Federal Legal Developments HSFO Conference Philip Peisch Scottsdale, AZ Brown & Peisch PLLC October 7, 2019 Washington, DC
ACA DSH Reductions • Legislative update • Methodology for calculating reductions • CMS final rule issued September 23, 2019 (42 C.F.R. § 447.295) • Uninsured percentage factor (UPF) – 50% • High level of uncompensated care factor (HUF) – 25% • High volume of Medicaid inpatients factor (HMF) – 25% 2
Hospital-Specific DSH Limit • Litigation re: whether States should include payments from third- party payors in calculating the hospital-specific DSH limit • December 31, 2018: CMS withdraws “FAQs 33 and 34” • Children’s Hospital Ass’n of Tex. v. Azar , 933 F.3d 764 (D.C. Cir. 2019) 3
Medicaid DSH Payments to Psychiatric Hospitals • States may make DSH payments to IMDs • To be eligible for DSH payments, must IMDs be certified as compliant with special conditions of participation? • CMS position 4
Medicaid Community Engagement Requirements • Approved community engagement requirements: Arizona, Arkansas, Indiana, Kentucky, Michigan, New Hampshire, Ohio, Utah, Wisconsin • CMS guidance • Decisions in U.S. District Court • Implications for other waivers? 5
Program Integrity: ACA New Adults Group • Enhanced match and the “threshold methodology” • OIG audits of States’ claiming of the enhanced match • CMS Informational Bulletin: • “highlight[s]” States’ responsibilities for “fiscal integrity” particularly “with respect to coverage of the Medicaid adult expansion group . . . and for other expenditures that are claimed at the enhanced federal matching rate” • “remind[s] states of their obligation to ensure that beneficiaries continue to be eligible between regularly scheduled redeterminations” and recommends “the use of periodic data matching to identify beneficiaries who may have had a change in circumstance that affects their eligibility” 6
Changes to IMD Rules • States have option to cover care in IMDs for “eligible individuals” with a substance use disorder, for up to 30 total days of care in an “eligible IMD” during a 12-month period • Only available FFY 2019-2023 • Limited exception to IMD exclusion for certain pregnant women: FFP available for items or services provided outside of the IMD • IMDs and managed care: States permitted to make capitation payments to MCOs for individuals during an inpatient stay in an IMD that is no more than 15 days during the month 7
Enhanced FFP for SUD-Focused Health Homes • SSA § 1945: health homes for individuals with chronic conditions, with 90% federal match for first 8 quarters • Extend enhanced 90% match from 8 quarter to 10 quarters for health homes targeted to Medicaid enrollees with SUD • Requires “SUD-focused” SPA approved by Secretary 8
Managed Care MLR • CMS regulations: actuarially sound rate-setting must be based on 85% MLR and a State’s MLR must be at least 85%, if it has an MLR • New law: federal share of any MLR remittance will be calculated based on the State’s regular FMAP, even if it is partially attributable to cap payments at the ACA’s increased match for newly eligible adults • NOT available to a State that adjusts its MLR to be higher than the greater of 85% or the MLR it had in effect on May 31, 2018 9
CMS Proposed Changes to Managed Care Directed Payments • 2016 managed care regulation: general prohibition on States “directing” a managed care entity’s payments to providers • Proposed revisions to the exceptions on the prohibition on directed payments • Minimum fee schedules • Value-based purchasing • Pass-through payments for States transitioning to managed care 10
CMS Proposed Changes to Managed Care Rate Setting • Option to certify a range of rates • Capitation rates that vary with the rate of FFP • CMS approval not required for adjustments up to 1.5% 11
Funding Sources for IGTs • Intergovernmental Transfers and Certified Public Expenditures • CMS’s position? 12
Forthcoming “Medicaid Fiscal Accountability” Proposed Regulation • “aims to increase accountability, transparency and clarity through improved reporting of Medicaid payments” • President’s FY 2020 Budget: CMS will seek to “improve the transparency and oversight of Medicaid supplemental payments” by issuing a regulation requiring “more complete and timely provider-level data on supplemental payments, including the financing of such payments” 13
Changes to Medicaid Anti-Assignment Rule • General rule: Medicaid payments must go directly to providers • 2014: CMS added an exception for “practitioners for which the Medicaid program is the primary service revenue” • Payment may be made “to a third party on behalf of the individual practitioner for benefits such as health insurance, skills training and other benefits customary for employees” • 2019: CMS eliminated this exception, but not other exceptions 14
Funding for Foster Care Prevention and Treatment Services • Funding for services or programs to a child, parents, or kin caregiver “directly related” to either the safety, permanence, or well-being of the child or to prevent the child from entering foster care • Eligibility for prevention and treatment services • Transitional services • July 2019 ACF program instructions • States to claim “transitional” payments for prevention and treatment services not yet reviewed and approved by the ACF Clearinghouse • Program instructions’ checklist 15
FFP Limits on Maintenance Payments for Children in Child-Care Institutions • 14-day limit on federal foster care maintenance payments for placements in “child-care institutions”, effective October 1, 2019 • Exceptions: qualified residential treatment program (QRTP); setting specializing in providing prenatal, post-partum, or parenting supports for youth; supervised independent living setting for children 18 and over; or setting providing high-quality residential care and supportive services to children who are at risk of or who have been victims of sex trafficking. • September 2019 guidance on QRTPs and the Medicaid IMD exclusion 16
Proposed Limits on Establishing Categorical Eligibility for Snap • Categorical eligibility for households receiving “benefits” under Title IV-A (TANF, SSI) • Proposal: categorical eligibility only for households (1) receiving “substantial” and “ongoing” TANF benefits (cash or non-cash); (2) for non-cash TANF, receiving benefits that focus on subsidized employment, work supports, and childcare 17
QUESTIONS? 18
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