Manatt on Health Reform: Weekly Highlights

House Republicans release long-awaited ACA repeal and replace legislation, Arkansas proposes a new waiver amendment to lower expansion adult eligibility levels, and California and Maine are considering new policies to tackle the opioid addiction crisis.

CONGRESSIONAL HEALTH REFORM NEWS:

House Republicans Release Repeal Bill, Markup to Begin This Week

House Republicans released an ACA repeal and replace bill entitled the American Health Care Act on Monday. The bill was released in two parts by the House Energy and Commerce Committee and the Committee on Ways and Means; both committees also posted updated substitute versions of the bill earlier today, and will begin marking up the bill on Wednesday. The bill largely aligns with the previously-released House blueprint for reform and would provide age-rated tax credits in the individual market, phase out enhanced funding for the Medicaid expansion beginning in 2020, implement capped financing in Medicaid (the most significant change to Medicaid financing since the program's inception in 1965), and expand the use of health savings accounts.

Group of Republican Senators Opposes Medicaid Cuts Under House Repeal Proposal

Senators Rob Portman (R-OH), Shelley Moore Capito (R-WV), Cory Gardner (R-CO), and Lisa Murkowski (R-AK) will not support a repeal plan "that does not include stability for Medicaid expansion populations," according to a letter sent to Senate Majority Leader Mitch McConnell (R-KY) on Monday. The letter stresses that a shift to a new Medicaid financing structure must be coupled with "a stable transition period" and "significant new flexibility" for states. The Senators reiterated their desire to see the ACA repealed and replaced but touted the benefits of the Medicaid program, particularly for those with mental health and substance use disorders.

Senate Finance Committee Advances Verma Nomination

The Senate Finance Committee on Thursday approved President Trump's nominee for CMS Administrator, Seema Verma, in a 13-to-12 party-line vote. Verma's nomination will now move to a vote in the full Senate, where she is expected to be confirmed.

OTHER FEDERAL HEALTH REFORM NEWS AND REPORTS:

Trump Speaks to ACA Replacement Plan in Speech to Congress

President Trump briefly touched on health reform during his speech to Congress on Tuesday and laid out a series of high-level principles for ACA replacement. These include: (1) maintaining access for those with pre-existing conditions and ensuring a stable transition for current Marketplace enrollees, (2) expanding the use of tax credits and health savings accounts and reducing stipulations on what must be included in coverage, (3) giving governors additional resources and flexibility on Medicaid, 4) reforming the legal system to protect doctors and patients from unnecessary costs and bring down the price of drugs, and (5) allow insurance to be sold across state lines.

CMS Advises Medicare-Eligible Marketplace Enrollees to Drop Marketplace Plans, Offers Incentives to Enroll in Part B

CMS is advising individuals enrolled in both Marketplace coverage and Medicare to drop Marketplace coverage, according to a notice issued on March 1. The notice also encourages eligible individuals to enroll in Medicare Part B if they have not already done so. CMS is also offering an incentive for these individuals to enroll in Medicare by waiving penalties for enrolling in Part B outside of regular enrollment periods. Insurers have argued that enrollment by Medicare-eligible individuals in the Marketplace drives up premiums as these individuals tend to use a disproportionate amount of medical care.

Access to Primary Care Doctors Increased for Medicaid Enrollees Following ACA

A new JAMA study found that primary care appointment availability for Medicaid enrollees increased by 5 percentage points between 2012 and 2016 (from 58% to 63%) while remaining stable for individuals with private insurance. The study, which compared primary care appointment availability across practices in 10 states, noted that access to primary care remains lower for Medicaid enrollees than privately insured individuals, despite gains following the ACA.

New Tools Show Impact of the ACA by Congressional District

A new report from House Democratic staff and a Kaiser Family Foundation interactive map illustrate the impact of the ACA by congressional district; both show coverage gains due to Medicaid and Marketplace enrollment and use of advanced premium tax credits by district.

STATE MEDICAID EXPANSION NEWS:

Arkansas: Governor Announces Plans to Amend Medicaid Expansion Waiver

Governor Asa Hutchinson (R) released a proposal to amend the State's Medicaid expansion waiver by lowering income eligibility for the Medicaid expansion population from 138% of FPL to 100% of FPL, instituting work requirements, and modifying the State's employer-sponsored insurance premium assistance program to target expansion adults with incomes between 75% and 100% of FPL who work for small employers. The State plans to post the waiver amendment for public comment by April 15 and submit the amendment for CMS review by June 1, 2017; the State will request that the new requirements go into effect on January 1, 2018.

Arkansas: House Passes Bill to Cap Medicaid Expansion Enrollment

The Arkansas House of Representatives passed by a 55-32 margin a bill that would prohibit new enrollment into Arkansas Works, the State's Medicaid expansion demonstration, beginning July 1, 2017. The bill now advances to the Senate for consideration. Governor Asa Hutchinson (R) opposes the bill and instead supports reforms to the expansion program, including lowering income eligibility from 138% to 100% of FPL and instituting work requirements.

North Carolina: Governor Cooper Restates Support For Medicaid Expansion In First Budget Release

Governor Roy Cooper's (D) FY 2017 - 2019 budget includes Medicaid expansion, and proposes to cover the State's share of expansion costs through provider contributions rather than general fund appropriations. The North Carolina Hospital Association indicated that hospitals are prepared to work with the Governor, Legislature and members of Congress on expansion.

STATE ACA REPEAL AND REPLACEMENT NEWS:

Minnesota: Department of Human Services Estimates Impact of ACA Replacement Plan

An early draft of an ACA replacement proposal endorsed by House leadership would eliminate Minnesota's Basic Health Program, MinnesotaCare, and cut $1.3 billion from the State's Medicaid program in 2018, according to a State Department of Human Services planning document obtained by the Associated Press. The Medicaid cuts in the House proposal are estimated to cost the State $6 billion per year by 2029.

Tennessee: Humana Will Withdraw From Marketplace in 2018

Humana announced it will withdraw from Tennessee's Marketplace by 2018; Humana has 80,000 enrollees in Tennessee. More than 75% of counties had only one insurer offering coverage on the Marketplace prior to Humana's exit, and Humana's departure will mean that no insurers are offering coverage to Knoxville residents through the Marketplace.

Texas: Capped Medicaid Funding Proposals Would Disadvantage State, Report Finds

A new report by Manatt Health for the Texas Alliance for Health Care considers recent proposals to cap Medicaid funding (including block grants and per capita caps), and analyzes implications of these proposals for Texas based on state-specific data. The study notes that Texas's historically low Medicaid spending, its fast-growing population, and its high dependence on waiver and supplemental funding could disadvantage Texas under a capped funding model. The report notes Texas may gain additional programmatic flexibility under a capped funding model, but Texas's Medicaid spending is largely focused on coverage for children, the elderly, and people with disabilities, so the State will need to consider how additional flexibility might affect these populations and the extent to which flexibility could actually reduce program spending.

Utah: Resolution Requests Block Grant Funding for Medicaid

A resolution advocating for a federal cap on Medicaid funding has been passed by the Utah State Senate, and the State House Health and Human Services Committee has also voted to advance the resolution to a full vote of the House of Representatives. The resolution, sponsored by Senator Daniel Hemmert (R) and Representative Michael S. Kennedy (R), would ask the federal government to put in place a Medicaid "block grant" with a "per capita allocation" and give states more flexibility to manage their Medicaid programs.

STATE HEALTH REFORM NEWS:

Alabama: Five RCOs Withdraw, Two RCOs Consider Option to Serve Now-Vacant Regions

Five potential Regional Care Organizations (RCOs) have withdrawn from Alabama's new delivery system reform initiative, leaving three regions without RCOs. Two other RCOs have initiated a process with the State Medicaid Agency to consider offering services in the three now-vacant regions, and, despite the setbacks, the Agency indicated it "is still in the position to implement RCOs by October 1, 2017."

California: Tax Proposed on Prescription Opioids to Fund Drug Addiction Programs

Assemblymember Kevin McCarty (D) introduced legislation that would assess a one cent per milligram surcharge on prescription opioids to fund county drug addiction prevention, treatment, and rehabilitation programs. The surcharge would be assessed on wholesalers. Assemblymember McCarty's office believes the proposal would raise "tens of millions" for county programs, reports the Los Angeles Times.

Illinois: Medicaid Managed Care Reforms Announced

Governor Bruce Rauner (R) announced a new Medicaid Managed Care Organization (MCO) procurement, aimed at enrolling 80% of the State's Medicaid enrollees in managed care while reducing the number of MCOs in the State from 12 to no more than 7 by January 1, 2018. The administration hopes the new contracts and consolidation of plans will result in increased efficiencies and lower overall costs for the Medicaid program.

Louisiana: Pre-Release Inmate Medicaid Enrollment Program Underway

Louisiana has launched the first phase of its program to automatically enroll inmates in Medicaid upon release, connecting incarcerated individuals to health plans prior to leaving prison so that they are covered once they leave Department of Corrections facilities. The program is expected to serve approximately 2,800 individuals annually, 30% of whom the State expects will qualify for additional case management support. The initiative has been developed in conjunction with Louisiana's Medicaid expansion, and is aimed at supporting "seamless" continuity of care for this high-need population.

Maine: Health Commissioner Proposes to Allocate Nearly $5 Million to Address Opioid Crisis

Maine Department of Health and Human Services Commissioner Mary Mayhew proposed to allocate approximately $5 million to opioid addiction treatment under an amendment to Governor Paul LePage's (R) budget proposal. The Commissioner's plan would appropriate $2 million in state funds for treatment for the uninsured and another $2.8 million in state and federal funds for Mainers eligible for MaineCare, the State's Medicaid program. The funds would support creation of "Opioid Health Homes" and expanded access to addiction treatment services.