Standards Perspectives

Healthcare regulations and policies are very complex and ever-evolving. It’s important for managers of health plans and state Medicaid agencies to understand what new legislation means and how it affects their programs. Standards Perspectives brings you the latest details on new policies and standards so you can quickly and clearly learn what’s important to make the right decisions.

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21st Century Cures Act for Healthcare

The 21st Century Cures Act, signed December 13, 2016 by President Obama, promotes and funds the acceleration of research into preventing and curing serious illnesses; accelerates drug and medical device development; attempts to address the opioid abuse crisis; and tries to improve mental health service delivery. The Act includes a number of provisions that push for greater interoperability, adoption of electronic health records (EHRs) and support for human services programs.

This bipartisan bill was passed by a Republican Congress and signed by a Democratic President. Its funding should survive through the new administration, even under scenarios of an Affordable Care Act repeal and Medicaid block granting.


A Sprawling Healthcare Bill

Virtually two years in the making, the 21st Century Cures Act was one of the most heavily lobbied pieces of legislation in recent memory. Along with addressing a number of critical healthcare issues, there are also several provisions that affect the nuts and bolts of government-funded healthcare programs.

Electronic Visit Verification

Electronic Visit Verification (EVV) is being required with phased-in dates for personal care and home health services provided under Medicaid, including Fee-for-Service and Medicaid Managed Care plans. Personal care services are required to be verified by January 1, 2019 and home health services by January 1, 2023.

There currently is a 90 percent/10 percent implementation match and a 75 percent/25 percent operations match on EVV systems through CMS-enhanced funding. Further regulatory guidance should be released by January 1, 2018.

Provider Termination Notification Database

Several provisions in the Act intend to reduce the likelihood that providers terminated for cause can receive reimbursement from another federally supported health plan in the same or another state.

HHS will consult with Medicaid agencies and plans and issue regulations that create a standard terminology for provider terminations in the Medicaid and CHIP programs. The deadline for HHS to issue these regulations is July 1, 2017.

By July 1, 2018, reporting of provider terminations between the states and HHS must be in place. States must report Medicaid and CHIP terminations within 30 days and HHS must determine within 30 days whether to include them in the “Termination Notification Database.” Once providers are in the database for 60 days, no federal funds will be provided for any payments related to services they render. States are also required to update their MCO contracts by this date to ensure alignment and compliance with these provisions by MCO providers and payments made in their behalf.

Mandatory Provider Enrollment with State

The 21st Century Cures Act echoes the 2016 Medicaid Managed Care Final Rule in requiring both fee-for-service and Medicaid managed care providers to be enrolled with the state Medicaid agency. The Act defines a standard set of information providers must submit to the state to participate in the Medicaid or CHIP program. It includes: name, specialty, date of birth, Social Security number, national provider ID (NPI), federal tax ID and state license or certification number. It also defines the provider roles required to submit this information: providing services, ordering, prescribing, referring and certificating eligibility or services.

The requirement for fee-for-service providers began January 1, 2017; MCO providers will start January 1, 2018. While many states already require their MCO providers to be enrolled with the state, this may be new for some CHIP and Medicaid managed care plans.

Fee-For-Service Provider Directory

An August 2016 report by the U.S. Government Accountability Office found varying levels of availability and functionality among online provider directories. As of January 1, 2017, states are required to publish and update an online provider directory on at least an annual basis. These provisions echo the provisions contained in the 2016 Medicaid Managed Care Final Rule. The directory must include physicians and can optionally include other types of providers. Providers that are enrolled but inactive for at least 12 months do not have to be included.

The directory must include physician or provider name, specialty, service address and telephone number. States could use their discretion to include other information, but the law specifically suggests the provider website and whether they are accepting new patients.

States operating a Primary Care Case Management program require additional. It’s mandatory for providers to accept new patients. The directory must also share the provider’s cultural and linguistic capabilities, including languages spoken by the physician or an on-site skilled medical interpreter.

Claims Processing Changes for Medicaid

There are several changes that affect claims processing:

  1. The pricing of Durable Medical Equipment under Medicaid is limited to the Medicare reimbursement rate starting January 1, 2018. Medicare publishes a fee schedule annually with updates occurring during the course of the year.
  2. Historically many healthcare programs have restricted the ability to receive mental health services and primary care services on the same day and at the same facility. The Act makes it clear there is no federal restriction against this, which may help support behavioral health integration.
  3. Services for Early and Periodic Screening, Diagnostic and Treatment (EPSDT) are now allowed for children receiving Medicaid-covered inpatient psychiatric hospital services.
  4. Drugs for cosmetic purposes or hair growth are prohibited from reimbursement, except where medically necessary.

Penalties for Misbehavior or False Statements with Contract Bids

New federal civil penalties have been created for those that knowingly provide false information in relation to fully or partially HHS-funded contracts. This includes making false statements, omissions or misrepresentations as well as failing to cooperate with investigations.


Federal Role Regarding HIT Standards

The law envisions a continuing strong federal role in the regulation and development of HIT standards. The Office of the National Coordinator for Health Information Technology (ONC) will continue to lead these activities at the federal level. ONC’s public website states: “The ONC is a resource to the entire health system to support the adoption of health information technology and the promotion of nationwide health information exchange to improve healthcare. ONC is organizationally located within the Office of the Secretary for the U.S. Department of Health and Human Services (HHS). ONC is the principal federal entity charged with coordination of nationwide efforts to implement and use the most advanced health information technology and the electronic exchange of health information.”


Implementation Timeline

A number of provisions have already taken effect, such as penalties for misbehavior or false statements with contract bids; no reimbursement for drugs for cosmetic and hair-growth purposes; receiving mental health and primary care services on the same day; and EPSDT services allowed while receiving inpatient psychiatric hospital services.

At the beginning of 2017, funding began for opioid state grants, which will run for two years.

Mandatory provider enrollment with state for fee-for-service providers also took effect, as did the online directory for fee-for-service providers.

Other parts of the 21st Century Cures Act are slated for implementation after this year:

January 1, 2018: Mandatory provider enrollment with the state for MCO providers, and DME reimbursement under Medicaid limited to Medicare rates.

July 1, 2018: Provider Termination Notification database takes effect.

January 1, 2019: EVV required for personal care services.

January 1, 2023: EVV required for home health services.


What This Means for Medicaid

Many of the items included in this law will lead to regulatory guidance that will be released over time by HHS and CMS. NPRMs will be issued, followed by comment periods and final rules.

Due to the detail and complexity of the provisions, it is likely that sub-regulatory guidance will follow the publishing of final rules.

You can read more Conduent insights about healthcare regulations in previous editions of Standards Perspectives.