Manatt on Health Reform: Weekly Highlights plans an open enrollment pilot that will let consumers compare provider network breadth; new Medicaid enrollees reduce out-of-pocket spending on prescription drugs by nearly 60%; and Kansas’s Governor announces his intent to restore Medicaid reimbursement rates.

FEDERAL MARKETPLACE UPDATES: Will Display Provider Network Breadth Information in Six Pilot States Only consumers in approximately six to-be-selected pilot states will be able to compare provider network breadth across Marketplace plans for adult primary care providers, pediatricians, and hospitals during the upcoming 2017 open enrollment period, according to CMS. The initiative was originally intended for all states, as announced in HHS’s 2017 Notice of Benefit and Payment Parameters final rule, which included a policy to assign each qualified health plan a rating based on its relative network coverage. CMS plans to use data collected from the pilot to better understand how consumers use network breadth information and may expand the pilot to additional states and provider types in future years.

CMS Requests Information Regarding Inappropriate Steering to Marketplace Plans

CMS is seeking information on instances of providers and provider-affiliated organizations encouraging Medicaid or Medicare-eligible individuals to enroll in Marketplace plans by paying their premiums and other cost-sharing; enrollment in these plans may allow the provider to secure higher Marketplace reimbursement rates. CMS expressed concern about a number of consequences of this practice for consumers and the stability of the overall healthcare market, including: Medicare-eligible individuals being penalized if they delay enrolling in Medicare because they have a Marketplace plan; distorting the risk pool in the individual market; and the possibility that enrollees may have to repay advanced premium tax credits if they enroll in Marketplace plans when they were eligible for Medicaid or Medicare. CMS is considering new rules to prevent this inappropriate steering, including through use of Medicare and Medicaid provider conditions of participation and enrollment rules and civil monetary penalties. Public comments are due September 22.


CMS Clarifies Modular Certification Plans for MMIS

CMS offered more detail on how it will certify Medicaid Management Information Systems (MMIS) on a modular basis as states introduce new system modules and replace existing ones, rather than after implementation of an entire system. CMS notes that states will be able to access the 75% enhanced federal financial participation rate for certified modules prior to completing the total replacement of an MMIS system. The State Medicaid Letter announcing this change, which is the third in a series of sub-regulatory guidance following a December 2015 final rule on this topic, also provides guidance on recommended modules and approaches to modular acquisition.

Expansion Did Not Impact Employment Rates Among the Newly-Eligible, Study Finds

A new study published by the National Bureau of Economic Research (NBER) found that Medicaid expansion has not significantly impacted employment among childless adults newly eligible for health coverage under Medicaid expansion, despite previous findings and predictions that expansion might hasten exits from the workforce by those who remained employed to maintain access to affordable health insurance. NBER researchers did not find evidence of lower employment in expansion states compared to non-expansion states, or reduced work hours for expansion enrollees.

Colorado: State Board Recommends Increased Medicaid Coverage for Hepatitis C Drugs

The State’s Medicaid Drug Utilization Review Board recommended extending Medicaid coverage for anti-viral hepatitis C drugs to patients in the final three stages of liver damage (the State currently covers the drugs for enrollees in the final two stages) and to women of childbearing age with hepatitis C at any stage of liver damage. In response, the American Civil Liberties Union has said it may file suit, arguing that Colorado is violating federal law by not providing coverage of the drugs to all Medicaid enrollees. The drugs cost between $54,600 and $94,000 per person before discounts or rebates. Colorado has spent $26.6 million since 2013 to treat 326 patients.

Kansas: Governor Seeks to Reverse 4% Medicaid Reimbursement Cut by Increasing Hospital Assessment

Governor Sam Brownback (R) will seek legislative approval to increase an existing hospital assessment to fund the restoration of Medicaid reimbursement rates after a 4% cut went into effect in July. The assessment currently generates $40 million in State funds and is matched by an additional $60 million in federal funds for KanCare, the State's Medicaid program. Kansas hospital leaders have twice blocked attempts to increase the assessment, citing the State's decision to not expand Medicaid. The 4%—or $56 million—reduction in reimbursement rates was part of a package of $100 million in cuts to cover a projected deficit in the 2017 fiscal year budget.


Prescription Drug Use Up and Out-of-Pocket Spending Down for Newly Insured

A new study published in Health Affairs found a “dramatic increase” in prescription drug use among uninsured individuals who gained either private coverage or Medicaid between 2013 and 2014. The study reviewed prescription transaction data for 6.7 million individuals and found that individuals who gained Medicaid filled 79% more prescriptions on average and had 58% less out-of-pocket spending per prescription than they did in 2013. Those who gained private coverage filled 28% more prescriptions and had 29% lower out-of-pocket spending per prescription than they did in 2013. Individuals with at least one chronic condition who gained coverage saw larger decreases in out-of-pocket spending compared to those who gained coverage but did not have at least one chronic condition.

Uninsured Adults Are Poorer, Younger, and Increasingly Latino, Report Finds

The demographics of uninsured adults have become disproportionately poor, young, Latino, and/or employed by small businesses since the ACA’s major coverage provisions went into effect in 2014, according to a Commonwealth Fund report. Latinos represented 40% of the uninsured in 2014, up from 29% in 2013. Of the remaining uninsured adults, 39% have incomes below the federal poverty level, which is twice the rate of their overall representation in the adult population. The report also found that 71% of uninsured adults have incomes that would make them eligible for either premium tax subsidies on the Marketplace or for Medicaid; the percentage rises to 94% if all states were to expand Medicaid. Like the general adult population, 70% of uninsured young adults (ages 19-34)—coveted by health insurers—were eligible for Marketplace subsidies or Medicaid. The authors recommend addressing the remaining uninsured by expanding Medicaid in additional states, increasing enrollment outreach and assistance, improving education around Marketplace cost-sharing options, and easing restrictions on the eligibility of undocumented immigrants.

California: Nearly Three-Quarters of Previously Uninsured Residents Now Have Health Coverage

A new survey from the Kaiser Family Foundation found that 72% of Californians uninsured in 2013 now have health coverage and that nearly half of those who remain uninsured cite cost as their main barrier to coverage. However, the survey also found that nearly 60% of those who remain uninsured have incomes that would likely make them eligible for Medi-Cal, the State’s Medicaid program, or for premium subsidies on Covered California, the State-based Marketplace. Of those previously uninsured that have gained coverage, 33% are enrolled in Medi-Cal, 21% have employer-sponsored coverage, 11% enrolled in coverage through Covered California, and the remaining 8% have coverage through another source. Compared to a 2013 baseline survey, Californians with health insurance today are more likely to say that their healthcare needs are being met and that they are less concerned with healthcare costs. The survey is the last in a four-part series examining the insurance status of Californians since 2013, prior to the launch of Covered California and expanded eligibility for Medi-Cal.



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