Weekly Updates

This week, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule to adopt the risk adjustment methodology that the U.S. Department of Health and Human Services previously established for the 2018 benefit year. In response to the February 2018 New Mexico district court ruling, the proposed rule includes an additional justification regarding the use of statewide average premiums to calculate risk adjustment transfers and explains the reasoning behind operating the federal risk adjustment program in a budget-neutral manner. Comments for the proposed rule will be accepted through September 7, 2018.

This week, the Departments of Health and Human Services, Labor, and Treasury issued a final rule clarifying the definition of, and expanding access to, short-term, limited-duration insurance coverage (short-term plans). The rule extends the federally permissible duration of short-term plans to up to 12 months, clarifies that renewals or extensions are permitted for up to 36 months, and proposes a standard disclosure that would advise consumers that the coverage was not required to comply with the Affordable Care Act’s consumer protections. The new rule is effective 60 days after publication in the federal register, such that short-term plans could be available for sale by early October. State Health and Value Strategies posted an expert perspective on our website authored by our friend and colleague Sabrina Corlette from Georgetown’s Center on Health Insurance Reforms that provides a summary of the final rule and options for states.

This week, the Centers for Medicare and Medicaid Services (CMS) issued a final rule to readopt the risk adjustment methodology for the 2017 plan year. With this new rule, CMS will resume the risk adjustment program and begin collecting and paying out about $10.4 billion in risk adjustment transfers for 2017. For a summary of the final rule, check out this Health Affairs blog post.

In light of the federal district court’s decision in Stewart v. Azar, the Centers for Medicare and Medicaid Services (CMS) announced it is re-opening the comment period for Kentucky’s Section 1115 waiver application, which included work/community engagement requirements. In the announcement, CMS noted that “[a]lthough an additional public comment period is not legally required, CMS is conducting one to ensure that interested stakeholders have an opportunity to comment on the issues raised in the litigation and in the court’s decision.” The agency is accepting comments through August 18, 2018. To learn more about the Stewart v. Azar decision and its implications for states, join us for our upcoming webinar (see below for the link to register).

This week, the Centers for Medicare and Medicaid Services (CMS) issued a press release announcing the suspension of about $10.4 billion in risk adjustment (RA) payments for 2017 until litigation around the federal RA program is resolved. The announcement was in response to a February 2018 New Mexico district court ruling that the government’s methodology for implementing the RA program was “arbitrary and capricious.” For a summary of the press release and its related implications, check out this Health Affairs blog post and a blog post by our friend and colleague, Sabrina Corlette from Georgetown University.

This week, the Centers for Medicare and Medicaid Services (CMS) released a series of three new reports on marketplace enrollment and trends. The reports include data on: Effectuated Exchange enrollment for 2017 and 2018; overall trends on the operational and programmatic performance of the Exchange, and trends in subsidized and unsubsidized individual market enrollment from 2014 to 2017. A comprehensive summary of the reports, including details on the role of agents and brokers, can be found in this Health Affairs blog post.

The cost of health care was the subject of a hearing this week held by the Committee on Health, Education, Labor and Pensions. In case you missed it, you can watch a recording. The hearing was the first in a series on how to reduce the cost of health care in the United States and featured testimony from Niall Brennan, head of the Health Care Cost Institute, who argued that price increases are to blame for rising costs rather than an increase in the utilization of care. Also on the topic of the cost of health care in the U.S., Leavitt Partners released a report this week, the product of a combined quantitative and qualitative analysis of factors that may be influencing total cost of care in health care markets across the United States.

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.

This week the Congressional Budget Office (CBO) released updated estimates of their baseline projections of the federal costs for premium subsidies under the Affordable Care Act for the 2018 to 2028 period. A few key takeaways: CBO previously estimated that repealing the mandate would reduce coverage by 13 million in 2027 and has now revised its estimate to around 8.7 million. Furthermore, CBO estimates that premiums will be “about 10 percent higher in 2019" because of the individual mandate repeal. For insights into CBO’s updated health insurance model, consider tuning in to a presentation on June 19 by CBO staff at the Bipartisan Policy Center which will be followed by a panel of budget and health care policy experts sharing their initial reactions to the proposed changes to the model.

This week State Health and Value Strategies (SHVS) published Medicaid Buy-In: State Options, Design Considerations and Section 1332 Waiver Implications, which explores opportunities for states to leverage their Medicaid programs to strengthen coverage. SHVS hosted a companion webinar on Tuesday (if you missed it, you can download the slide deck and the recording) and has created a map to track state activity around Medicaid buy-in programs. The map includes links to relevant legislation and groups states by whether they are pursuing a buy-in program or have established a task force to study the impact of a buy-in program.

Today President Trump gave a much anticipated speech on reducing the cost of prescriptions drugs and released American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs. The blueprint outlines actions that the Department of Health and Human Services (HHS) will take including advancing generics to increase competition and exploring changes to the Medicaid Drug Rebate Program rules. Also this week, the Centers for Medicare & Medicaid Services (CMS) released its Rural Health Strategy, an interagency effort that seeks to improve access and quality of care for rural Americans.

Secretary of Health and Human Services Alex Azar addressed the World Health Care Congress this week and focused his remarks on value-based care and the role of the Department of Health and Human Services (HHS) in transforming the health care system in the United states “into one that pays for value.” Azar outlined four areas of emphasis for HHS: health information technology; health care pricing transparency; new models in Medicare and Medicaid; and reducing barriers to care coordination.

There was a flurry of activity surrounding the opioid epidemic in Washington D.C. this week as both the House and Senate advanced measures, which have states optimistic about the prospect of additional federal funding for the crisis. The Kaiser Health News Podcast, What the Health (starts at 7:11) has a good summary of the activity in Congress this week. Additionally, the Centers for Medicare & Medicaid Services (CMS) Innovation Accelerator Program announced it is launching a new technical support opportunity for state Medicaid agencies through the Reducing Substance Use Disorder program area with an information session scheduled for May 2.

This week saw several states moving forward with Section 1332 waiver applications. On Wednesday, the Office of the Commissioner of Insurance in Wisconsin submitted the state’s 1332 waiver application to implement a reinsurance program, and today, Maryland posted its draft Section 1332 application and announced it will hold four public hearings.

On Monday the Centers for Medicare & Medicaid Services (CMS) issued the final 2019 Payment Notice Rule. Our colleague Sabrina Corlette from Georgetown’s Center on Health Insurance Reforms has authored an expert perspective for State Health and Value Strategies that focuses on the major provisions of the Payment Notice and accompanying guidance documents that have significant implications for states.

This week the Centers for Medicare & Medicaid Services (CMS) released the final report of enrollment activity for the individual marketplaces during open enrollment for plan year 2018.

Our friends, and insurance market technical experts, at Georgetown’s Center on Health Insurance Reforms, have produced a new report that examines how states regulate coverage arrangements that do not comply with the Affordable Care Act’s (ACA) individual health insurance market reforms. Sabrina Corlette, one of the report’s authors, recently authored an Expert Perspective and led a webinar for State Health and Value Strategies on the proposed rule on short-term limited duration insurance, one of the coverage options that do not comply with the ACA profiled in the report.

Today marks the eighth anniversary of the enactment of the Affordable Care Act (ACA). The ACA has proven to be resilient, and despite efforts to repeal and replace it over the past eight years, the law’s fundamental elements remain in effect. In other news today, President Trump signed into law the $1.3 trillion spending package. The omnibus bill does not include any funding to stabilize the Affordable Care Act individual markets, but it does include additional funding for the opioid crisis and mental health care.

Following the unveiling of President Trump’s initiative to address the opioid crisis, a new State Health and Value Strategies publication is available. Medicaid: The Linchpin in State Strategies to Prevent and Address Opioid Use Disorders by Manatt Health that illustrates the important role of Medicaid in addressing the crisis.

This week State Health and Value Strategies published a new issue brief, State Reinsurance Programs: Design, Funding, and 1332 Waiver Considerations for States by Manatt Health that provides a roadmap for states contemplating development of a state-based reinsurance program under 1332 waiver authority. And for those states ready to get to work on a 1332 waiver application to implement a state reinsurance program, SHVS has created a template to streamline the application process. As new states pursue section 1332 waivers, we continue to update our map with the latest activity.