Manatt on Health Reform: Weekly Highlights

Louisiana's Governor signs an executive order on his first day in office to expand Medicaid; Kentucky's Governor opts to replace, rather than repeal, its Medicaid expansion program; and New York and Missouri make it easier for pregnant women to secure health insurance.

MEDICAID EXPANSION NEWS:

Arkansas: Governor Notifies HHS of Intent to Extend and Amend Medicaid Expansion Waiver

In line with the recommendations of the Arkansas Health Reform Legislative Task Force, Governor Asa Hutchinson (R) submitted an application to the federal government to extend the State's Medicaid expansion waiver past its current end date of December 31, 2016 and informed HHS Secretary Burwell of his intent to submit an application in spring 2016 to amend the expansion program. The amended program, called "Arkansas Works," may include reforms currently supported by the Governor's Advisory Council on Medicaid Reform and the Task Force, including mandatory premium assistance for employer sponsored insurance, a work referral program, and premiums for beneficiaries with incomes above 100% of the federal poverty level. Following submission of the extension application, the Governor announced that he will meet with Secretary Burwell on February 1 to discuss the proposed changes, and plans to call a special legislative session later this year on Medicaid expansion.

Kentucky: Governor Announces Medicaid Redesign and Expansion Leadership; Medicaid Commissioner Resigns

Despite his initial campaign promise to repeal Medicaid expansion, Governor Matt Bevin (R) announced that the State has begun to redesign the State's Medicaid program and replace the traditional Medicaid expansion program with an alternative model through a federal waiver. The Governor appointed Mark Birdwhistell, the Health and Family Services Secretary under former Governor Ernie Fletcher (R), to develop the program and work with CMS to reach agreement on the new direction, which is likely to include a requirement for enrollees to pay for some of their plan costs, according to the Governor. Governor Bevin hopes to finalize the plan in 2016 for a 2017 launch. The current Medicaid expansion program will continue until the new plan is launched. In the meantime, Lisa Lee, the Medicaid commissioner appointed by former Governor Steve Beshear (D), has resigned. The Governor's spokeswoman said the Administration has begun searching for a new commissioner.

Louisiana: Governor Signs Executive Order to Expand Medicaid, Announces July 1 Launch Date

Governor John Bel Edwards (D), who took office on January 11, signed an executive order to expand Medicaid, fulfilling a campaign promise to do so within 24 hours of his inauguration. The Governor also announced his intention to implement the expanded coverage by July 1, 2016. Rebekah Gee, the incoming Secretary of the Department of Health and Hospitals, estimated that Medicaid expansion would make eligible an additional 300,000 Louisianians and noted she expects to hire 248 additional staff to handle the new enrollment and work with providers to address increased demand for services.

Missouri: Expanded Coverage for Pregnant Women Begins Under "Show-Me Healthy Babies"

Under the newly implemented Show-Me Healthy Babies program, recently approved by CMS under CHIP authority, pregnant women in families earning up to 300% of the federal poverty level (FPL) are now eligible to receive coverage for prenatal care and other services through their pregnancy, labor, delivery and up to 60 days postpartum, according to a press release from Governor Jay Nixon (D). Enrollees' children will also receive automatic CHIP coverage for up to one year after birth. The State currently provides pregnancy coverage under Medicaid for individuals earning up to 196% FPL. An additional 1,800 women are expected to be eligible for coverage.

Montana: Expansion Launched January 1 with Robust Demand

Approximately 20,000 Montanans have enrolled in the State's Medicaid expansion program that launched on January 1. Montana's expansion plan, referred to as the Health and Economic Livelihood Partnership (HELP) program, is estimated to cover up to 70,000 new adults and will be administered by the State's Third-Party Administrator, Blue Cross Blue Shield of Montana.

Medicaid Expansion Improves Access to Care for Low-Income Individuals Across Models, New Report Finds

A new report by the Commonwealth Fund found that low-income individuals residing in Arkansas and Kentucky, which have both expanded Medicaid, were more likely to be insured and less likely to have problems paying medical bills or being able to afford prescriptions than low-income individuals living in Texas, a state that has not expanded Medicaid. Between 2013 and 2014, Kentucky and Arkansas saw large drops in the uninsured rate and large increases in the rate of adults with chronic conditions receiving regular care. The authors note that findings across Kentucky's traditional expansion model, Arkansas's private option expansion model, and Texas's non-expansion suggest promising results for Medicaid expansion in improving access for low-income adults and that "deciding whether or not to expand matters much more than deciding how to expand."

FEDERAL AND STATE MARKETPLACE UPDATES:

CMS Releases Draft 2017 Federal Marketplace Issuer Letter

CMS released a draft 2017 letter to qualified health plan (QHP) issuers on the Federally-facilitated Marketplace (FFM) proposing network adequacy standards, including time and distance standards for certain provider or facility types based on population density. FFM states could apply their own standards if they use a "quantifiable metric" that is acceptable to CMS. The letter also discusses how a network breadth rating would be determined and displayed on HealthCare.gov. The letter provides additional information for QHP issuers on formulary reviews, benefit and plan designs, data requirements, and meaningful difference. Comments on the letter's proposed guidance will be accepted through January 17.

OIG Finds CMS Did Not Effectively Monitor Tax Credit Payments to Issuers

The HHS Office of Inspector General (OIG) released a report finding that CMS did not effectively ensure advance payments of the premium tax credit (APTC) were provided only to qualified health plan (QHP) issuers for enrollees who had paid their monthly premiums. CMS's process required relying on QHP issuers to verify that enrollees paid their premiums and attest that APTC payment information reported to CMS was accurate. The report recommends that CMS establish procedures to calculate APTC payments that do not rely on issuers' attestations, and that CMS consult with the IRS on sharing APTC payment data throughout the year. CMS agreed with the first recommendation and, as of October 2015, announced it is pilot-testing an automated policy-based payment process with issuers.

Kentucky: Governor Alerts Secretary of Plan to Transition to Federal Marketplace

In a letter to HHS Secretary Burwell, Governor Matt Bevin (R) formally announced his plan to transition kynect, Kentucky's State-based Marketplace, to HealthCare.gov thereby fulfilling a campaign promise. Many advocates quickly voiced their disappointment, citing kynect's accessibility and ease of use. According to the Courier-Journal, Governor Bevin indicated that the State would make the transition "as soon as is practicable." Kynect will remain functional until the transition takes place.

New York: First-of-Its-Kind Law Permits Year-Round Marketplace Enrollment for Eligible Pregnant Women

Governor Andrew Cuomo (D) signed legislation making New York the first state to designate pregnancy as a qualifying life event, thereby allowing eligible pregnant women to enroll in coverage through the Marketplace, New York State of Health, outside of the annual open enrollment period. Previously, pregnant women who were eligible for Marketplace insurance had to wait until the annual open enrollment period or the birth of their baby to enroll in coverage.

MORE HEALTH REFORM ACTIVITY:

California: CMS Approves Medi-Cal 2020 Waiver

CMS has approved California's Medicaid waiver renewal (Medi-Cal 2020), providing the State with $6.2 billion in federal funding through 2020 to continue efforts to transform the Medicaid delivery system by building on improvements made through the 2010 "Bridge to Reform" waiver. "Medi-Cal 2020" includes up to $3.7 billion to support the Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program, which builds on the State's Delivery System Reform Incentive Program (DSRIP). PRIME will require certain hospitals to improve physical and behavioral health integration and it will require "Designated Public Hospitals" to transition to alternative payment methodologies for Medi-Cal managed care plans. The five-year waiver, preliminarily approved by CMS in November and finalized on December 30, also invests in dental health and whole person care pilots.

Idaho: Administration Announces Proposed Primary Care Access Program

Governor C.L. "Butch" Otter (R) announced the Primary Care Access Program (PCAP), a State-funded proposal to cover basic primary care for the approximately 78,000 Idaho adults age 19-64 who earn too much to qualify for Medicaid but not enough to qualify for federal Marketplace tax subsidies. As part of the program, PCAP providers would receive a per-member-per-month fee to assess the health of each participant, develop treatment plans, and manage care through a patient-centered medical home model. While any licensed provider may participate, the governor anticipates community health centers and rural health clinics will serve as key program providers. Participants will be subject to a currently undefined sliding fee scale for certain services based on income and "must be engaged in the process" to remain in the program. As anticipated by preliminary local media reports, the program's $30 million annual cost would be funded by the redirection of existing tobacco and cigarette tax revenue.

Missouri: State Releases Procurement Details and Timeline for Medicaid Managed Care

Missouri issued a notice further detailing its plans to expand Medicaid managed care from 54 counties to all 114 counties by summer 2017. The State plans to issue a Request for Proposal in April 2016 and will award statewide contracts to three managed care plans, which will include a provision allowing for Medicaid expansion in the event that the State enacts Medicaid expansion legislation. The contracts may be renewed annually for up to five years.

West Virginia: Hospitals' Uncompensated Care Costs Drop by $265 Million

Over two dozen hospitals in West Virginia saw a $265 million or more reduction in uncompensated care costs between 2013 to 2014, according to data compiled by West Virginians for Affordable Health Care and reported on by the Charleston Gazette-Mail. According to the analysis, hospitals are providing less uncompensated care to the uninsured as a result of over 200,000 West Virginians having gained health insurance coverage since the Affordable Care Act's coverage provisions were enacted in 2013, including more than 165,000 individuals newly enrolled in Medicaid. The State's largest hospital, Charleston Area Medical Center, reduced its uncompensated care costs from $137 million to $72.6 million between 2013 to 2014. Six other hospitals saw a reduction of more than $10 million in uncompensated care while total State uncompensated care was reduced by nearly 40%. The State's uninsured rate has dropped from 17.6% in 2013 to 8.3% in the first half of 2015.

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