Plugged Into Health @ Hinman Straub – June 26, 2018

Legislative Update: End of Session

New York’s 2018 legislative session concluded on Thursday, June 21 with the customary flurry of activity and negotiations on high-profile issues, including teacher evaluations, speed cameras in school zones in New York City and Buffalo, sports gambling, and economic development transparency. However, the end of the 2018 legislative session was notably constrained with a lack of high profile legislative accomplishments. Likewise, a number of local laws, including local tax laws, requiring statutory extensions, were left unpassed. As a result, there is a possibility that the Legislature will return to Albany prior to the September primaries to wrap up unfinished business.

One of the biggest impediments to lawmakers reaching agreements on significant items was the politics of the State Senate. The Senate Republican Conference controls the chamber, but the absence of one Republican senator left both parties with 31 votes – one short of the number needed to approve legislation. The result, on many issues, was gridlock.

By now, you should have received from us a summary of those bills important to you that have passed both Houses of the Legislature. Those bills that have passed both houses of the Legislature will be delivered to the Governor in “batches” over the next several months. Once a bill has been delivered to the Governor, he has 10 days (excluding Sundays) to either sign the bill into law or veto the bill.

Governor Commits to Safe Staffing

Governor Cuomo, last Friday, issued a statement that he would be introducing legislation allowing the Department of Health to set safe staffing levels either by regulation or in next year’s Legislative Session. In the statement, he noted the lack of action on “safe staffing” issues, which would establish minimum nurse and health professional staffing ratios in hospitals and nursing homes.

The statement also indicated that the Governor has directed the Department of Labor to pursue penalty-pay for nurses who have been subject to wage violations by their employers. He noted reports of nurses being forced to work through lunch breaks, additional hours, and without fair compensation.

VBP Updates

VBP QIP Update Webinar

Last week, DOH held an update webinar for VBP QIP stakeholders.  Highlights from the webinar include:

  • DY4 Awards:  MCOs were advised to continue to pay VBP QIP hospital partners DY3 QIP amounts until the updated DY4 amounts are approved and loaded onto the system.  At that point, MCOs will be expected to make adjustments.
  • Contract Deadline: DOH reminded participants that VBP Level 1 contracts are due to DOH by Friday, June 29th or penalties will be imposed.  DOH reminded MCOs of the requirements for a VBP contract to be officially accepted as meeting the deadline.  This includes that it is emailed to the appropriate mailbox, [email protected].
  • Service Exclusion Waiver: As a reminder, there is a service exclusion waiver that may be submitted until Wednesday June 27 for facilities that do not believe they can meet the 80% requirement based on factors beyond the hospital’s control that limit its ability to meet the target, such as limited attribution based on lack of PCP partnerships.  The Waiver does not exempt a facility from the “80%” requirement but limits the calculation to only the hospital’s ED and inpatient dollars that are in VBP arrangements as a percentage of total ED and inpatient dollars paid to the facility by MCOs.  Waiver application reviews are expected to take no more than 72 hours for DOH to review and issue a determination.  DOH anticipates making a final determination whether a contract meets VBP and other DOH requirements by September 28, 2018.
  • Contract Attestation: New this year, DOH is asking for an attestation from the facility to be submitted by Friday June 29.  The attestation must be sent to [email protected] with “VBP QIP-MCO Contract Attestation” in the subject line.  Please note that this is a different email address than where the actual contract must be sent ([email protected]).
  • Contract Submission: Off-menu checklists are not required to be submitted, however, they are encouraged and well-received.  It is likely that any “no” selections will identified for remediation.
  • MCO Options for Withholding Penalties: Penalties for missing P4R or P4P requirements will be reflected in the January rate package.  MCOs will have three options when it comes to penalties: (1) withhold (in lump sum) the penalty assessed to the facility from their normal rate payments; (2) keep paying the full funding and then recover the penalty amount (the State will then recover this amount from the MCO); or (3) prorate the penalty over the course of the associated fiscal year.

The next VBP QIP Update Webinar will be held September 12, 2018.

DSRIP Updates

Medicaid Accelerated eXchange or (“MAX”) Series Results Announced

The Department of Health, last week, announced that the Medicaid Accelerated eXchange or (“MAX”) Series has resulted in a reduction in avoidable hospital use. Since its launch in 2015, the MAX Series has been a part of the Department’s strategy to achieve DSRIP goals. According to the press release, MAX series participants are showing an 18% reduction in hospital readmissions and an 8% reduction in hospitalizations overall.

The objective of the MAX Series is to empower hospital and community partners in their care redesign efforts, increase patient and workforce satisfaction and reduce avoidable hospitalizations. To date, the MAX effort has tracked 15,000 patients across the state, and more than 900 professionals from 68 hospitals and 11 community-based practices from around the State have participated.

For additional information on the MAX Series, click here.

DFS Responds to Federal Regulations on Limited Duration Policies and Association Health Plans

Last week, the Department of Financial Services (“DFS”) issued a circular letter (“Insurance Circular Letter No. 7 (2018)”) reminding insurers and health maintenance organizations (“HMOs”) that short-term limited duration health insurance plans are prohibited in NYS regardless of proposed federal regulatory changes. According to the letter, NYS Insurance Law prohibits all insurers from offering short-term limited duration plans because short-term limited duration plans do not comply with the guaranteed renewability requirements of New York law applicable to individual or group hospital, surgical or medical expense coverage. Additionally, every policy that provides hospital, surgical or medical expense coverage must be comprehensive and, with respect to individual and small group coverage, must provide coverage for essential health benefits. The Department of Financial Services indicates that these NYS requirements are not preempted by the requirements in federal law.

The circular letter was issued in response to a rule proposed by the federal Departments of Health and Human Services, Labor and Treasury that would expand the policy term for limited duration policies offered in the individual health insurance marketplace. Under the federal proposal, limited duration plans could be issued for terms of up to one day less than one year. Current federal law permits short-term plans in the individual market only if the term is less than three months. Short-term limited duration plans are exempt from protections afforded consumers under the Affordable Care Act including essential health benefits.

On a related note, the federal Department of Labor “(“DOL”) on June 19, 2018, issued a final regulation establishing “Association Health Plans” (“AHPs”), as directed by President Trump’s Executive Order issued in October. The final regulation allows AHPs to be deemed single employers, to form for the sole purpose of offering health coverage, for employer-members of an AHP to meet the commonality of interest test if they each have a principal place of business within a region that does not exceed the boundaries of the same state or the same metropolitan area, and for sole proprietors to join AHPs under certain conditions.  The regulation also includes nondiscrimination provisions which will somewhat mitigate the ability of AHPs to cherry-pick groups.

Importantly, the final regulation continues to allow state regulation of AHPs and thus will have no significant impact in New York. Under the final rule, community rating rules may continue to apply to employer members of associations with fewer than 100 employees and association groups will continue to have to meet existing requirements, including the requirement that the association be formed for purposes other than obtaining insurance.  State benefit mandates will also apply under the federal rule, and DFS is permitted to continue to regulate self-funded multiple employer welfare arrangements (“MEWAs”).

Despite what appears to be limited impact, New York Attorney General Underwood, last week, announced that she and Massachusetts Attorney General Maura Healey will be suing the Trump administration over the final AHP regulation.

DFS Advises Insurers on Underwriting for Individuals with a History of HIV-Prevention Medication Use

Last week, the Department of Financial Services (“DFS”) issued a circular letter (“Insurance Circular Letter No. 8 (2018)”) advising insurers and fraternal benefit societies authorized to write life insurance and accident and health insurance of their statutory obligations regarding underwriting in life insurance, disability income insurance, and long term care insurance for the use of PrEP to reduce the risk of contracting HIV infection.  PrEP is an HIV prevention strategy where individuals who are not infected with HIV but may be at risk of exposure to the virus take medication to reduce their risk of becoming infected.

According to the circular letter, existing statutory restrictions prohibit issuers from discriminating based on an applicant’s use of HIV prevention strategies, such as PrEP.  The letter reasons that underwriting practices in which adverse underwriting decisions are applied to individuals who take PrEP to mitigate the risk of contracting HIV, but no adverse underwriting decisions are applied to individuals with the same level of potential exposure to HIV who do not take PrEP to mitigate the risk of contracting HIV, are neither based on sound actuarial principles nor related to actual or reasonably anticipated experience.

The circular letter was issued in response to reports of insurance denials and a subsequent DFS investigation of issuers’ underwriting guidelines and practices related to HIV prevention strategies, such as the use of PrEP to reduce the risk of contracting HIV infection.

OMIG Work Plan Updates

The New York State Office of the Medicaid Inspector General has posted an update to its Work Plan for fiscal year 2018-2019 (“2018-19 OMIG Work Plan”). The update includes four new action items for the Work Plan.

  • Compliance Certification Change:  To make the annual compliance certification process more efficient, OMIG is transitioning from a system that utilizes the Federal Employer Identification Numbers (FEIN) to a system based on Provider Identification Numbers.
  • Drug Utilization Alerts:  OMIG is working to proactively educate providers where a substance utilization review indicates that a recipient may have an accumulation of a controlled substance although they did not meet the criteria for restriction under OMIG’s Recipient Restriction Program.  A “Controlled Substance Accumulation” notice will be sent to alert providers of the potential overutilization and abuse.  Similarly, OMIG developed the Medication Therapy Review Form to alert prescribers to instances of apparent therapeutic duplication.  This will allow the prescriber to reconcile the recipient’s medication list and identify potential forgeries or overutilization.
  • Transportation Review:  OMIG is conducting Credential Verification Reviews (“CVRs”) throughout New York State to ensure Medicaid transportation providers are adhering to all of the requirements outlined within the Department of Health Transportation Manual policy guidelines.
  • Medi-Medi Crossover:  OMIG is collaborating with both UPIC and RAC contractors to identify duplicative payments occurring between Medicare and Medicaid.

As a reminder, starting this year, OMIG will update priorities over the course of the year to “adapt to the changing Medicaid landscape.”  Thus, the Work Plan for 2018-19 is no longer a finalized document but a website containing ongoing agency priorities that will be updated over the course of the year.  These updates will be communicated via email to the OMIG listserv.

Visit the Work Plan webpage section entitled “Work Plan Updates” for updated information and activities.

OSC Audits Health and Recovery Plan (“HARP”) Drug Rebates

Last week, the Office of the State Comptroller (“OSC”) issued a report of a recent audit designed to determine whether the Department of Health took appropriate steps to collect all available drug rebates for Health and Recovery Plans (“HARPs”).

The audit found that the Department did not take appropriate steps to ensure that HARP-related drugs were identified and processed for rebate invoicing.  The Department erroneously excluded HARP drugs from rebate invoices due to inadequate monitoring of the drug rebate process by Department management.

After OSC notified the Department of the issue, the Department updated its procedures to include HARP drug encounters in its quarterly drug rebate invoicing process, and retroactively invoiced manufacturers for previously missed HARP rebates.  As a result of the Department’s corrective actions, $425.9 million in drug rebates has been invoiced for the period October 1, 2015 to December 31, 2017.  Additionally, another $1.2 million in rebates could be collected with further efforts.

The OSC report made several recommendations for the Department of Health based on the audit, including:

  • Regularly monitoring the activities of the new rebate contractor to ensure the accuracy of the drug rebate function, including:
    • Ensuring all appropriate HARP drug encounters are included in the rebate process;
    • Ensuring all new programs eligible for rebates are included in the rebate process; and
    • Independently verifying the accuracy of the final rebate invoices.
  • Taking appropriate steps, including working with the new contractor, to invoice any remaining uncollected drug rebates from HARP encounters, including the $1.2 million in physician administered drug rebates identified.

Regulatory Updates

Department of Financial Services

Minimum Standards for Form, Content, and Sale of Health Insurance, Including Standards for Full and Fair Disclosure

The Department of Financial Services recently issued a notice of emergency adoption and proposed rulemaking that would authorize accident and health insurers to issue volunteer firefighter enhanced cancer insurance policies.  The rulemaking establishes minimum standards for the policies providing this insurance coverage.  Among those standards, every volunteer firefighter enhanced cancer insurance policy would include lump sum benefits ranging from $25,000 to $6,250 for cancer diagnoses, a monthly benefit of $1,500 for disability caused by cancer, and a $50,000 cancer related death benefit.  The minimum loss ratio (“MLR”) for volunteer firefighter enhanced cancer insurance would be 75 percent.

This emergency/proposed regulation is being issued in response to Chapter 334 of the Laws of 2017 added a new General Municipal Law requiring every legally organized fire district, department or company in this state to provide eligible volunteer firefighters with enhanced cancer benefits.  The benefits may either be self-funded by a fire district, department or company or be provided in an insurance policy.

The Department will be accepting public comment on the proposed conversion until Monday, August 20, 2018.  Comments may be submitted by mail, or electronically.

Plan of Conversion by Medical Liability Mutual Insurance Company 

The Department of Financial Services recently issued a notice of proposed rulemaking that would approve the conversion of Medical Liability Mutual Insurance Company from a mutual property and casualty insurance company to a stock property and casualty insurance company.

A public hearing on the conversion will be held on Thursday, August 23, 2018 at 10:00 a.m. at the Department of Financial Services, One State St., 6th Fl., New York, NY.

The Department will be accepting public comment on the proposed conversion until Tuesday, August 28, 2018.  Comments may be submitted by mail, or electronically.

Upcoming Calendar

Monday, June 25, 2018

 

 New York State Council on Graduate Medical Education

10:45 a.m. to 1:15 p.m.

New York State Department of Health, 90 Church Street, Floor 4, Rooms A & B, New York, NY
Thursday, June 28, 2018

 

 New York State Immunization Advisory Council

12:30 p.m.

School of Public Health, Café Conference Room, 1 University Drive, Albany, NY
Thursday, August 23, 2018 Public Hearing on the Conversion of  Medical Liability Mutual Insurance Company

10:00 a.m.

Department of Financial Services, One State St., 6th Fl., New York, NY