Manatt on Health Reform: Weekly Highlights

Massachusetts releases $1.8 billion DSRIP program waiver for public comment; CMS awards $32 million in grants to enroll uninsured children in Medicaid/CHIP; and Wisconsin withdraws proposed changes to Medicaid long-term care.

FEDERAL MEDICAID EXPANSION AND REFORM ACTIVITY:

CMS Continues Efforts to Reach Uninsured Children

CMS released an informational bulletin urging states to continue their push to reach the remaining 2.8 million uninsured children who are eligible for but not enrolled in Medicaid or CHIP (60% of all uninsured children). To support those efforts, CMS awarded $32 million, through the Outreach and Enrollment Program re-extended under MACRA, to 38 organizations in 27 states for community-based outreach and enrollment activities that target uninsured but eligible children. CMS also reiterated a number of strategies states should use to enroll and retain eligible but uninsured children in Medicaid and CHIP, including adopting hospital presumptive eligibility for CHIP and facilitating seamless coverage transitions for young adults. The uninsurance rate for children is at a record low and 91% of all Medicaid- or CHIP-eligible children are enrolled in the programs.

CMS Guidance Aims to Increase Access to Family Planning Services and Supplies for Medicaid Enrollees

CMS released guidance encouraging states to offer all FDA-approved contraceptive methods through Medicaid and proposing actions that would eliminate existing barriers to accessing same day long-acting retroactive contraception (LARC) methods. (This guidance supplements LARC utilization strategies highlighted in a recent informational bulletin.) CMS also clarified that family planning services and supplies are eligible for a 90% federal match regardless of the type of medical visit (such as an annual physical exam) if the purpose of those services is to prevent or delay pregnancy.

Medicaid Expansion Provides Enrollees With Greater Financial Protection Compared to Marketplace Coverage

Marketplace enrollees earning above 100% of FPL in non-expansion states are at risk of facing higher premiums and out-of-pocket costs than if they were able to enroll in Medicaid expansion, according to a new report by The Commonwealth Fund. The “most important difference” between Medicaid and Marketplace plans, according to the report, is that Medicaid out-of-pocket limits are applied on either a monthly or quarterly basis further protecting enrollees from large medical bills. The report also notes that private plans do not adjust out-of-pocket limits based on income while Medicaid premiums and cost-sharing may not exceed 5% of income. The report further highlighted that while Medicaid and Marketplace plans both provide the 10 essential health benefits under the ACA, Medicaid enrollees have access to additional benefits.

STATE MEDICAID REFORM NEWS:

Massachusetts: MassHealth Releases Draft 1115 Waiver Amendment and Extension Request

The Massachusetts Executive Office of Health and Human Services released a draft 1115 waiver amendment and extension request to transition its Medicaid program (MassHealth) to a Medicaid Accountable Care Organization (ACO) model that emphasizes partnerships among provider ACOs, Medicaid managed care organizations, community-based organizations, and social service agencies. The proposal requests $1.8 billion for a Delivery System Reform Incentive Payment (DSRIP) program to: support ACO implementation; stabilize safety net hospitals; fund "flexible services" that address social needs not otherwise covered by publicly-funded programs; support infrastructure development for behavioral health and long-term services and support organizations operating in partnership with ACOs; and support statewide infrastructure and workforce investments. DSRIP funding would be subject to a statewide 2.5% Medicaid cost reduction target for ACO members as well as quality, ACO adoption and avoidable hospital utilization measures. ACO DSRIP funding would be increasingly risk-based over the life of the waiver subject to quality, cost and member experience measures, as well. The waiver also requests an additional $6.2 billion for a restructured Safety Net Care Pool, increasing accountability for funds historically dedicated to safety net providers. The existing waiver runs through July 2019, though funding for the current $1 billion per year Safety Net Care Pool was only approved through July 2017, in part prompting the State’s advance request for a five-year extension through 2022. The draft waiver is open for public comment until July 15.

Wisconsin: Major Proposals to Alter Medicaid Long-Term Care Programs Withdrawn

Department of Health Services (DHS) Secretary Kitty Rhoades informed the Legislature’s Joint Committee on Finance that planned changes to Medicaid long-term care (LTC) programs, initially scheduled to take effect in January 2018, were to be withdrawn entirely. Governor Scott Walker's (R) administration had estimated that shifting LTC contracts to managed care through regional integrated health agencies would produce $300 million in savings, or 1.7% of LTC spending over six years. The rescinded proposal involved significant changes to the Family Care and the “Include, Respect, I Self-Direct (IRIS)” programs, which function to keep more than 55,000 elderly and disabled out of nursing facilities and in their homes, and accounted for nearly 60% of LTC spending this fiscal year. Strong opposition to the proposal was voiced over the course of 10 public hearings, including concerns about reduction in services and increased barriers to access LTC.

STATE MARKETPLACE ACTIVITY:

Maryland: Health Insurance CO-OP Suing Federal Government Over Risk-Adjustment Payment

Evergreen Health CO-OP is suing the federal government over its risk adjustment program, instituted under the ACA to mitigate adverse selection and stabilize premiums. Under the program, Evergreen Health is required to pay one-quarter of its 2014 revenue—more than $22 million—to the State to offset losses experienced by poorer-performing insurers. Evergreen Health CEO Peter Beilenson argues the risk adjustment program methodology favors larger insurers and will ultimately put smaller insurers out of business.

STATE STAFFING UPDATE:

Texas: Medicaid Director to Lead New Health and Human Services Division

State Medicaid Director Gary Jessee will become the Deputy Executive Commissioner of the new Medical and Social Services division of the Texas Health and Human Services system. The division will combine the Office of Social Services, which includes SNAP food benefits, TANF cash assistance and community partners programs, with Medicaid and the newly created Community Services department. The new structure is based on recommendations made during the legislatively-mandated Sunset review process for consolidation and reorganization of the Health and Human Services system. The new division begins operations September 1.

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