Manatt on Health Reform: Weekly Highlights

Reductions in uninsured rates are greatest in states with Medicaid expansions and State-based or State Partnership Marketplaces; Kentucky finds increased use of preventive healthcare following Medicaid expansion; and, Delaware maintains its State Partnership Marketplace model post-King v. Burwell.

MEDICAID & MARKETPLACE REPORTS:

States with Medicaid Expansions and State-Based or State Partnership Marketplaces Have Greater Reductions in Uninsured Rate

States that expanded Medicaid and operate a State-based or State Partnership Marketplace have the lowest rates of uninsurance in the United States, according to new data by Gallup. Since the beginning of 2014, Arkansas and Kentucky have had the steepest reductions in uninsured rates, of 13.4 and 11.4 percentage points, respectively. Oregon, Rhode Island, and Washington have also seen at least a 10 percentage point reduction in uninsured rates. Of the 10 states with the highest reductions, the top 7 have both expanded Medicaid and established a State-based or State Partnership Marketplace. The average reduction in the uninsured rate across states that implemented both measures is 7.1 percentage points, compared to 5.3 percentage points across the 28 states that implemented only one or neither of the measures.

Despite Technology Improvements, Study Finds Consumers Still Seek Enrollment Guidance From Assisters

According to assister programs surveyed by the Kaiser Family Foundation, consumers continued to have a substantial need for assistance during the most recent open enrollment period. Nearly 80% of assister programs reported that most consumers who sought help said they lacked the confidence to apply on their own—similar to reports after the first open enrollment period. Improvements in Marketplace websites resulted in a decline in assistance related to Marketplace technical difficulties: just 38% of assister programs reported that most consumers sought assistance because of technical difficulties, compared to 65% in the first open enrollment period. In the second open enrollment period, more than 4,600 assister programs, with 30,400 full time staff and volunteers, served 5.9 million consumers.

HHS Inspector General Finds Terminated Medicaid Providers Participating in Other States

HHS's Office of the Inspector General (OIG) released a report finding that 12% of providers who were terminated from state Medicaid programs in 2011 for reasons of fraud, waste, or abuse participated in other states’ programs, despite the ban on such practices in the Affordable Care Act. According to the analysis, states paid a total of $7.4 million to 94 providers for services after the provider was terminated from Medicaid in a different state. Based on its findings, OIG reiterated its recommendation from a 2014 report that CMS require state agencies to report all terminations. Additionally, OIG newly recommended that CMS develop uniform terminology to identify a reason for termination and require state Medicaid agencies to directly enroll all providers in Medicaid managed care networks, as states that currently do not are not able to terminate these providers. The latter is a provision required in CMS’s proposed new Medicaid Managed Care rules. CMS agreed with all recommendations.

CMS NEWS:

CMS Selects New Contractor as Marketplace Systems Integrator

Booz Allen Hamilton has been awarded a contract to serve as the next Marketplace Systems Integrator, replacing the Optum subsidiary Quality Software Services. The Marketplace Systems Integrator is responsible for leading governance and technical coordination to implement and operate the Federally-facilitated Marketplaces, ensuring compliance and alignment with regulatory requirements. The contract is worth $202 million over a base year plus 4 option years, potentially continuing through July 2020.

CMS Advises Enrollees Who Received Advanced Premium Tax Credits to Reconcile Quickly

CMS is urging the 1.8 million enrollees who received financial assistance to purchase health insurance but have not yet reconciled their tax credits to act quickly or risk losing the subsidies in 2016. As previously reported, the IRS found that, as of May, two-thirds of those who should have filed the form to reconcile their premium tax credits have done so. Of the 1.8 million enrollees who have not reconciled, 360,000 received an extension to file their returns through October 15. Of those who did not receive an extension, approximately 710,000 households have not filed a tax return and 760,000 households that filed their tax returns did not file the form the IRS requires to conduct the reconciliation.

MEDICAID EXPANSION & REFORM:

Kentucky: Use of Preventive Healthcare Increases Following Medicaid Expansion

New data from the Kentucky Department of Medicaid Services shows an increase in use of preventive care from 2013 to 2014 following the State’s Medicaid expansion, including a 187% increase in annual wellness exams (from 22,290 to 63,888). Data also indicated a 110% increase in breast cancer screenings (from 24,386 to 51,292) and a 55% increase (from 784 to 1,214) in diabetes screenings. This information was presented to the oversight team of “kyhealthnow,” an initiative started by Governor Steve Beshear (D) to address public health issues.

Maine: Medicaid Family Planning Eligibility Expansion Now Law

Maine’s State Supreme Court affirmed as law legislation (LD 319) that expanded Medicaid reproductive health benefits to individuals with incomes up to 209% of the federal poverty level. The legislation had languished while the Governor sought to enforce his veto of this bill and 64 others delivered after the deadline allowed in the State Constitution. Governor LePage has indicated that he will enforce the laws and the State Department of Health and Human Services is now required to submit a state plan amendment to expand eligibility to the approximately 12,900 individuals made eligible, effective October 1.

MARKETPLACE ACTIVITY:

Delaware: State Opts to Continue With Partnership Marketplace Model

The Delaware Health Care Commission announced that it will continue to operate a State Partnership Marketplace (SPM) in 2016, rather than transition to a Supported State-based Marketplace. Delaware received a non-binding approval from CMS in June to transition to the SSBM model, which the State pursued as a fail-safe in the event that the Supreme Court ruled in King v. Burwell that qualified health plan subsidies may only be offered in states with State-based Marketplaces. Under the SPM model, the State will continue to use HealthCare.gov and manage consumer outreach and marketing resources.

Washington: Insurance Commissioner Proposes Additional Special Enrollment Period Categories

The Office of the Insurance Commissioner released an overview of a proposal to add two new special enrollment categories for the individual and small group markets established under the Affordable Care Act: 1) if an individual market plan ended midyear, and 2) if consumers experienced a serious medical condition or natural disaster that prevented them from enrolling during the open enrollment period, on a case-by-case basis. The proposed regulation, which will also aim to clarify language from the State special enrollment regulations issued in 2013, is intended to further align Washington's special enrollment periods with those established by the federal government. The changes are anticipated to go into effect before January 31, 2016, the conclusion of the next open enrollment period.

STATE HEALTH STAFFING UPDATES:

Alabama: Head of Department of Public Health Stepping Down to Lead Hospital Association

Dr. Donald Williamson is leaving his position as the State Health Officer for the Alabama Department of Public Health (DPH) to become the next President of the Alabama Hospital Association, but will stay in his current role until transitioning in November. Dr. Williamson has been with DPH since 1992 and is the chair of the Alabama Medicaid Transition Task Force. A successor has not yet been named.

North Carolina: Department of Health Secretary Announces Resignation

Aldona Wos, the Secretary of North Carolina’s Department of Health and Human Services, announced her decision to resign from the post she has held since January 2013, citing her wish to spend more time with her family. Under the leadership of Wos, the State’s Medicaid program was able to cover its expenses and end the last two fiscal years with a surplus. Wos will be replaced by Rick Brajer, a management consultant who ran several healthcare and diagnostic services companies.

Washington: Health Benefit Exchange CEO to Resign

Richard Onizuka, CEO of the Washington Health Benefit Exchange, announced his resignation effective August 31st. Onizuka has been the Exchange's only CEO since it was established in 2012. Exchange Board chairman Ron Sims expects Pam MacEwan, currently the Exchange's Chief of Staff, to be appointed Interim CEO.

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