Transcript Document

Health Reform:
What the States are Doing Now
October 17, 2012, 2:00 - 3:00 pm ET
Matt Salo
Executive Director
National Association of Medicaid Directors
Jack Meyer, Ph.D.
Welcome to Philips
Healthcare’s
“Reimbursement
Simplified” Webinar
Series
Managing Principal
Health Management Associates
Laurel Sweeney (moderator)
Senior Director
Global Health Economics & Reimbursement
Philips Healthcare
Medicaid Reform: Views from
the States
Philips Healthcare Webinar
October 17, 2012
Matt Salo
Executive Director
National Association of Medicaid Directors
National Association of Medicaid
Directors
• NAMD created in 2011 to support the 56 state and
territorial Medicaid Directors.
• Core functions include:
– Develop consensus on critical issues and leverage
their influence with respect to national policy debates;
– Facilitate dialogue and peer to peer learning amongst
the members; and
– Provide best practices and technical assistance
tailored to individual members and the challenges
they face.
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Medicaid 101
• Public health care coverage program
– Administered by states within a federal
regulatory framework
– Jointly financed by the federal government and
states with an average federal share of 57%
• Currently covering more than 62 Million enrollees
• Currently spending more than $420 Billion per
year
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Medicaid’s Complexity
• Due to state decisions compounded over 45 years, the
program looks markedly different in practically every
state
– Who is covered, what services are offered, how
services are delivered, as well as how and how
much providers are reimbursed
• Within any given state, Medicaid’s role is multi-faceted:
– Coverage for the poor, but not all people in poverty
– 40% of the nation’s births
– The majority of all long term services and supports
– The majority of mental health funding, HIV/AIDS
funding, etc.
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States Face Several Major Challenges
1. Ongoing state budget challenges
2. Medicaid not producing optimal quality health
outcomes
3. Implementation of the Affordable Care Act (ACA)
requires transformational changes to the
program
4. Supreme Court decision turns decision to expand
program over to the states
5. November elections bring uncertainty
6. Federal deficit reduction efforts could complicate
efforts at reform
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Budget constraints (cont)
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Worst economy since the Great Depression
State revenues have YET to return to 2008
levels
Balanced budget requirements force tax
increases or spending cuts
Political appetite for tax increases nonexistent
Options for cutting Medicaid are slim or
unappealing
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MOE prohibits eligibility changes
Provider reimbursements already too low
Optional services include Rx and LTC
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Star Trek Solution: Kobayashi Maru
• When faced with an untenable, impossible choice:
think outside the box.
• Taxes cannot be raised enough and benefits
cannot be cut enough
• Reframe the question!
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Medicaid’s Primary Problem?
• It is merely a reflection of the broader U.S. health
care system
• 17% of GDP produces third world country
outcomes
• The system is dysfunctional and inefficient
• The fee-for-service (FFS) delivery model cannot
work in a fractured, silo driven environment
• Physical vs behavioral vs pharmaceutical vs long
term care
• Medicare vs Medicaid
• Payment incentives are badly aligned and drive
unnecessary utilization and spending
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Solution? Reform the Whole System!
• Move away from FFS (or “fend for self”) towards more
managed, coordinated care
• Can be capitated or not (PCCM)
• Frail seniors and younger adults with disabilities
have the most to gain
• Re-align dysfunctional Medicare/Medicaid relationship
for dual eligibles
• Create new payment incentives that financially reward
keeping patients out of hospitals and other intensive
settings
• Medicaid cant go alone – other payers need to be at
the table – see Arkansas
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Implementing the ACA
• In many ways, the foundation of the 2009 health
reform law is built upon Medicaid.
• States responsible for implementation of Medicaid
provisions in health reform
• Conducting outreach and enrollment
• Integrating Medicaid enrollment with the Exchanges
• Applying new income standards
• Building provider networks and ensuring access to care
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SCOTUS Decision and What it Means
• In a surprise decision, the Roberts court ruled that
the mandatory expansion was unconstitutional as
written.
• This is unprecedented!
• Will state’s have a binary option (yes or no) or will
they have greater ability to dictate what the
expansion looks like?
• We don’t know for sure…yet.
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What Do We Know?
• HHS guidance has trickled out in various forms
– Only the expansion itself is optional – all other
Medicaid-related components of the ACA still
apply
◦ DSH cuts
◦ Excise tax
◦ Temporary provider reimbursement rate increase
◦ Overhaul of how Medicaid eligibility is calculated
– States may start later than 1/1/14, but the
window for the 100% FMAP is unchanged
– States may choose at any time to sunset the
expansion
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The Big Remaining Question
• Can a state do a partial expansion – up to 100%
FPL, or some other level?
– Federally subsidies for private exchange
coverage begin at 100% FPL
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Factors to Consider in Weighing the
Options
• Political
• Outcome of November elections
• Role of state legislature and state hospital associations
• Ideological/Policy
• Is expanding Medicaid the best way provide coverage to
17 million new individuals
• Does holding out give a state more leverage to obtain
greater flexibility in how the new or existing program is
run?
• Financial
• What is the short and long term benefit/risk to states of
the expansion
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November Elections and Beyond
• Less than 12 months away from open enrollment:
• “Repeal and Replace” or “Business as Usual”?
• Federal Deficit Reduction/Entitlement Reform
• Bipartisan support for major changes in how
Medicaid is financed
• Block grants/per capita caps?
• FMAP reductions (including to enhanced match of
expansion)
• Provider Tax reductions
• Delay of Medicaid/Exchange expansion?
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States, Providers Prepare
for Exchanges and Health
Care Delivery/Payment
Reforms
Jack Meyer, Ph.D.
Health Management Associates
October 17, 2012
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States Are Making Progress
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15 states plus DC have established Exchanges
3 states are pursing partnership Exchanges
7 states have declared that they will not play
Another 16 states have not committed but are continuing
planning efforts
• 9 states have not shown significant planning activities
• Source: Kaiser Family Foundation
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Building Two New Markets
• American Health Benefits Exchanges
• SHOP Exchanges for employees of small firms
• Fundamental shift away from the traditional model of turn
downs, rate-ups for health conditions, gender, age (unlimited),
etc.
• In new model, plans and providers succeed by real care
management, better quality, safety
• These new markets must be user-friendly
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Functions Under Construction
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Screen and enroll; done through federal hub
Determine eligibility for subsidies
Set up different categories of cost sharing
Determine the essential benefits package
Implement wide range of insurance reforms
Implement risk adjustment and reinsurance
Qualify health plans, MLR and rate review
Achieve financial self-sustainability by 2015
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Don’t Think All or Nothing
• Most states are getting ready to do several tasks but will need
federal help on other tasks
• States lagging can learn from states leading
• Leaders include MD, CA, and TN
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About ten states will be ready on 1-1-14
Successive waves over 2014/2015
CHIP developed this way; so did Medicaid
Most states do not want a federal exchange
Big question is: will the feds be ready?
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Major Problems in US
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US $2.8 T; $8,233 per capita; France, $3,974, Germany $4,338
48.6 m uninsured; 25+ million underinsured
Life expectancy 81.1; France, 84.7;Germany 83
Medicare & Medicaid, tax breaks on autopilot
Care delivery remains very fragmented
Moving from paper to electronics too slowly
Malpractice system unfair, inefficient
Only 3-5% of health spending on prevention
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Other key Problems
• Population aging: chronic illness key challenge
• Prices for health care goods and services higher in US than in
other countries
• Huge variations in spending and quality
• Scary patient safety problems
• Lack of effective technology assessment
• Epidemic of obesity
• Fee-for-service underwrites all of this
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Challenges, Opportunities for
Providers
• Use team-based care
• Must follow the patient across settings of care
• Work with payers to reduce avoidable ER use, hospital
admissions, and readmissions
• Work to change reward system from volume to performance;
gain-sharing is key
• Use EHR incentives; achieve meaningful use
• Address, modernize scope of practice limits
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Other Challenges,
Opportunities
• Support more competitive markets
• Develop “coverage with evidence development” for advanced
technology
• Join in demos for episode of care bundling, etc
• Support tax exclusion caps, sin taxes
• Support sensible changes in public programs
• Reduce health care fraud
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Threats and Opportunities
• Physicians and hospitals that cling to the fragmented care
delivery system, FFS, the “paper chase,” and volume-based
rewards will lose out in the new climate
• By contrast, those who practice coordinated care, preventive
medicine, care management, and performance-based rewards
based on cost, quality, and safety will thrive
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Questions?
Please type your questions into the video player window.
The moderator will pose questions to the panelists.
We would like to hear your views on today’s webinar. Go to
http://www.surveymonkey.com/s/JVYFZB5
For more information on reimbursement, please visit the Philips Healthcare
Reimbursement Website at www.philips.com/reimbursement
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Speaker Bios
Matt Salo
Executive Director
National Association of Medicaid Directors
Matt Salo was named Executive Director of the National Association of Medicaid Directors
(NAMD) in February 2011. The newly formed association represents all 56 of the nation’s state
and territorial Medicaid Directors, and provides them with a strong unified voice in national
discussions as well as a locus for technical assistance and best practices.
Matt formerly spent 12 years at the National Governors Association, where he worked on the
Governors’ health care and human services reform agendas, and spent the 5 years prior to that
as a health policy analyst working for the state Medicaid Directors as part of the American Public
Human Services Association.
Matt also spent two years as a substitute teacher in the public school system in Alexandria, VA,
and holds a BA in Eastern Religious Studies from the University of Virginia.
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Speaker Bios
Jack Meyer, Ph.D.
Managing Principal
Health Management Associates
Jack Meyer, Ph.D. is a Managing Principal with Health Management Associates in the Washington, D.C. office, conducting
health care research, policy analysis, and strategic planning. He works for grant-making foundations, health industry
leaders, and state and federal agencies. Dr. Meyer also holds a joint appointment as a Professor at the University of
Maryland School of Public Policy and School of Public Health.
Dr. Meyer is assisting states and the federal government in the planning, design, and implementation of Health Insurance
Exchanges established under the Affordable Care Act. This involves helping states make key design choices and build the
infrastructure necessary to facilitate enrollment and choice of health plans.
Dr. Meyer’s current research also includes designing care management programs that address the complex medical needs
of lower-income people who will be newly eligible for Medicaid under national health reform. This includes studying their
utilization patterns and clinical conditions, including primary diagnoses and co-morbidities. He was the lead author on a
study of the rate of return on interventions to reduce ER visits and hospital readmissions and improve health outcomes
for people with chronic medical conditions.
Dr. Meyer has also participated in studies sponsored by the Commonwealth Fund that identify the ingredients of highperforming hospitals. This involved identifying hospitals with both excellent clinical outcomes and lower-than-average
costs and visiting them to determine the programs and policies they followed to achieve good results. He is the lead
author of a ten-year review of the transformation of the health care system in the District of Columbia, sponsored by the
Brookings Institution and the Rockefeller Foundation.
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