Tag Archives: Medicaid

Congress Is Making Quiet Progress on Drug Costs

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https://www.commonwealthfund.org/blog/2018/congress-making-quiet-progress-drug-costs?omnicid=EALERT1477719&mid=henrykotula@yahoo.com

Progress on drug costs

While the Trump administration has taken small steps to implement its blueprint to lower prescription drug prices, Congress has recently made quiet progress on some policies that could help lower drug costs for patients.

First, both the Senate and House advanced legislation to ban “gag clauses” that prevent pharmacists from telling patients that they can save money on medications by paying for them out of pocket. Certain prescription benefit managers (PBMs) have used gag clauses as part of their formulary design. While this is not a widespread industry practice, a 2016 survey of community pharmacists found that nearly 60 percent had encountered a gag clause in the previous 10 months. Two bills (S. 2553 and H.R. 6733) would prohibit private Medicare plans from instituting gag clauses. A third, related bill (S. 2554) — passed by the Senate on Monday with overwhelming support — prohibits private health insurance plans from using them. While they enable pharmacists to advise patients on how to spend less at the pharmacy counter, these bans won’t necessarily lower the prices of drugs.

Second, a lesser-known provision of S. 2554, added by the Senate Committee on Health, Education, Labor and Pensions (HELP), could help lower drug prices by shedding light on patent-settlement agreements between drug manufacturers. Brand-name manufacturers sometimes use these agreements to extend their monopolies and keep drug prices higher by directly and indirectly compensating generic manufacturers for voluntarily delaying generics from coming to market. The Congressional Budget Office has found that setting a standard to rein in these types of settlements would produce $2.4 billion in savings over 10 years.

The HELP committee provision would require manufacturers of biologics (large-molecule drugs) and biosimilars (nearly identical copies of original biologics) to report patent-settlement agreements to the Federal Trade Commission (FTC) — an important step in understanding and preventing abuse of what is sometimes referred to as “pay for delay.”

Pay-for-Delay Stalls Drug Competition, Costing Patients Billions

In 2003, Congress required patent-settlement agreements between brand-name and generic small-molecule drug manufacturers to be filed with the FTC for review after they are made. (Currently most drugs sold are small-molecule drugs, but the biologics market is growing rapidly.) Such agreements effectively delay the sale of lower-cost generic drugs by nearly 17 months longer than agreements without payments, according to a 2010 report by the FTC. These anticompetitive agreements cost taxpayers approximately $3.5 billion each year.

In 2012, the U.S. Supreme Court decided in FTC v. Actavis that a brand-name drug manufacturer’s payment to a generic competitor to settle patent litigation can violate antitrust law. After the Court’s decision, the number of pay-for-delay agreements declined two years in a row. With drug companies now required to report these settlements to the FTC, the agency has been able to act to protect patients from anticompetitive deals that delay cheaper, generic drug products from coming to market. The FTC reviews reported settlements and, if it determines an agreement violates antitrust law, the agency challenges the agreement in the courts.

For example, in 2008 the FTC sued Cephalon, Inc., for paying four generic companies $300 million to delay marketing of their generic versions of Cephalon’s sleep-disorder drug, Provigil, until 2012. In 2015, the FTC reached a settlement with Cephalon’s owner, Teva Pharmaceutical Industries, Ltd., which agreed to ending pay-for-delay agreements for all their U.S. operations. The company also paid $1.2 billion in compensation for Cephalon’s anticompetitive behavior.

FTC Reporting Requirement Does Not Apply to Biologic and Biosimilar Manufacturers

The FTC reporting requirement applies only to small-molecule drugs, however, and not to far more expensive biologics and biosimilars. The potential savings of having biosimilars available for sale are significant: even one biosimilar competing against a brand-name biologic can result in a 35 percent lower price for patients and payers. Without delays in competition with brand-name biologics, biosimilars could save $54 billion to $250 billion over 10 years.

But there are concerns that manufacturers are entering into pay-for-delay agreements to keep prices for these drugs artificially high. Since 2015, when the biosimilar pathway was implemented, the FDA has approved 12 biosimilars, yet only three are currently available to patients — likely because of patent litigation and pay-for-delay agreements.

FTC Review Is Part of the Solution

In his remarks upon releasing the U.S. Food and Drug Administration’s Biosimilars Action Plan in July, FDA commissioner Scott Gottlieb noted the FTC’s key role in monitoring U.S. markets to protect consumers from anticompetitive behaviors, including those of prescription drug manufacturers. He also pointed out the patent litigation tactics manufacturers use to delay biosimilar competition.

As it does for the small-molecule drug market, the FTC can play a proactive role in monitoring what is happening in the biologic and biosimilar markets. At a workshop on drug pricing held last year, acting FTC chair Maureen Ohlhausen said that while her agency has been making progress in eliminating pay-for-delay agreements, it has not seen the last of them. She said they will remain a target. But to move forward, the FTC needs clearer authority to review patent settlements between biologic and biosimilar manufacturers.

With Senate passage of S. 2554 and its FTC reporting provision, Congress has taken an important step in encouraging a robust biosimilar market. (While the House has not passed a similar measure, the Senate bill could be added to a reconciliation of the House and Senate gag clause bills.) Engaging all the relevant market regulators — including the FTC, the U.S. Patent and Trademark Office, the Centers for Medicare and Medicaid Services, and the FDA — will inject needed competition into this nascent market and help lower drug prices for U.S. consumers.

 

How hospitals protect high prices

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https://www.axios.com/newsletters/axios-vitals-5af4f54b-8427-48c2-b638-933a1ae4883a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Large hospital systems don’t command high prices just because patients like them, or just because they have strong market share. There’s also another big reason: their contracts with insurance companies actively prohibit the sort of competitive pressures a free market is supposed to support.

“The free market has been distorted in an unhealthy way,” health care consultant Stuart Piltch told the Wall Street Journal’s Anna Wilde Mathews for this deep dive into hospitals’ pricing practices.

How it works: Hospital systems are consolidating rapidly and buying up physicians’ practices (which charge higher prices once they’re part of a hospital).

On top of that, per WSJ: Hospitals’ deals with insurance companies “use an array of secret contract terms to protect their turf and block efforts to curb health-care costs.”

  • Some hospitals do not allow their prices to be posted on the comparison-shopping sites insurers provide to their customers.
  • They often require insurers to cover every facility or doctor the hospital owns, and prohibit insurers from offering incentives — like lower copays — for patients to use less expensive competitors.
  • When Walmart, the country’s biggest private employer, wanted to exclude the lowest-quality 5% of providers from its network, its insurers couldn’t do so because of their hospital contracts.

The other side: Hospital executives told the Journal that mergers don’t drive higher prices, and reiterated their position that hospitals have to collect higher payments from private insurance to make up for the lower rates they get from Medicare and Medicaid.

My thought bubble: High-deductible health plans are increasingly popular, in part, because of the idea that patients will use their purchasing power to drive a more efficient system overall.

  • But if Walmart doesn’t have enough market power to actually penalize low-quality providers, you and I definitely don’t, either — especially if we can’t find out what the prices are, and especially if we only have one hospital to choose from in the first place.

Go deeper: Think drug costs are bad? Try hospital prices

 

 

Medicaid rolls set to be slashed under Trump-approved work rules

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Medicaid rolls set to be slashed under Trump-approved work rules

Image result for medicaid work requirements

The thousands of people who lost Medicaid coverage this month in Arkansas for not following newly implemented work requirements may be a sign of what’s to come in other GOP-led states.

Indiana and New Hampshire are slated to implement their Medicaid work requirements next year, and a slew of other states are awaiting approval from the Trump administration.

Arkansas has served as a test case of sorts since it was the first state to implement work requirements, and this month it became the first state to kick off beneficiaries for not following them.

The state removed more than 4,000 people from the Medicaid rolls, with some estimates saying that number could climb to 50,000 when the requirements are fully implemented in 2019.

“I think other states should be thinking seriously about the warnings that Arkansas’ experience has for their states,” said Erin Brantley, a senior research associate at George Washington University’s Milken Institute of Public Health.

While many people in Arkansas’ program are exempt from reporting their activities to the state because they’re already working, others are not, meaning they need to file monthly reports through an online portal to show they are meeting the requirements.

Of those who lost coverage this month, about 95 percent didn’t file the necessary documents with the state. That led to their removal from Medicaid, though some may have been working working the required 80 hours a month.

It’s unclear why those participants didn’t file reports, especially if they were working, though some say it could be due to confusion, an inability to access a computer or general unawareness about the new requirements.

The state said it conducted “extensive” outreach that included sending more than 136,000 letters and emails and making more than 150,000 phone calls from April through August.

“It seems that [the state] is doing some outreach, but a lot of individuals still don’t know about the new requirements and are not setting up their accounts,” said Robin Rudowitz, associate director of the Kaiser Family Foundation’s program for Medicaid and the uninsured.

“There are many lessons to be learned about online reporting, and communication, and having individuals understand what the requirements are,” Rudowitz said. “The changes to these programs are difficult to communicate.”

In a report published in the journal Health Affairs this month, the author conducted interviews with 18 Medicaid recipients in northeast Arkansas and found that a dozen had not heard about the state’s new requirements.

Seema Verma, head of the U.S. Center for Medicare and Medicaid Services, which is responsible for reviewing state requests for work requirements, characterized Arkansas’ recent removal of Medicaid recipients as a positive step.

“I’m excited by the partnerships that Arkansas has fostered to connect Medicaid beneficiaries to work and educational opportunities, and I look forward to our continued collaboration as we thoroughly evaluate the results of their innovative reforms,” Verma said in a tweet the same day that 4,000 recipients lost coverage.

The work requirements have prompted lawsuits in Kentucky and Arkansas by advocates who say they are harmful to those in need. The judge that blocked a similar program in Kentucky earlier this year will also preside over the Arkansas case.

The Trump administration says “able-bodied” adults on Medicaid should work if they’re able to. In all three states, the work requirements apply only to those who gained coverage through ObamaCare’s Medicaid expansion, which allowed for covering more low-income adults.

It’s unclear how the work requirements will impact beneficiaries in Indiana and New Hampshire when they are rolled out next year, but both states are planning to rescind coverage for those who don’t meet the new work rules.

Beneficiaries in Indiana will have to work at least eight months each year, and an 80-hour-a-month requirement will be gradually phased in over an 18-month period. Compliance with the requirements will be checked annually instead of monthly, like in Arkansas.

New Hampshire beneficiaries subject to the new requirements must work 100 hours a month beginning in January. Enrollees who don’t meet the threshold for one month will have their coverage suspended.

Some argue that the true purpose of Medicaid work requirements is to cut spending for the federal program, a priority of conservatives for years.

“This policy is clearly not designed to help people find work. It’s designed to take them off Medicaid,” said Joan Alker, executive director of the Center for Children and Families at the Georgetown University School of Public Policy, referring to the Arkansas policy.

“It’s nothing to do with promoting work, supporting work — it’s about creating red tape for folks who are not able to jump over these bureaucratic hurdles for one reason or another — no internet access, they may not know, may be homeless, may not get the letter,” she said. “Those are the ones that will lose coverage.”

 

 

The Health 202: The rate of people without health insurance is creeping upward

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https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/09/13/the-health-202-the-rate-of-people-without-health-insurance-is-creeping-upward/5b99569b1b326b47ec95958c/?utm_term=.ae9e8af79dd2

 

THE PROGNOSIS

New Census Bureau data on the number of uninsured Americans is either a testament to the resiliency of the Affordable Care Act or a sign that President Trump’s anti-ACA rhetoric and policies are starting to work.

As our colleague Jeff Stein reported Wednesday, there was a slight uptick in the number of Americans without health insurance in 2017 compared to 2016, even though that number essentially remained statistically flat. Still, the fact that uninsured rate went up at all, by about 400,000 people, marks the first time since the ACA’s implementation that the uninsured rate didn’t drop. 

Supporters of the ACA worry the news marks the beginning of a trend, especially when some of Trump administration policies intended to circumvent the ACA go into effect next year.

Ahead of open enrollment last year, the Trump administration dramatically decreased funding for any Obamacare outreach or advertising, limited resources for “navigators” who help people find an insurance plan, and shortened the window for people to sign up for insurance from three months to six weeks in states that use a federally run marketplace.

“Even with all of that, health coverage stayed steady. But at the same time, we’d like to see further progress in the rate of the uninsured,” said Judith Solomon of the Center on Budget and Policy Priorities.

It’s part of a pattern to weaken the 2010 health-care law known as Obamacare. After the GOP Congress failed to repeal and replace the ACA last summer, the Trump administration moved to dilute the law in other ways: including signing off on a plan to eliminate the individual mandate penalty next year; allowing individuals to buy skimpier, short-term health plans without certain coverage requirements under Obamacare; and seeking to allow states to put conditions on Medicaid coverage.

Some of the most prominent health care organizations in the country came together this morning to voice their disapproval of those short-term plans — including the American Cancer Society Cancer Action Network, the American Heart Association, Planned Parenthood Federation of America, the National Women’s Law Center, the , American Academy of Family Physicians, the American Academy of Pediatrics and Families USA.

“The Administration’s decision to expand short-term health plans will leave cancer patients and survivors with higher premiums and fewer insurance options,” said Dr. Gwen Nichols, chief medical officer of the Leukemia & Lymphoma Society.

The groups’ statements, compiled and released by Sen. Tammy Baldwin (D-Wis.), are in support of the senator’s effort to have Congress rescind the White House regulation. Nearly every Democratic senator has signed a resolution of disapproval to overturn it.

The census data reflects trends that started last year, when the administration’s policies had yet to be implemented. Fourteen states saw their uninsured populations rise in 2017. The only three states that didn’t see a spike in that number were New York, California and Louisiana. The first two aren’t surprising given those states’ robust efforts to enroll their own residents, while Louisiana expanded Medicaid in June 2016 so its decrease represents those low-income individuals who now have government coverage.

Medicaid expansion in most of the 33 states and D.C. that have done so under the ACA has predictably decreased the number of people without coverage. The uninsured rate last year in states with an expanded Medicaid program was 6.6 percent compared to 12.2 percent in non-expansion states — a gap that has only continued to grow since 2013.

To be fair, as Larry Levitt, senior vice president at the Kaiser Family Foundation, pointed out on Twitter: the uninsured rate started leveling off before the Trump administration started its work. But Levitt suggested the uninsured rate may really rise in 2019 when elimination of the individual mandate penalty takes effect. Moreover, states are increasingly taking the White House up on its suggestion to add work requirements to their Medicaid programs — in just the first three months of it being implemented in Arkansas, more than 4,000 people were jettisoned from the rolls for failure to comply.

Matthew Fiedler, a health-policy expert at the Brookings Institution, agreed with Levitt’s assessment, noting that the bulk of the people who were uninsured pre-ACA have already been enrolled  in the program. He contended that if policy had remained static, there would likely have been a modest decline instead of similar increase in the uninsured rate — though not a dramatic one. The real effects, he said, of the Trump administration’s efforts to chip away at the ACA are still to come. 

“I don’t think the right takeaway is that none of the policy changes will have a negative effect. I think they will going forward, we just haven’t seen that yet,” he said. “I think if your goal is to evaluate the ACA, I think the right takeaway is that there was a lot of progress, but more policy progress to be made.”

Of course, Democrats and Republicans have disparate views on how to get there. Democrats are now pushing for a public option or a universal health care system in which the government would foot the bill for many health-care costs. A lot of them feel  the ACA “got us roughly 40 percent there and established a framework for lawmakers to make that progress going forward,” Fiedler said. That’s why we’re now seeing so many Democratic candidates and lawmakers embracing some iteration of a “Medicare for all” program.  

Republicans still criticize the ACA as vast government overreach and are vowing they will take another stab at repealing it should they maintain the congressional majorities after the November midterms.

“We made an effort to fully repeal and replace ObamaCare and we’ll continue,” Vice President Pence said while campaigning for Baldwin’s opponent, Leah Vukmir, if the GOP performs well in the midterms.

One additional interesting data point from the census is ages at which there was the greatest increases or decreases in the uninsured rate. As highlighted in the chart above, rates of those without insurance rose at ages 18 and 19 — when children are no longer eligible for the Children’s Health Insurance Program; and for those between ages 25 and 26 — when children no longer qualify for their parents’ insurance. The uninsured rate dropped, however, for those aged 64 and 65 — when adults are eligible for Medicare.

The greatest spike in those without insurance was documented for 26 year olds. That’s likely because young adults are typically healthier and feel less urgency to pay for insurance when they lose coverage under their family’s plan.

As noted by the New York Times’ Margot Sanger Katz on Twitter, these stats show just how crucial government programs and laws have been in providing health coverage to Americans:

How the Midterms Could Impact Medicaid

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http://www.governing.com/topics/health-human-services/gov-medicaid-expansion-election-midterms-november-2018.html

Image result for 2018 midterm elections

 

The fate of Medicaid expansion, a central tenet of President Obama’s signature health-care legislation, is in the hands of the people in several states.

In Idaho, Nebraska and Utah, voters will decide whether to make more low-income people, those up to 138 percent of the federal poverty line, eligible for Medicaid, the government-run health insurance program. In most of the other states, who voters elect as governor and to the legislature will influence the direction of this health-care policy for years to come.

Since the Affordable Care Act passed in 2010, 33 states have expanded Medicaid, largely along partisan lines, with Republicans leading the holdout movement. But in some cases, Republican governors tried for years to convince their GOP legislatures to expand.

Health policy experts say that, generally, a state’s status of expansion guides which races are most important to watch in the midterms.

“For a state that hasn’t yet expanded, the governor can’t do it all, so you have to watch what happens with the legislature,” says David Jones, associate professor of health law at Boston University who recently examined where Medicaid expansion appears more vulnerable. “But for states that have already expanded, the legislature doesn’t matter as much” because the governor has authority to tweak the current law or to end expansion in some cases.

The midterms come at a crucial time for health care. The Trump administration gave states the greenlight to adopt new rules for Medicaid that the Obama administration rejected. For instance, Arkansas, Kentucky, Indiana and New Hampshire have been approved to add work requirements, and several other states have applied. In July, a federal judge struck down Kentucky’s work requirements plan, putting the rest of the states’ policies into legal jeopardy. Despite the ruling, the Trump administration has signaled that it plans to proceed with work requirements.

Michigan is one expansion state where health policy could veer far to the right if the Republican nominee for governor, ‎Bill Schuette, wins what is considered a tossup race. Schuette, the state’s attorney general, leans more conservative than term-limited Republican Gov. Rick Snyder. On the campaign trail, Schuette has supported repealing and replacing the Affordable Care Act.

“He talks a lot about what he doesn’t like [about the ACA], but he has yet to say what he’d do that’s positive,” says Marianne Udow-Phillips, executive director of the Center for Healthcare Research and Transformation based in Ann Arbor, Mich. “I see him being in the mold of Scott Pruitt at the Environmental Protection Agency, doing a lot of rolling back of regulations.”

In Michigan, 680,000 people gained coverage under Medicaid expansion, and 350,000 could lose it if work requirements are put in place. Snyder signed a bill in June to submit a waiver to the federal government that, if approved, would require Medicaid recipients in the state to have a job.

“We’ve gotten used to thinking that Michigan is a moderate state because they have Democratic senators and sometimes go blue in presidential elections,” says Jones, “but … it’s a pretty conservative group of senators in the statehouse,” and a more conservative governor might be able to drum up support for far-right Medicaid changes.

Schuette’s Democratic opponent, Gretchen Whitmer, supports Medicaid expansion and opposes the work requirements waiver, according to a spokesperson in her campaign office.

In Ohio, another expansion state, GOP Gov. John Kasich is term-limited. While he is one of the staunchest defenders of Medicaid expansion, he did pass off a waiver request for work requirements to the feds. Republican Attorney General Mike DeWine and Democrat Richard Cordray, the former head of the Consumer Financial Protection Bureau, are in a tossup race to succeed him.

DeWine leans more pragmatic in general, so John Corlette, executive director of the Center for Community Solutions based in Cleveland, says “I would expect his approach would be closer to Kasich.” DeWine has said he supports expansion with a work component, while Cordray supports expansion with no work requirements.

In Ohio, work requirements threaten coverage for 36,000 adults.

If any states elect governors who are more conservative than their predecessors, “Kentucky is a good example of what a change in leadership can mean for Medicaid expansion,” says Jones. There, a Democratic governor expanded Medicaid to 500,000 Kentuckians. When Republican Matt Bevin was elected in 2015, he added work requirements, along with premiums and reporting income changes.

A governor’s authority, however, isn’t limitless. Since residents in Maine voted in favor of expansion last year, GOP Gov. Paul LePage has refused to enact the policy. The state’s Supreme Court last week ordered him to move forward with expansion.

Implementation of it, though, will likely fall to his successor. LePage is term-limited. Running to take his place is Democratic Attorney General Janet Mills, who supports expansion. Republican challenger Shawn Moody, a business owner, is following LePage’s lead and opposing it. If the state expands Medicaid per the court’s orders, 70,000 people would gain coverage.

Among states that haven’t expanded Medicaid, Jones says the state to watch is Kansas. In 2017, the legislature passed a Medicaid expansion bill, but then-GOP Gov. Sam Brownback vetoed it. The legislature narrowly missed getting enough votes to override him.

While it’s unlikely that the legislature in a state that deep red would flip Democrat, “the state seems to be treading more moderate,” says Jones. On a recent trip to Topeka, he says “many Republicans were willing to say they would support Medicaid expansion. They saw it as a way to save their rural hospitals.”

The governor’s race in the state is a matchup between hardline conservative Secretary of State Kris Kobach and Democratic state Sen. Laura Kelly. Kobach has a slight edge. Kelly has vowed to expand Medicaid, and Kobach is opposed to it.

While it’s a wild card, the political landscape in Florida has the potiential to completely shift in November, laying the groundwork for the state to expand Medicaid. Despite support from GOP Gov. Rick Scott, who is running for U.S. Senate, the GOP-controlled legislature has rebuffed all expansion efforts over the years.

Now, Democrats have a real shot at taking control in the Senate. While it’s unlikely they’ll take control of the House, they are expected to gain ground. The governor’s race is between Tallahassee Mayor Andrew Gillum, who supports the Democratic Socialist platform of “Medicare for all.” His opponent, Republican Congressman Ron DeSantis, is against expanding Medicaid.

“Supporters of the ACA think of Florida as the holy grail in terms of expansion,” says Jones.

Ohio Gov. Kasich Stumps Again In Support Of Medicaid Expansion

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https://www.npr.org/sections/health-shots/2018/08/21/640636316/ohio-gov-kasich-stumps-again-in-support-of-medicaid-expansion

Four years after going out on a limb to get Medicaid expansion enacted in Ohio, outgoing Republican Gov. John Kasich is worried about the future of the program. So he is now defending it — through a study and through the stories of people who have benefited from the coverage expansion.

One of those people is Brenda Jean Searcy, a 55-year-old law student who lives with her 93-year-old father in the Columbus suburb of Westerville. She says she had always been healthy but was felled by Lyme disease and then Graves’ disease; the diagnosis of the latter came after she had signed up for Medicaid through the expansion.

“I am very grateful to have Medicaid. It has made my life much better and made me much healthier,” Searcy says at a press conference.
Searcy is one of the 653,000 Ohioans who gained coverage through the Medicaid expansion, four years after Kasich defied his fellow Republican legislators in pushing Medicaid expansion through.

He claimed it would bring $13 billion in federal funding to help low-income people in Ohio get health care — especially those struggling with mental illness and addiction. Kasich is nearing the end of his second term and will leave office in January. He wants the Medicaid expansion to continue, and his Medicaid department commissioned an independent study on the effects of the expansion to support it.

Ohio Medicaid Director Barbara Sears says the analysis shows Medicaid expansion has cut in half the number of uninsured Ohioans. Ninety-six percent of people in the program with opioid addiction got treatment, and 37 percent of smokers were able to quit. One-third reported improved health, including better access to medical care for high blood pressure and diabetes. ER visits went down 17 percent, and there was a 10 percent increase in the number of people seeing primary care doctors. And most recipients said Medicaid expansion made it easier to find work, earn more money and care for their families.

The state’s budget office, part of the executive branch, estimates Medicaid expansion will cost nearly $5.2 billion in 2021, the first year Ohio will pay its full share of the costs as determined by the Affordable Care Act.

Ohio budget director Tim Keen says the state’s projected share would amount to $354.1 million. However, with drug rebates, assessments on managed care plans, a 1 percent tax on premiums and other offsets, the state’s share drops to $163.1 million. “Medicaid expansion is a significantly better deal for the states and for Ohio than the traditional program, and that’s important as one considers our ability to fund this program,” Keen says.

But Republican lawmakers have long had concerns about the program’s cost.

And so does the Republican candidate to replace Kasich, Attorney General Mike DeWine. After stating for months that he feels the Medicaid expansion is financially unsustainable, DeWine says he’ll keep it but makes changes, such as implementing work requirements and wellness programs. DeWine hasn’t made clear how much those changes would save the program – for instance, 96 percent of Medicaid expansion recipients in Ohio would be exempt from work requirements.

Kasich says he has talked to DeWine’s team about supporting the program. “I worry a little bit about somebody kind of nickeling and diming it away somehow — a little bit here, a little bit there — but I think they’ll be for it,”

 

 

Trying to Survive: Community Responses to Uncertainties About Federal Funding for Medicaid and Public Health Programs

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https://www.commonwealthfund.org/blog/2018/community-responses-federal-funding?omnicid=EALERT1457501&mid=henrykotula@yahoo.com

Mother and baby at a Federally Qualified Health Center

“We are just trying to survive.”

So says the director of an Ohio federally qualified health center (FQHC) that, like many such clinics nationwide, struggles to meet the demand for a wide range of services, from prenatal and other preventive care to addiction treatment and oral health care.

Along with community hospitals and public health departments, FQHCs — critical providers of health services in many low-income communities — are funded through state and local taxes, federal and state government programs, and private philanthropy. But some FQHCs are experiencing shortfalls in trying to meet their clients’ needs. Threats from Congress to reduce federal Medicaid funding, scale back Medicaid expansion, and decrease funding for public health programs have further compounded the financial uncertainties.

To learn how funding shortfalls are being experienced on the ground, my colleagues and I spoke with hospital administrators, chiefs of emergency departments, directors of county public health departments, and heads of FQHCs and behavioral health clinics. We also interviewed community leaders connected to businesses, law enforcement, local media, religious organizations, and political groups in eight North Carolina, Ohio, Pennsylvania, and Wisconsin counties.

Local Health Funding Inadequate

Nearly all of these community leaders described increasing access to health care as just one of three priorities for their communities. Improving local schools and attracting businesses with good-paying jobs are the other top concerns. As one school superintendent said, “We need to focus on all of these if we are to attract employers and people and remain a desirable place to live.”

But local health needs keep growing. The list is daunting: the decontamination of public water supplies; prenatal and infant care; immunizations; reductions in smoking and obesity; better nutrition; dental care for children and adults; and addressing mental illness, suicide risks, and substance use disorders. “We don’t have the capacity to deal with all who [need help],” says a Wisconsin county public health director. “We need to build infrastructure” — clinics and treatment centers — “and provider network capacity.”

Health departments and community clinics report that local funding has been inadequate for some time. As state and county governments have resisted raising taxes and increasing funds for public health needs and community clinics, grants from local organizations and foundations have helped fill the breach. But private philanthropy only goes so far. “Local foundations do not want to fund long-term staff needs,” one public health director said.

Medicaid Funding Is Critical for FQHCs and Emergency Departments

Threats to Medicaid funding have community providers worried. Medicaid generally provides about half the revenues for FQHCs, enabling them to provide care to all, regardless of ability to pay. FQHC directors fear that changes to eligibility — including requirements that beneficiaries work or volunteer, as proposed under various waivers — could mean that some patients will lose coverage, along with their access to counseling and medications for mental illness or chronic conditions like diabetes. Medicaid cutbacks also could make it harder for FQHCs to find specialists willing to see their uninsured or underinsured patients.

Hospital emergency departments (EDs) also would suffer from cuts to Medicaid. “Medicaid and self-pay [patients are] now 40 percent of our revenue, compared to 20 percent before Medicaid was expanded,” one ED chief told us. While more patients are covered thanks to the expansion, ED revenue from private insurance in these communities is down over the past two years, making hospitals more dependent on public insurance. ED chiefs also say that people with mental illnesses or substance use disorders experiencing crises are already crowding EDs, in part because it’s often easier for Medicaid beneficiaries to get to the hospital than to find primary care providers willing to treat them in a timely manner. If Medicaid funding is cut or eligibility requirements are changed, such problems could become much worse.

Medicaid Changes Already Impacting Providers

Complicating matters is a 2016 rule issued by the Centers for Medicare and Medicaid Services that was intended to improve quality of care and oversight for the growing number of Medicaid beneficiaries enrolled in managed care. Some states are responding to the rule by requiring that FQHCs and other safety-net clinics use more complex coding to file their claims for reimbursement, adding to the administrative burden on clinics. “We used to use just 15 codes to bill for services,” the director of a behavioral health clinic said. “Now there are about 250, and I’ve had to hire more administrative staff.”

Moreover, some clinics have seen longer gaps between the time claims are submitted and reimbursement is received from the state. The resulting cash flow problems hit smaller clinics, which have narrow operating margins, particularly hard. “This [delay] is causing smaller clinics to live in their ‘line of [bank] credit’,” one clinic director said. “Does the state want to deal only with large provider agencies?”

Paralyzed by Unease About the Future

These ongoing changes to Medicaid payment, along with proposed eligibility changes and fears of funding cutbacks, are causing grave concerns among community health leaders. With needs for care growing, they are understandably focused on the present. Otherwise, as one clinic director said, “[we] would be paralyzed by unease about the future.”

In the counties we visited, local independent political groups that have sprung up in response to these and other concerns see the federal government as out of touch with local needs for better health care, better schools, and higher-paying jobs — and with communities’ inability to dig deeper into their pockets to address these needs. For the clinics and hospitals that serve Medicaid patients and their communities, stable Medicaid funding will be critical to meeting their missions.

 

 

Hospital profits in Massachusetts shriveling due to financial pressure

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Hit especially hard were Massachusetts’ community hospitals, with median operating margins plunging to 0.9 percent.

Acute care hospitals in Massachusetts are turning a profit for the most part, but in many cases those profits are less than robust. The state’s Center for Health Care Information and Analysis found that many are in a financially precarious position.

According to the report, about 65 percent of the commonwealth’s hospitals have operating margins below three percent. Overall, hospitals’ operating margins hovered around 1.6 percent. That’s down from 2.8 percent during the previous fiscal year.

While 49 of 62 hospitals were profitable in the fiscal year ending Sept. 30, many low margins low enough not to be considered financially healthy.

Hit especially hard were Massachusetts’ community hospitals, with median operating margins plunging to 0.9 percent — down two full percentage points from the previous year.

The northeastern part of the state saw the lowest margins geographically, at 1.6 percent, with some facilities operating on negative margins and hemorrhaging cash. North Shore Medical Center in Salem was among the hardest hit, seeing $57.7 million evaporate in fiscal year 2017.

Not all Massachusetts hospitals are feeling those kinds of pressures. Northeast Hospital enjoyed a 9 percent operating margin during the past fiscal year, translating into a $33.1 million surplus.

That the state’s rural hospitals are struggling isn’t surprising, given the national trend. A recent report found that nearly half are operating at negative margins, fueled largely by a high rate of uninsured patients. Eighty rural hospitals closed from 2010 to 2016, and more have shut their doors since.

Aside from the high uninsured rate, a payer mix heavy on Medicare and Medicaid with lower claims reimbursement rates is a contributing factor. More patients are seeking care outside rural areas, which isn’t helping, and many areas see a dearth of employer-sponsored health coverage due to lower employment rates. Many markets are also besieged by a shortage of primary care providers, and tighter payer-negotiated reimbursement rates.

 

 

 

The Health 202: ‘Medicare for all’ is the dream. ‘Medicaid for more’ could be the reality.

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“Medicare for all” is the hottest position on the left these days, but there’s a quieter push afoot to create a public option using Medicaid. 

Chanting “Medicaid for more” may not sound as bold for progressives seeking to prove their bona fides before the midterm elections. Yet all the most-hyped 2020 Democratic presidential candidates are on board with the idea, including the Medicare expansion’s biggest champion, Sen. Bernie Sanders (I-Vt.).

The idea in concept is simple: Allow states to open up their Medicaid programs to anyone regardless of income. Those people could buy in to the social safety net and have access to Medicaid’s provider network and benefits. The groundwork for expanding the program for low-income Americans has already been laid to some extent as 34 states have expanded Medicaid under the Affordable Care Act.

Sen. Brian Schatz (D-Hawaii) has introduced the “State Public Option Act” to promote states to expand Medicaid — co-sponsored by some familiar Democratic faces: Sanders, Elizabeth Warren (Mass.), Cory Booker (N.J.), Kamala Harris (Calif.) and Kirsten Gillibrand (N.Y.). But the real efforts are happening at the state level where legislatures all over the country are seriously considering the idea.

Heather Howard, a lecturer at Princeton University who also helps states with their health-care systems, said many plans are in their infancy, but that 14 states across the country have made moves to, at minimum, weigh the benefits and challenges of shifting Medicaid to a publicly available health insurance option.

“There are a lot of policy considerations to think about, but while the federal policy debate is stalled, you have states thinking about what tools do we have. [Medicaid] is the immediate tool you have,” she told me.

That’s because Medicare is operated at the federal level so any major changes to it have to be decided in Washington. Medicaid, on the other hand, is run by the states, so they have more discretion over how the program is set up. 

There are real critiques of Medicaid as it now exists, such as low reimbursement rates for doctors and uniform access to care. To offer it to everyone would require responding to those criticisms as well as new questions such as the cost to states, whether states have to apply for federal waivers to alter the program and whether a public option lives on or off the ACA exchanges.

This week stakeholders across New Mexico met with President Obama’s former Centers for Medicare and Medicaid Services Administrator Andy Slavitt to begin some of those conversations. Earlier this year, New Mexico’s state legislature passed a bill to create a committee to study a Medicaid buy-in program. Medicaid is popular there; one-third of New Mexicans are enrolled. Yet 230,000 people remain uninsured in the state, according to Kaiser Family Foundation data, and proposed premium rates for 2019 for those who don’t qualify for ACA subsidies are increasing anywhere from 9.2 percent to 18.5 percent.

Slavitt is the board chair of a new group, United States of Care, which has an impressive roster of bold-faced names leading it from investor Mark Cuban to former Obama speechwriter Jon Favreau to former congresswoman Gabrielle Giffords (D-Ariz.) and her astronaut husband Mark Kelly. In the absence of Washington leadership, the group is working with states on ways to improve health care.

Allison O’Toole, the group’s director of state affairs, was also on the ground in New Mexico this week and told me there’s a “real hunger” and “momentum” around the idea of allowing states to expand Medicaid.

“Washington is in gridlock and not addressing people’s real concerns around the cost and affordability of health care,” O’Toole said. “This has created a greater sense of urgency and necessity by states to pick up that ball and run with it.”

With the Republicans’ failure to repeal the ACA and the public outcry when they tried, Democrats are feeling emboldened this year to talk ambitiously about their health-care goals. 

Health care is a leading issue heading into November, and polls show at least half of Americans are in favor of a “Medicare for all” program. But even if Democrats win the House majority and make gains in the Senate, President Trump has said Obamacare is unsustainable and his administration has worked persistently to chip away at it.

That’s why Michael Sparer, a public- health professor at Columbia University, believes “Medicaid for more” is not only good policy, but also good politics. It’s the type of proposal, he reasons, that could peel off moderate Republicans in a way that a national Medicare program never could. 

It’s true that Medicaid is a favorite GOP punching bag. The Trump administration is urging states to add work requirements to their programs and the GOP playbook has long included capping how much the federal government pays each state to administer Medicaid.

Yet 34 states, including many with Republican governors, expanded the ACA under Medicaid to include more low-income residents, and several more red states are on the precipice of following them. It’s a program that has endured and grown for 53 years.

“The Medicaid buy-in is more of a compromise program, it’s not viewed as a big national program. People who believe in states’ rights can view it as states having more flexibility,” Sparer said.

Sparer has written extensively on the topic and told me his support for expanding Medicaid is heavily influenced by the political viability of focusing on the program for low-income Americans versus the one covering seniors — meaning states don’t have to wait for a new president to do something meaningful. But that doesn’t mean he thinks national political figures like Sanders should stop talking about “Medicare for all.”

“The advantage is [Medicaid buy-in] is incremental, it adds populations here and there. But incremental isn’t a great political slogan. You put ‘let’s change the system’ on a bumper sticker and I get that,” he said. “But the more there’s momentum for ‘Medicare for all,’ then ‘Medicaid for more’ could be the back up plan.”

“Given the ever-present debate,” he added, “a more incremental path is a better path.”

 

 

Reinsurance in Wisconsin expected to stabilize individual market

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Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

Wisconsin has received a federal waiver to leverage $200 million to implement a state-based reinsurance program to cover high-cost claims in the individual health insurance market.

Reinsurance covers a portion of the most expensive claims. The move helps to stabilize the individual market by reducing insurer claim costs and decreasing premiums.

Insurers don’t have the uncertainty that a small number of high-risk individuals could dramatically increase their expenses because there aren’t enough healthy consumers to balance out the risk pool.

Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

The Department of Health and Human Services and the Department of the Treasury on Sunday approved the 1332 state innovation waiver under the Affordable Care Act. The five-year program starts Jan. 1, 2019 and ends Dec. 21, 2023.

The approved waiver allows the state to have access to $200 million in reinsurance funding. The federal government will pay an estimated $166 million and the state, $34 million.

The program is budget neutral to the federal government. The money comes from savings from premium tax credits. The federal waiver allows the premium tax credits to be passed through to the state, rather than going directly to the consumer.

Consumers will see the savings in an expected 3.5 percent drop in their premiums in the individual market, starting in 2019, according to a released statement from the Centers for Medicare and Medicaid Services and Wisconsin Governor Scott Walker. This compares to a 44 percent rate hike on premiums in 2018.

Walker submitted the waiver request for the state’s Health Care Stability Plan in April.

In an unrelated waiver request, Wisconsin has asked to impose work requirements as a condition of Medicaid beneficiaries receiving coverage.

While CMS Administrator Seema Verma and HHS Secretary Alex Azar have reportedly said that a judge’s decision in Kentucky barring work requirements will not stop the Trump administration from considering similar waivers, Wisconsin’s request awaits federal approval.

Last month, a federal judge blocked Kentucky’s plan to implement a work requirement waiver. In light of the action, CMS decided to reopen Kentucky’s 30-day federal public comment through August 18.