June 2018

This week, the U.S. Department of Labor (DOL) released a final rule that alters the way that association health plans (AHPs) are regulated. The rule was accompanied by a press release and a new webpage. The DOL rule significantly loosens the conditions under which a group of employers – or the self-employed – can join together under an AHP and be considered a “single employer” under the Employee Retirement Income Security Act (ERISA). Such AHPs would be regulated under federal law as large-group coverage, making them exempt from Affordable Care Act (ACA) and other federal and state requirements that apply only to the individual and small-group insurance markets. The final rule includes an implementation timeline and a pathway for AHPs to gain single employer status under ERISA. It also clarifies rules against health discrimination and which ACA protections AHPs are still subject to. Our friend and colleague Sabrina Corlette, from Georgetown University, provides an Experts Perspective of the rule and notes key implications states must consider when regulating AHPs.

The Centers for Medicare & Medicaid Services (CMS) announced the release of guidance that provides states with information on how CMS can support their efforts to address the opioid crisis. The guidance consists of an informational bulletin on the design of approaches to covering treatment services for Medicaid eligible infants with Neonatal Abstinence Syndrome and a state Medicaid Director letter that advises states on which funding authorities may support health information technology efforts that could be used for the prevention and treatment of negative opioid outcomes. Next week State Health and Value Strategies is hosting a webinar on the status of state efforts to secure waivers to use federal Medicaid funding to provide care in Institutions for Mental Disease.

The Affordable Care Act (ACA) is in the news this week with the announcement by the U.S. Department of Justice (DOJ) that it will not defend the ACA’s constitutionality and is siding with Texas and 19 other states in a lawsuit filed earlier this year. The lawsuit being pursued by Texas and other states claims that Congress' decision to eliminate the ACA’s individual mandate penalty requires that all or some provisions of the law be ruled invalid. In a brief filed yesterday by the DOJ in response to the lawsuit, the administration argued that "this Court should hold that the ACA's individual mandate will be unconstitutional as of January 1, 2019, and that the ACA's guaranteed-issue and community-rating provisions are inseverable from the mandate." For further analysis of the DOJ’s actions, check out this take in a Health Affairs blog post on the subject. Updates follow.

This week State Health and Value Strategies (SHVS) published a new issue brief, Toward Hospital Global Budgeting: State Considerations, which digs into an innovative approach to shift hospitals from paying for volume to paying for value. The issue brief includes case studies of three states: Maryland, which pioneered global budgeting; Pennsylvania, which is preparing to launch its model; and Vermont, which offers an interesting twist on the concept. I hope the issue brief provides you with some ideas of how global budgeting might be a tool for payment reform in your state.