CMS Warns: Stop Using Federal Marketplace to Process all Medicaid Applications

Tennessee’s Medicaid agency (TennCare) essentially stopped processing Medicaid applications for children and nondisabled adults when the modified adjusted gross income (MAGI) eligibility standards became effective. Nine months after open enrollment began for the newly eligible adult group, TennCare cannot take or process applications under the standards required by law. It has relied on the Federally Facilitated Marketplace (FFM) to perform these functions for all MAGI-based Medicaid applications since the requirements of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) became effective on October 1, 2013. On June 27, 2014, CMS sent a letter to Darin Gordon, director of TennCare, the state’s program, giving the state ten business days to submit a plan to comply with the law.

The State’s Obligations

Under Soc. Sec. Act sec. 1943, all states were required to streamline their Medicaid eligibility determination systems to share information with the Health Insurance Exchange and to enroll individuals whom the Exchange identified as eligible. The statute and related regulations set seven requirements for state eligibility determination systems. Specifically, the state system must be able to:

  • Accept a single, streamlined application;
  • Convert the 2013 income eligibility standards to the modified adjusted gross income; (MAGI) rules required by Soc. Sec. Act sec. 1902(e)(14);
  • Communicate the state’s eligibility standards to the FFM as needed;
  • Process applications based on the MAGI rules;
  • Transfer application files to and from the FFM as needed;
  • Respond to inquiries from the FFM on current coverage through Medicaid and the children’s health insurance plan (CHIP); and
  • Verify eligibility information using electronic sources.

According to the letter, Tennessee has met only one of those requirements, the ability to transfer application files.

Temporary Mitigations

States were required to use the MAGI standards for children and their parents beginning October 1, 2013. Many states were not able to update their systems by that deadline, and CMS required them to develop mitigation strategies to be used until the updates were complete. Tennessee was permitted to rely on the FFM, www.healthcare.gov, for these purposes through December 31, 2013, but it remains in place. The state also placed kiosks in its Medicaid offices so that residents could apply for Medicaid at those locations. However, it has not provided any help to applicants who are using the kiosks.

Effects on Tennessee Residents

The Tennessean reports that at least one woman could not access prenatal care because of delays and mistaken determinations of ineligibility. Her baby was born six weeks early and spent time in neonatal intensive care. Eventually, she was found eligible, and Medicaid paid the bill.

Presumptive Eligibility Problem

The ACA also required states to allow hospitals to make presumptive determinations of Medicaid eligibility. Tennessee has not met that requirement, either. The CMS letter mentioned that compliance with this requirement also could serve as a mitigation strategy until the system updates were complete.

The Agency’s Statements

According to the Tennessean, Darin Gordon, the TennCare director, said that the agency has enrolled 95,000 individuals in Medicaid since January 1, 2014, the highest number since the program started. He attributed some of the delays to the changes in the federal requirements for the project and others to its contractor, Northrup Grumman. Gordon said that the company has not achieved most of the deliverables under its $35 million contract, so it has been paid only $5 million so far. He also said that the agency was becoming “skeptical” about the contractor’s ability to predict when it could meet benchmarks, and that the agency was hiring another contractor to audit Northrup Grumman’s performance and project delivery dates.

Highlight on Missouri: Sharp Divisions Between Governor and Legislature

The nations battles over health care issues, including abortion and implementation of the Affordable Care Act, continue to play out in Missouri. In the latest development, women will not have to wait 72 hours for an abortion because Governor Jay Nixon (D) vetoed  HB 1307, which would have imposed the requirement. The bill did not include any exception to the 72-hour wait even in cases of rape or incest.   Governor Nixon stated that the bill was “disrespectful” and “would unnecessarily prolong the suffering of rape and incest victims and jeopardize the health and well-being of women.”

The bill would have tripled the current minimum waiting period. Even if it had contained exceptions for rape and incest, Nixon said, the bill would still have been unacceptable because the delay:

  • served “no demonstrable purpose” other than to add to the emotional and financial hardships attendant to unplanned pregnancy;
  • presupposed that women were not capable of making difficult decisions for themselves; and
  • made the procedure more dangerous, thereby endangering women’s health.

Nixon noted that Missouri law currently requires the following to be given to the woman, in person, and in print, at least 24 hours before an abortion:

  • a detailed explanation of the procedure, risks, and contraindications;
  • counseling concerning the available alternatives to abortion;
  • a list of agencies that provide alternative services;
  • advice about the obligation of the father to support the child;
  • a detailed description of the anatomical and physiological characteristics of the fetus at each stage of development, in two-week increments, accompanied by color photographs or images;
  • the opportunity to view an “active ultrasound” and hear the fetal heartbeat;
  • on each page of the material described above, prominently displayed, the statement: “The life of each human being begins at conception. Abortion will terminate the life of a separate, unique, living human being.”

Missouri law requires the physician to have admitting privileges at a hospital that offers obstetrical or gynecological services within 30 miles of the location where the abortion is performed and to inform the woman that the physician will be available to provide follow-up care at that hospital if complications arise.

Affordable Care Act Implementation

The Missouri legislature has steadfastly resisted the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). In July 2010, it barred any future Health Insurance Exchange from offering policies that would cover abortion, even via an optional rider. In the fall of 2012, the voters prohibited the establishment of a state-based Exchange without explicit approval of the legislature or of the people by referendum. The law barred state agencies and employees from providing assistance to any federally managed Exchange. In July 2013, the legislature passed (and Governor Nixon signed) a law requiring Navigators, trained individuals who assist consumers with enrollment through the Health Insurance Exchange, to be licensed. The law also prohibited Navigators from advising on the advantages or disadvantages of a particular policy without an insurance license.

Nixon and the legislature have never reached agreement to expand Medicaid under the ACA. Even a private option waiver like Arkansas’ was unacceptable to the Republican  majority.

Medicaid Enrollment

Seventeen of the 26 states that did not expand Medicaid by March 31, 2014 saw increases in enrollment as eligible individuals came “out of the woodwork.” According to CMS’ enrollment figures and an analysis by Avalere Health, Missouri’s Medicaid enrollment has declined, however, along with six other states. CMS and Avalere compared Medicaid enrollment during the three months preceding open enrollment, i.e., July through September 2013, to enrollment at the end of each month in 2014. Enrollment dropped from  an average of 863,417  to 829,585 in March 2014.  According to the St. Louis Post-Dispatch, state officials attribute the drop to “people getting jobs” in an improved economy.

According to the Bureau of Labor Statistics, however, about 200,362 individuals, 6.6 percent of Missouri’s labor force, were unemployed in August 2013; the preliminary numbers for March 2014 were 204,209 unemployed individuals, about 6.6 percent of the state’s work force.

States Should Expand Medicaid: The Consequences of Ignoring Federal Dollars

Twenty-four states have not yet expanded their Medicaid services, potentially depriving themselves of billions of federal dollars and leaving 5.7 million people without health care coverage in 2016, according to research by the Urban Institute, a nonprofit social and economic policy research organization. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) allows the opportunity for substantial economic boosts to states that expand their Medicaid eligibility to nonelderly members of families that earn less than 133 percent of the federal poverty level, so why haven’t these states taken advantage of this opportunity?

The Study’s Evidence

The Council of Economic Advisors (CEA) released a report along with the Urban Institute that gathered data and formed analyses on past Medicaid policy decisions’ effects on states as well as on economic and health policy literature. The analysis pointed to several benefits of expanding Medicaid eligibility including improved health care access, better preventative care, financial security, improved mental health, and healthy state economies.

Some of these benefits result in:

  • 1.4 million additional people having a usual source of clinic care;
  • 651,000 additional people receiving “all needed care” over a full year;
  • 829,000 people getting preventative cholesterol-level screenings and 214,000 middle-aged women receiving mammograms;
  • 255,000 fewer people handling devastating medical costs each year;
  • 810,000 fewer people having trouble paying other medical-related bills; and
  • 458,000 fewer people with depression.

As if all this weren’t enough, the federal government will pay 100 percent of health coverage costs for newly eligible individuals through 2016 and 90 percent through 2020 and subsequent years. In 2014, the government paid only 50 to 70 percent of health care costs for eligible low-income persons. The Urban Institute said that if all states would increase Medicaid eligibility, states would see a reduction in uncompensated care, offsetting additional Medicaid costs and producing $10 billion in savings over 10 years.

The CEA further outlines direct consequences of expanding Medicaid in states, including its effects on health insurance coverage, using the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) that gives a state-by-state analysis on how the decision to expand (or not) Medicaid affects health insurance coverage in each state. The model shows that if all states increased the eligibility, there would be 10 million insured people by 2016. Finally, the study showed states with expanded Medicaid report that 575,000 have excellent overall health, which allow them to be gainfully employed and contribute to their communities—a lesson for the 24 states refusing to expand the program.

Highlight on Montana: Hackers Tapped into 1.3 Million Patients’ Records Last Year

On Tuesday, June 24, 2014, the Montana state officials announced that they are notifying 1.3 million people that their personal information may have been accessed in a security breach that occurred in last July. The Montana state government believes that the state’s health department computer server was hacked and, as a result, the personal information of some 1.3 million individuals was exposed. The breach was not discovered until May of this year, ten months after it occurred. While officials have reported that there is no evidence that the data was actually stolen or used in any way, Montana is now taking steps to identify any resulting fraud and prevent future security breaches.

Montana Breach

According to local reports, the hackers, who are of unknown origin, may have had access to Social Security numbers as well as other personal information contained in patients’ health records. Montana also identified and notified an additional 3,100 department employees and contractors because it is believed that the exposed information may have contained their bank account information. Officials also noted that 50 years of birth and death certificate information was contained on the hacked server. While Montana only has approximately one million residents, the state government notified current and former residents as well as the estates of deceased residents.

It has been estimated that up to 17,000 unauthorized attempts to enter the state’s data center occur each hour, and a total of six billion attempts to hack the system are acknowledged each year. Richard Opper, the director of Montana’s Department of Public Health and Human Services, stated,“There is no information, no indication, that the hackers really accessed any of this information or used it inappropriately,” but the state decided to take steps to notify the public of this breach and to rectify any resulting fraud, “erring on the side of displaying an overabundance of caution.”

After the announcement of the breach, the state offered those potentially affected free credit monitoring and free identity protection insurance. Those services could cost as much as $2 million and will be covered by the state’s cyber and data security insurance policy. Additionally, the Montana system has undergone security upgrades since the breach was identified.

Other Hacks

Montana’s Chief Information Officer, Ron Baldwin, stated, “This type of unauthorized access is not unique to Montana,” and such a security breach is an aspect of “the nature of the world we live in today.” Indeed, sources noted that in 2012 health information data contained on a Utah state health server was compromised in this same way and, in turn, the private information of 780,000 patients was released. The national data on this topic is even more telling. A survey conducted by the Identify Theft Resource Center indicated that in 2013 in the U.S., medical-related identity thefts accounted for 43 percent of all identity thefts. Moreover, a Kaiser Health News report cited HHS data that since 2009, “the medical records of between 27.8 and 67.7 million people have been breached.” The Kaiser report, which was released in February of this year, found that the implementation of the Patient Protection and Affordable Care Act (ACA) “has raised the stakes,” in terms of potentially exposing Americans’ confidential health records and the information contained therein. While the report referenced the two laws that have put certain provisions in place to prevent such security breaches, namely the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology Act of 2009 (HITECH), it also implied that these laws did not go far enough to truly prevent the exposure of private information in the emerging health care system.