Archives for July 2016

Massachusetts businesses relax for another year, rate setting waiver extended

In an effort to keep small business health insurance premiums low, the Commonwealth of Massachusetts has applied for and received an HHS waiver allowing it to use state small group rating factors. These factors, used to determine how rates should be set, are not aligned with the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), but continued use is likely to preserve the current status of the market and avoid disruption.

Previous waivers

Massachusetts had received a waiver in 2013 allowing it to implement a slower transition to ACA compliance. This waiver, extended various times, covered state rating factors, allowing small group insurers to use two-thirds of the state factors established in July 2013 through January 1, 2017 (see Massachusetts granted extension on ACA requirement deadline, Health Reform WK-EDGE, April 30, 2014). The state rating factors would be further reduced to one-third until December 31, 2017, and then completely phased out. The waiver extension will allow one-third of the rating factors to be used through the end of 2018.

Rating factors

The rating factors in question apply to businesses with no more than 50 employees. An employer group, Associated Industries of Massachusetts, stated that insurance costs for some small businesses could have increased by as much as 50 percent without the temporary waiver, and expressed hopes that a permanent waiver would come. Massachusetts allows a company’s size and industry to be considered, but the ACA does not take these factors into account.

Highlight on Maryland: Citing prison smuggling, opioid options handcuffed for all

In a change to the dismay of physicians and patients, Maryland’s Medicaid program recently removed Suboxone film, a drug used in the treatment of opioid addiction,  from the state’s list of preferred drugs and substituted it with the tablet form Zubsolv. Suboxone helps people control their opioid habit, but is an opioid as well. While Suboxone does not produce a high as intense as other opioids, it keeps cravings in check while creating some feelings of euphoria in users. The concern underlying Suboxone is that it comes as a tiny, dissolvable film, about the size of a breath mint strip, and thus, transparent and easy to hide. Suboxone will only be covered if prescribing physicians first go through a prior authorization process.

Maryland state officials stressed that the change was made to stop the flow of the drug into jails and prisons. According to the Department of Health and Mental Hygiene (DHMH), Suboxone strips were diverted or smuggled into prisons and resold or traded in criminal activity. The Department of Public Safety and Correctional Services (DPSCS) noted that seizures of the drug were up about 40 percent compared to 2015, with more than 2,300 doses of Suboxone confiscated. The strips are often divided up and sold individually in prisons. DPSCS had argued that the change was necessary because of 13 fatal overdoses in prisons since 2013. Opponents stressed that without Medicaid reimbursement, the well-tolerated Suboxone will be virtually unavailable for the most vulnerable patients, resulting in a serious restriction of access to treatment. The state health department did acknowledge that the overdoses were for opioids in general, not specifically related to Suboxone.

Physicians are against the change because the tablet form is not as effective at keeping opioid withdrawal symptoms in check. Suboxone film, as well as the Zubsolv pill that replaces it, actually protect against overdoses because they contain both the opioid buprenorphine and a drug called naloxone that reverses the effects of an overdose. Naloxone is used by emergency responders to revive people who overdose. Some physicians have reported that patients who were stable and doing well on Suboxone were reacting differently to Zubsolv, in many instances negatively.

Kusserow on Compliance: OIG reports on new items added to its 2016 work plan

The HHS Office of Inspector General (OIG) released a mid-year update on its 2016 Work Plan that summarizes new and ongoing reviews and activities it plan to pursue with respect to HHS programs and operations during the current fiscal year and beyond. This report includes those items that have been completed, postponed, or canceled, as well as including new items begun since the original plan had been published for this fiscal year, with links to the full summaries for new work. The following is a summary of some of the new items added to the Work Plan for the current year. Compliance Officers might find it useful to review to determine if any of this new work impacts on their organization.

  • Outpatient Outlier Payments for Short-Stay Claims. To determine the extent of potential Medicare savings if hospital outpatient stays were ineligible for an outlier payment. The purpose of the outlier payment is to ensure beneficiary access to services by having the Medicare program share in the financial loss incurred by a provider associated with individual, extraordinarily expensive cases.
  • Skilled Nursing Facility Prospective Payment System. Review of the compliance with the skilled nursing facility (SNF) prospective payment system requirement related to a three-day qualifying inpatient hospital stay. If the beneficiary is subsequently admitted to a SNF, the beneficiary is required to be admitted either within 30 days after discharge from the hospital or within such time as it would be medically appropriate to begin an active course of treatment.
  • National Background Checks for Long-Term Care. Review the procedures implemented by participating states for long-term-care facilities or providers to conduct background checks on prospective employees and providers who would have direct access to patients and determine the costs of conducting background checks to determine the outcomes of the states’ programs and whether the checks led to any unintended consequences.
  • Potentially Avoidable Hospitalizations of Medicare and Medicaid Eligible Nursing Home Residents for Urinary Tract Infections. Review of nursing home records for residents hospitalized for urinary tract infections (UTI) to determine if the nursing homes provided services to prevent or detect UTIs in accordance with their care plans before they were hospitalized.
  • Accountable Care Organizations: Beneficiary Assignment and Shared Savings.  Determine whether CMS properly performed the process of assigning beneficiaries to ACOs in the Medicare Shared Savings Program (MSSP). Examine CMS’ shared savings payments for beneficiaries who were assigned to ACOs under the MSSP to ensure that there is no duplication of payments for the same beneficiaries by other savings programs or initiatives.
  • Medicare Home Health Fraud.  Analyze Medicare claims data to identify the prevalence of potential indicators of home health fraud.
  • Physician-Administered Drugs for Dual Eligibles.  Determine whether Medicare requirements for processing physician-administered drug claims impact state Medicaid agencies’ ability to correctly invoice Medicaid drug rebates for dual eligible enrollees.
  • Oversight and Effectiveness of Medicaid. Determine the extent to which selected States made use of Medicaid waivers and if costs associated with the waivers are efficient, economic, and do not inflate federal costs.
  • State Medicaid Agency Breach Protections. Examine breach notification procedures of State Medicaid agencies and their contractors, as well as their responses to past breaches of unsecured patient health information.
  • CMS Oversight of Risk Adjustment Data. Timelines, Validity, and Review of summary reports produced by the ACA risk adjustment data collection system, as well as to determine the extent of any data discrepancies and what actions were taken by issuers to review and resubmit data as well as the extent to which issuers appealed risk adjustment changes.
  • Risk Corridors: Insights from 2014 and 2015. Assess the difference in reported risk corridors data from benefit years 2014 and 2015; and the guidance and tools that CMS used to ensure the accuracy of reported risk corridors data for the two benefit years.
  • CMS’ Implementation of New Medicare Payment System for Clinical Diagnostic Laboratory Tests-Mandatory Review. Assess CMS’ ongoing activities and progress toward implementing CMS’s new Medicare payment system for clinical diagnostic laboratory tests.
  • Other Providers and Suppliers. Assess CMS’ ongoing activities and progress toward implementing CMS’ new Medicare payment system for clinical diagnostic laboratory tests.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.

Arizona KidsCare restart estimated to help 40K children

Arizona will begin taking applications on July 26, 2016, for its government-sponsored health-insurance program KidsCare; coverage will begin September 1, 2016. As a result, the population of uninsured Arizona children, currently around 162,000, is projected to drop significantly this fall, as an estimated 34,278 Arizona children would be eligible for KidsCare upon reinstatement of the program.

KidsCare, the Arizona version of the Children’s Health Insurance Program (CHIP), is administered by the state’s Medicaid program, which is known as the Arizona Health Care Cost Containment System (AHCCCS). Officials with AHCCCS expect that within its first year of being newly active, KidsCare will enroll 30,000 to 40,000 Arizona children. Arizona is the only state without an active CHIP program. According to a study by the Center for Children and Families at Georgetown University, the state has the third-highest rate of uninsured children in the U.S.

Opponents of KidsCare have expressed concern that Arizona will eventually have to pick up the tab for the program, as federal dollars are only appropriated to cover the cost of the program for the next year. Supporters said reopening the program was the moral thing to do for Arizona children.


Enrollment in KidsCare was frozen in 2010 after Arizona decided to cut eligibility and phase out CHIP benefits over time. KidsCare II, a temporary hospital financing agreement meant to fill the gap due to frozen enrollments beginning in 2010 until new coverage options were available to Arizona families with the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), was terminated at the end of January 2014.

An earlier Georgetown study observed that the termination of KidsCare resulted in families paying more for alternative subsidized health care coverage while receiving fewer benefits under that coverage (see Arizona CHIP discontinuation results in higher prices, less coverage, Health Law Daily, May 9, 2014).