Amid what the Kaiser Family Foundation calls "some of the most significant changes to Medicaid since its enactment," California Medicaid policy is evolving at perhaps the quickest pace, trying to manage the $55 billion in annual spending.
California is expanding beneficiary eligibility, managed care and alternative payment and delivery policies -- while also implementing reimbursement reductions and some increases.
As part of a 2011 budget balancing deal brokered by the governor, most hospitals, non-primary care physicians, dentists and pharmacists are set to see 10 percent reimbursement cuts (along with a retroactive 5-percent cut following a two-year legal skirmish).
But primary care doctors with at least 60 percent of their services billed to Medicaid are receiving reimbursement increases, with rates brought in line with Medicare, and Medicaid dental coverage for adults is being restored.
Those are being combined with directed incentives (or disincentives) for beneficiaries and benchmarks for insurers. Medicaid beneficiaries earning 100 percent or more of the federal poverty level will have to pay $15 co-pays for non-emergency services provided in an ER, and regulators are preparing new HEDIS performance standards for managed care insurers, with the goal of defaulting future enrollments into higher-performing plans.
Medicaid enrollment in California is expected to grow by about 1 million this year, to more than 9 million, and its expected to cost about $55 billion in total -- a reason why state regulators and budget-conscious lawmakers are pursuing a variety of reforms.
California was the first state with a program available to pay for home- and community-based care for long-term care beneficiaries, as part of the federal community first choice plan, and it is one of six states incorporating accountable care policies into Medicaid, with a demonstration currently in San Mateo County, a part of Silicon Valley where an estimated 50,000 people live at the poverty level.
Also this fiscal year, under a federal waiver, California is expanding managed care to about 400,000 residents in 28 rural counties..
"Our new managed care enrollees will now have a medical home to coordinate all of their health care needs and a primary care physician to better manage health conditions," California Department of Health Care Services Director Toby Douglas said in a recent media release. "Statewide managed care will help ensure timely access to physicians and better management of services for our members."
In one area, though, California is slowing down slightly. The first phase of a three-year Medicaid waiver transitioning 456,000 dual- and Medicaid-eligible Southern Californians into managed care and medical homes has been delayed until April 2014, and was scaled back, originally envisioned to cover most of the state.
In part, state and federal regulators have more to evaluate, such as monitoring the 40,000 Medicare-Medicaid eligible Californians who were transitioned to managed care in 2012 under the 2010 "Bridge to Reform" waiver.
Other states are adopting similar Medicaid policies and they're facing similar challenges in making Medicaid work for more diverse populations -- it's not just "adults with children" that are eligible, as CMS Deputy Administrator Cindy Mann said at a conference recently.
Among the new Medicaid population will be parents of children currently covered by Medicaid, women previously covered by Medicaid during pregnancy, childless adults who may be earning just above minimum wage, 40-and 50-year-olds struggling to find long-term or salaried employment, and people with disabilities that don't yet qualify for federal disability benefits.
Nationwide, up to 16 million people many gain coverage over the next five years -- and capitated payments could account for up to half of all Medicaid spending, Mann said.