While a handful of states said they would not expand Medicaid under the Affordable Care Act, all state Medicaid programs are experiencing some transformation.
According to a Kaiser Family Foundation report, states are reforming administrative, financing and eligibility processes and healthcare delivery through innovative policies with the goal of better managing the program. Some are designing their future changes through waivers with the Centers for Medicare & Medicaid Services.
“These changes represent some of the most significant to Medicaid since its enactment in 1965, and taken together, are transforming the role of Medicaid in the healthcare system in each state,” the Kaiser report said.
For example, California is expanding beneficiary eligibility, managed care and alternative payment and delivery policies, while also establishing reimbursement reductions and some increases. Most hospitals, non-primary care physicians, dentists and pharmacist will see a 10-percent reimbursement cut. But primary care physicians with at least 60 percent of Medicaid-billed services are receiving reimbursement increases, with rates brought in line with Medicare, according to the Kaiser Family Foundation.
Those changes are being combined with directed incentives or disincentives for beneficiaries and benchmarks for insurers. And under a federal waiver, California is expanding managed care this fiscal year to about 400,000 residents in 28 rural counties, said Toby Douglas, director of California Department of Health Care Services, in a news release.
Some states are already seeing results from their innovations. For example, Colorado, which was the first state to experiment with accountable care in Medicaid, achieved $44 million in gross savings or cost avoidance in its accountable care collaborative program during the 2012-2013 fiscal year. Launched in 2010, the collaborative preserves fee-for-service but tries to incentivize value-based, coordinated care in primary care settings through a number of policies.
In Iowa, the state is using a federal waiver to roll out the Iowa Wellness Pan, which blends managed and accountable care coverage for members earning up to 100 percent of the federal poverty level, and subsidized private health plans for those earning up to 133 percent of the poverty level.
Utah, Minnesota, Oregon and South Carolina also have adopted accountable care Medicaid pilot programs.
Despite the fact that there is a lot of federal money on the table for expanded Medicaid, in many state houses it’s not a question of wanting more people to have coverage, but how best to do it. Is expansion of the Medicaid program in its present form the best way to do it?
“A lot of states, like Iowa, are saying we could make some tweaks to make it look more like private sector, make it look like a program with more personal responsibility,” he said.
For example, to help reduce the problem of churn, where low-income individuals move in and out of Medicaid repeatedly because of changes to their income – and having to switch doctors – 30 states will have at least one health plan operating as both a private insurer and a Medicaid managed care plan on the state and federal health insurance exchanges, according to an Avalere Health report.
“If more plans decide to bridge Medicaid and exchanges in the future, care continuity and quality could also improve through more consistent sharing of healthcare information about consumers who maintain coverage within the same organization,” said Matt Eyles, Avalere Health executive vice president, in a news release.
States are coming up with innovative ways to transform their Medicaid programs. In Iowa, the state is using a federal waiver to roll out the Iowa Wellness Pan, which blends managed and accountable care coverage.