Budget Blog

July 2, 2020 - Health Care Issues Update

By Stacey Mazer posted 07-02-2020 01:35 PM


CMS Medicaid Fiscal Accountability Proposed Rule in Final Regulatory Stage

The Centers for Medicare & Medicaid Services (CMS) published the Medicaid Fiscal Accountability Proposed Rule in November 2019 that has significant implications for both how states finance their Medicaid programs as well as make supplemental payments to Medicaid providers. The Office of Information and Regulatory Affairs (OIRA) updated its regulatory agenda, which includes a line item targeting September 2020 for finalization of MFAR. The proposal represents a major shift in the Medicaid state-federal partnership by giving CMS greater authority to determine how states fund their share of the program. States’ concerns about the proposed rule include the impact on intergovernmental transfers, provider taxes, certified public expenditures, supplemental payments, and other financing arrangements. States also are concerned about the budget uncertainty this rule would create and the lack of clarity about federal approvals for financing methods, the overall budget impact, increase in federal reporting requirements, and loss of dollars for health care services. The National Governors Association (NGA) submitted comments to CMS on MFAR expressing concerns that the proposed rule, as drafted, would significantly curtail the longstanding flexibility states have to fund and pay for services in their Medicaid programs.


Health Groups Send Letter on Renewing Public Health Emergency

The Association of State and Territorial Health Officials (ASTHO), along with several other health associations and groups, sent a letter to Health and Human Services Secretary Alex Azar urging him to renew the current public health emergency (PHE) declaration for at least an additional 90 days before it expires on July 25. The letter notes the increases in infections and hospitalizations in many states and localities due to COVID-19, even as these areas prepare for seasonal threats including hurricanes, wildfires, and influenza. The request highlights a PHE is necessary for actions including facilitating coordination and collaboration across and amongst federal agencies and with state and local authorities; facilitating the approval of new diagnostic tools to expand testing; and facilitating the approval of vaccines and antiviral drugs. Under the Families First Coronavirus Response Act, the duration of the 6.2 percent Federal Medical Assistance Percentage (FMAP) increase continues through the end of the quarter in which the public health emergency for COVID-19 ends. The current PHE can be found here. HHS spokesman Michael Caputo indicted that HHS intends to extend the COVID-19 public health emergency that is set to expire July 25 for another 90 days though no official announcement has been made. 


Fiscal Impact of COVID-19 on Medicaid Enrollment and Spending

An analysis by Manatt Health looks at growth in Medicaid enrollment, changes in per enrollee costs, and assumptions about the duration of the enhanced Federal Medical Assistance Percentage (FMAP) under the Families First Coronavirus Response Act. Projections for Medicaid spending increases vary depending on assumptions about unemployment rates with state Medicaid spending estimated to increase by $5.9 billion and federal spending by $115.9 billion under a low enrollment scenario and by $34.9 billion and $183.9 billion under a high growth scenario by December 2021. The public health emergency is assumed to last through calendar year 2020. States would need a 14 percent FMAP increase through October 2021 to address state shortfalls according to their estimates. The analysis also included a 50-state databook on the potential impact in federal and state Medicaid and CHIP expenditures during calendar years 2020 and 2021 across all 50 states and the District of Columbia for a given scenario and policy response. Based on tracking by the Georgetown University Health Policy Institute, Medicaid enrollment growth increased by 5.8 percent in the 15 states tracked over the past three months.


CMS Report on Health Insurance Exchange Enrollment Data During COVID-19

The Centers for Medicare & Medicaid Services (CMS) released a trends report that provides data on the number of individuals who signed up for coverage on HealthCare.gov through a special enrollment period during the COVID-19 pandemic. As a result of the economic disruption that followed COVID-19 outbreaks, many consumers experienced life changes, particularly related to employment, that allowed them to enroll in health coverage through the Exchange. The number of consumers gaining coverage in states with Exchanges using the HealthCare.gov platform increased by 46 percent from the prior year.


HHS Extends COVID-19 Testing Public-Private Partnership

The Department of Health and Human Services (HHS) announced the extension of its partnership with national pharmacy and grocery retail chains for COVID-19 testing. The contract uses a federal bundled payment program paid directly to retailers that receive a flat fee for each test administered, with participating retailers responsible for coordinating the full end-to-end testing. The partnership, which is part of the Community-Based Testing Program, has scaled up to more than 600 testing sites in 48 states and the District of Columbia.