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Vorys Health Care Advisors

For health care reformers, the challenge is to improve care quality and expand access to providers and services while controlling costs. It is not a job for the timid. Instead, it requires creativity, experience and leadership. Vorys Health Care Advisors’ strategic solutions and guidance exemplify each of these imperatives. Our health care and Medicaid consultants help providers, business decision makers, state and federal government agencies and professional associations respond to the complex needs of health care consumers by discovering, developing and implementing innovative policies and programs.

Is One Brand of Medicaid Expansion Waiver Better than Another?

Posted in Affordable Care Act, Health Care, Health Care Reform, Medicaid

Different strokes for different folks as the old adage goes.  This saying, however, is particularly true when you look at the states that have chosen to expand their Medicaid programs under the Affordable Care Act (ACA) through waivers.

States do not have to seek a waiver from the federal government in order to expand their Medicaid programs under the ACA.  However, if a state wants to implement the expansion in a way that does not comport with federal law, it must seek a waiver from the federal Centers for Medicare & Medicaid Services (CMS).  Three states – Arkansas, Iowa and Michigan – have received approval from CMS to provide access to health care coverage through specifically-tailored, Medicaid expansion programs.

Review of these waivers provides insight into the availability of coverage for the mostly uninsured, poor and childless adult population. These waivers also provide an opportunity to observe and analyze additional issues for states, including utilization of health services, possible health outcomes, health care spending priorities and states’ values related to these issues.  Insight on these issues will affect future policy, not only in the waiver states but across all states that are considering the needs of this population.

Before looking into the different waivers, it is worth noting that the expansion of Medicaid was intended to cover mostly low-income adults without dependent children who earn up to 138% of the federal poverty level ($15,856 for an individual).  Since the U.S. Supreme Court’s ruling made the expansion of Medicaid optional for states, 25 states have chosen not to expand coverage.  The vast majority of the states that have expanded, chose to provide to this population Medicaid benefits that look like the state’s traditional Medicaid program or a similar Medicaid benefit.  In these states, you can predict service utilization because the benefit packages are the same.

The Arkansas, Iowa and Michigan waivers present fresh opportunities to consider how states provide services, effect positive outcomes and attempt to keep health care costs down.  Notable similarities exist among the waivers.  For example, cost-sharing, or requiring individuals to pay for a portion of the cost of service, is required in all three plans.  The cost-sharing component is structured in accord with Medicaid laws that limit the percentage of income that can be required of an individual to pay out-of-pocket costs.  The inclusion of cost-sharing requirements may be reflective of a desire for Medicaid expansion consumers to use mechanisms that are very common in commercial health insurance plans.

On the other hand, the waivers differ significantly where each state has perceived that individual choice may have some impact on health outcomes and the sustainability of Medicaid expansion.  For example, Arkansas and Iowa will provide premium assistance for adults to enter the ACA-created, health insurance marketplace to purchase a qualified health plan instead of enrolling these individuals in the state’s Medicaid program.  Arkansas will not require these individuals to pay any premiums in the health care marketplace, but in Iowa, individuals may have a premium obligation.  Michigan will not offer premium assistance.  Rather, the state will cover this population through its existing Medicaid managed care delivery system.  Arkansas’ legislature recently approved the private option plan.

These innovations emerged out of a robust debate regarding state values and attitudes toward Medicaid expansion under the ACA.  As we approach future milestones, it will be interesting to see which innovations will have the greatest impact on cost and quality.

New York State’s Budget Relies on Federal Medicaid Money –Expecting an Answer from CMS Soon

Posted in Affordable Care Act, Health Care, Health Care Reform, Medicaid

In 2012, New York Governor Andrew Cuomo submitted to the federal Centers for Medicare & Medicaid Services (CMS) an amendment to New York’s existing Partnership Plan 1115 waiver that sought to “redesign” the state’s Medicaid program.  The amendment proposed to reinvest $10 billion of the $17 billion in savings the state anticipated it would achieve by implementing Medicaid Redesign Team (MRT) recommendations.  CMS has been carefully reviewing the waiver amendment in combination with several other pieces of New York’s Medicaid program that are also before CMS for consideration.

Earlier this week, Governor Cuomo released the New York State budget, which calls for the state to, among other things, spend $1.2 billion to restructure hospitals, long-term care, and other health care services, and to invest an additional $75 million in health information technology.  These projects would be financed, in part, by the $10 billion wrapped up in the waiver amendment.  In his budget presentation, the Governor called on CMS to approve the waiver amendment in order to free up this funding that, along with a 2% cap on state spending growth, will help balance the budget.

Some of the health care related provisions in the budget include the following:

  • Continues the downsizing of institutional programs for individuals with intellectual and developmental disabilities (IDD) by 300 individuals.
  • Encourages more integrated employment opportunities to reduce costs through reforming day service programs for individuals with IDD by transitioning them from full day-day service to Pathways to Employment opportunities.
  • Supports the integration of physical health and behavioral health services within a managed care environment through Behavioral Health Organizations and Health and Recovery Plans.
  • Makes additional funding available for affordable housing.
  • Facilitates the transition of foster care children into managed care.
  • Provides $54.3 million in 2014-15, growing to $148.3 million in state funding between the Department of Health and Department of Financial Service budgets, to sustain the continued operations of the New York Health Benefit Exchange, which will end January 1, 2015.
  • Requires counties to make good faith efforts to link uninsured women with health insurance coverage for prenatal care reimbursement through the General Public Health Works Program.

The Governor’s budget relies on funding still not approved by the federal government in addition to the modest increase in state spending. The health care initiatives are ambitious.  Yesterday’s Democrat and Chronicle from Rochester NY reports a conversation that Senator Schumer had with Secretary Sebelius on the floor of the House of Representatives following the President’s State of the Union Address, in which the Secretary indicated that a decision about the waiver, and the associated $10 billion dollars in funding,  would be made within 30 days. This budget will be one to watch.

Informative and Entertaining Look at Health Reform Issues for 2014

Posted in Affordable Care Act, Health Care Reform

In a move previously thought nearly impossible to pull off, Kaiser Health News recently published a list of “8 Things To Know About Obamacare in 2014″ that is both informative and entertaining.

This quick read highlights issues about which readers should be informed as they move into the new year, while injecting some levity into the often intense conversation about health care reform.  Check out the article to read up on important health insurance-related issues sure to remain on our radar screen this coming year.

Ringing in the New Year With Health Insurance

Posted in Affordable Care Act, Health Care Reform

So January 1, 2014, has come and gone.  While many people were busily ringing in the new year, others were celebrating a different kind of fresh start: one marked by the reassurance of having health insurance.

Although the rollout of healthcare.gov and even some state health insurance marketplaces was less than ideal, Americans who need and want health insurance are persisting – and getting results.  Results that amount to more than just receiving a health insurance card in the mail.  As a recent Washington Post article highlighted, results that mean Americans who have put off scheduling routine gynecological procedures and dermatological check-ups can now afford to do so; people who have not had a physical in years can schedule one to put their minds at ease – even if they do not appear to be currently suffering from any ailments; and individuals who previously feared experiencing an injury for which they could not afford treatment are able to go for a jog.

For these individuals, getting insurance may not have been not easy.  But their persistence in seeking coverage through the health insurance marketplace and Medicaid programs newly expanded in some states has paid off in the form of peace of mind and the ability to take better care of themselves.  Putting aside political differences, while the mere presence of health insurance does not in and of itself guarantee better health, having affordable health insurance at least gives Americans a fighting chance to improve their physical, mental, and emotional health.  As the Washington Post article (aptly titled “Beneath health law’s botched rollout is basic benefit for millions of uninsured Americans”) points out:

Various studies have found that children without insurance are less likely to get immunized or treated for a sore throat or even a ruptured appendix.  Adults without coverage are less likely to get mammograms or prostate exams.  If they have high blood pressure or diabetes, it is more likely to be out of control.  If they have a stroke, it is more likely to leave lasting damage.  The Institute of Medicine has said there’s “a chasm”between the health needs of uninsured people and their access to effective care — a gap that “esults in needless illness, suffering and even death.”

Moreover, having health insurance should also have at least a tangential positive impact on the financial “health” of many Americans.  Consider the following statistics reported by the American Journal of Medicine:

  • 62.1% of all bankruptcies have a medical cause
  • Most medical debtors are well educated and middle class – and three quarters have health insurance!
  • The share of bankruptcies attributable to medical problems rose by 50% between 2001 and 2007
  • Of the families who started out with insurance but lost it during the course of their illness, medical bills averaged $22,658.

So how many people have actually signed up for coverage so far under the Affordable Care Act?  According to the Obama Administration, as of December 31, 2013, 2.1 million people have signed up for health insurance through the health insurance marketplaces and another 3.9 million people have been determined eligible for Medicaid.

While the architects of the law hypothesized that newly insured individuals would be about split between those who accessed coverage through the marketplaces and those who got coverage under Medicaid, it is likely that the slow rollout of the marketplaces is initially impacting the numbers.

Whether these 6 million Americans are now getting their health insurance through a qualified health plan sold in the marketplace or through Medicaid, one thing is clear.  Despite the difficulty they may have had obtaining coverage, it will provide them new opportunities to improve their health.

Federal Budget Agreement Delays Medicaid DSH Cuts

Posted in Affordable Care Act, Medicaid

Section 1204 of the federal budget agreement, HJ.Res.59, delays the Medicaid Disproportionate Share Hospital (DSH) payment reductions included in the Affordable Care Act (ACA) for two years.  As originally contemplated in the ACA, the DSH reductions were to have become effective in October 2013.  Instead, the budget agreement delays the reductions until October 1, 2015, but doubles the reduction that would otherwise have applied in that year.  In light of the delay, the Centers for Medicare & Medicaid Services has indicated that it will publish updated fiscal year 2014 DSH allotments in the Federal Register early next year.

The budget agreement was recently passed by Congress and signed by the President on December 26th.

Ohio Supreme Court Upholds Medicaid Expansion

Posted in Behavioral Health, Medicaid

The Ohio Supreme Court issued a decision today confirming the constitutionality of the state’s decision to expand the Medicaid program through an action of the Controlling Board.  The Court rejected a constitutional challenge made by six legislators.

In November, our colleagues at Vorys, Sater, Seymour and Pease filed an amicus brief on behalf of Advocates for Ohio’s Future, the Coalition for Healthy Communities, the National Alliance on Mental Health, the Ohio Association of County Behavioral Health Authorities, the Ohio Council of Behavioral Health and Family Services Providers and the Ohio Provider Resource Association urging the Court to uphold the Controlling Board’s decision as constitutional.

Today’s decision ensures that an estimated 275,000 of Ohio’s most vulnerable citizens will have access to health care.

To read the decision, click here.

CMS Announces Extension of Stage 2 Meaningful Use

Posted in Uncategorized

The federal Centers for Medicare & Medicaid Services (CMS) announced on Friday that Stage 2 meaningful use for the Medicare and Medicaid EHR (electronic health record) Incentive Programs will be extended through 2016, and Stage 3 will not begin until at least fiscal year 2017 for hospitals and calendar year 2017 for physicians and other eligible professionals that have by then completed at least two years at Stage 2.

As reported by the U. S. Department of Health & Human Services’ Health IT Buzz, a statement by Robert Tagalicod, director, Office of E-Health Standards and Services, CMS, and Jacob Reider, M.D., acting national coordinator for health information technology for the Office of the National Coordinator for Health Information Technology (ONC), said that there are two goals of this change: (1) to allow CMS and ONC to focus on the successful implementation of the enhanced patient engagement, interoperability, and health information exchange requirements in Stage 2; and (2) to utilize data from Stage 2 participation to inform policy decisions for Stage 3.

Meaningful use is the set of standards defined by the CMS Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.  The goal of meaningful use is to promote the spread of electronic health records to improve health care in the United States.

Meaningful use is spread out over three stages.  The phased approach helps providers move from creating information in Stage 1, to exchanging health information in Stage 2, to focusing on improved outcomes in Stage 3.  The requirements for meeting each stage of meaningful use is available on CMS’ website.

The proposed rules for the requirements providers must meet for Stage 3 are expected to be released in the fall of 2014.  A separate rule extending Stage 2 by a year is expected sooner.

Vorys Attorney Discusses Confusion About Whether the Anti-Kickback Statute Applies to Qualified Health Plans

Posted in Affordable Care Act

Vorys attorney Robin L. Canowitz recently published an alert discussing potential confusion between a letter released by the U. S. Department of Health and Human Services (HHS) and a memo published a week later by the Centers for Medicare & Medicaid Services (CMS).  In the letter, HHS clarifies that qualified health plans sold in health insurance marketplaces are not “federal health care programs”.  As such, the federal Anti-Kickback Statute (AKS) does not apply.  As Robin explains, providers were concerned that the AKS would prohibit them from paying for the premiums of individuals enrolled in qualified health plans through the marketplace.  The letter clarifies that providers can legally pay premiums for patients enrolled in a qualified health plan without violating the federal AKS.  The memo issued by CMS just a week later, however, indicates that HHS has concerns with this practice.

Read Robin’s alert for a thorough discussion of these issues.

The Impact of the ACA on the Health Insurance Market – By the Numbers

Posted in Affordable Care Act, Health Care Reform

On a recent MSNBC segment, Steve Rattner shared the following slides that illustrate ways in which the health insurance market will be impacted as a result of the Affordable Care Act (ACA).

The first reflects how various populations will be affected by the individual mandate to have insurance.
Who will pay more under Obamacare?

The second indicates that most Americans who purchase individual plans — including those plans that the President recently announced may be continued depsite noncompliance with ACA requirements — only stay on those plans for a relatively short period of time before moving on.
Short Stays on Individual Plans

The third shows how coverage is projected to shift as a result of the ACA.
Shift in Coverage Under Obamacare

What does the President’s announcement about continuing canceled health insurance policies really mean?

Posted in Affordable Care Act

Responding to the concerns of many Americans regarding a potential cancellation of some health insurance policies, President Obama announced on Thursday that insurance companies can continue to offer for another year some health plans to individuals, families, and small businesses that do not meet the Essential Health Benefits requirements established under the Affordable Care Act (ACA).

As we reported in a recent blog post, beginning in 2014, Medicaid plans and small group and individual plans sold inside and outside of the Health Insurance Marketplace must cover a package of 10 categories of items and services known as Essential Health Benefits (EHBs).  These categories include:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care
  5. Mental and/or substance use disorder services, including treatment of behavioral disorders
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices
  8. Laboratory services
  9. Preventive and wellness services and chronic disease management
  10. Pediatric services, including oral and vision care

The President’s announcement was spurred by some individuals receiving cancellation notices for health insurance policies they currently have.  These are plans that will not meet EHB requirements.

  • The policies at issue are individual and family policies purchased directly from insurers.
  • Consumers covered by Medicaid, Medicare, or large employers are unaffected.
  • The administration is also allowing extension of small-employer plans that do not meet EHB requirements.
  • Qualified health plans sold in the Marketplace must continue to cover EHBs.

The policy change will allow insurers to extend these existing “noncompliant” plans for one more year for current customers.  Policies renewing before the end of this year will last until late 2014 and policies that expire in 2014 can extend into 2015.  If carriers do renew, they must disclose to the policyholder differences between the benefits offered in their existing plan and those EHBs required by the ACA.  In other words, why the policy is “noncompliant” with the EHB requirements.

As reported by The Washington Post:

Individual policies have long been a problematic part of the insurance market, with higher prices than most group plans, fewer benefits and a tendency to cut off people when they get sick. The health-care law tried to address this problem by directing Americans who rely on individual policies to buy coverage through the new insurance marketplaces — and by defining the set of essential benefits.

Despite the policy change, the administration is allowing each state to determine whether its residents can renew a plan that does not comply with the ACA’s EHB requirement.  Some states, including Washington, have already announced that they will not allow noncompliant health insurance policies to be sold to their residents.  Other states, such as Florida, have announced that they will allow noncompliant insurance plans to be renewed for their residents.

Additionally, an insurance company is not required to renew its noncompliant policy.  So although a consumer may want to renew a policy that will not cover EHBs, the state may not allow it and/or the insurance company itself may not continue the policy.  Consumers should check with their state to see if it will allow renewal of noncompliant plans.  They should also check with their insurer to see if it will be renewing canceled policies.

Even if the state and the insurance company will allow the renewal of a noncompliant plan, consumers should evaluate alternatives offered in the Marketplace to see if qualified health plans sold there offer better coverage at equal or better price.

Remember that individuals earning between 100% and 400% of the federal poverty level (FPL) ($23,550 to $94,200 for a family of four) will have access to premium tax credits in order to make purchasing insurance in the Marketplace more affordable.  Additionally, individuals earning between 100% and 250% FPL  ($23,550 and $58,875 for a family of four) will have access to cost-sharing subsidies that will bring down their deductibles, copayments, and coinsurance.  By contrast, noncompliant plans are not eligible for subsidies.

In summary, while you may now be able to keep your plan that does not include EHBs, when you compare plans in the Marketplace, you may find that you will get an equal or better price for a better benefit than what you have now.