Health committee hears passionate pleas for Medicaid improvements

The witnesses testifying at a September 18, 2015, Energy and Commerce Committee hearing on four different Medicaid bills all offered moving stories about someone they know whose lives will or would have been affected by the pending legislation. These bills cover a wide range of topics, but all intend to improve access to care for Medicaid beneficiaries.

Clinical trials

The Ensuring Access to Clinical Trials Act of 2015 (H.R. 209) would remove the sunset provision of a similar act passed in 2009 that creates an income exclusion provision for up to $2,000 received in exchange for participation in clinical trials. According to Dr. Michael Boyle, Vice President of Therapeutics Development for the Cystic Fibrosis Foundation, current clinical trial participants and future candidates will be forced to discontinue or decline to participate for fear of losing their Supplemental Security Income (SSI) or Medicaid benefits due to income restrictions if the exclusion is allowed to expire on October 5, 2015. In his testimony, Boyle pointed out that precision medicine allows very targeted and specific therapies to be developed to treat rare diseases and specific groups of patients. The possible trial population for these drugs is limited by the rarity of the disease and the specificity sought. Further reducing the pool of trial participants due to fears of losing vital benefits will limit scientific advancements and efforts to cure these devastating diseases. The Senate has already passed identical legislation.

PACE programs

H.R. 3243 would expand the Program of All-Inclusive Care for the Elderly (PACE) to include those with disabilities under age 55. PACE provides comprehensive in-home care to those who are 55 or older who would otherwise require institutional care. Tim Clontz of the National PACE Association testified about the importance of allowing those with disabilities to remain in their homes, surrounded by their loved ones, as opposed to the strain that moving into a nursing facility puts on both the patient and their families. When asked how PACE would adapt to serving younger patients, Clontz admitted that creative solutions would be necessary but hopes to use pilot programs to determine the best models of care. While some larger programs may be able to create a division dedicated to patients under 55 years of age, he noted that programs in more rural areas would likely need to use existing resources to treat the new patient population.

Special needs trust

The Special Needs Trust Fairness Act of 2015 (H.R. 670) would allow for non-elderly disabled individuals to establish special needs trusts on their own behalf. Special needs trusts, unlike most other trusts, are not considered an asset for Medicaid eligibility determinations. Currently, only parents, grandparents, a legal guardian, or a court may establish a special needs trust on behalf of a non-elderly disabled individual. Richard Courtney, President of the Special Needs Alliance, testified before the committee on the bill and stated that these individuals are mentally capable of making a contract and should be allowed to do so to protect their interests. He noted that some courts have been hesitant to establish these trusts, leaving those without surviving parents little recourse.

Medicaid directory

The Medicaid Directory of Caregivers Act would require state Medicaid programs to establish an electronic list of physicians that accept Medicaid patients. This list would include doctors who have billed Medicaid in the last six months. The Government Accountability Office (GAO) found that Medicaid enrollees encounter difficulties in attempting to access various types of specialty care, and the Centers for Disease Control and Prevention (CDC) noted that physicians are less likely to accept Medicaid patients than those covered by Medicare or private insurance. This updated list of providers accepting Medicaid patients would reduce the time and effort required to find a provider.

Highlight on Iowa: Privatizing Medicaid with managed care

In August 2015, the Iowa Department of Public Health took a major step in what Governor Terry Branstad calls “Medicaid Modernization.” Iowa is joining the ranks of states (estimated at 24) that require all disabled beneficiaries to receive their Medicaid services through a managed care organization (MCO), including individuals with disabilities and those receiving long-term care.

The process

The agency and the governor announced a competitive bidding process in February. Eleven companies submitted bids. On August 17, 2015, the state Department of Public Health announced its intention to offer contracts to four commercial Medicaid managed care organizations: Amerigroup Iowa, Inc.; Amerihealth Caritas Iowa, Inc.; United Healthcare Plan of the River Valley, Inc.; and WellCare of Iowa, Inc.

Two of the disappointed bidders, Magellan and Meridian, had existing Medicaid managed care contracts with Iowa agencies. Magellan has administered the behavioral health benefits since the 1990s, but it will have to turn its responsibilities over to the incoming MCOs. Three of the disappointed bidders, Aetna, IowaTotalCare, an affiliate of Centene, and Meridian, requested reconsideration of the award, which the agency denied.

Several concerns have been raised about the governor’s decision to convert all of Iowa to Medicaid to managed care. Some critics question whether the governor and the Medicaid agency can, or should, have begun the contracting process without any legislation or public discussion of the change in policy. The Cedar Rapids Gazette observed that Governor Branstad never mentioned the changes he planned to propose during the 2014 election campaign.

The governor argues that the cost of Medicaid has risen 73 percent since 2003, but opponents note that the cost of health care through private insurance has risen more than 80 percent during the same period. In addition, all four of the chosen entities have histories of misconduct. The Iowa Hospital Association has pointed out that in Florida, Massachusetts, and New Hampshire, the managed care organizations lost money and required millions of dollars in increases after a year or two.

Past misconduct

In August 2008, Amerigroup settled claims of Medicaid fraud by agreeing to pay $225 million to the state of Illinois and the federal government. The fraud claims involved allegedly avoiding and discouraging enrollment in its Medicaid plan by pregnant women and others beneficiaries with expensive illnesses when the law required that it enroll all eligible beneficiaries. A jury in a whistleblower action had entered a verdict against Amerigroup for $334 million in 2006; the settlement involved withdrawal of Amerigroup’s appeal.

WellCare’s Florida affiliate in 2009 agreed to pay a total of $80 million—$40 million to Florida’s Medicaid and Healthy Kids programs and $40 million in civil penalties to resolve criminal charges that it had withheld mental health care from children and falsified expenditure reports so that it would appear to have met a medical loss ratio requirement.

The investigation had expanded, however. In 2012, WellCare agreed to pay $137.5 million to resolve False Claims Act litigation based on its conduct in Connecticut, Georgia, Hawaii, Illinois, Indiana, Missouri, and Ohio in addition to Florida. In addition, four former executives of WellCare and its affiliates were convicted of health care fraud in 2013 based on the same events. Chief executive officer Todd Farha was sentenced to three years in prison.

AmeriHealth Mercy Health Plan, an affiliate with the same parent company as winning bidder Amerihealth Caritas, agreed to pay more than $2 million to the Kentucky Medicaid agency to resolve allegations that it falsified records to bill for services it had not performed. Finally, in 2014, United Healthcare was fined $173.6 million by the California Insurance Commissioner for alleged mismanagement arising from its 2005 takeover of PacifiCare; allegedly, the company mismatched physicians with medical groups with which they were not affiliated, and patients claimed that they went without medical care for months at a time because of lost and miscoded patient records, some of which turned up in India. An administrative law judge reduced the fine to $11.5 million, but the Commissioner did not adopt the order. United’s appeal is pending.

Next steps

The agency submitted the waiver request to CMS in early September 2015. CMS must publish the request on its website and allow a comment period before it approves the request or negotiates final changes with state officials. Opponents of the governor’s plan, including the Cedar Rapids Gazette, have urged the public to submit comments.





Florida takes a step forward in mental health care, but two steps back in treating sick children

The struggle to adequately provide mental health continues, and Florida is the next state to attempt to figure out the problem. Wolters Kluwer has recently reported on the industry’s difficulty in providing mental health services for various reasons, such as a shortage of psychiatrists, an aging practitioner base, and state level issues with coordinating care and meeting resident needs in North Dakota and Massachusetts. According to Florida Governor Rick Scott (R), the state’s mental health programs are too fragmented.  Despite these gains, some medical directors are launching accusations about the alleged “dismantling” of the Children’s Medical Services program, saying that sick and disabled children are being deprived of care.

Time for a plan

The governor expanded a previous Executive Order to various state agencies via addendum. The order originally charged the Department of Corrections (DOC), the Department of Children and Families (DCF) and the Department of Juvenile Justice (DJJ) to develop and implement better management practices related to mental health services. This order included a pilot program in Broward County that would conduct an inventory of all programs across all agencies that provide mental health needs. Scott hopes that streamlining access to these services will provide more timely access for those who need it, especially considering that many with untreated mental illnesses become incarcerated. The agencies do not currently share information, citing privacy laws.

The addendum expands the pilot programs to include Alachua and Pinellas counties. It also includes the Department of Health and the Agency for Health Care Administration in the list of agencies involved, as the addendum states that “both play a critical role with respect to mental health care services in Florida.” Ultimately, Scott hopes that the review will result in developing a coordinated system of behavioral care services. This system should include streamlined budgeting and tracking of health care spending. The DCF is tasked with auditing state mental health treatment facilities. The audit will examine patient care and safety, security, technology, productivity, staffing, organization, and training. The DCF will then advise Scott regarding the best methods for coordinating care and optimizing resources. In the end, this integrated system should help both youth and adults with mental illnesses as well as those involved in criminal and juvenile justice systems, the child welfare system, and those in treatment facilities.

Some suggest a central receiving facility as an option for improving the system. Those experiencing a mental health crisis would be directed to this facility, and then treatment would be coordinated between the agencies. Denise Marzullo, president and CEO of Mental Health America of Northeast Florida is “cautiously optimistic” about the plan. The governor’s office recently vetoed the funding for other mental health initiatives, so some are hoping that the audits and restructuring indicate that mental health care is becoming a priority for the governor.

Child health care

According to the Miami Herald, medical directors and assistant directors throughout Florida have addressed state health administrators about the changes to the Children’s Medical Services program. The directors say that extremely sick children are being forced to wait for treatment while a new program is being implemented. The state is accused of gutting the program without offering an explanation or input from providers.  The program is now so diminished that it no longer meets accreditation criteria. This is a serious concern, as accreditation is necessary to operate as a Medicaid managed care agency. The Health Department denied the accusations, saying that a moratorium on new admissions has never been imposed. Medicaid and the Children’s Medical Services program are being run by managed care entities, and the Health Department plans to enroll any children removed from the medical services program in Medicaid plan. Yet this raises more concerns, as the state’s managed care program has been a controversial topic and last December a judge ruled that the system for needy and disabled children violated federal laws. Although the state argued that more money has been infused into the system and that the judge’s decision is now moot, the children’s advocates strongly deny this point. The directors suggest that the administrators have purposely excluded the doctors running the program.

Highlight on Kentucky: What’s for breakfast? Country ham and a side order of Obamacare

While Kentucky’s Democrat Governor Steve Beshear and Republican U.S. Senator Mitch McConnell jousted about the Affordable Care Act (ACA) (P.L. 111-148) at the Kentucky Farm Bureau Federation’s annual Country Ham Breakfast at the Kentucky State Fair, Republican state Senator Ralph Alvarado surprisingly advocated expanding Kentucky’s successful state exchange (Kynect) to other states to help pay for Kentucky’s Medicaid expansion.

Breakfast Fun

According to Kentucky Health News (KHN), Beshear told a breakfast crowd of 1,500  that the share of uninsured Kentuckians has been reduced by 56 percent through “our aggressive embrace of federal health reform. And we’ve done so without jeopardizing our budget. Oh, I know, I know the political rhetoric you hear from health-reform opponents who say it’s costing us thousands of jobs and we’re gonna bankrupt our state. Well, as I’ve said a lot of times, everybody is entitled to their own opinion but nobody is entitled to their own facts.”

Beshear cited a state-funded study by Deloitte Consulting, which found that Kentucky created 12,000 new jobs in the first full year of health care reform, with over 40,000 new jobs predicted by 2021. Those figures, however, do not reflect job losses at hospitals, which, according to KHN, blame Medicaid managed-care companies and health reform for their layoffs.

Beshear also cited a Deloitte prediction of a positive $820 million impact over eight years on state and local governments. That prediction, according to KHN, is based upon Deloitte’s belief that the Medicaid expansion is increasing health-care payrolls and generating more tax revenue. However, KHN notes that in 2021, Deloitte said the expansion would cost more than it actually brings in.

When it was his opportunity to speak, McConnell responded that “[t]he governor and I have debated Obamacare at this breakfast the last two or three years. I’ll spare you my rebuttal other than to say higher premiums, higher co-payments, higher deductibles, lost jobs and a big bill is coming to the state government for Medicaid expansion in a couple of years.”

Success of Kynect

According to a Deloitte client spotlight, in just one year, Kentucky’s Cabinet of Health and Family Services (CHFS) and Deloitte designed and deployed Kynect, which logged over 10,000 applications for coverage in less than two days after launch and averaged 1,000 enrollments per day in the first few weeks. Since then, more than 421,000 Kentuckians have enrolled in new health coverage and 2,045 business have completed applications and are eligible to offer coverage to employees.

Exporting Kynect

At a recent legislative committee meeting, Alvarado, a physician, suggested that Kynect become a regional exchange and charge other states for its services, using the profit to pay for Kentucky’s Medicaid expansion.

According to KHN, Alvarado’s concerns are that the state will have to start paying 5 percent of the Medicaid expansion costs in 2017, rising to the ACA’s limit of 10 percent in 2020. “We are looking at about a little over one billion dollars to find between 2017 and 2021, and we are going to have to find a way to pay for that,” said Alvarado. “There are states that want a good state exchange, but haven’t been able to run one. And there are several that are about to expand Medicaid and are looking at the federal exchange. So my thought was, why not approach those states that are going to expand Medicaid, offer to do the same services that a federal exchange would do, and run the exchange for them for a fee?”

Alvarado is encouraged that there has been bipartisan support of his plan. KHN reports that Beshear’s Chief of Staff has called it a “novel idea” and democrat colleagues have said the proposal should be looked at.