. A recent American Medical Association and KPMG survey found fewer than one in four physicians said they felt prepared to meet QPP requirements. In another survey by Nuance Communications, 60% of hospital executives who claimed to understand QPP requirements underestimated or didn’t know what the financial ramifications might be.
CMS has taken some steps for program integrity, including oversight provisions for the MIPS track and the Advanced APM track in the 2017 QPP final rule and creating an oversight process for CMS-approved vendors, OIG stated.
However, the agency has yet to designate officers to lead various aspects of the program integrity effort, such as policy and IT development. It also still needs to develop and implement a comprehensive program integrity plan, the report stated. Such a plan should address potential vulnerabilities in the MIPS data submission system and the accuracy of MIPS data, especially the clinician self-attestation measures.
The mounting bipartisan push to block or delay the CMS’ planned $1.6 billion in Medicare cuts to 340B hospitals before the end of the year has the attention of congressional leaders.
Bipartisan lawmakers who oppose the CMS rule are in a race against time to stall the cuts, which are slated to start Jan. 1, but they’re increasingly optimistic that a delay could happen in the end-of-the-year deal or as a stand-alone bill early in the new year.
House Energy and Commerce Committee leaders are in talks with Reps. David McKinley (R-W.Va.) and Mike Thompson (D-Calif.) on a path forward for their bill either as part of the end-of-the-year spending deal or as a stand-alone bill on track for passage early next year, according to a McKinley aide.
In the upper chamber, talks are up in the air, but an aide said senators are considering a potential one-year delay and a moratorium on new hospitals from entering the 340B program pending altered transparency and reporting requirements on the hospitals.
As of Monday, more than 132 House lawmakers from both parties have signed onto the bipartisan bill by McKinley and Thompson that would essentially block the rule.
Last week, a powerful group of bipartisan senators led by John Thune, a leading Republican from South Dakota, asked Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.) to use the end-of-year spending package to stall the CMS rule.
The issue has proved to be a key priority for lawmakers from rural states whose hospitals have high stakes for the program.
Thune and his co-signatories on the letter—who include Sens. Rob Portman (R-Ohio) and Bill Nelson (D-Fla.) — said they are willing to step up oversight and transparency within the program. But they staunchly oppose allowing the CMS changes from taking imminent effect.
The Pharmaceutical Research and Manufacturers of America told Modern Healthcare earlier this month that it supports the rule and doesn’t want it delayed or overturned. But according to lobbyists they have ramped back their opposition and are pressing lawmakers to include transparency measures with any package that would delay the rule.
Apart from potential Hill action, hospital groups with stakes in 340B are also awaiting the Dec. 21 hearing on the injunction on the rule that they filed against HHS. A ruling is expected before Jan. 1.
A shrinking taxpayer base, swelling beneficiary numbers and growing healthcare costs all threaten Medicare’s long-term viability, according to the HHS, and the agency warned the program would need to increase its revenue or drastically reduce benefits to balance its budget.
In a wide-ranging report issued last week, HHS said the Medicare trust fund “is not projected to be sustainable over the long term with the projected tax rates and expenditure levels.”
The agency estimates that the ratio of workers paying taxes to beneficiaries eligible for Medicare will drop from 3:1 in 2016 to 2:1 by 2091. In addition, healthcare costs continue to rise faster than the taxable wages used to support the program. The shortfall is expected to equal $3.3 trillion over the next 75 years.
The CMS would need to significantly increase its revenue or reduce Medicare benefits to balance its budget, HHS said.
While providers have made an effort to move to value-based care and decrease Medicare spending, the move isn’t happening fast enough, according to the agency.
“It is conceivable that providers could improve their productivity, reduce wasteful expenditures and take other steps to keep their cost growth within the bounds imposed by the Medicare price limitations,” HHS said. “For such efforts to be successful in the long range, however, providers would have to generate and sustain unprecedented levels of productivity gains—a very challenging and uncertain prospect.”
But there’s another wrinkle. It’s unclear whether providers will continue to want to see Medicare beneficiaries in the coming years, according to Ernst & Young. The firm conducted an independent audit of HHS’ finances and found some clinicians may find it financially unfeasible to continue to participate in Medicare.
Medicare trustees raised similar concerns in their annual report this summer.
“Absent an unprecedented change in healthcare delivery systems and payment mechanisms, the prices paid by Medicare for most health services will fall increasingly short of the costs of providing these services,” the consulting firm said.
HHS itself echoed the concerns in the report, noting that projected MACRA payments for high-performing Merit-based Incentive Payment System (MIPS) and alternative payment model providers are scheduled to expire in 2025 under current law, resulting in a significant one-time payment reduction for most physicians.
In addition, under MACRA the annual physician payment update for 2017 through 2019 will be 0.5%. For 2020 through 2025, there will be no payment update.
“Absent a change in the delivery system or level of update by subsequent legislation, access to Medicare-participating physicians may become a significant issue in the long term under current law,” HHS said.
The U.S. Department of Health and Human Services names three members to the Health Information Technology Committee, as part of a provision in the 21st Century Cures Act.
The committee is tasked with making recommendations on national and local health IT infrastructure implementation to the National Coordinator for Health Information Technology.
Recommendations will include policies, standards, implementation specifications and certification criteria designed to improve access, exchange and use of electronic health information.
HHS Acting Secretary Eric Hargan appointed Medical University of South Carolina Chief Research Information Officer Leslie Lenert, MD; Lister Hill National Center for Biomedical Communications Director Clem J. McDonald, MD; and DXC Technology Global Chief Medical Officer Robert Wah, MD, to the group.
The three new members join 15 Government Accountability Office-appointed members who will serve for one-, two- or three-year terms, as well as six of eight appointments made by Congress.
Notable members include biotech mogul Patrick Soon-Shiong, MD, NantWorks CEO; Arien Malec, RelayHealth vice president for Data Platform Solution Line; Steven Lane, MD, Sutter Health clinical informatics director for privacy, health information security and interoperability; and Tina Esposito, Advocate Health Care VP of Information and Technology Innovation.
Former pharmaceutical industry executive Alex Azar (pictured) is President Donald Trump’s choice to lead HHS, replacing Dr. Tom Price who resigned in September after facing controversy over his extensive use of government and charter air travel.
“He will be a star for better healthcare and lower drug prices!” Trump proclaimed in a Twitter post.
Azar is the former head of pharma giant Eli Lilly’s U.S. division. He also served as HHS general counsel and deputy secretary during the George W. Bush administration, and has received praise for his competence and knowledge about health policy. He is a strong critic of the Affordable Care Act. And he previously has opposed ideas for reducing prescription drug prices such as purchasing drugs from other countries where prices are lower.
Azar went to work for Eli Lilly & Co. in 2007 as senior vice president of corporate affairs and communications, and later became chief of Lilly’s U.S. operations, a position he held until this past January. He also served on the board of BIO, which represents biotechnology companies.
In his confirmation hearings, Senate Democrats are expected to question Azar’s close ties to the drug industry and whether he has the independence to take strong steps to curb drug prices, an issue on which Trump has urged action.
If he is confirmed, Azar would take charge of an agency that is still roiled by investigations into Price’s air travel, and reportedly divided into different political camps. He will have to decide whether to continue the Obama administration’s push for much broader use of value-based payment programs in Medicare, and how much freedom to give states seeking waivers to restructure their Medicaid programs.