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The Fiscal Year (FY) 2020 JoE is probably one of the most important documents for CMS contractors since the Trump Administration began. I won’t bore you with the details of the Government’s budgetary process, but what is important to know is that the budgets for the Government agencies are generally finished two years in advance, making FY2020 the first year that Administrator Verma and the Trump Administration has had total control over the budget. And they are not playing games (well, they kind of are, but it’s still interesting). Here are some high level, interesting tidbits I found in my annual analysis.

Let’s start at the beginning with the Message from the Administrator.  No great surprise, there is a focus on giving states more control (get some Medicaid SMEs!), modernization of the infrastructure and systems, investing in fraud, waste, and abuse, and giving patients better access to their data. And then the fun begins.

There are four main accounts, as shown in the table below, with the change from FY19 to FY20. We only need to focus on the first two accounts as these contain contractual money.

Rogue Situation #1:

The JoE proposes to reduce the Program Management Account (which is discretionary as opposed to mandatory, meaning it isn’t required by statute; not that statutorily mandated appropriations matter to this Administration either, but more on that later), by $395 million! By the way, Program Management is the account out of which a lot of our contracts are funded. But that is not the rogue part.  Get this, $247.9 million of the reduction is due to the proposal to introduce user fees on the Federal Exchange! Now, JoE doesn’t clarify, but I am making the assumption that the user fees would be paid by the insurance companies, not the individuals seeking insurance. But it’s just that, a proposal.  So, if the proposal isn’t passed, from where will the money for the Federal Exchange come? The activities expressly called out by CMS related to user fees are: enrollment eligibility verification, issuer payment activities, quality work, and associated IT. Contracts included under the FY19 JoE request for which funding was not requested in FY20 include:

  • Health Plan Bid Review, Management, and Oversight: $10.0 million
  • Payment and Financial Management: $40.8 million
  • Eligibility and Enrollment: $233.8 million
  • Consumer Information and Outreach: $341.2 million
  • Information Technology (IT): $457.9 million
    • Data Services Hub
    • Health Insurance Oversight System (HIOS)
    • Federal Health Care Exchanges (HIX)
    • Heatlhcare.gov web portal

Rogue Situation #2

Back to that mandatory versus discretionary account discussion. Quality Improvement Organizations (QIOs) are legislatively mandated accounts whose funding comes from an apportionment from the Trust Fund which is negotiated by the Department of Health and Human Services and the Office of Management and Budget. Historically, the QIOs would have their own account that was labeled mandatory (I went back as far as the 2015 JoE), but in FY2020, CMS moved it under the discretionary Program Management Account. Again, this is my opinion, but this move was done to give CMS more control over the budget and money used for the QIO Program. Now why CMS wanted to do this is beyond my ability to opine.

In addition to the rogue situation, the JoE has several new sections, which are very interesting as many of these sections have a description, and associated budgets.  It is very likely that these will result in new contracts; contract that don’t have incumbents. Given the traditional incumbency rate at CMS (which is declining), these are very attractive opportunities. Some examples include:

  • Payment Policy Development Support: $4.1 million. This will support the analysis of claims data to monitor the effects of program policy changes and advise on policy or regulatory changes on Healthcare utilization and outcomes and aberrant billing behaviors.
  • Minority Health Initiatives: $1.8 million. The funding supports continued implementation and evaluation of the strategic plan created by CMS’ Rural Health Council to make Healthcare in rural America more affordable, accessible, and accountable.
  • Federal Coverage and Payment Coordination: $5.6 million. Federal Coverage and Payment Coordination funds support necessary activities and resources to implement the Medicare-Medicaid Coordination Office’s (MMCO’s) statutory obligations, as well as the HHS and CMS strategic goals. This work includes navigating a number of very complex operational issues, merging often conflicting systems, policies, financing, monitoring and oversight protocols, and data requirements across Medicare and Medicaid, and then adapting that work to the unique environment of each state.

There are also multiple sections that address existing contracts, and their associated budgets. If that is your contract, you want to know if CMS is decreasing funding or increasing funding. Some examples include:

  • Medicare Administrative Contractors (MACs): $865.7 million, an increase of $0.7 million above the FY 2019 Enacted Level
  • HIGLAS O&M: $88.2 million, flat with FY 2019 Enacted Level.
  • HIPAA Claims-Based Transactions and Electronic Data Interchange (EDI): $12.8 million.
  • Medicare Current Beneficiary Survey (MCBS): $12.0 million. This funding maintains the survey’s content and utility, and supports statutory requirements. In FY 2020, CMS plans to continue an equal split of the MCBS’ total operational cost of $24.0 million between RDE and the Innovation Center at $12.0 million each.
  • MACBIS: $47.4 million, an increase of $6.6 million above the FY 2019 requested level.
    • This includes Transformed Medicaid Statistical Information System (TMSIS), completion of the Medicaid drug rebate system rebuild, replacing the aging Medicaid financial system that tracks state financial reporting and administrative spending, and Rollout of additional authorities in the Medicaid and CHIP Program (MACPro) system.
  • Part C and D IT Systems: $29.8 million, a decrease of $3.6 million below the FY 2019 Enacted Level.
    • This includes the Medicare Advantage Prescription Drug Payment System (MARx), the Medicare Beneficiary Database Suite of Services (MBDSS), the Drug Data Processing System (DDPS), and the Payment Reconciliation System (PRS).
  • 1-800-MEDICARE/Beneficiary Contact Center (BCC): $273.1 million.

As you can see, the JoE is really a fantastic resource and is very detailed. Each of the four main accounts in the table above has several subaccounts. I encourage you to read the whole thing. However, if you don’t have time, I do go through the Program Management and Health Care Fraud and Abuse Control Accounts and subaccounts (and sub-sub and sub-sub-sub accounts) thoroughly identifying new sections and existing contracts with their associated budgets. As you are planning for FY2020, make sure you use the JoE as a resource.

If you would like more detailed, in-depth information, there is an hour long video, complete with a PDF version of my deck of slides available for purchase at https://www.acquisitionhelp.com/cms-justification-online-training. The PDF includes the notes from my presentation in which I list the incumbent contractors on the various programs presented throughout the JoE, and the solicitation methods (e.g. CIOSP3, GSA, SPARC, etc.). I figured I already did the research, I may as well share it with all of you.




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