INSIDE THE ISSUE

> Time to Reassess the Benchmark
> MHA on State Budget
> Governor Seeks to Shake Up System
> Office of Patient Protection
> MHA to CMS on Prior Authorizations
> Surprise Billing Guidance
> Medicaid and the PHE

MONDAY REPORT

HPC Benchmark Process Should Not Be an Academic Exercise

The Health Policy Commission (HPC) and the Joint Committee on Health Care Financing last Wednesday held a hearing on the state’s cost growth benchmark that delved deeply into the healthcare finance data that existed two years ago – before the pandemic hit.

Pursuant to Chapter 224, from 2023 through 2032, the Health Care Cost Growth Benchmark is set equal to potential gross state product, or 3.6%, unless the HPC determines that an adjustment to the growth standard is reasonably warranted. Because there is a two-year lag before the Center for Health Information and Analysis (CHIA) publishes its annual report on cost growth during the time period in question, the HPC sets the future benchmark based on past data, while not focusing on the present. Yet the past two years have been the most transformational for the healthcare system in generations.

In its written testimony to the HPC last Wednesday, MHA wrote, “Under normal times and when financial performance was more consistent, these lags between benchmark setting, measurement of cost growth, and filing of performance improvement plans may have been reasonable. However, given the pandemic and its continuing effects on healthcare providers and the current state of the Massachusetts economy – which includes substantial inflation, labor cost increases, and numerous examples of new spending – the existing timelines result in a cost benchmarking mechanism that is neither a fair nor an appropriate way of evaluating year-to-year changes in healthcare spending.”

MHA proposed that for FY2023, the HPC and legislature pause the benchmark and take the time to investigate “a meaningful, modernized approach that incorporates real-time circumstances and pressures on the healthcare system.” The fact that CHIA’s most recent available hospital data (July 2021) shows the statewide median operating acute hospital margin at 1.6% – half of what it was in 2019 – and that the healthcare system is beset by workforce shortages, spiking labor costs, and the inflation affecting the rest of the economy, makes the benchmark impractical, MHA argued. Hospitals have also expressed concern regarding commercial insurers using the benchmark as a cap on any rate increases.

In his oral testimony before the HPC, MHA’s President & CEO Steve Walsh, who as a former legislator was instrumental in crafting the HPC and the cost growth measure, said, “When we made that historic move to set a benchmark, it was carefully based on the assumption of smooth growth, inflation, and overall economics. Of course, the current financial realities facing our healthcare providers – and our commonwealth as a whole – are anything but smooth.

“The original idea for this benchmark was that it would be set at roughly a point-and-a-half greater than inflation, which was averaged at 2%. Of course, that would be incredibly unrealistic at this extraordinary moment for the healthcare system; inflation is now at 7%, which would mean that the benchmark needs to be 8.5% or higher simply to be consistent with the way it was created and envisioned. So this leads us to one of the inherent flaws of 224 by its very nature: it has you assess the past in order to regulate the future, while all the time never focusing on the present.”

Walsh said until HPC commissioners are able to assess the real-time, real-world experiences of hospitals, the benchmark process will continue to be flawed. He invited the commissioners to visit hospitals, adding, “Talk to frontline workers and support staff, walk the halls of a hospital to really understand what’s at stake in today’s environment. This is not an academic exercise. It’s about the unprecedented challenges our providers are facing. It’s about people. It’s about patients.”

MHA Offers Healthcare Opinion as State Budget Process Proceeds

Now that Governor Baker’s FY23 state budget proposal (H.2) has been filed, and the house’s own budget is set to be released in April, MHA recently wrote to legislative leaders to give the healthcare community’s broad overview of healthcare priorities following two years of the pandemic. The Senate’s budget bill is expected in May.

The major issue in this year’s budget process is the pending Medicaid waiver that has been filed with the Centers for Medicare and Medicaid Services (CMS) and the new hospital assessment that is a major supporting component of the waiver plan. The Massachusetts legislature must enact many elements of the assessment and related Medicaid spending plan into law, including safeguarding the funding in new trust funds and specifying the assessment amounts to be collected from hospitals over the next five years.

“The hospital assessment and related spending provisions now before the legislature will further the priorities of the commonwealth on several important fronts, including advancing health equity, improving clinical outcomes, supporting safety net providers, investing in delivery system reforms, and addressing reimbursement to hospitals for the care they provide to MassHealth patients,” MHA wrote to legislators. “MHA looks forward to working with the legislature to realize this historic opportunity to enhance the viability of Massachusetts hospitals and the MassHealth program.”

Among the many other priorities MHA outlined in the letter was a call to address the behavioral health crisis that results in more than 600 patients regularly boarding in acute care hospitals each week as they await placement in mental health facilities and units. To help address the behavioral health workforce challenges that contribute to the crisis, MHA recommended ensuring adequate resources for patients while they board and the continued funding of a grant program for innovative approaches to address the issue. MHA also requested the legislature restore the commonwealth’s contribution to the Health Safety Net at the statutory level in light of increased cost pressures on hospitals; this would raise the contribution by $15 million compared to FY22.

Governor’s Bill Would Shift Healthcare Priorities

Governor Charlie Baker, in re-filing his health reform bill that he initially introduced pre-pandemic, said he hopes to shift how the entire healthcare system prioritizes higher-end specialty services over long-neglected “soft services,” such as primary and behavioral healthcare, geriatrics, and pediatrics.

An Act Investing in the Future of Our Health requires providers and payers to increase expenditures on primary care and behavioral health by 30% over three years by rebalancing current expenditures. The bill gives providers and payers flexibility on how they achieve the target, but they must remain under the state’s healthcare cost growth benchmark while doing so. Under the legislation, calendar year 2019 would serve as the baseline year against which the 2024 target would be measured.

In announcing the legislation last Tuesday at the Codman Center Health Center, Baker said United States healthcare essentially bases all reimbursements on a single platform – Medicare.

“And Medicare, generally speaking, has always favored technology and transactional services over what we’d call ‘soft services’ – primary care, addiction services, behavioral health and geriatrics,” the governor said. That focus results in higher-end surgical and specialty services being reimbursed well, which in turn results in medical school students focusing on the higher-paying disciplines as opposed to the relatively lower-paying softer services, he said.

Baker said there is now a consensus that behavioral health and primary care must be improved to bring about the benefits of population health management and lower costs. There is general agreement that people need to be seen within the community and receive timely treatment to avoid conditions worsening and patients ending up in emergency departments. To bring that shared goal about, Baker said, “You have to be willing to fund it,” and to do that, he added, is to “require, not encourage, providers and payers to put more resources into primary care and behavioral health services.”

The governor’s bill contains many other components aside from the 30% funding shift that are detailed in this summary from the administration. It addresses surprise billing, focuses on pharmaceutical costs, expands the scope of practice of some providers, and, importantly, provides increased flexibility for providers delivering telehealth services.

MHA vowed to provide feedback to the legislature and administration as the bill progresses. In a statement to the media after an initial review of the administration’s summary document, MHA said, “Our members agree that now is a critical time to improve and invest in the commonwealth’s care delivery system. We strongly support many of the measures put forth in the governor’s legislation, including those aimed at boosting the healthcare workforce, expanding access to telehealth and urgent care, and making prescription drugs more affordable for patients … With more than 600 patients regularly waiting for specialized psychiatric treatment in ERs and hospital units, a focus on broadening behavioral healthcare is vital.”

The state’s Office of Patient Protection (OPP), which since 2013 has been part of the Health Policy Commission, released its annual report recently, showing that during 2020 Massachusetts health insurance companies reported 11,650 member grievances, which include many different types of complaints, such as disputes over coverage for treatment or cost-sharing. According to the OPP, insurers resolved more than 50% of those complaints in favor of consumers.

After consumers exhaust an insurer’s internal review process, they can pursue an external review, but only if the insurer’s determination was based on whether the specific treatment or service at issue was medically necessary, including whether the health plan determined that the service was experimental or investigational. When the OPP receives a request for an external review it farms it out to one of four nationally accredited review groups.

“During 2020, OPP screened 240 external review requests for eligibility,” the office writes in its annual report. “174 or 73% of these requests were deemed eligible for external review. Of the eligible cases, 47% were overturned in whole or in part or modified by the external review agency in favor of the patient. Approximately 2% of the eligible cases were resolved between the patient and the insurer or withdrawn before a final determination was issued by an external review agency. The external review agencies upheld the remainder of the cases, which accounted for 51% of cases eligible for review.”

Office of Patient Protection Provides Overview of Cases Heard

The state’s Office of Patient Protection (OPP), which since 2013 has been part of the Health Policy Commission, released its annual report recently, showing that during 2020 Massachusetts health insurance companies reported 11,650 member grievances, which include many different types of complaints, such as disputes over coverage for treatment or cost-sharing. According to the OPP, insurers resolved more than 50% of those complaints in favor of consumers.

After consumers exhaust an insurer’s internal review process, they can pursue an external review, but only if the insurer’s determination was based on whether the specific treatment or service at issue was medically necessary, including whether the health plan determined that the service was experimental or investigational. When the OPP receives a request for an external review it farms it out to one of four nationally accredited review groups.

“During 2020, OPP screened 240 external review requests for eligibility,” the office writes in its annual report. “174 or 73% of these requests were deemed eligible for external review. Of the eligible cases, 47% were overturned in whole or in part or modified by the external review agency in favor of the patient. Approximately 2% of the eligible cases were resolved between the patient and the insurer or withdrawn before a final determination was issued by an external review agency. The external review agencies upheld the remainder of the cases, which accounted for 51% of cases eligible for review.”

MHA Letter to CMS Re: Insurer Prior Authorizations

MHA has sent a letter to CMS Administrator Chiquita Brooks-LaSure outlining how the burdensome prior authorization requirements that insurers impose on patient discharges to post-acute care (PAC) settings is adversely affecting care.

During the public health emergency, CMS encouraged – but did not require – Medicare Advantage (MA) plans to relax or waive prior authorization requirements. “While many MA plans worked collaboratively with provider partners to waive or relax onerous prior authorization requirements during the PHE, others did not, or only did so during the initial stages or for certain brief periods,” MHA wrote. “Even for those that waived prior authorization, the process did not always go smoothly … The continued use of prior authorization and other health plan utilization management policies by some plans throughout the pandemic has prevented referring hospitals from using desperately needed health system capacity in post-acute care settings.”

The MHA letter details specific examples of the weeks-long delays that occurred in transferring patients to acute care settings, the lack of clinical guidelines governing the insurers’ decisions, and documented unwarranted MA denials, among many other issues with the current system.

“We encourage the Centers for Medicare & Medicaid Services, working with Congress as necessary, to require plans to waive these administrative processes during public health emergencies,” MHA wrote. At the local level, MHA continues to work with the MassCollaborative (a voluntary group of payers and providers) to streamline and improve the prior authorization process.

DPH Issues Updated Guidance on “Surprise Billing” Law

On January 1, 2021, Governor Baker signed An Act Promoting a Resilient Health Care System that Puts Patients First into law, which, among other directives, requires healthcare providers to tell patients how much they will pay for planned hospital stays, medical procedures, healthcare services, and referrals – based on the patient’s specific health insurance plan. Following significant concerns that MHA raised around confusion and duplication with the federal law, the January 1 implementation date was delayed. As noted in the governor’s supplemental budget, these requirements now begin on July 31, 2022. The requirements authorize the Massachusetts Department of Public Health to fine providers who fail to comply with a penalty up to $2,500 for each instance of non-compliance.

Last week DPH released guidance documents for patients and providers reflecting the revised dates.

Reports Review Medicaid Changes Following PHE

Earlier this month the Urban Institute released a report on state level preparations for the formal ending of the Public Health Emergency (PHE) and the expected end of Medicaid coverage, which expanded during the pandemic. The current PHE ends in April, but the Biden Administration has indicated they it may announce one more 90-day extension. Although Medicaid expansions will end with the end of the PHE, the Centers for Medicare and Medicaid Services has notified states that they have up to one year to redetermine eligibility for Medicaid beneficiaries.

A similar focus was contained in this report released last week by Kaiser Family Foundation and the Georgetown University Center for Children and Families. This report provides details from a 50-state survey on the implications of unwinding the Medicaid continuous enrollment requirement.

John LoDico, Editor