On January 11, 2018, CMS released a Letter to Medicaid Directors outlining guidance that work requirements can be used as a basis for eligibility for certain adult Medicaid beneficiaries through 1115 waivers. Medicaid beneficiaries that can be subject to work requirements include non-elderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis other than disability. The guidance also outlines that exemptions/protections from work requirements must be made for individuals who are medically frail or have substance use disorders. It also details that states should outline how they would support beneficiaries with limited employment opportunities (economically depressed area, rural area, transportation limitations, etc.). The guidance suggests state could use good cause exemptions similar to those used in SNAP and TANF. Continue Reading CMS Guidance on Work Requirements for Medicaid Eligibility
The release of the House and Senate GOP tax plan this month has left Washington on edge as it comes to grips with the realities of tax reform. However, the elimination of the medical expense tax deduction in the House Republicans’ tax reform package stands out above the rest as misguided. This elimination would not only affect filers using the deduction, but it also stands to have broader implications for our health care system.
ML Strategies has published a new blog post in Health Affairs on the consequences of the deduction’s removal to the Medicaid program. It can be found here.
As Part of an ongoing series, we have previously provided details on the structure, funding, and evaluation of the Maternal, Infant, Early Childhood, Home Visiting (MIECHV) program, Medicare therapy caps, and community health center funding. This post marks is the first in an exploratory series illuminating the structure, funding, and outlook of the Special Needs Plans (SNPs). Additionally, drawing on potential riders affected by the current health care minibus, the “minibus” refers to a handful of policy provisions tied together in one piece of legislation. Undoubtedly, this minibus will carry a number of provisions into law. The number of riders who will be on board when the minibus leaves the station remains to be seen. However, as Congress gears up for a mega-package in December – including the debt limit and the budget – there is the potential to incorporate the minibus and/or a health care stabilization package. Continue Reading Special Needs Plans: A Minibus Rider
A court in the Southern District of New York (“SDNY” or the “Court”) recently released an important decision applying the Supreme Court’s landmark Escobar ruling to a qui tam action involving percentage fee arrangements for billing agents. Among other claims, the City of New York (“the City”) and its billing agent, Computer Sciences Corporation (“CSC”) allegedly used an illegal incentive-based compensation arrangement for CSC’s services when billing New York Medicaid for services provided to eligible children under New York’s Early Intervention Program (“EIP”). EIP provides “early intervention services” to certain children with development delays using federal funds provided under the Individuals with Disabilities Education Act. EIP allows municipalities like the City to pay providers directly for EIP services and then seek reimbursement from other payors, like third party payors and New York Medicaid.
Continuing its annual tradition, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”) announced last week the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force. As part of the national health care fraud takedown, the government charged 412 defendants with approximately $1.3 billion in alleged fraud. In addition to these charges, HHS Office of Inspector General (“OIG”) is in the process of excluding 295 health care providers from participating in federal health care programs.
Our colleagues on the Employment Matters blog recently analyzed a budget proposal by the Massachusetts Senate that would authorize the Governor to collect additional funds from employers to offset increasing MassHealth costs. MassHealth, Massachusetts’s Medicaid program, offers low-cost, benefit rich coverage to low-income individuals. Eligible individuals sometimes forgo employer coverage in lieu of MassHealth coverage, a trend that is unsustainable for the Commonwealth.
In Governor Baker’s fiscal year 2018 budget, he called on Massachusetts employers to help pay for the increasing Medicaid costs. To support this initiative, the Senate recently introduced a proposal that would allow the Governor to select from two options to offset these rising costs: (1) a “play-or-pay” option that would impose a per employee assessment on companies that do not offer their workers health plans, or (2) an across the board increase in the Employer Medical Assistance Contribution (or “EMAC”). The Employment Matters post analyzes how the increase in the EMAC may be more administratively feasible for the Commonwealth, while the “pay-or-play” option is potentially preempted by the Employee Retirement Income Security Act of 1974 (ERISA).
Check out their full analysis here.
While we continue to monitor Congressional efforts to repeal and replace the ACA, we are also monitoring CMS’s efforts to implement the administration’s Medicaid program goals without Congressional action. The future of the Medicaid program depends not only on the final outcome of a repeal and replace bill, but also on the Secretary Price’s and CMS Administrator Verma’s strategy and vision for the program. In two recent Letters to Governors from Secretary Price and Administrator Verma, we see how some legislative provisions from the AHCA that are still the subject of debate could be implemented despite the lack of legislative action. Continue Reading Medicaid Reform Beyond the AHCA
Health care services cost money. Often times, a lot of money. This fundamental truism captures the challenge facing Congressional Republicans as they consider coverage of low income populations as part of their so-called Repeal and Replace effort.
The Medicaid program covers more people than Medicare but spends less on health care services (MACPAC 2016a, MedPAC and MACPAC 2017). Additionally, Medicaid pays substantially less for health care services than private sector insurance plans (MACPAC 2016a). Recent growth in Medicaid spending is primarily due to growth in enrollment (MACPAC 2016b). State Medicaid programs depend on the altruism of the medical profession to provide health care services at a lower rate, which can be below cost. This leads to Medicaid beneficiaries often having less access than those covered by private insurance because financial pressures limit the ability of some providers to take Medicaid beneficiaries.
Republicans in Congress are contemplating moving coverage for the “able bodied” from Medicaid to private insurance. There are many questions to be answered before such a policy change could be implemented, but the threshold question is simple: how could such a policy proposal not cost more than current law?
Medicaid beneficiaries have limited ability to pay for services. An individual with an income of $15,800 is currently Medicaid eligible. Assuming that the policy does not increase financial expectations from the beneficiary, it does not seem possible that Congressional Republicans could write a policy that moves coverage of Medicaid beneficiaries into subsidized private insurance coverage without spending more money. This leads us to the real question for Congressional Republicans: what would they have to do to ensure that this change would not result in spending more money?
Demography remains a constant pressure on payments to stakeholders. While stakeholders might look at movement away from Medicaid to private insurance coverage for any population as positive, there is a very high probability that any shift from Medicaid to private insurance coverage will come with strings to limit provider payments.
Republicans have been talking about remodeling the Medicaid program through block grants or per capita caps for years. Both block grants and per capita caps are designed to limit federal spending by providing a state with a set amount of federal money to fund its Medicaid program. With the sweeping Republican victory, Republicans are in a position to move forward with these policies, primarily focused on block grants. But, there are three main questions to consider in designing a block grant program, each of which could prove controversial.
Which populations would be included in the block grant?
Any block grant proposal must determine which populations are included in the block grant. While some proposals have included all Medicaid populations, others have specifically excluded the elderly and disabled, leaving them in the existing Medicaid program.
What services would be covered by Medicaid under the block grant?
Currently, states are required to provide a set of mandatory services in order to receive federal funds. A block grant proposal must consider and address whether the current set of services would still need to be covered under the block grant funds, and if not, what services would be covered. Any reduction in the coverage of mandatory services would likely be hotly debated.
What federal funds would be provided to the states?
A block grant proposal must also determine what federal funds will be provided to the states. Funding includes two parts: (1) the initial amount provided, and (2) how much is providing moving forward. In any block grant proposal written with the express purpose of reducing federal spending on Medicaid, the funding choices will be extremely controversial and perhaps rejected by states, including those with Republican governors.
While the road to Medicaid block grants may be open for Republicans come January, there are still many questions as to how such a policy would be implemented and how it will fit with other health reform proposals.
The Children’s Health Insurance Program (“CHIP”), created in 1997, helps states provide health care coverage to low-income children up to age 19 whose families fall above the Medicaid eligibility threshold but are unable to afford private insurance. Over the past ten years, federal funding for CHIP has steadily increased. Congress reauthorized CHIP in 2015 through MACRA, but the program, which represents one of the last remaining annual (or semi-annual) vehicles for Congress to advance health policy initiatives, will lapse September 30, 2017. CHIP has traditionally received bipartisan support but the question of whether to continue funding the program has recently been at issue.
For the past several years, some experts believed CHIP would slowly wind down as the uninsured rate for children dropped in light of other coverage options under the Affordable Care Act (“ACA”). According to the U.S. Census Bureau, the period of 2013-2015 saw the largest decline in uninsured children ever going from 7.1 to 4.8 percent uninsured. While the ACA provides additional coverage options for low-income families, CHIP remains popular because in some cases it offers better benefits at lower costs than plans on the exchanges. This was the subject of debate during the last reauthorization, and in the lead up to MACRA’s passage, the Medicaid and CHIP Payment and Access Commission (“MACPAC”) advised Congress “to extend federal CHIP funding for a transition period of two additional years, during which time policies can be developed to address concerns about affordability and adequacy, with the ultimate goal being integration of children in Medicaid, employer-sponsored, or exchange coverage depending upon their family circumstances.”
Currently, low-income children who are not eligible for Medicaid have three options for healthcare coverage: through their parents’ employer-based plan, through an exchange plan under the ACA, and through CHIP. These three coverage options differ in the benefits offered and cost-sharing requirements for families. As Republicans determine the fate of CHIP in 2017 and beyond, they will need to consider if coverage variations for low-income children should continue. In other words, when approaching the ACA, Republicans need to keep in mind the positive aspects of CHIP that may not be included in the current marketplace or employer-based plans.
CHIP has been a bipartisan program throughout its existence, but decisions about whether to extend the program are inextricably tied to decisions regarding the ACA.