State Medicaid Directors Discuss Expansion

Falls Church—When President Barack Obama signed the Patient Protection and Affordable Care Act (ACA) into law in March 2010, the legislation included a provision in which the federal government would stop making payments to states if they did not expand Medicaid starting in 2014. However, the Supreme Court ruled in June 2012 that states could not be penalized for refusing to expand Medicaid. The decision led to heated debates in several states as to whether to cover more people through Medicaid or choose to keep their programs intact because of the high costs associated with increasing coverage.

This year, 26 states and Washington, DC, are expanding Medicaid, according to the Advisory Board Company, a healthcare consulting firm. Three states are considering expansion, while the remaining 21 states are not expanding.

At the Leadership Summit on Medicaid Managed Care, several state Medicaid directors discussed their programs and the opportunities and challenges they face. Below, First Report Managed Care offers perspectives from 3 states. Minnesota and New Mexico expanded Medicaid this year, while Texas governor Rick Perry and the state legislature rejected an expansion proposal.

Minnesota

For the past few years in Minnesota, James Golden, PhD, has worked on integrating Medicaid into the state’s health insurance exchange. He noted that the ACA was implemented to provide coverage for anyone with an income of up to 400% of the federal poverty level (FPL). In Minnesota, anyone up to 138% of the FPL and children and pregnant women up to 275% of the FPL are guaranteed coverage from the state. In addition, for people whose incomes are between 138% and 200% of the FPL, the state has a Section 1115 Medicaid waiver that determines eligibility based on their modified adjusted gross income.

“A lot of the goal is to make sure there are not any cracks for people to fall through,” said Dr. Golden, Medicaid director, Minnesota Department of Human Services. “It is also thinking about how do you want to align your Medicaid program with the individual market, how do you make sure that as people’s life events are changing, that they can move seamlessly [between Medicaid and the exchange]? Does it make sense for them to switch managed care plans? Should they simply be able to move within a managed care plan between products?”

Dr. Golden also mentioned that families sometimes have different plans. For instance, if a family’s income is at 225% of the FPL, the parents receive tax credits and the children are in a Medicaid program. He said “there is very clear evidence” that if families are together on a managed care plan, they are receiving better care and results.

Of the nearly 1 million people in Minnesota enrolled in Medicaid, the vast majority are in managed care plans, according to Dr. Golden. The state is currently working on payment reforms, including possibly starting a Medicaid accountable care organization.

The state has a demonstration project with Hennepin County (Minnesota’s largest county) in which they are working together to integrate behavioral health, social services, and other healthcare services, particularly for people whose incomes are <75% of the FPL.

New Mexico

With a poor population and a large percentage of Medicaid enrollees, New Mexico was one of the early adopters of managed care, starting a program in 1997. The state moved behavioral health into managed care in 2005 and long-term services and supports and people with Medicaid and Medicare into managed care in 2008.

Approximately 25% of New Mexico’s 2 million residents are currently in Medicaid. Within the next few years, one-third of the state’s residents could be in Medicaid, according to Julie Weinberg, Medicaid director, New Mexico’s Human Services department. Since the beginning of 2014, the state has 90,000 new enrollees in Medicaid. By the end of the year, Ms. Weinberg expects a total of 150,000 new Medicaid enrollees.

On January 1, 2014, New Mexico changed the name of its Medicaid program to Centennial Care with an increased emphasis on care coordination. The state now has 4 managed care organizations responsible for integrating physical health, behavioral health, and long-term services and supports.

Ms. Weinberg said the state offers membership rewards for healthy behaviors and wants individuals to become more engaged and accountable for their healthcare and overall health. The initiatives include making sure people with diabetes are correctly testing their blood sugar and providing enrollees with an annual preventive dental check-up.

In New Mexico, there are also 17,000 people receiving personal care option services and an additional 3,000 on Medicaid 1915 (c) waivers receiving more services such as homemaker services. Ms. Weinberg said the state recently decided to expand the full benefits of home and community-based services to everyone who need the nursing facility-level of care but want to remain in the community.

“That is a huge expansion and people are wondering how we can afford it, but we do have a 5-year budget neutrality agreement with [the Centers for Medicare & Medicaid Services],” Ms. Weinberg said. “We expect that while in the beginning, we may see a spike in [costs], in the end we should see that level off and save money simply because people will be able to stay healthy and be in their homes with an environmental modification.”

Texas

Of 25 million people living in Texas, approximately 3.7 million are enrolled in Medicaid and 600,000 children are enrolled in the Children’s Health Insurance Program, which is 100% capitated managed care. Kay Ghahremani, director, Medicaid and the Children’s Health Insurance Program, Texas Health and Human Services Commission, said there is “a lot to manage” in the state because there are 19 health maintenance organizations (HMOs).

The state has 10 urban service areas and 3 rural service areas. The individual contracts for the service areas expire at different time, but Ms. Ghahremani said the state is attempting to get the contracts better aligned. The largest health plan has 900,000 enrollees, while the smallest has 7000 enrollees. The state has a profit-sharing requirement for HMOs, in which HMOs retain the initial 3% of profit. After the first 3%, there is a profit-sharing agreement in which the state receives a larger percentage of the profit. This year, Texas has been focusing more on quality initiatives and is holding back the first 4% of the capitation to make sure plans meet certain quality measurements.

“We are encouraging the HMOs to enter into creative relationships with providers, not basing reimbursement on fee-for-service and really trying to push them to do some incentive programs with their providers,” Ms. Ghahremani said. “We are trying to make sure we understand what we are doing that might prevent them or inhibit them from being able to do that.”

The state’s Medicaid program has evolved from a managed care pilot project in the early 1990s for pregnant women and children to an integrated acute and long-term care (LTC) program for people with physical disabilities in the late 1990s.

In the past few years, the Medicaid managed care program has undergone more expansions and now includes a statewide program for 2.5 million pregnant women and children and an integrated acute and LTC program for 400,000 people. In September, the integrated acute and LTC program will be rolled out throughout the state and will also include nursing home services and acute care services for people with intellectual and developmental disabilities. The state will also incorporate supported employment and managed care services for people with serious mental illness.

Six years ago, Texas also became the first state with a managed care program for children in foster care. Although the program is voluntary and participants can choose fee-for-service, nearly all of the 35,000 foster children are in managed care. Since its inception, the program has been managed through Superior health plan, a wholly-owned subsidiary of Centene Corp. According to Ms. Ghahremani, the state is looking for 1 or more health plans for the foster care program.

In March 2015, Texas is also planning to start dual-eligible capitated program for Medicaid and Medicare beneficiaries.