Congress to pass children's health home legislation by year-end

Congress plans to move forward with a revised bill to establish provider-coordinated health homes for chronically ill children after cutting the federal Medicaid money that would fund them.

The Advancing Care for Exceptional Kids, or ACE Kids, Act will move as part of a small healthcare package called the Improve Act. It has survived years of controversy and tweaks, and is slated to pass the U.S. House of Representatives on Tuesday, according to a House GOP aide. It will then head to the Senate.

The bill's champion in the upper chamber, incoming Senate Finance Chair Chuck Grassley (R-Iowa), also co-sponsored a provision to help pay for the measure through fines on drug companies that misclassify drugs within the Medicaid drug rebate program. In the House, the sponsors are retiring Rep. Joe Barton (R-Texas) and Rep. Kathy Castor (D-Fla.).

The bill, which permanently authorizes health homes for kids with complex conditions, is expected to cost much less money than previous iterations.

This final version boosts federal Medicaid funding for the states that establish the model by 15 percentage points above their traditional Medicaid match. The House Energy and Commerce Committee passed a version earlier in the fall that would have put up 90% federal funding.

The funding increase has been rolled back from a full year to two quarters, to function as the startup costs for the health homes. The latest bill also shrinks the planning grants from $25 million to $5 million. The start date for the program has also been pushed back to Oct. 1, 2022, but the CMS must issue its guidance on using out-of-state physicians or hospitals by Oct. 1, 2020, to give states time to work out their model.

The legislation's driving force was the Children's Hospital Association. The group's vice president of policy, Jim Kaufman, on Monday said that despite the changes, the bill "fixes an issue identified by states: not being able to focus health home coordination on kids specifically."

Kaufman added that it also offers a national definition for kids with complex conditions that will make it easier to gather data on their treatment and noted that the model is optional.

"At its core is the same care model with strong evidence of effectiveness—a national CMMI-funded three-year pilot that enrolled 8,000 children with medical complexity resulted in reductions in hospitalizations, emergency department visits and Medicaid spending," said Kaufman, referring to the CMS' Center for Medicare and Medicaid Innovation. He also noted that the bill's lower price tag.

Critics of the measure have argued that even though the model is optional, the funding boost would push states to adopt it.

Last week Grassley joined Sen. Ron Wyden (D-Ore.) on the bill to stop pharmaceutical manufacturers from misclassifying drugs in the Medicaid drug rebate program.

Grassley led congressional oversight over Mylan's misclassification of the EpiPen within the program, which HHS' Office of Inspector General estimated cost Medicaid $1.27 billion over a decade. The Grassley-Wyden provision imposes penalties on drug companies that misreport the classification of their drugs and also lets states recoup the monies they might have overpaid to violating manufacturers.

The healthcare package also includes an extension of the Money Follows the Person demonstration.