Maine Sues for Expedited Review of Medicaid Amendment

The state of Maine has filed a lawsuit in federal court to force the Centers for Medicare and Medicaid Services (CMS) to take action on the state’s proposed State Plan Amendment (SPA) to its Medicaid program. The SPA, if approved, would modify eligibility requirements for MaineCare, Maine’s Medicaid program, effectively dropping thousands of residents from its rolls. When the state submitted the SPA to CMS, it had requested expedited review and a decision by September 1, 2012, so that it could implement the amendments by October 1, 2012 to balance its budget as mandated by the state’s Constitution. CMS issued a letter denying an expedited process on August 31, 2012; Maine filed suit with the First Circuit Court of Appeals on September 4th.

PPACA & Proposed Amendments

Up until the U.S. Supreme Court’s June ruling on the health care reform law, the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), states were mandated to expand their Medicaid programs to cover individuals who make less than 133 percent of the federal poverty line, which would increase Medicaid coverage nationwide to a projected 17 million people. However, the Supreme Court held that the federal government would be overreaching the power granted to it by the U.S. Constitution to not allow states to opt out of the expansion. The remainder of PPACA’s provisions were left intact by the Court.

Maine Governor Paul LePage and other state officials have taken a very broad interpretation of June’s decision as stated by the governor’s spokesperson, Adrienne Bennett, who said, “Maine believes the Supreme Court decision confirms that states have the flexibility to manage their Medicaid program without risking the loss of federal funds.” The supporting rationale is that PPACA’s “maintenance of effort” provision, which penalizes states for tightening eligibility requirements beyond what they were in 2010, is also unconstitutional based on the Court’s reasoning regarding Medicaid expansion.

The Congressional Research Service, after reviewing the Court’s decision, concluded that the ruling did not alter the enforceability of the “maintenance of effort” provision; however, their opinion is not legally binding. The Obama administration, likewise, has stated that this decision does not enable states to implement stricter eligibility requirements.


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.


New Jersey, Maine to Pay Back Millions in Federal Medicaid Payments

A series of improper payments have left New Jersey’s and Maine’s Medicaid programs with sizeable bills from the federal government, which splits the cost of the programs with the states. Maine is estimated to owe $3.8 million for its mistake, while New Jersey’s debt comes to a hefty $61 million.

MaineCare’s $7.7 Million Computer Malfunction

Mary Mayhew, Maine’s Health and Human Services (DHHS) Commissioner, came forward with the information that MaineCare, the state’s Medicaid program, paid $7.7 million for medical services for people who were ineligible for the program. An error in the DHHS’s computer system resulted in 7,730 people remaining on MaineCare’s rolls that should have been removed due to a change in eligibility status.

DHHS and Mayhew have faced a great deal of criticism for waiting to disclose the computer problem until the state’s legislature passed a budget that helped patch DHHS’s budget to avoid the reduction of benefits to MaineCare beneficiaries. Many state legislators have called for an official investigation into the whether DHHS could have disclosed the improper payments at an earlier date.

Representative Peggy Rotundo addressed Mayhew at a meeting of the legislature’s Appropriations Committee, raising concerns that “[w]e did not get this information in a timely way when we were putting together the budget. We were having public discussions about figures and wanting to get accurate figures, and someone out there was not tuned in to the fact that numbers were relevant to what we were doing.”

Mayhew responded that it was difficult for the department to ascertain which computer system problems required reporting to legislators because the problems were so numerous. She also cast doubt on whether the portion of the improper payments made by the state could be recovered, saying, “These health care providers that provided services had a card” and properly provided services to residents they saw as eligible for MaineCare services. “I don’t see an opportunity to recover,” she concluded.

New Jersey’s Undocumented Services

During a 2 year period, from 2005 to 2007, New Jersey’s Medicaid program received $1.4 billion for a home care program, which aims to keep mentally and physically disabled beneficiaries out of institutions. In addition to frequently failing to follow federal procedures, the state neglected to document many services that it billed for, such as respite care. Often, patients’ disabilities were not regularly assessed, as required for federal reimbursement.

In October, Valerie Harr, the director of the state’s Division of Medical Assistance and Health Services, sent a letter to federal government auditors, supplying them with supplementary documents and requesting a recalculation of the Medicaid program’s debt. Auditors responded with a bill of $61 million, less than the originally estimated $90 million.