APRIL 24, 2012

Welcome to the Medicaid Update eNewsletter
This issue sponsored by The Seventh Medicaid Congress

Medicaid RAC Program Up and Running - 26 States Award RAC Contracts
Angela Brice-Smith, Acting Director of the Centers for Medicare & Medicaid Services (CMS) Medicaid Integrity Group, announced that 26 states have awarded contracts under the Medicaid RAC program as required by the Affordable Care Act. The remaining states are expected to be under contract in the near future. Brice-Smith will be a keynote speaker in the opening joint plenary session of the National Medicaid Congress and National Medicare-Medicaid Payment Summit on May 30. (Liles Parker Newsletter, April 11, 2012)

Health at a Glance 2011: OECD Indicators
The Organization for Economic Co-operation and Development (OECD), an organization focused on promoting world health improvement and a major source of international comparative health spending and related data, has released its 2011 report. This report is based upon its OECD Health Data 2011, arguably the most comprehensive statistical report and is regularly referenced by policy and research sources. (OECD, 2011)

European Hackers Suspected in Utah Medicaid Files Breach
Utah State Health officials are reporting a breach of 24,000 health records involving sensitive health information on some 500,000 victims. An additional 280,000 victims, including providers, have had their Social Security numbers compromised. Officials are advising potential victims to be vigilant and those with comprised SSNs will receive free credit monitoring services. (Reuters, April 4, 2012)

Sector Wrap: Medicaid Provider Shares Tumble
Medicals officials in Ohio recently selected Aetna Better Health of Ohio, CareSource, Meridian Health Plan, Paramount Advantage and United Healthcare Community Plan of Ohio as their Medicaid contractors. Aetna and Meridian Health are new payers in the Ohio program. Shares of Molina Healthcare Inc. and Centene Corp., companies dropped significantly. (Business Week, April 4, 2012)

Saving Medicaid: Smart, Targeted Spending on Health Care
Gov. Pat Quinn of Illinois has outlined his plan for reducing Medicaid expenditures by $1.35 billion (half of the $2.7 Billion Medicaid deficit) in next year's budget. Among his proposals are reductions of $675 million in payments to providers. (WLS-TV/DT, ABC affiliate, April 19, 2012)

Editorial: Raising Cigarette Tax $1 Makes Sense for Illinois
As part of his closing Illinois' $2.7 Billion Medicaid hole, Gov. Pat Quinn is proposing a $1.00 per pack tax on cigarettes. Illinois' tax is currently $0.98 - only 36th in the country (Massachusetts, the highest, is now at $2.51 and there is a movement there to boost it an additional $1.25 this spring). The tax could raise as much as $3.38 million, matched by the Federal government. (Chicago SunTimes, April 22, 2012)

Is Charity the Answer to Healthcare?
This Forbes editorial responds with disbelief to the suggestion that charitable donations could eliminate Medicaid. For charitable donations to take care of the entire Medicaid population "...our population of 313 million people total, every man, woman, and child would have to give $1,278 to charity..." to fund such an effort. (Forbes, April 23, 2012)

Medicaid Pushes for Fewer Early Births
An estimated 1 in 10 births are intentionally early, but scientific research suggests that planned early births put babies at increased risk. Medicaid, which pays for more than 40% of all births in the U.S., is now teaming up with other insurers and health groups to decrease the rate, which CMS believes could save hundreds of millions of dollars a year. (Politico, April 2, 2012)

Medicaid MCOs and Medical Loss Ratio (MLR) Requirements

The Affordable Care Act requires that insurers pay between 80% and 85% of their premiums in medical claims (these %s are referred to as the Medical Claims Ratio (MLR).One mechanism for ensuring that health insurance provides value to consumers for the premiums that they pay, or that others pay on their behalf, is to require insurers to meet a minimum "medical loss ratio" or MLR standard. The MLR is the share of premium revenues that an insurer or health plan spends on patient care and quality improvement activities, as opposed to administration and profits. A recent study by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured with Health Management Associates found that 11 states have minimum MLR requirements for their Medicaid MCOs. Recent indications suggest that an MLR standard for Medicaid could emerge as states seek to move Medicaid beneficiaries into managed care.

SOURCE: A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey
Information provided by the Kaiser Commission on Medicaid and the Uninsured
Publication Number: 8300
Publish Date: April 2, 2012

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Medicaid and CHIP: On the Road to Reform

Cindy Mann, JD
CMS Deputy Administrator, Director, Center for Medicaid, CHIP, and Survey & Certification, Washington, DC