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How states are shaping Medicaid managed care and marketplace participation

This week, our In Focus section reviews state policies designed to increase insurer participation in Medicaid managed care and Marketplace programs. As states seek to address healthcare costs, affordability, and consumer experiences, they are exploring a range of initiatives鈥攆rom the rise of prescription drug affordability boards to cost containment commissions, cost growth benchmarks, transparency, and examination of mergers and acquisitions.

A notable trend is the use of state policy and purchasing power to encourage or mandate that Medicaid managed care organizations (MCOs) offer Marketplace plans. Dual-market participation can help smooth coverage transitions, ensure continuity of care, and expand consumer choice. The remainder of this article addresses original research and analysis of this trend by 红领巾瓜报, Inc. (红领巾瓜报), experts Zach Sherman, Aimee Lashbrook, and Hannah Turner.

Current Landscape

In 2024, enrollment in the Marketplace program has surged to more than 21 million, approximately a 30 percent increase from 2023. This growth was largely attributed to the temporary enhanced subsidies that allowed more people to access affordable coverage. Over the past several regulatory cycles, federal policymakers also have taken steps to further align the Marketplace framework with Medicaid on key issues, such as essential community provider access, eligibility and enrollment processes, and plan design standards. In response, states are innovating to meet federal requirements while pursuing their own healthcare goals related to coverage, affordability, access, and healthcare outcomes.鈥�

Value Proposition

A compelling value proposition for Medicaid MCOs to participate in the Marketplace (and vice versa) includes the ability to market to and retain people moving from one program to another as life circumstances change. Dual-market participation also supports diversification and growth strategies. In fact, enrollment in the Marketplace has nearly doubled since 2020. For Medicaid MCOs in particular, expanding product offerings to include Marketplace plans presents a unique opportunity to leverage existing provider networks and reimbursement arrangements to deliver more competitive rates.

Consumers benefit when the same organization participates in both markets. Families with parents and children who obtain coverage under different programs have an opportunity to work with a single organization and choose providers from the same or overlapping networks. Income fluctuations may result in disenrollment from one program (e.g., Medicaid) and eligibility for a new program (e.g., Marketplace subsidies). Continuity of care policies can smooth these transitions in areas such as prior authorization, care management, and provider network.

State Strategies to Increase Dual-Market Participation

The Affordable Care Act expanded access to affordable health insurance coverage for as many as 45 million individuals by giving states the option to expand Medicaid and provide federal subsidies to people who purchase Marketplace plans. States are now using various strategies to encourage or require insurer participation in both programs to ease transitions for individuals and families 鈥渃hurning鈥� from one program to another, increase competition and choice of Marketplace plans, and reduce the risk of coverage gaps. For example:

Nevada聽is requiring any bidder that plans to respond to its upcoming Medicaid MCO procurement to separately submit a 鈥済ood faith鈥� response to the聽. This state-contracted, public option will be available on the Silver State Health Insurance Exchange beginning in 2026. Failure to submit a good faith proposal will disqualify an organization from participating in the Medicaid MCO procurement later this fall. Nevada鈥檚 current Medicaid MCOs must participate in the Marketplace by offering at least one Silver and one Gold qualified health plan (QHP) that has overlapping provider networks, serves the same service area, and charges reasonable premiums.聽
Rhode Island听补苍诲听New Mexico聽require or intend to require that their Medicaid MCOs participate in the Marketplace. As an awardee of Rhode Island鈥檚 recent Medicaid MCO procurement, UnitedHealthcare, must reenter the HealthSource Rhode Island market in 2027. These states also have designed their Medicaid MCO auto-assignment methodology to favor enrollment in a Medicaid MCO affiliated with an individual鈥檚 previous Marketplace plan or a family member鈥檚 Marketplace plan.聽聽
In its last Medicaid MCO procurement (2018),聽North Carolina聽offered bonus points to any bidder that agrees to offer a Marketplace MCO. The resulting contract codified the market entry commitment and included implications for failure to follow through. Nonfulfillment could result in the highest level of contract noncompliance and associated penalties.聽
础谤办补苍蝉补蝉听expanded its Medicaid program using federal matching funds to purchase QHP coverage through the Marketplace.聽Minnesota, one of the few states offering a basic health program, contracts with the same organizations to provide coverage under both programs.聽聽
Iowa聽uses contract language to encourage, but not require, Medicaid MCOs to participate in the Marketplace to facilitate continuity of care during coverage transitions.聽

The Centers for Medicaid & Medicare Services (CMS) collaborated with states to promote continuity of coverage following the end of the Medicaid continuous enrollment requirement established in the Families First Coronavirus Response Act of 2020, also known as the Medicaid public health emergency (PHE) unwinding. This support includes the of permissible outreach activities by Medicaid MCOs that also offer a Marketplace plan, information sharing, and other assistance. Many states have incorporated the CMS guidanceiii into Medicaid MCO contracts. North Carolina, Utah, and West Virginia include additional contract terms supporting their Medicaid MCOs鈥� ability to co-market Medicaid and Marketplace plans, including when an individual is losing Medicaid eligibility.

What to Watch For

Coverage transition challenges throughout the Medicaid PHE unwinding have highlighted the real-life impact of coverage gaps and the importance of policies and practices that promote uninterrupted access to healthcare coverage. Historic Marketplace enrollment levels and recent CMS guidance clarifying the allowability of outreach to people who are losing Medicaid coverage about Marketplace plan available make the prospect of dual-market participation increasingly attractive for Medicaid MCOs. A greater focus on improving continuity of care and Marketplace plan choice may lead to more states encouraging or requiring Medicaid MCOs to participate in the Marketplace.

Connect with Us

The upcoming 红领巾瓜报 event,鈥�, will offer more opportunities to engage with leaders from various sectors who are advancing innovations in Medicaid managed care and Marketplace programs and the points at which these programs intersect. State Medicaid and insurance commissioners, health plan executives, and community leaders, among others, will share insights into their market success and initiatives designed to address healthcare costs and insurance affordability.

Experts from 红领巾瓜报 and our family of companies have extensive experience in the policy, structure, and administration of healthcare markets and health plan contracting. For more information, contact 鈥�Zach Sherman.

Harnessing opioid abatement funds to prevent overdoses and enhance community care

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This week, our聽In Focus聽section recognizes聽聽(IOAD), August 31, by highlighting how states can use opioid abatement funds to mitigate the persistent overdose crisis in communities across the country.聽聽

In honor of IOAD, the August 2024 edition of 红领巾瓜报鈥檚 Podcast, Vital Viewpoints, features Erin Russell, a Principal at 红领巾瓜报 (红领巾瓜报), who discusses the importance of emphasizing harm reduction as a compassionate approach to drug policy. Meanwhile, this article addresses current gaps, opportunities, and strategies for applying opioid abatement funds to make further progress in addressing overdoses and the crisis.

Context for Opioid Abatement

Overdoses have more than one million lives since the late 1990s, with more than 100,000 deaths occurring annually. Exacerbating the overdose epidemic and the racial and ethnic disparities in fatal overdoses are persistent inequities in access to evidence-based treatment, which extend to biases based on physical and/or mental ability, sexual orientation and gender identity, geographic location, and socioeconomic and housing status.

In 2021, nationwide settlements were awarded to resolve all opioid litigation that states and local subdivisions brought against pharmaceutical distributors and manufacturers, with subsequent agreements reached in 2022 against pharmacy chains and additional manufacturers. These historic opioid settlement agreements, which total more than $56 billion, will provide funds to state and local governments to address the crisis in their communities.

Policy changes and investments to address this epidemic remain critical. These approaches require careful consideration of the data and evidence-based strategies that are responsive to the crisis. In 2024, the US Department of Health and Human Services issued a that updates the regulations regarding the governance of opioid treatment programs; for example, removing barriers to the treatment of substance use disorder (SUD) and expanding access to care. The and grant programs are another significant tool to improve prevention, expand treatment, and deliver free, lifesaving medications. Medicaid, including Medicaid managed care plans, also can be instrumental in supporting harm reduction strategies and enhancing access to addiction treatment and recovery support.

Opioid abatement funds offer states the opportunity to apply innovative solutions in response to the overdose epidemic. Despite their potential, however, 红领巾瓜报 experts have identified significant opportunities across many states to effectively use available opioid abatement funds.

Opioid Abatement Funds and planning for Community Needs

Strategic planning processes allow state and community leaders to understand the needs of residents, examine current services offered and their existing strengths, and explore barriers to accessing care to make informed decisions about how the settlement funding can be used successfully. A strategic plan can assist in tracking progress and establishing a clear vision for an organization鈥檚 future and can yield a living document that guides the most advantageous use of the funds. 红领巾瓜报 experts supported a strategic planning process for , NC, that identified strategies for designing, implementing, and evaluating tailored solutions for disbursing opioid abatement funds. The following are examples of approaches that are included in strategic plans for opioid abatement.

Sequential intercept model (SIM). SIM, one of the models used to support communities in building a stronger system of care, helps identify intervention opportunities with the highest potential for success based on a community鈥檚 strengths and needs. SIM maps out the stages of intervention to pinpoint gaps and opportunities, ensuring funding is used to address the most critical areas for improving community care systems, including those integrated within Medicaid managed care delivery systems (see Figure 1).

Figure 1: Sequential Intercept Model

Low-barrier/low-threshold recovery supports and treatment. The expansion of low-barrier/low-threshold recovery supports and treatment, including access to medications for opioid use disorder, is essential to reducing overdose deaths. States, local jurisdictions, and individual providers can redesign their treatment delivery systems to incorporate person-centered, low-barrier treatment access, including flexible scheduling and walk-in visits, same-day admission and medication initiation, and revision of clinic policies and procedures to eradicate practices that produce high barriers to treatment.

Though expanding low-barrier care in traditional treatment settings is an essential element of the response, implementation of nontraditional delivery modalities is another important target for using opioid abatement funds. Examples include:

Emergency medical service (EMS)-initiated buprenorphine聽
Medication units in unconventional locations (e.g., housing units)聽
Mobile medication units and delivery of street/shelter medicine in which SUD treatment and services are brought to disenfranchised and marginalized communities.聽

Finally, the availability of opioid abatement funds can introduce opportunities for local governments to partner with community members, including people with both past and current lived experience, to design, implement, and disseminate culturally responsive and tailored SUD treatment and recovery support services, including services to address health-related social needs to mitigate barriers to treatment entry and engagement.

Continuous quality improvement (CQI) plans. Locales that receive opioid abatement funds have the opportunity to develop strategies to create transformational systemic change. Each entity should have an intentional CQI plan in place. Ensuring the presence of strong CQI processes can streamline and improve services, connect data to practice, and ensure interventions are progressively more effective.

Connect with Us

The upcoming 红领巾瓜报 event,鈥�, will offer more opportunities to engage with leaders across multiple sectors and industries advancing innovations in the design of mental health and SUD systems, value-based purchasing, and care strategies. Notably, state Medicaid and behavioral health directors, insurance commissioners, health plan executives, and community leaders, among others, will share insights into major initiatives under way in their states to manage ongoing crises in mental health and SUDs.

红领巾瓜报 has a strong, diverse bench to help communities maximize opioid abatement funds and build a stronger system of care. We provide technical assistance in large-scale initiative implementation, convening stakeholder groups, designing CQI strategies, developing planning documents, and facilitating strategic discussions. For more information about鈥炝旖砉媳ㄢ€檚鈥痺ork, contact behavioral health experts Anika Alvanzo, Rachel Johnson-Yates, and Jessica Perillo.

红领巾瓜报 believes 鈥渢ogether we can鈥� end the overdose crisis on IOAD

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On , August 31st, communities worldwide come together to honor, without stigma, the people who have lost their lives to overdose. It鈥檚 a day for families to recognize their loved ones and for all of us to acknowledge the grief of family and friends who have experienced this loss. It鈥檚 also an opportunity to think critically about the programs and policies our communities need to finally put an end to the overdose crisis. In honor of this year鈥檚 IOAD theme, 鈥淭ogether we can,鈥� 红领巾瓜报 recognizes the power of community when we all stand together with a united goal of ending overdose.

Overdose can affect anyone. In the last twelve months alone, there were more than 100,000 across the U.S., and 42 percent of Americans now report they . More than ever, we need strong, multifaceted coalitions to shift the narrative around overdose and ensure we are using resources effectively to reduce harm, increase chances of overdose survival, and promote quality of life for people who use drugs, people in recovery, and the communities where they live.

红领巾瓜报 brings together people with lived and living experience, local community members, and public health professionals to plan, evaluate, and implement meaningful programs across the continuum of care to address overdose as the health crisis that it is. Our trusted subject matter experts have their own lived experience that influences 红领巾瓜报鈥檚 approach, and we strive to center the voices of people who are most impacted at every opportunity.

红领巾瓜报 is committed to helping clients prioritize effective solutions to the overdose crisis, which includes promoting services that are evidence-based and designed with robust input from community stakeholders. 红领巾瓜报 supports naloxone distribution by engaging in street-based outreach, developing mapping tools for organizations to see the impact of their efforts in real time, and training healthcare providers on harm reduction. In 2024, 红领巾瓜报 also hosted the Compassionate Overdose Response Summit to address questions about naloxone dosing and the long-term effects of precipitated withdrawal. 红领巾瓜报 continues to be a leader in helping clients revolutionize treatment, particularly for priority populations such as children鈥檚 behavioral health and the justice involved. Earlier this year 红领巾瓜报 led a webinar series called the Substance Use Disorder (SUD) Ecosystem of Care Webinar Series: Pivoting to Save Lives describing a whole person, integrated, solutions-based approach to the ongoing overdose epidemic. The series encourages leaders to reconsider standard attempts to solve this crisis and be willing to pivot away from approaches that have not yielded the level of impact that this crisis demands.

On IOAD, and every day, 红领巾瓜报 stands united with the communities that are left behind to experience the long-lasting impacts of grief, and we celebrate the thousands of people who have experienced overdose and survived. Every overdose survival is another opportunity to uplift the strategies that work to save lives. We honor everyone impacted by overdose by using a community-led approach that encourages collective action to prevent, and ultimately end, all overdoses.

For more information on 红领巾瓜报 overdose prevention services, visit our Harm Reduction solutions page.

Improving healthcare for justice-involved populations: key insights on Medicaid Section 1115 reentry demonstrations

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This week, our In Focus section considers state and local initiatives centered on the intersection of carceral care and state Medicaid programs.

The 红领巾瓜报 (红领巾瓜报) team includes clinicians and leaders who bring extensive expertise in justice healthcare, Medicaid, managed care, administration and operations, quality and accreditation, and information technology. Drawing on this wealth of experience, we provide five key insights for states, industry professionals, and other stakeholders aiming to improve healthcare access and related services for justice-involved populations.

Community Reentry: A Pivotal Point to Impact Health Outcomes

The Centers for Medicare & Medicaid Services (CMS) designed the to improve access to community resources that address the healthcare and health-related social needs of people who are preparing to reenter their communities after incarceration. Medicaid enrollment assistance and prerelease coverage for certain services can help ensure successful care transitions during reentry. This demonstration allows states to provide Medicaid-reimbursable services up to 90 days before release from carceral facilities. These services include care management, behavioral health consultations, and peer support designed aiming to smooth the transition back into the community.

States and their partners are using these Medicaid regulatory flexibilities to develop鈥攁nd eventually implement鈥攑rograms that focus on the critical point of transition and reduce emergency department visits and inpatient hospital admissions for both physical and behavioral health issues once individuals are released and return to the community.

Recent State Activity Interest in Medicaid Reentry Initiatives

In July 2024, CMS Medicaid Section 1115 reentry demonstration proposals from Illinois, Kentucky, Oregon, Utah, and Vermont. These states join California, Washington, Montana, and Massachusetts in their work to develop the operational details and implementation plans to cover some services prior to release, increasing access to and continuity of care for returning individuals. According to 红领巾瓜报鈥檚 monitoring and analysis, another 13 states and the District of Columbia have reentry proposals pending CMS review.

Roles for Medicaid Partners

With 41 states, including the District of Columbia, using managed care for specific Medicaid populations, local and regional managed care organizations (MCOs) are integral to this landscape. The Medicaid Reentry Section 1115 Demonstration highlights the importance of early engagement with state partners and MCOs in preparing to serve the justice-involved population effectively.

By understanding these demonstrations and strategically developing their policy and operational plans, states and MCOs can enhance their services and improve outcomes for individuals transitioning out of carceral facilities. The continued focus on integrating comprehensive care models reflects a commitment to advancing the quality of healthcare for justice-involved individuals and ensuring their successful reentry into the community.

Key Considerations for States and Partners

CMS approval of state reentry demonstration proposals is the first of several critical steps required to improve access to services and health outcomes. Based on their real-world strategy, policy, and operational experience in Medicaid and correctional systems, the 红领巾瓜报 team identified the following key considerations for states and their partners pursuing reentry initiatives:

Successful reentry programs require breaking down longstanding silos and challenges in policy, funding, contracting, systems/IT, bias, and other aspects integral to reentry.
All stakeholders will benefit from operationalizing best practices that use data metrics and reporting to demonstrate compliance with federal and state oversight and monitoring across carceral, public health, and Medicaid programs.
State and local carceral facilities may need to change their contracts with healthcare vendors to meet contractual and quality standards and best practices, including, in some cases, transitioning to provision of care to public health systems and university partners.
Build a team that will support successful state reentry programs. For example, government and their partners need expertise in the intersection of healthcare and correctional systems, skills in delivery system transformation, and knowledge of the publicly funded healthcare industry. The team will benefit from comprehensive experience with state prison systems, county and municipal jails, drug courts, and probation and parole, including implementing and coordinating medications for addiction treatment along a continuum of care in response to the substance abuse and opioid use disorder crisis facing communities nationwide.
Prepare to collaborate with new entities that have a range of experiences and perspectives.

Connect with Us

The July 2024 edition of 红领巾瓜报鈥檚 Podcast, Vital Viewpoints, features a discussion with 红领巾瓜报 Managing Director for Justice-Involved Services Linda Follenweider about her insights on this pivotal moment in carceral healthcare. Linda, an advanced practice registered nurse and board-certified family nurse practitioner, discusses the critical gaps in continuity of care for incarcerated individuals. She emphasizes how many people receive necessary medical care while in jail or prison but struggle to maintain these services upon release. The episode showcases the opportunities presented by adopting routine screening questions about incarceration history to ensure better health outcomes and resource utilization.

The upcoming conference, , hosted by 红领巾瓜报, will offer more opportunities to engage with fellow executives, policymakers, and thought leaders across multiple sectors and industries advancing policy and programmatic innovations in carceral care and reentry. Notably, 红领巾瓜报 experts Tonya Moore and Stuart Venske offer invaluable insights from their involvement in the development and execution of the CMS Section 1115 demonstration policies, including the reentry opportunity.

For more information about 红领巾瓜报鈥檚 work at the intersection of carceral care and Medicaid, contact Linda Follenweider and Julie White.

红领巾瓜报 Conference Keynote Speaker discusses innovation in Medicaid, Medicare, and Marketplaces

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Given that 50 percent of Americans have publicly funded health insurance鈥攊ncluding Medicare, Medicaid, or Affordable Care Act Marketplace plans in which many premiums are subsidized鈥攖he need is growing for innovations that will yield better quality at lower total cost. The 红领巾瓜报 (红领巾瓜报) Fall Conference, , offers an agenda that dives deeply into the latest innovations and opportunities in these critical programs. Focused on improving collaboration and information sharing, the event will explore strategies and practical solutions to reduce health disparities and enhance outcomes for aging, disabled, and chronically ill people.

The federal government recently created the Advanced Research Projects Agency for Health (ARPA-Health), which is charged with supporting the development of high-impact solutions to improve health outcomes. We are fortunate to have as our keynote speaker from ARPA-H. We have asked him to share his thoughts on why innovation in the public healthcare space is critical.

Dr. Sanghavi will kick off the 红领巾瓜报 conference with a discussion on how ARPA-H initiatives are intended to support new solutions to modernize today鈥檚 healthcare landscape鈥攏ot only with technology, but also through changes in our approaches to healthcare delivery and payment.

Only a month before the November elections, the 红领巾瓜报 conference presents a valuable opportunity to engage with healthcare leaders across the public and private sectors to hear how they are thinking about potential policy and regulatory changes that could affect publicly funded programs and supplemental coverage. Attendees will take home insights and actionable ideas to drive improvements in health and well-being. Join us to shape the solutions that will impact the future of healthcare!

FY 2025 Medicare hospital inpatient final rule will alter hospital margins and change administrative procedures

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This week, our In Focus section reviews the policy changes that the Centers for Medicare & Medicaid Services (CMS) finalized on August 1, 2024, in the fiscal year (FY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Final Rule (). This year鈥檚 IPPS final rule will impact hospital margins and administrative processes beginning October 1, 2024.

The remainder of our article delves into five of the key policy changes included in the final rule.

Key provisions in the FY 2025 Hospital IPPS and LTCH Final Rule

For FY 2025, CMS will modify several hospital inpatient payment policies. We highlight five of these policies because they will have the most significant impact on Medicare beneficiaries, hospitals and health systems, payors, and manufacturers:

The annual inpatient market basket update and changes to the standardized payment amount聽聽
New technology add-on payment (NTAP) policy changes聽
Implementation of the Transforming Episode Accountability Model (TEAM) bundled payment model in 2026聽
Hospital wage index changes and labor market adjustments聽
Severity of illness increase for housing insecurity social determinants of health (SDOH) codes聽聽

Several of these and other policy changes for FY 2025 will become effective October 1, 2024.

Market basket update

Final rule: Overall CMS鈥檚 Medicare 2025 Hospital IPPS Rule will increase hospital inpatient payments to acute care hospitals by 2.9 percent from 2024 to 2025, an estimated increase of approximately $2.9 billion after other policy changes are included.

红领巾瓜报 (红领巾瓜报) analysis: CMS鈥檚 2.9 percent increase is largely based on an estimate of the rate of increase in the cost of a standard basket of hospital goods鈥攖he hospital market basket. For beneficiaries, this payment rate increase will lead to a higher standard Medicare inpatient deductible and increase out-of-pocket costs. The finalized payment increase (2.9 percent) is larger than the increase included in CMS鈥檚 IPPS Proposed Rule (2.6 percent) but continues to fall below economy-wide inflation over the past year (3.5 percent).1,2 Importantly, after accounting for the various policy changes made within the final rule (e.g., wage index reclassifications) we anticipate individual cases will experience an average payment increase of 1.7 percent.

Transforming Episode Accountability Model

Final rule: CMS finalized the creation of a new mandatory episode-based CMS Innovation Center methodology鈥擳EAM. Under TEAM, selected acute care hospitals will coordinate care for people with traditional Medicare who undergo one of the following surgical procedures:

Lower extremity joint replacement聽
Surgical hip femur fracture treatment聽
Spinal fusion聽
Coronary artery bypass graft聽
Major bowel procedure聽

Hospitals in the model will assume responsibility for the cost and quality of surgical care through the first 30 days after a Medicare beneficiary leaves the hospital. Hospitals also must refer patients to primary care services to support optimal long-term health outcomes. Hospitals will be assigned to different risk tracks to allow a graduated path to ease in to full-risk participation.

红领巾瓜报 analysis: The mandatory nature of this model requires hospitals in the selected geographic areas to begin to prepare for implementation of the model requirements in 2026. TEAM builds on and combines previous models such as the bundled payment for care improvement (BPCI) and the comprehensive care for joint replacement (CJR) models. Hospitals in roughly 23 percent (188 of 925) of the nation鈥檚 core-based statistical areas (CBSAs) are required to participate in this advanced payment model, with some exceptions, such as hospitals in Maryland and Sole Community Hospitals. Participating hospitals will be required to report various quality measures, and payment will be based on spending targets and include retroactive reconciliation. Reimbursement under the model will follow four different tracks, which vary by the level of upside and downside risk that the hospital accepts and with a specific track for safety net hospitals.

Hospital Wage Index Adjustments and Labor Market Changes

Final rule: CMS finalized two wage index policies for FY 2025. First, CMS extended the temporary policy finalized in the FY 2020 IPPS/LTCH PPS final rule for three additional years to address wage index disparities affecting low wage index hospitals, which includes many rural hospitals. Second, as required by law, CMS revised the labor market areas used for the wage index based on the most recent CBSA delineations issued by the OMB based on 2020 Census data.

红领巾瓜报 analysis: The two wage index policy changes for FY 2025 will have important positive and potentially negative consequences on hospital payment. The policy to extend the low wage index policy for three more years will allow many hospitals with low wage indexes to increase their wage index and their payment rates across all Medicare severity鈥痙iagnosis-related groups (MS-DRGs).

Specifically, the roughly 800 hospitals with wage indexes below 0.9007 (the 25th percentile across all hospitals) will automatically receive an increase in their wage index and payment rates for all inpatient cases. This policy will bring additional millions of dollars to individual rural hospitals in FY 2025. The second policy is a statutorily required update to the labor markets used to establish CMS鈥檚 hospital wage indexes. To implement this policy, CMS will use US Census Bureau data to redefine urban and rural markets. As a result, CMS will redefine 53 urban counties as rural and will newly redefine 42 rural counties containing a hospital as urban. These changes will disrupt various hospital payment policies for hospitals in these counties. The overall impact of both geographic policy changes for FY 2025 will be to increase inpatient payment rates to rural hospitals.

Revision to Social Determinants of Health Housing Insecurity Diagnosis Coding

Final rule: CMS finalized a change in the severity designation of the seven ICD-10-CM diagnosis codes that describe inadequate housing and housing instability. Under the final rule, these codes are changing from non-complication or comorbidity (non-CC) to complication or comorbidity (CC) based on the higher average resource costs of cases compared with similar cases without these codes.

红领巾瓜报 analysis: This new policy will enable hospitals to receive higher inpatient payment rates when they provide care for patients with inadequate housing or housing instability are served. Specifically, this policy change will result in assigning cases involving patients with one of these codes to a higher-level MS-DRG. Hospital staff will want to ask patients about their housing upon admission and discharge to accurately document this critical SDOH characteristic.

New technology add-on payments

Final rule: CMS finalized three changes to the NTAP program and approved several products for NTAPs in FY 2025.

红领巾瓜报 analysis: CMS seems willing to increase NTAP payments in certain limited situations to boost selected policy goals but rejects comments seeking to increase the percentage for sickle cell products or expand the higher payments to other medical conditions. In addition, portions of the final rule indicate that CMS is applying some of the criteria for NTAPs more strictly than in recent years. If this trend continues, it may be more difficult for future new technologies to be approved for NTAPs.

Connect with Us

红领巾瓜报鈥檚 Medicare Practice Group works to monitor legislative and regulatory developments in the inpatient hospital space and assess the impact of inpatient payment, quality, and policy changes on the hospital sector. We will continue to follow these and other changes happening to hospitals and are available to provide additional detail on these or other policies in the final rule. If you have any questions, please contact Zach Gaumer ([email protected]), Amy Bassano ([email protected]), Kevin Kirby ([email protected]), or Clare Mamerow ([email protected]).

Don鈥檛 just grab the shiny new thing: integrating IT and business strategies to optimize technology ROI

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The emergence of generative artificial intelligence (Gen AI) and large language models, like OpenAI鈥檚 ChatGPT or Google Gemini, has spurred a renewed focus on the use of cutting-edge technology in healthcare. Healthcare payers, providers, and state Medicaid agencies are racing to deploy Gen AI and other technologies to improve patient outcomes, reduce costs, improve patient engagement, streamline administrative operations, and simplify compliance. While Gen AI holds tremendous potential to improve healthcare, we should heed the lessons learned by recent waves of technology: deploying technology鈥攊ncluding Gen AI鈥攊n isolation of a broader business strategy is a recipe for underperformance. Optimizing the return on technology investment requires taking a structured approach to integrate technology strategy with business strategy.

Investing in health IT is essential to meet innovation challenges. Technology can enable the scale, reach, speed, and the consistency needed to thrive in today鈥檚 fast-changing landscape. Moreover, as workforce shortages persist, technology must become a 鈥渇orce multiplier,鈥� allowing healthcare practitioners and other healthcare staff to focus on what they do best. In today鈥檚 changing business and social environment, there is no choice but to embrace health IT.

Investments in health technology, however, have often fallen short of expectations. For years, CEOs and chief information officers (CIOs) have lamented the poor return on substantial investments in health IT. For example, in a EY study, 70% of hospital executives report they have not seen an ROI from investments in digital health. A few years ago, only 10% of health professionals assessed the ROI on Electronic Health Records (EHR) investments as positive or better. Mis-investing in technology has long-term implications for any organization. Over-investment in technology reduces ROI and diverts resources from more productive uses. Under-investment in technology can undermine effectiveness, reduce productivity, and weaken patient engagement. So, optimizing technology ROI is essential to driving effective outcomes.

One challenge with IT investment is that measuring ROI in healthcare is an inherently difficult calculation. In addition to financial returns, the hoped-for return on technology investments is an improvement in patient outcomes, which may not translate into immediate financial benefits. Another challenge is that fragmented healthcare systems make it difficult for any single organization to gain system-wide efficiencies that drive a positive ROI.

However, an often-overlooked challenge to optimizing IT investment is thinking of IT strategy as something separate from, rather than integrated with, the business strategy. In healthcare, executing nearly every business strategy requires leveraging IT. To optimize the ROI in health tech investments, organizations must align and integrate their health IT strategy with their business strategy.

Organizations often take one of two different approaches to technology. In some cases, they cede responsibility for the IT strategy to the CIO, perhaps because technology can seem imposing, and the CIO speaks the language of IT. In these cases, the IT strategy may reflect imperatives important to the IT shop鈥攆or example, consolidating on a common tech stack or replacing a software component鈥攖hat do not support or advance the business strategy.

In other cases, organizations develop a business strategy in isolation of a technology strategy鈥攖hey define their business strategy, then look for technology to support it. This approach leads to a business strategy that either cannot be realistically supported by available technology or does not exploit technology effectively. Under either approach the result is the same: Failing to integrate and align your tech strategy with your business strategy will undermine the value of your technology investments.

To optimize the return on their technology investments, healthcare organizations should take a structured approach to aligning their technology strategy with their business strategy. 红领巾瓜报 works with health care organizations to:

develop or refine their business strategy,
develop an integrated technology strategy fully aligned with that business strategy,
assess their existing technology,
develop a strategic roadmap to modernize technology,
support technology procurements, and
support technology implementations.

红领巾瓜报 will be at MESC 2024 August 12-15, and if interested in learning more about this approach, come see us at Booth 450. Or for more hands-on exploring of how this can work for an organization, join us at these two pre-conference sessions at 红领巾瓜报鈥檚 Fall Conference on . The session on Navigating the Medicaid 1115 Demonstration Processes will give nuanced understanding of CMS鈥� criteria concerning budgeting, implementation, evaluation frameworks and administrative supports, along with strategies to effectively navigate through the approval process. Another session on A Framework for Thinking About 鈥� and Using 鈥� AI Effectively will share real-world examples of successful AI implementation, their impact on business outcomes, and lessons learned. Both will examine how 红领巾瓜报 works with clients to integrate their technology strategy into the overall company strategy.

For more information, contact our IT experts.

红领巾瓜报 celebrates 59th anniversary of Medicaid and Medicare

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This week, 红领巾瓜报 (红领巾瓜报) shifts聽In Focus聽from a newsworthy development to commemorate a seminal event in the expansion and strengthening of healthcare access in the United States. On July 30, 1965, Medicaid and Medicare were signed into law under Title XVIII and Title XIX of the Social Security Act. Today we celebrate the 59^th聽anniversary of this pivotal moment in America鈥檚 healthcare journey.

Medicaid: A Critical Safety Net that Remains Strong

All states, the District of Columbia, and the U.S. territories have Medicaid programs designed to provide health insurance coverage for low-income individuals. As of March 2024¹, 82,751,338 people, including eligible low-income adults, children, pregnant women, older adults, and people with disabilities are covered under their state鈥檚 Medicaid program in accordance with federal requirements. The COVID-19 pandemic underscored just how important this safety net program is for American families, as it continued to deliver vital services during unprecedented times.

Beyond its traditional role, Medicaid also drives significant innovations in care for people with complex conditions and challenges. States have implemented various programs and initiatives to improve healthcare quality and outcomes. These include:

Managed Care Expansion: Many states have expanded Medicaid managed care programs to enhance care coordination and improve health outcomes.
Value-Based Care Models: Innovations in value-based care are being tested, aiming to link reimbursement to quality of care and patient outcomes rather than volume of services.
Integration of Behavioral Health: Several states are integrating behavioral health services into Medicaid to address mental health and substance use disorders more effectively.
Telehealth: The pandemic accelerated the adoption of telehealth services in Medicaid, expanding access to care and reducing barriers for patients.

Medicare: Leading in Innovation and Coverage

Medicare provides coverage to more than 60 million seniors and people with disabilities. In addition to being a lifeline for so many Americans, Medicare is a force for innovation in health policy, piloting changes to payment and care delivery through the Innovation Center and through Medicare Advantage plan design. Key innovations include:

Alternative Payment Models: The Innovation Center has been at the center of piloting various alternative payment models to improve quality and reduce costs.
Medicare Advantage Enhancements: Medicare Advantage plans continue to evolve, offering more comprehensive benefits that include mental health and substance use disorder services and integrating additional services such as dental, vision, and wellness programs.
Chronic Care Management: Medicare is expanding its focus on chronic care management, providing additional resources and support for individuals with chronic conditions.

红领巾瓜报鈥檚 Commitment to Medicaid and Medicare

Since 红领巾瓜报鈥檚 founding, our experts have helped states, plans, providers, and other stakeholders deliver the full spectrum of Medicaid and Children鈥檚 Health Insurance Program (CHIP) services. As 红领巾瓜报 has evolved, we have built a leading-edge Medicare team that includes former agency officials, plan leaders, policy and data analysts, and actuaries. Healthcare plans, providers, and innovators call upon our colleagues to anticipate policy and regulatory change, develop and support Medicare Advantage business, transform fee-for-service programs, and support access to new technologies and treatments that can both improve quality patient outcomes and reduce costs of care.

Our growing聽team of聽includes 10 former state Medicaid directors and many more former state agency leaders, hospital and health plan executives, senior officials from the Centers for Medicare & Medicaid Services (CMS), and public health leaders.

红领巾瓜报 Colleagues Who Are Former聽Medicaid Directors聽Looking Ahead

红领巾瓜报鈥檚 Top Medicare Experts

Looking Ahead

As Medicaid and Medicare near their seventh decade, the programs will continue to evolve and change to better support covered individuals and meet the demands of policymakers and taxpayers. 红领巾瓜报 experts are committed in service of this important mission, and we are excited about building their future together with our clients to create more innovative, high-quality care that improves health outcomes for all.

鈫╋笌

Raising the Bar: Improving Health Equity through Actionable Frameworks

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This week, our In Focus section highlights an initiative, (RTB), which is designed to strategically address inequities in the healthcare system. Leading this effort is the National Alliance to Impact the Social Determinants of Health (), an alliance convened by Leavitt Partners, a 红领巾瓜报 (红领巾瓜报) Company, with support from the Robert Wood Johnson Foundation ().

Overview

There is significant and increasing demand across health and human services to address health inequities and eliminate disparities in service delivery and positive health outcomes. Organizations are asked to provide healthcare in holistic ways that recognize both individual and population-level needs.

Raising the Bar is a framework and a call to action for the healthcare sector to embrace all levers, resources, and opportunities available to advance equity and excellence. Raising the Bar seeks to accelerate the healthcare sector鈥檚 efforts to achieve equity and to improve the healthcare experience and well-being of individuals, families, and communities.

The Framework for Driving Action

The RTB project worked with healthcare leaders and people who have experienced inequities in the system to develop an actionable framework for the entire healthcare sector, which would embed equity and excellence throughout its work. The NASDOH convened extensive discussions with providers, hospitals, payers, and community leaders to develop foundational principles, essential roles, and concrete actions for the sector to achieve equity goals, big and small.

Raising the Bar Principles. The project generated five principles that put the priorities of individuals, families, and communities at the center of healthcare. They were informed by discussion with organizations and people who give, get, and pay for care.

Raising the Bar also identified four essential roles for individual contributors to the healthcare system and provide concrete actions they can take to transform how care is delivered.

Embedding Approaches to Address Health Inequities

Now in the next phase of this work, 红领巾瓜报 consultants are working one-on-one with five organizations committed to embedding approaches to address health inequities by implementing the framework within their own systems of care. Participating organizations include a multi-site, multi-state Catholic health system, an academic medical center, an independent health system, one certified community behavioral health clinic, and one county public health department. The entities vary by geography, demographics, population size, and rural and urban location.

Each of the following sites is using the Raising the Bar framework and individualized coaching to meet their equity goals:

Charles County Department of Health, White Plains, MD
Charles County is working to develop and strengthen trusting partnerships with local community organizations representing diverse populations to address health inequities in the county.
CHRISTUS Health, Texas, Arkansas, and Louisiana
CHRISTUS is developing an enterprise-wide six-year health equity road map that includes a strategy to build a community health worker sustainability.
Gaudenzia, Baltimore, MD
Gaudenzia is working to develop and implement a road map for establishing a Consumer Advisory Committee (a Substance Abuse and Mental Health Services Administration requirement for certified community behavioral health centers) that other Gaudenzia sites can use and spread nationwide.
Jefferson Health, Philadelphia, PA
Jefferson is conducting an enterprise-wide assessment and creating a governance structure for its health equity initiatives across multiple healthcare and medical education sites throughout their catchment area, which crosses state lines.
Sturdy Health, Attleboro, MA
Sturdy is creating an enterprise-wide health equity dashboard with measures that align with organizational goals and strategies and developing staff training to improve service delivery for populations who experience inequities in care.

The five entities are receiving individualized coaching from 红领巾瓜报 health equity experts over a one-year period using the Raising the Bar framework and each organization鈥檚 self-identified goals and objectives. At the project鈥檚 completion, findings from the project will be published in the Raising the Bar implementation guidance, developed in partnership with the Health Care Transformation Taskforce.

Continue the Conversation

Raising the Bar will be featured in discussions during the In the opening plenary session on social determinants of health, Leticia Reyes-Nash and Sara Singleton will describe some of the work, and during a breakout session, speakers from some the organizations participating in this project will share their experiences.

For more information about Raising the Bar or the types of technical assistance that 红领巾瓜报 can provide to organizations seeking to further develop equity in their practices and communities, contact project director , Principal, Leavitt Partners, or any of the 红领巾瓜报 coaching leaders on this project: Debra Carey, Principal; Akiba Daniels, Senior Consultant; Leticia Reyes-Nash, Principal; Maddy Shea, Principal; and Doris Tolliver, Principal.

Learn more at .

For details about 红领巾瓜报鈥檚 work in health equity, go to:

Continue the Conversation

Raising the Bar will be featured in discussions at , a conference powered by 红领巾瓜报 taking place in Chicago, October 7-9.

CMS鈥檚 newly released CY 2025 Medicare Physician and Hospital Outpatient Proposed Rules include proposals supporting primary care, care coordination, and increased access to care for Medicare Beneficiaries

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This week, our In Focus section provides an overview of the two key Medicare proposed payment rules that the Centers for Medicare & Medicaid Services (CMS) released last week鈥攖he (PFS) and the (OPPS). These two rules include policies that will affect a variety of providers. Below we highlight some key provisions. Comments on these proposals are due to CMS in early September.

PFS Proposed Rule for 2025

Released on July 10 and with comments due by September 9, this wide-ranging regulation proposes policy changes for many different types of providers.

PFS Payment Update: The estimated 2025 PFS conversion factor is $32.36, a $0.93 or 2.80 percent decrease from the calendar year (CY) 2024 level of $33.29, which included a one-time update required by statute. In previous years with cuts like this one looming, Congress has stepped in and adjusted the payment update in the positive direction. Congress is now considering approaches to do so again for this year.

Caregiver training services (CTS): CMS is proposing a new code for caregiver training for direct care services and supports such as wound dressing changes, infection control, and medication administration. These services could be provided via telehealth.

Telehealth services: CMS is proposing to add several new codes to the telehealth list and to refine a variety of policies related to the type of technology that must be used and what supervision must be provided for telehealth services and other requirements such as removing frequency limitations. Nonetheless, several telehealth flexibilities will end December 31, 2024, because of the expiration of pandemic era expansions unless Congress extends or makes telehealth flexibilities permanent.

Advanced primary care management services (APCM): CMS proposes to create a new set of APCM codes that would incorporate parts of several existing care management and communication technology-based services into a monthly bundle of services. The billing codes are differentiated by three levels based on a person鈥檚 number of chronic conditions and enrollment as a qualified Medicare beneficiary to reflect patient medical and social complexity. These APCM services could be provided by advanced primary care teams and are tied to primary care quality measures.

CMS seeks feedback on whether the agency should consider additional payment policies to recognize the delivery of advanced primary care, including on potential changes to coding and payment policies within traditional Medicare such as for additional bundles of services.

Behavioral health services: CMS is proposing new codes for behavioral health crisis services, including safety planning and interventions for patients at risk of suicide or overdose, follow-up contact after a crisis emergency department (ED) visit, for digital mental health treatment (DMHT) services, and for nonphysician practitioners to bill for interprofessional consultations.

Screening and risk assessment: The agency updates and expands coverage for screening and preventive services, including proposals to cover screening computed tomography colonography (CTC) for colorectal cancer, drugs covered as additional preventive services, the hepatitis B vaccine, and cardiovascular risk assessment and risk management.

Dental and oral health services: CMS proposes to add services provided to Medicare beneficiaries with end-stage renal disease to the list of clinical scenarios in which Medicare payment may be made for dental services. CMS also seeks comments on other clinical conditions appropriate for coverage.

Improving ambulatory specialty care: CMS seeks stakeholder feedback about a potential Innovation Center model that would increase specialist participation in value-based care through Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) and expand incentives for primary and specialty care coordination.

Medicare Shared Savings Program (MSSP): CMS is proposing several refinements to the permanent accountable care program. These include a prepaid shared savings option that lets eligible accountable care organizations that have previously earned shared savings to receive advanced earned shared savings to make investments that support beneficiaries, the addition of a health equity benchmark adjustment (HEBA) that increases an ACO鈥檚 historical benchmark based on proportion of beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS) or dually eligible for Medicare and Medicaid, changes to the MSSP quality measure set to align the measure with the universal foundation measure set and seeking comment on creating a risk track that is higher than what currently exists.

Rural health clinics and federally qualified health centers: CMS proposes several changes to update payment and coverage of services provided in these facilities including care coordination services, vaccines, and dental services.

Payment for major surgical procedures: CMS makes coding proposals to address scenarios in which follow-up care for beneficiaries who have undergone major surgical procedures is provided by different clinicians in different group practices.

Opioid treatment programs: CMS makes several proposals related to opioid treatment programs, including allowing assessments conducted via audio-only telecommunications, and increasing payments for social determinants of health (SDOH) risk assessments. CMS also proposes to pay for new FDA-approved opioid agonist and antagonist medications.

2025 Medicare Hospital OPPS Proposed Rule

CMS released the Medicare Hospital OPPS proposed rule on July 10, 2024, with comments due by September 9, 2024. This regulation proposes policy changes that largely impact hospital outpatient departments and ambulatory surgery centers (ASCs).

OPPS and ASC Updates: CMS proposes to update OPPS rates for hospitals that meet applicable quality reporting requirements as well as ASCs by 2.6 percent.

Access to non-opioid pain relief: The Consolidated Appropriations Act (CAA) of 2023, provides temporary additional payments for certain non-opioid treatments for pain relief in hospital outpatient department (HOPD) and ASC settings from January 1, 2025, through December 31, 2027. CMS proposes to implement this law with proposals on the evidence requirements for medical devices and the Food and Drug Administration (FDA)-approved indications that would meet the criteria for the temporary additional payments. CMS has identified seven drugs and one device that would qualify as non-opioid treatments for pain relief and proposes that they receive separate payment in 2025. CMS also is soliciting comments on other products that may qualify for these payments.

Justice-involved individuals: To support individuals returning to the community from incarceration, CMS proposes to narrow the definition of 鈥渃ustody鈥� in Medicare鈥檚 payment exclusion rule and to revise the Medicare special enrollment period (SEP) for formerly incarcerated individuals. These modifications would remove real or perceived barriers to Medicare access for individuals who have recently been released from incarceration or are on parole, probation, or home detention.

Maternal health: CMS is proposing several new maternal health related requirements for hospitals and critical access hospitals (CAHs). The proposed changes to conditions of participation, include new requirements for maternal quality assessment and performance improvement; baseline standards for the organization, staffing, and delivery of care within obstetrical units; and annual staff training on evidence-based maternal health practices. CMS further proposes changes to the emergency services requirements related to emergency readiness for hospitals and CAHs that provide emergency services.

Connect with Us

红领巾瓜报鈥檚 Medicare policy experts collaborate to monitor legislative and regulatory developments in the physician, outpatient, and ASC policy arenas and to assess the impact of changes in these reimbursement systems. 红领巾瓜报鈥檚 Medicare experts interpret and model policy proposals and use these analyses to assist clients in developing their strategic plans and comment on proposed regulations.

For more information or questions about the policies described below, please contact Amy Bassano, Zach Gaumer, Kevin Kirby, or Rachel Kramer.

CMS invites states to apply for transforming maternal health model

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This week, our鈥�In Focus鈥痵ection reviews the notice of funding opportunity (NOFO) for the鈥�, which the Centers for Medicare & Medicaid Services (CMS) Center for Medicaid and Medicare Innovation (the Innovation Center) announced on December 15, 2023. States interested in participating in this model must submit an application to CMS during the competitive application process.

As described in a December 2023 In Focus, pregnancy-related deaths have more than鈥€痵ince 1987 to 17.6 deaths per 100,000 live births, with鈥€痮nly worsening outcomes for different racial and ethnic groups. For example, the pregnancy-related mortality rates for Black and Native American and Alaska Native people are approximately two to three times higher than the rate for White people. In recent years,鈥€痟ave extended postpartum coverage, and鈥€痭ow offer doula coverage for Medicaid enrollees. This initiative accelerates the focus on maternal outcomes and, with Medicaid paying for nearly鈥€痮f births, has the potential to affect health across generations.

This model is designed exclusively to improve maternal healthcare for people enrolled in Medicaid and the Children鈥檚 Health Insurance Program (CHIP). The TMaH model takes a whole-person approach to pregnancy, childbirth, and postpartum care, addressing the physical, mental health, and social needs people experience during pregnancy.

Model Overview

Up to 15 participating state Medicaid agencies (SMAs) will receive as much as $17 million over the 10-year period to develop a value-based alternative payment model for maternity care services, with the intention of improving quality and health outcomes and promoting the long-term sustainability of services. TMaH will focus on three pillars:

Access to care, infrastructure, and workforce capacity聽
Quality improvement and safety聽
Whole-person care delivery聽聽

The TMaH model is designed to support birthing persons along their鈥�, expanding continuity, and improving outcomes.

During the model鈥檚 first three years, states will receive targeted technical assistance to achieve pre-implementation milestones. The table below highlights the key activities in the pre-implementation phase.

Following pre-implementation, participants will enter a seven-year implementation period during which the SMAs will implement the program with partners, such as managed care organizations (MCOs), perinatal quality collaboratives, hospitals, birth centers, health centers and rural health clinics, maternity care providers, and community-based organizations.

In year four, states will offer partnering providers and care delivery sites upside-only performance payments from state funds (no cooperative funds may be used). In year five, states will transition partner provider and partner care delivery locations to a new value-based payment model. CMS will lead the development of the value-based model, and it will be finalized during the pre-implementation period.

The model also requires a health equity plan, which has been a consistent requirement across models from the Innovation Center. Awardees must develop a plan that addresses disparities among underserved populations, such as racial and ethnic groups and people living in rural areas, who are at higher risk for poor maternal outcomes.

State Medicaid Agency Requirements

For states considering TMaH, the NOFO outlines the requirements for participating SMAs, which include:

States must include CHIP if pregnant people receive services through CHIP聽
States that have managed care plans must contract with at least MCO for implementation聽
Collaborate with partner providers (e.g., OBs, midwives, doulas), care delivery location (e.g., hospitals, birth centers, federally qualified health centers), and partner organizations聽
Collaborate in the process to create cost and quality benchmarks with CMS聽
Be actively involved in technical assistance activities, including attending regularly scheduled calls, providing input and working on portions of documents as appropriate聽
Execute the data-sharing agreements necessary to support the exchange of data and information related to the TA activities and completion of milestones聽
Provide CMS and contractors the necessary information and data to support the development of documents to help reach milestones聽
States must demonstrate their ability to meet these requirements as part of the NOFO process, and CMS will evaluate their responses as part of the selection process聽

TMaH Opportunities and Considerations

The model offers states resources and technical assistance to develop value-based alternative payment models to support whole-person pregnancy, birth, and postpartum care and improved outcomes. Many SMAs already are working on programs to innovate care and payment, and the TMaH is an opportunity to expand and accelerate those programs.

The model offers an opportunity for states that have yet to expand postpartum coverage or added doula benefits to adopt these policies with the funding and technical assistance they may need to support their efforts.

SMAs interested in this opportunity should evaluate their application readiness and pre-plan for the application.

What鈥檚 Next?

States interested in TMaH should submit a letter of intent by August 8, 2024. Applications are due by September 20, 2024, and the model is expected to start January 2025.

The 红领巾瓜报 team will continue to evaluate the TMaH model as more information becomes available. For more information, contact Amy Bassano ([email protected]), Melissa Mannon ([email protected]), and Andrea Maresca ([email protected]).

Unwinding recent Supreme Court rulings: impact on healthcare and beyond

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This week, our In Focus section provides an initial overview of recent US Supreme Court rulings that reshape the landscape of national healthcare policy and operations. These decisions, ranging from redefining federal agency powers to addressing local ordinances that will affect people who are unhoused, are poised to have far-reaching implications across the federal and state governments.

The Decisions

A significant ruling came on June 29, 2024, with the Court overturning the precedent established in the 1984 Chevron v. Natural Resources Defense Council ruling. This year鈥檚 decision in marks a pivotal shift by eliminating the deference traditionally granted to federal agencies鈥� interpretations of ambiguous statutes. By empowering courts to clarify vague legislation, the ruling raises fundamental questions about the future of existing regulations and may lead to a surge in litigation challenging federal agency interpretations. The Court did state this ruling would have no impact on past decisions regarding the Chevron doctrine. The decision would apply only to current, pending, and future cases. When read in conjunction with the 鈥渕ajor questions doctrine鈥� announced in 2022 in West Virginia v. Environmental Protection Administration, agencies now face more challenges to regulations under a legal structure that does not provide deference to the agency.

The Court in also significantly reduced the ability of agencies to rely on statutes of limitations to avoid challenges to older regulations.

In a separate ruling that garnered attention, the Supreme Court upheld local ordinances in Grants Pass, OR, that restrict individuals experiencing homelessness from using blankets, pillows, or cardboard boxes for shelter in public spaces. The majority opinion in supported the city鈥檚 stance that these ordinances, aimed at prohibiting camping on public property, do not constitute cruel and unusual punishment under the Constitution. This decision has sparked considerable debate over the balance between municipal governance and constitutional protections for people who are unhoused.

Also portending effects for the healthcare industry is the Court鈥檚 decision that defendants facing civil monetary penalties from the US Securities and Exchange Commission have a right to a jury trial. The decision presents new considerations for healthcare and life sciences companies facing civil monetary penalties from the US Department of Health and Human Services.

What鈥檚 Next

The implications of these rulings are poised to reverberate throughout both federal and state governments. Stakeholders across healthcare and beyond must prepare for a period of adjustment and adaptation. Numerous questions regarding implementation and enforcement will likely emerge. The outcomes could trigger a wave of legal challenges and legislative responses as stakeholders navigate the evolving regulatory landscape.

Future In Focus sections will dive deeper into the potential impacts these decisions will have on healthcare policies and partnerships with related sectors. These insights will be pivotal in guiding strategic decisions amid the evolving legal framework.

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Medicaid: A Critical Safety Net that Remains Strong

Medicare: Leading in Innovation and Coverage

红领巾瓜报鈥檚 Commitment to Medicaid and Medicare

Looking Ahead

PFS Proposed Rule for 2025

2025 Medicare Hospital OPPS Proposed Rule