In the latest episode of Payers, Providers, and Patients – Oh My!, David McFarlane and Sam Krause talk with Joe Records and Payal Nanavati about fiduciary duties under ERISA.
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Podcast: FCA Dismissals under the Granston Memo
In our first episode of Payers, Providers, and Patients – Oh My!, John Brennan talks with Joe Records and Payal Nanavati about FCA dismissals under the Granston Memo.
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CMS Announces and Solicits Comments on Expanded RADV Audit Methodology
In its recent notice of proposed rulemaking setting policy for Medicare Advantage (MA) and the Prescription Drug Program (PDP) for calendar year 2020, CMS announced that it would establish extrapolation as a method to be used in risk adjustment validation (RADV) audits, and further, that it would not make any adjustments to account for errors in Medicare fee for service data in determining recovery amounts.
CMS uses a risk adjustment process to modify MA plan payments to better reflect the relative risk of each plan’s enrollees. Payments to each MA plan are adjusted based on risk scores that reflect enrollees’ health status (categorized into Hierarchical Condition Categories (HCCs)) and demographic characteristics derived from member claims data. To counteract incentives that a plan might have to over-report enrollee diagnoses, CMS emphasizes that all diagnoses submitted to enhance risk must be documented in a medical record, and uses RADV audits to ensure that medical record documentation exists, and thus, that payments to MAOs accurately reflect the level of risk assumed.
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MA/PDP Star Ratings: Proposed Technical Changes for 2020
In the most recent technical changes made to Part C and Part D plans for 2019, CMS codified the star ratings methodology in regulations. Now, CMS is proposing changes to these regulations, such as new definitions to clarify the meaning of terminology used in describing the star ratings methodology. In addition, CMS is proposing several changes to improve program quality and accessibility of the Medicare Advantage (MA) and Part D Prescription Drug Program (PDP) Plan Quality Rating for measures other than Consumer Assessment of Healthcare Providers and Systems (CAHPS).
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GAO and CMS Seek Increased Scrutiny on Medicaid Managed Care Organizations
Federal agencies are signaling closer oversight of Medicaid managed care organizations (“MCOs”). On August 21, 2018, the U.S. Comptroller General Gene Dodaro and Centers for Medicare and Medicaid Services (“CMS”) Administrator Seema Verma testified to the Senate Homeland Security and Governmental Affairs Committee about combating Medicaid fraud and urged additional oversight of Medicaid MCOs and a larger restructuring of the Medicaid program. This testimony follows other steps taken by the Governmental Accountability Office (“GAO”) and CMS earlier this year to encourage increased scrutiny of Medicaid managed care programs.
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Iowa Enacts Legislation to Broaden Access to Association Health Plans
Iowa has enacted legislation to permit the offering of certain health benefit plans that would not be subject to the restrictions of the Affordable Care Act (ACA).
The bill combined two separate measures, each intended to expand access to association health plans (AHPs) that are exempt from many of the ACA’s protections. First, the new law would allow small employers to band together to form associations that would be eligible to offer members’ employees coverage as if they were a single large employer group, which would be subject to less burdensome regulation under the ACA. Second, a health benefit plan sponsored by a nonprofit agricultural organization domiciled in Iowa (the Iowa Farm Bureau Federation) and covered by a third-party administrator that has administered the organization’s health benefits plan for more than 10 years (Wellmark Blue Cross & Blue Shield) is exempt from the definition of insurance that is subject to regulation by the state insurance department.
Recently, AHPs have been touted by opponents of the ACA as a tool to avoid its effects for larger covered populations. Iowa’s measure follows an executive order by President Trump last fall directing the administration to, among other things, promote the use of AHPs. In response to that order, the Department of Labor proposed a rule that would expand the definition of AHP to allow employers greater access to AHP coverage. As we noted in a previous post, several states have pressed the idea through comments to that proposed rule that expanded access to AHPs would create opportunities for employers to offer more affordable coverage.
The impact of Iowa’s enactment remains to be seen. Critics of the measure have expressed concern that it will water down consumer protections by exempting coverage from ACA requirements that plans cover essential health benefits, such as maternity and mental health care. Although plans could continue to include such benefits, they would not be legally obligated to do so, and could cut costs by eliminating coverage for broad categories of health care.
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Federal Employees Health Benefits Program 2018 Carrier Conference Highlights
On Thursday, March 22, the U.S. Office of Personnel Management (OPM) and America’s Health Insurance Plans (AHIP) hosted the annual Federal Employees Health Benefits (FEHB) Program Carrier Conference. The conference featured OPM’s policy and contracting priorities for the FEHB Program for 2018. It followed and discussed OPM’s FEHB Program Call Letter (available here), which provides a high-level outline of its intentions for contract negotiations for plan year 2019.
This year’s Carrier Conference included three key highlights for FEHB carriers:
- OPM will re-open the Indemnity Benefit Plan to contract with either a nationwide carrier or a consortium of carriers to begin offering coverage in 2020.
- OPM is seeking legislative changes to apply the Anti-Kickback Statute to the FEHB Program.
- OPM is interested in Plans improving value by offering Accountable Care Organization or other innovative models
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Supreme Court: FEHBA Preempts State Subrogation Prohibitions
The U.S. Supreme Court unanimously decided, in Coventry Health Care of Missouri, Inc. v. Nevils, that the Federal Employees Health Benefits Act (FEHBA) preempts state laws that prohibit subrogation recovery by health insurance carriers.
FEHBA expressly preempts state law. Specifically, “[t]he terms of any contract under this chapter [5 U.S.C. § 8901, et seq.
CMS Delays Implementation of Episode Payment Models (EPMs)
In an Interim Final Rule with Comment Period (IFC) published on March 21, 2017, CMS provided that implementation of the EPMs for cardiac and orthopedic care improvement, the cardiac rehabilitation incentive payment model, and the changes to the Comprehensive Care for Joint Replacement (CJR) model would be delayed from July 1, 2017 to October 1,
Court Delays Action on Appeal of ACA Subsidies Case
On December 5, 2016, the U.S. Court of Appeals for the D.C. Circuit issued an order to stay the administration’s appeal of the district court decision in U.S. House of Representatives v. Burwell, a case challenging Cost-Sharing Reduction (“CSR”) payments to health insurance issuers under the Affordable Care Act (“ACA”) Section 1402. The district