Medicaid waiver applications test new administration’s policies

If CMS approves Maine and Wisconsin’s proposed Section 1115 Medicaid waivers, it will be marking a departure from the Obama Administration’s stance against work requirements and other previously unapproved proposals. The Kaiser Family Foundation (KFF) examined provisions of state waivers that are unrelated to Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) Medicaid expansion, and opined that the Maine and Wisconsin proposals could result in a loss of coverage and higher costs for consumers. Both states’ proposals are open for public comment in the month of May; if approved, implementation could take place within six months.

Work requirements

The Obama Administration opposed the imposition of work requirements as a condition of the Medicaid program, finding that it did not promote health and access to care. However, HHS Secretary Price and CMS Administrator Varma recently issued a letter to state governors, stating, “The best way to improve the long-term health of low-income Americans is to empower them with skills and employment.” Verma also said that CMS would review Section 1115 waiver requests with an eye to encouraging “meritorious innovations that build on the human dignity that comes with training, employment and independence” (see Did CMS just sound the death knell for Medicaid expansion?, March 15, 2017).

Wisconsin’s plan would require childless adults ages 19 to 49 to work or participate in job training for 80 hours per month, but would allow exemptions for mental illness, receipt of Social Security Disability, and several other categories. Maine’s proposal would require traditional adults ages 19 to 64 to participate in paid employment or approved job training for 20 hours per week, volunteer 24 hours per month, enroll at least half-time at an academic institution, participate in combined work and education for 20 hours per week, receive unemployment benefits, or provide caregiver services for a non-dependent disabled person, but only if they are planning a career in that area. If approved, they would be the first approved work requirements in the nation. Wisconsin has also proposed drug screening, while Maine has proposed premiums higher than 2 percent of income in some cases. Both states proposed eligibility time limits. No such proposals have been approved in the past.

KFF concerned

KFF expressed concern that both states admitted that coverage would decrease as a result of the waivers and that costs would increase. It noted that CMS has traditionally required Section 1115 waivers to be budget neutral, resulting in post-waiver federal costs that do not exceed pre-waiver federal costs. It is also concerned that proposals that have been tested in other states, including health behavior programs, are overly complex, and that other provisions, such as a requirement that individuals pay a premium before coverage being, create barriers to access or result in loss of coverage.

Highlight on Wisconsin: Medicaid waiver could be first of its kind

Wisconsin Governor Scott Walker (R) supports a number of novel Medicaid requirements for the state’s beneficiaries, including premium payments, drug testing, and a work requirement. Although a formal plan is not expected to be released until mid-April and sent to HHS by the end of May, if the plan is approved, Wisconsin would become the first state in the country with mandatory drug testing for Medicaid beneficiaries. Testing would be based upon Medicaid applicants’ answers to a screening. The proposal would mandate treatment for those who test positive. The screening is designed to limit the number of individuals in the program.

Price and Verma

The Wisconsin approach is part of a bigger theme of Republican-led states looking to limit Medicaid spending. Governors expect reciprocation from new HHS and CMS leaders regarding the restrictive ideals and, accordingly, are looking to get more out of Medicaid waivers than the Obama Administration allowed. The strategy is not without its rationale. In their first joint action, HHS Secretary Price and CMS Administrator Verma sent a letter to state governors discussing potential improvements to the Medicaid program. In that letter, Price and Verma wrote that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) expansion of Medicaid “to non-disabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program.” Also, prior to her position as Administrator, Verma worked on a proposed work requirement for Indiana’s Medicaid program. The Obama Administration rejected that proposal.

Drug screening

While the Obama Administration allowed states to differ in the expectation they placed upon program enrollees, governors like Walker are hoping they will see more eye-to-eye with Price and Verma than they did with Obama Administration officials on restrictive policies like work requirements. In light of the recent failure of the American Health Care Act (AHCA) in Congress, and that legislation’s attempt to cut Medicaid funding through per-capita caps, the Trump Administration is incentivized to find savings in other places. Walker believes Wisconsin’s plan is a promising approach. However, there is concern that the Trump Administration will be opposed to the drug screening because the Administration is trying to appear sympathetic to the growing drug epidemic. Opponents criticize the drug screening measuring, noting that the best way to help drug abusers is to expand Medicaid and provide them with the care they need.

Unconstitutional?

Other critics have called the drug screening measure illegal. However, the state’s Medicaid director defended the plan to test Medicaid recipients for drug use, rejecting assertions that the requirement would be unconstitutional. In addition to asking the Trump Administration whether Wisconsin can drug test childless adults on Medicaid, Governor Walker plans to request the ability to drug test able-bodied adults seeking other public benefits including food stamps and jobless payments—a request the Obama administration denied.

Highlight on Wisconsin: As opioid overdose and deaths rise, state seeks $15.7 million in SAMHSA support

The rate of opioid overdose deaths in Wisconsin has risen approximately 81 percent from 2006 through 2015, according to a new Wisconsin Department of Health Services (DHS) report, titled “Select Opioid-Related Morbidity and Mortality Data for Wisconsin.” In response, the Wisconsin DHS has submitted an application for up to $15.7 million in federal funding to boost the state’s response to the growing misuse and abuse of opioids from the Substance Abuse and Mental Health Services Administration (SAMHSA). The amount of the grant is based on the unmet need for opioid-related treatment and the number of opioid-related deaths in the state. Wisconsin is eligible to receive up to $7,636,938 each year for the next two years under the 21st Century Cures Act.

The DHS report provides statewide and county-level data on opioid-related deaths and hospital visits, neonatal abstinence syndrome (NAS) (in which an infant is born with withdrawal symptoms from substances taken by the mother), and data on ambulance runs in which naloxone (a medication used to reverse opioid overdose) was administered. The report includes these data highlights:

  • The rate of opioid overdose deaths increased from 5.9 deaths/100,000 residents in 2006 to 10.7 deaths/100,000 in 2015.
  • Rates of drug overdose deaths involving opioids were higher among counties in the southeastern region of the state (Milwaukee area), and higher among men compared with women.
  • Drug overdose deaths involving opioids were highest among young men aged 25-34, and among women aged 35-54.
  • Hospital visits involving opioid acute poisoning (including overdose) increased from 25.3 to 52.0 per 100,000 between 2006 and 2014.
  • The rate of ambulance runs in which naloxone was administered rose from 51.2 to 67 per 100,000 from 2011 to 2015.
  • The rate of NAS increased from 2.0 to 8.7 per 1,000 live births from 2006 to 2014, a rate increase of 335 percent.

In 2016, DHS issued a Public Health Advisory due to the opioid epidemic. In 2017, Governor Scott Walker called for a special session of the legislature to consider recommendations presented by the Governor’s Task Force on Opioid Abuse. New legislative proposals will build on efforts already underway under the HOPE (Heroin, Opioid Prevention and Education) agenda, which includes 17 bills aimed at prevention and treatment of opioid addiction and overdose.

Pending approval from SAMHSA, the funds will be used to:

  • Support community coalitions focused on reducing the nonmedical use of opioids among people age 12 to 25.
  • Establish a hotline to provide information on treatment services and recovery supports.
  • Expand access to treatment for uninsured and underinsured individuals.
  • Establish new opioid-specific treatment programs to reduce the distance people have to travel for these services.
  • Establish a network of individuals in long-term recovery from the misuse and abuse of opioids trained to coach people through the treatment and recovery process.
  • Develop training for professionals on proven intervention and treatment strategies for opioid misuse and abuse.

 

Wisconsin Insurers in Financial Distress Over Medicaid Program

As of October 31, 2012, United HealthCare is no longer overseeing the care of 174,000 recipients of BadgerCare Plus, one of Wisconsin’s Medicaid programs. The managed care organization (MCO), the largest of four servicing Medicaid recipients in southeastern Wisconsin, elected to terminate its contract with the state after losing millions of dollars due to reduced payments.

In an attempt to balance its budget, the Wisconsin Department of Health Services reduced payment rates to MCOs by 11 percent over two years, and it must still find another $372.3 million in state and matching federal funds combined to slash before June 29, 2013. In addition to United HealthCare, two of the other three MCOs have also raised concerns that they are losing money.

BadgerCare Plus covers children under 19 years of age, pregnant women, and other qualifying adults who meet income eligibility requirements, which generally is less than 200 percent of the federal poverty limit ($46,100 for a family of four). In certain instances, some people may qualify for a limited coverage plan if they exceed these requirements.

For each individual covered under the program, the MCOs get paid a fixed monthly amount by the state, which the MCO uses to reimburse health care providers. States are required by federal law to pay insurers based upon their anticipated costs. The problem the MCOs are claiming is that the fixed payment is now inadequate to cover the costs of some care, even at the rate negotiated with the providers.

Molina Healthcare Inc., the second MCO to raise concerns, stated that in the first half of 2012, it paid approximately $3.7 million more in claims above what the state had paid it. According to Mark Rakowski, the executive director of Children’s Community Health Plan, the third complaining MCO, “What we get paid by the state is not tied to what we pay providers.” The fourth MCO in the area, CommunityConnect HealthPlan, declined to comment on the issue.

While Molina has reiterated its commitment to the area market, it declared that it will continue to work with both state and federal Medicaid agencies to achieve sufficient payments for Wisconsin MCOs. However, it did caution, “If we are unable to achieve rates that are actuarially sound, it may no longer be feasible for us to continue as a health plan in the state.”

BadgerCare Plus recipients whose care was formerly managed by United HealthCare will now have their care paid for directly to their providers by the state.