Manatt on Health Reform: Weekly Highlights

California's Marketplace revises its QHP contract to improve care quality and value, and announces its support for a 1332 waiver to allow undocumented immigrants to purchase Marketplace plans; Wisconsin proposes transitioning LTSS to integrated health agencies; and CMS provides strategies for improving access to long-acting reversible contraception.

FEDERAL MEDICAID & HEALTH REFORM NEWS:

Hispanics Experience Significant Coverage Gains Though Uninsurance Rate Remains High

The uninsurance rate among Hispanics has dropped 10.4 percentage points since 2013, the largest drop among "key subgroups" (defined as whites, blacks, and Hispanics) in a new Gallup survey. Despite these gains, 28% of Hispanics remained uninsured in the first quarter of 2016, the largest of any subgroup. The uninsurance rate among blacks dropped 9.5 percentage points to 11% while the national uninsurance rate reduced by 6.1 percentage points to 11%. The survey's accompanying report notes that the larger declines for blacks and Hispanics partly reflect higher uninsured rates prior to the ACA.

Marketplace Coverage Remains Unaffordable for Some, New Report Finds

Many Marketplace enrollees struggle to afford their premiums and out-of-pocket costs despite the availability of cost sharing subsidies, according to a new report from the Kaiser Family Foundation. One-third of those with Marketplace coverage reported difficulty paying their premium, compared to 17% of those with employer-sponsored coverage. The report cites increased enrollment assistance via navigators or social workers, and improved health literacy as two strategies that can help enrollees select plans that more appropriately balance premiums and deductibles. The authors note that improving the affordability of Marketplace plans is necessary to maintain the coverage gains made to date.

New CMS Guidance Seeks to Improve Access to Long-Acting Reversible Contraception

CMS released an information bulletin identifying reimbursement strategies state Medicaid agencies can use to improve access and utilization of long-acting reversible contraception (LARC). The bulletin reviews strategies in 14 states for mitigating the challenges of LARC reimbursement, which include: provide comprehensive patient-centered coverage for the provision of contraceptive services; raise reimbursement rates for contraceptive devices; reimburse for immediate postpartum insertion of LARC separate from other labor and delivery services; address supply chain management issues; and remove administrative barriers. The bulletin also provides examples of best practice payment and policy strategies in Illinois, Louisiana, and South Carolina.

CMS Extends Medicaid Access Monitoring Review Plan Deadline

CMS is revising the deadline for submission of states' access monitoring review plan until October 1, 2016. Under the final access rule published in November, states are newly required to submit an access monitoring review plan to document if Medicaid payments are sufficient to assure access for beneficiaries to primary care services, physician specialist services, behavioral health services, pre- and post-natal obstetric services, and home health services. CMS is extending the deadline from July 1, 2016 in order to provide states more time to develop robust review plans.

STATE MEDICAID REFORM & EXPANSION ACTIVITY:

Alabama: Legislature Overrides Budget Veto, Medicaid Prescription Drug Benefit Targeted

Governor Robert Bentley (R) and State Medicaid Commissioner Stephanie Azar announced several potential changes to the Medicaid program a day after the Legislature overrode the Governor's budget veto, effectively funding Medicaid by $85 million less than requested. Governor Bentley and Azar said the budget's underfunding of Medicaid could halt the State's transition to managed care delivered through Regional Care Organizations if the budget goes into effect as is on October 1. They also said the State may have to forfeit federal funds provided under a recently approved 1115 waiver to support that transition. Governor Bentley and Azar identified several potential changes to the Medicaid program in response to the budget shortfall, including: eliminating prescription drug coverage for adults ($50-$60 million in savings); requiring all enrollees fill prescriptions through a single "big box" pharmacy ($19-$30 million in savings); reducing provider reimbursement rates for primary care ($15 million in savings); and eliminating coverage for eyeglasses, outpatient dialysis, prosthetics and orthotics ($5 million in savings). A joint legislative subcommittee will hold hearings on Medicaid funding next week. Any reduction in Medicaid benefits would require federal approval.

Arkansas: Governor Signs Medicaid Expansion Renewal, Legislature to Consider Funding This Week

Governor Asa Hutchinson (R) signed legislation to extend and reform the State's Medicaid expansion after the Legislature approved the measure last week. The legislature must now provide funding for the plan, called "Arkansas Works," by a three-fourths majority during this week's legislative fiscal session. Separately, HHS Secretary Sylvia Burwell said the federal government will continue to work with Arkansas on waiver approval for Arkansas Works, though Burwell said the State would need to make additional improvements to its Medicaid eligibility and enrollment system for CMS to approve the State's request to eliminate 90-day retroactive coverage for the expansion group.

Iowa: House Republicans Propose Oversight for Newly Implemented Medicaid Managed Care

House Republicans proposed an oversight plan for the managed care organizations (MCOs) in the State's Medicaid managed care program, which went into effect on April 1. The plan would require MCOs to publicly report on enrollment, health outcomes, access to care, and program integrity. The Senate approved a separate Medicaid oversight bill in March that would create a legislative oversight committee and a fund to collect savings realized from managed care. Governor Terry Branstad (R) and Senate Democratic leaders said they would work with the House to develop consensus legislation on MCO oversight.

Louisiana: Provider Opposition Stalls Medicaid Expansion Copay Proposals

Three bills to require copays for Medicaid expansion members, including a bipartisan proposal supported by Governor John Bel Edwards (D), were withdrawn from consideration during a hearing of the House Health and Welfare Committee following opposition testimony. The bill supported by Governor Edwards would have imposed an up to $8 per visit fee for non-emergency care in the emergency room and for "non-preferred" prescription drugs. Opposition to the proposals was led by the Louisiana Hospital Association, which released a statement indicating that Medicaid copays are "uncollectable" and a "huge administrative burden." Representative Jack McFarland (R) indicated after the hearing that he will bring the copay bill back up for consideration before the end of the legislative session.

Texas: Higher Costs, Less Access for Low-Income Residents Compared to Other Southern Expansion States

Low-income Texans are less able to afford their medical bills, to cover the costs of prescription drugs, and to access consistent care for chronic conditions compared to their counterparts in southern states that expanded Medicaid, according to The Commonwealth Fund. In addition to its decision to not expand Medicaid, Texas chose not to develop an in-person assistance program to help consumers enroll in insurance, and it passed laws limiting community organizations' ability to fill that role. The report also found that Texans had less awareness of the ACA's coverage expansions; lower application rates for Medicaid or Marketplace coverage, and lower rates of application assistance from navigators or social workers among those who applied for coverage. Five million, or nearly one in five Texans, are uninsured—the highest level in the country.

Wisconsin: Concept Paper Proposes Integration of Medicaid Programs

The Department of Health Services (DHS) has finalized a concept paper on the redesign of the State's Medicaid long-term services and supports (LTSS) programs that would move more than 55,000 Medicaid beneficiaries receiving LTSS through the Family Care and Include, Respect, I Self Direct (IRIS) programs into "integrated health agencies." DHS was mandated to make a number of changes to these programs under Act 55 of the 2015-2017 State budget, including designing and implementing integrated health agencies to coordinate beneficiaries' LTSS, primary and acute care, and behavioral health care. The final concept paper was submitted to the Legislature's Joint Committee on Finance on March 31 for final approval following a series of public hearings. If approved, DHS will seek a federal waiver or Medicaid State Plan Amendment.

STATE MARKETPLACE NEWS:

Arkansas & Georgia: United Healthcare to Exit Marketplaces

United Healthcare announced it will not sell insurance plans on the Arkansas or Georgia health insurance Marketplaces for the 2017 plan year. The company previously said it may withdraw from Marketplaces after lower-than-expected earnings last year. Arkansas consumers purchasing coverage on the Marketplace will have a choice of four insurers, while Georgia consumers will have eight insurer options. United is the largest health insurer in the country but has a much smaller share of enrollees in the Marketplaces.

California: Marketplace Presses Health Plans to Improve Quality and Value

The Covered California board unanimously approved a series of adjustments to the 2017-2019 Qualified Health Plan (QHP) Model Contract aimed at promoting higher quality and better value for consumers. A wide range of provider, health plan, and consumer stakeholder groups helped craft the new contract provisions, which aim to lower costs, increase access to appropriate and timely care, reduce health disparities, and empower consumer choice. Numerous levers will be used to achieve these goals, including encouraging plans to adopt advanced primary care models such as patient-centered medical homes and accountable care organizations; requiring plans adopt value-based payment methodologies including linking at least 6% of hospital reimbursements to quality performance over time; increasing expectations for network quality; and providing consumer decision-making tools to increase understanding of care options and costs.

California: Marketplace Supports 1332 Waiver to Enroll Undocumented Immigrants

The Covered California board published a report supporting the pursuit of a Section 1332 waiver to allow undocumented immigrants to purchase "non-qualified health plans (QHPs) that 'mirror' Covered California QHPs" through the State-based Marketplace. Undocumented residents are currently only able to purchase full-cost coverage through private insurance brokers. If approved, the waiver could provide access to up to 50,000 undocumented residents to purchase the plans, though they would not be eligible for federal cost sharing or premium subsidies. The change could take effect as early as January 1, 2017 pending State legislation and federal approval.

New York: New SEP Created for Victims of Domestic Violence

New Yorkers who are victims of domestic violence or spousal abandonment may now enroll in insurance plans offered through the NY State of Health, the State-based Marketplace, at any point during the year, Governor Andrew Cuomo (D) announced. The special enrollment period (SEP) applies to any member of a household who is a victim of domestic abuse, including those who are unmarried or are dependents, as well as dependents of victims of spousal abandonment. CMS made the HealthCare.gov SEP for victims of domestic violence permanent in 2015 and several other states, including California and Minnesota, have followed suit.

STATE STAFFING UPDATE:

Tennessee: New Medicaid Director Appointed

Governor Bill Haslam (R) appointed Wendy Long as the State's new Medicaid director, effective July 2016. Long will replace current Medicaid director Darin Gordon, who announced his resignation last week. Long is a medical doctor currently serving as deputy director of the State's Health Care Finance and Administration division. She was previously the Medicaid program's chief medical officer.

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