PRESIDENT TRUMP'S BUDGET FOR FISCAL YEAR 2019

The Trump administration has made considerable efforts to reform the ACA. In spite of all of the failed efforts in 2017, the Whitehouse is once again targeting the nation's healthcare safety net. The recently introduced budget for Fiscal Year 2019 clearly outlines the president's aim to restructure Medicaid over the following twelve months.

REVISE THE AFFORDABLE CARE ACT AND REFORM MEDICAID

The Trump administration will continue its attempts to remove and replace the ACA with a bill reminiscent to what Senators Graham and Cassidy presented last fall. Had the Graham/Cassidy bill passed, the landscape of Medicaid would have dramatically changed. The approximated number of uninsured Americans would have risen to 20 million by 2026 and federal health care expenditures would be cut in 10 years by $215 billion.

In Trump's budget proposal, the funding from the ACA for Medicaid expansion and premium subsidies would be distributed as block grants to each state. In addition, the proposal would put into place a per-person spending cap for Medicaid. Trump's proposed budget places serious cuts for Medicaid above and beyond the Graham/Cassidy block grants. For instance, $675 billion would be cut from federal spending and Medicaid would experience a $1.4 trillion cut due to offset spending on block grants.

While the president's health care reform initiatives have not yet materialized, the numerous attempts are definite indications of intent for the nation's healthcare system. In the event that the GOP can secure a larger Senate majority in the upcoming midterm elections, the administration's vision could quite possibly become a reality.

BIG PHARMA AND MEDICAID DRUG PRICES

Though the Trump administration has not made any progress to bring down the price of pharmaceuticals, the budget does include a number of drug cost proposals. For instance, Medicaid could create drug formularies of preferred drugs so private insurers could negotiate drug prices with pharmaceutical companies. However, it is uncertain if President Trump and Congress would approve the formulary system.

MEDICAID COULD GO THROUGH ADDITIONAL CUTS

Aside from the $1.4 trillion in reform cuts and spending caps, the president might also:

• Cut $2.2 billion by denying benefits to individuals that cannot verify their immigration status
• Cut $1.3 billion over 10 years by increasing the copayments of beneficiaries for improper use of the ER
• Cut $2 billion by 2028 by authorizing asset and income testing for Medicaid eligibility

The president has made evident through his budget that he plans to restructure healthcare and Medicaid. Although the president and the GOP's attempts did not happen last year, it is clear that they will continue their efforts in 2018.

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MANAGED MEDICAID MARKET IN 2018

Over the past year, the Trump administration and the GOP had a strong push to reverse the ACA in addition to reforming Medicaid. With the New Year in progress, it is very clear that the uncertainty in Medicaid's future is a reason for concern among Medicaid managed care organizations.

In 2017 the Senate and House both failed to reform the Federal Medical Assistance Percentages (FMAP) structure from fixed per capita allotments to block grants for states. President and CEO of Medicaid Health Plans of America, Jeff Myers, explained, "its kind of like being in a major gunfight when the gun smoke's all around you. It's still very cloudy and there are going to be lots of challenges this year, but I think 2017 kind of changed the nature of the debate." Legislators have "a very different perception of Medicaid. Trying to swing a hammer at it is not effective".

These bills aimed to get rid of enhanced FMAP funding for the program. The CBO foresees that the White House and GOP's efforts to restructure funding through the bills could have initiated massive reductions in federal expenses to Medicaid between $772 billion and $834 billion.

Myers recognizes that Medicaid is complicated and has a "meaningful impact on state budgets far beyond just treating their most disadvantaged citizens." Because of this, the probabilities are slim that Medicaid financing will experience fundamental restructuring from Congress.

Nonetheless, The Tax Cuts and Jobs Act of 2017 passed shortly before Christmas repeals the ACA requirement for purchasing health insurance coverage. According to the CBO, eliminating this mandate could possibly lead to millions of uninsured people between 2019 and 2027. The president of EBG Advisors, Bob Atlas, notes, "Medicaid is implicated because when people in fulfilling their obligations under the mandate go to sign up, many of them discover they are eligible for Medicaid and by law are steered in that direction. So, if fewer uninsured people are going through the enhanced process of seeking coverage, fewer are going to end up on Medicaid."

MEDICAID EXPANSION FOR MORE STATES 

In addition to enhanced FMAP funding, it is probable that more states will look to expand Medicaid. Maine for example, pushed a referendum through to grow the program but it was blocked by Governor LePage (R). He wants the state to fund their program before expansion is taken into consideration. On the other hand, VA Governor-elect Northam (D) is seeking to expand the program despite the opposition from state legislatures. Having said that, the move to expand the program is unresolved within the House of Delegates.

Bob Atlas, also pointed out that Medicaid budgets could be drastically strained from the new tax law. By restricting the deductibility of state and local income and property taxes, states with higher taxes will be pressured by taxpayers to lower them also.

MHPA stresses that behavioral health costs, drug spend, and long-term care cost are the primary factors that Congress must deal with in order to improve Medicaid spending. Presently, MHPA is completing a proposal for revisions to the Medicaid Drug Rebate Program. They are of the opinion that the program promotes improper pharmaceutical pricing incentives. Their objective is to design Medicaid drug pricing off of the Medicare Part D program.

POTENTIAL MEDICAID WORK REQUIREMENTS

Myers and Atlas are in agreement that states will aim to relieve financial pressures on the program by adjusting Medicaid enrollment via the Section 1115 demonstration waiver process. Atlas claims, "a number of Republican-led states are proposing to implement work requirements as a condition of eligibility for so-called nondisabled people." At this point, seven states have submitted such waivers to CMS. As a result, MCO's have sought partnerships with local agencies to join their recipients with employment opportunities. Atlas notes that apart from work requirements, measures to raise the frequency of eligibility recertification and to get rid of retroactive eligibility will trigger intense controversy in Medicaid enrollment. It is a legitimate possibility that these types of modifications will be met with lawsuits.

MEDICAID MANAGED CARE REGULATION REVISIONS

For now, Plans are anxious to see CMS's revisions to the Medicaid managed care rule from 2016. Last year, Seema Verma from CMS, committed to a, "full review of managed care regulations in order to prioritize beneficiary outcomes and state priorities."

According to Myers, "I think generally the questions we have are, if they're going to redo the managed care regs, are they making it easier for our state partners to provide data to CMS that's valuable to both, are they ensuring that there's no duplication of efforts so that plans aren't being asked for one more thing that people don't actually use, and then lastly, in any type of reform are they ensuring that the actuarial soundness requirements are met? Because if those aren't met, then services can't be provided."

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THE MAJORITY OF UTAH RESIDENTS ENDORSE THE EXPANSION OF MEDICAID UNDER ACA

By Howard Green

Just under 60% of Utah residents side with the expansion of Medicaid under the ACA so as to include a greater number of low-income adults, according to a recent poll. A strong majority of Utahns stand behind a complete Medicaid expansion, according to the poll carried out by Dan Jones and Associates for UtahPolicy.com.

Thirty-six percent protest the expansion of Medicaid under the Affordable Care Act, whereas four percent said they "don't know."

There certainly are hopes from activists that a voter referendum next year will expand the state's Medicaid program. The group has up until the middle of April to gather the required 113,143 signatures to get on the November 2018 ballot. Those that advocate the initiative were motivated after a similar effort in Maine passed by voter referendum last month.

Activist groups in Idaho are also aiming to get on the state's ballot next year.

31 states and Washington, D.C., have extended Medicaid under the Affordable Care Act.

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GAO REPORTS $95 BILLION WASTED IN FISCAL 2016

By Howard Green

The GAO announced this week that The Centers for Medicare & Medicaid Services will need to create a much more rugged risk-based anti-fraud solution for the Medicare and Medicaid programs. Improper payments within both programs totaled about $95 billion in fiscal 2016.

The GAO, in a report published on December 5, 2017, indicated that CMS's anti-fraud objectives merely "partially align" with the GAO's fraud risk framework, which gives guidance on developing anti-fraud initiatives. The report notes that despite the fact that CMS has implemented anti-fraud training programs for stakeholders such as service providers, it does not require equivalent awareness training for agency staff members.

The report also declared that CMS does not have a fraud risk assessment for Medicare and Medicaid, in conjunction with an anti-fraud strategy for both programs.

"By developing a fraud risk assessment and using that assessment to create an anti-fraud strategy and evaluation approach, CMS could better ensure that it is addressing the full portfolio of risks and strategically targeting the most-significant fraud risks facing Medicare and Medicaid," the GAO stated.

In response, HHS said it will develop risk-based anti-fraud strategies for both Medicare and Medicaid after it completes its ongoing fraud-risk assessment of the federal healthcare marketplace.

The report was driven in part by earlier GAO assessments that determined both Medicare and Medicaid as having a great risk for fraud, waste, and abuse.

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TACKLE MEDICAID’S IMPROPER CLAIMS PAYMENTS WITH DATA, NOT ‘PAY AND CHASE’

By Howard Green 

The federal government must quickly move away from the “Pay and Chase” model where Medicaid routinely makes improper claims payments (those that were the liability of primary insurance plans), then retrospectively identifies the claims with third party liability. To make this change, the government must review and remedy the current, antiquated processes that are in place.

Medicaid is the payer of last resort; in other words, by law, all other sources of insurance coverage must pay for claims before Medicaid will pay for the care of an enrollee. This federal requirement is called third party liability (TPL). This means claims payments are the obligation of a third party other than the enrollee or Medicaid. To employ the Medicaid third party liability requirements, federal regulations mandate that states have processes in place to identify other health insurance (OHI) and process claims accordingly.

As much as 13 percent of Medicaid enrollees across thenation hold additional insurance other than Medicaid. Types of TPL include employee insurance, Workers’ Compensation, Medicare, COBRA health insurance from former employment, casualty insurance, dental insurance, eye insurance and insurance to cover pharmaceutical costs. Given the large numbers of Medicaid enrollees with “other health insurance,” the timely identification of TPL and mitigating improper claims payments equates to massive savings for the program.

In a recent GAO report, Medicaid accounted for 25% of government-wide improper payments amounting to $36 billion. The GAO noted that while states have improved TPL efforts in recent years, the increasing proportion of Medicaid enrollees with private health insurance creates additional opportunities to avoid and recover Medicaid funds (GAO 2015).

 TWO WAYS TO AVOID COSTS ASSOCIATED WITH IMPROPER CLAIMS PAYMENTS

Pay and chase. If primary insurance is discovered after a claim had been paid improperly, the Medicaid plan must pay the claim and then attempt to recover the money from the primary insurer. This has been the primary model for most TPL efforts; unfortunately, this approach is burdened with hefty administrative costs. When “Pay and Chase” is used to recover improper claims payments, an average of only 17% of the funds ever gets recovered. This is precisely why Medicaid programs must hasten their move away from the “Pay and Chase” model.

Cost avoidance. If the Medicaid plan is aware that an enrollee has primary insurance coverage when the claim is filed, the plan can reject the claim and instruct the provider to submit it to the potential primary payer. The GAO has noted that this type of cost avoidance accounts for most of the savings to Medicaid associated with TPL (GAO 2015).

The Centers for Medicare & Medicaid Services’ stated that methods for identifying and preventing improper payments “not reassuring.” House Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) rebuked CMS for utilizing “pay and chase” methods of investigating improper payments.

“Despite the fact that Congress has given the agency expanded authority to stop payments before they are made, it continues to rely on pay-and-chase, or making the payment and only checking after the fact to see if it was proper,” Roskam said in his hearing remarks.

In order to address these problems, CMS issued guidance that requires states to uphold the cost avoidance standard for pharmacy claims and eliminate waivers that permit “pay and chase” methodologies.

Based on this guidance, states have responded by developing coordination of benefits (COB) programs that rely on self-reported recipient eligibility data and/or on stagnant data collected by TPL vendors for pay and chase purposes. This data is incomplete, latent and not sufficient for true cost avoidance. In order to successfully meet CMS’ cost avoidance guidelines, an effective real time, point of sale solution would be required to cost avoid claims and mitigate the need for “Pay and Chase.”

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THE REPERCUSSIONS OF REPEALING THE ACA MEDICAID EXPANSION

By Howard Green

While the Senate takes into consideration the Obamacare Repeal Reconciliation Act of 2017, the Kaiser Family Foundation just recently reported on the primary provisions that would impact Medicaid; they are, the removal of statutory authority to cover childless adults up to 138% FPL ($ 16,643 for an individual in 2017) in addition to the provision that does away with the enhanced match rate for the Medicaid expansion.

In the research study, KFF reports that a repeal of the Medicaid expansion would have dire coverage and financing repercussions for the states that have expanded the program.

Evaluation of the data showed that states would see a $700 billion deficit in federal Medicaid funds from 2020 to 2026. In 2026, states would see a decrease in federal Medicaid funding of $121 billion and estimated reductions in coverage of 17.6 million individuals. Without Medicaid expansion or affordable insurance alternatives, it is likely that most of these individuals would become uninsured.

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MEDICAID ENROLLEES GENERALLY HAPPY WITH PROGRAM

By Howard Green

Enrollment surveys have shown that healthcare choices under Medicaid programs are acceptable to enrollees. Enrollees have stated in a countrywide survey that the healthcare they receive under Medicaid is more than adequate. Analysts at Harvard T.H. Chan School of Public Health found that in general, Medicaid enrollees have accessibility to doctors with their Medicaid insurance.

JAMA Internal Medicine just recently published these findings while some lawmakers continue to argue the opposite. Some argue that Medicaid is broken and does not supply appropriate services to those in need. Never the less, JAMA's findings indicate that enrollees are obtaining and making use of the provided options.

According to Michael Barnett and Benjamin Sommers, professors of health policy at the Harvard Chan School, "the debate on the future of Medicaid has largely marginalized a crucial voice: the perspective of enrollees. Our findings confirm that Medicaid programs are fulfilling their mission to provide access to necessary medical care."

Harvard researchers evaluated data from Medicaid's first national Consumer Assessment of Health Providers and Systems survey. This sought to assess people's experiences with Medicaid. The survey was carried out by the Centers for Medicare & Medicaid Services from December 2014 to July 2015. More than 270,000 members from 46 states responded. Based on the survey's results, researchers where able to garner the following information about enrollee's satisfaction with the program:

• On a scale of zero to 10, with zero representing "the worst health care possible" and 10 representing "the best health care possible," participants in the survey rated their overall health care an average rating of 7.9.
• 84% of enrollees revealed that prescribed care was accessible from their physician in the past six months.
• 83% reported having a usual source of care.
• Only 3% reported not being able to get care because of waiting times or insufficient coverage.

As a whole, the study revealed that participants from all demographics are satisfied with Medicaid in states that did not expand and states that did expand under the ACA.

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