NOVEMBER 7, 2012

Welcome to the Medicaid Update eNewsletter
Editor: Philip L. Ronning
This issue sponsored by the Dual Eligibles Summit

CMS Details Medicaid Primary Care Payments Boost
CMS issued a final rule temporarily increasing primary-care physician payments from Medicaid designed to match Medicare rates. The increase takes effect in January and will last through 2014. "The healthcare law will help physicians serve millions of Americans across the country," said HHS Secretary Kathleen Sebelius. The American Academy of Family Physicians (AAFP) praised the increase as a step to keep more primary care physicians from joining the nearly 20% who have stopped accepting new Medicaid patients. The temporary nature of the increase, however, will limit its benefits, the AAFP said. (ModernHealthcare.com, November 1, 2012)

CMS: States Must Collect Data on Primary Care Pay Hike's Impact on Medicaid Physicians
The CMS final rule on the temporary increase in Medicaid pay to primary care physicians (see story above) requires states to collect and report data on how the increases affect Medicaid physician participation. This information should help Congress determine whether to extend the health reform provision beyond 2014. (Inside Health Policy, November 1, 2012)

Total Medicaid Spending and Enrollment Growth Slowed Significantly in FY 2012 amid Signs of Economic Recovery and States' Efforts to Curb Costs
Medicaid spending growth and enrollment slowed substantially in states' fiscal year 2012, according to the Kaiser Commission on Medicaid the Uninsured's 12th annual Medicaid budget survey entitled "A Look at State Medicaid Program Spending, Enrollment and Policy Trends: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2012 and 2013," released October 2012. During this time total Medicaid spending increased 2.0%, which was down from 9.7% in 2011. Key findings include: 1) Curbing costs remains a strong focus, 2) Medicaid eligibility levels remained stable in most states, 3) Medicaid programs are engaged in a range of delivery system changes, and 4) States continue to move ahead with efforts to implement the ACA.

(Kaiser Family Foundation, October 25, 2012)

For related articles on this topic see Business Week, October 25, 2012 http://www.businessweek.com/news/2012-10-25/medicaid-spending-growth-slows-as-u-dot-s-dot-economy-improves and New York Times, October 25, 2012 http://www.nytimes.com/2012/10/26/us/spending-on-medicaid-has-slowed-survey-finds.html.

Two SSM Health Care Hospitals Will Pilot Medicaid/Medicare Bundled Payments
The St. Louis American reports that SSM St. Mary's Health Center and SSM DePaul Health Center have been accepted by The Center for Medicare and Medicaid Innovation (CMMI) for two different "Bundled Payments for Care Improvement" pilot programs. SSM DePaul Health Center will focus on episodic orthopedic care while SSM St. Mary's Health Center will address bundled payments for patients with Heart Failure (CHF). SSM Health Care - St. Louis will manage the bundled payments. Jay Moore, M.D., chief medical officer at SSM DePaul Health Center, said, "Our participation in these pilots will help shape the Medicare and Medicaid payment process of the future. This all about finding ways to reduce costs while maintaining the highest quality care for patients." (The St. Louis American, October 30, 2012)

State Officials Disagree over Per Capita Caps Medicaid Reform Potential
Per capita payments as an alternative to block grants for Medicaid are under discussion in entitlement reform discussions. The merits of capitation were discussed at a recent meeting of the National Association of Medicaid Directors (NAMD) in Virginia. Disagreements are heated and this report on the meetings' exchange highlights the discussion of the pros and cons of this approach. (Inside Health Policy, October 31, 2012)

Preliminary SC Medicaid Budget Seeks Extra $194M
Tony Keck, director of South Carolina's Medicaid agency, submitted a preliminary budget calling for nearly $200 million more from state taxes in 2013-14 which would eat up all of the state's growth for the next fiscal year. The increased request is due to the federal health care overhaul, general inflation and the loss of tobacco money, says Keck. The State must decide whether to expand Medicaid coverage in 2014 to embrace more low-income adults or opt out and Keck's budget does not include expanding eligibility for the government program for the poor and disabled as the Affordable Care Act requires. (Yahoo! Finance, October 24, 2012)

Medicaid Dollars Not Worth Cost, Mississippi Decides
Conventional wisdom suggests that Mississippi would jump at the prospect of billions of federal dollars to expand Medicaid because it has long been one of the sickest and poorest states in America. Mississippi has some of the highest rates of obesity, diabetes and heart disease in the country and more than 1 in 7 residents are without insurance. But not so. GOP Govs. Rick Scott of Florida, Bobby Jindal of Louisiana, Nathan Deal of Georgia, Nikki Haley of South Carolina and Rick Perry of Texas have said they, too, will reject a Medicaid expansion, calling it too expensive. This article debates whether the decision is economic or political with the authors concluding the decision is simply political. (St. Louis Post-Dispatch, October 17, 2012)

As California Prepares to Expand Medicaid, Only the Poorest Will Benefit in Sacramento
Sacramento County, which has closed six clinics in recent years, has just rolled out the Low Income Health Program, known as LIHP, with state support and an infusion of federal funds that officials hope will help provide better service. The LIHP program is expected to reach between 10,000 and 14,000 Sacramento County residents who don't qualify for Medi-Cal, the state's Medicaid program. It extends coverage to childless adults with an annual income of less than $7,500. (Kaiser Health News, November 4, 2012)

Appeals Court Blocks Indiana Law to De-Fund Abortion Providers
The Chicago-based U.S. Court of Appeals blocked part of an Indiana law that cut public funding to abortion providers. The Court said the law deprived Medicaid patients of their right to obtain medical care from providers of their choice. This finding was in stark contrast to an August decision by the New Orleans-based U.S. Court of Appeals for the Fifth Circuit upholding a Texas law that de-funded Planned Parenthood and other abortion providers and a related case unfolding in Arizona, where a federal district judge recently blocked enforcement of a similar state law. (Wall Street Journal Law Blog, October 23, 2012)

Lessons from Aligning Forces: Using Comparative Cost Information and Collaborating with Medicaid
Aligning Forces for Quality (AF4Q), Robert Wood Johnson Foundation's signature effort to improve the quality of U.S. health care in collaboration with 16 communities, is documenting ways to improve care delivery, engage patients, lower costs, measure quality, and reduce racial and ethnic disparities. AF4Q has released its first two papers which examine physician and consumer attitudes about publicly reported information that compares the quality and/or cost of care delivered by different local medical providers. These papers were the result of interviews with physicians and focus groups of consumers regarding how they view information about costs of medical care, including comparisons between different providers. A third paper will illustrate how and why Medicaid agencies are aligning their quality improvement strategies with other payers, and what benefits these alignments yield. (Robert Wood Johnson Foundation, October 24, 2012)

Medicaid in Comparison to Healthcare Expenditures

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Medicaid Managed Care Plans - Opportunities and Challenges under Health Reform

Thomas Johnson
Medicaid Health Plans of America, Washington, DC

Brian Coyne, MA
Amerigroup, Washington, DC

Frank Siano
Coventry, St Louis, MO

Tom Kelly
Schaller Anderson, Inc., Columbia, MO