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Healthcare Payment Systems & Policy: Medicaid & CHIP


Healthcare Payment Systems & Policy: Medicaid & CHIP Kimberly Davis Policy Advisor for Policy Development Medicaid/CHIP Division Overview Medicaid & CHIP: Overview ... – PowerPoint PPT presentation

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Title: Healthcare Payment Systems & Policy: Medicaid & CHIP

Healthcare Payment Systems PolicyMedicaid
  • Kimberly Davis
  • Policy Advisor for Policy Development
  • Medicaid/CHIP Division

  • Medicaid CHIP Background
  • Benefits
  • Eligibility Enrollment
  • Costs Financing
  • Delivery Models
  • Texas Specifics
  • Current HHSC Initiatives

Medicaid CHIP Overview
Medicaid What is it?
  • Provides medical coverage to eligible individuals
  • Low-income families
  • Non-disabled children
  • Related caretakers of dependent children
  • Pregnant women
  • People age 65 and older
  • People with disabilities
  • Entitlement program no enrollment limitation

Medicaid What is it?
  • Federal / State Program
  • Funded jointly by state and federal governments
  • Administered by states
  • Subject to federal law and regulation
  • Requires coverage of certain populations and
  • Allows states to cover additional populations and

Medicaid Who runs it?
  • Federal level
  • Centers for Medicare Medicaid Services (CMS)
  • Within the U.S. Department of Health and Human
  • Kathleen Sebelius Secretary of Health and Human
  • Cindy Mann Director, Center for Medicaid and
    State Operations
  • Texas level
  • Administered by single state agency HHSC
  • Billy Millwee Texas State Medicaid Director
  • Single point of contact with federal government
  • Establishes Medicaid Policy
  • Administers state plan or agreement with the
    federal government
  • Administers Medical Care Advisory Committee
    (MCAC) mandated by federal Medicaid law

Medicaid in the Federal Budget, Federal Fiscal
Year 2009
Medicaid State Plans State Federal Program
  • State Plans agreements with federal government
  • Eligibility
  • Services
  • Program administration
  • Financial administration
  • Other program requirements
  • State Plan Amendments (SPA) requests to CMS to
  • Optional services provided, or
  • Manner benefits are offered.

Medicaid Waivers State Federal Program
  • Waivers state request to CMS for permission to
    deviate from certain requirements, often to
  • Provide services beyond those in state plan.
  • Limit geographical areas.
  • Limit free choice of providers.
  • Implement innovative new service delivery and
    management models.
  • Common Types of Medicaid Waivers
  • 1115 Waiver Research and Demonstration Test
    policy innovations likely to further Medicaid
    program objectives.
  • 1915(b) Waiver Freedom of Choice Allow states
    to implement managed care delivery systems or
    otherwise limit individuals' choice of provider
    under Medicaid (i.e. STARPLUS).
  • 1915(c) Waiver Home and Community-Based
    Services Waive Medicaid provisions to deliver
    long-term care services and supports in community
    settings as an alternative to institutional

CHIP What is It?
  • Childrens Health Insurance Program (CHIP)
  • Medical coverage for uninsured children up to age
  • Joint state-federal program, either
  • Extension of state Medicaid program
  • Separate program
  • Federal funding
  • Limited to block grant amounts allocated to each
  • Not entitlement program, so states can
  • Determine age and income eligibility.
  • Cap enrollment.
  • Limit service benefits (as approved by HHS).

Medicaid Benefits Acute and Long-Term Care
  • Acute Care
  • Physician, inpatient, outpatient, pharmacy,
    behavioral health, lab, X-ray services
  • Health care for children and pregnant women for
    episodic health care needs.
  • Long-Term Services and Supports
  • Chronic health conditions requiring ongoing
    medical care often social support.
  • Includes care
  • In facilities, e.g. nursing homes
  • For behavioral health conditions
  • Distinction based on
  • Cognitive and medical condition
  • Need for assistance with activities of daily
  • Degree to which a disability is chronic
  • Nature of services provided
  • Setting in which services are provided

Medicaid Benefits Mandatory vs. Optional
  • Mandatory
  • Inpatient hospital services
  • Outpatient hospital services
  • Early and Periodic Screening, Diagnostic, and
    Treatment (EPSDT) services
  • Nursing facility services
  • Home health services
  • Physician services
  • Rural health clinic services
  • Federally qualified health center services
  • Laboratory and X-ray services
  • Family planning services
  • Nurse midwife services
  • Certified pediatric and family nurse practitioner
  • Freestanding birth center services (when licensed
    or otherwise recognized by the state)
  • Transportation to medical care
  • Smoking cessation for pregnant women

Medicaid Benefits Mandatory vs. Optional
  • Optional
  • Prescription drugs
  • Clinic services
  • Physical therapy
  • Occupational therapy
  • Speech, hearing and language disorder services
  • Respiratory care services
  • Other diagnostic, screening, preventive and
    rehabilitative services
  • Podiatry services
  • Optometry services
  • Dental services
  • Dentures
  • Prosthetics
  • Eyeglasses
  • Chiropractic services
  • Other practitioner services
  • Private duty nursing services
  • Other services approved by HHS Secretary

CHIP Benefits
  • Inpatient hospital services
  • Outpatient hospital ambulatory services
  • Lab X-ray
  • Surgical medical physician / physician extender
    services (including immunizations well-baby /
    well-child exams)
  • Emergency services
  • Prescription drugs
  • Behavioral health substance abuse benefits
  • Physical / speech / occupational therapy
  • Home health
  • Transplants
  • Durable medical equipment
  • Dental services
  • Hospice care services
  • Skilled nursing facilities
  • Vision (eye exams / eyeglasses)
  • Chiropractic services
  • Tobacco cessation

CHIP Benefits
  • Perinatal benefits limited, basic prenatal care
  • Prenatal postpartum visits
  • First 28 weeks of pregnancy 1 visit every 4
  • 28 to 36 weeks of pregnancy 1 visit every 2-3
  • 36 weeks to delivery 1 visit per week
  • Delivery
  • Hospital facility charges
  • Professional services charges
  • Other
  • Pharmacy (based on CHIP formulary)
  • Prenatal vitamins
  • Limited laboratory testing
  • No cost-sharing requirements
  • 2 postpartum visits
  • Additional visits if medically necessary

Assessments Planning services Education
and counseling
Income and Federal Poverty Levels
  • Federal Poverty Level (FPL)
  • Compared to familys income level.
  • Basis for Medicaid financial eligibility.
  • Intended to identify the minimum amount of income
    a family would need to meet certain, very basic,
    family needs.
  • Indicate annual income levels by family size and
    are updated each year by the U.S. Department of
    Health and Human Services.

Federal Poverty Income Levels, 2011
U.S. Department of Health and Human Services
poverty guidelines based on annual income
Family Size 100 FPL 1 10,890 2
14,710 3 18,530 4 22,350 5
26,170 6 29,990 7 33,810 8 37,630
At 100 of poverty, for families larger than 8,
add 3,820 for each additional person.
SOURCE  Federal Register, Vol. 76, No. 13,
January 20, 2011, pp. 3637-3638
Medicare and Medicaid Eligibility
  • Medicaid
  • Jointly funded by federal and state government
  • Administered by state
  • Eligibility
  • Low-income individuals
  • Pays for most long-term care services
  • Medicare
  • Federally funded
  • Federally administered
  • Eligibility
  • People age 65
  • People with disabilities
  • People with end stage renal disease

Medicaid Medicare Dual Eligibles
  • Dual eligibles
  • Individuals who are aged or disabled (Medicare
    eligible) AND
  • Limited income (eligible for some Medicaid
  • Full Dual Eligibles
  • Entitled to Medicaid benefits that Medicare does
    not cover.
  • Include low-income individuals who are aged or
    disabled in community, waiver programs, nursing
    homes, and state schools.
  • Other Dual Eligibles
  • Eligible only for Medicaid payments for Medicare
    premiums, deductibles, and coinsurance for
    Medicare services.
  • Not entitled to Medicaid services.
  • Include several categories of eligibility
    incomes generally up to 135 of FPL.

CHIP Eligibility
  • CHIP covers children in families who
  • Have too much income or too many assets to
    qualify for Medicaid.
  • Cannot afford to buy private insurance.
  • Generally are below 200 of the FPL.
  • States can design their CHIP program as
  • Medicaid expansion (7 states, D.C. and 5
  • Separate from Medicaid (17 states)
  • Combination of the two approaches (26 states)

Medicaid CHIP Texas Specifics
Texas Medicaid Organization
Texas Medicaid Optional Benefits
  • The state may choose to provide some, all, or no
    optional services specified under federal law.
  • Optional services provided in Texas include
  • Prescription drugs
  • Physical therapy
  • Occupational therapy
  • Targeted case management
  • Some rehabilitation services
  • Certified Registered Nurse Anesthesiologists
  • Eyeglasses/contact lenses
  • Hearing aids
  • Services provided by podiatrists
  • Certain mental health provider types

Texas Medicaid Pharmacy Benefits
  • HHSC Vendor Drug Program performs most pharmacy
    services functions, including policy and program
    oversight, formulary management, and pharmacy
    customer services.
  • Texas contracts with private companies for
  • Pharmacy claims processing
  • Prior authorization services
  • Administration of drug rebate program
  • Texas contracts with pharmacies to provide
    Medicaid clients with pharmacy benefits.
  • Over 4,200 licensed Texas pharmacies are under
  • Beginning March 2012, managed care organizations
    (MCOs) will be responsible for providing pharmacy
    benefits to their members

Texas Medicaid Womens Health Program (WHP)
  • Certain screenings related to family planning
  • Pregnancy test
  • Rubella antibody test
  • Routine urinalysis
  • Urine culture
  • Complete blood count (CBC)
  • Hemoglobin and hematocrit tests
  • Blood typing
  • Blood glucose screening
  • Lipid panel
  • Thyroid stimulating hormone test
  • Annual family planning exam Pap smear
  • Follow-up visit, if related to contraceptive
  • Counseling on specific methods use of
  • Female sterilization
  • Follow-up visits related to sterilization
  • Sexually Transmitted Infection (STI) Screenings

Texas Medicaid Womens Health Program (WHP)
  • Services not covered through WHP
  • Mammography - screens for breast cancer are
    limited to a clinical breast exam.
  • Treatment for any conditions diagnosed during a
    WHP visit.
  • Visit for pregnancy test only.
  • Visit for STI test or treatment only.
  • Follow-up after an abnormal Pap test.
  • Counseling on and provision of emergency
  • Referrals made for medical problems to providers
    that perform elective abortions.
  • Other visits that cannot be appropriately billed
    with one of WHP- allowable diagnosis codes.

Texas CHIP Benefits
  • Inpatient general acute rehabilitation hospital
  • Surgical services
  • Transplants
  • Skilled nursing facilities
  • Outpatient hospital, comprehensive outpatient
    rehabilitation hospital, clinic ambulatory
    health care center services
  • Physician/physician extender professional
    services (including well-child exams preventive
    health services)
  • Laboratory radiological services
  • Durable medical equipment, prosthetic devices,
    disposable medical supplies
  • Home community-based health services
  • Nursing care services
  • Inpatient mental health services
  • Tobacco cessation
  • Outpatient mental health services
  • Inpatient residential substance use treatment
  • Outpatient substance use treatment
  • Rehabilitation and habilitation services
  • Hospice care services
  • Emergency services
  • Emergency medical transportation
  • Care coordination
  • Case management
  • Prescription drugs
  • Dental services
  • Vision
  • Chiropractic services

Texas CHIP Perinatal Program
  • Provides prenatal post-partum care to pregnant
    women ineligible for Medicaid due to
  • income (whose income 186-200 FPL), or
  • immigration status (with income below 200 FPL).
  • Upon delivery, CHIP Perinatal newborns in
  • With incomes at or below 185 FPL
  • are deemed to Medicaid
  • receive 12 months of continuous Medicaid coverage
  • With incomes above 185 FPL up to 200 FPL
  • remain in CHIP Perinatal Program
  • receive CHIP benefits for the remainder of the
    12-month coverage period
  • Members receiving CHIP Perinatal benefits are
    exempt from
  • 90-day waiting period, asset test all
    cost-sharing, including enrollment fees co-pays

Medicaid Benefits Compared to Private
Employer-Sponsored Coverage
Texas Medicaid Eligibility
  • Medicaid serves
  • Low-income families
  • Non-disabled children
  • Related caretakers of dependent children
  • Pregnant women
  • People age 65 and older
  • People with disabilities
  • Texas Medicaid does not currently serve
  • Non-disabled, childless adults

Texas Medicaid Eligibility Percent of FPL June
Texas Medicaid Womens Health Program (WHP)
  • WHP Eligibility Criteria
  • Ages 18 44.
  • U.S. citizens qualified immigrants.
  • Reside in Texas.
  • Not eligible for full Medicaid benefits, CHIP, or
  • Not pregnant.
  • Not sterilized, infertile, or unable to get
    pregnant due to medical reasons.
  • No private health insurance coverage covering
    family planning services.
  • Exception if filing a claim would cause physical,
    emotional, or other harm from a spouse, parent,
    or other person.
  • Countable household income at or below 185 FPL.

Texas CHIP Eligibility
  • General eligibility
  • Uninsured children under age 19.
  • CHIP Perinatal serves unborn children meeting
    eligibility requirements.
  • Gross income up to 200 FPL.
  • U.S. citizens or legal permanent residents.
  • Not eligible for Medicaid.
  • Families with net incomes above 150 FPL must
    meet assets criteria
  • Assets below 10,000.
  • One vehicle is exempt up to 18,000 additional
    vehicles are exempt up to 7,500.
  • Eligibility is determined for a 12-month period
    income verification at 6th month for families at
    185 FPL and above
  • CHIP Perinatal eligibility is determined for a
    12-month period

Texas Medicaid Enrollment
  • The Texas Medicaid program has grown considerably
    in recent years.
  • Texas Medicaid now serves over 3.4 million people
    out of a total population of about 25 million (as
    compared to 2.8 million in 2006).
  • Persons who are aged, blind or disabled
  • 25 of Texas Medicaid recipients.
  • 58 of Texas Medicaid costs.
  • They often have complex medical conditions,
    needing both
  • Acute care (e.g. hospitalization, outpatient
    services, and laboratory), and
  • Long term services and supports (LTSS) provided
    in the home or community (e.g. assistance with
    daily living, skilled nursing, and therapy

Texas Medicaid Historical Enrollment
History of Medicaid Eligibility Caseload
September 1977- August 2010
Texas Medicaid Enrollment by Age, State Fiscal
Year 2009
Texas Medicaid Enrollment Spending
  • June 2011, 3.3 million people received Medicaid.
  • Over 2.3 million are children.
  • Over 700,000 are individuals who are aged, blind,
    or disabled.
  • Texas Medicaid beneficiaries expenditures,
    state fiscal year 2009

Texas Medicaid State Budget
  • Medicaid spending
  • FY 2010-2011
  • 44.9 billion from all fund sources
  • 18.8 billion from General Revenue (GR),
    GR-Dedicated, and Tobacco Settlement Receipts
  • 75 of all appropriations for HHS

Texas Medicaid Historical Spending
16.1 B
Federal Spending
State Spending
Texas CHIP Enrollment Spending
  • How many children in Texas are enrolled CHIP?
  • Caseload for June 2011 539,137 children
  • How much is spent on CHIP?
  • Total state fiscal year 2010 budgeted for CHIP
  • 815.6 million from all fund sources
  • 270.2 million from GR
  • Based on FY 2010 Operating Budget.  Includes
    all traditional CHIP costs client service costs
    for federally funded children, legal immigrants,
    school employee children, and vendor drugs
    administrative and operating expenses.

Texas CHIP Average Monthly Enrollment, State
Fiscal Year 2000-2010
Texas CHIP Enrollment by Age, State Fiscal Year
Texas CHIP Perinatal Program Enrollment, State
Fiscal Year 2007-2010
Texas Medicaid FMAP
  • Federal Medical Assistance Percentages (FMAP)
  • Portion of total Medicaid costs paid by the
    federal government.
  • Texas FMAP for federal fiscal year 2012 58.42
  • Of each dollar spent on Medicaid services in
    Texas, the federal government pays approximately
    58 cents.
  • Based on average state per capita income compared
    to the U.S. average.
  • Small changes in the FMAP could result in
    significant loss or gain of federal funds.

Texas Medicaid DSH Payment
  • Medicaid Disproportionate Share Hospital (DSH)
  • Source of reimbursement to state-operated and
    non-state (local) Texas hospitals that treat
    indigent patients.
  • Federal law requires that state Medicaid programs
    make special payments to hospitals that serve a
    disproportionately large number of Medicaid and
    low-income patients.
  • Not tied to specific services for
    Medicaid-eligible patients, unlike other Medicaid
  • Total funds to all DSH hospitals in state fiscal
    year 2009 1.615 billion
  • State DSH Hospitals 339 million
  • Non-state DSH Hospitals 1.276 billion

Texas Medicaid UPL Payment
  • Upper Payment Limit (UPL)
  • Financing mechanism used by states to provide
    supplemental payments to hospitals or other
  • Federal regulations allow states to pay providers
    up to what Medicare would have paid, or the
    amount the hospital charges for services.
  • States may use local funds transferred to the
    state to fund the supplemental payments.
  • HHSC currently makes UPL payments to
  • 4 state-owned hospitals
  • 11 non-state large urban public hospitals
  • 100 non-state owned rural public hospitals
  • 7 childrens hospitals
  • 11 state university physician group practices
  • unknown number of privately-owned hospitals in
    Private Hospital UPL program

  • Enhanced Federal Medical Assistance Percentages
  • Portion of total CHIP costs paid by the federal
  • Generally higher than Medicaid
  • In 2012, the federal government pays 70.89 of
    CHIP medical care expenditures
  • Compared to 58.42 of Medicaid medical care

Texas CHIP Historical Spending, State Fiscal
Year 2000-2010
Texas CHIP Cost Sharing
  • CHIP annual enrollment fee
  • 0 for families with net income less than 150
  • 35 for families between 151-185 FPL
  • 50 for families between 186-200 FPL
  • Families are required to pay the enrollment fee
    upon enrollment or renewal of CHIP.

Texas CHIP Cost Sharing
  • Families enrolled in CHIP are responsible for
  • co-payments for certain plan benefits.

Texas Medicaid Womens Health Program (WHP)
  • In 2008, WHP saved
  • 63 million (all funds) due to reduction in
    expected births.
  • 42.4 million (all funds) after paying program
  • State share of reduced Medicaid costs totaled
  • approximately 23.5 million (GR)
  • net state share of savings after paying WHP
    expenditures totaled approximately 21.4 million

Medicaid Delivery ModelsManaged Care vs. FFS
  • Managed Care Programs in Texas
  • STAR provides acute care services to children,
    pregnant women, and families.
  • STARPLUS provides acute and long-term services
    and supports to individuals with disabilities and
    elderly people.
  • NorthSTAR provides behavioral health services
    to individuals in a multi-county area in and
    around Dallas.
  • STAR Health provides a comprehensive managed
    care program for children in foster care.
  • Fee-for-Service (FFS)/Traditional Medicaid
  • A few eligibility categories remain in FFS.
  • Individuals in FFS can choose any provider.
  • FFS does not offer the management or utilization
    controls that managed care provides.

Provider Reimbursement Managed Care vs. FFS
  • Payment and processes vary by delivery model
  • Managed Care
  • HHSC pays MCOs a capitated rate.
  • MCOs pay providers reimbursement rates
    established by contracts with the providers.
  • Providers send claims (bills for services) to the
    MCO for payment.
  • FFS
  • HHSC establishes FFS methodologies to pay
  • Claims are sent to state for payment.

Texas CHIP Delivery Systems
  • CHIP Service Delivery Models include
  • MCO A type of health care plan that arranges
    for or provides benefits to covered clients
  • The state pays the CHIP MCOs on a capitation
    basis a set dollar amount PMPM to cover the
    health care costs of clients.
  • Client selects an MCO and a Primary Care Provider
  • PCP authorizes services within the network
  • Providers are paid reimbursement rates
    established by the MCO
  • Exclusive Provider Organization A health plan
    that arranges for or provides benefits to covered
    persons through a network of exclusive providers
  • Limited to services provided to client in
    network, except for emergencies.
  • Dental Maintenance Organization for dental

Medicaid CHIP New Initiatives
Budget-Related Outcomes of the 82nd Texas
  • Summary of Medicaid Funding for FY 2012-13
  • 40.6 billion in All Funds (17.1 billion in GR).
  • Assumes expansion of managed care, anticipated to
    result in a net savings of 385.7 million GR and
    increases in insurance premium tax revenue
  • Funding levels continue provider rate reductions
    implemented during the 2010-2011 biennium,
    including an 8 hospital rate reduction.
  • Cost containment initiatives totaling 1.8
    billion in GR funds, including 450 million
    assumed in Rider 61.

Budget-Related Outcomes of the 82nd Texas
  • Statewide Standard Dollar Amount (SDA)
  • Converted hospital reimbursement from a
    hospital-specific, cost-based reimbursement to a
    statewide base SDA effective September 1, 2011.
  • HHSC worked closely with hospital industry to
    develop the statewide SDA.
  • Add-on adjustments for hospital wages, medication
    education, and trauma centers to recognize
    high-cost services and geographic variations.
  • Hold Harmless
  • HHSC authorized to use up to 20 million in
    GR(48.1 million all funds) to mitigate losses
    to hospitals that are disproportionately
  • Funding available up to September 1, 2012.

Budget-Related Outcomes of the 82nd Texas
  • Medicare Equalization
  • Past Texas Medicare-Medicaid Policy
  • Part A - State limits Medicare coinsurance and
    deductible payments to no more than the Medicaid
    rate for the same service.
  • Part B - State makes Medicare coinsurance and
    deductible payments. Total payment for service
    may exceed Medicaid rate.
  • As of January 2012
  • The 2012-13 General Appropriations Act directs
    HHSC to align payment policies for Medicare Part
    A and B cost sharing.

Initiatives from the82nd Texas Legislature
  • Managed Care Expansion
  • September 1, 2011
  • Expanded existing STAR and STARPLUS service
    areas to contiguous counties.
  • March 1, 2012
  • Expand STAR to new service areas.
  • Expand STARPLUS to new service areas.
  • Replace TX Primary Care Case Management Program
    (PCCM) with a capitated MCO program.
  • Carve the pharmacy benefit into the services
    delivered by the Medicaid and CHIP MCOs.
  • Develop statewide Medicaid dental MCOs.

Initiatives from the82nd Texas Legislature
  • Reduce inappropriate utilization of Emergency
    Departments (ED) by Medicaid recipients
  • ED hospital rates
  • As of September 1, 2011, HHSC applied a 40
    reduction to facility charges for non-emergent
    services delivered in an ED setting to recipients
    of Medicaid FFS
  • Medicaid cost-sharing
  • Encourage personal accountability and appropriate
    use of health care services.
  • Cost-sharing includes non-emergency services
    through a hospital ED.
  • HHSC is researching options for implementation.
  • Target implementation date is December 2012.
  • Develop incentives though MCOs for providers to
  • Offer evening and weekend hours, and
  • Educate recipients about appropriate Emergency
    Department utilization.

Initiatives from the82nd Texas Legislature
  • Quality Initiatives
  • Shift to paying for outcomes and quality instead
    of volume.
  • Quality-based payments for hospitals and managed
  • Policy changes
  • Example Ending Medicaid payments for elective
    deliveries prior to 39 weeks.
  • S.B. 7 established
  • Quality-Based Payment Advisory Committee
  • Texas Institute of Health Care Quality and

Healthcare Transformation 1115 Waiver
  • Texas Health Care Transformation and Quality
    Improvement Program 1115 Waiver includes
  • Managed care expansion
  • Expands Medicaid managed care services statewide.
  • Includes legislatively mandated pharmacy carve-in
    and dental managed care.
  • Hospital financing component
  • Preserves hospital funding under a new
  • Creates Regional Healthcare Partnerships (RHPs).

Healthcare Transformation 1115 Waiver
  • Under the waiver, trended historic UPL funds and
    additional new funds are distributed to hospitals
    through two pools
  • Uncompensated Care Pool
  • Costs of care provided to individuals who have no
    third party coverage for the services provided by
    hospitals or other providers (beginning in first
  • Delivery System Reform Incentive Payments
  • Support coordinated care and quality improvements
    through RHPs to transform care delivery systems
    (beginning in later waiver years).

Healthcare Transformation 1115 Waiver Pool
Healthcare Transformation 1115 Waiver
  • RHPs
  • Will form around hospitals currently receiving
    UPL payments.
  • Will develop plans to address local delivery
    system concerns with a focus on improved access,
    quality, cost-effectiveness, and coordination.
  • Must provide opportunities for public input in
    plan development and review.
  • Should encourage broad engagement of local
    stakeholders in RHPs.

Chronic Conditions Waiver
  • S.B. 1, 82nd Legislature, First Called Session,
  • If feasible and cost-effective, HHSC may apply
    for a waiver to more efficiently leverage use of
    state and local funds.
  • Would provide benefits to individuals eligible to
    receive services through the county for chronic
    health conditions.
  • Requires broad-based input from interested
  • Must use intergovernmental transfers to maximize
    federal Medicaid matching funds.

Affordable Care ActMedicaid Expansion
  • Medicaid eligibility expands to include
    individuals under age 65 with incomes up to 133
  • Includes income deduction of 5 percentage points,
    creating effective eligibility level of 138 FPL.
  • In 2014, Texas will experience 1.8 million
    increase in caseload.
  • New client populations in Texas include
  • Parents and caretakers at 14 - 133 of FPL
  • Childless adults up to 133 FPL
  • Emergency Medicaid in expansion populations
  • Children in foster care through age 25
  • Federal government bears full cost of coverage
    for new eligibles for first 3 years of mandatory

Current Estimated Future Medicaid/CHIP
Eligibility Levels
Current Medicaid 225 FPL
Current Medicaid 185 FPL
Current Medicaid 185 FPL
Current Medicaid 185 FPL
NEW Medicaid (Currently CHIP) 133 FPL
NEW Medicaid 133 FPL
Current Medicaid 133 FPL
NEW Medicaid 133 FPL
Current Medicaid 100 FPL
Current Medicaid 74 FPL
14 FPL
Affordable Care Act Eligibility Changes
  • State Health Benefit Exchange (HBE)
  • The law requires each state to have a HBE.
  • If a state chooses not to operate a HBE, the
    federal government will operate an HBE for the
  • Texas has not yet decided whether or not it will
    operate an HBE.
  • Medicaid, CHIP, and the HBE must interface.
  • Applications through the HBE must be deemed to
    Medicaid and CHIP with no additional required
    action by the applicant.

Affordable Care ActMedicaid Benchmark Benefit
  • Federal law allows for a Medicaid benchmark
    benefit that
  • Will be provided to the new Medicaid adult
    expansion population in 2014,
  • May be different from the regular Medicaid
    benefit package,
  • Must include essential health benefits (EHB), as
    defined by federal Department of Health and Human
    Services (HHS).
  • In December 2011, HHS released initial guidance
    on EHB.
  • Additional guidance specific to Medicaid is
  • HHSC is reviewing the guidance and researching
    options for Texas while awaiting additional
  • Texas will seek stakeholder input while
    developing the benchmark benefit.

Texas Health Care Coverage Post ACA
Estimated Insured but not Subsidized (In or Out
of Exchange) 15.5 million
of Federal Poverty Level
Estimated Insured Subsidized in Exchange 1.9
Estimated Medicaid/CHIP 5.6 million
Estimate of Ongoing Uninsured 2.3 million
Current State Challenges
  • Redesign of existing programs
  • Strengthening and transforming the health care
  • Streamlining Medicaid and CHIP eligibility
    determinations and coordinating with the HBE.
  • Effectively redesigning existing state and local
    programs currently serving the population.
  • Building adequate workforce to serve newly
    insured populations.
  • Uncertainties
  • Pending federal guidance for many provisions,
    which complicates states ability to implement.
  • Long term fiscal planning as federal
    participation levels decrease over time.
  • Estimating the ongoing needs of the undocumented
    and remaining uninsured populations.

Additional Resources
  • Medicaid Managed Care Initiatives
  • Approved Healthcare Transformation 1115 waiver
  • HHSC News Releases
  • Texas Medicaid Pink Book
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