Medicaid block grants would pose challenges for states

If federal support for Medicaid was transformed into a block grant to states, with a per capita cap set by Congress, the impact would vary widely on different states, according to participants in a webinar sponsored by the Alliance for Health Reform. The webinar also focused on the reauthorization of the Children’s Health Insurance Program (CHIP) and state Medicaid waiver requests. The American Health Care Act (H.R. 1628) would transform the federal part of Medicaid into a block grant to states starting in 2020, with a per capita cap on spending. Also, it would roll back the enhanced federal spending for adult Medicaid beneficiaries newly eligible under the Affordable Care Act. (The legislation, which passed the House on May 4, has not yet been considered by the Senate.).

Current Medicaid challenges

Robin Rudowitz, associate director at the Kaiser Family Foundation, noted that certain states are at higher risk if federal funding for Medicaid is transformed into block grants with per capita caps. These states have challenging demographics, including higher populations of people with poor health status, high cost health markets, and limited ability to raise tax revenues. Tony Leys, a reporter with the Des Moines Register, noted that state Medicaid programs already struggle to cover expensive blockbuster drugs, such as those for treating hepatitis C. If the federal Medicaid payment was capped, Leys said, states would struggle to pay for the next blockbuster drug that comes along.

Per capita caps 

Chris Pope, senior fellow at the Manhattan Institute, noted that per capita caps do nothing to prevent future expansions of benefits or eligibility by future Congresses, and may be preferable to the long-term health of the Medicaid program rather than “letting the program continue on autopilot without any real scrutiny.” Hemi Tewarson, program director for the National Governors Association Center for Best Practices’ Health Division, noted, however, that because of the way most states have to prepare their annual budgets “if we were to introduce every year uncertainty around whether the per capita caps would be raised or lowered…that would throw a lot of chaos into state operations, not just impacting health care, but all the their programs they have to make decisions on.”

Pope said that it’s a political decision for states to maintain coverage for Medicaid enrollees if expansion funding from the federal government is rolled back. He added, “There is a substantial overlap between the Medicaid expansion population and the population that would be eligible for substantial subsidies at the bottom of the income distribution covered by the exchange.” These are people who would be eligible for basic insurance plans with capped out-of-pocket spending.

Leys noted that in Iowa, this would be difficult because the state is about to lose its last participating insurer in the Exchange. In addition, Rudowitz said that after the per capita caps would go into place in 2020, the restriction of growth in federal spending would compound over time, putting Medicaid beneficiaries in the higher risk states noted above at greater risk of losing any insurance coverage. Tewarson agreed, noting that for some states disenrollment would be necessary over time as the restriction in federal spending grows.

CHIP reauthorization

The transformation of Medicaid into a federal block grant is not a sure thing, but the deadline for reauthorizing CHIP is. Congress has to regularly reauthorize CHIP, which provides enhanced federal funding to states who offer expanded Medicaid coverage for children; the program is currently extended only until September 30, 2017. Tewarson noted that as states prepare their 2018 budgets, some are planning on the enhanced match being renewed, while others plan on it going away, in which case states have to budget reserves to make up for the lost matching funds. Rudowitz also noted that the continuation of CHIP is a coverage issue; if the program is not reauthorized or the enhanced funding is cut back, states will have to make decisions about coverage and contact beneficiaries in a timely manner.

Medicaid waivers

States have been able to request waivers from federal Medicaid requirements for years; waivers are used by states for demonstration programs related to delivery system reforms, long-term care, behavioral health, among other things. As of February 2017, 33 states have 41 approved Medicaid waivers in place. Since President Trump was inaugurated, states have submitted waivers that would require certain Medicaid beneficiaries to be employed, although none of these waivers have been approved.

Tewarson noted that one of the big question states have regarding waivers is the administrative aspect—”how do you operationalize them?” In considering work requirement waivers, the administrative issues get bigger, she said. “How do we connect systems? What are the real outcomes we want to see from this? How do we define work requirements and who would be exempt?” She also noted that while the Obama administration approved many Medicaid waivers, they had guideposts as to what would or would not be acceptable; work requirements were not one of the acceptable waiver options previously.

States chosen to participate in community behavioral health clinic demonstration

The two-year Certified Community Behavioral Health Clinic (CCBHC) demonstration program will begin in eight states—Minnesota, Missouri, New York, New Jersey, Nevada, Oklahoma, Oregon, and Pennsylvania—no later than July 1, 2017. HHS announced the participating states, which will implement a program designed to improve behavioral health services and integrate behavioral health with physical health care. The demonstration, which is authorized by Section 223 of the Protecting Access to Medicare Act (PAMA) of 2014 (P.L. 113-93), hopes to increase and make consistent use of evidence-based practices for Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries with mental and substance-use disorders.

The eight participating states were chosen from 19 applicants, following review that included ensuring the inclusion of a diverse selection of geographic areas, including rural and underserved areas. The program will reimburse the states through Medicaid for behavioral health treatment, services, and supports to Medicaid-eligible beneficiaries using an approved prospective payment system. CCBHCs must provide core services across the lifespan, utilize evidence-based practices and health information technology (HIT), report on quality measures, and coordinate care with physicians and hospitals in the community. The projects will be evaluated based on data from 21 quality measures, with qualitative data also obtained from interviews with state officials and clinic staff.

Populations to be served are adults with serious mental illness, children with serious emotional disturbance, and those with long term and serious substance use disorders, as well as others with mental illness and substance-use disorders. Beginning in December 2017, HHS will annually report on the performance of the demonstration programs.

OIG challenges industry to come up with an upgraded statistical sampling tool

CMS handles more than a trillion dollars in Medicare and Medicaid claims every year. Because not every claim can be scrutinized, statistical sampling is essential for effective oversight of these claims. The current sampling tool, RAT-STATS, was originally designed by the HHS Office of Inspector General (OIG) to give nonexperts a robust method for selecting statistically valid samples. It is the primary statistical tool for OIG’s Office of Audit Services. Although OIG does not require the use of RAT-STATS, many providers download the software and use it in their efforts to fulfill the claims review requirements for corporate integrity agreements or provider self-disclosure protocol.

The OIG has recently announced the launch of the Simple Extensible Sampling Tool Challenge (Challenge) to develop the foundation for an upgraded version of RAT-STATS. According to the OIG, while the current version of RAT-STATS is well validated, its user interface can be difficult to navigate and the underlying code makes the software costly to update. Therefore, the OIG needs a new, modern version of the software that is easy to use and can be extended in a cost-effective manner.

Current RAT-STATS

The RAT-STATS software was originally created in 1978 and has gone through several upgrades since then. Unlike a full statistical package that attempts to answer all types of questions for a wide range of users, RAT-STATS serves as a streamlined solution to handle the specific task of developing valid statistical samples and estimates within the health care oversight setting.

For example, an OIG investigator may pull a simple random sample in order to estimate damages for a provider suspected of fraud. RAT-STATS then generates valid pseudo-random numbers and outputs all of the information needed to replicate the sample. Once the investigator finishes reviewing the sample, he or she can then enter the results into RAT-STATS to get the final statistical estimate. While the investigator may need some basic training in statistics, they do not need the same level of expertise as would be required to navigate the many options available in a full-service statistical or data analysis package.

The Challenge

In order to complete the Challenge participants must create a software package that replicates the operation of four of the functions of the original RAT-STATS software: (1) single stage random numbers;
(2) unrestricted attribute appraisal; (3) unrestricted variable appraisal; and (4) stratified variable appraisal.

Teams of one or more members can participate in this Challenge. Each team must have a captain. Individual team members and team captains must register in accordance with the registration process set forth in the Federal Register notice.  The team captain is to serve as the corresponding participant
with OIG about the Challenge and to submit the team’s Challenge entry. While the OIG will notify all registered Challenge participants by email of any amendments to the Challenge, the team captain is expected to keep the team members informed about matters germane to the Challenge.

Submissions must meet all of the 20 rules and requirements outlined in the Federal Register notice. The technical specifications behind the four RAT-STATS functions along with 10 test datasets are available on the OIG website.

The Challenge began on September 28, 2016. The submission period runs from September 28, 2016, to May 15, 2017. The judging period runs from September 28, 2016, to June 15, 2017. A winner will be announced no later than July 1, 2017. The grand prize is $25,000.

 

Arizona KidsCare restart estimated to help 40K children

Arizona will begin taking applications on July 26, 2016, for its government-sponsored health-insurance program KidsCare; coverage will begin September 1, 2016. As a result, the population of uninsured Arizona children, currently around 162,000, is projected to drop significantly this fall, as an estimated 34,278 Arizona children would be eligible for KidsCare upon reinstatement of the program.

KidsCare, the Arizona version of the Children’s Health Insurance Program (CHIP), is administered by the state’s Medicaid program, which is known as the Arizona Health Care Cost Containment System (AHCCCS). Officials with AHCCCS expect that within its first year of being newly active, KidsCare will enroll 30,000 to 40,000 Arizona children. Arizona is the only state without an active CHIP program. According to a study by the Center for Children and Families at Georgetown University, the state has the third-highest rate of uninsured children in the U.S.

Opponents of KidsCare have expressed concern that Arizona will eventually have to pick up the tab for the program, as federal dollars are only appropriated to cover the cost of the program for the next year. Supporters said reopening the program was the moral thing to do for Arizona children.

KidsCare

Enrollment in KidsCare was frozen in 2010 after Arizona decided to cut eligibility and phase out CHIP benefits over time. KidsCare II, a temporary hospital financing agreement meant to fill the gap due to frozen enrollments beginning in 2010 until new coverage options were available to Arizona families with the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), was terminated at the end of January 2014.

An earlier Georgetown study observed that the termination of KidsCare resulted in families paying more for alternative subsidized health care coverage while receiving fewer benefits under that coverage (see Arizona CHIP discontinuation results in higher prices, less coverage, Health Law Daily, May 9, 2014).