When will states receive federal pass through funding?
A9: Generally, states will receive an initial estimate of the federal pass-through funding amount in the fall of each year (before the beginning of the plan year). The initial federal pass-through funding amounts estimated in the fall of each year are informational and may be adjusted by the Departments as necessary to reflect subsequent developments such as changes in Federal or State laws. For example, if a state newly expanded Medicaid, the pass-through funding amount could change. The final federal pass-through funding amount or final administrative determination will be shared in a letter prior to the payment of the pass-through funding amount as provided in the specific terms and conditions of the approval letter (typically before the end of April of the plan year).
How is section 1332 funding determined?
A2: The pass-through funding amount is determined by the Departments. When applying for a section 1332 waiver and seeking pass-through funding, a state must explain why, under its state plan, the state anticipates that individuals would not qualify for, or would qualify for a reduced amount of, PTC or SBTC for which they would otherwise be eligible. The state must also provide analysis and supporting data to inform the Departments’ estimate of the pass-through funding amount. This may include information about enrollment, premiums and other information as may be required by the Departments. The state’s application must also explain
What is the state responsible for?
A6: A state is responsible for ensuring that the approved state plan is fully funded, consistent with the terms and conditions for an approved waiver. A pass-through funding amount higher than estimated may reduce the level of funding required by the state to implement the waiver . States that receive more pass-through funding than estimated must use all federal pass through funds to implement their state waiver plan, or return unused funds to the Treasury. In this situation, a state may not have to use all the state funds it anticipated.
Why do states use pass through payments?
Historically, states have used pass-through payments to ensure funding to specific providers who serve a significant number of Medicaid recipients. An example of this is funding safety-net providers, who largely focus on providing care to low-income and uninsured populations.
What is Medicaid managed care?
1. A specific service or benefit provided to a specific enrollee covered under the contract. 2. Permissible provider payment methodologies outlined in §438.6 (c) (1) of the final Medicaid managed care regulations. 3.
What is CMS's conceptual framework?
Under CMS’s conceptual framework, payments to providers should be directly related to services provided to beneficiaries under the contract or value-based payment structures for such services . Further, CMS maintains that managed care plans should maintain the ability and responsibility to utilize the full value of the capitation payment for delivery of services and associated administrative costs.
Does higher mandated reimbursement reduce supplemental payments?
Although higher mandated reimbursement may mitigate the loss of supplemental payments for healthcare providers, a source of funding must also be found. For states that already have provider assessments in place, funding may already be adequate to support mandated minimum reimbursement.
Is Medicaid supplemental payment subject to the new regulations?
Currently, supplemental payments made for Medicaid members under a fee-for-service arrangement with the state are not subject to the new regulations. Therefore, the new regulations do not represent a level playing field and may dis-incentivize the use of managed care. CMS responses to state concerns.
How much does a drug have to be to be eligible for pass through payments?
To be eligible for pass-through payments, a drug’s estimated cost must: Exceed 10% of the ambulatory payment classification (APC) rate. Exceed the portion of the APC rate associated with packaged drugs by at least 25%. In addition, the difference between the estimated cost of the drug and the portion of the APC rate associated with ...
What is the GAO for Medicare?
The 2018 federal budget included a provision for the Government Accountability Office (GAO) to review the impact of Medicare’s policy of packaging payment for high-cost drugs with related procedures after their pass-through payment eligibility expires.
What are some examples of factors other than payment structure that affect utilization?
The report notes that factors other than payment structure may affect utilization. Examples include: Hospital formulary processes, especially for new drugs. Specific benefits of the drug for certain populations. Specific challenges of the drug that limit use.
Does APC increase after pass through?
APC rates tend to increase after pass-through payments expire. The end of a drug’s pass-through status actually may lead to higher payments in some situations. Namely, associated APC rates tend to go up, in which case Medicare pays more for the procedure when the drug is not used compared with what it paid in that scenario when ...
Does Medicare pay for outpatient drugs?
The Government Accountability Office found that Medicare pays more to cover drugs used in hospital outpatient settings when pass-through payment status is in effect. Hospital utilization of drugs increased when pass-through status applied relative to when drugs were package-priced with the related procedure. However, the removal of pass-through ...
Does Medicare pass through increase APC?
However, the removal of pass-through status might raise the APC payment rate for a drug’s related procedure. The Medicare pass-through payment policy that applies to certain drugs drives higher spending and utilization in the outpatient setting, according to a new report from a U.S. government agency. The 2018 federal budget included ...