Tuesday, January 27, 2015

Budget Update: more interim budget cuts, calls for long term fix, Medicaid deficit due to temporary issues

In response to a growing budget shortfall for this year, last week the Governor ordered $31.5 million in budget rescissions. This is the Governor’s second round of cuts for this fiscal year. Health-related cuts included $8.4 m from DDS, $1.3 m from DMHAS, $602,435 from school-based health clinics, $71,515 from Healthy Start, and $1.3m from UConn Health Center. Republican leaders are concerned that continuing rescissions are keeping the deficit just under the statutory level requiring a deficit mitigation plan be submitted to the legislature.

OPM is reporting that Medicaid spending is $120 m over budget. It is our understanding that the shortfall is due to one-time issues including CMS settlement payments from difficulties categorizing eligibility, and uncertainty over relevant dates (service vs. payment) affecting reimbursement in the first Medicaid expansion year. The state is responsible for half the costs of care for enrollees in pre-ACA coverage categories, in contrast to newly eligible enrollees whose costs are 100% reimbursed by the federal government trough 2016, slipping modestly to 90% eventually. Reports of higher than expected enrollment in pre-ACA HUSKY categories have reversed in recent months. Also adding to the Medicaid shortfall was an optimistic fraud recovery estimate in the original budget passed last Spring. Hospital retroactive settlements are up over last year, but this will also be resolved when the state moves to a DRG-based payment system.

All the issues adding to the shortfall will be resolved soon and should not precipitate calls that Medicaid spending is “out of control”. Because of quality and value improvements in the program, per person spending in the program is stable, saving about $150m in state Medicaid funds compared to per person health cost increases for all Americans

Friday, January 23, 2015

FDA Advisory Committee recommends new orphan anti-infective drug

Yesterday’s FDA Anti-Infective Drug Advisory Committee meeting considered evidence about the safety and effectiveness of ISA, a new drug to treat a rare fungal infection threatening the lives of people with severe illnesses. The condition affects a few thousand Americans each year suffering from weakened immune systems due to conditions such as HIV, stem cell transplants, or cancer. Without treatment virtually all these patients would die. We heard very compelling public testimony from an affected patient, a doctor calling for more treatment options, and the father of a young boy who died from a fungal infection, not from his cancer. There are few other drug options to fight these infections and they are very imperfect. Because these conditions are rare, there is not a lot of clinical data about the effectiveness of the drug but it is promising. The committee voted to recommend that the FDA approve the medication for these uses, but with warnings about use in children, pregnant and nursing mothers. The committee emphasized the need for more studies including more information on an interesting ethnic variation in the drug’s physiology.

Wednesday, January 21, 2015

Medicaid deficit rises to $120 million, but causes are unclear

The Governor announced yesterday that new cuts to the state budget will be necessary due to the rising state deficit. A large part of that deficit is in the Medicaid program, but the causes are unclear. Per person costs in the program are stable, even declining slightly since the switch away from financial risk-bearing organizations – which has saved the state many millions compared to past trends and other states – and likely will continue to deliver savings sustainably into the future. It is unclear how much of the current deficiency is temporary and administrative. OPM’s monthly letter points to higher than expected enrollment (but most of that is still fully reimbursed with federal funds), resolving enrollment category issues, higher than expected hospital settlements, and medication initiative estimates. The letter does not give details on the deficiency causes. Advocates are concerned that potential cuts to program eligibility or provider rates, meant to address the deficiency, will be counter-productive -- undermining recent success in the program and reversing CT’s progress toward meaningful coverage for every state resident.

Tuesday, January 20, 2015

Medicaid update – impressive quality dashboard demo

At Friday’s Medicaid Council meeting, DSS demonstrated their upcoming HUSKY Health Data Dashboard. When it goes live the dashboard will give visitors drill-down access to a wealth of quality and access data across the program including outcomes, member and provider experience, provider enrollment, spending and utilization, as well as special projects. All Medicaid services will be included in the dashboard – medical, behavioral health, dental, non-emergency transportation, pharmacy, and long term services and supports. Because the state no longer fragments the program among managed care organizations, we avoid all those apples-to-oranges disclaimers that kept policymakers in the dark for over a decade. The data will be available in pre-set charts as well as downloadable aggregate data. I am particularly interested in the ability to parse spending increases by category of service and price vs. utilization influences. There were objections to a suggestion that providers receive identifiable information on Medicaid members not affiliated with a provider for outreach purposes. While we acknowledge the benefits of encouraging connections to the health system, release of identifiable data raises concerns of adverse selection, especially given DSS’s controversial plan to introduce provider risk into the program a year from now.

Friday, January 16, 2015

Rhode Island’s exchange trusted consumers and it worked

Exchanges across the country had to decide last year whether to require current members to return this year and choose a health plan or automatically re-enroll them in their old plan if they don’t choose to switch. A federal study found that 70% of consumers would save money if they switched. But there was general concern among the experts that many wouldn’t come back and would lose coverage. Both the federal Healthcare.gov and CT’s exchanges decided to default people back into their old plan, sometimes with much higher premiums, if they didn’t affirmatively switch. Rhode Island’s exchange, however, trusted consumers to come back and re-evaluate the best fit for them – 78% did, and many saved a lot. Only 40% of HealthCare.gov consumers returned to shop. There is also evidence that plan switching causes health plans to offer better value plans to keep customers. Rhode Island has a history of successfully trusting consumers to manage their own affairs.  A NY Times article explores the exchange enrollment assumptions that drove the different decisions, and how Rhode Island turned out to be right to trust consumers.

Wednesday, January 14, 2015

Surgical hospital coming to CT, promises to serve Medicaid

The Hospital for Special Surgery has received approval to open a large outpatient center in Stamford, according to Crain’s New York Business. The New York hospital has a reputation for very high quality and serving wealthy patients. But as a condition of DPH approval, HSS has agreed that 10% of their CT patients will be Medicaid members. Only 2% of NY patients are covered by Medicaid. Access to orthopedic specialty care has been a serious issue for Medicaid members in our state. This announcement is testament to the improvement in CT Medicaid’s attractiveness to providers.

Tuesday, January 13, 2015

Only half of fully-insured US Medicaid providers available

A new HHS-OIG survey found that only 49% of providers listed as participating by full-risk Medicaid managed care plans were available for routine, non-urgent appointments. When CT had full-risk MCOs running our Medicaid program, a secret shopper survey found that shoppers could only schedule appointments with 25% of listed providers. But things have improved significantly in CT. A recent secret shopper survey in our self-insured program found that 68.3% of providers were taking appointments, a large improvement over CT history and exceeding the national average.