Budget Blog

May 21, 2020 - Health Care Issues Update

By Stacey Mazer posted 05-21-2020 12:00 AM


Early Look at Medicaid Enrollment and Spending Amid COVID-19

This brief, based on a survey conducted by the Kaiser Family Foundation and HealthManagement Associates of Medicaid directors in all 50 states and the District of Columbia, provides some early insights about Medicaid spending and enrollment during the COVID-19 pandemic. Overall, nearly all states with enrollment projections and over half of states with spending projections anticipate fiscal 2020 growth rates to exceed pre-pandemic estimates. Nearly all states with projections anticipate fiscal 2021 growth rates to exceed rates in fiscal 2020 for both enrollment and spending. Among the 17 states with projections available, 19 states reported a budget shortfall is almost certain or likely for fiscal 2021. Some states were still in the process of gathering data to understand the implications of the coronavirus at the time of the survey and did not have updated enrollment and/or spending projections yet for fiscal 2020 and/or fiscal 2021. Survey results reflect the 38 states that responded to the survey.

CMS Informational Bulletin on Medicaid Managed Care

The Centers for Medicare and Medicaid Services (CMS) released an Informational Bulletin to address the shifts in utilization across the health care industry during the COVID-19 pandemic. While some providers are experiencing surges in COVID-19 related utilization, other providers are experiencing dramatic declines in utilization and revenue. The bulletin provides several options that states can consider under their Medicaid managed care contracts to address the impacts of the public health emergency and preserve access to care for Medicaid beneficiaries, including adjusting capitation rates and provider payment methodologies. Examples of requested adjustments can be found here. The CMS COVID-19 resource page for Medicaid can be found here

HHS Reminds Eligible Providers to Act by June 3, 2020 for Additional Relief Funds

The Department of Health and Human Services (HHS) reminded eligible providers that they have until June 3, 2020, to accept the Terms and Conditions and submit their revenue information to support receiving an additional payment from the Provider Relief Fund. HHS previously announced $50 billion of the Provider Relief Fund was allocated for general distribution to facilities and providers that bill Medicare and were impacted by COVID-19, based on eligible providers' net patient revenue. HHS distributed $30 billion immediately, proportionate to providers' share of Medicare fee-for-service reimbursements in 2019. On April 24, HHS began distributing an additional $20 billion to providers based on their share of net patient revenue and began accepting submissions from eligible providers of their financial data. Other allocations have included $12 billion for hospitals in COVID-19 high-impact areas, $10 billion for rural providers, and $400 million for tribal healthcare providers. Some providers may receive further, separate funding, including skilled nursing facilities, dentists, and providers that solely take Medicaid. A portion of the Provider Relief Fund is being used to reimburse healthcare providers, generally at Medicare rates, for COVID-19 related treatment of the uninsured. On May 19, the National Governors Association (NGA) sent a letter to Secretary of Health and Human Services Alex Azar and Centers for Medicare & Medicaid Services Administrator Seema Verma requesting the unobligated Provider Relief CARES funds and the additional $75 billion included in the Paycheck Protection Program and Health Care Enhancement Act be dedicated to assist health care providers that are predominantly serving Medicaid beneficiaries.

HHS Sends Letter to Governors on Testing Plans

The Department of Health and Human Services (HHS) sent a letter to governors on state testing plans required under the Paycheck Protection Program and Health CareEnhancement ActThe bill includes $10.25 billion for states, localities, and territories to develop, purchase, administer, process, and analyze COVID-19 tests, conduct surveillance, trace contacts, and conduct related activities. A list of funding amounts by state can be found here. According to the letter, HHS will be providing funds to state health departments before May 23 through an existing cooperative agreement. Each governor or designee must submit a plan to HHS for COVID-19 testing, including goals for the remainder of the calendar year. Plans must align with the Opening Up America Again Guidelines. 

How the COVID-19 Recession Could Affect HealthInsurance Coverage 

In this brief by the Urban Institute, researchers estimate how an estimated 20 percent unemployment rate could affect health insurance coverage and how an estimated 25-43 million people could lose their employer-sponsored health insurance coverage. More than half of the newly jobless would obtain Medicaid coverage in states that expanded Medicaid under the Affordable Care Act, while only about one-third would receive Medicaid coverage in the 15 states that have not expanded the program, according to the estimates. The analysis assumes less than a quarter of these workers and their dependents in expansion states would become uninsured, while about 40 percent in non-expansion states would become uninsured.

Health Resources and Services Administration Updates FAQs

The Health Resources and Services Administration (HRSA) recently updated frequently asked questions (FAQs). Topics include supplemental funding for heath care centers, the Provider Relief Fund and allocations from the Fund, and claims reimbursement process for COVID-19 testing and treatment for the uninsured. 

HHS Awards Funds to Rural Health Clinics for COVID-19 Testing 

The Health Resources and Services Administration (HRSA) provided rural health clinics $225 million to expand COVID-19 testing through the Paycheck Protection Program and Health Care Enhancement Act. The funding will be divided among 4,500 clinics and can be used to implement testing programs, procuring supplies, training providers and staff, building or constructing temporary structures, leasing properties, and retrofitting facilities as necessary to support COVID-19 response.