Health Estimates
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Aug. 23, 2018: CMS Strengthens Financial Oversight Of State Medicaid Waiver Demonstrations

CMS Strengthens Financial Oversight Of State Medicaid Waiver Demonstrations.

Modern Healthcare  (8/22, Luthi, Subscription Publication) reports CMS on Wednesday said it is “tightening its financial oversight of state Medicaid waiver formal guidance emphasizing that the changes must be budget-neutral.” The agency “will not approve waivers that predict the federal government will incur additional costs.” States will now need to upload all the financial data of a given Medicaid demonstration into a new monitoring tool, which will consolidated the figures in one report to the agency. CMS Administrator Seema Verma said, “Today’s guidance is a comprehensive explanation of how CMS and our state partners can ensure that new demonstration projects can simultaneously promote Medicaid’s objectives and keep federal spending under control.”

        Healthcare Finance News  (8/22, Lagasse) reports the guidance “comes a day after Administrator Seema Verma testified before the Senate Homeland Security and Government Accountability Committee on improper payments in the Medicaid program, which often result in higher federal spending.”

Legislation and Policy


GAO: Administration Needs To Do A Better Job Managing ACA Sign-Up Sessions.

The AP  (8/23, Alonso-Zaldivar) says a nonpartisan Government Accountability report due out Thursday says the Trump Administration “needs to step up its management of sign-up seasons for” the Affordable Care Act “after mixed results last year amid a failed GOP drive to repeal it.” The report “finds problems with consumer counseling and advertising and recommends the administration set enrollment targets, but it also credits administration actions that helped people sign up, such as a more reliable website and reduced call center wait times.” The AP says the report will “add to Democrats’ election-year claims that the administration ‘sabotaged’ the health law.”


State AGs, AHIP Urge Appeals Court To Revisit Risk-Corridor Payment Case.

Fierce Healthcare  (8/22, Richman) reports attorneys general in 18 states and health groups, including AHIP, Blue Cross Blue Shield, and National Association of Insurance Commissioners, are urging a federal US Court of Appeals “to revisit its ACA risk-corridor payment decision through a slew of new amicus briefs.” The briefs “argue that the court’s June decision will wreck havoc on the ACA marketplaces if allowed to stand.”


Six States To Receive $840 Million In Lawsuit Over ACA Fees.

The Lincoln (NE) Journal Star  (8/22) reports Nebraska is projected to receive more than $36 million from the federal government after a US District Court judge in Texas “ruled that it and five other states are entitled to a refund of fees on their state Medicaid programs.” US District Court Judge Reed O’Connor ruled late Tuesday “that language in the ACA actually statutorily exempts the states from having to pay the Health Insurance Providers Fee and that the states are entitled to receive a refund of the money they paid from the Internal Revenue Service.” The nearly $840 million will be dispersed among Texas, Kansas, Louisiana, Kansas, Wisconsin, and Nebraska.


CMS Approves Maryland’s Waiver To Establish Health Reinsurance Program.

The AP  (8/22, Witte) reports Maryland officials on Wednesday announced CMS approved a waiver “to create the nation’s largest health reinsurance program, a step designed to protect insurers from skyrocketing claims and hold down rates in the struggling individual market of the state’s health care exchange.” State lawmakers who sponsored legislation “said the program was needed to rescue the state’s individual health exchange market, which faced collapse over sharply rising rates. State officials feared increases of up to 50 percent without action in the individual market, which affects about 250,000 people.” Michele Eberle, the executive director of the Maryland Health Benefit Exchange, said, “This program will buy us time to strengthen the market for health coverage, which has already come a long way in the past few years.”

        Modern Healthcare  (8/22, Subscription Publication) reports Maryland “estimates the program will effectively cancel out the previously projected 30% average rate hike for 2019.” The piece says the “waiver is slated to cost $462 million next year, $365 million of which will be funded by a 2.5% tax on health insurance and Medicaid managed care plans.” The program has been approved through 2023.

        The Annapolis (MD) Capital Gazette  (8/22) also reports on this story.


Republicans Playing Defense On Healthcare Heading Into Midterms.

The Los Angeles Times  (8/21, Haberkorn) reported Republicans are “heading into a national election divided and defensive over healthcare” after “failing to deliver on their years-long-promise to repeal the Affordable Care Act and faced with the sudden popularity of Obamacare’s consumer protections.” Many still want to repeal the ACA, “but a growing number of Republicans – particularly those facing tough elections – want to quietly admit defeat and move on to other issues.” Some GOP candidates are attempting to “thread an awkward needle of opposing Obamacare – a law that is still unpopular with base voters – while supporting some of its key provisions.” For example, Republican state Attorneys General Patrick Morrisey of West Virginia and Josh Hawley of Missouri are part of a “multistate, GOP-backed lawsuit that seeks to end a requirement in the 2010 law that all Americans have insurance.” But as they run for US Senate, “they have had to distance themselves somewhat from the effort,” especially now the Trump Administration is pushing to eliminate the preexisting conditions mandate, as well.

Public Health and Private Healthcare Systems


Mississippi Seeks Waiver To Impose Work Requirements Without Expanding Medicaid.

The Hill  (8/23, Weixel) reports the Trump Administration is “facing a key test with Mississippi’s Medicaid program as the state seeks permission to be the first ever to impose work requirements without expanding Medicaid under ObamaCare.” The five-year waiver request from Republican Gov. Phil Bryant “seeks to require non-disabled adults to participate in at least 20 hours per week of ‘workforce training.’” The federal comment period closed Aug. 18, “and advocates point to the changes submitted by the state as a sign that the administration wants to green light the request.” CMS Administrator Seema Verma “said during a news briefing in May that the administration would need to work with non-expansion states to ensure Medicaid beneficiaries would not be at risk of losing coverage.” However, a group of 12 Democratic House members, led by Mississippi Rep. Bennie Thompson, sent a letter to HHS Secretary Azar urging him to reject the request because “the work requirements would disproportionately hit African American families the hardest.”


Generic Drugs Would Have Saved Medicare $925 Million, Analysis Shows.

The Springfield (MA) Republican  (8/22, Gerald-Flynn) reports a retrospective analysis of Medicare Part D expenditures “shows a difference of $925 million between what Medicare reported spending in 2016 on 29 brand-name combination medications and the analysis’ estimate of potential spending on their generic constituents.” The estimate by Boston researchers “includes a difference of $235 million if generic products had been prescribed at the same doses, $219 million using generic substitution at different doses, and $471 million from substitution of similar generic medications in the same therapeutic class.” The study, published in JAMA, looked at CMS data from 2011 to 2016 on some 70 percent of Part D enrollees during the time period.

        Fierce Healthcare  (8/22) reports that between 2011 and 2016, according to the study, “Medicare could have saved $2.7 billion by paying for generic versions of the 10 costliest brand-name drugs alone.”


Seventeen Health Systems Join Medicaid Transformation Project.

Healthcare Finance News  (8/22, Morse) reports, “Seventeen health systems, comprising 280 hospitals, are joining the Medicaid Transformation Project, a new national effort to develop financially sustainable solutions that improve the health of underserved individuals and save providers money.” The program is led by AVIA, “a network for health systems seeking to innovate,” and Andy Slavitt, former Acting CMS Administrator and the founder and general partner of venture investment firm Town Hall Ventures. Slavitt said. “The Medicaid Transformation Project will be part of a decade-long journey leading some of the best health systems in the country. Our work will be to deepen and refine the best innovations and then implement them at an accelerated pace at providers across the country.”

        Fierce Healthcare  (8/22, Sweeney) reports five health systems will “anchor the project: Advocate Aurora Health, Baylor Scott & White Health, Dignity Health, Geisinger and Providence St. Joseph Health.” The collaboration will first “focus developing solutions to five key issues facing Medicaid patients: Behavioral health, women and infant care, substance use disorder and avoidable emergency department visits.”

        Forbes  (8/22, Tindera) also reports on this story.


A.M. Best Announces Upgrades For More Insurers This Year Than Last, Due To Improved Profits On ACA Exchanges.

Modern Healthcare  (8/22, Livingston, Subscription Publication) reports, “A.M. Best upgraded the ratings of more health insurers in the first half of 2018 than in the same period last year” following “improved operating results” in Affordable Care Act marketplaces, and continued profits “in other markets.” A.M. Best announced it had “upgraded nine ratings and downgraded three for health insurers in the first half of this year” compared to upgrades in four and downgrades in six a year ago. The firm said the improved status followed “years of high rate increases and a narrowing of provider networks” on the ACA exchanges. Firms mentioned receiving upgrades were UnitedHealth Group, its subsidiary Sierra Health and Life Insurance Co., and Highmark Health, while EmblemHealth was downgraded.



More Americans Move From Traditional Insurance To Cost-sharing And Primary-care Clinics.

Bloomberg News  (8/22, Tozzi) reports on how some Americans are living without health insurance, focusing on the case of Lindsie and Chris Bergevin. In their case, dropping health insurance “helped them eventually” to pay for $7,000 in uncovered medical expenses. Now, they have “patched together an alternative” to insurance and are part of “a small but growing number of Americans rigging their own medical safety nets” along with physicians who “have opted to reject insurance.” The Bergevins belong to a cost-sharing plan and a primary-care clinic. While Bloomberg says that “no reliable data exist on how many people” are doing similar things, “the trend appears to be gaining momentum” with “more than 1 million” belonging to cost-sharing groups, and “almost 900” primary-care clinics established, according to the Direct Primary Care Coalition. For the Bergevins the total expense is “about as much as Obamacare insurance would cost” and they are “still exposed to considerable risk.”

Jeff Sopko