Manatt on Health Reform: Weekly Highlights

Early data emerges on the impact of Medicaid expansion on states’ budgets and enrollees’ healthy behaviors. Read on for the latest in state and federal health reform updates and Manatt’s staffing announcement.

MANATT NEWS:

Cindy Mann Joins Manatt

Manatt, Phelps and Phillips, LLPannounced that former top Medicaid official Cindy Mann will join the firm’s Healthcare practice on April 13th as its newest partner. A key leader in implementing the Affordable Care Act (ACA), Mann previously served as deputy administrator of the Centers for Medicare and Medicaid Services (CMS) and director of the Centers for Medicaid and CHIP Services within CMS. In these roles, Mann oversaw the rollout of the Medicaid provisions of the ACA and the modernization of the Medicaid program. Her leadership enabled the expansion of Medicaid in 28 states, including innovative waivers in Arkansas, Michigan and Iowa; fundamental changes in Medicaid eligibility and enrollment policies and systems; improvements in the availability and delivery of long-term care services and supports; and new initiatives in partnership with states to support payment and delivery system reform. During her time at CMS, Medicaid and CHIP enrollment nationally increased 16%, and Medicaid policy and programs became viewed as major levers in healthcare reform.

IMPACT OF MEDICAID EXPANSION IN STATES:

Report Finds Medicaid Expansion Leads to Economic Benefits for States

States that expanded Medicaid in 2014 have already realized savings and revenue gains as a result, says an issue brief recently released by Manatt and the Robert Wood Johnson Foundation. The brief is the second in a series on the economic impact of Medicaid expansion. Authors Deborah Bachrach, Patti Boozang and Dori Glanz examined eight states from across the country for the early results on the budget impact of Medicaid expansion and found that these states expect to see more than $1.8 billion in savings and revenue gains through 2015 as a result of expansion. In some states, savings are expected to offset the costs of expansion for several years. The report includes detailed tables and explanations of the savings opportunities identified in each state. Stay tuned for a Manatt on Medicaid highlighting the report’s findings.

Michigan: Governor Says Medicaid Expansion Plan Achieves Healthy Behaviors

In celebration of the Healthy Michigan Medicaid expansion plan’s launch one year ago, Governor Rick Snyder (R) celebrated the plan’s achievements in encouraging beneficiaries to take initiatives to improve their health—a key goal of Healthy Michigan. In its first year, the Healthy Michigan expansion has enrolled 600,000 individuals who have completed 334,000 primary care visits, 116,000 preventive care visits, 35,000 mammograms, and 17,000 colonoscopies.

Ohio: Hospital Attributes Decline in Charity Care to Medicaid Expansion

One of the nation’s largest hospitals, the Cleveland Clinic, reported a 40% decline in charity care spending in 2014 compared to 2013. Cleveland Clinic officials attribute the resulting savings of approximately $70 million to the expansion of Medicaid eligibility in the State.

STATE MEDICAID ACTIVITY:

Florida: Governor Revokes Support for Medicaid Expansion

Governor Rick Scott (R), who unexpectedly announced his support for Medicaid expansion in 2013, publicly withdrew it this week amid negotiations between Florida and CMS over the continuation of the Low-Income Pool (LIP) program. Renewal of the LIP program, which reimburses hospitals for uncompensated care, has been increasingly linked to Medicaid expansion since CMS stated a few months ago that it would not renew funding for the LIP program “in its present form.” The secretary of the Florida Agency for Health Care Administration clarified that CMS has not made approval of the LIP program contingent on expansion of Medicaid. Governor Scott said his reversal was based on concern that the federal government could reduce or discontinue the enhanced federal funds for Medicaid expansion, as he feels it has done with the LIP program. CMS reiterated its commitment to provide enhanced federal funding for states’ Medicaid expansions as outlined in the ACA and to working with Florida to expand or develop an alternative solution to reduce hospital costs.

New Jersey: State Supreme Court Finds Elimination of Medicaid Benefits for Some Legal Immigrants Permissible

New Jersey’s Supreme Court ruled in favor of the State in a class action suit alleging that New Jersey's decision to eliminate Medicaid eligibility for legal immigrants who have been in the country for less than five years violated the Constitution. The Court upheld a lower appellate court ruling that New Jersey legally altered NJ Family Care's eligibility criteria in 2010, when it decided to no longer offer Medicaid benefits to some legal immigrants as the state faced massive budget shortfalls. Since 1996, federal law has granted states the right to eliminate such benefits for legal resident aliens, but the plaintiffs argued that this action was akin to discrimination against women or minorities, reports the New Jersey Law Journal.

Tennessee: Revival of Medicaid Expansion Plan Cut Short by Senate Committee

While Governor Bill Haslam’s (R) “Insure Tennessee” Medicaid expansion plan failed to gain approval from lawmakers last month, a modified version of the proposal was recently passed by the Senate Health and Welfare Committee and believed to have modest support. The plan’s revival, however, was short-lived, as it was defeated 6-2 in the Senate Commerce Committee less than one week later. Proposed amendments to the bill included a six month lockout provision for nonpayment of premiums, delaying implementation until after a decision in King v. Burwell, and a federally approved opt-out election for the State.

STATE MARKETPLACE NEWS:

Colorado: Board Selects “Finalist” for Marketplace CEO/Executive Director

The Board of Directors of Connect for Health Colorado selected Robert C. Malone to serve as the Marketplace's new Chief Executive Officer/Executive Director. Malone’s selection is open for public comment for 14 days and must be approved by the Legislative Health Benefit Exchange Implementation Review Committee before being finalized. In 2013 Malone became the Chief Executive of The Assist Group, a claim review and resolution services company, and previously consulted for a New York regional health insurance company.

New Mexico: Exchange Board Decides to Lease Federal Technology

The New Mexico Health Information Exchange (NMHIX) Board decided to cease building its own exchange technology and instead lease HealthCare.gov from the federal government for 2017. Having utilized HealthCare.gov for eligibility and enrollment since NMHIX’s launch, the Board’s evaluation indicated that leasing the technology would cost the State less. CMS has assured New Mexico that it will still be defined as a State-based Marketplace and plans to issue regulations regarding a lease agreement, reports POLITICO Pro.

New York: Health Plan Fee to Support Marketplace Sustainability Excluded from Final State Budget

The State’s final 2015-2016 budget passed without the Governor’s proposed assessment on all health plans sold by insurers both on and off the State's Marketplace. The assessment, which the Governor had estimated to be $25 per plan, was intended to financially support Marketplace administration, but was removed during negotiations with the Assembly and Senate. The State instead intends to use revenue from its Health Care Reform Act to help support the cost of running the Marketplace.

Washington: State Budget Proposals, Legislation Leave Exchange Funding Up in the Air

The Washington Health Benefit Exchange’s funding levels remain unclear after the release of the State House and Senate budget proposals and related bills. The House budget proposal appropriates $124 million for Fiscal Year 2016-2017—which comes close to matching Governor Jay Inslee’s (D) call for $127 million—but the Senate proposal allots $85.9 million to the Exchange. While the bills must be reconciled, the House is also now considering Senate-passed SB 6089, which calls for the 2% qualified health plan premium tax revenue the Exchange is already collecting to be newly allocated to the State’s general fund beginning in 2016. Initial reports from State of Reform estimate the change could result in a $29 million reduction in funding for the Exchange through 2017.

FEDERAL NEWS:

Mental Health Parity Proposed for Medicaid and CHIP

On Monday, CMS issued a proposed rule to extend the Mental Health Parity and Addiction Equity Act of 2008 to Medicaid and the Children’s Health Insurance Program (CHIP). The law requires group health plans that cover behavioral health services to do so with the same terms as they apply to medical care; the ACA extended these protections to the individual market. CMS’s proposed rule applies to Medicaid alternative benefit plans and to all Medicaid enrollees who receive services through Medicaid managed care organizations.

Department of Treasury and HHS Announce Tax Season Relief & SEP Enrollment Updates

The Department of Treasury announced that consumers impacted by problems pertaining to their 1095A Marketplace tax forms may file their tax return through October 15 without penalty, provided that the consumer files an extension request by April 15. This announcement follows guidance relieving consumers who filed a return with an incorrect 1095A form of the obligation to file an amended return. Also last week, the Department of Health and Human Services announced that as of March 29, 36,000 consumers have enrolled in coverage through HealthCare.gov’s Special Enrollment Period (SEP) for individuals who owe a tax penalty. This represents only 2–4% of taxpayers who will owe the tax penalty and thus are eligible for the SEP, which runs through April 30 for people living in states with a Federally-facilitated Marketplace.

Report Suggests More than 80 Percent of All Marketplace Plans Non-Compliant with Tobacco Cessation Benefit Requirements

According to a recently-released American Lung Association (ALA) report, only 17.2% of issuers are compliant with the ACA requirement that plans cover certain tobacco cessation interventions and counseling without cost-sharing. Based on a review of Marketplace plan formularies, the ALA found that an additional 41.4% covered approved interventions but required some level of cost sharing. The report recommends greater transparency in Marketplace websites and plan issuer formularies and materials.

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