States are on the front lines of health reform. The Affordable Care Act (ACA) acknowledged this by authorizing several grant programs for states to promote its implementation in addition to the many programs that already existed. Recently, the Department of Health and Human Services has awarded hundreds of millions of dollars in grants to states, territories, and other governmental entities to develop innovation programs, improve access to and quality of health care in rural areas, prevent and fight chronic diseases and promote effective rate review programs.

Innovation Grants

At the end of last year, the Centers for Medicare & Medicaid Services (CMS) announced awards of nearly $700 million in grants to states and territories. Pursuant to § 3021 of the ACA (42 U.S.C. § 1315a), these grants will fund state-level initiatives to design and test new and innovative models for health care payment and service delivery. Eleven states will receive portions of $622 million over the next four years to test innovation plans that are already fully designed. Another 17 states, three territories, and DC will receive a total of $42 million to design, refine, and submit their innovation plans to CMS over a period of 12 months. More information on these grants is available here.

These awards represent the second round of innovation grants to governmental entities under § 3021. More than two-thirds of states now have received innovation grants from the Center for Medicare & Medicaid Innovation (CMMI). Through fiscal year 2019, CMMI will continue to award and administer grants up to its $10 billion appropriation.

Access to Health Care in Rural Areas

Continue Reading Federal Funds, States, and Health Care Reform: Innovation and Opportunity in 2015

On November 26, 2014, the U.S. Department of Health and Human Services (HHS) released its proposed Notice of Benefit and Payment Parameters for 2016, also known as the “Payment Notice.” Now that HHS has completed the majority of its major rulemakings implementing the Affordable Care Act, the annual Payment Notice has become the recurring opportunity for HHS to modify Affordable Care Act (ACA) policy in a wide variety of subject areas. The 2016 Payment Notice touched on a number of policies, including essential health benefits (EHB), rate review, network adequacy and discriminatory benefit design, among others. Below is a summary of some of the key provisions of the 2016 Payment Notice.

Essential Health Benefits

Section 1302 of the ACA requires all non-grandfathered health plans in the individual and small group markets provide EHB to their beneficiaries. EHB are a comprehensive set of health care items and services. The Secretary of Health and Human Services defines the EHB to be covered; however, at a minimum, EHB must be equal in scope to the benefits covered by a typical employer plan and cover at least 10 general categories. The 2016 proposed Payment Notice would make several changes to the EHB regulations.
First, HHS proposes to establish a universal definition for one of these 10 general categories of care: habilitative services. Currently, issuers are required to match the habilitative services provided by the appropriate base-benchmark plan. When the base-benchmark plan does not offer habilitative services, the state in which the issuer is located may specify the services that are included in that category. If no definition is provided, however, the issuer is obligated to provide habilitative services benefits that are similar in scope, amount, and duration to benefits covered for rehabilitative services or to determine which services will be covered and report the determination to HHS. The proposed rule would alleviate this challenge for issuers by defining habilitative services as “health care services that help a person keep, learn, or improve skills and function for daily living.” Additionally, HHS proposes to remove the option for issuers to determine the scope of habilitative services under 45 C.F.R. § 156.110(c)(6).

Second, HHS wants to clarify that pediatric services should be provided until at least age 19. HHS proposes new language in 45 C.F.R. § 156.115(a) to clarify that coverage for pediatric services should be provided until at least the end of the plan year in which an enrollee turns 19.

Third, HHS proposes to give states the option of selecting a new 2014 plan to serve as their base-benchmark plan for the 2017 plan year. The proposed rule reinstates unintentionally deleted data submission requirements used to determine potential state benchmark plans.

Continue Reading 2016 Payment Notice Proposed Rule: Potential Changes to EHBs, Rate Review, and Other ACA Tweaks

On June 6, 2013, the Center for Consumer Information and Insurance Oversight (CCIIO) published a new set of frequently asked questions about Cycle III of CMS’s state rate review grant program. Through this program, CMS gives grants to states to support health insurance rate review and increase transparency in health care pricing. Rate review activities