Medicaid: What Now

1
Medicaid What Now?
CityMatCH NACCHO E-MCH Conference Call
February 16, 2006

• Anne Markus, Ph.D., J.D., George Washington
  University, Department of Health Policy
• Kay Johnson, MPH, Johnson Group Consulting

2
Medicaid 101 Basic facts

• Medicaid is health care financing
• It works like insurance but pays for many things
  most private insurance doesnt cover.
• Medicaid is a federal-state partnership
• Some program rules are set by the federal
  government, others by the state.
• Federal and state dollars pay for services.

3
Benefits of Medicaid Expansion for Maternal
Child Health

• Medicaid has
• Become an important source of insurance for
  working families.
• Offset losses in employer coverage for
  dependents.
• Provided comprehensive coverage for more children
  with special needs.

4
Deficit Reduction Act of 2005

• Eligibility
• Premiums and cost-sharing
• Benchmark coverage
• Targeted case management

5
Who is eligible for Medicaid? What rules apply?
MEDICAID ELIGIBILITY
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Medicaid Eligibility groups

• Low income senior citizens
• Low income children, pregnant women, and some
  parents
• Persons with physical and mental disabilities
• Individuals receiving cash public assistance
  (welfare)

7
Eligibility for Children

• Children are currently more likely than adults to
  be eligible.
• Congress and states approved Medicaid expansions
  between1984-1990.
• Since 1996, the State Childrens Health Insurance
  Program (SCHIP) has covered more children.
• In about half of states SCHIP benefits provided
  under Medicaid program.

8
Eligibility for US Children

• Federal law mandates
• Infants and children to age 6 up to 133 of
  poverty
• Children ages 6-18 up to 100 of poverty
• States have options to cover other children
• Medicaid at any level
• SCHIP to 200 of poverty and above

Optional Medicaid and/or SCHIP up to or above
200 of poverty
Mandated up to 133 of poverty
Mandated up to 100 of poverty
Birth to 6 Ages 6 -18
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New Eligibility Option Family Opportunity Act
(Effective 1/1/2007)

• New State option allows children with
  disabilities to buy-into Medicaid
• Age Under age 19 phased-in, starting with
  younger children under age 6
• Income Up to 300 FPL higher with state funds
  only
• Premiums
• 5 cap lt200 FPL, 7.5 cap 200-300 FPL
• States may terminate coverage for failure to pay
  gt60 days
• States may waive payment if undue hardship
• Employer-sponsored family coverage
• Must enroll if eligible and 50 of premium paid
  by employer
• Premium subsidies at option of state

10
Eligibility Pre-DRA Documentation of Citizenship
/ Residency

• Citizens
• No written proof of citizenship at time of
  application (i.e., oral affirmation of
  citizenship status)
• Legal residents
• Written proof of legal status for legal residents
  at time of application

11
Eligibility Post-DRA Documentation (Effective
7/1/2006)

• Citizens
• No self-declaration of U.S. citizenship
• Must present either
• U.S. passport, certificate of naturalization,
  certificate of U.S. citizenship, valid drivers
  license, or other ID document deemed valid, or
• birth certificate or other ID document deemed
  appropriate
• Legal residents
• No change

12
Medicaid Health Insurance Flexibility and
Accountability (HIFA) Waivers
as of February 2006
Active HIFA waiver Pending HIFA waiver No HIFA
waiver Coverage for childless adults only
Source CMS, NASMD, Kaiser Family Foundation
13
Medicaid Family Planning Waivers
as of February 2006
Implemented FP waiver No FP waiver Women not
previously covered by Medicaid Coverage for
men Limited to teens
Source Kaiser Family Foundation, CMS, AGI, NASMD
14
How are Medicaid services financed? What do
families contribute?
MEDICAID FINANCING
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Federal / State Matching

• Under a federal - state partnership
• Federal financial participation (FFP)
• Level of FFP is set under federal law for each
  state.
• FFP can vary by service.
• States must provide matching funds.
• States must come up with funds to draw down
  federal dollars.
• Matching funds are generally state and local
  public dollars.

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Medicaid Family Cost Sharing

• PRIOR LAW
• Children, all income levels
• No premiums, no cost-sharing
• Demonstration waiver authority
• Pregnant women, all income levels
• No premiums
• Pregnancy-related services no cost-sharing
• Non-pregnancy-related services nominal
  cost-sharing (3 or 5 of cost of service, with
  special limits for institutional care)
• Demonstration waiver authority

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Premiums Cost-Sharing Post-DRA(Effective
3/31/06, except ER 1/1/07)

• State option to impose premiums, cost-sharing, or
  both
• Explicit limitations against excessive financial
  exposure for certain groups
• Physicians and hospitals may require payment of
  allowable cost-sharing may waive on case-by-case
• States may terminate coverage for failure to pay
  premiums if failure lasts gt60 days may waive if
  undue hardship
• HHS will annually adjust nominal cost-sharing
  levels for non-preferred Rx and non-emergent use
  of ER for the rate of medical inflation

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Premiums Cost-Sharing State Options

• No premiums and cost-sharing
• Premiums only within DRA/stricter state limits
• Cost-sharing only within DRA/stricter state
  limits
• Both premiums and cost-sharing within
  DRA/stricter state limits
• Premiums only beyond DRA limits with waiver
• Cost-sharing only beyond DRA limits with waiver
• Both premiums and cost-sharing beyond DRA limits
  with waiver

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Implementation Challenges/UnknownsPremiums
Cost-Sharing

• Limitations on financial exposure of very poor
  families with children
• Amount of premiums and cost-sharing
• Tracking system for aggregate maximum
  out-of-pocket expenses

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What services are covered?What benefits are
available to children under EPSDT?
MEDICAID BENEFITS
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Medicaid Benefits

• PRIOR LAW
• Some federally mandated
• Some optional, state selected
• Since 1989, more benefits required for children
• EPSDT is benefit package for children
• Included all allowable under federal law, even if
  not in state plan

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EPSDT

• We think of EPSDT as a set of requirements, not
  a specific service or benefit package.
• Paul Wallace Brodeur
• Former Medicaid director, Vermont

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EPSDT Framework

• Follow the letters
• Early - starting before problems worsen
• Periodic - at regular intervals as needed
• Screening - comprehensive well child exams
• with developmental, physical, and mental, plus
  separate vision, hearing, dental
• Diagnosis - as appropriate
• Treatment - all services (covered under federal
  law) needed for diagnosed conditions

24
Medicaid Benefits

• States must cover
• Inpatient hospital services
• Outpatient hospital services
• Physician services
• Nurse midwife and pediatric / family nurse
  practitioner services
• Medical surgical dental care
• Laboratory x-ray services
• EPSDT services
• Family planning services
• Rural health clinic and federally-qualified
  health center services
• Home health nursing facilities

• Optional, covered for children as necessary
• Prescription drugs
• Dental services
• Optometrist eyeglasses
• Mental health services
• Prosthetic devices
• Intermediate nursing facility / mental
  retardation services
• Nursing facility for lt age 21

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Medicaid Benefits

• NEW LAW
• Benefits required for children
• Guarantee is not the same.
• States may change benefit package based on
  benchmark plans.
• It appears EPSDT is intact but will not be
  offered in same manner.

26
Post-DRA Coverage Rules (Effective 3/31/2006)

• States have the option to use a benchmark
  benefit package and require enrollment for
  certain groups.
• No need for waiver State Plan Amendment suffices
• This is similar to what is used for State
  (non-Medicaid) SCHIP programs.

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Benchmark Plans State Options

• FEHBP standard Blue Cross/Blue Shield PPO option
• State employee benefit plan
• Coverage by HMO with largest insured, commercial,
  non-Medicaid enrollment in the state
• Another benefit package designed by the state and
  approved by HHS

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Post-DRA Coverage Wrap-around(Effective
3/31/2006)

• For children, states may supplement with
  wrap-around EPSDT coverage
• Benefits as defined since 1989 in Sec. 1905(r) of
  Medicaid law
• Obligation to provide comprehensive childrens
  services appears to be maintained. For all
  groups of children?
• CMS guidance expected

29
Benchmark Benefits No definition

• Actuarial value equivalent to benchmark for 5
  basic services
• Inpatient and outpatient hospital services
• Physicians surgical and medical services
• Lab and x-ray
• Well-baby and well-child care, including
  age-appropriate immunizations
• Other preventive services defined by HHS
• 75 of actuarial value of benchmark for 4
  additional services
• Rx
• Mental health
• Vision
• Hearing

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Implementation Challenges Unknowns related to
Coverage

• What will be defined in benchmark vs. wrap-around
  benefits?
• How will benchmark and wrap-around coverage be
  coordinated?
• How will plans, providers, and patients be
  informed?

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What are the types of Medicaid case
management?What has changed?
MEDICAID Case Management
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Case Management PRIOR LAW
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Targeted Case ManagementAfter DRA (Effective
1/1/2006)

• Definition changed
• Narrows types of case management for certain
  individuals that qualify for federal
  reimbursement
• Limits availability of FFP in cases where third
  party liability (TPL) exists
• i.e., if another entity is liable for payment

34
Targeted Case ManagementAfter DRA General
Definition

• Expands the definition
• Assessment
• Development of care plan
• Referrals
• Monitoring and follow-up
• Excludes from the definition
• Direct delivery of referred medical, educational,
  social, or other services
• Potentially related to Part C Early Intervention,
  home visiting, mental health, child development,
  etc.

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Targeted Case ManagementAfter DRA Foster Care

• Excluded foster care services
• research gathering/completing documentation
• assessing adoption placements
• recruiting/interviewing foster care parent
• serving legal papers
• investigating homes
• administering subsidies and
• making placements.

36
Targeted Case Management Types and Conditions
for FFP

• Individuals who are not eligible for medical
  assistance under state plan or who are eligible
  but not part of the targeted population specified
  in state plan
• Allowable CM Contacts directly related to the
  management of individuals care
• Non-allowable CM Contacts directly related to
  the identification and management of individuals
  needs and care

37
Targeted Case Management Third Party Liability
Recovery

• FFP available only if no other third parties are
  liable to pay for services
• Third parties include medical, social,
  educational and other programs
• Exemption IHS and Ryan White Act activities

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How can local public health leaders affect
implementation?
Local Action
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Learn Think Do

• Review these slides and keep up to date on
  analyses of the DRA.
• Think about the implications for
• the children and families you serve
• the programs you operate.
• Prepare to inform others in your agency and
  policymakers.
• Use opportunities to make lemonade.

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Be Strategic

• Promote new option to cover children with
  disabilities.
• Start planning to replace existing targeted case
  management dollars.

• Design local coordination strategies to fit any
  wrap-around coverage plans.
• Analyze impact on immigrant families.