On March 23, 2020 CMS approved 11 more Section 1135 state Medicaid waiver requests for the following states: Alabama, Arizona, California, Illinois, Louisiana, Mississippi, New Hampshire, New Jersey, New Mexico, North Carolina, and Virginia. As with the prior waivers, CMS approved the requests in

Many states are looking to adapt their Medicaid programs to address new challenges related to COVID-19, including by increasing coverage and protection for Medicaid enrollees. The Centers for Medicare and Medicaid Services (CMS) has issued guidance on the types of measures that states can take to change their Medicaid programs.

In an FAQ addressed to state Medicaid and Children’s Health Insurance Program agencies, CMS addressed questions from states, saying that states may have flexibility to cover telehealth services, accelerate or relax prior authorization requirements, expand provider networks, extend Medicaid eligibility, and suspend copayments, although some of these measures may require CMS’ waiver of federal requirements or approval of changes to the state Medicaid plan.

On March 22, CMS released checklists and tools that guide Medicaid programs through the processes of seeking expedited approval of such changes and waivers, including section 1115 demonstration waivers, section 1135 waivers, Appendix K of section 1915(c) home and community-based services waivers, and disaster amendments to the state plan. In the associated press release, the Trump Administration indicated that the tools could be used by states to “access emergency administrative relief, make temporary modifications to Medicaid eligibility and benefit requirements, relax rules to ensure that individuals with disabilities and the elderly can be effectively served in their homes, and modify payment rules to support health care providers impacted by the outbreak.” CMS is providing states the options to request waivers effective retroactively to March 1.

Continue Reading CMS & State Medicaid Agencies Seek to Expand Enrollee Protections During COVID-19 Pandemic

On January 31, 2020, U.S. Department of Health and Human Services Secretary Alex Azar declared COVID-19 a public health emergency under Public Health Service Act Section 319. Subsequently, on March 13, 2020, President Trump declared COVID-19 a national emergency under Sections 201 and 301 of the National Emergencies Act. Doing so empowered Sec.

The past week has seen daily action at the state and federal level that seeks to ensure that health plans and insurers are providing unrestricted access to testing for COVID-19 and for related services.  Health plans nationally have responded by adopting copayment and preauthorization waivers even where they have not been mandated.

Here are a few of the headlines:

On March 2, 2020, New York Gov. Andrew Cuomo announced he would require state health insurers to waive fees related to coronavirus testing in the state in order to avoid cost as a barrier to testing.  To implement his directive, Governor Cuomo announced that the New York State Department of Financial Services (“DFS”) will promulgate an emergency regulation that (i) prohibits health insurers from imposing cost-sharing on an in-network provider office visit or urgent care center when the purpose of the visit is to be tested for COVID-19 and (ii) prohibits health insurers from imposing cost-sharing on an emergency room visit when the purpose of the visit is to be tested for COVID-19.  In addition, DFS issued other COVID-19 guidance to New York insurers, including: (a) directing insurers to develop robust telehealth programs with their participating providers, and (b) directing insurers to verify that their provider networks are adequately prepared to handle a potential increase in the need for health care services, including offering access to out-of-network services where appropriate and required.
Continue Reading Flurry of Regulatory Activity Driven by COVID-19 Anxiety Impacts Health Plan Requirements and Permissible Actions

On February 11, the U.S. Court of Appeals for the Seventh Circuit ruled that consultants who provide services to nursing homes and long-term care facilities lack standing to sue the state Medicaid agency and its contracted Managed Care Organizations on behalf of patients.

In Bria Health Servs., LLC v. Eagleson, No. 18-3076 (7th Cir.

Last week, Tennessee proposed to the Centers of Medicare and Medicaid Services (“CMS”) the first of its kind Medicaid block grant program, which would constitute a fundamental restructuring of the Tennessee Medicaid program. The proposal is intended to implement Tennessee House Bill 1280, enacted in May of 2019, which directed the governor to request CMS to approve the block grant through a Section 1115 waiver amendment.

Tennessee currently operates its Medicaid program (“TennCare”) through a Section 1115 waiver approved by CMS. Under the proposed amendment, the state would receive a block grant in an amount calculated using the federal government’s projections for the state’s Medicaid program costs, calculated as if the state were not currently participating under a 1115 demonstration waiver. In years in which the state spends less than the block grant, the state and the federal government would evenly share in the resulting savings.

As part of the proposal, Tennessee has asked for significant exemptions from federal Medicaid managed care laws. Among other things, the state has asked for flexibility to spend block grant funds on items and services not otherwise covered under Medicaid; to adopt a commercial-style closed formulary; to make changes to its benefit packages without CMS approval; to vary benefit packages for members based on medical factors or other considerations; and to be relieved from compliance with Part 438 of Title 42 of the Code of Federal Regulations, including provisions requiring federal approval for pursuit of healthcare delivery system reform initiatives, managed care contracts, and actuarially certified capitation rates paid to managed care contractors. The state believes that the proposal would “appropriately recognize[] the state’s efforts to contain costs and improve program quality, while providing a meaningful incentive to continue building on those efforts to make TennCare a stronger and more effective program.”
Continue Reading Tennessee Proposes First of Its Kind Block Grant Program for Medicaid

Nearly 20,000 comments have been submitted in response to the Department of Health and Human Services January 31, 2019 notice of proposed rulemaking eliminating discount safe harbor protection for reductions in price to prescription pharmaceutical products (or rebates) provided by manufacturers to plan sponsors under Medicare Part D and Medicaid managed care organizations (MCOs), whether negotiated by the plan or by pharmacy benefit managers (PBM) or paid through a PBM to the plan or Medicaid MCO. Most of the comments appear to be relatively short, text box comments submitted by individuals through patient or business advocacy groups.  The following is a very high level summary of the several hundred comments posted (so far) from health plans, manufacturers, pharmacies, their respective associations, and policy oriented groups:
Continue Reading Highlights from the Comments on the Proposed Elimination of Discount Safe Harbors for Rebates

In Gresham v. Azar, United States District Court for the District of Columbia Judge James E. Boasberg “[found] its guiding principle in Yogi Berra’s aphorism, ‘It’s déjà vu all over again.’” No. CV 18-1900 (JEB), 2019 WL 1375241, at *7 (D.D.C. Mar. 27, 2019). In striking down the Department of Health and Human Services (“HHS”) approval of Arkansas’s Medicaid work requirements as “arbitrary and capricious,” Judge Boasberg noted that the agency’s failures were “nearly identical” to those in Stewart v. Azar I, 313 F.Supp.3d 237, 243 (D.D.C. 2018), where he vacated the agency’s approval of Kentucky’s Medicaid Work requirements back in June 2018. The same day the Court issued Gresham, Judge Boasburg declared “[t]he bell now rings for round two” and again vacated Kentucky’s Medicaid work requirements finding the agency’s reaproval “arbitrary and capricious” in Stewart v. Azar II. No. CV 18-152 (JEB), 2019 WL 1375496, at *1 (D.D.C. Mar. 27, 2019).

Under Section 1115 of the Social Security Act, HHS may approve a state’s waiver application and allow a state to waive certain Medicaid program requirements. Such waivers include “experimental, pilot, or demonstration project[s]” that “in the judgment of the Secretary, [are] likely to assist in promoting the [Medicaid Act’s] objectives.” 42 U.S.C. § 1315(a). In March 2017, Seema Verma, the Administrator for the Centers for Medicare & Medicaid Services (“CMS”), along with HHS Secretary at the time, Thomas Price, sent a letter to state governors clarifying the agency’s “intent to use existing Section 1115 demonstration authority to review and approve” Medicaid work requirements. Heeding this call, the governor of Kentucky applied for a Section 1115 waiver to implement an experimental program which includes work requirements as a condition of Medicaid coverage. Under these work requirements, many adults must complete 80 hours of employment or other qualifying activities every month or lose their Medicaid coverage. These requirements primarily target the Medicaid expansion population (individuals who obtained coverage after states expanded eligibility under the Affordable Care Act). Arkansas’ program—which took effect last June as the first work requirements in the history of Medicaid—is substantially similar to the Kentucky program. The Kentucky work requirements had yet to take effect.

Continue Reading Federal District Court Judge Vacates Arkansas and Kentucky’s Medicaid Work Requirements

On March 22, 2019 CMS issued new guidance to State Medicaid Directors on implementation of the 2014 Home and Community Based Services (HCBS) rule. The 2014 HCBS rule required states to scrutinize facilities, including an assisted living facilities or group homes, receiving HCBS funding to make sure they met certain standards. The 2014 rule aimed to define the characteristic of “community based” to move these settings and facilities away from the qualities of an “institution.” In May of 2017, CMS delayed implementation of the rule and in response to concerns regarding the transition process, a three year extension was granted. The transition period for states to ensure provider compliance with the criteria for settings in which a transition period applies has now been extended to March 17, 2022 during which states may work with all existing HCBS providers to complete their remediation and be validated as fully complying with the settings criteria. Not meeting these standards could mean loss of Medicaid funding.

The new CMS guidance, issued as an FAQ, defines a setting that is isolating individuals as a facility that limits any opportunities for patients and residents to interact with the broader community. Certain settings are presumed under the regulations to have the qualities of an institution:
Continue Reading CMS Issues New Guidance to States on Home and Community Based Services