National Litigation Trends and Regulatory Update Dena Feldman
National Litigation Trends and Regulatory Update Dena Feldman Philip Peisch Covington & Burling LLP NASMHPD/NASDDDS Legal Divisions Meeting November 12, 2013 The Medicaid Expansion and Alternative Benefit Plans
Alternative Benefit Plans New low-income adult group will be covered by Alternative Benefit Plans (ABP), not full state plan benefits ABPs are what used to be called benchmark coverage under Section 1937 Enforcement flexibility in 2014 3
Alternative Benefit Plans ABPs must cover Essential Health Benefits Complex ABP design process: compare/combine Section 1937 plan with commercial base benchmark plan Essential Health Benefits include rehabilitative and habilitative services and devices mental health and substance use disorder services, including behavioral health treatment
4 Alternative Benefit Plans Secretary-approved Section 1937 plan Alignment with state plan? Access to home and community based services? 5
Alternative Benefit Plans Mental Health Parity and Addiction Equity Act applies to ABPs CMS applies Medicaid IMD exclusion to ABPs 6 Alternative Benefit Plans Other ABP requirements: family planning services, EPSDT, non-emergency
transportation Arkansas Private Option: State provides premium assistance for purchase of qualified health plans on the Exchange State provides wrap-around services to enrollees have access to ABP coverage 7 Alternative Benefit Plans Certain populations exempt from mandatory
enrollment in an ABP and have a choice between ABP and State Plan ABP Medically frail or otherwise an individual with special medical needs 8 Mental Health Parity and Addiction Equity Act (MHPAEA) Final Rule
9 MHPAEA Final Rule Six classifications: (1) inpatient, in-network; (2) inpatient, outof-network; (3) outpatient, in-network; (4) outpatient, out-ofnetwork; (5) emergency care; (6) prescription drugs Financial requirements and quantitative treatment limits for mental health and substance use disorder (MH/SUD) benefits must not be more restrictive than the predominant limits or requirements of that type applied to substantially all medical/surgical benefits within the classification Nonquantitative treatment limits: any processes, strategies,
evidentiary standards, or other factors for MH/SUD benefits must be comparable to and applied no more stringently than processes, strategies, evidentiary standards, or other factors applied to medical/surgical benefits within the classification 10 Brief Litigation Update Brief Litigation Update
States required to cover Applied Behavior Analysis therapy for children with autism spectrum disorder? CMS: Applied Behavior Analysis is generally not an EPSDT benefit Olmstead: many questions remain 12
DSH Allotments DSH Allotments Will see reductions beginning in FY 2014 ACA
$500 million in 2014 Increase to $5 billion in reductions by 2019 Congress extended to 2022 Presidents budget called for delay, but Congress has not implemented In September, CMS finalized a DSH Reduction Methodology for 2014 and 2015 No accounting for Medicaid expansion 14
DSH Allotment: Impact on IMDs Section 1923(h) of the Social Security Act imposes limit on DSH for IMDs Limit is the lowest of: The percentage of the States DSH payments paid to IMDs in 1995 Dollar amount of DSH payments made in 1995 33% of the States DSH allotment
15 DSH Reductions Specifics DSH Health Reform Methodology (DHRM) Impose largest percentage of reductions on States with lowest percentage of insured based on most recent data Impose larger reductions on States that do not target DSH payments to high volume hospitals Impose larger reductions on States that do not
target DSH payments based on uncompensated care Impose smaller percentage on low DSH States Based on percentage of States total plan expenditures 16 DSH Allotment: Impact on IMDs In preamble to the final rule, CMS states that it will calculate the IMD DSH limit based on the DSH allotment after reductions are
implemented. Thus, DSH funds for IMDs will have a corresponding reduction to overall reductions 17 Certification of Psychiatric Hospitals Certification of Psychiatric Hospitals
Issue: Must psychiatric hospitals meet the special Medicare Conditions of Participation (CoP) in order to claim DSH funds? Pending OIG audits in several States In past year, OIG has finalized several reports recommending disallowances for DSH funds paid to IMDs that dont meet the special Medicare CoP 19
Certification of Psychiatric Hospitals: Special Medicare CoP Staffing 42 C.F.R. 482.60 Recordkeeping 42 C.F.R. 482.61 20
Certification of Psychiatric Hospitals: The Joint Commission (TJC) Accreditation Formerly JCAHO Medicare law and regulations permit CMS to deem hospitals accredited by TJC Medicaid certification can be established through deemed status Until recently (2011), TJC deeming authority did not extend to Medicare special CoP See 42 C.F.R. 488.5
Notice in FR modifies for Feb 25, 2011 through Feb 25, 2015 21 Certification of Psychiatric Hospitals: OIG Audits States paid DSH funding to psychiatric hospitals that did not satisfy special Medicare CoPs though they had TJC accreditation
OIG position: Prior to Feb 2011, no Medicaid payments, including DSH, may be made to psychiatric hospitals that did not undergo separate survey for two special CoPs. 22 Certification of Psychiatric Hospitals: States Position
There is no statute, regulation, or CMS guidance advising that a facility must be Medicare certified in order to be eligible for DSH payments DSH statute allows for payments to institutions for mental diseases and other mental health facilities. Receipt of regular Medicaid payments is not required for receiving a DSH payment.
23 Status So far, CMS has been silent on whether it agrees or disagrees with OIG Pending in several states some with potential disallowances of over $100 million 24
New Omnibus Health Privacy Rule (HIPAA) HITECH Omnibus Privacy Rule Business Associates now liable And subcontractors More stringent standard for deciding what is a breach Presumption that unauthorized disclosure is a
breach unless low probability that PHI has been compromised. No more risk of harm test 26 HIPAA: Implications for Mental Health Providers and Health Plans Authorization required for disclosure of psychotherapy notes
Revisions of Notice of Privacy Practices Update Business Associate Agreements New provisions in individual rights Right to restrict disclosures Right of Access to PHI in electronic format 27 HIPAA: Compliance Date Compliance date was September 23, 2013
Business associate agreements entered into before January 25, 2013 have until September 22, 2014 Unless changed or amended 28 D.C. Circuit Ruling on IMD Under 21 Virginia v. HHS
Virginia v. HHS Case concerned the scope of services for children (under 21) in IMDs. Court upheld HHS position that the statute prohibits Medicaid from paying for any services other than inpatient psychiatric services provided to children in IMDs meaning of inpatient psychiatric hospital services for individuals under age 21
30 Virginia v. HHS CMS has issued an Informational Bulletin on allowed services on flexibility currently available to states to ensure the provision of medically necessary Medicaid services to children in inpatient psychiatric facilities 31
Inpatient Psychiatric Services for Individuals Under 21 Included in childs inpatient psychiatric plan of care Must involve active treatment designed to achieve childs discharge from inpatient status Services must be provided by a qualified psychiatric facility Facility must arrange for and oversee provision of all services, maintain medical records, ensure services are
under care of a physician Furnished by a qualified provider that has entered into a contract with the inpatient psychiatric facility to furnish services to inpatients 32 Practical Effect of CMS Guidance Medicaid-eligible child in IMD breaks leg. Will CMS reimburse? Is the care provided in the facility or individual
practitioner that has entered into a contract with the facility? Is it included in plan of care? (all necessary medical services). 33 Medicaid Managed Long Term Services and Supports (MLTSS)
MLTSS Delivery of LTSS through capitated Medicaid managed care More and more States --16 in 2012; CMS expects 26 in 2014. May be operated under multiple federal authorities as approved by CMS 1915(a), 1915(b), Section 1115 Can be paired with HCBS
35 CMS Required Elements for MLTSS Adequate planning Stakeholder engagement Enhanced provision of HCBS Consistent with
Olmstead Alignment of payment structure and goals Beneficiary support and education Person-centered process Comprehensive,
integrated service package Adequate network of Qualified Providers Participant Protections Quality 36 CMHC Conditions of Participation
New Rule on CoPs for CMHCs Codified at 42 C.F.R. Part 485, Subpart J Effective October 29, 2014 Areas of focus: Staffing, integrated care, client rights, personcentered approaches, coordination of services and active treatment plan, quality assessment and improvement 38
MQHC: Conditions of Participation Concern: CMHCs cease to provide services after regional office determination; mistreatment of clients; fragmented care; minimal options for termination from Medicare program First time federal law has established requirements for CMHCs to participate in the Medicare program 39
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