Colorado, CMS weigh major Medicaid expansion

Saturday, September 01, 2012 01:26 PM

Board of directors encourages physicians to provide input, consider options

CMS staff report

As Colorado considers whether to expand Medicaid eligibility to 200,000 or more new participants, the Colorado Medical Society should remain at the forefront of the conversation while continuing to advocate for changes to make the program work better for physicians and patients alike, CMS members overwhelmingly agreed in recent forums.

Neither the state of Colorado nor CMS has taken a position on the expansion, which would cover all individuals living in families below 133% of the federal poverty level ($30,657 for a family of four in 2012).

Because the General Assembly and Gov. John Hickenlooper would likely have to approve any expansion, the issue is expected to be a major one during the legislative session that will convene in January.

The CMS Board of Directors, recognizing the importance of physicians being at the table for any debate, recently created a process to gather and consider member input. In addition to online polling conducted over the summer, the process included discussions at the 2012 Annual Meeting in Keystone and other opportunities for physicians to provide feedback. Next month, the CMS Council on Legislation and Committee on Physician Practice Evolution will hold a joint meeting to discuss the issue. The two physician-led groups will forward a recommendation to the board for consideration at its Nov. 16 meeting.

“The board recognizes that whether we support the expansion or an alternative approach, we are uniquely positioned to share our knowledge and insight with key policymakers,” said CMS President Jan Kief, MD. “That’s why it’s so critical for members to let their voices be heard.”

“As physicians, we see every day what a difference access to care can make in the lives of our patients. We also understand the challenges of delivering that care in a system that doesn’t always work as well as it could,” added CMS Immediate Past President F. Brent Keeler, MD. “This is an opportunity for us to have considerable influence in both areas.”

Background
The Medicaid expansion originally was mandated by the Affordable Care Act (ACA), President Obama’s signature health care reform legislation, and scheduled to occur by Jan. 1, 2014. But earlier this year, the U.S. Supreme Court ruled it should instead be optional, with officials in each state making the decision as to whether to expand.

Several governors have stated they intend to expand Medicaid by the 2014 target date, while several others have stated they do not plan to expand. Most, including Colorado’s, have either been silent or are studying the implications of expansion.

Colorado’s program has been reforming and transforming since early 2007, first as part of the state’s health reform agenda and later to prepare for implementation of the ACA. These reforms included myriad initiatives, including adopting medical homes for children in Medicaid and CHP+; expanding Medicaid eligibility for pregnant women and children; increasing reimbursements to pediatricians and other primary care providers; implementing new models of care for individuals with chronic conditions and high cost claims (now known as “hot spotters”); developing loan repayment programs and instituting quality incentive payments for nursing homes.

With the support and collaboration of provider organizations including the Colorado Medical Society, the state took further steps to expand coverage, develop new models of service delivery, and initiate payment reforms. The capstone was the passage of House Bill 1293 in 2009. The bill created a financing mechanism to expand Medicaid for the first time in Colorado to additional populations, including adults without dependent children, through a hospital provider fee.

Simultaneously the state had been working on new service models, moving away from fee-for-service. CMS strongly supported the development of a hybrid plan for Colorado that took the best ideas from other states. These efforts culminated in the creation of the Accountable Care Collaborative (ACC) that is now the foundation of the Medicaid service delivery system and delivering promising preliminary results.

As Colorado considers whether to participate in this latest expansion, however, there are several factors to consider – not the least of which are cost and whether there are enough providers willing and able to participate in the program to meet the increased need.

The ACA calls for the federal government to fund the expansion for the first three years. Thereafter, however, the state would have to provide a portion of matching funds (5% in 2017, 6% in 2018, 7% in 2019 and 10% in 2020). Colorado is still working to estimate how much money from the state’s coffers that could mean, and how much of it could be offset by savings realized in other state and local agencies, such as the Department of Corrections, local public safety, behavioral health, human services and public health.

Options
Colorado’s options may extend beyond an all-or-nothing expansion. Until the U.S. Department of Health and Human Services issues further guidance, it is assumed that states’ options include:

• Expand Medicaid but propose doing so in phases, i.e. up to 100% federal poverty level (FPL) by 2014, 125% FPL in 2015, to 138% FPL in 2016. Or expand to specific populations such as non-elderly dually eligible individuals.
• Examine the use of a Basic Health Plan (BHP) for individuals up to 200% FPL. The ACA gives states the option to put adults between 133 and 200% of FPL into a health plan with minimum essential benefits versus sending those individuals to the health benefit exchange for subsidies.
• Fully implement hospital provider fee expansion (from 10 to 100% FPL) but have individuals above 100% FPL go to the exchange with subsidies.
• Agree to expand eligibility under ACA but postpone the implementation date from 2014 to 2015 or later.
• Expand eligibility while the federal government’s share of costs is 100% (2014-2016), then roll back eligibility when the state has to provide a funding match beginning in 2017.
• Request a waiver (prior to 2017) to cover everyone with a state-designed approach instead of ACA models. The federal Health and Human Services (HHS) secretary has authority to allow a state to develop its own coverage model if it achieves the same coverage and financial goals of the ACA.

Many of these options would require federal approval through a state plan amendment or waiver and it is not clear if the HHS secretary would have the authority (or willingness) to grant waivers for all of these options.

CMS feedback
An online “flash” poll of CMS members showed the majority (60%) either strongly (38%) or somewhat (22%) supported the expansion, pollster Benjamin Kupersmit told members gathered at the annual meeting last month. Thirty-one percent strongly (10%) or somewhat (21%) opposed it, while 9% said they were unsure.

Asked what the organization’s top priorities should be as the discussion evolves, members responded with four clear areas: reimbursement rates, encouraging patient responsibility to achieve cost savings, streamlining/standardizing administrative procedures and liability reform.

“You can’t expand Medicaid and have the support of the majority without addressing at least three of these four things,” Kupersmit said. “It is absolutely urgent for that conversation to happen.”

In live polling during the annual meeting, 57% of physicians said “making the Medicaid program work better for physicians and patients” is the most important factor for CMS to consider when taking a position on the expansion. Access to care for Medicaid recipients was the response of 14%, while “financial impact on medical practices,” “concerns about the state budget” and “the role of government in health care” each received 8%.

Former CMS President Gary Vander-Ark, MD, told members that expanding Medicaid would save lives. Several physicians expressed concern, however, that without additional reforms and reimbursement that better covers the cost of providing care, there won’t be enough physicians participating in the program to meet the increased need.

Joan Henneberry, the former director of Colorado’s Health Care Policy and Financing department, told CMS members that the state recognizes physicians will need help from “an army” of health educators, social workers and others who will support doctors and work with them as a team. She also encouraged CMS members to share suggestions for innovative change as the conversation moves forward.

Mark Wallace, MD, president of the North Colorado Health Alliance in Weld County, noted that people who are not currently covered by Medicaid but would be under the expansion already are getting sick and getting care, but are doing so in “the most expensive places.” Physicians and policymakers shouldn’t forget that fact as they weigh how to proceed, he said. “Cost shifting is happening all the time, and I think to ignore it and to assume the uninsured aren’t getting sick and aren’t getting care … is a fallacy in this discussion,” Wallace said. “The hardest time to innovate is when there’s absolutely no funding.”

CMS is continuing to gather input from members and is available to answer your questions. Please contact chet_seward@cms.org for more information.