CMS seeks feedback on ‘new direction’ for Innovation Center

The Center for Medicare and Medicaid Innovation (CMMI) is seeking feedback on a potential “new direction” to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, and increase choices and competition. To be considered, comments on the informal Request for Information must be submitted online or through email by November 20, 2017.

CMMI develops new payment and service delivery models in accordance with the requirements of Sec. 1115A of the Social Security Act, as added by Sec. 3021 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), in an effort to reduce program expenditures while preserving or enhancing the quality of care furnished to individuals. However, CMMI has recently come under fire; HHS Secretary Tom Price criticized CMMI for dictating the type of care physicians are to provide for patients. In August 2017, CMS proposed to eliminate the Episode Payment Models and Cardiac Rehabilitation incentive payment model and revise aspects of the Comprehensive Care for Joint Replacement model (see Out with the old models, CJR model gets revamped, August 16, 2017).

In the Request for Information, CMMI sought feedback on testing models in eight areas: (1) increased participation in Advanced Alternative Payment Models (APMs); (2) consumer-directed care and market-based innovation models, which could empower beneficiaries to make choices from among competitors in a market-driven health system; (3) physician specialty models; (4) new models for prescription drug payment, in both Medicare Part B and Part D and Medicaid, that incentivize better health outcomes for beneficiaries at lower costs and align payments with value; (5) Medicare Advantage (MA) innovation models; (6) state-based and local innovation, including Medicaid-focused models; (7) potential models focused on behavioral health, including opioids, substance use disorder, dementia, and improving mental health provider participation in Medicare, Medicaid, and CHIP; and (8) program integrity.

In an op-ed piece, CMS Administrator Seema Verma called CMMI a “powerful tool” for improving quality and reducing costs. House Ways and Means Committee Chairman Kevin Brady (R-Tex) lauded CMMI’s issuance and said that the Obama Administration at times used the Innovation Center’s authority “in a top-down manner through mandatory, national ideas that received little to no input from those actually providing care to patients,” resulting in bipartisan Congressional concern for patients and stakeholders.

Arnold & Porter welcome back attorney after 7-year tenure with CMS

Following a seven-year tenure as the CMS Director of the Division of Outpatient Care, Dr. John McInnes, has rejoined Arnold & Porter Kaye Scholer LLP as counsel in the firm’s Life Sciences and Healthcare Regulatory practice.

CMS

McInnes served in several roles at CMS, including management roles as the Director of the Division of Outpatient Care and Acting Director of Practitioner Services. Those divisions are responsible for the development of national hospital outpatient department, ambulatory surgery center, and physician service payment policies for Medicare. He recently served as a Medical Officer at the Center for Medicare and Medicaid Innovation at CMS, which was created under Section 3021 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

Arnold & Porter

Prior to his tenure at CMS, as an associate with Arnold & Porter Kaye Scholer LLP, McInnes focused his practice on Medicare regulatory matters and healthcare fraud and abuse defense. He will use the experience he gained at CMS regarding Medicare coverage, coding, and payment policy to bolster the firm’s healthcare department.

HHS to receive $73.5B under House funding bill, ACA left out

The 2017 Omnibus Appropriations bill allocates a total of $73.5 billion to HHS for the 2017 Fiscal year, ending September 30, 2017. The House Appropriations Committee released the fiscal year 2017 Omnibus Appropriations bill on May 1, 2017. The bill provides discretionary funding for the federal government and prioritizes health while cutting funding for “ineffective or wasteful programs.”

HHS

The HHS funding represents an increase of $2.8 billion above the 2016 enacted funding level and $3.8 billion above the Obama Administration’s budget request. The budget is split among various agencies within HHS to fund what the bill calls “effective, proven programs.”

Funding

The bill allocates $34 billion to the National Institutes of Health (NIH) for research related to Alzheimer’s, antibiotic resistance, and precision medicine. The legislation includes funding for critical disease prevention and biodefense activities by allocating $7.3 billion for the Centers for Disease Control and Prevention (CDC). The bill provides the Substance Abuse and Mental Health Administration (SAMHSA) with $3.6 billion for 2017, with a focus on prevention and treatment of opioid and heroin use. The legislation provides $6.4 billion for HRSA Health Resources and Services Administration (HRSA), in part to fund Community Health Centers.

CMS and the ACA

The bill allocates $3 billion for CMS program management and operations and, notably, does not provide funding to implement Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) programs. The bill continues prohibitions and restrictions on use of federal funds related to the ACA.

States try to manage expectations for Medicaid managed care

When CMS updated regulations regarding Medicaid managed care in May 2016, it was the first significant update to these regulations since 2002. Over the past year, as speakers at the American Health Lawyers’ Association Institute on Medicare and Medicaid Payment on March 29, 2017, noted, states have started the multi-year process of complying with the new rules, while dealing with resources issues at the state level and political change in Washington, D.C.

About 80 percent of the 73 million Medicaid enrollees are in some kind of managed care program, according to Lindsey Browning with the National Association of Medicaid Directors. Thirty-nine states and the District of Columbia have contracted with managed care entities to deliver care to all or some of their Medicaid beneficiaries.

Four options

Prior to the issuance of the revised regulations (81 FR 27498, May 6, 2016) states had basically one option for putting a managed care plan in place—requesting a Medicaid state plan amendment from HHS. Under the revised regulations states now have four options to implement managed care waivers under various provisions of the Social Security Act: (1) a Sec. 1932 state plan waiver; (2) a Sec. 1915(a) waiver (waiving competitive procurement process); (3) a Sec. 1915(b) waiver, requiring all enrollees, including dual eligibles and children with special health care needs to enroll in managed care; and (4) a Sec. 1115 waiver (which may permit coverage of services not otherwise covered in Medicaid) (see CMS modernizes Medicaid managed care, Health Law Daily, May 6, 2016).

James Golden, director, Division of Managed Care Plans at CMS, noted that full implementation of the revised regulations will take three to five years, and that the key to success is how well states work with affected stakeholders—both managed care entities and beneficiaries. “CMS expects the states to take the lead in setting standards,” Golden said.

State challenges

Browning highlighted two key challenges that states face – setting up adequate networks of providers so managed care beneficiaries can actually access health care; and limited staff capacity to drive expansion of Medicaid managed care alongside a number of other Medicaid related regulations.

Impact of new administration

A further complication, Browning noted, is the new Trump Administration and new leadership for HHS and CMS. She noted that the new CMS Administrator, Seema Verma, indicated an interest in re-examining all recent rules related to Medicare and Medicaid during her confirmation hearing. Browning also pointed to the Executive Order issued by President Trump which requires all agencies to create a Task Force to review existing regulations with the goal of repealing many of them. Browning noted that both Verma and HHS Secretary Tom Price are interested in increased state flexibility around health programs.

In addition, Browning said that any changes to the Affordable Care Act (ACA) (P.L. 111-148) may impact the new Medicaid managed care regulations, for example, she noted that a key goal of the managed care rule was alignment with qualified health plan requirements under the ACA. Would this change if the ACA’s health insurance Exchanges are eliminated? Finally, she said that any structural changes to Medicaid would likely require revised managed care rules.