Manatt on Health Reform: Weekly Highlights

HealthCare.gov enrolls 8.2 million; Manatt and RWJF release an open access dataset on Marketplace plans nationwide; Montana names administrator for its Medicaid expansion; and Michigan gets the green light in the nick of time to extend its expansion.

Manatt on Health Reform will be taking a break for the holidays and will be back on Tuesday, January 12.

FEDERAL UPDATES:

More Than 8.2 Million Enroll in Coverage for January 1 Through HealthCare.gov

Department of Health and Human Services Secretary Burwell announced that more than 8.2 million individuals have signed up for or automatically re-enrolled in Marketplace coverage in the 38 states utilizing HealthCare.gov for coverage beginning January 1, 2016. This year's figure exceeds the 6.4 million people who had enrolled at this time last year. The Secretary also emphasized that 2.1 million (or 26%) of the 8.2 million enrollees are under aged 35, 1 million more than at this time last year. More than 3.7 million individuals visited HealthCare.gov on December 14 and December 15 alone and due to unprecedented demand, the Administration announced a two-day extension for enrolling in coverage beginning January 1. The Administration also announced last week that consumers enrolling in coverage through HealthCare.gov are now able to fully utilize previously piloted consumer decision support tools, including the out-of-pocket cost calculator and look-up features for providers and prescription drugs.

2016 Marketplace Plan Dataset Released

The 2016 HIX Compare dataset, released this week by Manatt Health and the Robert Wood Johnson Foundation, contains details for more than 22,000 Marketplace plans in all fifty states and the District of Columbia including plans' premiums, deductibles, out-of-pocket maximums, cost sharing requirements for primary care and specialty visits, prescription drugs, emergency room services and inpatient/outpatient visits. An updated 2015 dataset was released simultaneously. HIX Compare is a comprehensive, open access dataset that enables comparisons between gold, silver, and bronze offerings in both Federally-facilitated Marketplaces and State-based Marketplaces.

President Obama Signs Spending Bill that Delays Several ACA Funding Mechanisms

The $1.8 trillion spending bill signed by President Obama last week includes a two-year delay of the excise tax on high-cost employer-sponsored insurance plans, known as the "Cadillac tax," and a moratorium on the collection of the annual health insurance provider fee and medical device tax. When the Cadillac tax becomes effective in 2020, it will be permissible to deduct it as a business expense, a change from the original design of the tax that reduces its impact. The health insurance provider fee, which has been in effect since 2013, will be lifted for 2016 and become effective again in 2018. The spending bill also eliminates the medical device tax for 2016 and 2017. The Joint Committee on Taxation estimates that these changes will reduce revenue by approximately $34 billion.

MEDICAID EXPANSION & REFORM NEWS:

Arkansas: Task Force Supports Extending and Amending Medicaid Expansion Waiver

The Arkansas Health Reform Legislative Task Force voted unanimously to move forward with CMS negotiations to extend and amend the State's 1115 Medicaid expansion waiver, and to achieve the Governor's target of $835 million in savings through the traditional Medicaid program over five years. In a speech to the task force prior to the vote, Governor Asa Hutchinson (R) outlined his vision for an amended Medicaid expansion program called "Arkansas Works" that includes reforms such as mandatory premium assistance for employer-sponsored insurance, a work referral program, and enhanced cost sharing for certain beneficiaries. The Governor noted that "Arkansas Works" may also include a 1332 waiver to promote employer-sponsored insurance and increase use of the Small Business Health Options Program Marketplace.

Iowa: CMS Delays Transition to Managed Care

CMS told Iowa it cannot transition its Medicaid program to managed care on January 1, 2016, as the State had previously planned, citing network inadequacies among the managed care organizations (MCOs) hired to run the program, including an insufficient number of in-network hospitals and behavioral health providers. CMS anticipates being able to approve the transition effective March 1, 2016, as long as Iowa meets specific readiness requirements outlined in a letter to the State. Separately, the director of administrative services, Janet Phipps, adopted an administrative law judge's recommendation to terminate the State's contract with Wellcare, one of the four MCOs selected to run the managed care program, based on Wellcare's failure to disclose sufficient information during the bidding process. The judge's recommendation was made in response to a challenge brought by several MCOs who submitted bids but were not selected to run Iowa's Medicaid program. The president of Wellcare of Iowa said the company would seek an injunction to remain in the program until the decision can be appealed.

Michigan: CMS Approves Medicaid Expansion Waiver Amendment

The federal government approved Michigan's Section 1115 waiver amendment requesting changes to coverage options for "Healthy Michigan" (Medicaid expansion) enrollees with incomes above 100% of the federal poverty level (FPL). Under the waiver, all qualified beneficiaries with income above 100% FPL will have two options for healthcare coverage beginning April 1, 2018: (1) enroll in a qualified health plan (QHP) and pay premiums up to 2% of income and cost sharing consistent with Michigan's State Plan, or (2) remain enrolled in the Healthy Michigan Plan (Medicaid managed care), which will utilize an "alternative cost sharing model" that requires healthy behaviors. The new alternative cost sharing model will be defined in an updated Operational Protocol that the State must submit to CMS by July 1, 2017. The State legislation that enabled Medicaid expansion required Michigan to obtain approval of a waiver amendment from the federal government by the end of 2015 or terminate its expansion on April 30, 2016.

Missouri: Limited Benefits Package Extended for One Year for St. Louis Residents in Coverage Gap

Approximately 20,000 residents of St. Louis, Missouri who fall into the coverage gap—those who earn too much to qualify for Medicaid but too little to qualify for federal tax subsidies—will continue to receive limited primary and specialty care benefits for an additional year. The program, known as the Gateway to Better Health, operates through a Medicaid Section 1115 waiver and provides access to community health clinics with low co-payments for individuals who earn less than 100% of the federal poverty level. The one-year extension authorizes the State to spend up to $30 million to preserve and improve primary and specialty care in St. Louis in lieu of spending the funds on payments to disproportionate share hospitals. The program will continue to receive the regular Federal Medical Assistance Percentage (FMAP) match and not the enhanced FMAP provided for Medicaid expansion programs.

Montana: BCBS Becomes Nation's First Commercial Administrator of a Medicaid Expansion Program

Montana has signed a $16 million two-year contract with Blue Cross Blue Shield of Montana (BCBSM) to serve as the State's third-party administrator (TPA) for its Medicaid expansion program. BCBSM will administer healthcare services such as program enrollment and claims for the expansion population, excluding individuals with incomes at or below 50% of the federal poverty level, the medically frail, and those requiring continuity of coverage not available through the TPA. As many as 70,000 Montanans are expected to gain coverage through expansion, which takes effect on January 1, 2016.

North Carolina: Health Systems Collaborate on Potential Statewide Provider-Owned Medicaid Managed Care Plan

In response to legislation passed last September establishing a Medicaid managed care delivery system in North Carolina, 11 of the State's leading hospital systems have joined together to explore forming a statewide provider-owned managed care company. The company would be jointly owned by the hospital systems—which include Carolinas HealthCare System, Vidant Health, UNC Health Care System, and Duke University Health System—and a provider-owned MCO. The Medicaid managed care bill allows enrollees to choose from two options: statewide commercial managed care plans and regional provider-led entities. The statewide provider-led health plan being considered would be a hybrid of the two options.

Virginia: Governor Includes Medicaid Expansion in Budget Proposal

Governor Terry McAuliffe's (D) two-year, $109 billion budget proposal, presented last week to the General Assembly's finance and appropriations committees, calls for expanding Medicaid without a budget appropriation. Expansion would instead be paid for by a combination of federal matching funds and a provider revenue assessment, a funding mechanism supported by the Virginia Hospital and Healthcare Association. Expansion is projected to generate $157 million in Medicaid savings that the budget allocates towards corporate and individual income tax relief and other spending measures favored by Republican legislators. While Governor McAuliffe called expansion "necessary and inevitable" in his address accompanying the proposal, initial reactions from legislators indicate the proposal will continue to face strong opposition in the General Assembly when the legislature convenes in January.

MORE STATE HEALTH REFORM NEWS:

Nevada & Oregon: Marketplaces Explore Partnership for Eligibility & Enrollment Functionality

Nevada's Marketplace director Bruce Gilbert had "very preliminary" discussions with Oregon about developing a joint call center and shared IT platform for both State-based Exchanges on the federal platform (SBE-FP), according to Politico Pulse. The directors of these Exchanges have said that the federal government's proposed 3% user fee on issuers selling qualified health plans in SBE-FPs would encourage states to explore alternatives to using the federal platform.

Vermont: All-Payer Health Care System Under Consideration

The Green Mountain Care Board briefed the Vermont House Health Care Committee on details of an emerging all-payer health care initiative—which would give the State control of rates paid under Medicare, Medicaid, self-insured health plans and commercial insurance, thereby creating opportunities for the State to standardize costs and influence quality of care. Negotiations with CMS are underway for a federal waiver to give Vermont authority over how Medicare pays providers, though details of the model have not yet been fully established. The Board proposes to hold annual per capita increases in healthcare spending to 3.5% over five years, with a maximum growth rate of 4.3%. Additionally, the all-payer initiative focuses on a "transformative care model" based on a single statewide accountable care organization, which providers would be encouraged to join. The only other state to implement a similar model is Maryland, where an independent commission has been setting rates for hospital services since the 1970s. The State expects the terms of the all-payer Medicare waiver to be settled by the end of the year, which would lay the framework for negotiations with CMS to establish a more concrete plan by May 2016 in anticipation of January 2017 implementation.

STATE STAFFING UPDATE:

Oregon: New Medicaid Director Named

The Oregon Health Authority (OHA) has named Lori Coyner as the State's new Medicaid director. Coyner joined OHA in 2013, where she served as the director of accountability and the director of health analytics. Coyner is a biostatistician by training and led the initiative to develop rates for Oregon's Coordinated Care Organizations. Prior to joining OHA, she served as the director of measurement and reporting at the Oregon Health Care Quality Corporation.

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