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.

 

Medicaid fills a space for children with special health care needs

Medicaid is the sole source of coverage for 36 percent of children with special health care needs, according to a Kaiser Family Foundation (KFF) Issue Brief. Public insurance, like Medicaid, is important for many children with special health care needs because the Medicaid program covers medical and long-term care services that are either not covered or subject to limited coverage through private insurance. The proposed restructuring of Medicaid financing would likely impose limits on the scope of benefits available to all Medicaid beneficiaries. The KFF believes that Medicaid reform should carefully evaluate the potential impact on children with special health care needs.

Special Health Care Needs

HHS reports that nearly 20 percent of all U.S. children under 18 years of age have special health care needs. Additionally, one in five U.S. families has a child with a special health care need. HHS defines special health care needs as applying to children who  “have or are at increased risk for chronic physical, developmental, behavioral or emotional conditions and who also require health and related services of a type or amount beyond that required by children generally.” Special health care needs stem from conditions including Down syndrome, cerebral palsy, depression, anxiety, and autism. Children falling under the definition have multiple and varied needs. For example nearly 70 percent of children with special needs have difficulty with bodily functions such as breathing, swallowing, or chronic pain. Children with special health care needs often have conditions which require nursing, therapy, and mental health counseling services.

Demographics

The majority (73 percent) of children with special health care needs live in low or middle-income families. This means that 73 percent of children with special health care needs live in families with incomes below 400 percent of the federal poverty level. Of the 11.2 million children with special health care needs, 59 percent are white, 16 percent are black, 17 percent are Hispanic or Latino, and 8 percent fall into other racial or ethnic categories.  Forty-one percent of children with special health care needs are between 12 and 17 years old, 39 percent are between six and 11 years old, and 21 percent are between zero and five years old.

Eligibility

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) required states’ Medicaid programs to cover children in families with incomes up to 138 percent of the federal poverty level. However, all states expanded financial eligibility for children above that level. As of January 2017, the median eligibility for Medicaid and CHIP children is 255 percent of the FPL. States may also make children who receive federal Supplemental Security Income (SSI) benefits eligible for Medicaid. Such children reside in poor families and are disabled in a way that severely limits their ability to function at home, school, and in the community.

Coverage

Regardless of whether a state chooses to cover such services for adults, children are eligible for Medicaid’s Early and Periodic Screening Diagnostic and Treatment (EPSDT) benefit, which includes regular medical, vision, hearing, and dental screenings as well as other services necessary to “correct or ameliorate” physical or mental health conditions. Additionally, because private insurance is designed to meet the health care needs of a generally healthy population, Medicaid can fill the gap to provide care related to more intensive and chronic needs.

Conclusion

Medicaid provides a board scope of services and coverage to children with special health care needs. For many families, Medicaid serves as an important source of insurance and a means to fill gaps presented by inadequate private insurance. As a result, lawmakers should be cautious when evaluating Medicaid reforms to consider the impact such restructuring could have on children with special health care needs.

Structure call coverage arrangements to avoid Stark & AKS issues

When compensating physicians for the time they spend on-call, hospitals should draft call coverage agreements with care to avoid potential problems implicating federal laws prohibiting physician self-referral (Stark Law) and kickbacks (Anti-Kickback Statute (AKS)). In a webinar presented by the Health Care Compliance Association (HCCA), Robert G. Homchick, partner at Davis Wright Tremaine LLP, and Scott M. Safriet and Adam S. Polsky, partners at HealthCare Appraisers, Inc., discussed changes to the call coverage risk analysis based on court opinions and changes in government implementation of rules.

As with most physician compensation arrangements, the Stark Law (42 U.S.C. §1395nn) is the threshold issue when analyzing call coverage agreements; additionally, if the agreement passes muster under Stark, the AKS (42 U.S.C. §1320a-7b) risks should be relatively modest. Both analyses contain some of the same considerations, such as fair market value (FMV) and commercial reasonableness.

Homchick, Safriet, and Polsky noted the following concerns for call coverage:

  • on-call coverage is becoming more expensive, but hospitals are facing decreased reimbursement; and
  • because traditional methods of securing call coverage no longer apply to all situations, hospitals are becoming more creative to obtain coverage.

To effectively secure coverage, hospitals should consider many options, and determine which is best applied in their situation. Potential coverage options include concurrent coverage, telemedicine, bundling on-call coverage with services beyond the emergency room, on-call coverage payment for employed physicians, and use of the “activation fee” concept.

However, the webinar cautioned that not all arrangements are the same, and in situations where it is truly difficult to secure coverage, a different approach may be necessary. Additionally, hospitals should look into the underlying reasons of why securing that coverage has been difficult—for example, are there shortened response times, a physician shortage in the marketplace, or is coverage restricted or quasi-restricted.

Highlight on Puerto Rico: Just how bad will Puerto Rico’s Medicaid funding crisis be?

Puerto Rico is in danger of a serious Medicaid funding crisis beginning late 2017, according to a data point report by the Office of the Assistant Secretary for Planning and Evaluation (ASPE) under the HHS Secretary from January 12, 2017. Under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), territories like Puerto Rico receive not only an increased funding rate, but a temporary additional Medicaid funding amount for spending above their statutory caps for use between July 2, 2011 and September 30, 2019 (ACA sec. 2005), and another sum provided in lieu of funding for individuals enrolling in health insurance exchanges to be used by December 31, 2019 (ACA sec. 1323). (States only would only receive the sec. 1323 funding when the sec. 2005 funding is exhausted.) Amounting to $6.4 billion, these funds will not reach 2019 but instead will be depleted as early as the first quarter of fiscal year 2018 (or the fall of 2017). The route that Puerto Rico takes in responding to this funding crisis could take this situation from bad to worse.

Background and ACA

Both states and the federal government pitch in to jointly fund the Medicaid program. The amount that comes from the federal government is called the federal medical assistance percentage (FMAP). How much FMAP a state receives is based on its per capita income, with the average being 57 percent (50 percent for wealthier states, 75 percent for the poorest), adjusted on a three-year cycle. U.S territories, like Puerto Rico, however, receive an FMAP amount that varies greatly from that of states because their rates are capped by statute.

Puerto Rico faces immense poverty, with individuals being eligible for Medicaid with an annual income of only $6,600 (compared to $15,800 for the continental U.S.) and families with an income of $10,200 ($32,319). Over one million people are enrolled in Medicaid in Puerto Rico. Under the per capita income formula used to calculate the FMAP of states, and still considering the statutory maximum that is in place, Puerto Rico would receive 83 percent (93 percent absent the statutory maximum). Instead, Puerto Rico’s Medicaid expenditures are matched at 55 percent. This is an increase from the 50 percent that was in effect prior to passage of the ACA.

 Possible scenarios

Two scenarios are provided in the report as options for Puerto Rico to approach the exhaustion of funds. First, Puerto Rico could continue to spend the same amount of its own funds in fiscal year (FY) 2018 as in 2017, adjusting for inflation on a per-enrollee basis, which would result in a decrease in spending to 44 percent less than that required to maintain current enrollment of over one million today. Around 500,000 people would lose coverage. Although this scenario is similar to the funding that was in place prior to the ACA, considering that officials may choose to prioritize infrastructure and debt payments over Medicaid, they may decide on scenario two.

The second option is that Puerto Rico spends none of its own unmatched funds over those necessary to get the maximum federal funding, but that would result in spending being 80 percent less than that required to maintain the current enrollment, and nearly 900,000 individuals would lose Medicaid coverage.

In either case, it is assumed the Puerto Rico will reduce coverage (lowering income eligibility levels or capping enrollment) rather than reduce benefits for those covered by Medicaid.