CMS Clarifies Requirements for Managed Care Reimbursement to FQHCs and RHCs

CMS released guidance clarifying the requirements for states to implement alternative payment methodologies (APMs) under which Medicaid and CHIP managed care entities directly reimburse federally-qualified health centers (FQHCs) and rural health clinics (RHCs) the full amounts payable to them under the prospective payment system (PPS). As is the case for any APM, the APM can only be implemented with respect to an FQHC or RHC if the FQHC or RHC agrees, and if the payments that the FQHC or RHC receives are equal to the full PPS rate. CMS clarifies that any states that implement such arrangements must describe them in their State Plans, and is requiring states that have already implemented such arrangements without describing them to submit updated State Plan Amendments by July 1, 2017. Finally, CMS is requiring all managed care contracts starting on or after July 1, 2017 to include access to at least one FQHC, one RHC, and one freestanding birth center, when available.

CMS Guidance Encourages States to Facilitate Access to Medicaid for Justice-Involved Populations

CMS released guidance aimed at ensuring states facilitate Medicaid access for justice-involved populations prior to and after a stay in correctional institutions. For the purposes of claiming Federal Financial Participation (FFP), the guidance clarifies the regulatory definition of an "inmate of a public institution" as an individual who is in custody and held involuntarily in a public institution operated by law enforcement authorities. CMS further clarifies that the State may claim FFP for justice-involved populations: on parole or probation; residing in a halfway house, under certain conditions; or on home confinement. States may not receive FFP for individuals residing in Residential Reentry Centers or in facilities for treatment of mental health and substance abuse disorders furnished exclusively to inmates. Reinforcing long-standing CMS policy, the sub-regulatory guidance encourages states to suspend, rather than terminate, Medicaid enrollees entering incarceration to ensure better continuity of coverage upon release. Correctional institutions are encouraged to prepare inmates by assisting them in submitting an application for Medicaid prior to release.

New York: Governor Seeks Medicaid Coverage for Incarcerated Individuals Re-Entering the Community

Governor Andrew Cuomo (D) announced that New York State is seeking federal approval to use Medicaid funding to coordinate medical, pharmaceutical and home health services for "incarcerated individuals with serious behavioral and physical health conditions" in the 30 days prior to their release. If the waiver is approved, New York will be the first state to provide transitional health coverage as individuals re-enter society. The Governor noted that the State expects to see cost-savings in the future, as improved continuity of care will lead to reduced recidivism and fewer emergency admissions from relapses in chronic conditions. The proposal was included in the State's fiscal year 2016-2017 budget.

Oklahoma: Medicaid Board Cuts Mental Health Services and Provider Rates

The Oklahoma Health Care Authority (OHCA) board has cutreimbursement rates for behavioral health professionals as well as the amount of mental health therapy Medicaid enrollees can receive. Independent psychologist rates will be cut by 10%, residential psychiatric service rates by 15%, and private therapist rates by 30%, among other rate reductions. Medicaid behavioral health services are administered by the Oklahoma Department of Mental Health and Substance Abuse Services, which is separate from the OHCA, though the OHCA board votes on Medicaid-related cuts proposed by the mental health department. OHCA has separately proposed the "Medicaid Rebalancing Act of 2020" as an alternative to its proposal to cut other provider rates by 25% beginning June 1.

Pennsylvania: New Managed Care Contracts Will Require Value-Based Contracting

The Department of Human Services (DHS) will negotiate three-year contracts with eight managed care organizations (MCOs) requiring gradual increases in their share of value-based or outcome-based provider contracts to 30% of the medical funds received from DHS. The new contracts, which the Department describes as the most significant change in the Medicaid program since its move to managed care 18 years ago, are expected to shift $6 billion from fee-for-service payments to accountable care organizations, bundled payments, patient-centered medical homes, and other performance-based arrangements. MCOs will still be required to develop integrated care plans with behavioral health MCOs, and medical and behavioral MCOs will share an opportunity to earn performance payment incentives for improving targeted beneficiary population health outcomes.

Texas: State Receives 1115 Waiver Extension Amid Ongoing Negotiations

CMS approved Texas's request for a 15-month extension of the State's 1115 waiver, maintaining current funding levels for the Uncompensated Care and Delivery System Reform Incentive Payment (DSRIP) programs through December 2017. While Texas continues to negotiate for a five-year renewal, the State will receive $3.1 billion for the Uncompensated Care and DSRIP programs for twelve months beginning October 1, 2016, and a prorated amount for the additional three months. If a waiver renewal agreement is not reached by the end of the extension, the uncompensated care pool will be reduced to cover the costs of uncompensated and charity care for low-income Texans "who are uninsured and cannot be covered through Medicaid or other insurance programs" while DSRIP funding will be phased down 25% each year beginning in 2018.