MACPAC suggests Congress authorize states to mandate managed care

Congress should amend Section 1932(a)(2) of the Social Security Act (SSA) to allow states to require all beneficiaries to enroll in Medicaid managed care programs under state plan authority, without a waiver, according to the Medicaid and CHIP Payment and Access Commission (MACPAC).

Other recommendations

During its January session, MACPAC approved the managed care recommendation, which will be added to the commission’s draft March 2018 report to Congress alongside two December 2017 recommendations that Congress (1) extend Section 1915(b) waiver approvals from two to five years; and (2) revise Section 1915(c) waivers to waive freedom of choice and allow selective contracting.

Concerns

Other concerns raised by MACPAC in December 2017 included: (1) whether the managed care recommendation should include long-term services and supports; (2) the adequacy of protections for vulnerable beneficiaries under state plan authority; and (3) that the recommendation to allow mandatory managed care enrollment requires oversight of states and plans to ensure beneficiary needs are met.

10-Year CHIP extension would save $6B

The Congressional Budget Office (CBO) estimated that a 10-year extension of the Children’s Health Insurance Program would cut $6 billion from the deficit, since the program allows the federal government to avoid paying higher costs for alternate insurance obtained through federally-subsidized marketplaces (CBO Report, January 11, 2018).

The CBO and Joint Committee on Taxation had previously estimated that a five-year renewal for CHIP would add $0.8 billion to the deficit, down from its previous estimate of $8.2 billion. The change stems from Congress’s repeal of the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate. Without CHIP, parents would be more likely to seek federally-subsidized coverage offered through health insurance marketplaces set up by the ACA, and CBO expects that the individual mandate’s repeal will lead to lower enrollment and higher costs in those marketplaces (see Eliminating individual mandate lowers cost of CHIP funding, Health Law Daily, January 8, 2018).

A longer CHIP extension, through S. 1827 the Keep Kids’ Insurance Dependable and Secure Act of 2017, would yield even higher net savings, the CBO said in response to a question by Rep. Frank Pallone Jr. (D-NJ). The KIDS Act would increase the deficit from 2018 to 2020, and decrease the deficit every year thereafter, because the federal matching rate for CHIP would decline from an average of 93 percent in 2019 to 70 percent in 2021 and subsequent years. Under the KIDS Act, the federal costs of insuring children through CHIP would decline as states pick up more of the costs, and would allow the government to avoid paying higher costs for alternative coverage through the marketplaces, Medicaid, and employment-based insurance.

Kusserow on Compliance: OIG adds six new projects in December to its Work Plan

In 2017, the HHS OIG moved to regularly update updating its Work Plan. In December, the OIG added six new projects that set forth various audits and evaluations that are underway or planned in the current fiscal year and beyond. In conducting its work, the OIG assesses relative risks in HHS programs and operations to identify those areas most in need of attention. In evaluating potential projects to undertake, the OIG considers a number of factors, including mandates set forth in laws, regulations, or other directives; requests by Congress, HHS management, or the Office of Management and Budget; top management and performance challenges facing HHS; work performed by other oversight organizations (e.g., GAO); management’s actions to implement OIG recommendations from previous reviews; and potential for positive impact. In addition to working on projects that often result in audits, reviews, and reports, the OIG also engages in a number of legal and investigative activities that are separately reported.

New Projects Added

  1. Status Update on States’ Efforts on Medicaid-Provider Enrollment. Provider enrollment is the gateway to billing in the Medicaid program. If this gateway is not guarded, Medicaid is at risk of fraud, waste, and abuse. Prior OIG work found many states had yet to complete fingerprint-based criminal background checks and site visits. CMS agreed with this and moved ahead to assist, however, CMS continues to extend the deadline for completion of fingerprint-based criminal background checks, indicating that states are still working on provider enrollment. The OIG plans to determine the extent to which states have completed fingerprint-based criminal background checks and site visits. For those not completing these steps, the OIG will inquire about challenges preventing them from completing this effort.

 

  1. Review of CMS Systems Used to Pay Medicare Advantage Organizations. CMS has designed its Medicare Part C systems to capture the necessary data in order to make increased hierarchical condition categories (HCC) payments to MA organizations. CMS is transitioning to a new data system to make these payments. The OIG will review the continuity of data maintained on current Medicare Part C systems, specifically instances in which CMS made an increased payment to an MA organization for a HCC and determine whether CMS’s systems properly contained a requisite diagnosis code that mapped to that HCC.

 

  1. State Compliance With Requirements for Reporting and Monitoring Critical Incidents. CMS requires states to implement an incident reporting system to protect the health and welfare of the Medicaid beneficiaries who receive services in community-based settings or nursing facilities. OIG previously found that some states did not always comply with federal and state requirements for reporting and monitoring critical incidents such as abuse and neglect. The OIG will review additional state Medicaid agencies to determine whether the selected states are in compliance with the requirements for reporting and monitoring critical incidents. The work will focus on beneficiaries residing in both community-based settings and nursing facilities.

 

  1. Paper Check Medicaid Payments Made to Mailbox-Rental Store Addresses. The CMS Medicaid Manual sets forth general federal requirements for adequate documentation of Medicaid claims. Potential providers are required to submit an application to bill for Medicaid services, and potential providers can choose to be paid by an electronic funds transfer (EFT) or a paper check. They must also list their practice and correspondence addresses. Because of theft, forgery, or alteration, the issuance of paper checks to providers carries more risk than using an EFT. The GAO reported identifying potential issues with Medicare-provider addresses and revealed that payments made to a provider with a mailbox-rental store, vacant, or invalid practice address increase the potential risk of fraud, waste, or abuse. The OIG will assess whether similar problems exist with the Medicaid program. Specifically, the OIG will determine if Medicaid payments issued by paper checks and sent to providers with mailbox-rental locations were for unallowable services.

 

  1. Prescription Opioid Drug Abuse and Misuse Prevention – Prescription Drug Monitoring Programs. Opioid abuse and related overdoses is a national epidemic and according to the Centers for Disease Control and Prevention (CDC), more than 33,000 people died in 2015 from overdoses involving opioids. HHS, through the CDC and the Substance Abuse and Mental Health Services Administration (SAMHSA), provides funding to States to prevent opioid abuse and misuse. Funding is provided by the CDC’s Prescription Drug Overdose: Prevention for States program and SAMHSA’s Strategic Prevention Framework for Prescription Drugs program. The OIG intends to identify actions state agencies have taken using federal funds for enhancing prescription drug monitoring programs (PDMPs) to achieve program goals—improving safe prescribing practices and preventing prescription drug abuse and misuse—and in doing so determine whether they complied with federal requirements. This series of audits will include states that have had a high number of overdose deaths, have a significant increase in the rate of drug overdose deaths, or received HHS funding to enhance their PDMPs.

 

  1. Impact of the Indian Health Service (IHS) Delivery of Information Technology/Information Security Services and Opioid Prescribing Practices. IHS has a decentralized management structure that is separated into two major categories: Headquarters and 12 Area Offices. The Area Offices are responsible for overseeing 26 hospitals, 59 health centers, and 32 health stations, some of which are located in remote locations. The OIG found that hospitals with limited cybersecurity resources struggle to implement information technology improvements and update the IHS electronic heath record system. The OIG will analyze and compare information technology/information security (IT/IS) operations and opioid prescribing practices at five IHS hospitals to determine whether (1) IHS’s decentralized management structure has affected its ability to deliver adequate IT/IS services in accordance with federal requirements and (2) hospitals prescribed and dispensed opioids in accordance with IHS policies and procedures.

 

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 © 2017 Strategic Management Services, LLC. Published with permission.

Eliminating individual mandate lowers cost of CHIP funding

The Congressional Budget Office (CBO) lowered its estimate of the deficit impact of legislation that would fund the Children’s Health Insurance Program (CHIP) for five years, finding that CHIP had become less expensive relative to the rising costs of providing alternative coverage through the federally-subsidized health insurance marketplaces (CBO Report, January 5, 2018).

Prior estimate

The CBO and the Joint Committee on Taxation previously reviewed S. 1827, the Keep Kids’ Insurance Dependable and Secure Act of 2017, in October, finding then that it would add $8.2bn to the deficit. The new estimate finds that the bill, which would also change the federal matching rate for the program and state eligibility requirements, would only increase the deficit by $0.8 billion over the next ten years.

Individual mandate

The change stems from Congress’s repeal of the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate. Without CHIP, parents would have to seek alternative coverage, including federally-subsidized coverage offered through health insurance marketplaces set up by the ACA. Without the individual mandate, the CBO expects lower enrollment and higher costs for the insurance marketplaces, which increases the federal cost of enrolling a child in coverage through the marketplaces. The rising marketplace costs make CHIP a more cost-effective alternative to funding children’s health costs, the CBO found.