National, Federal and State Policy Updates: July 20, 2022

State Policy Update July 20

National, Federal and State Policy Updates: July 20, 2022 

Spotlight on Oncology 

  • On June 27, CMS introduced the Enhancing Oncology Model, a voluntary 5-year model that refines the recently concluded Oncology Care Model. The new model focuses on transforming cancer care through value-based payments, care coordination, and emphasizing health equity. CMS will reimburse participants with a Monthly Enhanced Oncology Services payment for activities including patient navigation, 24/7 access to care, use of evidence-based guidelines, using certified electronic health records, and analyzing data for quality improvements. Payments will be higher for dual eligible patients who have both Medicaid and Medicare coverage to incentivize dual eligible care coordination.  Model participants will be required to screen for health-related social needs related to nutrition, transportation, and housing, ask patients for a variety of self-reported outcomes, and create detailed care plans. CMS also encourages non-Medicare fee-for-service payers to participate to encourage providers to take the same approach for patients with different insurance coverage. The model will have 2 levels of down-side risk, making participants immediately eligible for a performance-based payment or recoupment in 6-month episodes. Provider groups who qualify as alternative payment model (APM) participants will be exempt from Merit-based Incentive Payment System (MIPS) reporting requirements and payment adjustments. The model will focus only on systemic (non-hormonal) chemotherapy treatment for 7 cancer types and is set to begin on July 1, 2023. Applications must be submitted by September 30, 2022. 

Federal Policy Updates 

Manchin and Schumer Continue Reconciliation Discussions 
  • Senators Joe Manchin (D-WV) and Majority Leader Chuck Schumer (D-NY) have continued to negotiate a limited reconciliation package that could be enacted without Republican support. After talks for the larger Build Back Better bill did not pass because of Manchin’s concerns with increasing the deficit, the current negotiation has faced concerns increased spending will accelerate inflation. Therefore, current reports have indicated that Manchin will only support a very narrow bill that extends existing ACA subsidies for 2 years as well as various drug pricing measures: Medicare negotiation, Part D benefit redesign, and price increase limits tied to inflation.  The drug pricing measures would generate significant government savings that can be used to fund other policy priorities.  
CMS Asks TN to Restructure its Current 1115 Medicaid Waiver  
  • On June 30, CMS sent a letter to the Tennessee Department of Finance and Administration requesting changes to their TennCare III waiver demonstration. These changes included removing the closed formulary provision, submitting a new financing model for budget neutrality based on a per member per month cap, and working towards a new structure for expenditures and investment in healthcare initiatives that explicitly states that benefits or coverage will not be reduced.  The current waiver has faced lawsuits after being approved at the end of the Trump administration and has not yet bee implemented.  The waiver seeks to establish a closed formulary similar to that of a commercial plan while still receiving Medicaid drug rebates, create a block-grant funding system that places an aggregate cap on expenditures, and request additional funding for uncompensated care.  However, the Biden Administration opened a new comment period on the waiver in 2021 to solicit additional feedback on the program, where some commenters expressed concern that the capped funding system would incentivize the state to reduce access to benefits and services. 
  • CMS is also still considering a request by Oregon’s Medicaid program to limit coverage of drugs under the pharmacy benefit that have been approved under the accelerated approval program. Payers have had significant concerns with the cost of covering Aduhelm as well other drugs with limited data on their efficacy that are still undergoing confirmatory trials. 

State Policy Updates 

CMS Renews VT’s Medicaid Managed Care Waiver 
  • On June 28, CMS approved VT’s application for their Global Commitment to Health Medicaid demonstration waiver.  The waiver is effective for 5 years until December 31, 2027, and allows the state to continue to operate its managed-care system, home and community-based services (HCBS), pilot programs, and other healthcare innovations. New investments into mental and behavioral health include a substance abuse disorder (SUD) community treatment and intervention eligibility group providing expanded benefits, a family-focused maternal health SUD treatment initiative, a “V-Pharm” Part D premium assistance for those with incomes up to 225% of the federal poverty level (FPL), and HCBS providing housing, developmental disabilities services, and dental coverage.  1115 waiver approvals require ongoing monitoring and evaluation of disparities in access and health outcomes. 
CMS Approves CO’s 1332 Public Option Waiver 
  • On June 22, CMS approved CO’s application for a 1332 waiver amendment to create a state-run public insurance option by waiving certain ACA requirements in the individual market.  The program will use standard benefit design and a 5% premium reduction requirement to increase affordability and access using federal pass-through funding (an expected $213 million in 2023). The public option will operate in tandem with CO’s existing reinsurance program which has successfully lowered premiums in the state by 20% each year to generate savings and expand premium tax credit subsidies to a larger population. The program is projected to lower premiums by 14% and increase enrollment by 10,000 individuals over a 5-year period. It also has built-in regulations to enforce premium reductions including requiring changes to provider and plan contracts, levying fines on hospitals, and additional public rate hearings. 
CMS Approves CA 1115 Waiver 
  • On June 29, CMS approved CA’s demonstration to increase the asset limit for Medicaid eligibility and eliminate the asset test for certain populations. The CA state legislature directed the Department of Healthcare Services to increase asset limits for the “non-MAGI groups” – children under 21, pregnant women, families with slightly higher incomes, those 65 and older, and the blind or disabled. Effective on July 1, the state will not consider $130,000 in property value when calculating the assets of those applying for Medicaid eligibility in this group. 

Other Updates 

CMS Releases Survey Results on Medicare Preventive Services  
  • In June, CMS released a beneficiary survey on access to timely preventive care in Medicare Part B and Medicare Advantage.  Key findings included: 
  • 58% of beneficiaries received flu shots each year over a 4-year period, and those who were 75 and over and White non-Hispanic groups were more likely to receive a flu shot than other groups.  Older adults are at particularly higher risk of serious illness and death from influenza. 
  • 59% of female beneficiaries in the age range of 50 to 74 received mammogram screenings on a recommended basis of at least every other year, while 15% did not receive any mammogram within the timeframe of the study. Those with incomes of $50,000 and higher who were not dual eligible were more likely to receive mammograms than other groups. 

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