Recommendations

The Secretary of the U.S. Department of Health and Human Services (HHS) should update the model single, streamlined application to include updated questions to gather race and ethnicity data. These questions should be developed using evidence-based approaches for collecting complete and accurate data. The updated application should include information about the purpose of the questions so that the applicant understands how this information may be used. HHS should also direct the Centers for Medicare & Medicaid Services to update guidance on how to implement these changes on a Secretary-approved application.

The Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services to develop model training materials to be shared with state and county eligibility workers, application assisters, and navigators to ensure applicants receive consistent information about the purpose of the race and ethnicity questions. The training materials should be developed with the input of states, beneficiaries, advocates, and application assisters and navigators, user tested prior to implementation, and adaptable to state and assister needs.

1. The Centers for Medicare & Medicaid Services should develop an ongoing and robust access monitoring system consisting of a core set of measures for a broad range of services that are comparable across states and delivery systems. These measures should:

• capture potential access, realized access, and beneficiary perceptions and experiences;
• prioritize services and populations for which Medicaid plays a key role and those for which there are known access issues and disparities; and
• be adaptable to reflect changes in measurement, policy priorities, and care delivery.

CMS should issue public reports and data at the state and national level in a consumer-friendly and research-ready format in a timely manner.

2. The Centers for Medicare & Medicaid Services should involve stakeholders in the development and future modifications of a new system. The agency should actively solicit and incorporate input from key stakeholders, including, but not limited to, states, beneficiaries, consumer groups, health plans, providers, researchers, and other policy experts. The process for establishing a new access monitoring system should be public and transparent.

3. The Centers for Medicare & Medicaid Services should field an annual federal Medicaid beneficiary survey to collect information on beneficiary perceptions and experiences with care.

4. The Centers for Medicare & Medicaid Services should further standardize and improve the Transformed Medicaid Statistical Information System data to allow for meaningful cross-state comparisons of the use of particular services, access to providers, and stratification by key demographic characteristics, such as race and ethnicity.

5. To assist states in collecting and analyzing access measures, the Centers for Medicare & Medicaid Services should provide analytical support and technical assistance.

1. Congress should amend Section 1902(a)(10)(A) of the Social Security Act to make coverage of vaccines recommended by the Advisory Committee on Immunization Practices a mandatory benefit and amend Sections 1916 and 1916A to eliminate cost sharing on vaccines and their administration.

2. The Centers for Medicare & Medicaid Services should implement payment regulations for vaccines and their administration. Payment for vaccines should be established at actual acquisition cost and a professional fee for administration, similar to the payment requirements established for outpatient prescription drugs under 42 CFR 447.512(b) and 447.518(a)(2).

3. The Centers for Medicare & Medicaid Services should issue federal guidance encouraging the broad use of Medicaid providers in administering adult vaccinations.

4. The Secretary of the U.S. Department of Health and Human Services should direct a coordinated effort with the Centers for Medicare & Medicaid Services (CMS), the Office of the Assistant Secretary for Health, and the Centers for Disease Control and Prevention to provide guidance and< technical assistance to improve vaccine outreach and education to Medicaid and CHIP beneficiaries. Additionally, CMS should release guidance on how to use existing flexibilities and funding under Medicaid and CHIP to improve vaccine uptake.

5. Congress should provide additional federal funds to improve immunization information systems (IIS). In addition, Congress should require the Secretary of the U.S. Department of Health and Human Services to coordinate efforts across relevant agencies within the department to release federal guidance and implement standards to improve IIS data collection and interoperability with electronic health records and state Medicaid Management Information Systems (MMIS). The Centers for Medicare & Medicaid Services should also provide guidance on matching rates available and ways to integrate IIS and MMIS to be eligible for the 90 percent match for the design, development, installation, or enhancement of MMIS and the 75 percent match for the ongoing operation of MMIS.

The Secretary of HHS provide states with guidance on how to use Medicaid authority to promote EHR adoption, and that HHS develops a voluntary certification for health IT essential for the delivery of high-quality behavioral health care that also
complies with state and federal privacy and security laws.

The Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services, the Substance Abuse and Mental Health Services Administration, and the Office of the National Coordinator for Health Information Technology to develop joint guidance on how states can use Medicaid authorities and other federal resources to promote behavioral health information technology adoption and interoperability.

The Secretary of Health and Human Services should direct the Centers for Medicare & Medicaid Services (CMS), the Substance Abuse and Mental Health Services Administration (SAMHSA), and the Administration for Children and Families (ACF) to issue joint subregulatory guidance that addresses the design and implementation of benefits for children and adolescents with significant mental health conditions covered by Medicaid and the State Children’s Health Insurance Program.

The Secretary of Health and Human Services should direct a coordinated effort by the Centers for Medicare & Medicaid Services, the Substance Abuse and Mental Health Services Administration, and the Administration for Children and Families to provide education and technical assistance to states on improving access to home and community-based behavioral health services for children and adolescents with significant mental health conditions covered by Medicaid and the State Children’s Health Insurance Program. Additionally, the Secretary should examine options to use existing federal funding to support state-level activities to improve the availability of these services.

The Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services, and the Substance Abuse and Mental Health Services Administration, to issue joint subregulatory guidance that addresses how Medicaid and the State Children’s Health Insurance Program can be used to fund a crisis continuum for beneficiaries experiencing behavioral health crises.

The Secretary of the U.S. Department of Health and Human Services should direct a coordinated effort by the Centers for Medicare & Medicaid Services, and the Substance Abuse and Mental Health Services Administration, to provide education and technical assistance on the implementation of a behavioral health crisis continuum that coordinates and responds to people in crisis in real-time. Additionally, the Secretary should examine options to use existing federal funding to support state-level activities to improve the availability of crisis services.

Congress should require states to provide full Medicaid benefits to individuals enrolled in all pregnancy-related pathways.

(Reiterates March 2014 recommendation).

The Secretary of Health and Human Services should engage the Centers for Medicare & Medicaid Services and the Administration for Children and Families to develop joint subregulatory guidance to assist states in understanding what therapeutic foster care services can be covered under Medicaid and how to coordinate services with other agencies in order to meet the needs of children and youth with significant behavioral health or medical conditions in a family-based setting.

To align coverage for pregnant women, Congress should require that states provide the same benefits to pregnant women who are eligible for Medicaid on the basis of their pregnancy that are furnished to women whose Medicaid eligibility is based on their status as parents of dependent children.

Congress should extend the postpartum coverage period for individuals who were eligible and enrolled in the State Children’s Health Insurance Program while pregnant (if the state provides such coverage) to a full year of coverage, regardless of changes in income.

1. Congress should extend federal CHIP funding for a transition period that would maintain stable source of children’s coverage and provide time to develop and test approaches for a more coordinated and seamless system of comprehensive, affordable coverage for children.

2. Congress should extend federal CHIP funding for five years, through fiscal year 2022, to give federal and state policymakers time to develop policies and to implement and test coverage approaches that promote seamlessness of coverage, affordability, and adequacy of covered benefits for low- and moderate-income children.

3. In order to provide a stable source of children’s coverage while approaches and policies for a system of seamless children’s coverage are being developed and tested, and to align key dates in CHIP with the period of the program’s funding, Congress should extend the current CHIP maintenance of effort and the 23 percentage point increase in the federal CHIP matching rate, currently in effect through FY 2019, for three additional years, through fiscal year 2022.

4. To reduce complexity and to promote continuity of coverage for children, Congress should eliminate waiting periods for CHIP.

5. In order to align premium policies in separate CHIP programs with premium policies in Medicaid, Congress should provide that children with family incomes below 150 percent FPL not be subject to CHIP premiums.

6. Congress should create and fund a children’s coverage demonstration grant program, including planning and implementation grants, to support state efforts to develop, test, and implement approaches to providing for CHIP-eligible children seamless health coverage that is as comprehensive and affordable as CHIP.

7. Congress should permanently extend the authority for states to use Express Lane Eligibility for children in Medicaid and CHIP.

8. The Secretary of the U.S. Department of Health and Human Services, in consultation with the Secretaries of the U.S. Department of Agriculture and the U.S. Department of Education should, not later than September 30, 2018, submit a report to Congress on the legislative and regulatory modifications needed to permit states to use Medicaid and CHIP eligibility determination information to determine eligibility for other designated programs serving children and families.

9. Congress should extend funding for five years for grants to support outreach and enrollment of Medicaid and CHIP-eligible children, the Childhood Obesity Research Demonstration projects, and the Pediatric Quality Measures program, through fiscal year 2022.

The Congress should extend federal CHIP funding for a transition period of two additional years during which time the key issues regarding the affordability and adequacy of children’s coverage can be addressed.

In order to align premium policies in separate CHIP programs with premium policies in Medicaid, the Congress should provide that children with family incomes below 150 percent FPL not be subject to CHIP premiums.

To reduce complexity and to promote continuity of coverage for children, the Congress should eliminate waiting periods for CHIP.

Congress should extend the postpartum coverage period for individuals who were eligible and enrolled in the State Children’s Health Insurance Program while pregnant (if the state provides such coverage) to a full year of coverage, regardless of changes in income.

The Secretaries of Health and Human Services and Treasury should specify that pregnancy-related Medicaid coverage does not constitute minimum essential coverage in cases involving women enrolled in qualified health plans.

(The Commission’s intent was to allow women already enrolled in exchange plans to retain that coverage when they become pregnant even if they became eligible for Medicaid thus reducing churning.)

In order to ensure that current eligibility options remain available to states in 2014, the Congress should, parallel to the existing Medicaid 12-month continuous eligibility option for children, create a similar statutory option for children enrolled in CHIP and adults enrolled in Medicaid.

The Congress should permanently fund current Transitional Medical Assistance (TMA)—required for six months, with state option for 12 months—while allowing states to opt out of TMA if they expand to the new adult group added under the Patient Protection and Affordable Care Act.

In order to improve transparency and enable analyses of net Medicaid payments, Congress should amend Section 1903(d)(6) of the Social Security Act to require states to submit an annual, comprehensive report on their Medicaid financing methods and the amounts of the non-federal share of Medicaid spending derived from specific providers. The report should include:

• a description of the methods used to finance the non-federal share of Medicaid payments, including the parameters of any health care-related taxes;
• a state-level summary of the amounts of Medicaid spending derived from each source of non-federal share, including state general funds, health care-related taxes, intergovernmental transfers, and certified public expenditures; and,
• a provider-level database of the costs of financing the non-federal share of Medicaid spending, including administrative fees and other costs that are not used to finance payments to the provider contributing the non-federal share.

This report should be made publicly available in a format that enables analysis.

In order to provide complete and consistent information on the financing of Medicaid and the State Children’s Health Insurance Program (CHIP), Congress should amend Section 2107(e) of the Social Security Act (the Act) to apply the Medicaid financing transparency requirements of Section 1903(d)(6) of the Act to CHIP.

Congress should amend the Social Security Act to provide an automatic Medicaid countercyclical financing model, using the prototype developed by the U.S. Government Accountability Office as the basis. The Commission also recommends this policy change should also include:

• an eligibility maintenance of effort requirement for the period covered by an automatic countercyclical financing adjustment;
• an upper bound of 100 percent on countercyclical adjusted matching rates; and
• an exclusion of the countercyclical adjusted federal matching rate from services and populations that receive special matching rates (e.g., for the new adult group) or are otherwise capped or have allotments (e.g., disproportionate share hospital payments, territories).

1. In issuing guidance and in providing technical assistance to states on engaging beneficiaries in Medical Care Advisory Committees (MCACs) under Section 42 CFR 431.12, the Centers for Medicare & Medicaid Services should address concerns raised by states related to beneficiary recruitment challenges, strategies to facilitate meaningful beneficiary engagement in Medicaid MCAC meetings, and clarify how states can provide financial arrangements to facilitate beneficiary participation.
2. In implementing requirements in 42 CFR 431.12(d)(2) that Medicaid Medical Care Advisory Committee (MCAC) membership include beneficiaries, state Medicaid agencies should include provisions in their MCAC bylaws that address diverse beneficiary recruitment, and develop specific plans for implementing policies to recruit beneficiary members from across their Medicaid population, including those from historically marginalized communities.
3.  In implementing requirements in 42 CFR 431.12(e) to increase the participation of beneficiary members in Medicaid Medical Care Advisory Committees (MCACs), state Medicaid agencies should develop and implement a plan to facilitate meaningful beneficiary engagement and to reduce the burden on beneficiaries in engaging in MCACs by streamlining application requirements and processes, and by addressing logistical, technological, financial, and content barriers.

State Medicaid agencies should use their contracting authority at 42 CFR 422.107 to require that Medicare Advantage dual eligible special needs plans (D-SNPs) operating in their state regularly submit data on care coordination and Medicare Advantage encounters to the state for purposes of monitoring, oversight, and assurance that plans are coordinating care according to state requirements. If states were required by Congress (as previously recommended by the Commission) to develop a strategy to integrate Medicaid and Medicare coverage for their dually eligible beneficiaries, states that include D-SNPs in their integration approach should describe how they will incorporate care coordination and utilization data and how these elements can advance state goals.

The Centers for Medicare & Medicaid Services should update guidance that supports states in their development of a strategy to integrate care that is tailored to each state’s health coverage landscape. The guidance should also emphasize how states that contract with Medicare Advantage dual eligible special needs plans can use their state Medicaid agency contracts to advance state policy goals.

Congress should authorize the Secretary of the U.S. Department of Health and Human Services to require that all states develop a strategy to integrate Medicaid and Medicare coverage for full-benefit dually eligible beneficiaries within two years with a plan to review and update the strategy as needed, to be determined by the Secretary. The strategy should include the following components—integration approach, eligibility and benefits covered, enrollment strategy, beneficiary protections, data analytics, and quality measurement—and be structured to promote health equity. To support states in developing the strategy, Congress should provide additional federal funding to states to assist with these efforts toward integrating Medicaid and Medicare coverage for full-benefit dually eligible beneficiaries.

Congress should amend Section 1917(b)(1) of Title XIX of the Social Security Act to make Medicaid estate recovery optional for the populations and services for which it is required under current law.

Congress should amend Section 1917 of Title XIX of the Social Security Act to allow states providing long-term services and supports under managed care arrangements to pursue estate recovery based on the cost of care when the cost of services used by a beneficiary was less than the capitation payment made to a managed care plan.

Congress should amend Section 1917 of Title XIX of the Social Security Act to direct the Secretary of the U.S. Department of Health and Human Services to set minimum standards for hardship waivers under the Medicaid estate recovery program. States should not be allowed to pursue recovery for: (1) any asset that is the sole income-producing asset of survivors; (2) homes of modest value; or (3) any estate valued under a certain threshold. The Secretary should continue to allow states to use additional hardship waiver standards.

The Centers for Medicare & Medicaid Services should issue subregulatory guidance to create an exception to the special enrollment period for dually eligible beneficiaries eligible for Medicare-Medicaid plans. This exception would allow such individuals to enroll on a continuous (monthly) basis. For purposes of switching plans or disenrolling under the special enrollment period, Medicare-Medicaid plan enrollees should be treated the same as other dually eligible beneficiaries in Medicare Advantage.

Congress should provide additional federal funds to enhance state capacity to develop expertise in Medicare and to implement integrated care models.

Congress should amend Section 1902(r)(2)(A) of the Social Security Act to require that when determining eligibility for the Medicare Savings Programs (MSPs), states use the same definitions of income, household size, and assets as the Social Security Administration (SSA) uses when determining eligibility for the Part D Low-Income Subsidy (LIS) program. To reduce administrative burden for states and beneficiaries related to MSP redeterminations, Congress should amend Section 1144 of the Social Security Act to require SSA to transfer continuing LIS program eligibility data to states on an annual basis.

The Secretary and the states should accelerate the development of program innovations that support high-quality, cost-effective care for persons with disabilities, particularly those with Medicaid-only coverage. Priority should be given to innovations that promote coordination of physical, behavioral, and community support services and the development of payment approaches that foster cost-effective service delivery. Best practices regarding these programs should be actively disseminated.

The Secretary, in partnership with the states, should update and improve quality assessment for Medicaid enrollees with disabilities. Quality measures should be specific, robust, and relevant for this population. Priority should be given to quality measures that assess the impact of current programs and new service delivery innovations on Medicaid enrollees with disabilities.

1. To bring independence and improve trust in the appeals process, Congress should amend Section 1932(b) of the Social Security Act to require that states establish an independent, external medical review process that can be accessed at the beneficiary’s choice, with certain exceptions for automatic review at the state’s discretion. The external medical review should not delay a beneficiary’s access to a state fair hearing.
2. To improve the beneficiary experience with the appeals process, the Centers for Medicare & Medicaid Services (CMS) should issue guidance to improve the clarity and content of denial notices and share information on approaches managed care organizations can leverage to fulfill their requirements to provide beneficiary assistance in filing appeals. Additionally, CMS should clarify how Medicaid funding may be used to support external entities, such as ombudsperson services.
3. To ensure beneficiaries receive denial notices in a timely manner, the Centers for Medicare & Medicaid Services should require managed care organizations to provide beneficiaries with the option of receiving an electronic denial notice, in addition to the mailed notice.
4. To improve beneficiary access to continuation of benefits, the Centers for Medicare & Medicaid Services (CMS) should extend the timeline for requesting continuation of benefits. Additionally, CMS should issue guidance offering tools, including model notice language, to improve beneficiary awareness of their rights to continue receiving services while an appeal is pending. Guidance should also clarify the federal limitations on managed care organizations seeking repayment for continued benefits after a denial is upheld and provide model notice language to explain to beneficiaries that repayment could be required if the state allows for recoupment under fee for service.
5. To improve monitoring and oversight of denials and appeals, the Centers for Medicare & Medicaid Services (CMS) should update regulations to require that states collect and report data on denials, beneficiary use of continuation of benefits, and appeal outcomes, using standardized definitions for reporting. The rules should require that states use these data to improve the performance of the managed care program. Additionally, CMS should update the Managed Care Program Annual Report template to require these data fields. CMS should also issue guidance to states regarding implementation of this data reporting requirement and incorporation of these data into monitoring and continuous improvement activities.
6. To improve oversight of denials, Congress should require that states conduct routine clinical appropriateness audits of managed care denials and use these findings to ensure access to medically necessary care. As part of rulemaking to implement this requirement, the Centers for Medicare & Medicaid Services (CMS) should allow states the flexibility to determine who conducts clinical audits and should add clinical audits as an optional activity for external quality review. CMS should release guidance on the process, methodology, and criteria for assessing whether a denial is clinically appropriate. CMS should update the Managed Care Program Annual Report template to include the results of the audit.
7. To improve transparency, the Centers for Medicare & Medicaid Services (CMS) should publicly post all state Managed Care Program Annual Reports to the CMS website in a standard format that enables analysis. Reports should be posted in a timely manner following states’ submissions to CMS. Additionally, CMS should require that states include denials and appeals data on their quality rating system websites to ensure beneficiaries can access this information when selecting a health plan.

Congress should amend Section 1932(a)(2) to allow states to require all beneficiaries to enroll in Medicaid managed care programs under state plan authority.

Congress should extend approval and renewal periods for all Section 1915(b) waivers from two to five years.

Congress should revise Section 1915(c) waiver authority to permit Section 1915(c) waivers to waive freedom of choice and selective contracting.

Congress should amend § 1927(d)(1)(B) of the Social Security Act to allow states to exclude or otherwise restrict coverage of a covered outpatient drug based on coverage with evidence development requirements implemented under a Medicare national coverage determination.

Congress should amend Section 1903(m)(2)(A)(xiii) to require the managed care contract conform to the state’s policy with respect to any exclusion or restriction of coverage of a covered outpatient drug based on coverage with evidence development requirements implemented under a Medicare national coverage determination.

1. Congress should amend Section 1902(a)(10)(A) of the Social Security Act to make coverage of vaccines recommended by the Advisory Committee on Immunization Practices a mandatory benefit and amend Sections 1916 and 1916A to eliminate cost sharing on vaccines and their administration.
2. The Centers for Medicare & Medicaid Services should implement payment regulations for vaccines and their administration. Payment for vaccines should be established at actual acquisition cost and a professional fee for administration, similar to the payment requirements established for outpatient prescription drugs under 42 CFR 447.512(b) and 447.518(a)(2).
3. The Centers for Medicare & Medicaid Services should issue federal guidance encouraging the broad use of Medicaid providers in administering adult vaccinations.
4. The Secretary of the U.S. Department of Health and Human Services should direct a coordinated effort with the Centers for Medicare & Medicaid Services (CMS), the Office of the Assistant Secretary for Health, and the Centers for Disease Control and Prevention to provide guidance and technical assistance to improve vaccine outreach and education to Medicaid and CHIP beneficiaries. Additionally, CMS should release guidance on how to use existing flexibilities and funding under Medicaid and CHIP to improve vaccine uptake.
5. Congress should provide additional federal funds to improve immunization information systems (IIS). In addition, Congress should require the Secretary of the U.S. Department of Health and Human Services to coordinate efforts across relevant agencies within the department to release federal guidance and implement standards to improve IIS data collection and interoperability with electronic health records and state Medicaid Management Information Systems (MMIS). The Centers for Medicare & Medicaid Services should also provide guidance on matching rates available and ways to integrate IIS and MMIS to be eligible for the 90 percent match for the design, development, installation, or enhancement of MMIS and the 75 percent match for the ongoing operation of MMIS.

Congress should amend Section 1927(c)(1) of the Social Security Act to increase the minimum rebate percentage on drugs that receive approval from the U.S. Food and Drug Administration (FDA) through the accelerated approval pathway under Section 506(c) of the Federal Food, Drug, and Cosmetic Act.

Congress should amend Section 1927(c)(2) of the Social Security Act to increase the additional inflationary rebate on drugs that receive approval from the U.S. Food and Drug Administration (FDA) through the accelerated approval pathway under Section 506(c) of the Federal Food, Drug, and Cosmetic Act.

Congress should amend Section 1927(d)(1)(B) of the Social Security Act to allow states to exclude or otherwise restrict coverage of a covered outpatient drug for 180 days after a new drug or new formulation of a drug has been approved by the Food and Drug Administration and entered the market.

Congress should amend Section 1927(c)(2)(D) of the Social Security Act to remove the cap on Medicaid drug rebates.

To ensure that manufacturer rebates are based on the price of the drug available to wholesalers and pharmacies, Congress should remove the statutory requirement in section 1927(k)(1)(C) that manufacturers blend the average manufacturer price of a brand drug and its authorized generic.

Congress should give the Secretary of Health and Human Services the authority to level intermediate financial sanctions to compel drug manufacturers to submit accurate drug classification data and strengthen enforcement actions. These authorities could include clear authority to reclassify an inappropriately classified drug and to level civil monetary penalties for the submission of inaccurate drug classification data.

The Centers for Medicare & Medicaid Services should facilitate state Medicaid agency coordination of benefits with the Department of Defense TRICARE program by working with the Department of Defense to develop a mechanism for routinely sharing eligibility and coverage data between state Medicaid agencies and the Defense Health Agency.

To protect Medicaid from improper payment of claims that are the responsibility of a third party and improve coordination of benefits for persons who have coverage through both Medicaid and TRICARE, Congress should direct the Department of Defense to require its carriers to implement the same third-party liability policies as other health insurers, as defined in Section 1902(a)(25) of the Social Security Act.

The Secretary of the U.S. Department of Health and Human Services should, under the Medicaid Integrity Program, conduct a rigorous examination of current state program integrity activities to identify the features of policy design and implementation associated with success. The Secretary should also use this authority to establish pilots to test novel strategies or improvements to existing strategies. Information gleaned from such examinations and pilots should be shared with states.

To provide states with flexibility in choosing program integrity strategies determined to be effective and demonstrate high value, Congress should amend 1902(a)(42)(B)(i) of the Social Security Act to make the requirement that states establish a recovery audit contractor program optional.

The Secretary should ensure that current program integrity efforts make efficient use of federal resources and do not place an undue burden on states or providers. In collaboration with the states, the Secretary should:

• create feedback loops to simplify and streamline regulatory requirements;
• determine which current federal program integrity activities are most effective; and
• take steps to eliminate programs that are redundant, outdated, or not cost-effective.

To enhance the states’ abilities to detect and deter fraud and abuse, the Secretary should:

• develop methods for better quantifying the effectiveness of program integrity activities;
• assess analytic tools for detecting and deterring fraud and abuse and promote the use of those tools that are most effective;
• improve dissemination of best practices in program integrity; and
• enhance program integrity training programs to provide additional distance learning opportunities and additional courses that address program integrity in managed care.

1. To improve the relationship between total state and federal DSH funding and the number of non-elderly low-income individuals in a state, Congress should revise Section 1923 of the Social Security Act to require the Secretary of the U.S. Department of Health and Human Services to develop a methodology to distribute reductions in a way that gradually improves the relationship between total state and federal DSH funding and the number of non-elderly low-income individuals in a state, after adjusting for differences in hospital costs in different geographic areas.
2. To ensure that total state and federal disproportionate share hospital (DSH) funding is not affected by changes in the federal medical assistance percentage, Congress should amend Section 1923 of the Social Security Act.
3. Congress should amend the Social Security Act to provide an automatic Medicaid countercyclical financing model, using the prototype developed by the U.S. Government Accountability Office as the basis.
4. To provide states and hospitals with greater certainty about available disproportionate share hospital (DSH) allotments in a timely manner, Congress should amend Section 1923 of the Social Security Act to remove the requirement that the Centers for Medicare & Medicaid Services (CMS) compare DSH allotments to total state Medicaid medical assistance expenditures in a given year before finalizing DSH allotments for that year.

To improve transparency of Medicaid spending, the Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services to collect and report the following data in a standard format that enables analysis:

• facility-level data on all types of Medicaid payments to nursing facilities, including resident contributions to their cost of care;
• data on the sources of non-federal share of spending necessary to determine net Medicaid payment at the facility level; and
•  comprehensive data on nursing facility finances and ownership necessary to compare Medicaid payments to the costs of care for Medicaid-covered residents and to examine the effects of real estate ownership models and related-party transactions.

To help inform assessments of whether Medicaid nursing facility payments are consistent with statutory goals of efficiency, economy, quality, and access, the Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services (CMS) to update the requirement that states conduct regular analyses of all Medicaid payments relative to the costs of care for Medicaid-covered nursing facility residents. This analysis should also include an assessment of how payments relate to quality outcomes and health disparities. CMS should provide analytic support and technical assistance to help states complete these analyses, including guidance on how states can accurately identify the costs of efficient and economically operated facilities with adequate staff to meet residents’ care needs. States and CMS should make facility-level findings publicly available in a format that enables analysis. 

1. To improve transparency of Medicaid spending, the Secretary of the U.S. Department of Health and Human Services should make directed payment approval documents, managed care rate certifications, and evaluations for directed payments publicly available on the Medicaid.gov website.

2. To inform assessments of whether managed care payments are reasonable and appropriate, the Secretary of the U.S. Department of Health and Human Services should make provider-level data on directed payment amounts publicly available in a standard format that enables analysis.

3. To provide additional clarity about the goals and uses of directed payments, the Secretary of the U.S. Department of Health and Human Services should require states to quantify how directed payment amounts compare to prior supplemental payments and clarify whether these payments are necessary for health plans to meet network adequacy requirements and other existing access standards.

4. To allow for more meaningful assessments of directed payments, the Secretary of the U.S. Department of Health and Human Services should require states to develop rigorous, multiyear evaluation plans for directed payment arrangements that substantially increase provider payments above the rates described in the Medicaid state plan.

5. To promote more meaningful oversight of directed payments, the Secretary of the U.S. Department of Health and Human Services should clarify roles and responsibilities for states, actuaries, and divisions of the Centers for Medicare & Medicaid Services involved in the review of directed payments and the review of managed care capitation rates.

To avoid Medicaid making disproportionate share hospital (DSH) payments to cover costs that are paid by other payers, Congress should change the definition of Medicaid shortfall in Section 1923 of the Social Security Act to exclude costs and payments for all Medicaid-eligible patients for whom Medicaid is not the primary payer.

1. If Congress chooses to proceed with DSH allotment reductions in current law, it should revise Section 1923 of the Social Security Act to change the schedule of DSH allotment reductions to $2 billion in fiscal year (FY) 2020, $4 billion in FY 2021, $6 billion in FY 2022, and $8 billion a year in FYs 2023-2029, in order to phase in DSH allotment reductions more gradually without increasing federal spending.

2. In order to minimize the effects of DSH allotment reductions on hospitals that currently receive DSH payments, Congress should revise Section 1923 of the Social Security Act to require the Secretary of the U.S. Department of Health and Human Services to apply reductions to states with DSH allotments that are projected to be unspent before applying reductions to other states.

3. In order to reduce the wide variation in state DSH allotments based on historical spending, Congress should revise Section 1923 of the Social Security Act to require the Secretary of the U.S. Department of Health and Human Services to develop a methodology to distribute reductions in a way that gradually improves the relationship between DSH allotments and the number of non-elderly low-income individuals in a state, after adjusting for differences in hospital costs in different geographic areas.

1. The Secretary of the U.S. Department of Health and Human Services should establish process controls to ensure that annual hospital upper payment limit demonstration data are accurate and complete and that the limits calculated with these data are used in the review of claimed expenditures.

2. To help inform development of payment methods that promote efficiency and economy, the Secretary of the U.S. Department of Health and Human Services should make hospital-specific upper payment limit demonstration data and methods publicly available in a standard format that enables analysis.

The Commission recommends that the Secretary of the U.S. Department of Health and Human Services collect and report hospital-specific data on all types of Medicaid payments for all hospitals that receive them.  In addition, the Secretary should collect and report data on the sources of non-federal share necessary to determine net Medicaid payment at the provider level.

As a first step toward improving transparency and facilitating understanding of Medicaid payments, the Secretary should collect and make publicly available non-DSH (UPL) supplemental payment data at the provider level in a standard format that enables analysis.

The Secretary of Health and Human Services should direct relevant agencies to issue joint subregulatory guidance that addresses Medicaid and CHIP provider and plan needs for clarification of key 42 CFR Part 2 provisions.

The Secretary should direct a coordinated effort by relevant agencies to provide education and technical assistance on 42 CFR Part 2. Such efforts should target state Medicaid and CHIP programs, health plans, primary care and specialty providers, patients and their families, and other relevant stakeholders.