RE­FORM:

A num­ber of states could re­ject Med­i­caid ex­pan­sion

Modern Healthcare - - CONTENTS - Rich Daly

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Even as the Repub­li­can-led House of Rep­re­sen­ta­tives voted again to re­peal the 2010 health­care over­haul, providers were brac­ing for the pos­si­bil­ity that a ma­jor­ity of states may de­cline to im­ple­ment the law’s Med­i­caid ex­pan­sions.

A grow­ing num­ber of state lead­ers have ex­pressed hes­i­tancy or out­right op­po­si­tion to grow­ing Med­i­caid af­ter the U.S. Supreme Court’s June 28 de­ci­sion up­hold­ing much of the Pa­tient Pro­tec­tion and Af­ford­able Care Act. That de­ci­sion also al­lowed states to forgo the law’s plan to ex­pand Med­i­caid el­i­gi­bil­ity with­out penalty.

The House, mean­while, voted 244-185 to re­peal the law, gain­ing sup­port from all Republicans and five Democrats. It re­mained un­clear whether the Demo­crat-led Se­nate would hold a sim­i­lar vote, and the White House is­sued a pre-emp­tive threat to veto the leg­is­la­tion.

Throughout the week, providers watched as state re­ac­tions to the Med- icaid pro­vi­sions of the law con­tin­ued to range from vo­cal sup­port to strong op­po­si­tion, lead­ing some provider ad­vo­cates and health pol­icy ex­perts to con­clude many states ul­ti­mately may in fact refuse to grow their Med­i­caid pro­gram.

“We fig­ure there are 30 at-risk states,” Bruce Siegel, CEO of the Na­tional As­so­ci­a­tion of Pub­lic Hos­pi­tals and Health Sys­tems, said in an in­ter­view. “Those states ac­count for 60% of the ex­pan­sion pop­u­la­tion.”

States were expected to add at least 16 mil­lion ben­e­fi­cia­ries to their Med­i­caid rolls un­der the re­form law, and 13.8 mil­lion would have come from the wa­ver­ing states, Siegel said.

Bon­nie Wash­ing­ton, se­nior vice pres­i­dent for con­sult­ing firm Avalere Health, told at­ten­dees at a July 9 Wash­ing­ton health pol­icy meet­ing that the gov­er­nors’ re­sponses to date left her “less and less com­fort­able” with the ear­lier as­sump­tion that the states would ex­pand their Med­i­caid pro­grams be­cause the fed­eral gov­ern­ment was fund­ing much of its cost.

The health­care over­haul au­tho­rized the fed­eral gov­ern­ment to fund the to­tal cost for the first three years of ex­pand­ing it to ev­ery res­i­dent with in­comes of up to 138% of the fed­eral poverty level. That fed­eral share would ta­per to 90% by 2020 and there­after.

The Na­tional Gov­er­nors As­so­ci­a­tion and Na­tional As­so­ci­a­tion of Med­i­caid Di­rec­tors wrote let­ters last week to HHS seek­ing “for­mal guid­ance” about pos­si­ble tan­gen­tial ef­fects of the court’s de­ci­sion. Chief among the out­stand­ing ques­tions is whether the de­ci­sion ef­fec­tively elim­i­nated the law’s main­te­nance of ef­fort pro­vi­sion, which re­quired states to re­tain at least the Med­i­caid en­roll­ment lev­els they had when it was en­acted.

“There is still de­bate about the

ques­tion and cer­tainly the fed­eral gov­ern­ment is en­cour­ag­ing states to continue their main­te­nance of ef­fort,” said Sandi Hunt, a prin­ci­pal spe­cial­iz­ing in gov­ern­ment health pol­icy for Price­wa­ter­house­Coop­ers.

Maine Gov. Paul LePage, for one, in­ter­preted the rul­ing to mean that re­quire­ment is void and is plan­ning to im­ple­ment the Leg­is­la­ture’s cut of at least 21,000 ben­e­fi­cia­ries from the pro­gram.

Mean­while, con­gres­sional Republicans said Congress should re­move any doubt about the en­roll­ment re­quire­ment. “I think it’s cer­tainly pos­si­ble that there would be—I would like to see—a vote on the House floor re­peal­ing the main­te­nance of ef­fort pro­vi­sion of the law, which, as you all know, puts hand­cuffs on the gov­er­nors and pre­vents them from do­ing the things they need to do in re­gard to the Med­i­caid pro­gram,” Rep. Phil Gin­grey (R-Ga.), a physi­cian and co-chair­man of the GOP Doc­tors Cau­cus, told Mod­ern Health­care.

So far, HHS Sec­re­tary Kath­leen Se­be­lius has writ­ten gov­er­nors only to con­firm the re­moval of state penal­ties for not ex­pand­ing el­i­gi­bil­ity and to clar­ify that low-in­come res­i­dents of states that don’t would not face tax penal­ties for lack­ing in­sur­ance. “The court’s de­ci­sion did not af­fect other pro­vi­sions of the law,” Se­be­lius wrote.

Sim­i­larly, Mar­i­lyn Taven­ner, act­ing CMS ad­min­is­tra­tor, wrote in a July 13 let­ter to Vir­ginia Repub­li­can Gov. Bob McDonnell, chair­man of the Repub­li­can Gov­er­nors As­so­ci­a­tion, that states have no dead­line to de­cide on their Med­i­caid ex­pan­sion and can keep re­cent fed­eral fund­ing for Med­i­caid-re­lated IT up­grades ei­ther way.

Fed­eral of­fi­cials may take a while to an­swer the many more ques­tions that re­main for states and providers, in­clud­ing whether Med­i­caid will still cut fund­ing for Dis­pro­por­tion­ate Share Hos­pi­tals on the sched­ule laid out by the health­care law. “More guid­ance will be is­sued in the year and half be­fore Med­i­caid el­i­gi­bil­ity ex­pan- sion and the ex­changes be­gin,” Taven­ner wrote.

But states need to de­cide on the Med­i­caid ex­pan­sion by early 2013 in or­der to have enough time to meet the Jan­uary 2014 start date of the ex­panded en­roll­ment, said Wash­ing­ton of Avalere.

One state that plans to de­lay that de­ci­sion un­til af­ter the Novem­ber elec­tions is Kansas, the state’s Repub­li­can Lt. Gov. Jeff Colyer, a physi­cian, said at a July 10 con­gres­sional hear­ing on the law’s im­pacts on providers. “We’ve got an elec­tion com­ing up; the gover­nor has said that we need to change the sys­tem and we are go­ing to make a de­ci­sion af­ter­ward,” Colyer said when asked whether the state’s ef­forts to im­prove its Med­i­caid pro­gram will in­clude ex­pand­ing it to con­form with the Af­ford­able Care Act.

Bruce Rueben, pres­i­dent of the Florida Hospi­tal As­so­ci­a­tion, said he is en­cour­aged by more re­strained re­ac­tions from the state’s leg­isla­tive lead­ers af­ter Repub­li­can Gov. Rick Scott firmly pledged in the wake of the court’s rul­ing not to en­roll more peo­ple in Med­i­caid un­der the re­form law. “There’s been a lot of rhetoric, but we’ve al­ready seen some cool­ing down,” Rueben said.

GETTY IM­AGES

House mem­bers as­cend the Capi­tol steps be­fore vot­ing to re­peal the re­form law.

Source: Cen­ter for Amer­i­can Progress, Ur­ban In­sti­tute, Mod­ern Health­care re­ports

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