Alabama wants to push back Medicaid managed care demonstration

Alabama wants to delay the transition of its Medicaid program to a managed care model. In a letter to CMS, the state requested CMS’ acceptance of amended terms for the state’s Medicaid transition demonstration. The request makes no substantive changes to the program. Its purpose is to allow the state more time to appropriate funding and complete readiness activities.

Waiver

In 2016, CMS approved a Section 1115 waiver permitting Alabama to transition its Medicaid program to a managed care model relying on regional care organizations (RCOs). Under the waiver, Alabama was granted almost $750 million to start and improve its RCO program. However, even with the federal funds, the state says it does not have the necessary funds to get the program up and running.

Delay

The state is requesting to change the demonstration time period from April 1, 2016, through March 31, 2021 to April 1, 2017, through March 31, 2022. The change is driven primarily by financial concerns. Alabama officials say the delay allows more time for the appropriation of additional state funding and completion of readiness activities. Finally, the letter indicated the delay would also help the state meet broader demonstration goals: addressing fragmentation in health care delivery, improving chronic disease prevention and management, improving access and care coordination, improving birth outcomes, and enhancing the financial efficiency of the health care delivery system.

Highlight on Alabama: Class action against state alleges inadequate prison mental health care

Focus on the issue of accessibility to quality mental health care has been growing in recent years, and the state of Alabama is facing intense scrutiny for the possible failure to treat mentally ill inmates. A federal trial began on December 5, 2016, in which dozens of inmates are expected to testify.

This trial is one part of a larger suit filed by the Southern Poverty Law Center (SPLC) in 2014 alleging that overall, medical care in the state’s prisons is below constitutional standards. Claims that the Department of Corrections (DOC) failed to accommodate prisoners with physical disabilities were previously settled, with the DOC agreeing to improve its facilities.

U.S. District Judge Myron Thompson granted class action status to the mental health portion of the case in November 2016,  noting that the failure to provide funding for staff creates an Eighth Amendment violation, even if this is caused by a lack of available money.

The claims currently being heard allege that the mental health care, provided through the contractor MHM Correctional Services, fails to provide enough providers to offer care, including psychiatrists, psychologists, and nurses. Additionally, the lack of security staff causes interruptions in care. This results in failing to identify mentally ill inmates and properly diagnose the severity of illness in those who are identified. These issues have led to a failure to prescribe medication, manage side effects, offer adequate counseling, and properly monitor and treat inmates who are suicidal and self harm.

According to a local news report, the first inmate witness had been in prison for six years and is currently at the Donaldson Correctional Facility. He testified that he had physical and mental illnesses and was prone to self harm, but he only sees mental health staff approximately every two months for sessions lasting about five or 10 minutes.

SPLC stated that other expected witnesses include a Dr. Kathryn Burns, a mental health expert who has inspected nine Alabama prisons and their mental health procedures.

This suit is not the only attention Alabama’s prisons are currently receiving. In October 2016, the Department of Justice began a statewide investigation into the conditions in Alabama’s prisons. This investigation is to focus on efforts to protect prisoners from abuse and excessive force at the hands of other prisoners or correctional offers, as well as the provision of sanitary, secure, and safe living conditions.

Update on Controversies in Medicaid Managed Care

Since October 2012, Kentucky’s Medicaid officials have been on notice that Kentucky Spirit, the Medicaid managed care organization  (MCO) owned by Centene, was terminating its contract at the beginning of July. As we reported in June, the Circuit Court in Franklin County ruled that neither party had breached the contract yet. That meant that when Kentucky Spirit terminated, it would breach the contract, and, therefore,  would be liable to the state for liquidated, or predetermined, damages. Kentucky Spirit appealed.

As the termination date approached, state officials returned to court seeking an order to keep the MCO from leaving. On June 26, 2013, Judge Thomas Wingate denied the state’s request. For one thing, the appeal ended his jurisdiction over the matter. But, he added, the court had repeatedly cautioned the state to prepare for the termination, and its lack of preparation did not justify  the extraordinary remedy of an injunction.

State officials asked the Kentucky Court of Appeals for an emergency order to compel Kentucky Spirit to stay on the job through August. On Monday, July 1, 2013, Chief Appeals Court Judge Glenn Acree denied the request for the same reasons. The state had ample time to prepare, and it should not need another two months to transition the MCO’s 124,000 members to one of the two remaining plans. Kentucky Spirit  ceased offering services to beneficiaries at 12:01 a.m. Saturday, July 6, 2013, although about 100 employees remain to help patients and providers with the transition.

Developments in Other States

Mississippi also moved to Medicaid managed care in 2012. In June 2013, Dr. Tim Alford, president of the Mississippi Academy of Family Physicians, met with Governor Phil Bryant  and testified before a state House committee. Dr. Alford called the managed care program “wildly unpopular” and stated that it was disruptive to the physician-patient relationship.

KanCare has been operational about six months now. So far, there have been few complaints. However, owners of small pharmacies say that the MCOs’ maximum allowable cost formula for some prescription drugs doesn’t cover their costs.

Now Alabama is beginning the latest adventure in Medicaid managed care contracting.

 

Thirteen States, Including IL, FL, CA, See Opportunity to Make Medicaid Cuts

Amid the Obama Administration’s encouragement for states to expand their Medicaid rolls per the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), 13 states have implemented cuts to the program or are preparing to implement reductions in provider payments and benefits offered to Medicaid recipients. Some states may have seen June’s Supreme Court decision, requiring that states be allowed to opt-out of PPACA’s Medicaid expansion scheme, as an opportunity to scale back their Medicaid programs.

Eligibility Requirements

While the decision did not specifically state so, some state level officials have interpreted the lifting of the Medicaid expansion requirement as the lifting of the PPACA-imposed prohibition from altering their Medicaid eligibility requirements. Wisconsin has already changed its policy to deny Medicaid coverage to non-pregnant adults who are both offered affordable employer-sponsored coverage and have an income that exceeds 133 percent of the federal poverty level (FPL). Some adult recipients must also be responsible for paying new or increased monthly premiums. Wisconsin officials estimate these changes will save the state around $28.1 million.

Other states that have made changes to their eligibility requirements since the PPACA decision or are preparing to do so include the following:

  • Hawaii–Non-pregnant adults will no longer be eligible for Medicaid if their income exceeds 133 percent of the FPL (the limit was formerly 200 percent of FPL).
  • Illinois–Parents’ income must not exceed 133 percent of FPL (formerly 185 percent of FPL).
  • Connecticut–Plans to limit adult coverage to those with less than $10,000 in assets, not including one car and a home, and to calculate income for adult children aged 19 – 25 living at home by including their parents’ assets and income.
  • Maine–Plans to reduce parental eligibility to 100 percent of the FPL (currently 200 percent of FPL) and to do away with coverage for 19 and 20-year olds.

Drug Benefits

Currently, 16 states limit the monthly amount of drugs that recipients can obtain through their Medicaid programs. Four states have increased prescription drug copays and/or imposed monthly caps since the PPACA decision was issued:

  • Alabama–With the exception of long-term care patients and HIV and psychiatric drugs, Medicaid beneficiaries were limited to one brand name drug through July 31. Now, beneficiaries are limited to four brand-name drugs monthly.
  • California–Implemented $1 and $3 copays for specific drugs.
  • Illinois–Program recipients are now limited to four prescriptions monthly, in addition to being subject to increased copays. Recipients may seek state approval to receive more than four drugs.
  • South Dakota–Beneficiaries must now pay copays of $1 for generic drugs and $3.30 for brand name drugs.

Other Cuts

In addition to budget-saving measures surrounding prescription drug benefits and program eligibility, states have implemented a variety of other cost reductions since the June decision, including provider payment cuts, emergency room copays, and reductions in coverage. Among those cuts are the following:

    • Alabama–Physician and dentist reimbursement has been reduced by 10 percent. The frequency of routine eye exams has been reduced to one every three years, and eyeglass coverage has been completely eliminated.
    • California–Payment rates have been frozen for nursing facilities while private hospital reimbursement has been reduced by $150 million. Clinical laboratory reimbursement has been lowered by 10 percent.
    • Colorado–Copays and enrollment fees, to be determined by family income, have been added to the Children’s Health Insurance Program. Nursing home reimbursement rates have been reduced by 1.5 percent, and orthodontics coverage has been limited.
    • Florida–Reimbursement rates have been lowered by 1.3 percent for nursing facilities and 5.6 percent for hospitals. Florida is planning to reduce the allowable number of home health visits for non-pregnant adults to three per day maximum, emergency room visits to six per year maximum, and primary care visits to a maximum of two monthly, pending federal approval.
    • Illinois–Reduced reimbursement to non-safety net hospitals by 3.5 percent and to non-physician, non-dentist providers by 2.7 percent. Routine dental care and chiropractic services are no longer covered. Beneficiaries who visit an emergency room for non-emergency purposes now incur a $3.65 copay.
    • Louisiana–Payments have been reduced by 3.7 percent to dialysis centers and dentists, 3.4 percent to non-primary care physicians, and 1.9 percent to mental health providers.
    • Maine–Services obtained at ambulatory surgery centers and sexually transmitted disease clinics will no longer be covered. With the exception of pregnant women, smoking cessation products will also not be covered.
    • Maryland–Payments to hospitals have been lowered by 1 percent and by 2 percent for nursing facilities.
    • New Hampshire–Hospital reimbursement has been reduced by $160 million.
    • South Dakota–Coverage for non-emergency adult dental services has been limited to $1,000 per year.