DECEMBER 20, 2012

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

To Prevent Massacres like Newtown's, Expand Medicaid
According to this post by Joshua Green, a reasonable response to the tragedy at Sandy Hook is to advocate for limiting the availability of assault weapons, but an equally important effort is improving mental healthcare services. Medicaid represents 50% of the mental health budget for most states. "Anyone moved to act by Adam Lanza's massacre would probably have a greater near-term impact by pushing states to expand Medicaid coverage rather than lobbying for new gun laws. Newtown provides a vivid, heart-wrenching example of how broader coverage might help prevent future tragedies. Even before the shooting, Nevada's Republican governor, Brian Sandoval, who opposed Obama's health law, cited mental health care as a reason why he decided to accept the Medicaid funding." Gun control will be difficult to get through Congress. Medicaid expansion has already passed and requires only public pressure on politicians to be implemented. (Business Week, December 19, 2012)

Brian Sandoval, Nevada Governor, Is First Republican to Back Obamacare Medicaid Expansion
Nevada Gov. Brian Sandoval is the first Republican governor to embrace a Medicaid expansion under President Barack Obama's health care reform law. As a result of Sandoval's decision, 78,000 poor Nevadans will gain Medicaid coverage starting in 2014 and the state will save $16 billion because of generous federal funding for the program. Nevada will join four other GOP-led states in creating a state-run health insurance exchange under the law. Idaho Gov. C.L."Butch" Otter, (R) announced Tuesday that his state would manage its own exchange, joining GOP officials in New Mexico, Iowa and Mississippi. (Huffington Post, December 122, 2012)

Sources: Rebasing Medicaid DSH a Likely SGR Offset among a Menu of Options
White House and congressional negotiators are said to have agreed on a proposal to "rebase" Medicaid disproportionate share hospital (DSH) payments after 2020 either as an offset to the one-year, $25 billion "doc fix" included in the president's recent fiscal cliff offer or as part of any potential down payment on entitlement reform. Details are unclear but the rebasing is likely based on a proposal put forth by the Center for American Progress (CAP) that requires HHS to formulate the rebased payments so that states with the highest taxes on providers receive lower DSH payments, and vice versa. Sources have also said congressional staff are examining rebasing home health and skilled nursing facility payments, which the Medicare Payment Advisory Commission (MedPAC) has recommended, as an offset and which could save $10 billion over five years. A number of other budget issues are addressed in this story. (Inside Health Policy, December 19, 2012)

Governors Ask Obama for Flexibility on Medicaid
A bipartisan group of six governors met with the President to press for a deal to avert the "fiscal cliff," being careful not to endorse a particular approach. The governors are asking President Obama for more flexibility when it comes to running joint federal-state programs like Medicaid, a particular concern for the governors. "We did talk briefly about the potential unintended consequences [of the "fiscal cliff"] as it relates to Medicaid," said Gov. Jack Markell, D-Del., and chairman of the National Governors Association. "Some of us have made the decision to expand Medicaid. In our case we made that decision because of the underlying economics...the fact that there's a higher federal reimbursement for the population we're already serving. If that were changed we would have to revisit that decision." (CBS News, December 4, 2012)

Providers Weigh Legal Options after Court Says California Can Impose Medi-Cal Rate Cuts
Providers are discussing their next legal steps in the wake of a 9th Circuit three-judge panel's recent decision to lift an earlier court ban on 10 percent rate cuts to the Medi-Cal program. Providers have 45 days to request a new hearing but the State is reportedly crafting plans to implement the approved cuts and collect retroactive payments. The case is being watched nationally because of the potential legal ramifications for other states. The decision could dissuade providers from joining Medi-Cal (California's Medicaid program) due to uncertain payment rates, which runs against the health reform law's goal of attracting more providers with a Medicaid primary care payment bump. A spokesman for the California Department of Health and Human Services says the court's decision does not change the state's commitment to access to health care by complying with federal and state law as California relies on the federally approved access monitoring plan to make sure beneficiaries have access to providers. (Inside Health Policy, December 17, 2012)

Medicaid Source Rejects GOP Assertion HHS 'Blended Rate' Reversal Is Bad for States
A source close to state Medicaid directors says states are reassured by the administration's decision this week to scrap support for its earlier Medicaid "blended rate" funding proposal. This is in sharp contrast to the assertions by key GOP lawmakers that the move is a "bait and switch" effort to pressure states to expand Medicaid. In a letter to HHS Secretary Kathleen Sebelius, Sen. Orrin Hatch (R-UT) and Rep. Fred Updon (R-MI) Upton argue that a discussion about entitlement reforms cannot be delayed. "Governors are understandably concerned about the federal government's ability to maintain promised levels of Medicaid matching funds," they write. Medicaid stakeholders assailed the idea when it was proposed. "It appears the only ones concerned about the 'bait and switch' are congressional Republicans," according to a confidential source who goes on to say that state officials were reassured by the administration's message. (Inside Health Policy, December 14, 2012)

GAO: Medicaid Duplicates Efforts, Needs Efficiency
CMS established the Medicaid Integrity Group (MIG) to implement and oversee the National Medicaid Audit Program (NMAP) to fight fraud, waste and abuse. MIG hired contractors to do the same review and audit according to a November 2012 Report to Congress. Both the staff and the contractors reviewed whether payments violated state Medicaid policies. The GAO criticized the duplication and waste after it found that conducting Medicaid fraud audits costs the government five times more than the amount it finds. (FierceHealthcare, December 12, 2012)

Medicaid Expansion: Framing and Planning a Financial Impact Analysis
The State Health Reform Assistance Network, an initiative funded by the Robert Wood Johnson Foundation, has released an analytical tool to aid state policymakers in their assessment of the many variables involved in the decision regarding Medicaid expansion. While each state's health care system, fiscal condition and demographics vary, the most important elements to consider do not. The State Network's goal for this effort is to provide a reliable tool to help state leaders identify and evaluate all of the data that make up those elements. (State Health Reform Assistance Network, November 2012)

It's All or Nothing

Health and Human Services issued on December 10, 2012 a FAQ memo answering 39 questions. One key answer: The health-care law will not fund partial Medicaid expansions. "Consistent with the law, there is not an option for enhanced match for a partial or phased in Medicaid expansion," said acting Center for Medicare and Medicaid Services administrator Marilyn Tavenner. (Washington Post, December 10, 2012)

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Monitoring Managed Care Plans for Performance

Chris Duff
Executive Director, Disability Practice Institute, Boston, MA