Although last month’s partial government shutdown briefly put a hold on the legal drama surrounding the Affordable Care Act (ACA), it didn’t have an impact at the Centers for Medicare & Medicaid Services (CMS), which rolled out proposed changes to the Medicare Advantage program during the 35 days that other federal offices and departments were closed. In this article, RISE looks at recent regulatory actions that impact Medicare Advantage plans, the legal challenges to the ACA, and the latest news involving Medicaid.

 Medicare: Proposed changes to the Medicare Advantage Program

Additional benefits for the chronically ill: In the wake of Health & Human Services Secretary Alex Azar’s announcement that the agency wants to pay for services that address social determinants of health, CMS proposes to give Medicare Advantage plans more flexibility in 2020 to offer supplemental benefits for chronically ill patients, including those who are in chronic pain or undergoing treatment for addiction. Those benefits could cover additional services, such as providing home-delivered meals or transportation for non-medical needs.

The announcement was made with the release of the second part of CMS’ 2020 Advance Notice and Draft Call Letter (you can find the first part, released Dec 20, 2018, on the proposed risk adjustment payment model changes to Medicare Advantage plans here.) The payment model includes new features, such as a count of the conditions identified for each member. Public comment on the proposals listed in Part I and Part II must be submitted by Friday, March 1. CMS intends to publish the final 2020 Rate Announcement and Final Call Letter by Monday, April 1.

New benefits added to voluntary Medicare Advantage model: CMS’ Center for Medicare and Medicaid Innovation has announced updates to an existing model (Medicare Advantage Value-Based Insurance Design or VBID) for Medicare Advantage and Part D plans. The model is voluntary and is meant to increase greater competition between plans and improve quality and lower costs. The VBID model is now available in all 50 states and will allow plans to provide reduced cost-sharing and additional benefits to enrollees, including customization based on chronic condition, socioeconomic status, and non-health care needs; bolster rewards and incentive programs; and additional access to telehealth services. Furthermore, for 2021, the VBID model will allow Medicare Advantage plans to offer Medicare’s hospice benefit.

DOJ takes on another Medicare Advantage risk adjustment court case: The Department of Justice (DOJ) has announced it has intervened in a False Claims Act lawsuit against Sutter Health and Palo Alto Medical Foundation for mischarging the Medicare Advantage program. The case, brought forth by a whistleblower, alleges that Sutter Health and Palo Alto knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under their care. These scores allegedly inflated the risk scores of these beneficiaries and resulted in inflated payments to Sutter. Even after learning about these unsupported diagnosis codes, Sutter failed to take corrective action. The DOJ’s involvement is meant to show it intends to closely monitor provider participation in the Medicare Advantage program. The action “sends a clear message that we will seek to hold health care providers responsible if they fail to ensure that the information they submit is truthful,” Assistant Attorney General Jody Hunt of the DOJ’s Civil Division said in the announcement.

Medicaid: Legal ruling, work requirements

Medicaid expansion stands in Idaho: This week the Idaho Supreme Court ruled that Medicaid expansion, which was passed by voters on Nov. 6, 2018 in a Proposition 2 ballot initiative, is legal. Idaho Freedom Foundation claimed in the lawsuit that Proposition 2 was unconstitutional and delegated too much power to the federal government. But the court found the argument unpersuasive. Indeed, it said that “if it were to accept that any reference to a federal statute delegates lawmaking authority to the federal government, then many of Idaho’s statutes would be unconstitutional, and in fact, the option of any cooperative federal-state program would be curtailed.”

Arizona to impose work requirements: CMS has approved Arizona’s request for an amendment to add work requirements to people enrolled in Medicaid beginning Jan. 1, 2020. The Grand Canyon State is the eighth state to receive federal approval to implement work requirements. The amendment allows the state to require that adults ages 19-49 must engage in “qualifying community engagement activities” for at least 80 hours per month and report that they are meeting the requirements. The Arizona Republic reports that the new work requirements will affect about 120,000 ArizoniansCritics worry that the requirements may lead to Medicaid kicking off vulnerable residents for not having a job.

Meanwhile, WellCare announces program to help Kentucky Medicaid members meet work requirements: WellCare has introduced a benefit to help their Medicaid beneficiaries find work. WellCare Works will offer its 400,000 members help with job and volunteer searches, online career assessments, resume assistance, and job interview tips. William Jones, president of WellCare of Kentucky, told Modern Healthcare that the health plan put the program in place to avoid members losing Medicaid because they didn’t know how to connect with community service opportunities or didn’t know how to write a resume or interview for a job

North Carolina awards five plans contracts for Medicaid: This week the North Carolina Department of Health and Human Services announced the health plans that have received contracts to participate as “prepaid health plans” in Medicaid Managed Care when the program launches in November. Statewide PHP contracts were offered to AmeriHealth Caritas North Carolina, Inc., Blue Cross and Blue Shield of North Carolina, UnitedHealthcare of North Carolina, Inc., and WellCare of North Carolina, Inc. A regional PHP contract was awarded to Carolina Complete Health. The five Medicaid contracts are worth $6 billion per year, according to Modern Healthcare.

ACA: Latest legal twists and turns

Texas v. Azar: A coalition of 18 Democratic attorneys general have appealed to the Fifth Circuit Court a U.S. District Judge’s December 2018 decision that ruled the ACA was unconstitutional because a Congressional tax bill the year prior eliminated the penalty for not having health insurance. The case was briefly put on hold during the government shutdown and lifted on January 28 after President Trump restored funding to the DOJ. Meanwhile the House authorized its general counsel to intervene to defend the health care reform law in the federal court case as well as other cases involving the ACA. The parties now have until Feb. 8 to respond to the motion to intervene. Meanwhile four more states—Colorado, Iowa, Michigan, and Nevada—want to join the Democratic coalition of attorneys general to defend the ACA. The states have requested that the court expedite the appeal.

State of Maryland: A U.S. District Court judge for the District of Maryland has dismissed without prejudice a lawsuit filed by Maryland to enforce the constitutionality of the ACA and prevent the Trump administration from dismantling it. Judge Ellen Lipton Hollander wrote in her opinion that President Trump’s “profound disdain for the ACA cannot be seriously disputed,” and the State would be harmed if the federal government did stop enforcing the ACA. Despite his attempts to repeal the health reform law, there is no current risk that the federal government will stop enforcing it.

“In sum,” she wrote, “the State points to the President's rhetoric, his legislative agenda, his regulatory agenda, and his litigation positions to demonstrate that he might possibly terminate enforcement of the ACA. But, its claim consists of little more than supposition and conjecture about President Trump's possible actions. In effect, the State proclaims that the sky is falling. But, falling acorns, even several of them, do not amount to a falling sky.”

Because she dismissed the case without prejudice, Maryland can refile the case if circumstances change.  Maryland Attorney General Brian E. Frosh said in a statement that the state will “resume this litigation immediately if the President breaks his promise of continued enforcement or when the stay of the Texas Court’s decision is lifted. In the meantime, we will work with the General Assembly to continue efforts to safeguard the millions of Marylanders who rely on the ACA for coverage of preexisting conditions and access to the affordable, quality health care coverage so critical to their health, financial security, and well-being.”

Silver loading changes may be looming: CMS is also seeking comment on the practice of “silver loading,” or increasing cost-sharing reduction-related premiums in only silver-level plans, and the auto-enrollment process through the exchange. The agency said it isn’t proposing any regulatory changes to these practices, but they are seeking comment to help determine better options in the future.