House Energy & Commerce Committee Issues Report on Ensuring Removal of Terminated Providers from Medicaid, Chip Act

Targeted News Service

WASHINGTON, Feb. 27 -- The House Energy and Commerce Committee issued a report (H.Rpt. 114-427) on legislation (H.R. 3716) to to amend title XIX of the Social Security Act to require States to provide to the Secretary of Health and Human Services certain information with respect to provider terminations. The report was advanced by Rep. Fred Upton, R-Mich., on Feb. 23.

Excerpts of the report follow:

PURPOSE AND SUMMARY

H.R. 3716, the Ensuring Terminated Providers are Removed from Medicaid and CHIP Act, would require States and Medicaid managed care plans to report identifying information for providers terminated for reasons related to fraud, integrity and quality from Medicare or one State's Medicaid or Children's Health Insurance Program (CHIP). The bill would, among other things, also require providers participating in Medicaid or CHIP managed care to be enrolled with the State; require CMS to include State reported provider terminations and Medicare provider terminations in its Termination Notification Database or equivalent system; and require States to pay back the federal portion of Medicaid and CHIP payments made to terminated providers for services performed more than 60 days after a provider's termination is included in the CMS Termination Notification Database.

BACKGROUND AND NEED FOR LEGISLATION

Prior to passage of the Patient Protection and Affordable Care Act (PPACA), a provider excluded from participation in one State's Medicaid program, could potentially participate in another State's Medicaid program, leaving the second State's program vulnerable to fraud, waste, or abuse committed by that provider. To prevent this from happening, Section 6501 of PPACA amended Section 1902(a)(39) of the Social Security Act (SSA) so that a State not only must exclude a provider for engaging in activities articulated in Section 1128 and Section 1128A (engaging in fraud or other certain criminal activity related to patient care), but that other States also must terminate the participation of a provider from its Medicaid program if that provider's participation was terminated from Medicare or from another State Medicaid program. This requirement was intended to strengthen Medicaid program integrity across States, so that a specific provider found to warrant termination in one State cannot continue to provide services for Medicaid beneficiaries in another State and receive Medicaid payments for doing so.

Despite the PPACA requirement, the Department of Health and Human Services' Office of Inspector General (OIG) found continued participation from providers terminated 'for reasons of fraud, integrity or quality' (referred to as 'for cause' terminations) by one State Medicaid program in other States' programs. Specifically, the OIG found that 12 percent of providers terminated for cause from a State Medicaid program during 2011 (295 of the 2,539 providers) were participating in another State's Medicaid programs as of January 1, 2012. Further, 172 of the 295 providers continued their participation in Medicaid as late as January 2014, more than 2 years after they were terminated for cause from another State program. These Medicaid programs paid $7.4 million to 94 providers for services performed after each provider's termination for cause by the initial State. Furthermore, a review of public records conducted by Reuters found that more than one in five providers excluded from Medicare were still able to bill State Medicaid programs.

The OIG report noted several challenges faced by States in implementing the PPACA requirement, including the lack of a comprehensive centralized data source that identifies providers terminated for cause; the lack of uniform terminology in existing data sources regarding the reasons for provider terminations; and challenges related to excluding providers participating in managed care since those providers may not be enrolled with the State Medicaid agency. H.R. 3716 would address the challenges and concerns raised by the OIG.

HEARINGS

The Subcommittee on Health held a hearing on H.R. 3716 on September 11, 2015. The Subcommittee received testimony from:

John Hagg, Director of Medicaid Audits, Office of Inspector General, U.S. Department of Health and Human Services;

Nico Gomez, Chief Executive Officer, Oklahoma Health Care Authority; and

Trish Riley, Executive Director, National Academy for State Health Policy; Commissioner, Medicaid and CHIP Payment and Access Commission.

COMMITTEE CONSIDERATION

On November 3, 2015, the Subcommittee on Health met in open markup session and forwarded H.R. 3716 to the full Committee, as amended, by a voice vote. On November 17, 2015, the full Committee on Energy and Commerce met in open markup session and ordered H.R. 3716 reported to the House, as amended, by a voice vote.

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion to report legislation and amendments thereto. There were no record votes taken in connection with ordering H.R. 3716 reported.

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House of Representatives, the Committee held a hearing and made findings that are reflected in this report.

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The objective of H.R. 3716 is to ensure that providers terminated for cause from one State's Medicaid program or Medicare are also removed from other States' programs.

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the House of Representatives, the Committee finds that H.R. 3716, would result in no new or increased budget authority, entitlement authority, or tax expenditures or revenues.

EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of the House of Representatives, the Committee finds that H.R. 3716 contains no earmarks, limited tax benefits, or limited tariff benefits.

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by the Director of the Congressional Budget Office pursuant to section 402 of the Congressional Budget Act of 1974.

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House of Representatives, the following is the cost estimate provided by the Congressional Budget Office pursuant to section 402 of the Congressional Budget Act of 1974:

H.R. 3716--Ensuring Removal of Terminated Providers from Medicaid and CHIP Act

Summary: H.R. 3716 would assist states in identifying health care providers who are ineligible to participate in their state Medicaid or Children's Health Insurance Program (CHIP) programs because the provider was terminated from participating in another state's programs or in the Medicare program.

CBO estimates that the bill would reduce direct spending by $28 million over the 2016-2026 period. Because the legislation would affect direct spending; pay-as-you-go procedures apply. Enacting the bill would not affect revenues.

CBO estimates that enacting H.R. 3716 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.

H.R. 3716 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).

Estimated cost to the Federal Government: The estimated budgetary effects of H.R. 3716 are shown in the following table. The costs of this legislation fall within budget function 550 (health).

To view the table, click this link: http://thomas.loc.gov/cgi-bin/cpquery/36?&sid=cp11471KAv&refer=&r_n=hr427.114&db_id=114&item=36&&sid=cp11471KAv&r_n=hr427.114&hd_count=50&item=36&&sel=TOC_19850&.

Basis of estimate: The Affordable Care Act required states to terminate the participation of health care providers under Medicaid if they have been terminated under the Medicare program or another state Medicaid program. The Secretary of Health and Human Services (HHS), under regulatory authority, required states to comply with similar standards in CHIP. H.R. 3716 would codify the requirements in CHIP and also require states and managed care organizations that participate in Medicaid or CHIP to collect information about all participating health care providers and report information about terminated providers to the Secretary. The Secretary would be required to review the termination and, if the Secretary determines appropriate, include such information in any database intended for sharing data on terminated providers among states. The bill would also require the Secretary to issue regulations that establish uniform terminology to document the reasons for terminating a health care provider's eligibility to participate in Medicaid or CHIP.

CBO expects the additional requirements in H.R. 3716 for states and managed care organizations to collect and report information regarding terminated health care providers will reduce the likelihood of such providers receiving federal payments under Medicaid and CHIP. Based on information from a 2015 report from the HHS Office of Inspector General, CBO estimates that providers operating under managed care contracts receive, on average, $3 million per year in federal payments from Medicaid and CHIP even though they have been terminated from the Medicare program or Medicaid programs in other states. Once fully implemented, CBO estimates that the bill would reduce improper payments by $3 million to $4 million annually and reduce direct spending by $28 million over the 2016-2026 period.

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table.

To view the table, click this link: http://thomas.loc.gov/cgi-bin/cpquery/36?&sid=cp11471KAv&refer=&r_n=hr427.114&db_id=114&item=36&&sid=cp11471KAv&r_n=hr427.114&hd_count=50&item=36&&sel=TOC_19850&.

Increase in long term direct spending and deficits: CBO estimates that enacting H.R. 3716 would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2027.

Intergovernmental and private-sector impact: H.R. 3716 contains no intergovernmental or private-sector mandates as defined in UMRA and would impose no costs on state, local, or tribal governments. CBO estimates that provisions in the bill that would decrease federal spending in Medicaid and CHIP would similarly result in a reduction of $18 million in state spending for Medicaid and CHIP (combined) over the 2016-2026 period.

The bill also would place new conditions on states. It would require them to provide information about Medicaid and CHIP providers who are terminated for cause and to prevent terminated providers from receiving payments by updating their contracts with managed care providers. For large entitlement programs like Medicaid and CHIP, UMRA defines an increase in the stringency of conditions or a cap on federal funding as an intergovernmental mandate if the affected governments lack authority to offset those costs while continuing to provide required services. Because states have flexibility within the Medicaid and CHIP programs to offset their financial and programmatic responsibilities to reduce costs, the costs of complying with the new conditions would not result from an intergovernmental mandate.

Estimate prepared by: Federal costs: Lisa Ramirez-Branum; Impact on state, local, and tribal governments: J'nell Blanco Suchy; Impact on the private sector: Amy Petz.

Estimate approved by: Holly Harvey; Deputy Assistant Director for Budget Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act.

DUPLICATION OF FEDERAL PROGRAMS

No provision of H.R. 3716 establishes or reauthorizes a program of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111-139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance.

DISCLOSURE OF DIRECTED RULE MAKINGS

The Committee estimates that enacting H.R. 3716 specifically directs to be completed 1 rule making within the meaning of 5 U.S.C. 551.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the Federal Advisory Committee Act were created by this legislation.

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the terms and conditions of employment or access to public services or accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

This section provides the short title of the 'Ensuring Removal of Terminated Providers from Medicaid and CHIP Act'.

Section 2. Increasing oversight of termination of Medicaid providers

Subsection (a) would require States to report to the Secretary of Health and Human Services identifying information about a specific provider or person terminated for cause pursuant to 42 CFR 455.101 or other reasons specified by the Secretary from participating in the State's Medicaid program. The subsection would also require State Medicaid programs to include in their contract with managed care entities a provision that providers of services or persons terminated from participation in Medicaid, Medicare or CHIP also be terminated as a provider in the managed care entity's network serving Medicaid beneficiaries. States would also be required to provide for a system for notifying managed care entities of any such provider terminations and would not be eligible for federal funds for managed care expenditures if they did not comply with these requirements. The subsection would require the Secretary of HHS to include providers terminated from participation in Medicare or Medicaid in a termination database or similar system within 21 days of notification of the termination and would prohibit federal Medicaid funds for expenditures to providers listed in the termination database after 60 days. Finally, the subsection would require the Secretary of HHS to issue regulations establishing uniform terminology regarding the reasons for provider terminations.

Subsection (b) would require States to enroll all providers participating in Medicaid to enroll with the State, regardless of whether the provider services Medicaid beneficiaries on a fee-for-service basis or through a managed care entity.

Subsection (c) would make the requirements in this bill applicable to CHIP.

Subsection (d) is a rule of construction that specifies that providers appeals rights and processes are not changed or limited by this legislation.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, and existing law in which no change is proposed is shown in roman):

The full text of the report is found at: http://thomas.loc.gov/cgi-bin/cpquery/36?cp114:temp/~cp11471KAv&sid=cp11471KAv&item=36&sel=TOCLIST&l_f=401&l_file=list/cp114ch.lst&l_b=351&l_file=list/cp114ch.lst&report=hr427.114&hd_count=50&&&l_t=495&&&.

Myron Struck, editor, Targeted News Service, Springfield, Va., 703/304-1897; [email protected]; http://www.targetednews.com

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