National Association of Medicaid Directors Submits Medicaid Program Integrity Recommendations to Senators – In a June 29, 2012 letter to Senators Baucus, Hatch, Grassley, Wyden, Carper, and Coburn, the National Association of Medicaid Directors (NAMD) offered recommendations on how to improve current Medicaid program integrity (PI) efforts. NAMD explains that state Medicaid Directors are concerned “by the disjointed and ineffective approach” to Medicaid PI efforts and are “struggling to balance the maintenance of existing efforts and meeting new requirements.” NAMD further provides that states’ concerns regarding Medicaid PI efforts are exacerbated by the fact that the Medicaid program is in a period of “historic change” and many states face ongoing budget constraints.
NAMD identifies numerous ways to improve current federal and state Medicaid PI efforts, including but not limited to the following:
- Clarify the roles of federal and state Medicaid PI responsibilities. According to NAMD, it is not clear whether Congress intends for CMS to primarily oversee states’ PI efforts or whether CMS is to assume primary responsibility of state PI efforts. NAMD explains that this lack of clarity has resulted in “significant duplication and inefficiency as well as confusion about information sharing and which entity is carrying out any particular activity.”
- Provide meaningful technical assistance to strengthen state Medicaid PI activities. NAMD recommends the expansion of the national Medicaid Integrity Institute. NAMD further recommends that CMS develop a compendium of model state Medicaid policies and practices.
- Facilitate immediate collaboration between Medicare and Medicaid. For example, NAMD recommends, among other things, that states be authorized to access the Medicare fraud investigation database, have real-time access to the federal Automated Provider Screening System, and establish a federal Medicare PI liaison for each state Medicaid program. While NAMD encourages collaboration between Medicaid and Medicaid, NAMD also cautions that “it is generally not effective or operationally feasible to retrofit a Medicare-designed initiative to the Medicaid program.”
- Establish a national PI entity to improve ongoing collaboration. NAMD recommends the establishment of a national PI entity that could be tasked to develop mechanisms to increase ongoing collaboration between Medicare and Medicaid.
- Ensure that federal programs reflect the unique aspects of the Medicare and Medicaid programs. NAMD emphasizes that a “one-size-fits-all” approach to Medicaid PI is not appropriate given the unique design of each state Medicaid program.
- Improve Collaboration between Medicaid and DHHS OIG. According to the NAMD, state Medicaid Directors seek to work more collaboratively with the Department of Health and Human Services Office of the Inspector General (DHHS OIG) to identify potential investigation targets. NAMD believes such collaboration is necessary in order to “address current concerns with methodologies that lead to overstated overpayments.”
NAMD also specifically addresses the perceived inefficiencies of the federal Medicaid Integrity Contractor (MIC) program. NAMD provides that “problems plaguing the Audit MIC program” include insufficient coordination with the states and inaccurate data. To that end, NAMD recommends that CMS “undertake a thorough [state-by-state] evaluation” of the return on investment (ROI) of the Audit MIC program and eliminate the Audit MIC program if it does not demonstrate a “reasonable ROI for federal and state partners.” NAMD is also concerned that the implementation of the Medicaid Recovery Audit Contractor (RAC) program will overlap with existing MIC reviews. Finally, NAMD requests that CMS “redirect the focus and resources of the Medicaid Integrity Group (MIG) away from conducting Medicaid integrity reviews.”
To view all of the NAMD’s recommendations, click here.
Reporters, Sara Kay Wheeler, Atlanta, +1 404 572 4685, skwheeler@kslaw.com and Stephanie F. Johnson, Atlanta, +1 404 572 4629, sfjohnson@kslaw.com.
States Begin to Make Decisions Regarding Medicaid Expansion and Exchanges – Following the Supreme Court’s June 28, 2012 decision in NFIB v. Sebelius upholding most of the Patient Protection and Affordable Care Act (PPACA), state governors were left to make vital decisions regarding their states’ implementation of PPACA’s Medicaid expansion and insurance exchanges. The Supreme Court upheld the PPACA individual mandate, which will be implemented in part through the health insurance exchanges. However, the Supreme Court also held that the federal government cannot withhold current Medicaid spending on existing eligible populations if states opt to forego PPACA’s Medicaid expansion. On July 10, HHS Secretary Kathleen Sebelius sent a letter to the governors announcing new funding and federal assistance to set up the exchanges and expressing hopefulness that all states would participate in the Medicaid expansion.
Medicaid Expansion
Under PPACA, as of 2014, states may expand their Medicaid-eligible populations to those adults under the age of 65 with incomes up to 133 percent of the federal poverty level. In the first three years of the program, the federal government will pay all costs of the additional Medicaid populations. After 2016, the federal government will pay at least 90 percent of those costs. The Congressional Budget Office and Center on Budget and Policy Priorities have estimated that the true state share of the Medicaid expansion will be only seven percent, with only a three percent increase in total state Medicaid spending. The Medicaid expansion is one of the chief vehicles through which PPACA should expand the insured population. Safety net advocates, such as the National Association of Public Hospitals and Health Systems, have suggested that rejecting the Medicaid expansion would result in four million Americans remaining uninsured in those states that have already announced that they will not expand Medicaid eligibility, and warned that millions more may be at risk.
Both the National Governors Association and the National Association of Medicaid Directors have sent letters to CMS following the Supreme Court’s decision, inquiring about issues related to the Medicaid expansion and the additional federal funding available. Numerous state governors of both political parties are currently evaluating their states’ plans and have expressed doubts regarding whether the additional federal funding can truly make up the costs of the expansion. Several states, including Florida, South Carolina, Louisiana, Mississippi, and Texas have already announced their intention to reject the Medicaid expansion. Nevertheless, Secretary Sebelius and other outside observers expect that most, if not all, states will eventually embrace the Medicaid expansion, given the generosity of the federal government’s financing and pressure from safety net hospitals and other providers. On July 13, CMS Acting Administrator Marilyn Tavenner sent to a letter to Virginia Governor Robert McDonnell, who is currently chairman of the Republican Governors Association, stating that there is “no deadline” for states to inform CMS of their intentions regarding the Medicaid expansion and that states can receive federal funding for Medicaid IT costs related to the expansion even before they have declared their intention to expand Medicaid eligibility, adding that if the state ultimately decides not to go forward with the expansion, those costs will have to be repaid.
State-run Insurance Exchanges
PPACA gives state governments the option to establish insurance exchanges, through which many Americans will purchase their own individual or family policies, or to allow the federal government to establish and operate an exchange market on behalf of the state. Secretary Sebelius previously announced additional funding available to states whether the states set up their own exchanges, partner with the federal government to operate certain functions of the exchanges, or allow the federal government to establish and operate those exchanges. This new funding is available through the end of 2014.
In addition to Massachusetts, which already operates an insurance exchange based on its state healthcare reform law, 15 states, including California and New York, have announced their intention to establish state-run exchanges and are taking legislative and administrative steps to authorize and establish them. However, six states, including those that rejected the Medicaid expansion, have already announced that they will not implement state-run exchanges, while other state governors have vetoed legislation that would authorize their creation. Additional states continue to evaluate their options. The deadline for each state to notify HHS of its plans regarding the health care exchanges is November 16.
HHS Secretary Sebelius’ July 10 letter can be found by clicking here. CMS Acting Administrator Tavenner’s July 13 letter is located here.
Reporter, Adam Laughton, Houston, +1 713 276 7400, alaughton@kslaw.com.
CMS Approves 89 New ACOs – On July 9, 2012, HHS announced the approval of 89 new accountable care organizations (ACOs) for participation in the Medicare Shared Savings Program. These new ACOs began participating in the Shared Savings Program on July 1, and HHS estimates that these ACOs will serve 1.2 million Medicare beneficiaries in 40 states and the District of Columbia.
All but five of the 89 ACOs will participate in the Shared Savings Program’s “one-sided model” in which participants are eligible only for a portion of shared savings upon satisfying certain clinical quality measures and realizing minimum cost savings; the remaining ACOs will participate in the “two-sided model” and will be eligible for a larger portion of shared savings, but also may incur losses if the ACOs fail to realize cost savings.
In total, 154 ACOs are participating in the Shared Savings Program. The list of the 89 new ACOs is available by clicking here.
Reporter, Christopher Kenny, Washington, DC, + 1 202 626 9253, ckenny@kslaw.com.
Proposed Regulations Under 501(r) Affecting Tax-Exempt Hospitals Webinar Roundtable – On Tuesday, July 31, 2012, King & Spalding will be hosting a Roundtable Webinar focused on the proposed regulations recently published by the Treasury Department and the IRS concerning certain additional requirements imposed on charitable hospitals by Section 501(r) of the Internal Revenue Code.
The Roundtable will include the following topics related to requirements of Internal Revenue Code Section 501(r) and the new proposed regulations:
- Financial assistance policy (FAP) requirements, including what is required to satisfy the obligation to “widely publicize” the FAP
- Emergency medical care policy requirements
- Limitations on charges, including permitted methods of calculating “amounts generally billed”
- Billing and collection restrictions, including those imposed on “extraordinary collection actions”
- Requirement to make “reasonable efforts” to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy
- Update on the status of IRS guidance concerning the requirement for charitable hospitals to conduct a community health needs assessment
This Roundtable will only be presented as a Webinar. You do not have to be a client to attend, and there is no charge. You can register to participate by clicking here.
This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.
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