July Medicaid Newsletter Syrtis Solutions


Syrtis Solutions distributes a Medicaid newsletter on a monthly basis to help you stay informed. The newsletter focuses on legislation, insights, comments, and industry developments relating to Medicaid integrity, cost avoidance, improper payments, fraud, waste, and abuse. Here is a summary of last month’s noteworthy developments.

NPR, July 30
Haley Organ thought she had everything figured out. After graduating from a small private college just outside Boston, she earned her master’s degree, entered the workforce and eventually landed a corporate job in St. Louis as a data analyst. Life seemed to be going as planned until the national retailer that Organ worked for announced furloughs during the coronavirus pandemic. After nine weeks of mandatory leave, the 35-year-old was laid off. The company gave her a severance package and put an expiration date on her health insurance plan. “I haven’t slept the whole night since about March,” Organ said, earlier this summer. “I can’t turn my brain off, just worrying about everything. “Organ filed for unemployment, adding her claim to more than 40 million others nationwide since the pandemic took hold in mid-March, according to the Department of Labor. That’s about 1 in 4 U.S. workers. As a result of the unemployment crisis, millions of people lost access to their private health insurance plans at a time when they might need it most.  read more


Syrtis Solutions Blog, July 30
The Coronavirus pandemic has had a devastating impact on the nation’s economy. As of June, the U.S. Bureau of Labor Statistics reported that the national unemployment rate reached 11.1 percent which translates to 17.8 million unemployed people. Many Americans that have lost employer sponsored health insurance are now turning to Medicaid for healthcare coverage. According to the Georgetown University Health Policy Institute, Medicaid enrollment has increased by 5.8 percent in the last three months. In Florida alone, enrollment has almost reached 10 percent. Due to the surge in unemployment and Medicaid enrollment and the decrease in revenue, states are experiencing severe budget gaps. As a result, some states have made significant reductions in funding to their Medicaid programs, the NAG is requesting additional federal funds, and Medicaid programs are likely to focus on cost containment reform to balance their budgets. read more


Healthcare Dive, July 29
Anthem CFO John Gallina said on the earnings call Wednesday morning that utilization among members was down about 40% in April and 20% in May, but returned to 90% of baseline in June. The payer expects pent up demand to push utilization above normal levels in the third and fourth quarters. SVB Leerink analysts labeled the second-quarter results “solid,” noting the payer has good visibility and should see stable results for the next six to 18 months. Anthem kept its full-year earnings guidance but has withheld 2020 guidance on all other measures. Payers, unlike hospitals and medical practices, have not taken a financial hit from the pandemic so far and have in fact reported significant profits. Prodded by Congress in some cases and in a bid to sidestep criticism from cashing in on a public health crisis, insurers have waived co-pays for COVID-19 testing and treatments as well as some care not directly related to the coronavirus.  read more


Becker’s Hospital Review, July 28
The Ohio Department of Medicaid has released a request for proposals for a company to act as a single pharmacy benefit manager, advancing its plan to reshape the state’s pharmacy benefit management system, the Journal-News reported. Ohio’s House and Senate leaders agreed on a plan last July to restructure the state Medicaid department’s pharmacy benefit management by contracting with a single PBM. Proposals to become the Medicaid department’s sole PBM are due Sept. 4. The PBM chosen will be required to disclose to the state how much it pays for drugs and how much it reimburses pharmacies. The contract will be rebid every four years, and PBMs could be fined for noncompliance. The restructuring came as Ohio Medicaid’s former PBMs, CVS Caremark and OptumRx, came under scrutiny for a lack of transparency and a study found they had billed the department $244 million more than they paid pharmacies. The state also created a single, transparent list of preferred medications, which streamlines the prior authorization process for many drugs, the newspaper reported.  read more


Forbes, July 28
Health insurer Centene is seeing a boost in Medicaid enrollment as unemployment rises amid the spread of the coronavirus strain Covid-19 though Americans are signing up to such coverage at a slower pace than the company originally projected. Centene Tuesday said its overall managed care membership in the second quarter of this year rose nearly 64%, or 9.6 million members, compared to June 30, 2019 to 24.6 million total members. Of that, Centene’s total Medicaid enrollment increased to 12.5 million in the second quarter compared to nearly 8.5 million in the year-ago period. Though Centene is also a larger company thanks to acquisitions, the health insurer is expecting a continuing enrollment boost in Americans signing up for Medicaid, the health insurance for low income Americans it manages via contracts with states. Centene, which bought WellCare Health Plans earlier this year, is now a national health plan providing benefits to 1 in 15 Americans and is the largest provider of individual coverage known as Obamacare under the Affordable Care Act.  read more


KHN, July 23
The predictions were dire: Coronavirus lockdowns would put millions of Americans out of work, stripping them of their health insurance and pushing them into Medicaid, the health insurance program for low-income people. In California, Gov. Gavin Newsom’s administration projected that the pandemic would force about 2 million additional people to sign up for the state’s Medicaid program, called Medi-Cal, by July, raising enrollment to an all-time high of 14.5 million Californians — more than one-third of the state’s population. But July is almost over, and Medi-Cal enrollment has hovered around 12.5 million since March, when the pandemic shut down much of the economy — though enrollment ticked up in May and June, according to the latest data from the state Department of Health Care Services, which administers the program.  read more


Health Payer Intelligence, July 22
Molina Healthcare (Molina) will acquire the Passport Health Plan (Passport) Medicaid and dual special needs plan, Molina announced. The healthcare companies have agreed to a price of around $20 million for the purchase. In addition to the initial cash transaction, Molina may make an additional payment in 2021 based on Molina’s Kentucky health plan performance during 2020 open enrollment. “Acquiring the operations as well as transferring over employees of Passport Health Plan provide us with a well-known brand in Kentucky and position us well to compete even more effectively in the market,” Joe Zubretsky, president and chief executive officer of Molina, said in Molina’s press release on the acquisition. “We look forward to being able to achieve a major objective of this transaction, which is the continuity of care for Passport’s members.” By mentioning continuity of care, Zubretsky alluded to the major upset of the Kentucky Medicaid managed care contracts which were awarded earlier this year.  


Health Affairs, July 21
Following a busy Supreme Court term with two decisions on the Affordable Care Act (ACA), many more ACA-related legal challenges remain pending at appellate and district courts across the country. This post discusses the status of long-standing ACA-related lawsuits and highlights newer lawsuits over ACA implementation. A prior post summarized the implications of recent Supreme Court decisions and California v. Texas. A third post will focus on the resolution of lawsuits over the risk corridors program. This post covers a decision from the Court of Appeals for the Second Circuit holding that New York is preempted from making changes to ACA-governed risk adjustment transfers and a decision from the Court of Appeals for the Ninth Circuit holding that the ACA prohibits discrimination in plan benefit design under Section 1557 of the ACA. Additional decisions could be issued any day on a Trump-era rule on association health plans, whether insurers are entitled to unpaid cost-sharing reductions, and how the health insurance tax applies to Medicaid managed care organizations.  read more


Inforum, July 20
A proposed initiated constitutional amendment and a proposed initiated measure, both that would expand Medicaid eligibility requirements in South Dakota, have been filed with the South Dakota Secretary of State’s Office, according to a news release from Attorney General Jason Ravnsborg’s Office. The explanations for the constitutional amendment and initiated measure will appear on petitions circulated by their sponsor, Rick Weiland. “If the sponsor obtains a sufficient number of signatures by November 2021, as certified by the Secretary of State, the proposed amendment may be placed on the ballot for the November 2022 general election,” the release states. The petitions will need 34,000 signatures each. The amendment and initiated measure would expand income eligibility requirements to all those who live below 133% of the federal poverty line. Medicaid is funded by both the state and federal governments. About 118,000 South Dakotans are covered by the state’s Medicaid during an average month, according to information on the state’s Department of Social Services website.  read more


Health Affairs, July 20
The Supreme Court recently ended its 2019 term, which included two Affordable Care Act (ACA) decisions and several other decisions with implications for ACA cases. Briefing in California v. Texas is ongoing and will be heard later this fall, with a decision expected in 2021. Beyond the Supreme Court, there are many ACA-related legal challenges pending at appellate and district courts across the country. This post summarizes the recent Supreme Court decisions and the latest in California v. Texas. A second post will discuss the status of long-standing ACA-related lawsuits and highlight newer lawsuits over ACA implementation. A third post will focus on the resolution of lawsuits over unpaid risk corridors payments. Health policy watchers know the Supreme Court issued two major ACA decisions in its recently ended 2019 term: Maine Community Health Options v. United States and Little Sisters of the Poor v. Pennsylvania. Both decisions have major implications for insurers and consumers and have been covered at length at the Health Affairs Blog.  


News Tribune, July 19
Nationwide, resistance to Medicaid expansion has crumbled over the years as, one by one, conservative states have joined the ranks of those that have expanded the program’s health coverage to low-income adults. Missouri remains one of only 13 (mostly conservative southern) states that have not expanded their Medicaid programs to include adults earning up to 138 percent of the poverty level. State Rep. David Griffith, of Jefferson City, and state Rep. Sara Walsh, of Ashland, both Republicans, said they strongly oppose Amendment 2 because the drafters of the amendment didn’t include a funding mechanism for the program. State Rep. Rudy Veit, a Wardsville Republican, said his opinion is people will vote the way they want to vote. But, Veit warned, “There’s a lot of people who don’t like to expand any program. Once you expand, it becomes a right (to people), and you can never get rid of it.” Oklahoma was the most recent to opt into Medicaid expansion. Voters passed expansion in that state June 30 with a narrow 6,000-vote margin. It was the fifth state in which voters passed expansion despite opposition by Republican leaders and the first state to expand Medicaid during the COVID-19 pandemic.  read more


The Hill, July 16
A federal inspector general report finds that the Centers for Medicare and Medicaid Services (CMS) and its chief, Seema Verma, violated rules around the management of contracts with GOP-aligned communications consultants. The Department of Health and Human Services (HHS) Inspector General, in a report issued on Thursday, found that CMS improperly “allowed a subcontractor individual to perform inherently governmental functions, such as making managerial decisions and directing CMS employees,” as part of $6.4 million in strategic communications contracts. The report finds that the communications consultants, from firms including Porter Novelli and Nahigian Strategies, performed some tasks that the government already had employees in the Office of Communications to perform, including “writing social media” and “National media pitching for Administrator.” “These tasks are similar in nature to the types of services that CMS’s Office of Communications employees perform,” the report said, noting the risk that the move “circumvents civil service laws.”  read more


The Texas Tribune, July 14
Job loss stemming from the coronavirus stripped health insurance from an estimated 659,000 Texans between February and May, according to a new study. The analysis, published Tuesday by Families USA, a nonpartisan consumer advocacy group, found that 5.4 million laid-off workers across the country lost their health insurance from February to March. The report called the past few months the “deepest economic crash since World War II,” adding that job loss from the pandemic has left more people uninsured than ever recorded. The increase in uninsured Americans this spring is 39% higher than the previous record, set during the Great Recession of 2008 and 2009, when 3.9 million adults under the age of 65 lost insurance. In Texas, 29% of adults under 65 — about 4.9 million people — were estimated to be without health insurance this May, the highest uninsured rate of all states. In 2018, a quarter of adults under 65 were uninsured in Texas.  read more


Health Payer Intelligence, July 14
America’s Health Insurance Plans (AHIP) and Blue Cross Blue Shield Association (BCBSA) have called on Congress to ensure access to coronavirus care and healthcare coverage through federal funds. More specifically, the payer organizations recommended that Congress protect at-risk populations, increase Medicaid support, extend suspended regulations, and stabilize health insurance markets. “The steps Congress has taken have been essential to providing Americans with that support, and we thank you for your continued leadership in addressing these unprecedented times,” the letter read. “We know that Americans are anxious to maintain their health coverage, keep that coverage stable, ensure access to widespread and reliable testing, and ensure the resources needed to overcome COVID-19. That is why we recommend the following legislative actions – to help Americans and our communities, and to keep our nation strong.” The payer organizations had three recommendations regarding how Congress could support employers as they struggle to extend healthcare coverage to their employees during the crisis.  read more


The Missouri Times, July 13
Consider this a tale of two hospitals. Four years ago, our health system was forced to shut down Ozark Community Hospital in Springfield. Two hundred employees lost their jobs, and a corner of the city lost its access to both primary and emergency care. We’ve since closed three other clinics in Missouri. One hundred miles to the south, our hospital in Gravette, Arkansas is thriving, with 350 employees on payroll at a facility that includes primary and specialty care clinics. The difference? Arkansas expanded Medicaid in 2014. Missouri’s elected leaders have consistently resisted such a move — a failure Missouri voters will now have a chance to rectify with the Aug. 4 vote on a citizens’ initiative ballot measure called Amendment 2.  read more


Live Well Nebraska, July 13
Madeline Almond can hardly wait for Nebraska to start enrolling people for expanded Medicaid next month. It will mean she can finally see a doctor in her adopted home state for the painful muscles, lung problems and mental health issues she’s struggled with most of her life. “I won’t have to choose between breathing and food anymore,” Almond said. She and her spouse have waited nearly a year for coverage, since moving to Lincoln for work and college. Others have waited more than six years for Nebraska to join the majority of states in expanding Medicaid as allowed under the Affordable Care Act. That includes nearly 21 months waiting for state officials to implement the expansion law passed by voters in November 2018.  read more


Forbes, July 5
The expansion of Medicaid benefits via ballot initiative next month in Missouri is gaining momentum after last week’s successful vote in Oklahoma to expand health coverage in that deep red state. “It’s a movement that builds with every election,” Jonathan Schleifer, executive director of the Fairness Project told healthcare reporters on a call following the successful  “Yes on 802” campaign that is putting Medicaid expansion into the Oklahoma state constitution. The Fairness Project has now helped put together five successful campaigns in Republican-leaning states to win voter approval to expand Medicaid via ballot initiative after last week’s success in Oklahoma. The Fairness Project is also involved in an election Aug. 4 when Missouri voters will decide whether to expand Medicaid under the Affordable Care Act.  read more


NC Health News, July 5
Get ready to start hearing the name “Centene” a lot more around Charlotte. In the biggest economic-development deal in state history, the CEO of health-insurance giant Centene said Wednesday that it will build an East Coast regional headquarters and technology hub on an 80-acre site in the University City area — a massive project that he said could eventually employ more than 6,000 workers. Average salaries: more than $100,000 a year. The company plans to break ground on the site — off Mallard Creek Road north of W.T. Harris Boulevard, part of University Research Park — as soon as next month. It has committed to invest $1 billion over the next 12 years and to create about 3,200 jobs. The deal was greased by a $388 million state grant, the largest such grant in state history.  read more


Patch, July 2
The state has secured $2.67 billion in federal funding to support Texas hospitals providing care for people receiving Medicaid, officials announced Thursday. The windfall is a $1.07 billion increase from the previous state fiscal year 2020, the governor and officials with the Texas Health and Human Services Commission noted in an advisory. The Uniform Hospital Rate Increase Program is a statewide program that provides for increased Medicaid payments to hospitals for inpatient and outpatient services provided to persons with Medicaid, offiicals explained. The program aims to reduce the Medicaid shortfall for hospitals that serve people who receive Medicaid, officials added. The Centers for Medicare and Medicaid Services approved the estimated Uniforim Hospital Rate Increase Program pool size for state fiscal year 2021 at $2.67 billion, up from $1.6 billion in state fiscal year 2020.  read more


Fierce Healthcare, July 1
A group of Republican senators introduced legislation Tuesday intended to enshrine two controversial price transparency rules into law and negate legal challenges from payers and providers. The bill called the Health Care PRICE Transparency Act codifies a rule that requires hospitals to post payer-negotiated rates for shoppable services and another rule that requires insurers to post online negotiated rates for in-network providers and allowed amounts for out-of-network providers. “An extra dose of transparency will bring more accountability and competition to the healthcare industry,” Sen. Chuck Grassley, R-Iowa, one of the bill’s co-sponsors, said in a statement. The bills comes a week after hospital groups seeking to shut down the rule lost in court. A federal judge ruled that the Centers for Medicare & Medicaid Services (CMS) did have the authority to impose the rule, which goes into effect on Jan. 1 and requires hospitals to post payer-negotiated rates for 300 services.  read more


Healthcare Dive, July 1
Earlier this year, before the country was consumed by the novel coronavirus, Molina CEO Joseph Zubretsky outlined his strategy to the company he helped turn around. Zubretsky said the company would focus on growing its three lines of business organically and through acquisitions. Those bolt-on acquisitions would be added on to the company’s core competencies. Zubretsky said during the J.P. Morgan Healthcare Conference in January that he was not interested in acquiring companies to pursue new avenues. “We will not pursue capability plays. We are a managed care company. We like membership. We like premium. We like capitated risk. That’s what we do, that’s who we are,” Zubretsky told the crowd in San Francisco. He added that the company had assembled a team to look for very specific deals across the country.  read more


NPR, July 1
Voters in Oklahoma narrowly approved a ballot measure Tuesday night to expand Medicaid to eligible adults who need health insurance. Oklahoma is now the 37th state to expand Medicaid under the Affordable Care Act; coverage will begin a year from now, on July 1, 2021. Based on the final unofficial count, the measure passed with just over a 6,000-vote margin — less than one full percentage point. Medicaid expansion was a key provision of the Affordable Care Act, but a Supreme Court ruling made it optional and left the decision up to each state. Medicaid is a public health insurance program for the poor, with states splitting the cost with the federal government. Historically, Medicaid mostly covered low-income children and people with disabilities, but the Affordable Care Act allows states to expand access to Medicaid to uninsured adults who earn up to 138% of the federal poverty level. As an inducement, the federal government shoulders 90% of the cost of those newly-covered adults.  read more


Health Affairs, July 
State fee-for-service Medicaid programs have traditionally based payments to pharmacies for drugs on a percentage of the drugs’ list price. Because list prices have increased more quickly than the prices actually paid by pharmacies, estimating appropriate reimbursements has become challenging. In recent years most states have switched to models where payments were based instead on results from a survey of pharmacy invoices. We examined how this changed fee-for-service Medicaid drug spending. We found that the policy change had minimal, if any, effects on overall Medicaid drug spending. This was at least partially explained by concomitant sharp increases in dispensing fees paid to pharmacies, designed to help cover operating expenses and profit margins. We discuss ways to improve invoice-based pricing approaches and lower costs if desired.  read more