Turning Up the Heat on Medicaid Expansion

There was a study published last week in the New England Journal of Medicine that is getting a lot play in the popular media – which as I have written before is the sharpest of double-edged swords where issues of truth and reality are concerned. Nonetheless, the timing of the research reported is well done in light of a number of states still wrestling with whether or not to accept the Affordable Care Act’s Medicaid expansion.

The Oregon Experiment — Effects of Medicaid on Clinical Outcomes

Back in 2008 approximately 90,000 individuals in Oregon signed up for a lottery that would subsequently provide Medicaid coverage to approximately 30,000. In doing so, Oregon created two randomly selected groups that could be analyzed to determine the comparative effects of having access to health insurance via the state Medicaid program there.

Two years later the relative impact of being insured through Medicaid produced what on the surface appears to many as conflicting results. Use of medical services (i.e., physician services, medications and hospital services) by those covered by Medicaid increased 35%, while access to preventative services and screenings increased by 50% or more. The rate of depression incidence in the Medicaid covered population was reduced by 30% compared to the control group. In addition, the financial impact on families was dramatic – e.g., it was reported the probability of having to endure financial hardship to pay medical bills was reduced by more than 50%.

On the other hand, the health impact in terms of outcomes for those individuals covered by Medicaid was less impressive. In fact, while those receiving the Medicaid benefit were more likely to be diagnosed with diabetes as compared to the control group, their blood sugar levels were not markedly impacted. And the same held true for blood pressure and cholesterol levels.

So in a nutshell, what the research shows is that having health insurance can drive higher access and utilization of available medical services. If you provide it, they will use it – a good thing. But it very well may not have a significant impact on health outcomes – particularly outcomes that are largely influenced by chronic conditions such as obesity, diabetes and hyperlipidemia (high cholesterol). Providing it won’t change lifestyle behaviors – a bad thing.

As this research demonstrates, addressing the behavioral elements that impact health outcomes is far more difficult and far more complex than just an access issue. But I think it is certainly shortsighted and faulty logic to fail Medicaid based on health outcome data alone. Improving access and utilization of medical services by the un- and underinsured population is a progressive advancement that has merits independent of outcomes, which is further reinforced when considering the relatively short time period covered by this research.

But the more salient if not subtle point of these results is that chronic disease management requires a coordinated effort of social, educational and medical influences that clearly place expectations of behavior modification beyond the sole responsibility of healthcare practitioners. That reality neither bolsters nor detracts from the arguments being made in support of state Medicaid expansion under the Affordable Care Act despite what you may read or hear otherwise.


Medicaid Coverage of Nursing Care in Tennessee: Prudent, Rationing or Inevitable Reality?

In an article published yesterday in the Washington Post, Guy Gugliotta writes about a new Medicaid policy in Tennessee, which seeks more efficient alignment between reimbursement and cost settings (my interpretation). 

This is very likely an important bellwether of state Medicaid policy that will be repeated in some fashion or other in other states, and it has unsurprisingly been met with a fair amount of controversy and concern.

Operating under a Section 1115 waiver from CMS, TennCare is the State of Tennessee’s Medicaid program, providing health care for 1.2 million with an annual budget of $8 billion. TennCare utilizes a managed care model that extends coverage to additional populations who would not otherwise be Medicaid eligible, while seeking to maintain a consistent level of quality care.  Tennessee has one of the oldest Medicaid managed care programs in the country, having begun on January 1, 1994. It is the only program in the nation to enroll the entire state Medicaid population in managed care.

On June 20th of this year TennCare released a new Nursing Facility Level of Care Guide outlining programmatic changes to its CHOICES program, which, “are designed to target Nursing Facility services to persons with higher acuity of need, while simultaneously making Home and Community Based Services more broadly available.”  This is the subject of the above-referenced article.

With this initiative TennCare seeks to increase the Nursing Facility Level of Care criteria necessary for Medicaid eligibility to a level it believes to be more in line with criteria used in other states while providing a less costly benefit for those individuals who will no longer qualify under the new criteria.  The new criteria are being applied prospectively, so no one currently qualifying for nursing care will be affected.

Under the new eligibility criteria three groups are established:
Group 1: Individuals eligible to receive care in a nursing
facility (NF) and requesting care in a NF;
Group 2: Individuals eligible to receive care in a NF but
                   requesting home and community-based services
                   (HCBS) in lieu of receiving care in a NF; and
Group 3: Individuals not eligible to receive care in a NF,
                   but “at risk” of NF placement and requesting
                   HCBS in the TennCare CHOICES program.

Group 3 is the population of concern and being debated from a policy perspective.  These are individuals that may have qualified for nursing care coverage under previous criteria and been eligible for HCBS cost coverage at a level commensurate with the cost of coverage in a NF.  Now the annual benefits available to this population will be $15,000.

From a consumer advocacy perspective the concern is that many individuals in Group 3 will not receive adequate services and care because the $15,000 benefit is not sufficient.  From a state policy perspective the concern is trying to allocate finite resources in a fashion where those individuals with the greatest need are afforded the ability to receive care that meets those needs.  In short, pub patrons, welcome to Healthcare Public Policy in the 21st Century.

From a pragmatic vantage, the initiative in Tennessee has very important ramifications for providers of community-based services and post-acute/long-term care.  This is an initiative that is certain to hasten the trend toward HCBS and away from care in institutional settings.  It is a threat to projected demand for long-term care in NF settings – and it is a threat to projected reimbursement levels available to HCBS providers under Medicaid.

It seems to me that any healthcare provider wishing to include the Medicaid population in its targeted market in the future look now at how to integrate BOTH NF-based care AND HCBS in its care continuum if it wishes to be economically viable and sustainable.  What do you think?

~ Sparky

Implications of SCOTUS Decision on Medicaid Funding of PA/LTC

Before I get to the heart of this post (the Medicaid story), please allow me to share some additional thoughts up front.

Dewey Wins Moment
First, as was announced this morning, the Supreme Court has found the Affordable Care Act is constitutional in its entirety (noted exception regarding Medicaid expansion).  I was following the announcement on the
SCOTUS blog this morning (where it was shared that the Individual Mandate was upheld), and so I had a very hearty laugh listening to John King of CNN go on for nearly five minutes about the implications of the Individual Mandate being struck down.  Apparently, a reporter in the Court read the opinion passage that, “the individual mandate thus cannot be sustained under Congress’s power to ‘regulate Commerce’ ” and failed to keep reading.  Ah, the risks of wanting to be first.

Maintaining Political Perspective
Second, a modest word of caution.  As I have written here and shared with industry peers and constituencies in various other formats, this is another step along the path of Healthcare Reform.  The next challenge the Affordable Care Act faces is the fall elections.  And I would not be the least bit surprised – or really, at all disappointed – to know that Republican strategists are in a back door way pleased with this decision because they can
now use it to energize their voting base.  It will be a rallying cry to get the vote (and donations) out.  Democrats will have to redouble their efforts (if not their campaign fund raising) if they want the ACA to survive in tact beyond the 113th Congress.

But, it will be very difficult now to rescind the entire Act regardless of what Messrs. Romney, Boehner, McConnell, et al would like us to believe.  First, there is the political reality of having to not only win the Presidency but to maintain a majority in the House and take back control of the Senate.  I think retaking the Senate will actually be a longer shot than Romney defeating Obama.  Second, by the time any new legislation could be drafted, vetted and passed, the ACA will be well into implementation.  Trying to go backwards at that point would have devastating social and economic consequences that elected officials of any stripe are unlikely to want to be associated with.

There very well could – and I would expect, regardless of election outcomes, will – be some modest tinkering in the future.  We still have the economic realities of a very fragile world economy that keeps us teetering on the brink of another deep recession.  So I think it is likely the essential benefits definitions and actuarial soundness of insurance plans under standardization of coverage will be tightened up in ways that improve budget projections. 

Medicaid Expansion
To some, like me, this part of the decision was more of a surprise than the IM being found as constitutional – and there could, potentially, be rather significant implications for post-acute/long-term care providers.  I am not by a long stretch a legal scholar, but I will try to give you my best understanding.

Title II, Section 2001 of the Act – Medicaid Coverage for the Lowest Income Populations – expands coverage for individuals with incomes at or below 133 percent of the federal poverty level ($14,856 in 2012).  As a practical matter, this means expanding coverage for adults without children or disabilities.  According to a May 2010 Kaiser Family Foundation Report, it is estimated that an additional 15 million individuals will receive beneficial healthcare coverage under this provision by 2019 at an estimated cost of $465 billion.

According to 42 USC § 1396c – Operation of State plans, the Secretary of HHS has the ability to withhold federal funding of a state’s Medicaid program for failure to comply with federal requirements (this was existing code not altered by the ACA).  Thus, states not complying with provisions of Section 2001 of the ACA would be at risk of having all federal Medicaid funding cut off – not just funding of the Medicaid expansion.  In lieu of the ACA’s Medicaid expansion, the Court found that application of 1396c in such instance would be unconstitutional because states could not have anticipated such an onerous exercise of coercion when electing to participate in the original Medicaid program.

The remedy of this finding is that the Act must be amended such that 1396c would not apply to a state’s decision whether or not to participate in the Medicaid expansion under Section 2001.  So, in theory, states now have the option of whether they want to participate in the Medicaid expansion or not.

Now, given that the program’s design will initially provide 100% federal funding for newly eligible enrollees under the expansion program – declining to 93% by 2019 – I cannot imagine how any state would choose not to participate.  It would seem to be political suicide for an elected official to forgo federal funding to expand healthcare coverage to the poor when the relative impact on that state’s budget is, by comparison to federal spending, rather small.  And by not participating, that state would essentially be choosing to lose a portion of the taxes paid by its citizens that will benefit the poor in other states.

On the other hand, as we witnessed when several Republican governors chose not to accept economic stimulus funding, there is a very real possibility that some states may choose to opt out of the Medicaid expansion as objection or disagreement with the expansion (or the Affordable Care Act in general).  Add to that concern over the potential Medicaid Crowding Out effect, and you can see where some states may choose to opt out of Medicaid expansion.

In as much as many post-acute and long-term care providers are very dependent upon state Medicaid funding, the ripple effect of how this plays out in the months ahead will be something such organizations will want to watch closely.  And, of course, we will be actively monitoring such developments here in the Pub.  There could be significant state policy ramifications impacting the budgeting of Medicaid funding for post-acute and long-term care.

That’s what I think, anyway.  I would be very interested to know what you think.

  ~ Sparky

Managed Care for Dually Eligible

On another discussion venue in which I participate, a very learned and esteemed physician colleague in the San Francisco area shared with our group a recent brief from the California Medical Association (CMA Alert) regarding that state’s pilot project to move dually eligible individuals in Los Angeles, Orange, San Diego and San Mateo counties into a managed care plan.

Under the Medi-Cal 1115 Waiver, California is pursuing four pilot projects to redesign care for dually eligible seniors.  Similar pilot projects are being pursued in a number of other states as part of a national effort under the direction of the Center for Medicare & Medicaid Services’ (CMS) Center for Medicare and Medicaid Innovation (CMMI).  Of significance for this post, it was noted in the CMA Alert that, “if dual eligibles (sic) wish to remain in fee-for-service Medicare, they will have to actively choose to do so.”

In other words, they will be assigned to the new managed care pilot project by default.  Given what is the reasonably perceived inability of this aging population to necessarily advocate for themselves, at issue is whether such default can be interpreted as a back door mandate.  Are these individuals being deprived of their right to choose their healthcare provider? And who, by right, assumes the responsibility of advocating on their behalf?

This is certainly a moral dilemma, and I can appreciate CMA physician members’ concerns.  We are a nation and society with deep roots and political sensibilities to individual rights.  We are also a society, however, that is facing a potential national calamity in being unable to provide basic housing, services and care for an aging population that cannot afford to pay for such necessities.  From that vantage, I think an effective argument can be made that the potential to infringe upon such rights is outweighed by the urgent need to proactively develop innovative public policy solutions to address the aging tsunami that is building every day.

But setting aside for the moment the issue of the means by which the dual eligible population is enrolled, according to a Kaiser Family Foundation research paper, when compared to the non-dual eligible population dually eligible individuals are more likely to have chronic care needs, have a higher incidence of ADL needs, and be more than twice as likely to be both in fair or poor health – and suffer from a cognitive or mental impairment. This is a population for which the right to choose their own doctor is often not high on their list of priorities. This is also the very population where coordination of services and care across community-based programs, acute care, post-acute/long-term care and behavioral health services has the most promise of being beneficial to the individual because of the huge communication gaps that now exist between those areas.

So we are looking at a frail elderly population that isn’t able to pay for their own care – and likely in need of a host of complimentary/supplementary assistance (housing, ADL assistance, private duty, medication management, behavioral health – addiction in this population is scarily on the rise).  I do not wish to be ignorant of those individuals’ rights – but we are standing on the beach looking into the abyss of the looming demographic tsunami and understanding before a lot of others that such tradeoffs will have to be made.  They will be made.  The only thing at issue is when and how.  Wouldn’t it be better to plan for the flooding after the age wave hits?

These are the types of critically important public policy issues that senior housing, aging services and PA/LTC organizations should be aware of – and have active participation in their advocacy – whatever your views.

So, what do you think?

  ~ Sparky