Highlight on Pennsylvania: Better Medicaid spending through technology

Pennsylvania lawmakers introduced legislation attempting to reduce spending and improve patient care within the state’s Medicaid program. Under the proposed legislation, Senate Bill 600, the state would adopt new technology to monitor and identify areas of unnecessary or wasteful health care services and procedures. The state would have 90 days within enactment of the bill to pick a technology company and implement the monitoring. Lawmakers noted that by providing more information, patients and providers, alike, could make better health care decisions. Consequently, this would reduce Medicaid spending. Pennsylvania is one of the highest spenders per Medicaid enrollee in the U.S., with one out of every four dollars in the state’s annual budget accounted for by Medicaid.

The lawmakers have started to review tech companies with prior experience in collecting and monitoring patients to improve care, notably companies that have worked with Alaska’s Medicaid program. The tech company involved  reduced misdiagnosis rates, improved outpatient care, cut waste, and reduced Medicaid expenditures in Alaska by over 14 percent. According to Pennsylvania lawmakers, a similar program could generate between $2 billion and $4 billion in annual savings.

In fiscal year 2015-16, the federal government spent about $15.3 billion on Medicaid in Pennsylvania, while the state spent about $10.6 billion, bringing the total to $25.9 billion; the state’s Department of Health and Human Services budget over the past few years has increased by about $500 million annually. The influx of approximately 700,000 new patients into the Medicaid system is a 20 percent increase and has cost an additional $4.6 billion. State lawmakers are concerned that the push for health care reform by the federal government will result in a cut in the federal portion of Medicaid to the state.

 

States try to manage expectations for Medicaid managed care

When CMS updated regulations regarding Medicaid managed care in May 2016, it was the first significant update to these regulations since 2002. Over the past year, as speakers at the American Health Lawyers’ Association Institute on Medicare and Medicaid Payment on March 29, 2017, noted, states have started the multi-year process of complying with the new rules, while dealing with resources issues at the state level and political change in Washington, D.C.

About 80 percent of the 73 million Medicaid enrollees are in some kind of managed care program, according to Lindsey Browning with the National Association of Medicaid Directors. Thirty-nine states and the District of Columbia have contracted with managed care entities to deliver care to all or some of their Medicaid beneficiaries.

Four options

Prior to the issuance of the revised regulations (81 FR 27498, May 6, 2016) states had basically one option for putting a managed care plan in place—requesting a Medicaid state plan amendment from HHS. Under the revised regulations states now have four options to implement managed care waivers under various provisions of the Social Security Act: (1) a Sec. 1932 state plan waiver; (2) a Sec. 1915(a) waiver (waiving competitive procurement process); (3) a Sec. 1915(b) waiver, requiring all enrollees, including dual eligibles and children with special health care needs to enroll in managed care; and (4) a Sec. 1115 waiver (which may permit coverage of services not otherwise covered in Medicaid) (see CMS modernizes Medicaid managed care, Health Law Daily, May 6, 2016).

James Golden, director, Division of Managed Care Plans at CMS, noted that full implementation of the revised regulations will take three to five years, and that the key to success is how well states work with affected stakeholders—both managed care entities and beneficiaries. “CMS expects the states to take the lead in setting standards,” Golden said.

State challenges

Browning highlighted two key challenges that states face – setting up adequate networks of providers so managed care beneficiaries can actually access health care; and limited staff capacity to drive expansion of Medicaid managed care alongside a number of other Medicaid related regulations.

Impact of new administration

A further complication, Browning noted, is the new Trump Administration and new leadership for HHS and CMS. She noted that the new CMS Administrator, Seema Verma, indicated an interest in re-examining all recent rules related to Medicare and Medicaid during her confirmation hearing. Browning also pointed to the Executive Order issued by President Trump which requires all agencies to create a Task Force to review existing regulations with the goal of repealing many of them. Browning noted that both Verma and HHS Secretary Tom Price are interested in increased state flexibility around health programs.

In addition, Browning said that any changes to the Affordable Care Act (ACA) (P.L. 111-148) may impact the new Medicaid managed care regulations, for example, she noted that a key goal of the managed care rule was alignment with qualified health plan requirements under the ACA. Would this change if the ACA’s health insurance Exchanges are eliminated? Finally, she said that any structural changes to Medicaid would likely require revised managed care rules.

OIG reviews MassHealth and its Medicaid data and information system safeguards

MassHealth failed to adequately safeguard data and information systems through its Medicaid Management Information System (MMIS) according to an audit by the HHS’ Office of Inspector General (OIG) undertaken to determine whether Massachusetts safeguarded MMIS data as required under federal requirements.

What is MMIS?

The MMIS is “an integrated group of procedures and computer processing operations (subsystems) developed at the general design level to meet principal objectives” which are: Title XIX program control and administrative costs; service to recipients, providers and inquiries; operations of claims control and computer capabilities; and management reporting for planning and control. States receive 90 percent federal financial participation (FFP) for design, development, or installation of MMIS and 75 percent FFP for operation of state mechanized claims processing and information retrieval systems.

MassHealth MMIS

The Massachusetts Executive Office of Health and Human Services is responsible for administering the state Medicaid program, commonly known as MassHealth, and information technology architecture, maintenance, and support is provided by the Massachusetts Office of Information Technology. Application support is provided through a contract with Hewlett-Packard.

The audit

Audits of information security controls are performed routinely on states’ computer systems used to administer HHS-funded programs and states are required to implement computer system security requirements and review them biennially. The OIG’s audit of MassHealth’s MMIS included MassHealth’s websites, databases, and other supporting information systems. The review was limited to security control areas and controls in place at the time of the visit. Specifically, the OIG looked at MassHealth’s implementation of federal requirements and National Institute of Standards and Technology guidelines regarding: system security plan, risk assessment, data encryption, web applications, vulnerability management, and database applications. Preliminary findings were communicated directly to MassHealth prior to the report’s issuance.

OIG’s findings

The OIG found MassHealth did not safeguard MMIS data and supporting systems as required by federal requirements. Vulnerabilities were discovered related to security management, configuration management, system software controls, and website and database vulnerability scans. Should exploitation of the vulnerabilities have occurred (and there was no evidence that it had), sensitive information could have been accessed and disclosed and operations of MassHealth could have been disrupted. Sufficient controls must be implemented over MassHealth Medicaid data and information systems.

Specific vulnerabilities uncovered were not detailed in the report because of the sensitive nature of the information. However, specific details were provided to MassHealth so it may address the issues. In response to the report, MassHealth described corrective actions it had taken or planned to take in response to the vulnerabilities.

States adopting ACA’s health care provisions provide more access to care

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) “has significantly affected health insurance coverage and access among U.S. adults. However, the law gives states flexibility in implementing certain provisions, leading to wide variations between states in consumers’ experience,” according to a report issued on March 22, 2017, by the Commonwealth Fund. The Commonwealth Fund analyzed the Commonwealth Fund Biennial Health Insurance Survey, 2016, which was conducted by Princeton Survey Research Associates International, to compare the differences in insurance coverage, access to care, costs of care, and medical bill and debt problems in California, Florida, New York, and Texas, the nation’s four largest states.

Findings

The uninsured rate has fallen in all four states since 2012. The report noted the following variations for 2016:

  • The uninsured rates among adults age 19 to 64 varied from 7 percent in New York and 10 percent in California to 16 percent in Florida and 25 percent in Texas.
  • The proportions of residents reporting problems getting needed care because of cost was significantly lower in California and New York than in Florida and Texas.
  • Lower percentages of Californians and New Yorkers reported having a medical bill problem in the past 12 months or have accrued medical debt compared to Floridians and Texans.
  • The uninsured rates for young adults were 8 percent in California, 10 percent in New York, 23 percent in Florida, and 30 percent in Texas.
  • The uninsured rates for adults with incomes below the federal poverty level were 9 percent in California, 15 percent in New York, 22 percent in Florida, and 39 percent in Texas.
  • Adults in small firms are more likely to be uninsured in Florida (24 percent) and Texas (37 percent) than in California (14 percent) or New York (12 percent).
  • Cost-related access problems impacted 28 percent of Californians, 29 percent of New Yorkers, 41 percent of Floridians, and 45 percent of Texans.
  • Medical debt impacted 29 percent of Californians and New Yorkers, while 41 percent of Floridians and 44 percent of Texans were impacted by medical debt.

Factors influencing variations

Factors that might explain the variations include (1) whether the state expanded Medicaid eligibility, (2) whether it ran its own health insurance marketplace, (3) what the uninsured rate was prior to the ACA, (4) differences in the cost protections provided by private health plans; and (5) demographic differences.

California and New York both operate their own health insurance marketplaces and have expanded eligibility for Medicaid to adults with incomes at or below the federal poverty level. Florida and Texas use the federal marketplace to enroll residents in health plans and did not expand Medicaid eligibility. In addition, the report noted that the higher rate of insurance coverage and lower deductibles in California and New York likely played a role in the two states’ lower rates of cost-related access problems.

Although Florida and Texas experienced enrollments in private plans through the health insurance marketplace, they have made less progress covering uninsured residents. Of the four states included in the report, Texas had the highest uninsured rate in every age group for 2016. A contributing factor for Texas’ higher uninsured rate is the number of undocumented immigrants residing in Texas. The ACA does not provide access to any new coverage options for undocumented immigrants.