Manatt on Health Reform: Weekly Highlights

CMS releases new redetermination regulations and links uncompensated care funds to expanding Medicaid, and New York becomes the second state to launch the Basic Health Program.

FEDERAL REGULATIONS:

CMS Releases Guidance on Redetermination Process for 2016

CMS issued guidance on the 2016 annual redetermination process for the Federally-facilitated Marketplace, with significant updates from 2015. While the guidance retains a provision allowing enrollees who take no action prior to the enrollment deadline to maintain coverage, the processes for determining eligibility for 2016 have changed. Most notably, enrollees who take no action will receive a new eligibility determination updated for 2016 based on either updated tax return information from the IRS or information from the most recent eligibility application. Additionally, enrollees who failed to reconcile their advance payments of the premium tax credit (APTC) from the 2014 coverage year will be re-enrolled in coverage without APTC or cost-sharing reductions.

FEDERAL NEWS:

CMS Links Uncompensated Care Funds To Expanding Medicaid in Multiple States

CMS sent a letter to the nine states that receive uncompensated care funding—Medicaid dollars that help states pay hospitals and doctors to treat the uninsured—warning them that this funding may be at risk if they do not expand Medicaid, reports Kaiser Health News. This outreach comes on the heels of CMS telling Florida that the State's decision not to expand Medicaid will impact the agency’s decision regarding the renewal of its uncompensated care funding. Because uncompensated care arrangements are discretionary, HHS has flexibility to define the conditions under which the funding is granted. Texas Governor Greg Abbott (R) weighed in, voicing his support for Florida Governor Rick Scott's (R) decision to sue CMS over this issue. Texas currently receives $3 billion in uncompensated care funding, which is set to expire in 2016. Four of the nine states that receive uncompensated care funding from CMS—Florida, Kansas, Tennessee and Texas—have not expanded Medicaid. States that have expanded that receive the funding include Arizona, California, Hawaii, Massachusetts and New Mexico.

HealthCare.Gov Subsidy Calculation Error Impacts Families

Families with a disabled or deceased parent who applied for health insurance through HealthCare.gov may have received lower subsidies than they were eligible for or been erroneously determined ineligible for Medicaid due to a miscalculation of their income, as reported by Kaiser Health News. The technical glitch at the Federally-facilitated Marketplace resulted in children’s Social Security Income being included in determining eligibility when it should have been excluded. CMS has asked assisters to help impacted consumers file an eligibility appeal with the Marketplace or submit an application for a Medicaid determination.

New Report Finds Improved Marketplace Plan Satisfaction in 2015

Marketplace plan satisfaction among new enrollees has increased significantly (by 55 points, from 615 to 670) in 2015 compared to satisfaction in 2014, according to a report by J.D. Power that queried enrollees’ satisfaction across six dimensions on a 1,000-point scale: claims processing, communications, cost, coverage and benefits, customer service, provider selection, and enrollment experience. Consumers who used the auto re-enrollment process to re-enroll in the same plan were more satisfied, with a score of 744 points, than those who returned to the Marketplace to select a new plan, with a score of 724 points. Notably, satisfaction in Marketplace plans for 2015 is slightly higher (696 versus 679) than in traditional, mostly employer based, insurance.

MEDICAID BUDGET UPDATES:

Florida: Governor Announces Possibility of Special Session to Complete State Budget

The Florida House abruptly adjourned its session early today due to extreme policy differences between budgets introduced in the House and Senate, reportsThe Miami Herald. The House and Senate are at odds over the continuation of the uncompensated care Low Income Pool (LIP) funding and Medicaid expansion. Earlier, Governor Rick Scott (R) announced his intent to convene a special session to finalize the 2015-2016 State budget, should the House and Senate fail to compromise during the current session; in advance, the Governor will gather a Commission on Healthcare and Hospital Funding "to examine the revenues of Florida hospitals, insurance and healthcare providers and how any taxpayer money contributes to the profits or losses of these institutions in Florida." Governor Scott has announced he will bar conversations about LIP funding in the special session until the federal government responds to a request the State intends to submit to extend the funding through 2017. Instead, Governor Scott is asking legislators to focus on services like education, law enforcement, children’s services and transportation.

Ohio: House Budget Includes Transfer of Certain Medicaid Authority

By a vote of 63-36, the Ohio House passed a $131.6 billion budget plan for FY 2016-2017, which supports a continuation of Medicaid expansion and related federal funding, but transfers the authority to set Medicaid eligibility levels from the Medicaid Director to the legislature. The House also directs the Medicaid Department to seek federal approval to require almost all Medicaid enrollees to make contributions to a health savings account, in contrast to the Governor’s proposal to require only Medicaid expansion adults with incomes above 100% of the federal poverty level to pay premiums. The bill, now under review in the Senate, must be finalized by the end of June before going to the Governor.

MORE STATE HEALTH REFORM NEWS:

Maine: Report Finds Medicaid Expansion Would Create State Savings and Revenue Gains

A new Manatt report commissioned by the Maine Health Access Foundation estimates that expanding Medicaid in Maine would result in more than $26.7 million in net savings and revenue gains to the State in 2016. Savings would mostly come from enhanced federal matching funds for some current Medicaid enrollees and replacing State General Funds with Medicaid funds. Revenue gains would result from increased hospital tax revenues generated by increased hospital payments due to expansion.

Massachusetts: Health Department Creates New Unit Focused on Medicaid Cost Containment and Payment Reform

The Massachusetts Executive Office of Health and Human Services announced the creation of a new unit focused on payment reform as the Commonwealth's Medicaid program, MassHealth, grapples with a large estimated increase in annual spending. The three-member unit is tasked with transitioning the Medicaid program from a fee-for-service system towards one that offers incentives to providers to manage population heath.

New York: Marketplace Invites Health Insurers to Offer Plans through Basic Health Program

The NY State of Health announced its Basic Health Program, an optional program established under the Affordable Care Act, and invited health insurers to participate for the 2016 coverage year. The Basic Health Program option gives states the flexibility to provide more affordable coverage options than would otherwise be available to individuals with incomes generally between 138% and 200% of the federal poverty level. New Yorkers will enroll in the Basic Health Program through the NY State of Health during the next open enrollment period beginning November 1, 2015 for coverage that begins on January 1, 2016. New York is the second state, after Minnesota, to exercise the Basic Health Program option.

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