An Update on MACRA Implementation

By now many of you have heard of the new Medicare Quality Payment Program (QPP), born out of the Medicare and CHIP Reauthorization Act of 2015 (MACRA) that went into effect this year.   The QPP completely revamps the way Medicare pays its providers and is made up of two tracks, the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (AAPM).

Also by now, you have hopefully seen NACHC’s fact sheet on the QPP and have heard that MIPS will not impact the way that Medicare pays Federally Qualified Health Centers (FQHCs), as they have their own unique payment methodology in Medicare are not paid on the Medicare Physician Fee Schedule.  However, if a health center bills the Medicare Physician Fee Schedule (Medicare Part B) for services outside the FQHC service package, those providers may be impacted by MIPS.  There is a low volume threshold that exempts providers that see fewer than 100 Medicare beneficiaries or bill equal to or less than $30,000 in Medicare charges annually or are newly enrolled Medicare clinicians.  Please note, the low volume threshold is calculated either by group or individual, depending on how the center decides to bill Medicare Part B.

CMS has just launched an online “Lookup Tool” for providers to enter in their 10 digit National Provider Identifier (NPI) to determine if he or she is eligible for the Merit-Based Incentive Payment System (MIPS), or exempt and if so, the reason for the exemption. On top of this, CMS is also sending out letters to providers to let them know if they are exempt from MIPS.  Please keep an eye out for these important letters or use the “Lookup Tool” to fully understand how your providers may be impacted by the QPP.

If you have questions on this or any other Medicare related issue, please contact Susan Sumrell.

Uncertainty Remains in the Marketplace

On April 13, 2017 CMS issued its final rule designed to make the ACA Marketplaces more appealing to insurers.  Under this final rule, starting for the 2018 plan year:

  • The annual Open Enrollment Period will be shortened from 3 months to 6 weeks
  • States will have full authority to determine if an insurer’s network has an adequate number of providers
  • Insurers will be required to include only 20 percent of Essential Community Providers (also known as ECPs and includes heath centers) in their networks, down from the previous requirement of 30 percent.
  • People will need to prove that they qualify for a Special Enrollment Period

However, even with this final rule to stabilize the Marketplaces, there is still much uncertainty of what will happen with the Cost-Sharing Reductions, which remain in flux.

By way of background, cost sharing reductions are discounts that lower the amount an individual must pay for deductibles, copayments and coinsurance, available for individuals or families up to 250 percent of poverty.  In 2014, the House of Representatives filed a lawsuit against the Obama Administration claiming that Congress never authorized spending for Cost-Sharing Reductions.  The Courts originally agreed with the House of Representatives and the Obama Administration appealed the decision, which led the Court to allow the Cost-Sharing Reductions to continue until the case is resolved.

It is not certain how this will be resolved, but there is much discussion about potential next steps.  If the Trump Administration chooses to continue the appeal, the Cost Sharing Reductions would continue as long as the appeal is being considered.  At the same time, there is talk that Congress could authorize the Cost Sharing Reductions through an Omnibus or Continuing Resolution package.  On the other side of either of those options, if the Trump Administration does not continue the appeal and Congress does not act, the Cost Sharing Reductions could immediately end, leaving the insurers in the Marketplace to cover the cost of the Cost Sharing Reductions on their own, which could lead to many dropping out of the Marketplaces.

While much of this remains in flux, NACHC has joined other safety net coalitions in letters to both the House and Senate Leadership and President Trump encouraging the continuation of the Cost Sharing Reductions in order to ensure access to affordable health care.  We will continue to watch this very closely and will continue to provide updates as there are new developments.

CMS, HHS Send Letter to Governors on Medicaid

Just after her Senate confirmation as Administrator of the Centers for Medicaid Services (CMS), Seema Verma joined HHS Secretary Tom Price in a letter to governors on their commitment to work together to improve the Medicaid program.   The letter states that the federal framework for Medicaid has not “kept pace with emerging evidence around the factors that drive improvements in health outcomes” and the ACA’s Medicaid expansion was a “clear departure from the core, historical mission of the program.”   The letter highlights CMS’ commitment to a “new era for the federal and state Medicaid partnership,” by:

  • improving state and federal program management,
  • supporting innovative approaches to increase employment and community engagement,
  • aligning Medicaid and private insurance policies for non-disabled adults,
  • creating reasonable timelines and processes for Home and Community Based Services and finally,
  • providing states with more tools to address the opioid epidemic.

This letter aligns with comments from both Secretary Price and Ms. Verma to provide states with increased flexibility in the Medicaid program.   As this conversation continues, we will be following new developments at both the CMS and state level and will keep you all updated.

The New Medicaid Landscape: How the Administration May Increase Flexibility for States

While it is unclear what changes Congress may make to the Medicaid program, even without further Congressional action, changes are coming to Medicaid.  The recent Senate confirmations of Health and Human Services Representative Tom Price as Secretary of Health and Human Services and Seema Verma as Administrator of the Centers for Medicare and Medicaid Services (CMS) suggest that, even without Congressional action, the new Administration will soon be granting states significantly greater flexibility to design their own programs using waivers than they have had to date.

While the Administration must enact the laws that Congress has passed and does not have the authority to create or pass laws, it does have the authority to grant waivers in the Medicaid and CHIP programs to states interested in pursuing new or innovative ways to deliver care in the state’s Medicaid program.    By way of background, in order to receive federal funding, there are certain federal requirements a state must include in its Medicaid program, including mandatory coverage of certain populations, services, and payments.  Through a waiver, states cannot seek to waive all of these federal requirements in Medicaid, but can seek waive certain requirements, which provides them with additional flexibility under the law.  Each must be approved by the CMS.

The most common form of Medicaid waiver today is the 1115 waiver, originally created to test experimental, pilot or demonstration projects, and which can focus on areas such as delivery system reform, behavioral health, and other services.  Each 1115 waiver must follow a transparency process, as directed by the Affordable Care Act.   Today, 33 states operate 41 different 1115 waivers that are used to test innovations such as delivery reforms, Medicaid expansion or new services.  To date, seven states (Arkansas, Arizona, Iowa, Indiana, Michigan, Montana, and New Hampshire) have used 1115 waivers for Medicaid expansion.  For an in-depth look at each of these waivers, see NACHC’s recent waiver update.

While the Administration’s health care plans are still being developed, we do know that Seema Verma will work to provide states additional flexibilities in Medicaid and CHIP.  If fact, in her previous work as health care consultant, she helped states design 1115 waivers, including the Healthy Indiana 2.0 waiver.   During her confirmation hearing with the Senate Finance Committee in February, she noted that “(a)ny state should have that flexibility to design a program that works better for the people that they are serving and they’re better positioned to make those decisions than we are in D.C.”

It is too soon to say what states will request under the new Administration, but we can look to the flexibilities states have requested in the past to get an understanding of what types of flexibilities states may seek going forward.  Of importance to health centers, it is worth noting that to date, no changes to FQHC provisions, including changes to PPS or FQHC services, have been approved by CMS. However, it will be important for Primary Care Associations and health centers to remain engaged in their state conversations to ensure that FQHC provisions remain intact.

The common trends in the flexibilities currently approved by CMS via an 1115 waiver include:

  • Premium Assistance Models: Under this approach, Medicaid funds are used to help an individual pay premiums for coverage purchased through the private market. There is much variation in this approach across the states; some states have required individuals to enroll in Qualified Health Plans (QHPs) in the Marketplaces to expand waivers, while others have used Employee Sponsored Insurance models.
  • Premiums or Monthly Contributions: States have requested to apply premiums to the expansion population, typically no more than 2 percent of a beneficiary’s income for those individuals that fall between 100-138% of Federal Poverty Level (FPL), to be used toward offsetting the cost of expansion. Some states that have chosen to use this model have also included “premium protections,” such as individual incentives or delays in premiums, to lessen the burden on beneficiaries.
  • Healthy Behavior Incentives: States have included incentives for healthy behaviors as a way to reduce premiums or copayments.
  • Waiving retroactive eligibility: States have waived retroactive eligibility, meaning that coverage starts on the date of the first premium payment, as opposed to the date of enrollment. States have also requested to bar individuals from re-enrolling if they are disenrolled for unpaid premiums.
  • Higher copayment amounts: While higher copayment amounts are not allowed via 1115 waivers, Indiana created a special demonstration via its waiver to look at allowing higher copayment amounts for non-emergency use of the emergency department for certain individuals.
  • Waiver of certain required benefits: Two states have received a waiver from the requirement to provide non-emergency medical transportation.

The table below provides an overview the currently approved flexibilities from CMS via 1115 expansion waivers.

Please note that the table includes provisions that states have requested and CMS has approved to date.  We do expect that states may seek new and additional flexibilities that have previously been denied but may be approved under the new Administration, such as:

  • Premiums for individuals with incomes under 100% of the FPL as a condition of eligibility;
  • Waiver of Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefits
  • Waiver of free choice of family planning provider
  • Work requirements or incentives as a condition of Medicaid eligibility

In fact, we have already seen movement on some of these provisions, including:

  • Arizona has announced it is considering a waiver that includes work requirements and a lifetime cap on eligibility
  • Indiana is seeking a renewal of Healthy Indiana 2.0, which is coming under question due to concerns with the evaluation data
  • Arkansas recently announced its plans to submit amendments to its Arkansas Works program, including limiting eligibility, applying work requirements, and reforming employee sponsored insurance.

As Seema Verma takes the reins at CMS, much remains uncertain.  But NACHC will continue to monitor the states’ waiver requests and the potential impact on FQHCs and their patients and work with Primary Care Associations and health centers to address any issues that may arise.

CMS Issues Proposed Rule on “Market Stabilization” for the ACA Marketplaces

On February 15, 2017, CMS issued its proposed rule on “market stabilization” in the Affordable Care Act’s Marketplaces.  This proposed rule is one of the first issued by the Trump Administration.  Below you will find a summary of the major provisions of the proposed rule and can read NACHC’s comments on the proposed rule here.  We will continue to follow this and other actions from the Administration and encourage you to check back for further updates.


Summary of Proposed Rule on ACA Marketplace Stabilization 

  • Stated goal is to “stabilize” the ACA Marketplaces by making them more attractive (aka less risky) for insurers, so they’ll be less likely to withdraw.
  • Development of this proposed rule began under the Obama Administration, although it is not entirely clear which provisions resulted from which Administration.
  • Major provisions include:
    • Cutting the length of the Open Enrollment Period by half (from 3 months to 6 weeks), which aligns with Medicare and most private sector Open Enrollment periods.
    • Tightening up on Special Enrollment Periods (SEPs) by strengthening the requirements that people applying during a SEP prove that they qualify (e.g., they really did get married, have a baby, get laid off).
    • Lowering the requirement that Qualified Health Plans (QHPs) contract with 30% of the Essential Community Providers in their service area to 20%. (Note that the NPRM does not propose to eliminate the requirement that QHPs contract with at least one FQHC in each county in their services areas.)
    • Requiring individuals who dropped out of a plan and later choose to re-enroll in the same plan to pay any back premiums before they can re-enroll.
    • Slightly loosening the actuarial requirements on QHPs.
    • CMS will defer entirely to States’ reviews of QHPs for network adequacy. (In states without adequate capacity to conduct such reviews, CMS will defer to outside accrediting bodies.) For the 2016 and 2017 plan years, CMS had applied minimum time-and-distance standards when evaluating network adequacy.
  • Contrary to some expectations, the proposed rule did not include any provisions to:
    • Increase the spread between how much the youngest and oldest enrollees can be charged.
    • Further restrict the ability of third-parties to pay individuals’ premiums
    • Increase flexibility around the required Essential Health Benefits.