Highlight on Maine: Able-bodied MaineCare recipients could be subject to more stringent requirements

“Able-bodied adults” would be subject to work/education requirements and a lifetime limit of five years under changes Mary Mayhew, director of the Maine Department of Health and Human Services, proposed to Maine’s Medicaid program, MaineCare. In a letter to HHS Secretary Tom Price, Mayhew said she would be seeking the changes in a forthcoming formal 1115 demonstration waiver request.

Mayhew’s letter comes at the heels of a referendum campaign to expand Medicaid in Maine at, according to Mayhew, a cost of $400 million over the next five years. A second motivation is the apparently sympathetic Trump Administration, which has proposed replacing Medicaid with block grants.

Mayhew said that the state has expanded its Medicaid program over decades, resulting in the use of hundreds of millions of state dollars “to turn Medicaid into an entitlement program for working-age, able-bodied adults.” MaineCare serves 270,000 individuals, just over 20 percent of Maine’s population, which, Mayhew said, represents a 22 percent reduction in enrollment since 2011.

Mayhew’s Medicaid proposals include the following:

  • work or education requirements for able-bodied adults in the Medicaid program, similar to the work requirements for Temporary Assistance for Needy Families (TANF) or Able-Bodied Adults Without Dependents (ABAWDs) in the Supplemental Nutrition Assistance Program (SNAP);
  • a five-year lifetime limitation on able-bodied adults’ eligibility for Medicaid;
  • limiting non-emergency transportation (NET) to situations where the underlying service to or from which individuals are being transported is a required Medicaid service and requiring them to access existing transportation resources before accessing NET;
  • requiring monthly premiums for adults who are able to earn income;
  • requiring monthly coinsurance of a set amount (approximately $20) for all members, cost-sharing of $20 for using the emergency department, and fees for missed appointments;
  • applying a reasonable asset test to Medicaid; and
  • waiver of the retroactive coverage of services incurred during the 90 days before Medicaid eligibility.

 

Strike balance in proposals to modify private physician contracts, KFF warns

Policy makers considering proposals to ease Medicare private contracting rules should strike a balance between ensuring doctors and practitioners receive fair payment and helping beneficiaries face predictable and affordable medical care, a Kaiser Family Foundation (KFF) issue brief concluded. While proponents of such proposals may tout increased physician autonomy, easing private contracting rules could lead to “an unraveling of financial protections” currently in place.

Options for charging Medicare patients

Currently, physicians and practitioners have three options for charging patients in traditional Medicare—by registering as a participating provider, a nonparticipating provider, or an opt-out provider who privately contracts with Medicare patients. Participating providers (see Social Security Act (SSA) Sec. 1842(h)(1)) agree to accept the Medicare physician fee schedule amount as payment in full for all Medicare services, and patients are liable for a 20 percent coinsurance. Nonparticipating physicians may choose, on a service-by-service basis, to charge Medicare beneficiaries higher fees, up to a limit of 115 percent of the fee schedule amount (see SSA Sec. 1848(g)).

Opt-out providers with private contracts may charge Medicare patients any fee they feel is appropriate, as agreed upon in the contract, and Medicare does not cover or pay for such services (see SSA Sec. 1802(b)). Less than 1 percent of physicians in clinical practice chose to opt out of Medicare in 2016.

Patient protections

Before providing services, physicians must inform a beneficiary in writing that they opted out of Medicare (see 42 C.F.R. Sec. 405.415). The physician is prohibited from entering into a private contract when the beneficiary needs emergency or urgent care. Also, a physician must opt out of Medicare for all of his or her Medicare patients and for all services provided to them. A two-year opt-out period is automatically extended for two-year periods.

Proposals to change Medicare private contracting

The issue brief described various proposals to modify private contracting in Medicare, including legislation introduced by Rep. Tom Price (R-Ga): (1) allowing physicians to contract more selectively, on a patient-by-patient or service-by-service basis; (2) allowing patients and physicians to seek Medicare reimbursement for an amount that Medicare would normally pay under the physician fee schedule; and (3) allowing patients and physicians to seek reimbursement from supplemental insurance, such as Medigap policies and employee-sponsored retiree coverage.

KFF noted the arguments in favor of these proposals. First, lifting restrictions on private contracting would allow physicians to receive higher payment for services, which could offer practitioners greater autonomy. Second, the proposals could increase the number of physicians willing to accept Medicare patients because they could charge higher fees to some Medicare patients. Third, the proposals could reduce beneficiary out-of-pocket costs because beneficiaries entering into private contracts would be able to seek Medicare reimbursement for part of the physician’s bill.

KFF raised concerns, however. For example, liberalizing private contracting rules could increase costs for beneficiaries. In addition, some beneficiaries could lose access to affordable services, particularly for less common physician specialties.

MedPAC votes to recommend recalculation of MA benchmarks

The Medicare Payment Advisory Commission (MedPAC) unanimously voted to recommend that the HHS Secretary modify the calculation of Medicare Advantage (MA) benchmarks. The recommended change, discussed at the January 12, 2017, MedPAC meeting, would increase spending between $750 million and $2 billion over one year and between $5 billion to $10 billion over five years. Mark Miller, executive director of MedPAC, suggested, however, that previous coding recommendations from the June 2016 report could offset the increased cost.

CMS sets the MA county benchmark based on the average risk-adjusted per capita Part A and Part B fee-for-service (FFS) spending in the county. While this calculation includes all beneficiaries in Part A or Part B, MA enrollees must be in both Part A and Part B. MedPAC policy analyst Scott Harrison noted that 12 percent of FFS beneficiaries are enrolled in Part A only, and Part A-only beneficiaries spend less than half than what those with Part A and Part B spend on Part A. This, he said results in an underestimate of FFS spending compared to MA spending, which leads, in turn, to an understatement of MA benchmarks.

To make calculations more reflective of MA enrollment, the members voted on a draft recommendation, which they also discussed at the December 2016 meeting, that the HHS Secretary should calculate MA benchmarks using FFS spending data only for beneficiaries enrolled in both Part A and Part B.

CMS already adjusts the rate calculation in Puerto Rico so that it is based on beneficiaries who are enrolled in both Part A and Part B. In the April 2016 Announcement of Calendar Year 2017 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter, CMS stated in response to a comment that it would consider expanding this Part A and Part B adjustment to all counties in the future.

At the same meeting, MedPAC also voted to recommend that the Secretary should require hospitals to add a modifier on claims for all surgical services provided at off-campus, stand-alone emergency department facilities. The modifier would allow Congress and CMS to track the growth of off-campus emergency departments, which are reimbursed at higher rates than urgent care centers.

Recipients of cost-sharing reductions seek to intervene in House v. Burwell

Two recipients of cost-sharing reductions under section 1402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), concerned that the House Republicans might alter their position after the inauguration of President-elect Donald Trump (R), sought permission to intervene in the pending appeal in House of Representatives v. Burwell.

House v. Burwell

The Department of Treasury has been reimbursing insurers for their payment of reductions under section 1402 from the permanent appropriation in the Internal Revenue Code (31 U.S.C. §1324). The U.S. House of Representatives filed suit against the Secretaries of HHS and the Treasury claiming that the payments are not authorized by section 1324. The district court entered an injunction barring the payments (see Court sides with House Republicans, finds no appropriation for cost-sharing reductions, Health Law Daily, May 18, 2016) and the Secretaries appealed. On December 5, 2016, the D.C. Circuit granted the House’s motion to hold the appeal in abeyance until February 21, 2017 (see Court puts cost-sharing appeal on hold, awaits possible Trump policy, Health Law Daily, December 7, 2016).

Possible about-face

According to the movants, their interests were aligned with those of the Executive Branch, which advocated for a construction of section 1324 that permits the continued payment of cost-sharing reductions to insurers. However, statements in the House’s motion suggest that it could change position after Trump’s inauguration and enter into an agreement to dismiss the appeal or otherwise agree that the injunction should take effect—for example, that the House and the incoming Administration are “discussing possible options for resolution” of the appeal other than to “continue prosecuting” it. To defend their interest in continued payment of the cost-sharing reimbursement, the recipients asked to intervene in the case.

Potential for harm

The motion noted that if cost-sharing reimbursement payments stop, recipients of cost-sharing reductions who purchased insurance policies for 2017 will likely face early termination of those policies because the government will allow insurers to leave the exchanges. Even if the insurer remained in the market until the end of 2017 without government reimbursement for cost-sharing reductions, it would “surely exit the marketplace at the end of the plan year in order to shed any obligation to provide cost-sharing reductions.” All of this, say the movants, would drastically increase their costs for insurance.