CMS's sweeping final rule aligns Medicaid and CHIP managed care with QHP and Medicare Advantage regulations; New York's DSRIP is enabling change in the State's Medicaid delivery system; and Medicaid expansion reduces non-medical debt in low-income areas.
FEDERAL AND STATE MEDICAID REFORM UPDATES:
CMS Finalizes Medicaid/CHIP Managed Care Regulations
CMS published a final rule overhauling the regulations governing Medicaid and CHIP managed care, which represents the most significant revisions in nearly two decades. The final rule substantially aligns Medicaid managed care rules with those that apply to Medicare Advantage plans and qualified health plans under the ACA, and seeks to enable managed care to drive delivery system reforms and quality improvement throughout the healthcare system. CMS incorporated many of the proposed rule provisions with relatively modest changes but dispensed with proposals that would have required states to provide 14 days of fee-for-service (FFS) coverage as an "enrollment choice period" for beneficiaries and to adopt a comprehensive quality strategy that includes Medicaid FFS, and plans to be accredited as a condition of contracting with a state. CMS also phased the implementation timeframes for many of the provisions.
Alabama: Legislature Convenes Medicaid Hearings Amid Pending Service Cuts
The Legislature's Joint Medicaid Study Group began hearings last week in response to Medicaid's $85 million budget shortfall, though panel chairman Senator Trip Pittman (R) said he does not expect the hearings to produce a funding solution. The goal of the hearings remains unclear since legislators have not indicated a willingness to revisit the budget after overriding Governor Robert Bentley's (R) budget veto. Medicaid Commissioner Stephanie Azar testified in one of the panel's first meetings, explaining how average patient costs have been level since 2008 but that enrollment has increased 28% during that time, to more than one million enrollees. She further stressed that provider reimbursement rates or services like dialysis and hospice would need to be cut under the current budget. The panel will meet over the next several weeks, past the end of the current legislative session.
Alaska: Legislature Approves Medicaid Reform Bill
The Legislature approved a Medicaid reform bill that will save the State an estimated $365 million over six years by requiring the Department of Health and Social Services (DHSS) to adopt new approaches to care coordination, payment reform, and behavioral healthcare. The bill's approval comes several months after reports commissioned by Governor Bill Walker (I) and the Legislature called for changes to the State's Medicaid program. The bill, which Governor Walker is expected to sign, also includes new initiatives to identify Medicaid fraud and to develop a new eligibility verification system. DHSS will have significant latitude in designing and implementing the bill's reforms.
Nebraska: Plans Selected for Integrated Medicaid Managed Care Program
The State Department of Health and Human Services (DHHS) selected Nebraska Total Care, UnitedHealthcare Community Plan and WellCare to administer "Heritage Health," the State's newly integrated Medicaid managed care program. Heritage Health aims to streamline the delivery model for Medicaid beneficiaries by providing them with a benefit package that includes physical, behavioral and pharmacy services. DHHS currently works with three insurance companies that manage enrollees' physical health and two separate entities for behavioral health and pharmacy services. Approximately 230,000 enrollees will be served by Heritage Health, which is scheduled to launch on January 1, 2017. All three plans will be offered statewide.
New York: Report Examines State's DSRIP Implementation
A new report from The Commonwealth Fund and Manatt Health examines New York's early experiences implementing its Delivery System Reform Incentive Payment (DSRIP) waiver. The report reviews the State's approach to governance, care models, analytics, measurement, and value-based payment arrangements, flagging emerging issues that enable or impede Medicaid transformation and assessing how other states and CMS might draw upon these experiences. Findings were drawn from two rounds of stakeholder interviews that included federal and State officials, thought leaders from national healthcare organizations, and on-the-ground implementation leaders from provider and health plan entities.
FEDERAL AND STATE MEDICAID EXPANSION NEWS:
Medicaid Expansion Improves Overall Financial Well-Being, New Report Finds
Medicaid expansion significantly reduced the number of unpaid non-medical bills and the amount of non-medical debt sent to third-party debt collectors, according to a report from the National Bureau of Economic Research. The report estimates that Medicaid expansion is associated with a reduction in collection balances by $600 to $1,000 per person and suggests that expansion populations may have better access to credit markets in the future than if they had not gained coverage. This is the first national study of expansion's effect on multiple measures of financial well-being, according to the authors.
Medicaid Expansion Is Improving Access to Care, According to Report
Individuals with incomes less than 138% of FPL in Medicaid expansion states were more likely to see a doctor, stay overnight in a hospital, and receive their first diagnoses of diabetes and high cholesterol than their counterparts in non-expansion states, according to an analysis of National Health Interview Survey data published in the Annals of Internal Medicine. This is the first evidence of increased healthcare utilization by low-income adults in expansion states, according to the researchers. The percentage of survey respondents who spoke with a doctor increased from 58% pre-expansion (2010 to 2013) to 68% post-expansion in expansion states, while there was no change in non-expansion states. Those who said they had no usual source of care due to costs fell from 13.3% to 6.6% in expansion states while that rate dropped "marginally" in non-expansion states. Despite improved access to care, enrollees did not have improved assessments of their own health, which the authors suggest may be because too little time has passed to allow for health improvements and because increased contact with providers and improved health awareness may negatively affect opinions about one's own health.
Arkansas: Medicaid Expansion Funding Secured, Program to Continue
Governor Asa Hutchinson (R) signed an appropriation bill funding "Arkansas Works," the re-named State's Medicaid expansion, by using a line-item veto of a last-minute provision that would have ended Arkansas Works on December 31, 2016. The provision was added with the understanding that Governor Hutchinson would issue this line-item veto, effectively preserving the program's funding. The procedural maneuver was devised after the original bill failed to receive the required three-fourths majority vote to pass the Legislature. The State must now seek federal waiver approval to institute mandatory premium assistance for beneficiaries with access to cost-effective employer-sponsored insurance, a work referral program, and premiums for beneficiaries with incomes above 100% of FPL. The federal government has pledged to work with State officials to approve the waiver. Separately, Governor Hutchinson said he would seek to end Medicaid coverage of emergency contraceptives in response to a request from a legislator that supported Arkansas Works, according to the Arkansas Democrat-Gazette.
Louisiana: Governor Testifies on Merits of Medicaid Expansion in State Senate
Governor John Bel Edwards (D) and Department of Health and Hospitals Secretary Rebekah Gee provided updated savings estimates and new operational details on the launch of Medicaid expansion at a Senate Health and Welfare Committee meeting last week. Governor Edwards and Gee told lawmakers that expansion will generate an estimated $677 million in savings over five years and approximately $1 billion over 10 years, in addition to the $184 million in anticipated savings for fiscal year 2017. These estimates are in stark contrast to former Governor Bobby Jindal's (R) estimates of $1.7 billion in costs over 10 years. The Medicaid agency's statement also highlighted plans to auto-enroll approximately 200,000 individuals who receive other State services and are Medicaid eligible in anticipation of a July 1 launch date.
FEDERAL AND STATE MARKETPLACE AND HEALTH REFORM ACTIVITY:
Access to Some High-Cost Drugs Is Improving in Marketplace Plans, According to Report
Marketplace plans were less likely to place entire categories of drugs that treat complex diseases in the highest cost-sharing tiers in 2016 compared to previous years, according to a report from the consulting firm Avalere. The report, which analyzed silver plans' formularies across 20 medicine classes, also found that fewer plans this year are applying coinsurance above 40% for all drugs in a single class, though a small portion of plans still apply high coinsurance rates for all branded drugs in a class. Half of the plans reviewed placed all antiangiogenics—drugs used to treat cancer—in the highest cost-sharing tiers, making it the class of drug most frequently placed in the highest tier. Nearly one-third of silver plans placed multiple sclerosis drugs on the highest tier, a 14-percentage-point reduction from 2015. The report notes that CMS has discouraged plans from placing all drugs used to treat a condition in the highest tier without considering the medication's cost, and California has passed legislation preventing plans from placing all drugs for a condition on the highest tier beginning in 2017.
Premium Increases May Result in Increased Financial Assistance and Marketplace Enrollment, Report Finds
Significant increases in benchmark premiums may increase Marketplace enrollment by raising the premium assistance threshold to higher income levels, according to a new report from the actuarial consulting firm Milliman. States relying on HealthCare.gov that had significant premium increases for their benchmark plans between 2015 and 2016 had higher enrollment among those who qualify for financial assistance, compared to states with premium decreases or moderate increases. Changes in enrollment between 2015 and 2016 varied less between states among those eligible for premium tax credits in both years. Not surprisingly, the report also found that states that expand Medicaid or establish Basic Health Plans (BHP) are likely to see a decrease in Marketplace enrollment as expansion and BHP enrollees switch from Marketplace plans.
Kentucky: Report Highlights State's ACA Implementation Successes
Kentucky's uninsured rate has been cut in half—to 8%—and Medicaid enrollment has nearly doubled since 2013, according to a report by the Kaiser Family Foundation that describes the State's ACA implementation as one of the most successful in the nation. The report credits Kentucky's ACA successes to: strong and engaged leadership; a high-functioning, integrated eligibility system for Medicaid and Marketplace determinations; broad outreach and enrollment efforts; State-specific branding; and strong access to care for Medicaid beneficiaries (access to care for qualified health plan enrollees has varied by plan). The report also highlights the State's lower-than-anticipated care costs for the Medicaid expansion population and overall cost savings generated by expansion. Additionally, the report reviews ongoing changes and potential implications, including the transition from kynect, the State-based Marketplace, to HealthCare.gov, and Governor Matt Bevin's (R) plan to make changes to the Medicaid expansion through a waiver. The report comes amid the troubled rollout of Benefind, the State's new online enrollment system for Medicaid and other public assistance programs, and the Legislature's failed efforts to preserve the Medicaid expansion and kynect.
Nevada: Exchange to Continue Using Federal Platform
Nevada's Silver State Health Exchange will continue to use the HealthCare.gov platform to sell qualified health plans in 2017, according to the Nevada Appeal. Executive Director Bruce Gilbert said the exchange, a State-based Exchange on the federal platform (SBE-FP), may consider other options for 2018. Gilbert had previously said he expected the federal government's proposed 3% user fee on SBE-FP issuers—which has since been reduced to 1.5% for 2017—would encourage states to pursue private sector alternatives to the federal platform.
STATE STAFFING UPDATE:
New York: Department of Financial Services Announces New Insurance Leadership
The Department of Financial Services (DFS) announced Scott Fischer as New York's Executive Deputy Superintendent for Insurance. Fischer was previously the Special Deputy Superintendent at the New York Liquidation Bureau. As the head of the Insurance Division, Fischer will have regulatory oversight of 1,700 insurers with assets totaling $4.2 trillion. Fischer replaces Robert Easton, who left the department last year.