DECEMBER 4, 2012

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

MACPAC: Impact of Medicaid Primary Care Bump Will Be Hard to Gauge
The Medicaid and CHIP Payment and Access Commission (MACPAC) members are worried that the new primary care bump for Medicaid services may quickly become so complicated that its actual effect will be impossible to ascertain. MACPAC Commissioner Patricia Gabow has said that the fix "...only adds more complexity to an already complex system." Vice Chairman David Sundwell said that the intent of the recently finalized regulation is quite clear and straightforward - the primary care bump was intended to increase access within the Medicaid program and to engage more providers with the program. But Gabow said the system as currently set up is too complicated to evaluate. MACPAC staff has noted implementation issues such as whether states plan to implement Medicaid rate changes that may be made throughout the year or instead plan to lock in rates at the beginning of the year. States can also apply for site of service adjustments, or pay all increases as office visits. States can also allocate lump-sum supplemental payments to specific services. CMS is expected to release guidance as well as run calls with states regarding implementation before 2013. (Inside Health Policy, November 20, 2012)

High-Performance Health Care for Vulnerable Populations: A Policy Framework for Promoting Accountable Care in Medicaid
The Commonwealth Fund has released a new report entitled High-Performance Health Care for Vulnerable Populations: A Policy Framework for Promoting Accountable Care in Medicaid. The report recommends a process for the development of a shared savings--ACO-based program for Medicaid similar to the Medicare Shared Savings Program. The authors suggest that Medicaid, because of its size, could be an important factor in harmonizing delivery system reform initiatives and driving accountability and quality improvement. The report is based upon these fifteen policies for states to following in implementing ACOs:
  1. Getting the strategy right
  2. Translating strategy into action
  3. ACO certification
  4. ACO governance and ownership
  5. Assignment to an ACO
  6. Opt-out
  7. Exclusivity of primary care providers
  8. Financial model

  1. Benchmark calculation and trending
  2. Compensation of ACO participating providers
  3. Quality metrics
  4. Health information technology and exchanges
  5. Federal fraud and abuse provisions
  6. Antitrust guidance and the state action doctrine
  7. State laws and levers
(The Commonwealth Fund, November 16, 2012)

End of Medicare Improvement Standard Could Benefit Medicaid Budgets
State budgets will get a boost if a recently proposed court settlement ends a decades-long CMS practice of denying Medicare beneficiaries skilled care if conditions do not continuously improve. Currently care for these dual eligibles is left to the states and should this settlement be finalized, it may place responsibility for these patients under Medicare, according to some health experts. If the number of people affected by the change is as large as speculated, the states could see a significant reduction in their Medicaid spending. (Inside Health Policy, November 21, 2012)

Medicaid Expansion Poses 'Modest' State Costs - Study
A study by the Kaiser Family Foundation has found that President Obama's $1 trillion plan to expand Medicaid will raise state's cost by only 3 percent over the next ten years with some states even experiencing savings. The findings, which highlight significant regional differences, show that New England and Mid-Atlantic states with generous Medicaid services could see savings while states in the Southeast could see cost increases of up to 11%. (Reuters, November 26, 2012)

Durbin Lays Out Potential Entitlement Reforms for Longer-term Fiscal Cliff Solution
Sen. Dick Durbin (D-IL), the Democratic Majority Whip, listed three things that Democrats would not agree to: turn Medicare into a voucher program, block grant Medicaid, or repeal the Affordable Care Act. Durbin also identified entitlement reforms he considers viable including extending Medicaid drug rebates to Medicare's Part D program, altering Medicaid provider taxes, increasing Medicare means-testing, encouraging greater use of generic drugs, expanding competitive bidding, Medicare eligibility age increase (which Durbin would not consider without assurances for low-income people) and building upon payment reforms in the Affordable Care Act. (Inside Health Policy, November 27, 2012)

Pressure for Entitlement Cuts Is on Medicare, Medicaid
For Democrats Social Security cuts are off the table which means any entitlement cuts, which Republicans are demanding, must come largely from Medicare and Medicaid. Republicans have proposed raising the Medicare eligibility age. Another cut on the table is co-payments and increases in premiums paid by high-income recipients. President Obama has proposed changing the federal matching formula for matching state Medicaid expenditures which would produce an estimated $70 billion in savings over 10 years. Other proposals are circulating but reductions are certain. (Business Week, November 28, 2012)

Senate Finance Panel May Hold Hearing on Duals Demos during Lame Duck
Senate Finance Committee Chair Max Baucus (D-MT) may hold a hearing during the lame duck session on the duals demonstrations being administered by the Medicare-Medicaid Coordination Office (MMCO). The potential hearing is expected to feature testimony from MMCO Director Melanie Bella for the first time in more than a year. A focus of questioning is likely to be the status of the controversial duals payment alignment demonstrations. (Inside Health Policy, November 20, 2012)

4 Medicaid Myths, Debunked
Medicare pays little for extended stays in nursing homes. Therefore Medicaid is the public primary payer for long-term care for seniors. Many myths among retirees and their families exist regarding Medicaid for seniors requiring long-term care. These four myths regarding Medicaid and long-term care are debunked: 1) "You have to exhaust every dollar to qualify," 2) "You can't leave an inheritance," 3) "You can hide your assets," and 4) "Medicaid only pays for subpar care." (MarketWatch, November 28, 2012)

CMS Crafts Medicaid EHB Rule, but Tells States Exchange EHBs Generally Apply
State Medicaid directors have been sent the essential health benefits (EHB) guidance on what states must offer to residents who are newly eligible for Medicaid. The regulations that apply to private insurance sold in the health insurance exchanges will apply to Medicaid. Nonetheless, CMS will soon propose a separate regulation on Medicaid EHBs. "We expect the proposed regulation on Essential Health Benefits in Medicaid will be published shortly," according to an information bulletin accompanying the letter to state Medicaid directors explaining how existing Medicaid law interacts with the alternative benefit plans. The Affordable Care Act requires that private plans sold inside and outside the exchanges include 10 types of essential health benefits. "[B]ecause of the role of the states in defining Medicaid benefits and existing title XIX statutory provisions, we will propose through regulation some modifications that will apply when furnishing these services to Medicaid beneficiaries," the letter states. The process of ensuring coverage of essential benefits for Medicaid beneficiaries will mirror the process that applies to issuers in the individual and small-group markets. (Inside Health Policy, November 26, 2012)

Medicaid Expansion Decision Looms for Many States
Many states have not announced their plans for the optional Medicaid expansion provided under the Affordable Care Act. The reelection of President Obama together with upcoming budget deadlines is likely to cause many state to decide soon. This article provides an assessment of those states which have made no announcement to date. (Politico Pro, November 14, 2012)

The Medicaid Program at a Glance from the Kaiser Family Foundation

(Click on the figure to read the full fact sheet.)

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Medicaid's Role: Issues for the Future

Diane Rowland
Executive Vice President, Henry J. Kaiser Family Foundation, Executive Director, Kaiser Commission on Medicaid and the Uninsured, Washington, DC