Manatt on Health Reform: Weekly Highlights

Congress passes a bill to give states greater flexibility in defining “small businesses”; South Dakota seeks to offset Medicaid expansion costs in part with increased use of the fully federally-funded Indian Health Service; and Texas applies for an extension of its Medicaid transformation waiver and an increase in uncompensated care funding.

FEDERAL NEWS:

Congress Approves Bill Maintaining Definition of Small Employer

A bill maintaining the definition of small businesses as those with up to 50 full-time employees passed the House and the Senate with bipartisan support and is expected to be signed by President Obama, reports the New York Times. While the definition was set to expand on January 1, 2016 to businesses with up to 100 employees, the “Protecting Affordable Coverage for Employees Act” instead maintains the current definition but gives states the option to adopt the expanded criteria, though few states are expected to do so. Passage of the bill followed months of lobbying and advocacy, with many groups raising concerns about the capacity for employers with 51 to 100 employees to meet the new requirements and the potential for increased premium costs.

FEDERAL & STATE MARKETPLACE ACTIVITY:

CMS Releases New Enrollment Manual for Issuers

CMS released an updated enrollment manual for Qualified Health Plan issuers in states that rely on HealthCare.gov for eligibility and enrollment functionality. The manual largely assembles previously posted operational and policy guidance on enrollment transactions, direct enrollment, special enrollment periods, premiums, terminations, retroactivity, reinstatements, and enrollment reconciliation. Any new guidance in the manual supersedes all previous CMS enrollment bulletins and is effective immediately. A chapter-by-chapter summary of the manual can be found at the Health Affairs Blog.

Issuers to Receive Fraction of Requested Risk Corridors Payments for 2014

CMS announced that Qualified Health Plan issuers will receive $362 million of the requested $2.9 billion in risk corridors payments for 2014. Assuming full collection of risk corridors charges, issuers across the board will therefore receive 12.6% of their requested payments. CMS will begin collecting the risk corridor payments, meant to help provide protection against claims uncertainty for the first three years of the Marketplace program, in November 2015 and paying issuers starting December 2015.

Nevada: Insurance Division Petitions to Operate Health CO-OP During Closing Months

Nevada's Division of Insurance filed a petition to place Nevada Health CO-OP into a “conservation-rehabilitation receivership” (that is, to gain control of the CO-OP’s assets, distribution of funds and administration) due to concerns that the CO-OP’s financial position is unsound. The CO-OP announced in August that it would close at the end of 2015 due to financial difficulties; however, after reviewing the CO-OP's proposed wind down plan, Acting Insurance Commissioner Amy Parks said the CO-OP required greater State oversight to ensure it can continue paying claims and providing services to its members through December 2015. Parks confirmed that, despite the petition, CO-OP members can continue to access their plan benefits through the end of the year.

MEDICAID EXPANSION AND REFORM UPDATES:

Oklahoma: Medicaid Managed Care Considered for the Aged, Blind, and Disabled

As part of the Oklahoma Health Care Authority’s (OHCA) efforts to explore cost-saving options for its aged, blind, and disabled (ABD) Medicaid population, the agency is evaluating 23 “request for information” responses from managed care companies, administrative service organizations and regional healthcare groups interested in coordinating their care. Supporters of H.B. 1566—the bill that directed OHCA to request vendor proposals—have promoted the potential savings from transitioning the $2.4 billion program to managed care, but consumer advocates have voiced concerns about disruptions in care. Oklahoma established a Medicaid managed care program in 1995 but it was ended in 2004 once the ABD population was added to the program and health plans began leaving, citing insufficient capitation rates. October 2017 is the earliest the new program would launch.

South Dakota: Governor Advances Medicaid Expansion Paid in Part with Increased Use of Indian Health Services

Governor Dennis Daugaard (R) is moving forward with a Medicaid expansion plan that seeks to offset the cost of expansion in part by increasing utilization rates of Indian Health Services, which are fully funded by the federal government. To do so, South Dakota intends to make the IHS services more accessible to ensure those who are eligible are not seeking care from outside providers unnecessarily. Other expansion goals include improving access to care for all enrollees, and to preventive care services on reservations in particular. The Governor’s office reported that HHS Secretary Burwell expressed openness to the plan during a meeting with the Governor, according to the Argus Leader. The Governor’s senior advisor said that expanding Medicaid would extend coverage to 48,500 individuals and cost the State up to $33 million per year starting in 2020.

Texas: State Requests Extension for Delivery System Reform Incentive Payment Program

Texas submitted a five-year extension application for its Healthcare Transformation and Quality Improvement Program 1115 Waiver, which allocates funds to the State’s hospitals and providers through an uncompensated care pool and a Delivery System Reform Incentive Payment (DSRIP) program. The extension application requests $35 billion in uncompensated care funding, almost twice the amount provided under the current waiver and approximately $15 billion ($3.1 billion per year) to continue the DSRIP program at its 2015-2016 demonstration year funding level. CMS and Texas officials have until September 2016, when the current waiver expires, to reach an agreement.

Utah: Medicaid Expansion Details to Be Publically Released

Lawmakers had their first look at “UtahAccess+,” the new Medicaid expansion plan assembled by the “Gang of Six” (comprised of Governor Gary Herbert (R) and Republican legislative leaders) during closed-door Republican House and Senate caucuses. While details are set for public release during the first Health Reform Task Force meeting, media sources report that UtahAccess+ relies on provider taxes (including on managed care organizations, prescription drug companies, providers of psychological and home health care services, podiatrists and others) starting in 2017 to pay for the State's eventual 10% share of the federal program, a maneuver supported by the Utah Hospital Association but opposed by most other provider groups. The Governor’s “Healthy Utah” plan, which previously passed the Senate but failed in the House, was exclusively funded by public taxes. Governor Herbert commented that changes may be needed to the State-share funding mechanisms for the plan to pass, especially through the supermajority Republican House.

STATE HEALTH STAFFING NEWS:

Rhode Island: Medicaid Director Resigns

Rhode Island’s top Medicaid official, Deidre Gifford, is leaving her position at the end of October, as the State’s Medicaid reform initiatives move forward. Gifford has been in the job since 2014, during which time she oversaw Rhode Island’s expansion of Medicaid. A successor has not yet been named.

Virginia: Top Mental Health Officer Accepts Policy Position in Governor’s Office

Debra Ferguson will leave her position on October 20 as the Commissioner of the Department of Behavioral Health and Developmental Services (DBHDS) to become a Senior Policy Advisor to Governor Terry McAuliffe (R). Jack Barber, DBHDS’s Medical Director, will serve as Interim Commissioner.