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Value-Based Payment (VBP) 鈥� Is your organization ready?

Utilization of value-based payment (VBP) strategies continues to expand, with states and health plans recognizing the benefits of rewarding outcomes over volume. This includes population based VBP initiatives intended to address disparities. 海角社区 (海角社区) is at the center of these initiatives, supporting payers with development and implementation, as well as supporting providers through the transition from a traditional FFS model to maximizing reimbursement through effective care delivery, supported by the necessary administrative infrastructure and resources. As our clients in health care communities move forward with alternative payment models, we have developed tools and strategies to achieve the essential milestones to successful implementation.

Milestone 1: Provider Readiness Assessment

Successful planning for the transition to VBP begins with an understanding of where your organization is starting from, informing the targeted milestones associated with each providers鈥� unique strengths and challenges.

Understanding that success under VBP models requires adjustment of both clinical and administrative practices, 海角社区 has created an assessment tool that considers the programmatic, financial, and technology resources necessary for VBP implementation. In addition to the ability to leverage these resources, organizations must have the capacity for VBP components such as cost reporting, revenue cycle management, and real time risk monitoring through the collection and analysis of data.

鈥�With VBP on the horizon for our organization, 海角社区 helped us to determine our readiness and to devise a strategy to remediate gaps in operations in order to be successful with the new payment model.鈥�

– Tamara Player, CEO; Polara Health, AZ

Milestone 2: Strategy Development and Change Management

A change in reimbursement methodology requires organizational realignment of administrative and programmatic approaches. Assessing and supporting staff through these changes is a key milestone for success. Activities in which 海角社区 have supported our clients include:

Creating leadership and governance buy-in

Preparing the Board and Staff for VBP

Aligning mission and vision with payment models and accountability metrics

Project Management, including development and monitoring of implementation plans

Cross functional team support

Milestone 3: Data Collection and Reporting Capabilities

The ability to collect and report meaningful outcomes is at the core of successful engagement in VBP. Following an assessment of current capabilities, 海角社区 has supported provider organizations in maximizing electronic health record and other data system capabilities to capture data essential for reimbursement, as well as increasing analytic capabilities that are essential for monitoring outcomes to ensure programs can pivot when data indicates outcome achievement may be at risk. Activities include:

Technology and Data Enterprise configuration to support analytics and reporting

Creating real-time access to data

Benchmarking current outcomes against proposed VBP metrics

Alignment of current framework to payer metrics

Creation of internal clinical leadership infrastructure to support proactive monitoring and action in response to data

Milestone 4: Business Office and Finance

All aspects of an organization鈥檚 financing can be impacted by transitions in payment methodology, including cash flow, impacting cash on hand for capital and other expenses. Anticipating these changes and adjusting accordingly are key to readiness for VBP and importantly, mitigating risk during the transition. 海角社区 can assist with:

Assessing organizational ability to accept risk

Developing a risk corridor based on organizational readiness

Negotiating alternative payment arrangements with payers

Milestone 5: Clinical Programmatic Approaches under VBP

VBP arrangements provide opportunities for organizations to move closer to the goal of achieving outcomes for their clients, rather than productivity targets and units of service. This includes incorporating approaches that could not receive reimbursement under an FFS model. With this flexibility comes the opportunity to review and adapt clinical approaches and programming, including population specific strategies. 海角社区 is ready to support these efforts through:

Workforce analysis

Re/design of clinical workflows

Implementation of measurement-based care

Optimization of clinical templates within the EHR to support data collection and reporting

Understanding the opportunities of value-based payment across the continuum of payment models

While these activities may seem overwhelming, 海角社区 is ready to support your organization to receive reimbursement based on meaningful improvement for your clients through technical assistance and training on each of the core elements outlined above.

海角社区 selected as CalAIM Technical Assistance vendor

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One of only two firms selected in all seven domains out of 46 vendors.

The California Department of Health Care Services (DHCS) has developed a multi-year initiative whose goal is to improve health outcomes and health care quality through broad delivery, payment, and program reforms known as California Advancing and Innovating Medi-Cal (CalAIM). This includes the introduction of new programs and changes to existing programs that will occur over the span of five years. CalAIM further expands upon prior initiatives, such as Whole Person Care, the Health Homes Program, and the Coordinated Care Initiative, and strives to integrate California鈥檚 delivery systems to better facilitate the overall Medi-Cal program.

With the rollout of these programs and the vast requirements associated with them, DHCS and California鈥檚 Medi-Cal managed care health plans are now tasked with the challenge of implementing CalAIM and enabling the participation of community providers and partners in these opportunities. To support these partners, DHCS developed a funding initiative, known as Providing Access and Transforming Health (PATH) to aid in strengthening capacity and infrastructure of Community Based Organizations, public hospitals, county agencies, and others to stand up CalAIM. This five-year, $1.85 billion initiative includes the creation of a virtual Technical Assistance (TA) Vendor Marketplace that organizations can use to request resources and support from approved vendors through services that are fully paid for by the State.

海角社区 (海角社区) is recognized as a valued partner to Payers, Community Based Organizations, public hospitals, and county agencies and has deep expertise in CalAIM policy, operations and implementation. Recognized for our extensive capabilities in the field, 海角社区 is one of only two firms out of 46 vendors that received State approval to serve as a technical assistance vendor on the for all :

Domain 1: Building Data Capacity: Data Collection, Management, Sharing, and Use
Domain 2: Community Supports: Strengthening Services that Address the Social Drivers of Health
Domain 3: Engaging in CalAIM Through Medi-Cal Managed Care
Domain 4: Enhanced Care Management (ECM): Strengthening Care for ECM Population of Focus
Domain 5: Promoting Health Equity
Domain 6: Supporting Cross-Sector Partnerships
Domain 7: Workforce

海角社区 also has expertise in and hands-on experience with addressing the unique challenges experienced by providers and partner agencies serving rural communities. Please visit the to access TA resources that can help strengthen capacity to provide high quality Enhanced Care Management (ECM) and Community Supports services for Medi-Cal members.

New Hampshire releases Medicaid managed care RFP

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This week, our In Focus section reviews the New Hampshire Medicaid Care Management (MCM) request for proposals (RFP), which the state鈥檚 Department of Health and Human Services released on September 8, 2023. The new contracts will be worth approximately $1.1 billion and will provide full-risk, fully capitated Medicaid managed care services to approximately 190,000 beneficiaries. Implementation will begin September 2024.

MCM Program

The MCM program covers traditional Medicaid, the Children鈥檚 Health Insurance Program (CHIP), and the state鈥檚 adult Medicaid expansion Granite Advantage Health Care Program. MCM provides integrated acute care, behavioral health, and pharmacy services. Managed long-term services and supports are not included in the program.

Incumbents are AmeriHealth Caritas, Boston Medical Center/WellSense, and Centene/New Hampshire Healthy Families.

RFP

New Hampshire will award contracts to three Medicaid managed care organizations (MCOs). MCOs will cover the populations outlined in Table 1.

Table 1. New Hampshire MCM Program Enrollment as of July 1

The state outlines several key areas of focus within the RFP, including introducing a primary care and preventive services model of care鈥攁n approach centered on patient-provider relationships and provider-delivered care coordination. The RFP also will have a greater emphasis on priority populations, such as individuals with inpatient admissions for behavioral health diagnoses; children in the child welfare system; babies with low weight or neonatal abstinence syndrome; and people who are incarcerated and eligible for the Community Reentry demonstration program, pending approval from the Centers for Medicare & Medicaid Services.

Timeline

Mandatory letters of intent are due September 18, 2023, and a mandatory conference will take place September 21. Proposals are due October 30, 2023. An award date has yet to be announced, but the state contract discussions with selected MCOs will occur November 20鈭扗ecember 11, 2023. Contracts will run from September 1, 2024, through August 31, 2029.

Evaluation

MCOs will be scored on their ability to meet a possible 2,160 points. The technical proposal comprises a possible 1,510 points, as shown in Table 2.

Table 2. Technical Proposal Scoring

The cost component sections will make up 650 points, as shown in Table 3.

Table 3. Cost Component Scoring

Virginia releases Cardinal Care Medicaid managed care RFP

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This week, our In Focus section reviews the request for proposals (RFP) for the Virginia Cardinal Care Medicaid managed care program, released by the Department of Medical Assistance Services (DMAS) on August 31, 2023. The RFP includes a new foster care specialty plan. Implementation is scheduled to begin July 1, 2024.

Cardinal Care

Cardinal Care launched in January 2023 as a rebranding of the state鈥檚 Medicaid program and Children鈥檚 Health Insurance Program鈥擣amily Access to Medical Insurance Security Plan (FAMIS). Cardinal Care Managed Care (CCMC) will combine the state鈥檚 existing Medallion 4.0 managed care program for traditional Medicaid and the Commonwealth Coordinated Care Plus (CCC Plus) managed long-term services and supports (MLTSS) program to serve 1.9 million Medicaid managed care members.

RFP

The state will award statewide fully capitated, risk-based contracts to a maximum of five health plans. A separate foster care specialty plan contract will also be awarded to one of the winners. If none of the plans win the separate foster care specialty program, all plans awarded a CCMC contract will be required to cover all services.

Selected plans will provide acute care, behavioral health, and MLTSS services to all Virginians who are eligible for Medicaid, including children, adults, and pregnant women in low-income households; children and adults with disabilities; low-income older adults; and individuals receiving LTSS, including dual-eligible populations. The foster care plan will cover children in foster care, individuals younger than 26 years old who were formerly in foster care, and children eligible for adoption assistance.

The RFP contains several targeted focus areas and changes to the managed care program. For example, it emphasizes improvements to the state鈥檚 behavioral health care system and improved health outcomes through a focus on health-related social needs such as housing stability and food insecurity for CCMC members.

Contracted plans will be required to operate a dual-eligible special needs plan (DSNP) in Virginia.

Market

CVS/Aetna, Elevance/Anthem, Sentara/Optima Health, Molina, and UnitedHealthcare are the current incumbents. Effective with the new RFP, DMAS intends to reassign most CCMC members as part of an enrollment process. At present, Optima holds the largest market share of enrollment at 37 percent, followed by Anthem at 30 percent.

Timeline

Letters of intent are due by September 20 and proposals are due on October 27. As previously mentioned, new contracts will begin July 1, 2024. Contracts will have a six-year initial term, with two two-year renewal options. Award dates have not been announced.

Evaluation

Plans will be awarded up to 1,000 points during the evaluation process based on the categories shown below.

CMS takes major step forward in Medicare drug price negotiation program

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This week鈥檚 In Focus centers on the U.S. Department of Health and Human Services (HHS) August 29, 2023, of the first 10 prescription medications that will be subject to price negotiation for Medicare coverage. This week, Health Management Association (海角社区) experts offer their perspective on what this change means and what to expect next.

Background

Medicare was granted the authority to negotiate prescription drug prices through the Inflation Reduction Act (IRA), which the president signed into law on August 16, 2022. HHS, acting through the Centers for Medicare & Medicaid Services (CMS), will lead negotiations and enter into agreements with manufacturers for these products, negotiating a maximum fair price (MFP) for each selected drug in the Medicare program. HHS is required to negotiate on a certain number of drugs each year: 10 drugs in 2026, 15 drugs in 2027 and 2028, and 20 drugs in 2029 and subsequent years. Up to 60 drugs could be negotiated by 2029. Manufacturers that are noncompliant will face an excise tax that could far exceed the cost of drugs sold over time and civil monetary penalties.

Medicare Drug Negotiations: The Latest Development

Since passage of the IRA, CMS has been working to establish the regulatory infrastructure and policies to support implementation of Medicare鈥檚 new drug price negotiation authority on an expedited timeline. Guidance on the approach the agency will take in negotiating MFPs, along with other provisions of the act, has been issued.

With this week鈥檚 action, CMS will begin the first round of negotiations. Table 1 lists the drugs CMS has identified for the first round of negotiations. Products selected for negotiation (with prices effective in 2026) are medications that represent the highest spending in the Part D drug benefit, excluding products with generic or biosimilar competition as well as certain orphan drugs and other products that qualify for a small biotechnology exemption.

Alongside CMS鈥檚 announcement, HHS鈥檚 Office of the Assistant Secretary for Planning and Evaluation (ASPE) released its of prescription drug use and out-of-pocket spending for each of the 10 drugs for all Part D enrollees and separately by whether an enrollee receives the low-income subsidy (LIS). The report also examines demographic information about enrollees who use the selected products.

Takeaways

The products selected were largely in line with initial modeling that Moran Company analysts and others performed, but with some surprises. Variation from earlier projections could be expected for a number of reasons, including:

The June 2022鈭扢ay 2023 data CMS used were not generally available to outside analysts, and it is clear that several products had spending increases (whether because of volume or price increases) relative to prior years that moved them up the list.
Some higher spending products have seen generic or biosimilar competitors launch, making them ineligible for selection for negotiation.
- For the top 30 products identified in previous dashboard data, at least 10 have evidence of generic or biosimilar competition.
CMS鈥檚 decision to treat multiple products together for purposes of negotiations also affected the products included on the list.
For a few other products, it is still unclear how CMS decisions were made.

What to Expect Next

The drug negotiation policy is highly controversial and is the subject of litigation that could delay the process. If litigation does not affect the timeline for implementation, manufacturers of selected drugs have until October 1 to agree to negotiate and provide initial information to CMS. If a manufacturer opts out of the negotiations, the company must pay either an excise tax or withdraw all its products from the Medicare and Medicaid programs. CMS and participating companies will then meet to discuss manufacturer submissions, and CMS will receive information from other stakeholders. Several listening sessions will take place.

CMS will make initial price offers by February 1, 2024. After a counteroffer process, negotiations may continue into the summer of 2024, but final determinations will be made by August 1, 2024. CMS plans to publish any agreed-upon negotiated prices for the selected drugs by September 1, 2024. Those prices take effect starting January 1, 2026.

In addition to the short-term impact on prices for specific drugs, several questions about the potential effects of the policy are worth monitoring over the long-term:

How will research and development of new products and trends in the type of products prioritized change as a result of these policies?
How will the policies affect pricing for competitor products and the launch prices of products in the future?
Beyond the Medicare population, for whom the prices are directly applicable, how will MFPs affect negotiations on costs and supplemental rebates for other payers. including state Medicaid programs, state employee programs, drug purchasing pools, and commercial insurers?
Will negotiations affect the design of standalone Prescription Drug Plans (PDPs) and Medicare Advantage PDPs.

The IRA included several other changes to the Medicare program, which we discussed in a previous In Focus.

海角社区 recognizes unseen populations on International Overdose Awareness Day 2023聽

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In honor of (IOAD), August 31, 2023, we take time to pause and reflect on this year鈥檚 theme of 鈥渞ecognizing those people who go unseen.鈥� 海角社区 stands with those affected by overdose and promotes an ecological approach to addressing substance use, one that acknowledges the many facets of the crisis that leads to approximately 300 overdose deaths every day in the United States.

We recognize that many Americans experience the repercussions of overdose in ways that are often unseen: friends and family members who act as first responders by reversing an overdose with naloxone; ; pregnant and parenting people who use drugs and/or medications for opioid use disorder; those who are often unable to access resources due to structural barriers such as homelessness or those living in rural and frontier communities; and, the justice-involved population, who serve as a salient example and often go unseen. Research has confirmed that overdose is the leading cause of death among people leaving carceral settings, as well as the third leading cause of deaths in custody in U.S. jails.

We also recognize that many of the racial disparities in U.S. overdose deaths are unseen and underrepresented in national dialogue about the crisis. At a time when people of color are dying at a higher rate than non-Hispanic White people, the International Overdose Awareness Day theme of recognizing those unseen is timely, and apt. Non-Hispanic American Indian or Alaskan Native people had the highest drug overdose death rates in both 2020 and 2021. Rates of overdose among Black or African American men outpace other groups. Racial disparities extend beyond overdose fatality rates and into the broader substance use disorder continuum of care. People of color are offered medications for opioid use disorder at a rate almost 50% lower than non-Hispanic White people, and the duration of their treatment tends to be shorter; ultimately leading to increased risk of returning to use. These statistics only reinforce .

Finally, we recognize that the overdose landscape is developing unseen changes, as overdose deaths involving psychostimulants such as methamphetamine are increasing with and without synthetic opioid involvement. Polysubstance use is the norm, not the exception. The healthcare sector must broaden and expand services to meet the current needs, including incorporating harm reduction strategies for stimulants, especially in states with high concentrations of deaths such as Nevada, West Virginia, Maine, and among non-Hispanic American Indians or Alaskan Natives.

海角社区 honors the often-unseen work and expertise of those leading advances in the field including peers, public health professionals, people who use drugs, and friends and family who become first responders. In remembrance of those impacted by overdose, our call to action is to honor unseen populations affected by this crisis, to elevate existing work by and for these communities, and to continuously seek innovative approaches that ensure we carry everyone forward into a responsive system of care.

Someone you know or may have seen may be struggling with addiction. Help is always available. The Substance Abuse and Mental Health Services Administration (SAMHSA) offers free, confidential, and 24/7 support in both English and Spanish at 1-800-662-HELP (4357).

For more information on 海角社区 overdose prevention services, visit 海角社区’s Behavioral Health page or contact our experts below.

Digital innovation to be a featured topic at 2023 海角社区 fall conference

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Advancements in digital health and data technology have made for rapid and remarkable transformation of the healthcare landscape. From wearable devices to mobile health apps to telemedicine platforms, the integration of digital solutions and patient data is disrupting every facet of healthcare 鈥� to say nothing of the AI revolution that has only just begun. While this innovation is exciting and meaningful, it still has runway to truly deliver 鈥渂etter, cheaper, faster鈥� for patients. These innovations and others will be featured at 海角社区 annual fall conference, being held October 30-31, 2023.

Digital innovation has graduated from its 鈥渆xperimentation/compliance鈥� phase and is now in its 鈥渆xpectation of results鈥� phase. Healthcare payers and providers should incorporate digital into core payment and delivery strategies to deliver better outcomes and a better care experience at a most efficient cost. Health data management is creating more efficient platforms to provide the right care at the right time to the right patient. Federal policy programs like the 21^st Century Cures Act, and CMS Interoperability and Patient Access rule have opened the door for providers, payers, and applications to make better use of health information, with patients more in control.

While this level of innovation is exciting anywhere, it is particularly exciting to see how it is enabling improvements in publicly funded healthcare programs to deliver more effective care. 海角社区 consultants are leading conversations and presentations on how digital innovation is driving change in Medicare, Medicaid, and state marketplaces.

Key Sessions (full agenda and panelists here)

The Dynamic World of Publicly Sponsored Health Care: Trends and Innovations: Learn about new payment models, quality and equity initiatives, new products and services, workforce, likely policy initiatives, and new ways of reaching and serving members. (Monday 9:15-10:30am plenary session)

Digital Health, Interoperability, and Information Sharing: From Compliance to Innovation: Discover how early adopters will show how they have moved from compliance to innovation by embracing data sharing, FHIR APIs, and third-party applications using real-time data. (Monday 1:30-3:00pm breakout session)

The Pitch: Innovative and Potentially Disruptive Models in Care Delivery: Hear the latest innovations in care delivery models and will also gain an understanding of how to best approach managed care partners when considering value-based contracting or other network arrangements. (Monday 3:30-5:00pm breakout session)

Behavioral Health System Redesign: Learn why federal and state governments and the healthcare delivery system must collaborate in new and innovative ways to meet the rapidly growing demand for a more integrated behavioral health system (Sunday preconference, this session and others running 1pm 鈥� 5pm)

To learn more about 海角社区鈥檚 work in the digital innovation space or digital health work, please contact our experts below.

CMS rolls out new initiatives: key updates to watch this fall

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In this week鈥檚 In Focus, we continue our review of Medicare developments from this summer and look ahead at Centers for Medicare & Medicaid Services (CMS) activities to watch for this fall.

CMS ACO Strategy Update

In a July 31, 2023, Health Affairs Forefront , CMS leaders outlined the agency鈥檚 plan to further accelerate the growth and accessibility of accountable care organizations (ACOs), especially for beneficiaries in rural and underserved areas. The article signals the agency鈥檚 continued commitment to increasing participation in ACOs and future policy and model initiatives that CMS could undertake to achieve those goals.

In particular, the CMS Innovation Center is considering testing models and features to support Medicare Shared Savings Program (MSSP) ACOs in increasing investments in primary care. This initiative might include piloting ACO-based primary care models that provide prospective payments in an effort to reduce reliance on fee-for-service (FFS), support innovations in care delivery, and increase access to advanced primary care in underserved communities.

CMS leaders point to a second component of its ACO strategy in the calendar year (CY) 2024 proposed Medicare Physician Fee Schedule (PFS) rule. The proposed PFS includes technical updates to the Advance Investment Payment (AIP), which provides financial support for providers who participate in the MSSP. The proposed PFS rule also includes several opportunities for the public to inform CMS鈥檚 ongoing ACO work, including considerations for adding higher-risk participation options in the MSSP, ways to better support collaboration between ACOs and community-based organizations to meet health-related social needs, and other initiatives. 海角社区 discussed the PFS changes in an earlier In Focus.

CMS also announced refinements to the ACO Realizing Equity, Access, and Community Health (REACH) Model on August 18. The agency鈥檚 three goals in making these changes are to:

Increase predictability for model participants (e.g., policies to change certain beneficiary alignment requirements and refinements to eligibility criteria for high-need ACOs
Protect against inappropriate risk score growth (e.g., revisions to the risk-adjustment methodology)
Advance health equity (e.g., revisions and expansions to the health equity benchmark adjustment)

These topics are of importance to CMS across its model portfolio and are, in part, based on experience the agency has gained in running the ACO REACH model. Below is a summary of several key policy changes that will take effect in 2024. The can be found on the CMS website.

Finally, CMS released the request for applications (RFA) for the Innovation Center鈥檚 Making Care Primary (MCP) model previously announced in June. This voluntary model is scheduled to begin in June 2024 and run for 10.5 years. It will have three participation tracks that build upon previous Innovation Center primary care initiatives.

The MCP model is designed to improve care for beneficiaries by supporting the delivery of advanced primary care services. This framework provides a pathway for primary care clinicians who have varying levels of experience with value-based care to gradually adopt prospective, population-based payments while building the infrastructure to improve behavioral health and specialty integration and drive more equitable access to care. CMS is working with Medicaid agencies in eight states鈥擟olorado, North Carolina, New Jersey, New Mexico, New York, Minnesota, Massachusetts, and Washington鈥攖o engage in full care transformation across payers, with plans to engage private payers in the coming months.

The RFA provides additional details about the model鈥檚 payment, care delivery, quality, and other policies. The application period opens September 4, 2023, and closes November 30, 2023. CMS plans to select participants in winter 2024. Onboarding for participants will take place April鈭扟uly 2024.

The 海角社区 team continues to review the RFA and is available to assist clients in determining whether this model may be a good fit as well as with assistance in submitting the application.

What to Watch

Comments on the Medicare CY payment rules (home health, end stage renal disease, physician, and outpatient hospital) are due in early fall. CMS will review the comments on each of the proposals and finalize each rule by November 1. Some stakeholders, such as physicians and home health suppliers, may seek congressional action to mitigate payment cuts that CMS has proposed.

In addition, CMS is expected to continue implementing the drug pricing related provisions of the Inflation Reduction Act (IRA). The agency already has released several guidance documents about the process. The list of the first 10 drugs to be negotiated is due to be published September 1, 2023, and manufacturers of selected drugs will have one month to sign agreements to participate in negotiations and provide information for CMS鈥檚 consideration in the negotiation process.

The 海角社区 team will continue to evaluate Innovation Center opportunities, CMS payment regulations, and IRA implementation. If you have questions about these topics, contact our experts below.

Arizona releases Medicaid ALTCS-EPD Program RFP

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This week, our In Focus section reviews the Arizona Long Term Care System (ALTCS) Elderly and Physically Disabled (EPD) Program request for proposals (RFP), which the Arizona Health Care Cost Containment System (AHCCCS) released on August 1, 2023. The ALTCS-EPD program covers 26,000 individuals, representing approximately 38 percent of the ALTCS managed care population. The remaining ALTCS members are covered under a state-run model through the Department of Economic Security, Division of Developmental Disabilities (DES/DDD) health plans, which provide long-term care (LTC) to individuals with intellectual/developmental disabilities. Contracts for ALTCS-EPD are worth approximately $1.6 billion and will take effect October 1, 2024.

Background

ALTCS is one of the oldest Medicaid managed long-term services and supports (MLTSS) programs in the country, providing integrated physical health, behavioral health, and LTSS to individuals who are 65 years of age or older or who have a disability and require nursing facility level care. Beneficiaries may live in assisted living facilities or receive in-home services. The ALTCS-EPD program covers nearly all Arizonans who are dually eligible for Medicaid and Medicare statewide. Winning managed care organizations (MCOs) also will be required to implement companion Medicare Advantage Fully Integrated D-SNPs (FIDE SNPs) effective January 1, 2025.

Market

Members receive coverage through Banner-University Family Care, Mercy Care Plan, and UnitedHealthcare, depending on their geographic service area (GSA). MCOs will bid on all three GSAs and indicate their order of preference to be awarded. AHCCCS will not award the South GSA only or the North GSA only. At present, in the South region, Mercy Care Plan serves Pima County only. Under the new RFP, AHCCCS will not make an award specific to Pima County; rather the MCO will serve all seven counties within the South GSA.

Together, the plans cover 25,973 individuals (see below).

(United and Mercy administer DDD plans.)

Timeline

Intent to bid forms are due by August 31. Proposals are due October 2, and awards are expected to be announced December 13. As noted previously, implementation is scheduled to begin October 1, 2024.

Learning the invaluable lessons of value-based care聽at 2023 海角社区 conference

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If you search the term 鈥渧alue-based care鈥� on the internet you will find over 2.5 million hits on that term alone. No one would disagree with the need to provide value to patients and purchasers, but how we define value differs based on where we sit. Value is paying for outcomes, not volume of services. Value is ensuring that patients get the right care at the right time. Value is ensuring that purchasers pay a reasonable cost for the highest possible quality. Value is ensuring that healthcare is provided equitably and sustainably. Implementing value is even trickier than defining it, given the complexity of who pays for care and the challenges of measuring the outcomes we seek to reward.

From the top office of HHS to the back office of a health center and everywhere in between, 海角社区 leaders have been part of our collective journey to value: advancing policy and regulatory change, calculating risk and setting prices, crafting alternative payment models, integrating social services and behavioral health, and coaching industry leaders to make important changes to their business models to adapt to a more sustainable approach to American healthcare. These experiences 鈥� both successes and challenges 鈥� provide a unique perspective from which to advise clients on transformation of healthcare.

The 海角社区 2023 fall conference, scheduled for October 30-31, 2023, has thoughtfully curated several discussions to educate, enlighten and motivate attendees on industry standards and navigating the practicality of providing value in care, coverage, and patient experience in publicly funded healthcare:

Leading the Charge on Value, Equity and Growth: The Future of Publicly Sponsored Healthcare: Discuss how these public programs came to be the industry standard bearers and what this shift means for outcomes, affordability, policy, and the overall direction of U.S. healthcare.

Positive Change and the Growing Importance of Managed Care in Publicly Sponsored Healthcare: Discuss the future of publicly sponsored healthcare, outline promising initiatives aimed at improving coverage and care, and address key concerns over funding, policy, equity, and coordination between government, plans, providers, and members.

The Future of Delivery Systems: Achieving Operational and Financial Sustainability: Discuss a wide range of practical approaches to prepare for the future, including managing cash flow, optimizing the workforce, developing long-term reimbursement plans, improving operational efficiency, and addressing changes in government policy.

Real Talk from the Trenches of Value-based Payments: Learn about the advantages and pitfalls of value-based payments, with important insights from organizations that have made it work.

Navigating Change in Medicare Advantage: A Roadmap for Success: Discuss what Medicare Advantage plans must do to meet the demanding, new requirements 鈥� all against a backdrop of continued efforts to improve equity, access, outcomes, and cost.

In addition, a pre-conference workshop on behavioral health will be held the afternoon of October 29^th, prior to the official start of the conference. This workshop will highlight the integral role of behavioral healthcare in improving patient outcomes across the continuum of publicly sponsored healthcare programs.聽聽

We are excited to engage with industry experts throughout these discussions about value-based care and forge a better path forward toward a more sustainable and equitable system of care.

CMS finalizes 2024 hospital inpatient rule with mixed reimbursement changes

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This week, our In Focus section continues analysis and insights from 海角社区 (海角社区) and its affiliate The Moran Company on recent Medicare payment and policy developments. Today, we review the policy changes that the Centers for Medicare & Medicaid Services (CMS) released August 1, 2023, for the fiscal year (FY) 2024 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) final rule ().

This year鈥檚 IPPS final rule includes several important policy changes that will alter hospital margins and change administrative procedures beginning October 1, 2023. More specifically, the IPPS rule increases payments to hospitals, enhances the wage index policy for rural hospitals, reduces Medicare disproportionate share payments, and modifies the New Technology Add-on Payment (NTAP) program.

Key provisions of the FY 2024 Hospital IPPS and LTCH Final Rule

We highlight four policies that will significantly affect Medicare beneficiaries, hospitals, health systems, payers, and manufacturers:

The annual inpatient payment update
Medicare disproportionate share hospital (DSH) payments
Hospital wage index adjustments
NTAP policy changes

Hospital market basket update and the inpatient standardized amount

CMS鈥檚 Medicare 2024 IPPS final rule will increase payments to acute care hospitals by an estimated $2.2 billion from 2023. The primary driver of this increase is CMS鈥檚 3.1 percent increase in the annual update to inpatient operating payment rates. The update is the sum of the hospital market basket update of 3.3 percent and a statutorily required 0.2 percentage point reduction for productivity growth.

海角社区/Moran analysis: Between the time CMS released the 2024 proposed IPPS rule and the final rule, the inpatient payment update for 2024 increased to 3.1 percent from 2.8 percent. This spike occurred because of the effects of an increase in estimated inflation on the cost of a standard basket of hospital goods (hospital market basket) throughout 2022 and 2023. Although economy-wide inflation slowed in mid-2023, inflation was higher in late 2022 and early 2023鈥攖he period in which the market basket is measured for the final rule.

For beneficiaries, increasing payment rates eventually will lead to a higher Medicare inpatient deductible and greater out-of-pocket costs for many other services. For hospitals and healthcare systems, payers, and manufacturers, a payment increase of 3.1 percent falls below economy-wide inflation (5鈭�6 percent in recent months).

Despite the publicized 3.1 percent payment update for 2024, after factoring in various policy adjustments the actual change between 2023 and 2024 to inpatient payments per case will be roughly 2 percent. The primary reason per-case payments will increase only 2 percent is a budget-neutrality adjustment that CMS finalized for 2024 to account for hospital wage index reclassifications. This adjustment will reduce payments to all hospitals by more than 1 percent to neutralize the added program spending associated with payments to hospitals that choose to reclassify into higher paying wage index areas. The final rule states, 鈥淸T]he geographic reclassification budget neutrality adjustment is significantly larger than in prior years.鈥�

Medicare Disproportionate Share Hospital Payments

CMS finalized two Medicare disproportionate share hospital (DSH)-related policies for 2024. First, DSH payments and Medicare uncompensated care payments combined will decrease in FY 2024 by approximately $957 million. Second, CMS finalized its proposal to limit the number of patient days included in the Medicare DSH calculation to only those days when the patient鈥檚 Medicaid Section 1115 Demonstration health insurance covers inpatient hospital services or the patient鈥檚 premium assistance program covers 100 percent of the premium cost for patients who buy health insurance that covers inpatient hospital services, if the patient is ineligible for Medicare Part A.

海角社区/Moran analysis: CMS鈥檚 $957 million reduction in DSH and uncompensated care payments stems from the agency鈥檚 estimate of the percentage of individuals without insurance in the United States. Between the 2024 proposed and final rules, CMS estimates the percentage of individuals without insurance will decline from 9.3 percent to 7.7 percent in 2023 and from 9.2 percent to 8.5 percent in 2024. As a result, the pool of uncompensated care dollars available to hospitals for 2024 was reduced from roughly $6.7 billion to $5.9 billion.

CMS鈥檚 estimated decline in the rate of uninsured beneficiaries is somewhat surprising given the common projection that Medicaid enrollment will drop following the end of Medicaid鈥檚 COVID-19 related continuous coverage policy. However, 海角社区/Moran colleagues believe state-level Medicaid enrollment changes will vary in the year ahead. Consequently, hospitals located in states where levels of Medicaid enrollment are sustained will benefit from CMS鈥檚 uninsured rate estimates and hospitals in states where Medicaid enrollment drops will not.

With regard to the Section 1115 demonstration related DSH policy, hospitals located in states that have not expanded Medicaid under the Accountable Care Act and instead rely on Section 1115 Demonstrations to expand health coverage, are likely to receive lower DSH payments. In addition to the Medicare DSH payment adjustments, reductions in the Medicaid DSH program are scheduled to begin October 1, 2023. The $8 billion reduction in FY 2024 is the first time CMS has planned to make cuts in the program.

Hospital Wage Index Adjustments

CMS finalized two wage index policies for FY 2024. First, CMS will extend the low-wage index hospital policy, which boosts the wage index of hospitals in geographic areas with low wages relative to other areas. Second, CMS finalized a policy to begin including labor data from urban hospitals that choose to reclassify as providers in rural areas to maximize their payment into the calculation of rural wage index areas.

海角社区/Moran analysis: These two wage index policies for FY 2024 will increase payment to rural hospitals. Under the first policy, hospitals with wage indexes below 0.8667 (the 25^th percentile across all hospitals) will automatically receive an increase in their wage index and therefore their payment rates for inpatient cases. Under the second policy, the inclusion of labor data for geographically urban hospitals that choose to reclassify into rural wage index areas within the calculation of state-level rural wage indexes and the state-level rural floor will increase payments to rural hospitals in many states. The overall impact of both proposed wage index policy changes for FY 2024 will be an increase in inpatient payment rates for rural hospitals.

New Technology Add-On Payments (NTAP)

Citing the increased number of applications for NTAP over the past several years and noting the need for CMS staff to have time to review and analyze the applications, CMS finalized two changes to the NTAP application requirements. First, CMS will require that all applicants have a complete and active U.S. Food and Drug Administration (FDA) market authorization request in place at the time of NTAP application submission, if not already FDA approved. The FDA鈥檚 acceptance letter will serve as proof of a full and complete application. In addition, CMS proposes to move the FDA approval deadline from July 1 to May 1, beginning with applications for FY 2025.

海角社区/Moran analysis: The stated aim of these CMS policy changes is to 鈥渋ncrease transparency, facilitate public input, and improve the review process.鈥� As a result of these modifications, products will need to be on the market longer before the NTAP payment begins, and fewer products will be eligible for the three full years of NTAP payments. Taken together, hospitals will have a shorter NTAP payment window for most products. The further tightening of FDA application and approval requirements runs counter to the efforts of various stakeholders to establish more flexible or additional NTAP application windows.

海角社区 and The Moran Company collaborate to monitor legislative and regulatory developments in the inpatient hospital space and assess the impact of inpatient policy changes on the hospital sector. 海角社区鈥檚 Medicare experts interpret and model inpatient policy proposals and use these analyses to help clients develop their strategic plans and their comments on proposed regulations. Moran replicates the methodologies CMS uses in setting hospital payments and models alternative payment policies to help support stakeholder comment letters and strategies. Moran also assists clients with modeling diagnosis-related group reassignment requests and to support innovative NTAP applications.

For more information or questions about the policies described above, contact our experts below.

Focus on equitable access at 2023 海角社区 conference

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Access to care is not as simple as obtaining an insurance card. Some people find access to care is limited by geography or distance, others are limited by their native language or cultural awareness. In other ways, care can be limited by who is in the insurance network. All of these inequities can cause gaps in care that undermine health outcomes. In a system that is increasingly paying for outcomes, elimination of inequities is a matter of financial performance, as well as a sign of clinical excellence. Finding and reducing inequities in access to care requires an operational commitment to change workflows, leverage technology, and train staff at all levels to align incentives and culture.

Providing equitable access to care is subject to ever-changing policy and regulatory requirements, and it is increasingly tied to funding, work force staffing and many other operational requirements. This topic will thread through several discussions and panels during the 2023 海角社区 fall conference with federal policy leaders, health system administrators, and other industry leaders all poised to address the pain points of achieving and maintaining equitable access.

Key sessions:

Leading the Charge on Value, Equity and Growth: The Future of Publicly Sponsored Health Care 鈥� A discussion on how these public programs came to be the industry standard bearers and what this shift means for outcomes, affordability, policy, and the overall direction of U.S. health care. (Monday 8:30am keynote by Alan Weil)

Understanding and Meeting New Health-Related Social Needs Requirements 鈥� An environmental overview, including a look at what鈥檚 driving these demands and how organizations are specifically working to address the new mandates. (Monday 1:30pm breakout session featuring Bryan Buckley of NCQA, Richard Ayoub of Project Angel Food, and Paul Leon of National Healthcare & Housing Advisors)

Practical Approaches to Ensuring Equity in Publicly Sponsored Healthcare Programs 鈥� This session will provide practical approaches to addressing equity, including an overview of efforts by policymakers, health plans, and providers to make equity the central component of all initiatives to improve healthcare outcomes, access, and health-related social needs. (Tuesday 8:30am keynote by Karen Dale of Amerihealth Caritas)

Medicaid in a Post-Pandemic World: Challenges, Opportunities, and a Renewed Focus on Equity 鈥� State Medicaid directors will provide a status report on all this and more, including a special emphasis on how equity plays into planning and policy decisions. (Tuesday 9:15am plenary featuring Jacey Cooper of the California Department of Health Care Services, Kelly Cunningham of the Illinois Department of Healthcare and Family Services, Drew Snyder of the Mississippi Division of Medicaid, and Stacie Weeks of the Nevada Department of Health and Human Services)

海角社区 consultants and our speakers look forward to engaging with participants as they delve into these topics to gain a better understanding of the gains we are making as industry leaders and where we still need to innovate.

To learn more about our Equity and Managed Care work, please contact our experts below.

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