JULY 31, 2012

Welcome to the Medicaid Update eNewsletter
This issue sponsored by the
Conference on Reaching, Retaining, and
Servicing Dual Eligible Beneficiaries

Lines Are Drawn Over Opting Out of Medicaid Plan
After Florida Governor Rick Scott announced on national television following the Supreme Court's ruling that he would reject Medicaid expansion, many advocates for the poor, including some hospitals, announced their intention to push back against such moves. This article presents perspectives from both sides of this ongoing controversy. (New York Times, July 12, 2012)

Medicaid Expansion's Costs to States Leave Governors Undecided
While six governors, all Republicans, have objected to the Medicaid expansion, at least 26 have said they are undecided. The upcoming presidential election confuses the matter as some are waiting to see whether Gov. Romney, if elected, will overturn the Affordable Care Act. (Bloomberg Businessweek, July 16, 2012)

Examining Medicare and Medicaid Coordination for Dual-Eligibles: Testimony Before the U.S. Special Committee on Aging Hearing
Robert Berenson, MD, a fellow at the Urban Institute, testified before the U.S. Senate Special Committee on Aging arguing that the proposed Financial Alignment Initiative is too ambitious and represents the equivalent of Medicaid waivers that will produce permanent programmatic change. Because 80% of the funding for dual eligibles comes from federal funding, Berenson argues that Medicare should be the primary platform for change. He says, "...enhanced state, rather than federal, responsibility for overall spending increases the risk of cost-shifting to Medicare and undermining the quality of care for vulnerable beneficiaries." (The Urban Institute, July 18, 2012)

Advancing Medicaid Accountable Care Organizations: A Learning Collaborative
The Center for Health Care Strategies (CHCS) has announced the formation of a Learning Collaborative to aid states collaborating with multiple stakeholders to pursue the development of accountable care organizations (ACOs). The goal of this initiative is to advance quality, delivery, and payment reform changes. CHCS created this program with support from The Commonwealth Fund and the Massachusetts Medicaid Policy Institute and has already developed working relationships with Maine, Massachusetts, Minnesota, New Jersey, Oregon, Texas, and Vermont. (Center for Health Care Strategies, July 2012)

Medicaid Expansion Complicates Health Insurance Exchanges
The Supreme Court's decision making Medicaid expansion a state option will complicate health insurance exchanges impacting the backend IT systems used to verify eligibility. The problem involves the computation of Modified Adjusted Gross Income (MAGI) using new definitions introduced by the Affordable Care Act. (Governing, July 11, 2012)

13 Sates Cut Medicaid to Balance Budgets
Thirteen states are looking to cut Medicaid spending by reducing benefits, paying health providers less and tightening eligibility. These reductions may limit access for some 60 million recipients. Cuts for doctors and hospitals could increase the difficulty of expanding Medicaid in 2014 as providers resist accepting new Medicaid patients. The article includes information on the thirteen states' plans for reductions. (Kaiser Health News, July 24, 2012)

Acquisition May Be First Wave of Medicaid Managed Care Consolidations
WellPoint's purchase of Amerigroup announced this month will double WellPoint's Medicaid business, bringing them to 4.5 million beneficiaries and giving them a presence in 19 states. Other large insurers are expected to purchase Amerigroup's competitors. The power that these insurers have over so many patients and physicians may overwhelm physicians. Moe Auster, Vice President for Legal and Regulatory Affairs for the Medical Society of the State of New York said, "This continuing consolidation in the health insurance industry and the mercy [sic] that this places individual physicians [under] causes an even greater need to permit physicians to collectively negotiate with health insurance companies." (amednews.com, July 30, 2012)

How Do Blue States Expand Medicaid? By Paying Doctors Less
This author contends that Medicaid "suffers from the developed world's worst health outcomes" and that this is due to the fact that "...the program pays doctors and hospitals so little many doctors lose money treating Medicaid patients" and so they don't treat them. As a result "people on Medicaid die sooner from cancers that could have been adequately treated at an earlier stage." He produced an interactive map of Medicaid physician reimbursement rates as a percentage of what private insurers pay physicians and overlaid the results on a map of the politically blue and red states. His findings suggest that states that pay physicians for services to Medicaid patients) the least are blue (Democratic states) and states that pay physicians the most are red. His conclusion: "[If] states need to reduce Medicaid spending, but can't make less people eligible for Medicaid, what do they do? Pay doctors less." (Forbes, July 23, 2012)

States' Plans for Dual Eligibles

Click chart above for larger version.

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New Opportunities for Coordinating Care for Dual Eligibles

Melanie Bella
Director, Medicare-Medicaid Coordination Office, Centers for Medicare & Medicaid Services, Baltimore, Maryland