HHS Letter Sets Forth Framework for Medicaid Cost-Sharing Provisions, Extension of HCBS Rule Implementation

On March 14, Secretary of Health and Human Services (HHS) Tom Price and the newly-confirmed Administrator of the Centers for Medicare and Medicaid Services (CMS) Seema Verma sent a letter to state governors suggesting that states should focus on ways to ensure that Medicaid “operates in a way that best serves the most vulnerable populations.” The letter starts by characterizing the current Medicaid program as “outdated”, “rigid”, and full of federal rules that have been implemented and interpreted in way that hinder states from ensuring that Medicaid achieves positive health outcomes for vulnerable individuals and families. One of these hindrances, according to the letter, is the expansion of Medicaid to non-disabled, working age adults contained within the Affordable Care Act (ACA). 

 

The letter then sets forth several keys areas that HHS plans to improve collaboration with states on. It starts by pledging that CMS will engage in a more transparent and efficient State Plan Amendment approval process. Part of this process will be to conduct a full review of managed care regulations, in order to prioritize beneficiary outcomes and state priorities. The letter also reaffirms HHS’ commitment to assist states in programs that “have demonstrated success” in empowering low-income Americans with skills and employment by approving section 1115 demonstrations that innovate around training, employment and independence.

 

The letter then discusses state-led reforms to Medicaid design and benefit structure that could align them with commercial insurance, including cost-sharing, programs similar to Health Savings Accounts (HSAs), premium payments, and waiving non-emergency transportation benefit requirements. It also mentions the used of emergency room copayments to encourage the use of non-emergency providers. Finally, it notes that states should consider waivers of enrollment and eligibility procedures that do not promote continuous coverage, such as presumptive eligibility and retroactive coverage. 

 

Of particular interest to ANCOR members is a section of the letter discussing the timeline for the HCBS rule. The letter notes that CMS has worked with states and other stakeholders to implement the HCBS final rule. The letter then says, “In recognition of the significance of the reform efforts underway, CMS will work toward providing additional time for states to comply with the [rule].” This is significant for several reasons. First, it does not actually extend the implementation date set in the rule of March 17, 2019. Second, it doesn’t include another target date or provide any indication if or when a different implementation date may be set. This could mean that implementation may be extended on a case by case basis rather than as a blanket extension that would cover all states. It could also mean a different timeline for different states. Finally, it is notable because it does not indicate that the rule itself will be rolled back or significantly changed, only that the implementation timeframe may change. Both Price and Verma discussed the rule in their confirmation hearings and did not indicate that the rule would be repealed. The next sentence in the letter reads, “Additionally, we will be examining ways in which we can improve our engagement with states on the implementation of the HCBS rule, including greater state involvement in the process of assessing compliance of specific settings.” This final sentence on HCBS signals that there may be additional guidance forthcoming regarding the heightened scrutiny piece of the settings rule, potentially by providing states more flexibility to determine whether a setting meets the criteria to undergo heightened scrutiny.