Tag Archive: Medicaid

Burgeoning enrollment in California’s Medicaid program raises tensions between administration, lawmakers over access to care, provider reimbursement rates

California Gov. Jerry Brown took a cautious approach on expanding Medicaid eligibility under the Patient Protection and Affordable Care Act. It was well into 2013 and not long before the start of the new fiscal year (July 1) and the October 1, 2013 launch of open enrollment in that state’s exchange marketplace, Covered California, before Brown approved legislation authorizing the Medicaid expansion. Even though the federal government would initially be covering most of the cost of the expansion, Brown was concerned about the overall growth of the state’s Medicaid program, Medi-Cal.

With good reason. Kim Belshé, who served as Health & Human Services Agency secretary in the previous administration of Gov. Arnold Schwarzenegger, warned in 2009 that even with a $10 billion infusion of supplemental federal cost share funding provided by the American Recovery and Reinvestment Act of 2009, “California cannot afford the Medicaid program as currently structured and governed by federal rules and requirements.” In other words, it’s a budget buster.

In 2013, Brown was at odds with his fellow Democrats in the Legislature who wanted to increase reimbursement rates paid to medical providers unhappy with low reimbursement rates. Since providers can opt not to accept Medi-Cal, they argued, it’s critical that they have sufficient incentive to do so to allow Medi-Cal enrollees adequate access to health care. Brown didn’t go along with boosting provider reimbursement rates that year, reasoning the state was still on the road to recovering its fiscal health after tax revenues were severely crimped in the 2008-09 recession.

Now two years later, Medi-Cal enrollment has jumped to more than 12 million, covering nearly 1 in 3 Californians and following the pattern seen in other states where Medicaid enrollments are outpacing by 2 to 1 sign ups for subsidized commercial health plans sold though state health benefit exchanges. The burgeoning enrollment has heightened the pre-existing tensions between Brown and legislative Democrats over increasing Medi-Cal provider reimbursement rates, as the Los Angeles Times reports in this story on two measures that would reverse the recession-era cuts in provider reimbursement rates.

As The Times reports, those tensions surfaced in this blunt exchange between the chair of the Senate Health Committee, Ed Hernandez (D-West Covina), and Jennifer Kent, director of the state Department of Health Care Services, at a hearing this week. Hernandez asked Kent to respond directly as to whether Medi-Cal patients have the same access to doctors as presumably more affluent Silicon Valley workers covered by commercial health plans.

“Yes or no?” he said.

“Yes,” Kent said.

“I don’t think so,” Hernandez replied.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Top health care issue shifts from coverage in 2014 to provider access in 2015

For implementation of the Patient Protection and Affordable Care Act, 2014 was the year of increasing medical coverage. The rate of those lacking coverage in 2014 fell to its lowest level in seven years, driven in large part by states that have fully implemented the law, California Heathline reported this week. States that fully implemented the ACA saw their uninsured rates decline by almost twice the rate as states that did not do so, according to the story.

For 2015, the focus is shifting to how well expanded coverage ensures access to and payment for care. In California – a state that has fully implemented the Affordable Care Act by establishing its own state health benefit exchange and expanding Medicaid eligibility – these issues are coming into full play.

Underlying them are economic tensions in both commercial individual coverage and Medicaid. In the former, they arise from the tradeoff of narrow provider networks in commercial individual health plans in order to keep premium rates down, particularly in exchange qualified health plans that must offer standardized benefits. (Narrow networks have also increased patients’ risk of medical bankruptcy due to “balance billing” when they receive care and particularly emergency care from providers outside of their plan’s network as Kaiser Health News reports). Provider resistance to the high volume/lower reimbursement model of these networks is manifesting in complaints from those enrolled in exchange plans that their coverage is being declined when they seek care amid provider network volatility and churn. That has drawn attention in all three branches of government as California Healthline reported earlier this month:

California has addressed the issue on all fronts, from consumer groups launching suits against insurers over allegedly inadequate provider networks, lawmakers taking legislative action and state regulators implementing immediate policy changes.

In October 2014, Gov. Jerry Brown (D) signed a bill (SB 964) that increased oversight of insurers’ provider networks by authorizing the state Department of Managed Health Care to review insurers’ annual report on timeliness compliance. More recently, state Sen. Ed Hernandez (D-West Covina) has proposed a bill (SB 137) that would require insurers to update their provider directories on a weekly basis, among other requirements.

Meanwhile, Insurance Commissioner Dave Jones (D) released regulations on Jan. 5 that his office said were designed “to address the deficiencies in the market we have been seeing.”

Department of Insurance officials noted that they have received complaints from consumers about difficulty getting doctor appointments, traveling long distances to access in-network care and encountering erroneous provider directories. Relatedly, multiple suits have been launched against Anthem Blue Cross and Blue Shield of California over the issue.

In the Medicaid segment that covers about 1 in 3 California residents, burgeoning enrollments are outstripping available providers. As with commercial individual coverage, provider dissatisfaction with reimbursement rates is widely considered a key contributing factor. A California Healthcare Foundation study issued in August 2014 found the ratio of primary care physicians to Medi-Cal enrollees in 2011 and 2013 (35 to 49 per 100,000 enrollees) fell well short of the federal Health Services and Resource Administration’s guidelines of 60 to 80 per 100,000 enrollees. “Without a large increase in the number of primary care physicians participating in Medi-Cal or another means of increasing efficiency in primary care, such as greater use of nonphysician clinicians or phone and electronic visits, Medi-Cal beneficiaries are likely to have difficulty accessing primary care,” the study concludes.

While low Medi-Cal reimbursement rates are linked to the lack of access to PCPs, the study notes it did not find an association with unmet health care needs or preventative services. It also suggested a greater role for community health centers since they receive higher Medi-Cal reimbursement rates than private practice physicians.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Utah: Medicaid expansion would save large employer penalties, use SHOP exchange for individual plans

Approval of its proposed Healthy Utah Medicaid expansion program would allow large employers of low wage workers avoid penalties when those workers enroll in subsidized individual health plans though the state’s health benefit exchange, according to a document describing the program. The proposed 3-year pilot program is pending approval of a Section 1115 waiver of Medicaid rules from the U.S Department of Health and Human Services.

Utah is served by a federally facilitated exchange (FFE) in the individual market and operates a state-based exchange (SBE) serving small employers of 1 to 50 employees under the Small Business Health Options Program (SHOP) of the federal Patient Protection and Affordable Care Act. A notable component of Utah’s proposed Medicaid expansion program is those in the expansion population would receive federal Medicaid share funding to purchase commercial plans sold via the state’s small business exchange, Avenue H, and not the FFE, healthcare.gov. Those earning more than 100 percent of federal poverty levels (FPL) are eligible to purchase coverage in the FFE.

“Beginning in 2016, large businesses in Utah will likely face $11 to $17 million less in tax penalties each year if their employees making between 101 percent and 133 percent FPL are enrolled in a state-sponsored program rather than a Health Insurance Marketplace plan with a tax credit,” the document states. Employers of 50 or more full-time employees must offer health insurance to 95 percent of their workforces starting in 2016.

In addition, children who currently receive Medicaid would have the option to enroll in the same commercial plan their parents select through Avenue H. “Medicaid would continue to provide cost sharing and wrap-around coverage for these children to ensure they continue to receive the same level of coverage they do today,” the Healthy Utah plan states. “It is hoped that having a single primary health plan for the family will simplify coverage for the family. The federal government has previously denied Utah’s requests to use Medicaid funding to purchase these private plans. However, through the Healthy Utah negotiations, Utah was able to obtain approval for this type of assistance.”

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Idaho mulling reforming Medicaid to use blend of DPC and “Arkansas plan”

Idaho is considering restructuring its Medicaid program to use state funds to directly cover primary care (DPC) for Medicaid eligibles earning less than 100 percent of federal poverty levels while using federal Medicaid funding to cover their major medical costs. Those with household incomes between 100 and 138 percent of federal poverty under the Patient Protection and Affordable Care Act’s Medicaid expansion would be eligible to purchase commercial health plans through the state’s health benefit exchange marketplace. That strategy is referred to as the “Arkansas Plan” in recognition of that state’s obtaining a waiver from the U.S. Department of Health and Human Services last year approving of the use of Medicaid dollars to help those new Medicaid eligibles buy exchange plans. The state’s Medicaid Redesign Workgroup estimates implementing both would save $1 billion over 10 years.

(H/T to Liz Osius of Manatt Phelps & Phillips LLP for the heads up in her weekly health care reform roundup)

 

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Rapid Growth in Wisconsin’s Medicaid Program Could Cause Strain on State Budget | MacIver Institute

[Madison, Wisc…] The Department of Health Services (DHS) has requested a $2.78 billion increase in funding for the 2015-17 biennium. The new dollars would grow the agency’s total budget to nearly $23 billion, or roughly one-third of the entire state budget.

Almost half of the new money, $1.25 billion, would come from the federal government, which already provides $10.5 billion to the agency for federally sponsored programs. Another $831.5 million would come from Wisconsin’s General Fund, made up of state tax dollars paid by the average Wisconsinite.

What is driving such an increase in costs for the agency? The answer lies mostly in its massive Medicaid program.

Of the $831.5 million in additional state dollars requested by DHS, $760 million would be added to Wisconsin’s Medicaid program and its outcrop, BadgerCare.

via Rapid Growth in Wisconsin’s Medicaid Program Could Cause Strain on State Budget | MacIver Institute.

This is likely to become a major budgetary issue in the states. This summer, California had to appropriate more than $2 billion in increased tax revenues in its fiscal year 2014-15 budget toward offsetting rising Medicaid cost sharing.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Underinsured ACA enrollees strain community health centers | Modern Healthcare

When the ACA was enacted, leaders of community health centers were excited about the prospect of their previously uninsured patients getting coverage and having their levels of uncompensated care drop. But they were surprised when many of their lower-income patients bought bronze plans with high cost-sharing and started coming in seeking treatment on a sliding-scale fee basis. Previously, sliding-scale fees were used mostly by uninsured people who had to pay their own bills.

The centers say this has had a negative impact of their finances. “The use of the sliding fee scale due to the inability to pay required co-pays impacts the community health centers’ uncompensated-care costs, which are not declining as rapidly as contemplated by some policymakers,” said Mary Leath, CEO of Community Health Centers of Arkansas.

The squeeze is being felt even in states that have expanded Medicaid to adults with incomes up to 138% of poverty, which has provided community health centers in those states with more paying patients. Deb Polun, director of government affairs at the Community Health Center Association of Connecticut, said the lowest deductibles for bronze plans in her state are about $4,000, which is not affordable for lower-income patients.

via Underinsured ACA enrollees strain community health centers | Modern Healthcare.

This is an interesting development that points to some potential implications:

1. Lower income households are mistakenly choosing high deductible bronze metal tier plans that are ill suited to their economic resources and health statuses — particularly among people who are frequent users of primary care services — because they don’t understand how out of pocket cost sharing works and believe health plans are all inclusive.

2. These households should be but are not being directed toward silver metal tier plans that feature cost sharing subsidies for households earning up to 250 percent of federal poverty. If so, this suggests state health benefit exchanges and those who help people choose individual plans such as insurance agents need to do a better job ensuring consumers are getting adequate information in order to choose the best metal tier plan for their circumstances.

3. Lower income households are deliberately selecting bronze plans in order to benefit from their lower premiums, knowing they can get low cost primary care on a sliding scale fee basis from community health centers.

4. Lower income households are overestimating their incomes and should be enrolled in Medicaid programs if eligible instead of exchange plans. California’s state-operated exchange, Covered California, has switched some plan year 2014 enrollees from exchange plans to Medicaid when income redeterminations for plan year 2015 found some households earning too little to qualify for an exchange plan.

The item reports bronze health plan issuers are denying claims submitted by CHCs, which are then written off as uncompensated care. This raises the question of the type of care for which reimbursement is requested since preventative services are not subject to cost sharing and are included in plans at all metal tiers of coverage.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

GAO report points to low Medicaid reimbursements as impetus for “Arkansas plan”

A recent critical assessment of Arkansas’s use of federal Medicaid dollars to subsidize the purchase of commercial individual health plans by low income people through the state’s health benefit exchange indicates a lack of health care providers willing to accept standard Medicaid reimbursement played a key role in the move. The repurposing of the Medicaid funding was authorized under a 3-year-long demonstration project waiver issued in the U.S. Department of Health and Human Services (HHS) in 2013.

The U.S. Government Accountability Office (GAO) issued a report earlier this month criticizing the waiver as contrary to HHS’s policy of requiring such waivers not incur costs beyond existing state Medicaid program expenditures. The report concluded that $4 billion HHS approved for the demonstration project was approximately $778 million more than the state would have spent for adult beneficiaries under its then-existent Medicaid program. HHS disagrees with the report’s conclusion, contending GAO too narrowly analyzed HHS’s budget neutrality policy governing Medicaid demonstration programs and Arkansas’s Medicaid cost data and failed to take into account the effect of Medicaid program expansions.

The stated policy intent of the demonstration is to ensure access to care and continuity of coverage since individuals could stay enrolled in the same health plan regardless of whether their coverage is financed through Medicaid or federal subsidies. The GAO report noted that according to Arkansas’s waiver application, the state’s network of Medicaid providers was at capacity. “By purchasing [exchange qualified health plan] coverage for newly eligible [Medicaid] beneficiaries, the state suggested it could improve access to care because beneficiaries would have access to expanded provider networks” through commercial plans sold on the exchange.

The GAO report takes issue with “questionable assumptions about provider payment rates,” noting the demonstration program projected the cost of expanding Medicaid without the demonstration assumed Arkansas would have had to pay its Medicaid providers rates comparable to private insurance payment rates—significantly higher rates than the rates the state was paying its [Medicaid] fee for service (FFS) providers—to ensure access for newly eligible beneficiaries.

For example, the report noted, the state assumed that it would have to pay 67 percent above its Medicaid reimbursement rate for primary care services and 10 percent above Medicaid reimbursement rates for higher-cost services such as inpatient and long-term care. “HHS approving officials told us that they thought the state’s underlying concern about the insufficient capacity of the state’s Medicaid provider network was valid given a projected 25 percent increase in the number of individuals covered under the state’s Medicaid program,” the GAO report states.

HHS has approved similar demonstration waivers for Iowa and Pennsylvania, allowing those who would otherwise be eligible for Medicaid coverage to purchase coverage through those state’s health benefit exchanges. Interest has also been shown by New Hampshire and active negotiations underway between HHS and Utah.

“Arkansas’s demonstration may prove an important test of whether using Medicaid funds to finance coverage offered through exchanges will improve access to care and continuity of coverage for the adult population that the demonstration aims to cover,” the GAO report concludes. “However, the increasing use of demonstrations has shifted a significant portion of federal Medicaid funds into financing care that is not subject to all of the federal Medicaid requirements. While HHS policy requires that demonstrations be budget-neutral and therefore not increase the costs to the federal government, we have had long-standing concerns about the Department’s ability to ensure budget neutrality given HHS’s flexible approach towards approving spending for new demonstrations.”

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Lingering recession fallout: Medicaid grows to cover nearly one third of Californians

Enrollment in California’s Medicaid program, Medi-Cal, is projected to grow in the new fiscal year that began July 1 to cover about 30 percent of the state’s population, with total enrollment expected to rise from 7.9 million before implementation of the Patient Protection and Affordable Care Act to 11.5 million in fiscal 2014-15, according to a summary of the budget.

The growing importance of Medi-Cal was highlighted in the release today of results of a California Field Poll of registered voters showing respondents assigning growing importance to Medi-Cal. Twenty-nine percent of voters surveyed rated the program as “very important” in a 2011 Field Poll; that number rose to 40 percent this year. “This is a safety net program (for the poor) that has now reached the masses,” noted Mark DiCamillo, senior vice president of the Field Research Corporation, calling the increase “very significant.”

The high percentage of Californians covered by Medicaid appears to coincide with the 2007-09 recession. As the downturn began to bite, data compiled by Kaiser Family Foundation show California having about the same percentage of its population in Medi-Cal in 2010 – 31 percent that year – and among the highest proportion of its population in Medicaid compared to other states. Only Maine and Vermont equaled California’s 31 percent in 2010 and those three states were exceeded only by the District of Columbia at 35 percent, according to the Kaiser Family Foundation. (Comparative year to year data are not available)

The growth in Medi-Cal spending all but wiped out an unanticipated surge in state tax revenues, the Ventura Star quoted Gov. Jerry Brown as saying. Consequently, Brown’s revised $107.8 billion general fund budget proposal contains little new spending beyond covering the additional costs of providing health care to 307,000 more low-income residents than anticipated when the 2014-15 budget was released in January, the newspaper reported. Another account appearing in The Sacramento Bee quoted Brown as saying California faces $1.2 billion in unanticipated costs in expanded Medi-Cal enrollment in the new fiscal year.

As Medi-Cal grew to cover 1 in 3 Californians in 2010 as tax revenues declined in the recession, the administration of then-Gov. Arnold Schwarzenegger bluntly declared the state could no longer afford to fund the program as it sought cost relief though program reductions and federal rule waivers. The heavy fiscal burden of program clearly continues to vex the current Brown administration. “As we are paying for this that will be at the expense of other government priorities,” said Health and Human Service Secretary Diana Dooley at today’s Sacramento briefing on the Field Poll results.

A final takeaway worth pondering: With more people being covered by Medicaid, might California and eventually the United States as a whole be moving toward the German “Kaiser system” where the government provides a safety net of basic health coverage for all?

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

California’s continuing Medicaid woes

Five years ago as California stared down a severe budget gap as the economy cratered, the state drew up plans to cut $1.2 billion from its Medicaid program, Medi-Cal, through program reductions and federal rule waivers.

At the time, then-California Health & Human Services Agency Secretary Kim Belshé warned that even with a $10 billion infusion of supplemental federal cost share funding provided by the American Recovery and Reinvestment Act of 2009, “California cannot afford the Medicaid program as currently structured and governed by federal rules and requirements.”

Now with the budget crisis in the past amid an uneven economic recovery, the Golden State faces renewed concerns that it can fund a sustainable Medicaid program given its acceptance of expanded family status and income eligibility guidelines under the Patient Protection and Affordable Care Act. As a result of the expansion, a staggering 3 in 10 California residents are expected to obtain health coverage though the program. In addition to budgetary concerns, there is also the practical matter of whether Medi-Cal beneficiaries will have adequate access to providers given the state’s low reimbursement rates.

Kaiser Health News provides an analysis of the situation here.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Some states expanding Medicaid eligibility through exchange marketplace

Some states that initially decided not to expand Medicaid eligibility guidelines for individuals earning up to 133 percent of federal poverty guidelines as permitted under the Patient Protection and Affordable Care Act are now opting to do so. But instead of directly expanding their existing Medicaid programs, the states want to integrate broadened Medicaid eligibility into their health benefit exchange marketplaces. And they want to do so with some economic incentives for enrollees.

The Washington Post’s Wonkblog reports Iowa joins Arkansas in obtaining a waiver from the U.S. Department of Health and Human Services to use federal dollars funding the Medicaid expansion to subsidize the premiums for commercial plans sold on the exchange marketplace. Iowa’s Marketplace Choice includes a wellness component that waives plan premiums for plan years 2014-16 if participants undergo annual health screenings and follow a doctor-directed wellness regimen.

On December 6, 2013, Pennsylvania submitted its waiver application to the federal government. The Keystone State’s proposed 5-year Healthy Pennsylvania program that would similarly allow those age 21 to 65 earning up to 133 percent of federal poverty to purchase commercial coverage on that state’s exchange. Enrollees earning 50 percent of federal poverty and greater would pay modest premiums that could be reduced with incentives for healthy behaviors and engaging in ongoing work search activities.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

%d bloggers like this: