Kansas Lawsuit Filed Against Huge Medicaid Cuts Denied

The Kansas Supreme Court last week said it lacked jurisdiction to take up a lawsuit filed on behalf of Kansans with disabilities. The action leaves open the door for litigation to be filed in a lower district court as groups representing the disabled reel from a 10 percent cut in Medicaid reimbursements.

The case stems from a 10 percent cut to funding for Medicaid reimbursements—money that Governor Parkinson (D) said he wants to see restored even as lawmakers battle a budget gap now exceeding $400 million. He called restoring the funds "critical."

The 10 percent cut, which was implemented in January, eliminates $22.7 million in state funds for Medicaid programs this year. Of that, about $6.2 million affected services for people with disabilities and mental health programs. The state-level cuts also meant the state lost significant matching federal funds, which pay about 70 percent of Medicaid costs.

The Kansas Department of Social and Rehabilitation Services has seen its waiting list for people with developmental disabilities seeking home and community-based services expand to 2,236 as of February 28. That is up from 1,397 in July 2008 and 1,655 in July 2009.
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Mississippi Health Care Association Files Suit to Stop Medicaid Cuts

The Mississippi Health Care Association, the Independent Nursing Home Association and dozens of nursing homes from across the state filed a lawsuit Thursday seeking to stop the Mississippi Division of Medicaid from making a planned $14 million cut in payments to providers.

The lawsuit filed in Hinds County Chancery Court late Thursday afternoon argues that state reserve funds can be used to shore up the Medicaid budget and the cuts are unnecessary.

The suit seeks an injunction to stop the cuts over the uncertainty of "adequate funding" for providers. The cuts are pending federal permission.

Mississippi Medicaid recently announced plans to cut $14 million in reimbursements to health care providers for services for the remainder of the fiscal year, which ends June 30, because of successive months of revenue collections below estimates. However, tax revenue collections were on target in March.

Calls by Democratic lawmakers to dip into state reserves to close the gap have been rebuked by Governor Barbour (R), who argues the state's savings needs to last for several years.

The largest chunk of money went to public education, and Medicaid was not on the restoration list. About $14 million of an $82 million budget patch-up plan approved by lawmakers, however, was provided via a stimulus-related federal government reimbursement to the Division of Medicaid.


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New Reports on Medicaid and State Conditions

Kaiser releases a new report on Medicaid’s Continuing Crunch in a Recession: A Mid-Year Update for State FY 2010 and Preview for FY 2011. From the beginning of state fiscal year 2010, fiscal pressures have escalated and additional program reductions have become a necessity to balance state budgets. Half-way through the states' fiscal year, a total of 44 states and D.C. report that Medicaid enrollment and spending trends are above projected levels. Twenty-nine states report that additional mid-year cuts are likely. The February 22nd issue brief reports on interviews with all Medicaid directors about several issues, including the effects of the recession. Their primary concern is the upcoming end of the enhanced federal Medicaid match (as provided in the ARRA) and what that will mean for state budgets.

Kaiser Update on State Fiscal Conditions and Medicaid on How States Used ARRA Enhanced FMAP and State-by-State Measure of State Fiscal Distress.
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HHS Secretary Response to Senate Letter on Medicaid PERM Rates

In response to a letter from Senator Cornyn (R-TX) asking for CMS information on Medicaid's improper payment rates (PERM) for 2007 and 2008, Secretary Sebilius released a letter February 25th detailing state-by-state Medicaid PERM rates for those years. Cornyn had raised the issue because “CMS had reported Medicaid's improper payment rates average between 8.7 percent and 10.5 percent among the states, which is substantial considering the combined federal/state spending on Medicaid reached approximately $438 billion in 2009.” Sebelius reported a national Medicaid error rate of 9.6 percent in its FY 2009 Agency Financial Report. The error rate was based on a weighted average of the states that were measured in FY 2007 and FY 2008.

In her letter, Secretary Sebelius said that that “CMS uses a 17-state rotation so that each state is reviewed once every three years. FY 2007 was the first year in which states were fully measured in each component of the PERM measurement. Therefore, we are only providing information about state rates for FY 2007 and FY 2008; the remaining states will be measured during the FY 2009 rotation.” She reported that for all the states sampled in FY 2007, the average rate was 10.5% with Rhode Island having the largest PERM rate of all sampled states, at 21%--followed by California at 16% and Georgia at 12 %. The combined rate for all sampled states in FY 2008 was 9%--with the top three PERM rates belonging to Oregon at 21%, Washington, D.oiC. at 20%; and Indiana at 17%. Read more!

State of the States: The State We're In Report Examines Health Reform Efforts in 2009 and Initiatives Underway in 2010

This new Robert Wood Johnson Foundation report it examines how states responded to declining job-based coverage and rising health care costs, as well as Medicaid eligibility and CHIP enrollment in 2009, when many states went forward with meaningful health care reforms despite the fiscal challenges they faced. Read more!

Kaiser Examines Medicaid and Managed Care

The Kaiser Commission on Medicaid and the Unisured issued a policy brief Monday, February 8th which provides an overview of the Medicaid program’s increasing reliance on managed care to deliver services. Medicaid provides health and long-term care coverage to nearly 60 million low-income individuals, or roughly 1 in 5 Americans. About 70 percent of Medicaid enrollees receive some or all of their services through managed care. Adopting managed care also gives states more cost predictability and control over their Medicaid programs, and contracts with managed care plans offer states a mechanism, through quality measurement and improvement requirements, for holding plans accountable for the quality of care they provide to Medicaid enrollees. Read more!

Grassley Introduces Bill to Fight Fraud, Waste, and Abuse in Medicaid, Medicare, and SCHIP

On the same day that the departments of Health and Human Services and Justice held a Summit on Health Care Fraud (see related article) Ranking Senate Finance Member Chuck Grassley (R-IA)Thursday introduced the “Strengthening Program Integrity and Accountability in Health Care Act." Grassley's legislation brings together "bipartisan initiatives to fight fraud, waste and abuse in taxpayer-sponsored health care programs, which all face serious budgetary challenges.” It includes many of the themes for fighting fraud addressed in the HHS/DOJ summit.

The bill would strengthen the Federal False Claims Act, strengthen provider screening requirements, establish provider compliance program requirements and increase disclosure requirements of entity and provider ownership, increase federal funding, strengthen reporting requirements for Medicaid and Medicare Integrity Programs, and improve collection and sharing of data. “As spending on these programs continues to grow, Congress should act quickly to pass these reforms out of respect for taxpayers and on behalf of program beneficiaries.”

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Thompson Reuters Releases 2008 Medicaid LTC Expenditures

ThompsonReuters has released the 2008 Medicaid long-term care expenditures and HCBS waiver expenditures. To access them please visit our Data & Statistics website. Read more!

HHS Using Tougher Standards to Calculate Improper Medicare Payment Rates for 2009

As part of the Obama Administration’s goal of reducing waste, fraud and abuse in Medicare, the HHS and CMS significantly revised and improved its calculations of Medicare fee-for-service (FFS) error rates in 2009. “As we move forward in our review of the Medicare and Medicaid error rate data, we expect to be able to determine if there are specific trends that can better help us identify weaknesses in our programs or systems,” said Acting CMS Administrator Charlene Frizzera. “We hope to be able to use data available through the use of new electronic health record reporting that can help in the design of new and innovative approaches to finding emerging trends and vulnerabilities in high risk areas such as durable medical equipment and home health.” HHS Secretary Kathleen Sebelius and Frizzera also pointed out the HHS and the CMS would invest more time and resources into working with providers to eliminate errors through increased and improved training and education outreach. “It’s important that we continue to work closely with doctors, hospitals and other health care providers to make sure they understand and follow the more comprehensive fee-for-service requirements,” said Frizzera. “We are committed to working closely with them to reduce the rate of improper payments.”
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CMS Withdraws Medicaid Rehab Proposed Rule

CMS is withdrawing the proposed rule, “Medicaid Program: Coverage for Rehabilitative Services” originally published in the Federal Register on August 13, 2007 (72 FR 45201). The withdrawal notice will be published in the November 23, 2009 Federal Register. As you will recall, the rule proposed to “clarify the definition of Medicaid ‘rehabilitative services’ [including elimination of rehabilitation services except under certain circumstances], established new documentation [including 15-minute unit billing], and other requirements.”

CMS received a total of 1,845 public comments in response to the August 13, 2007 proposed rule. Congress included a moratorium on this regulation on December 29, 2007 and that moratorium was extended until April 1, 2009 in the Supplemental Appropriations Act of 2008. Before that moratorium was up Congress included a “Sense of Congress” in the American Recovery and Reinvestment Act of 2009 that the HHS Secretary should not promulgate as a final regulation the August 13th proposed rule. CMS has decided to withdraw the August 2007 proposed rule in light of Congressional concerns, public comments in 2007, and in order to assure agency flexibility in re-examining the issues, options, and alternatives with both the Congress and stakeholders.

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Medicaid Audits Got Down? ANCOR is Offering a Two Part Series on How Providers Can Survive Audits and Reviews with Barb Edwards. Save the Date!

Did you miss ANCOR's most popular Governmental Activities Seminar preconference EVER?

If you couldn't make it to the September conference, or even if you want to hear it all again and want another chance to ask The Expert, ANCOR is excited to bring you a series of two webinars featuring Barb Edwards and her Medicaid expertise. Ms. Edwards is a principal in Health Management Associates, former interim director of the National Association of State Medicaid Directors, and former Ohio State Medicaid Director.

Dates: November 16th and November 23rd

Time: 2:00 PM to 4:00 PM (EST) both days

Registration Begins Next Week-Watch for Details
(Can't make the date - Order a recording)

Driven in part by Congressional pressure to combat fraud, waste and abuse, there is a growing attention being paid to program integrity within the Medicaid program. Many state and federal players have authority to conduct provider audits or other reviews under Medicaid, and audits have increased. Find out what providers need to know to about the purpose and use of audits and how to prepare for them.

Webinar #1: Medicaid Program Integrity and YOU

Ms. Edwards will take you through the history of Medicaid's focus on program integrity and the federal structure of Medicaid. She will also cover the KEY Medicaid integrity programs, including PERM (Payment Error Rate Measurement) and HHS Office of Inspector General audits, including their purpose, audit protocols, how CMS uses these audits, and MUCH more! You will also hear directly from other ANCOR providers about their experiences. Of course, time will be allowed for "Q and A" with Barb and the provider-presenter.

Webinar #2: Providers and Medicaid Oversight: Getting Ready

Ms. Edwards will give a more detailed look at three federal oversight programs: waiver reviews, the Medicaid Integrity Program, and the False Claims Act. She will also focus on provider readiness for these audits. Again, hear from an ANCOR provider with first-hand experience and take advantage of the "Q and A" session following the presentation.

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New Kaiser 50-State Survey Reports Sharp Increase in Medicaid Enrollment and Spending Amidst Worst Recession in Decades.

The annual Kaiser Commission on Medicaid and the Uninsured 50-state survey of state Medicaid officials found that the increased federal, temporary Medicaid assistance (FMAP) was critical to states. However, the survey results also find that the number of people on Medicaid and state spending on the program are climbing sharply as a result of the recession, straining state budgets and pressuring officials to curb costs. Total Medicaid spending growth averaged 7.9 percent in FY 2009, the highest rate in five years, well above the 5.8 percent projected growth. For FY 2010, states estimate Medicaid enrollment will grow by 6.6 percent over FY 2009 levels, with Medicaid spending across states expected to grow by an average of at least 6.3 percent in fiscal 2010.
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CMS Issues ICF/MR Clarifying Memo on “Client Right to Manage Financial Affairs and Money Management Training”

CMS issued the letter on July 10th. ANCOR offered comments prior to the letter publication and many suggestions were incorporated. The letter puts the assessment and determination for the need for formal money management programs in the hands of the interdisciplinary team (IDT). Providers who are cited will want to have this letter handy – as long as their IDTs review the comprehensive functional assessment (CFA) and discuss the need for a formal program for each client (who is the chronological age to utilize money) and document their reasoning when there is no formal objective. If the surveyors find that the CFA and the individual’s skills (and age) support the need for a formal program, and there is not one, they can cite a deficiency during the survey process.

ANCOR suggestions incorporated into the letter:
· Added the use of the “formal objective” vs. just saying money management program
· Changed several “must be” to “is” to show that the standard regarding use of CFA continues and is not new
· Softened what must be included in the assessment from dictating - “Assessment findings should include at a minimum:” and changed it to “Assessment findings to be considered by the team include skills that can be cross-utilized in training programs such as:”
· Took out the use of the work “transferable” but changed it to “cross-utilized”.
· Added that the CFA must be reviewed at least annually, but did leave in that the annual review “should always include an update to the CFA and take into consideration any changes in the individual’s circumstances since the last IDT.”

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CMS Releases New FMAP Frequently Asked Questions

Today, the CMS released one of a series of Medicaid Frequently Asked Questions (FAQs) designed to provide guidance on the implementation of the American Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5.The FAQs address questions that have been submitted to the ARRA mailbox, CMSOARRAQuestions@cms.hhs.gov. Future Medicaid FAQs letters will be issued in the coming weeks and months. This CMS document, along with other CMS documents on the FMAP increase under the ARRA stimulus legislation is available on ANCOR’s Economic Recovery web page. Read more!

President Proclaims Year of Community Living

Marking the 10th Anniversary of the U.S. Supreme Court’s Olmstead decision, President Obama launched a new effort to assist Americans with disabilities—The Year of Community Living. The President directed Health and Human Services Secretary Kathleen Sebelius and Housing and Urban Development Secretary Shaun Donovan to work together to identify ways to improve access to housing, community supports, and independent living arrangements. In joining the President in commemorating the anniversary of the Olmstead decision, HHS Secretary Sebelius announced that agencies within her department would begin aggressively addressing barriers that prevent some Americans with disabilities from enjoying a meaningful life as part of their community.

Throughout this “Year of Community Living,” HHS will hold listening sessions, giving stakeholders an opportunity to come together for a common purpose: overcoming barriers to community-based living for people with disabilities and the elderly. These forums will help HHS craft the agenda to improve federal programs and better support the efforts of state and local government.

HUD announced that it will make1,000 housing vouchers available for individuals with disabilities transitioning from institutions to the community—targeting states operating Money Follows the Person Demonstration programs. HUD will award an additional 3,000 housing vouchers to serve non-elderly people with disabilities and encourage Public Housing Authorities to form working relationships with state Medicaid agencies interested in addressing community living needs of beneficiaries.
See the next issue of LINKs for more information. Read more!

CMS Issues Advance Notice of HCBS Waiver Rulemaking

The June 22nd Federal Register included a CMS Advanced notice of proposed rulemaking on the Medicaid 1915(c) waiver. The notice invites advanced public comments by August 21, 2009. The “advanced” notice is an announcement of CMS’ intention to publish a proposed rule and solicit public comments on the changes. Last year, ANCOR provided CMS with comments on the areas it is now asking for public comments on in this advanced notice. CMS is seeking to make changes in several areas: providing states with the option of designing 1915(c) waivers to serve more than one targeted population based on functional need rather than diagnosis or condition: recommendations to strengthen person-centered principles in HCBS waiver; requirements related to identifying home and community-based character of HCBS settings; and standards for defining home and community under waivers and CMS approval of a state’s definition. ANCOR will be submitting comments to CMS. Read more!

Chairman Pallone Introduces Senate Version of Empowered at Home Act

House Energy and Commerce Subcommittee on Health Chairman Frank Pallone (D-NJ) introduced today the House version of the Empowered at Home Act (H.R. 2688). This bill would improve the state plan amendment option (1915i) for providing home and community-based services under the Medicaid Program. The state plan amendment option was passed as part of the DRA. Senators John Kerry (D-MA) and Charles Grassley (R-IA) introduced the Senate version in July. Read more!

Three CMS Regs Rescinded--with Partial Rescission of Targeted Case Management

HHS Published a notice in the Federal Register May 6 rescinding the outpatient and school-based health regulations and partially rescinding the targeted case management regulation. The provider tax regulation is being delayed for one year while more information is gathered. Read more!

Health Care Groups and Finance Committee Chair Advocate Expansion of Medicaid Program

Families USA, a national consumer health organization, and PhRMA, a pharmaceuticals group, are joining together to promote the expansion of the Medicaid program. On April 21, the groups launched a campaign to make health care more accessible and affordable by reforming Medicaid eligibility. These policy changes are intended to be included with health care reform legislation being developed in Congress. The groups advocate establishing an eligibility floor for Medicaid of 133 percent of poverty and sliding-scale subsidies for those who cannot afford to purchase insurance but do not qualify for Medicaid. Senate Finance Committee Chairman Baucus (D-MT) released a statement on the proposal saying that “increasing Medicaid access is a critical part of health care reform.” Read more!

States Cut Social Safety Net as Deficits Grow

Widening budget deficits have prompted a majority of states to cut safety net programs including services to the elderly and disabled. The American Recovery and Reinvestment Act (ARRA) passed in February provides $787 billion for a variety of programs but the money is estimated to cover only 40% of losses to state revenues. As a result, at least 34 states have already cut services to vulnerable populations. Read more!