Tag Archives: Medicaid Block Grants

Red states’ Medicaid gamble: Paying more to cover fewer people

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Red states are getting creative as they look for new ways to limit the growth of Medicaid. But in the process those states are taking legal, political and practical risks that could ultimately leave them paying far more, to cover far fewer people.

Why it matters: Medicaid and the Children’s Health Insurance Program cover more than 72 million Americans, thanks in part to the Affordable Care Act’s Medicaid expansion. Rolling back the program is a high priority for the Trump administration, and it needs states’ help to get there.

The big picture: The Centers for Medicare & Medicaid Services, under the leadership of Administrator Seema Verma, has made clear that it wants to say “yes” to new limits on Medicaid eligibility, and has invited states to ask for those limits.

  • But CMS hasn’t actually said “yes” yet to some of the most significant limits states have asked for.
  • In the meantime, states are left either with vague ambitions they’re not sure how to implement, or with risky plans that put their own budgets on the line.

What we’re watching: State-level Republicans are waiting for CMS to resolve two related issues: how much federal funding their versions of Medicaid can receive, and the extent to which they’re able to cap enrollment in the program.

  • “These issues are going to continue to be intertwined,” said Joan Alker, the executive director of Georgetown University’s Center for Children and Families.

Verma has reportedly told state officials that she wants to use her regulatory power to convert Medicaid funding into a system of block grants — which would be an enormous rightward shift and probably a big cut in total funding.

  • CMS probably cannot do that on its own, experts said, but it could achieve something similar by approving caps on either enrollment or spending.

Where it stands: GOP lawmakers in a handful of states are looking to Utah, which has bet big on Verma’s authority, for signals about what’s possible.

  • Utah voters approved the full ACA expansion last year, but the state legislature overruled them to pass a more limited version.
  • By foregoing the full expansion, Utah passed up enhanced federal funding. It’s still asking for that extra money — a request CMS has never previously approved.
  • Utah will also ask CMS to impose a per-person cap on Medicaid spending — a steep cut that was part of congressional Republicans’ failed repeal-and-replace bill, and which may strain CMS’ legal authority.
  • If Utah doesn’t get those two requests, its backup plan is simply to adopt the full expansion.

What’s next: Utah is not the only red state leaning into Verma’s agenda, but it’s further out on a limb than any other.

  • Idaho, like Utah, overruled its voters to pass a narrower Medicaid bill. But it preserved an option for people to buy into the ACA’s expansion.
  • Alaska Gov. Mike Dunleavy has said he wants to take Verma up on her offer of block grants; so have legislators in Tennessee and Georgia. But in the absence of any detail about what that means, or what CMS will approve, that’s all pretty vague right now.

If CMS does move forward on any of this, it could face the same threat of lawsuits that have stymied its first big Medicaid overhaul — work requirements.

  • Those rules are on ice in two states because a judge said they contravene Medicaid’s statutory structure and goals. The same argument could await a partial expansion or tough spending caps.

“There’s a clear agenda here to get a handful of states to take up these waivers, which fundamentally undermine the central tenets of the Medicaid program — which [are] that it is a guarantee of coverage, and a guarantee of federal funding,” Alker said.

 

 

 

Opioid Commission Unveils Blueprint To Fight Crisis, But Passes Funding Buck To Congress

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The group’s 56 recommendations include tightening prescription practices and expanding drug courts, prevention efforts, treatment access and law enforcement tactics.

President Trump’s bipartisan commission on the opioid crisis made dozens of final recommendations on Wednesday to combat a deadly addiction epidemic, ranging from creating more drug courts to vastly expanding access to medications that treat addiction, including in jails.

The commissioners did not specify how much money should be spent to carry out their suggestions, but they pressed Congress to “appropriate sufficient funds” in response to Mr. Trump’s declaration last week of a public health emergency.

The 56 recommendations — which covered opioid prescribing practices, prevention, treatment, law enforcement tactics and funding mechanisms — did not so much advocate a new approach as expanding strategies already being used.

Reaction from treatment advocates was mixed, with many expressing frustration that the commission had not called for a specific level of funding. Chuck Ingoglia, a senior vice president at the National Council for Behavioral Health, which represents treatment providers, said that his group agreed with many of the recommendations, but that the report “starves the country for the real resources it needs to save American lives.”

Although the commission did not put a dollar amount on its recommendations, it had specific ideas for how federal money should be funneled to states. Its top recommendation was to streamline “fragmented” federal funds for addiction prevention and treatment into block grants that would require each state to file only a single application instead of seeking grants from dozens of programs scattered across various agencies.

The commission also appealed to the Trump administration to track more carefully the huge array of interdiction, prevention and treatment programs it is funding and to make sure they are working. “We are operating blindly today,” its report said.

Regina LaBelle, who was chief of staff in the White House Office of National Drug Control Policy under President Barack Obama, said the recommendations recognized “the importance of proper and appropriate treatments” for addiction, particularly medications that help people avoid cravings and symptoms of withdrawal. But, she added, “There needs to be more funding for this.”

The head of the commission, Gov. Chris Christie of New Jersey, a Republican, suggested in a television interview Sunday that Mr. Trump would soon ask Congress to allocate far more money for fighting the nation’s addiction problem. “I would say that you’re going to see this president initially ask for billions of dollars to deal with this,” he said on ABC’s “This Week.”

The White House issued a statement thanking the commission and saying it would review the recommendations.

It is hard to determine how much money is truly needed. When Senate Republicans added $45 billion in addiction treatment funds to an Obamacare repeal bill that ultimately failed, Gov. John Kasich of Ohio, a Republican, said that amount was akin to “spitting in the ocean.”

Richard Frank, a health economics professor at Harvard Medical School who worked in the Obama administration, estimated that it could cost roughly $10 billion a year to provide medication and counseling to everyone with opioid use disorder who is not already in treatment. Treating opioid-dependent newborns, meeting the needs of children in foster care because of their parents’ addiction and treating hepatitis C and other illnesses common among opioid addicts would cost “many billions more,” Mr. Frank said.

Mr. Frank also cautioned that block grants would not work if the administration decided to include federal Medicaid funding for addiction treatment in them. “When one starts to carve out certain services as grants, as opposed to insurance funding, one undermines the insurance,” he said. “It is a method of killing Medicaid with 1,000 nicks.”

Some of the commission’s other recommendations included making it easier for states to share data from prescription drug monitoring programs, which are electronic databases that track opioid prescriptions, and requiring more doctors to check the databases for signs of “doctor shopping” before giving a patient opioids.

The commission encouraged the federal Centers for Medicare and Medicaid Services to review policies that it claimed discouraged hospitals and doctors from prescribing alternatives to opioids, especially after surgery. According to the commission’s report, C.M.S. pays a flat, “bundled” payment to hospitals after patients undergo surgery, which includes treatment for pain. Because they get a flat fee, hospitals are encouraged to use cheap products – and most opioid medications are generic and inexpensive.

“Purchasing and administering a non-opioid medication in the operating room increases the hospital’s expenses without a corresponding increase in reimbursement payment,” the report said.

More broadly, the report said the federal government as well as private insurers should do a better job of covering a range of pain-management and treatment services, such as non-opioid medications, physical therapy and counseling. And it recommended that the Department of Health and Human Services and other federal agencies eliminate any reimbursement policies that limit access to addiction medications and other types of treatment, including prior authorization requirements and policies that require patients to try and fail with one kind treatment before getting access to another.

One prevention measure the commission did not embrace is expanding syringe exchange programs, which public health experts say save money and lives by reducing the spread of H.I.V. and hepatitis C with contaminated syringes.

“I was hoping to see that in this report,” Ms. LaBelle said.

The commission’s members – Mr. Christie, Gov. Charlie Baker of Massachusetts, a Republican; Gov. Roy Cooper of North Carolina, a Democrat; Pam Bondi, the Republican attorney general of Florida; Patrick Kennedy, a former Democratic congressman from Rhode Island and Bertha Madras, a Harvard professor – all voted for the final recommendations, which came about a month later than expected.

His voice quaking with emotion, Mr. Kennedy said during the commission’s meeting Wednesday that Congress needed to appropriate sufficient funds for the initiative, suggesting at least $10 billion.

”This town doesn’t react unless it hears from real people“ who will vote in the next election, he said, nodding to guests who had testified about their families’ searing experiences with addiction, stigma, lack of treatment options and the refusal of insurance companies to cover treatment.

Mr. Kennedy also noted that insurance coverage is crucial to fighting addiction; in another commission meeting earlier this year, he took Republicans to task for working to repeal the Affordable Care Act and cut Medicaid.

 

House Bill Targets Pre-Existing Conditions in Multiple Ways

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http://www.realclearhealth.com/articles/2017/05/18/house_bill_targets_pre-existing_conditions_in_multiple_ways_110599.html?utm_source=RC+Health+Morning+Scan&utm_campaign=38995c8cb7-EMAIL_CAMPAIGN_2017_05_19&utm_medium=email&utm_term=0_b4baf6b587-38995c8cb7-84752421

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For those with pre-existing medical conditions, the House-passed health bill became notorious for a last-minute addition that would let insurers once again charge them higher premiums in the individual market based on their health status. But the focus on this single provision distracts from a troubling fact: even without it, the bill would threaten health care for those with pre-existing conditions in four broader ways.

#1: The bill would cap and cut federal funding for virtually all of Medicaid by imposing a per capita cap or letting states convert Medicaid into a block grant.

A per capita cap would set annual limits on federal funding per beneficiary that would grow more slowly than actual health care costs. A block grant would cap the amount of overall federal Medicaid funding the state could receive. Either way, states would receive significantly less federal funding compared to current law, under which the federal government pays a fixed share of state Medicaid costs, and the funding cuts would grow deeper each year.

Faced with large cuts in federal funding, states would have no choice but to sharply cut their programs. Consequently, tens of millions of people with pre-existing conditions – including millions of children with disabilities and special health care needs – would face the threat of Medicaid cuts.  They could lose coverage entirely or go without needed care as states scaled back covered benefits and payments to medical providers.

Home- and community-based services, an optional Medicaid benefit that most states already limit based on available funds, would be at particular risk. These services, which include nursing and home health care and help with chores, meals, transportation, and other services, let seniors and other low-income people with serious health problems remain in their homes instead of having to go to a nursing home.

#2: The federal government wouldn’t provide any more enhanced funding after 2019 for Medicaid enrollees who were enrolled because their states took the option, under the Affordable Care Act (ACA), to expand their Medicaid programs.

That would force states to pay three to five times more for the ACA’s Medicaid expansion.  Most or all of the 31 states and Washington, D.C. that have adopted it would have no choice but to drop it because they could no longer afford it.

The Medicaid expansion now covers 11 million people, including many who have pre-existing conditions. For example, almost 30 percent of those benefitting from the Medicaid expansion have a mental illness or substance use disorder. By effectively ending the Medicaid expansion starting in 2020, the House bill would leave millions of low-income people with pre-existing conditions without coverage.

#3: The bill would let insurers charge older people — many of whom have pre-existing conditions —at least five times more to buy coverage compared to younger consumers, while also slashing the subsidies that help them afford insurance. 

For example, a 60-year-old woman with $22,000 of annual income who faced the national average benchmark premium would pay $8,200 more in premiums after accounting for federal tax credits than she does now. The Congressional Budget Office projects that uninsured rates for people age 50-64 would double due to the House bill.  Some 84 percent of people age 55-64 have pre-existing health conditions.

#4: The bill would eliminate a broad range of consumer protections that the ACA established in the individual market, threatening access to health care and coverage for those with pre-existing conditions.

Plans would no longer need to offer a comprehensive set of benefits and could exclude even core benefits such as maternity services and mental health care. Nor would they have to limit the amount that people with expensive health care must pay out-of-pocket for deductibles and other cost-sharing each year.  Insurers could again place annual and lifetime limits not only on individual and small-group plans but also on coverage that people get from large employers, leaving millions with costly pre-existing conditions to once again worry about exhausting their benefits.

All told, then, the House bill would bring back the highly-flawed, pre-ACA individual insurance market that made it impossible for millions with pre-existing conditions to get adequate, affordable health coverage.  Additionally, it would threaten the coverage of millions of Medicaid recipients with pre-existing conditions.

That’s not a health care system that should make us proud.

Medicaid Financing: The Basics

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http://kff.org/report-section/medicaid-financing-the-basics-issue-brief/

Figure 1: Medicaid costs are shared by the states and the federal government.

 

Trump’s Health Plan Would Convert Medicaid to Block Grants, Aide Says

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President Trump’s plan to replace the Affordable Care Act will propose giving each state a fixed amount of federal money in the form of a block grant to provide health care to low-income people on Medicaid, a top adviser to Mr. Trump said in an interview broadcast on Sunday.

The adviser, Kellyanne Conway, who is Mr. Trump’s White House counselor, said that converting Medicaid to a block grant would ensure that “those who are closest to the people in need will be administering” the program.

A block grant would be a radical change. Since its creation in 1965, Medicaid has been an open-ended entitlement. If more people become eligible because of a recession, or if costs go up because of the use of expensive new medicines, states receive more federal money.

If Congress decides to create block grants for Medicaid, lawmakers will face thorny questions with huge political and financial implications: How much money will each state receive? How will the initial allotments be adjusted — for population changes, for general inflation, for increases in medical prices, for the discovery of new drugs and treatments? Will the federal government require states to cover certain populations and services? Will states receive extra money if they have not expanded Medicaid eligibility under the Affordable Care Act, but decide to do so in the future?

 

 

What Would Block Grants or Limits on Per Capita Spending Mean for Medicaid?

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http://www.commonwealthfund.org/publications/issue-briefs/2016/nov/medicaid-block-grants

ABSTRACT

Issue: President-elect Trump and some in Congress have called for establishing absolute limits on the federal government’s spending on Medicaid, not only for the population covered through the Affordable Care Act’s eligibility expansion but for the program overall. Such a change would effectively reverse a 50-year trend of expanding Medicaid in order to protect the most vulnerable Americans.

Goal: To explore the two most common proposals for reengineering federal funding of Medicaid: block grants that set limits on total annual spending regardless of enrollment, and caps that limit average spending per enrollee.

Methods: Review of existing policy proposals and other documents.

Key findings and conclusions: Current proposals for dramatically reducing federal spending on Medicaid would achieve this goal by creating fixed-funding formulas divorced from the actual costs of providing care. As such, they would create funding gaps for states to either absorb or, more likely, offset through new limits placed on their programs. As a result, block-granting Medicaid or instituting “per capita caps” would most likely reduce the number of Americans eligible for Medicaid and narrow coverage for remaining enrollees. The latter approach would, however, allow for population growth, though its desirability to the new president and Congress is unclear. The full extent of funding and benefit reductions is as yet unknown.

Clinton vs. Trump: 5 critical election issues

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http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/hillary-vs-trump-5-critical-election-issues?cfcache=true&ampGUID=A13E56ED-9529-4BD1-98E9-318F5373C18F&rememberme=1&ts=25102016

While Hillary Clinton vows to forge ahead with Obamacare if she is elected president, Donald Trump would scrap it altogether. The end results would be two very different forms of healthcare, and industry leaders have much to consider.

Brill“Many different factors are weighing on managed care executives such as the costs of pharmaceuticals, diagnostics and devices; the impact of consolidation amongst hospitals, physicians, health plans; and the losses in the exchange marketplace,” says Managed Healthcare Executive editorial advisor Joel V. Brill, MD, chief medical officer, Predictive Health, LLC, which partners with stakeholders to improve coverage of value-driven care. “With each of these factors, plans can, at least at a high level, make some educated guesses about the relative risk of each factor and impact to the bottom line.”

The election results, however, are much less certain, which from a risk perspective, weighs heavily on the minds of healthcare executives, Brill says. “How can you plan for business knowing that whatever you are doing currently could be upended in the beginning of November?”

To help provide some clarity, Managed Healthcare Executive identified five of the top industry issues, reviewed the candidates’ platforms for each, and asked industry experts to weigh in.

Donald Trump’s Health Care Reform Proposals: Anticipated Effects on Insurance Coverage, Out-of-Pocket Costs, and the Federal Deficit

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http://www.commonwealthfund.org/Publications/Issue-Briefs/2016/Sep/Trump-Presidential-Health-Care-Proposal

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Issue: Republican presidential candidate Donald Trump has proposed to repeal the Affordable Care Act (ACA) and replace it with a proposal titled “Healthcare Reform to Make America Great Again.” Proposed reforms include allowing individuals to deduct the full amount of premiums for individual health plans from their federal tax returns, providing block grants to finance state Medicaid programs, and allowing insurers to sell insurance across state lines.

Goal: To assess how each of these reforms, when implemented individually, would affect insurance coverage, consumer out-of-pocket spending on health care, and the federal deficit in 2018.

Methods: RAND’s COMPARE microsimulation model.

Key findings and conclusions: The policies would increase the number of uninsured individuals by 16 million to 25 million relative to the ACA. Coverage losses disproportionately affect low-income individuals and those in poor health. Enrollees with individual market insurance would face higher out-of-pocket spending than under current law. Because the proposed reforms do not replace the ACA’s financing mechanisms, they would increase the federal deficit by $0.5 billion to $41 billion.

What can we expect in healthcare with Clinton, Trump?

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http://thehill.com/blogs/congress-blog/healthcare/289527-what-can-we-expect-in-healthcare-now-that-clinton-and-trump

Now that our presidential nominees are set and the general election has begun, what do our nation’s hospitals and health systems need to do, whether Secretary Clinton or Mr. Trump is elected in November? They, and their parties, offer stark contrasts, but what will they mean for hospitals?