MEDICAID IN 2019

In 2018, there were numerous attempts to reform the Medicaid program. While initiatives at the federal level met resistance, several reform initiatives came about at the state level. These efforts included legislation, program expansion, demonstration waivers, eligibility restrictions, and work requirements. Some of these changes have been adopted and successfully incorporated while others are still waiting for approval. For 2019, it will be important to monitor the impact of these changes to understand how the Medicaid program will evolve.

Section 1115 Medicaid Waivers

In spite of the Trump administration's failed attempts to overturn the ACA and reform Medicaid, states have sought to make reforms by utilizing demonstration waivers. Section 1115 waivers provide states the flexibility to pursue test coverage models and forgo key provisions of federal law under the condition that the changes meet the objectives of the Medicaid program.

On January 11, 2018, CMS issued new guidance for the Section 1115 waivers that made it possible for states to impose work requirements on their program's beneficiaries. According to CMS, the decision was made to "support states helping Medicaid beneficiaries improve well-being and achieve self-sufficiency." In addition to the revised eligibility requirements, states also started considering provisions including time limits, lockout periods for unpaid premiums or untimely reporting, drug testing, and premiums. The guidance has been controversial with legislators and government officials.

As of January 9th, the federal government has approved waivers from seven states. Arkansas and Indiana introduced their waivers last year. Michigan, Kentucky, Maine, Wisconsin, and New Hampshire have obtained approval and are implementing the changes in 2019. Arizona, Mississippi, Ohio, Oklahoma, South Dakota, Tennessee, Utah, and Virginia have proposed waivers but are waiting for decisions from CMS.

Regardless of its approval from CMS, Kentucky's waiver was blocked from going into effect last year after a group of 16 Kentucky Medicaid enrollees filed suit against it. U.S. District Judge James Boasberg then ruled the legislation unconstitutional. He specified that "The Secretary never adequately considered whether Kentucky HEALTH would, in fact, help the state furnish medical assistance to its citizens, a central objective of Medicaid." 

Since then, a reworked demonstration waiver was resubmitted to CMS with minor technical changes that require Kentucky to submit implementation and monitoring protocols for the eligibility requirements.

The key components submitted for approval are:

• Premiums instead of copays 
• Cost Sharing measures that would pull from HSAs for non-emergency use of the ER.
• Health Savings Accounts 
• Work Requirements 
• A six month lockout period for the failure to report a change in circumstances such as household income and hours worked.

On November 20, 2018, Kentucky's revised waiver was approved by CMS; however, health advocates argued that it was nearly identical to the original. Recently, the National Health Law Program, Kentucky Equal Justice Center, and the Southern Poverty Law Center joined together to file a lawsuit against the law. Kentucky is set to have the waiver carried out in April of this year but Governor Bevin is ready to pull coverage if the waiver does not survive the lawsuit.

Arkansas was the first state to implement its work requirement. It's waiver called for enrollees to report 80 hours of work or community engagement activities each month in order to be eligible for coverage. Merely six months since the implementation 17,000 members have been disenrolled either because they did not comply or they had failed to be given an exemption. According to state officials, enrollees were not informed of the requirements or they misunderstood them. Furthermore, enrollees reported having difficulty getting enrolled and accessing support. States intending to implement equivalent waivers can learn from Kentucky's uncoordinated implementation. It will be extremely critical for states to proficiently communicate their intended program changes to their communities. At the moment, there is litigation challenging Arkansas's waiver and the state has not received approval for its work requirement evaluation process.

States Adopt Medicaid Expansion

In states that had previously expanded Medicaid under the ACA, research studies have revealed that the decision to do so has been economically beneficial; moreover, it has also improved coverage, access to care, and service utilization. Due to the success, Medicaid expansion was a popular issue at the ballot box for voters in the midterm elections.

After the polls closed, Washington D.C. and 37 states approved expansion of their Medicaid programs. Idaho, Nebraska, and Utah adopted expansion using ballot initiatives. Maine also successfully passed a ballot initiative in 2017 but the governor at that time, Paul LePage (R), refused to carry it out referring to it as it "fiscally irresponsible". Fast-forward to this year, newly elected governor, Janet Mills (D) signed an executive order that began the expansion. In states such as Wisconsin and Kansas, Governor Tony Evers (D) and Governor Laura Kelly (D) ran on expansion and will now be working with legislators to pursue it.

Apart from the 37 states that have expanded or are expanding in 2019, there are also developments in other areas of the country. Historically, Mississippi and Georgia have fought Medicaid expansion but they might possibly consider the option this year.

Montana pushed to continue funding for their Medicaid program with the I-185 ballot initiative. However, the attempt failed to secure the necessary votes and the state is now in a similar situation to Alaska where expansion is in the hands of law-makers.

Regardless of the nationwide momentum to expand Medicaid under the ACA, there has also been a recent effort in Texas that would overturn the law for the entire country. In December, U.S. District Judge Reed O'Connor found the ACA unconstitutional as a result of changes in federal tax law. While the court's ruling could possibly dismantle the health-care law, appeals have been filed and it will not be addressed until it arrives at the Supreme Court.

Reform Of Medicaid Payment And Delivery Models

Medicaid relies on risk-based managed care as the program's main delivery system. This year, states will be seeking to utilize alternative delivery systems and payment models. These efforts will work to improve MCO's while also addressing social determinants of health.

On November 8th, CMS submitted considerable regulatory revisions aimed towards updating the managed care regulatory framework from 2016. According to CMS, these changes "reflect a broader strategy to relieve regulatory burdens; support state flexibility and local leadership; and promote transparency, flexibility, and innovation in care delivery." CMS, the National Association of Medicaid Directors (NAMD) and State Medicaid Directors organized a group to develop the framework. The group serves "to identify opportunities to achieve a better balance between appropriate federal oversight and state flexibility, while also maintaining critical beneficiary protections, ensuring fiscal integrity, and promoting accountability for providing quality of care for Medicaid beneficiaries."

States will want to improve access to care within rural communities in 2019. Some of the components used to accomplish this include: e-Consult, telehealth, telemonitoring, and telemedicine. Additionally, there will probably be increases in funding for primary care residency programs and providers in these communities, increased SUD services, and the incorporation of multi-payer models. Additionally, the reduction of skyrocketing pharmaceutical drug costs will certainly be another issue on the new year's agenda. To lower this spending, states will look to implement cost containment initiatives that will maximize rebate opportunities and enact revised utilization controls.

Lastly, states are also focused on LTSS issues and expanding coverage within community settings this year by extending provisions from existing support programs. Money Follows the Person (MFP) and Spousal Impoverishment are two programs being considered by Congress. MFP helps states in rebalancing their Medicaid long-term care systems. The Spousal Impoverishment provision dates back to 1988 and serves to protect the financial resources of elderly couples when employing nursing home care. CMS has also reached out to State Medicaid Directors in a November letter "to announce opportunities to design innovative service delivery systems including systems for providing community-based services for adults with a serious mental illness (SMI) or children with a serious emotional disturbance (SED) who are receiving medical assistance." The invitation authorizes states to waive the federal IMD payment exclusion in order to improve care for beneficiaries.

2018 was a significant year for Medicaid, the largest public health care provider in the United States. A variety of attempts were made to reform the program at the federal and state levels. Some of these efforts have turned out to be beneficial while others have become contentious with legislatures and enrollees. In 2019, Medicaid expansion, Section 1115 waivers, and new payment and delivery models will be some of the key issues to keep an eye on.

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