VOLUME 3 - ISSUE 45
OCTOBER 2, 2012



Welcome to the Medicaid Update eNewsletter
Editor: Philip L. Ronning
This issue sponsored by the Dual Eligibles Summit



When Parents Can't Enroll in Medicaid, Children Stay Uninsured
Theoretically all children should have health insurance; if not private insurance through a parent then through Medicaid or CHIP (Children's Health Insurance Program). Yet 2.23 million or 1 in 5 children are uninsured according to a new US Census Bureau report due largely to the mountainous red tape associated with securing coverage through these programs. Being eligible does not equate with being covered. (New York Times, September 26, 2012)

Eyes Turn to Arkansas' Bold Effort to Cut Medicaid Costs, Add Transparency
On October 1, 2012 Arkansas kicked off a program with Arkansas Blue Cross Blue Shield and QualChoice, the state's two largest insurers, which could save $4.4 million in FY 2013 and $9.3 million in FY 2014. The program, Health Care Payment Improvement Initiative, is a shared savings plan intended to move the state's payers away from fee-for-service payments. Payments to previously approved physicians deemed to be a case's principal provider or "quarterback" will be based on how well providers deliver and manage care. The plan calls for episode of care payments on selected conditions and payments are adjusted by an evaluation of costs of care: a determination "acceptable" results in the customary payment, "commendable" results in a bonus while a determination of "exceeds the acceptable threshold" results in a withhold of a portion of the payment. The program is mandatory for all physicians treating patients with the identified conditions participating in either Medicaid or the two insurance plans. (gantdaily.com, September 30, 2012)

The Supreme Court and Health Reform
This Robert Wood Johnson Foundation (RWJF) Health Policy Brief, published in Health Affairs, reviews the Supreme Court's decision on the Affordable Care Act and discusses the implications particularly as it relates to federal-state programs. In a related Issue Brief entitled "Medicaid Expansion: Framing and Planning a Financial Impact Analysis," RWJF provides a guide for states conducting their own analysis of Medicaid expansion. The analysis is a collaboration of experts at State Health Access Data Assistance Center (SHADAC), Center for Health Care Strategies (CHCS), and Manatt Health Solutions. (Health Affairs, September 27, 2012)

States Moving Ahead on Defining 'Essential' Health Insurance Benefits under Federal Law
October 1, 2012 was the target for states to specify "essential health benefits" and provide them to the federal government. These benefits must provide some basic coverage in ten broad categories such as preventive care, emergency services, and maternity, as well as hospital, physician and prescription coverage. They will serve as the basis for insurers offering coverage, including those offered through Health Insurance Exchanges and Medicaid. The requirements do not apply to self-insured plans. Coverage levels and costs will vary as will state requirements. For example, California and Washington require acupuncture coverage while Oregon does not require bariatric surgery coverage but does require coverage for cochlear implants. Sixteen states and the District of Columbia have already filed their list of benefits and 16 more states are preparing to do so shortly. (Kaiser Health News, September 30, 2012)


NAMD Releases Medicaid Innovations Meeting Summary
The National Association of Medicaid Directors (NAMD) released a summary of its most recent meeting. Among the conclusions reached during the meeting was the need for 1) better integration of behavioral health with physical health services to replace the fragmented systems of today with one holistic, coordinated system of care, 2) increased flexibility to build quality measures and greater accountability into contracts with managed care plans and fee-for-service arrangements, 3) the ability and support to more effectively engage in multi-payer reforms, and 4) support and best practices in strategic planning, stakeholder engagement and staff development within Medicaid agencies themselves. (National Association of Medicaid Directors, October 1, 2012)

Report: Medicaid Boost Would Save Arizona Money
The Grand Canyon Institute, whose board includes both Republican and Democratic lawmakers, has presented research demonstrating that an investment in Medicaid expansion of $1.5 billion over four years would result in the state collecting nearly $8 billion in federal monies, insure an additional 435,000 by 2017, and create an estimated 21,000 jobs in Arizona. The conservative Goldwater Institute argues that neither the state nor the federal government can afford such investments and the healthcare industry, not the taxpayers, would benefit. (azcentral.com, September 26, 2012)

Implications of Medicaid Expansion Decisions on Private Coverage
A new Decision Brief by the American Academy of Actuaries advises that states which choose not to implement the Medicaid expansion should prepare for the impact of the decision, which the Congressional Budget Office (CBO) estimates will increase private insurance premiums by 2.0%. The conclusions include these: 1) individual market premiums could increase in states that opt out of the Medicaid expansion due to health status differences of new enrollees, 2) exchange premiums also may increase due to spreading fixed reinsurance subsidies over a larger enrollee population, 3) Basic Health Program decisions by states, pending clarifications from HHS, can affect the risk profile of enrollees in an exchange, and 4) employers may be at greater risk of penalties in states that don't expand Medicaid eligibility. (American Academy of Actuaries, September 2012)

New York's Medicaid Reforms
New York State, the nation's largest provider of Medicaid services, has undertaken a long-term remake of its Medicaid program. The State has requested through a "groundbreaking new 1115 Medicaid waiver amendment" (see http://www.health.ny.gov/health_care/medicaid/redesign/docs/2012-08-06_waiver_amendment_request.pdf for the 1115 waiver amendment) to reinvest the federal government's share of the $20.8 billion, or $10 billion, the restructuring efforts have saved. The State is asking for the right to reinvest the $10 billion in programs to modernize hospitals and clinics serving the poor and to expand primary and preventive care. This editorial advocates for New York's right to the monies. (New York Times, September 17, 2012)



Effects of Proposed Medicaid Overhaul

This CNN video evaluates the Medicaid overhaul from the perspective of a young family.


(Click above to play video)

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Medicaid's Role: Issues for the Future

Diane Rowland
Executive Vice President, Henry J. Kaiser Family Foundation, Washington, DC