Governor proposes deep cuts to Medicaid

Updated February 19

Despite strong evidence of cost control and improving quality in the Medicaid program, today the Governor has proposed significant cuts to both eligibility and provider payment rates. The Governor has proposed cutting 34,000 low income parents off the HUSKY program. Parents in families of three with annual incomes as low as $28,000 will now have to buy insurance on the exchange. For comparison, a 28 year old Hartford parent of two children with an income of $32,000 choosing a Silver plan on the exchange (the most common plan) would pay between $1,460 per year for the parent’s coverage, 4.56% of their family income. Employer-sponsored coverage in CT has eroded significantly in the last decade, limiting that option for parents. The Governor has also proposed deep cuts in provider payment rates which will jeopardize broad engagement efforts that have increased the number of participating providers by 32%. 

This is particularly disappointing because of the significant progress in Medicaid both improving quality and controlling costs. Per person costs have been stable over the last two years, saving the state $420 million compared to most health coverage increases, more than the expected savings from the Governor’s proposed cuts. While the Medicaid program has a deficit this year of $120 million, the problems are mainly temporary, administrative issues that will be corrected.

In a classic case of penny-wise and pound-foolish, the Governor has also proposed eliminating funding for the health neighborhood program for people eligible for both Medicaid and Medicare. This program, a model of collaboration and how constructive health reform can happen in CT, has the potential to improve care and control costs for CT’s most fragile, and costly residents. After a great deal of hard work by all stakeholders, the program is very near implementation.

Other cuts proposed by the Governor include pharmacy fees, chiropractic care, closing the CT Home Care program to new applications and increasing costs for current clients, reducing the personal needs allowance for people living in long term care facilities, reducing burial funding for SAGA recipients, closing DSS’s Torrington office, increasing newborn screening fees, and cuts to grant programs.

Medicaid quality up, costs stable since switch to ASO

We got lots of good news at today’s Medicaid Council meeting. New financial reports show that since October of 2013 HUSKY enrollment has grown 20% but spending has grown only 13.6%. Per person spending on HUSKY Part D, which includes the former SAGA members and the newly eligible childless adults from the ACA, has actually decreased slightly. We expected pent-up demand for services to increase that number for a short time; this may indicate that it is a healthier population that has enrolled. Another report, a précis, summarizes the considerable innovations in the program since the shift from capitated managed care plans to an ASO model, including exciting new data. The program now benefits from predictive modeling and tracking of health measures that can help providers deliver the right care to the right person at the right time. We also heard about improvement in the ConnectCT enrollment system – average wait time on the phone to talk with a benefit center is down from 78 minutes in August to 66 minutes last month. DSS talked about plans to bring that down further. We also heard about the behavioral health program’s efforts to improve access to care.

LIA waiver denied

The administration’s plan to apply an asset test to families of young people in the Low Income Adults program (formerly SAGA) was not approved by the federal Medicaid agency Friday. Advocates objected to the plan stating that it was designed to address a problem that rarely happens, college-aged children in wealthier families on Medicaid, and it would have further stressed an already overwhelmed DSS. In their denial letter, HHS stated that “eliminate[ing] coverage for as many as 13,381 very low-income individuals” is “not consistent with the general [Medicaid] statutory objective to extend coverage to low-income populations.”

Who is coming into LIA?

Today’s CT Mirror asks the question – who are the 37,000 new enrollees in the Low Income Adult Program? LIA was created just over a year ago as an option under the Affordable Care Act. CT shifted our fully-state-funded SAGA program into Medicaid, getting a 50% federal match, and re-named it LIA. When the program switched, the SAGA $1,000 asset limit on eligibility was lifted. As more people have signed up for the program than intended (fuzzy policy estimates are hardly new) and costs are higher than expected, the state has asked the feds for permission to re-impose an asset limit of $10,000 for eligibility. The administration has suggested that many new LIA members are able to pay for insurance, but are choosing coverage in a public program. The article notes that we really don’t know who is enrolling, because the state doesn’t ask about assets in applications and no one has surveyed the population. But the reporter spoke to providers who say that’s not what they are seeing in the real world. The article also includes interviews with two new enrollees that do not fit the administration’s picture. Make sure and read down to both stories – important lessons about people working hard doing everything they should and are unlucky enough to have health problems – exactly who safety net programs are built for. In a down economy, it shouldn’t be surprising that numbers are up.

Medicaid Council meeting update

Friday’s Medicaid Assistance Program Oversight Council meeting was very productive and mainly positive. The main area of discussion was DSS’ implementation of new asset limits required by budget negotiations (bad news) and new spend down tracking processes (good news). This August the enrollment brokers (Xerox, formerly ACS) will handle tracking and evaluation of medical bills as well as information and support for people “spending down” to Medicaid eligibility. This has been a significant barrier to coverage for up to 17,000 people at any time. The new process will move time-consuming documentation to ACS and to electronic formats, providing welcome relief for both frustrated consumers and overwhelmed DSS workers. In bad news, as an outgrowth of negotiated budget cuts, DSS is applying to CMS for a waiver to the LIA program (formerly SAGA) to institute a $10,000 asset test (exempting a home and one car), permission to count parental income and assets for applicants under age 26 who live with parents or are claimed as dependents, and to establish a 90 day limit on nursing home coverage. Spending down to LIA coverage will not be necessary in January 2014 under national health reform. DSS expects that many or most of those with assets will be able to transition to Charter Oak coverage for the interim, which their assets should cover. DSS will also assist anyone needing more than 90 days of nursing home care to apply for disability or other Medicaid coverage. In other news, DSS responded to comments on their dual eligible application and “reserved” the requirement for a behavioral health co-lead in each neighborhood to allow further study and agreed to include incentives in all three years of the pilot for health neighborhoods that improve performance and outcomes, less than if they also achieve savings, but something. DSS also outlined ConnectCT, their plans to improve application, web, customer service and document management/workflow processes. Long overdue and very exciting; hoping for more meetings like this.

Governor’s proposed budget adjustments – one major health change

The Governor’s proposals to adjust the current biennial budget include changes to LIA (the former SAGA program). When SAGA was merged into Medicaid in 2010, creating LIA, the asset limit of $1,000 was removed. Since that time enrollment has grown significantly due in part to removing the asset limit (the economy doubtless had something to do with it as well). Because program costs are now matched by the federal government, significant new revenues came into the General Fund. While enrollment growth has moderated, the Governor is proposing re-imposing a more generous $25,000 asset limit, and counting family income for applicants under age 26 living with a parent or claimed as a dependent for taxes. He has also proposed unspecified limits on medical services. The changes would save $22.5 million in the next fiscal year. In 2014, those applicants will become eligible for Medicaid anyway under national reform.

Other proposals include changes to who can administer medications, expanding childhood vaccinations, cost of living increases for private providers, expanding Money Follows the Person, among others.
Ellen Andrews

State chooses CHN to run Medicaid

The administration announced that they will be negotiating with Community Health Network to administer the entire state Medicaid program as of January 1st. Based on the state’s community health centers, CHN has been a participating managed care provider for HUSKY since its inception sixteen years ago. The managed care program will expand beyond the current 400,000 children and families to include 120,000 seniors, single adults (formerly SAGA members) and people with disabilities. The new program will not be capitated and will focus on coordinating care and building patient-centered medical homes to both improve quality and rein in costs. CHN’s contract is estimated to be between $70 and 73 million for the first year. CHN expects to contract with McKesson for intensive care management and data analytics and with Value Options for intensive case management.
Ellen Andrews

DSS implementer bill allows agency to cut benefits without legislative approval

Section 116 of SB 1240, passed by the Senate yesterday, would allow DSS to cut benefits provided to consumers in the LIA program, formerly known as SAGA. Cuts could include, but is not limited to, office and hospital visits, therapy services, medical equipment and supplies, medications, non-emergency medical transportation, and home care. If unchanged, the language would also allow DSS to develop lesser benefit packages for the estimated 140,000 new Medicaid enrollees entering the program in 2014 under national health reform. Section 100 of the bill allows DSS to create a patient-centered medical home program for people with chronic illnesses, a hospital bundled payment demonstration, and create an Accountable Care Organization for pediatricians. The bill also requires that DSS ensure provider rates are sufficient to ensure access to care and reduce inappropriate ER use, possibly including cost sharing and intensive case management. The bill now goes to the House of Representatives.

State moving to ASO and PCCM for all Medicaid consumers

At a press conference today, Lieutenant Governor Nancy Wyman and OPM Secretary Ben Barnes announced that CT’s Medicaid program will move to a self-insured administrative services organization (ASO) model effective Jan. 1, 2012. An RFP is expected to be released next month. The state will also expand the current PCCM/patient-centered medical home program statewide as soon as possible to serve as an option for every Medicaid member. Under this model, the state will directly pay all medical costs of care for all Medicaid clients including HUSKY Parts A and B, Low Income Adults (formerly the SAGA program), Charter Oak, seniors and people with disabilities. PCCM patient-centered medical homes will provide consumers with all their primary care, personalized care management, help accessing needed specialty care and expanded service hours reducing the need for ER visits. Patients will have help navigating an increasingly hostile health care environment and get tools and support to manage their own health. Beyond savings millions of dollars, the shift will allow the state to track exactly where tax dollars are going and improve accountability. The new system puts CT in a better position to access opportunities under national health reform, including the health home option that will reimburse the state 90% of the care coordination costs for patients with chronic conditions.
Ellen Andrews

Medicaid Managed Care Council update

Friday’s Council meeting focused mainly on plans for the $50 million temporary high risk pool opportunity created by national health reform. DSS joined the CT Insurance Dept. and the Health Reinsurance Association (HRA) to describe their plans. They intend to piggyback on the current high risk pool administered by HRA which was created in 1976 to provide coverage to CT residents with pre-existing conditions denied individual insurance. Insurance coverage will be provided through United Healthcare. After more than three decades HRA enrollment is only 2,529. HRA was criticized at the meeting for very high premiums, high deductibles, and a very confusing website. There will be at least three call centers for the various stakeholders involved in the program, including DSS, CID, ACS, HRA and United Healthcare. Concerns were raised about fragmentation, that consumers would be left with no clear point of contact, and the risk of very high administrative costs, especially given the limited federal resources available. Concerns were also raised about benefits and cost sharing under the plan. DSS admitted that the plan does not comply with state law, but doesn’t have to under federal law. Even more controversial, DSS intends to seek legislative approval to shift any eligible Charter Oak members with pre-existing conditions to this new plan; consumers moving from Charter Oak to the new plan would face significantly higher costs, potentially reaching over $1,000 more per month. DSS refused to outline how they would use the savings in the Charter Oak plan; suggestions from Council members included reducing premiums, lifting benefit caps, raising the pharmacy cap or eliminating the requirement that applicants be uninsured for six months.

In other updates, DSS described the increases in copayments and premiums in Charter Oak and HUSKY Part B. ACS will track cost sharing for families and alert both the HMOs and families when they have reached the federal limits and will no longer be charged copays. DSS is still pursuing the conversion of SAGA into Medicaid with CMS. For the first time since its inception and despite stubbornly high unemployment rates, enrollment in Charter Oak dropped in May when members were notified of the increase in premiums.
Ellen Andrews

Immediate impact of national health reform for CT

The White House has developed a list of the benefits of the Affordable Care Act to CT this year. The list includes small business tax credits, closing the Medicare donut hole, funding for early retirees, no lifetime limits on coverage, no rescissions, no pre-existing condition exclusions for children, all children to age 26 can stay on their parents’ policies (and parents don’t have to pay taxes on those benefits), Medicaid coverage (and matching funds) for SAGA, $50 million for a high risk pool, funding for community health centers, and to train more providers. And that’s just part of the list.
Ellen Andrews

New report outlines long term cost of fully funding state retiree health benefits, Gov. Rell aggressively pursuing funding opportunities in national h

An early estimate to the state’s Post Employment Benefits Commission estimated that fully funding health benefits for the state’s 42,000 retired workers would average $1.9 billion over the next 28 years. The state now pays these bills as they arise; just over $490 million is budgeted for these costs in the fiscal year that starts next month. While full funding would cost more now, it would reduce future costs. The Commission includes representatives from the Comptroller’s and Treasurer’s Offices, the administration, and labor and is charged with analyzing long term funding of the state’s health and pension benefits system. The report was prepared by Milliman.

Governor Rell’s administration is aggressively pursuing federal funding opportunities in the new national health reform act, despite criticizing the reforms. The state will not be pursuing any new opportunities to cover Connecticut’s 343,000 uninsured under the act, but is only considering options to replace current state funding including $53 million to move current SAGA recipients into Medicaid and another $50 million to fund our high risk pool. The Comptroller’s Office has also applied for $100 million over the next four years to support coverage for state employee early retirees not yet eligible for Medicare. As funds for early retiree benefits are limited, the Comptroller’s Office responded to the opportunity quickly to apply early.
Ellen Andrews

Only CT and DC take early expansion option

To date only CT and the District of Columbia have submitted early option applications to expand Medicaid under the new federal health reform law. CT applied April 15th and DC submitted their application May 13th. CT plans to cover our 45,000 SAGA members under Medicaid, providing expanded coverage and eliminating the SAGA asset test, while bringing in $53 million in new federal matching funds over the next fifteen months. DC expects to save $56 million over the next four years. Twenty nine states, including CT, are also taking advantage of the new federal option to create a temporary high risk pool; eighteen states are going to use the federal high risk program rather than creating their own pool.
Ellen Andrews

Medicaid Managed Care Council update

We ran out of time at Friday’s Council meeting, so we will devote the entire June meeting to discussing how the state plans to implement the new budget provision to self-insure the HUSKY/SAGA/Charter Oak program. Some of the decision points are whether to keep the program capitated but without financial risk (not sure how that works), whether we can continue to allow some providers to be paid more than others, whether to re-bid the contracts for one or more ASOs (or just keep the current HUSKY HMOs as happened last time), and whether we can have (or need) more than one ASO. Other HMOs are interested in applying now that the program does not carry financial risk. Apparently, responses from the current HUSKY HMOs to the RFP to provide non-risk care management services to the current Medicaid fee-for-service population were not cost effective.

In other reports, the Council heard about important work being done by the Women’s Health Subcommittee and Community Health Center, Inc to prevent low birth weight babies and improve breastfeeding rates by getting pregnant women into prenatal care early, ensuring access to dental care, smoking cessation and identifying and treating depression during pregnancy. The committee is planning a prenatal care summit in the fall.

Mercer gave their usual, glowing evaluation of the HMOs. Under questioning, it became clear that their evaluation is only of processes, and does not reflect actual access to care for members. Performance studies were not promising; at best, there was little progress on any health outcome or process measures. The CT Dental Health Partnership continues its impressive progress to enroll more providers and expand access to oral health care. And PCCM enrollment is up to 388 as of May 1st; up from 359 a month before.

And the Council’s name changed to the Council on Medicaid Care Management Oversight.
Ellen Andrews

Rell administration will not challenge national health reform law

At yesterday’s Health Reform Cabinet meeting, the Rell administration announced that they will not join twelve other states in a lawsuit challenging the Patient Protection and Affordable Care Act. All twelve Republican state senators signed onto a letter urging the state to join the suit. The senators argue that the federal law usurps states’ rights in regulating health care delivery and individual freedoms including the individual mandate. So far the administration has signaled that they will be pursing two opportunities under the new law – the Medicaid early expansion option to bring 43,000 SAGA recipients into Medicaid saving the state over $50 million and another $50 million or more available for CT’s high risk pool to cover people with pre-existing conditions.
Ellen Andrews

Medicaid Managed Care Council update

Friday’s Council meeting was relatively uneventful. We started with a wonderful outreach video by CT’s Healthy Start programs describing the important work they do supporting at-risk pregnant women and connecting them to the care they need to ensure healthy births. (Advocates think it would be a good idea to start every Council meeting with babies – it makes it hard to be grumpy.) We then heard about the challenges of keeping families enrolled in HUSKY. A study by CT Voices for Children found that 141,000 people came into HUSKY in 2006 and 2007, but total enrollment grew by only 11,000. However they were unable to determine if people left because they found other coverage or if they became uninsured. DSS noted that they have implemented several improvements to the eligibility system since 2007. PCCM/HSUKY Primary Care enrollment is up to 359 clients and 237 providers. DSS has also agreed with advocates’ concerns and will ask CMS for permission to delay the PCCM evaluation until 2011 when it is hoped enrollment will be high enough to make the study meaningful. DSS described their plans to move all SAGA recipients into Medicaid (as of April 1st) under a new option passed in the recent national health reform act. It is expected that the option will save CT $53 million over the next 15 months. CT is the first in the nation to apply under this provision. However we are eligible because the state never acted on multiple directives from the General Assembly to apply for a waiver to cover SAGA – most other New England states have been covering childless adults under a Medicaid waiver for years. New enrollment numbers from ACS show that about half of all Charter Oak members are over age 50 and that older members have higher incomes than younger members – over half of members paying the full, unsubsidized Charter Oak premium are over age 50.
Ellen Andrews

CT Medicaid wins in health reform reconciliation bill

The reconciliation bill scheduled to be considered this weekend by Congress benefits CT’s Medicaid program, and the state bottom line, in significant ways.

The bill would expand Medicaid coverage to all state residents (except undocumented immigrants) up to 133% of the federal poverty level (FPL) -- $14,620.50 for individuals and $19,669.50 for a family of two – in 2014. CT would receive full funding for all newly eligible residents in 2014, tapering down to 90% after 2019. In 2007/2008 CT had 110,200 uninsured residents living below 133% FPL. In January of this year there were 43,549 members of our state-funded SAGA program; those members would become eligible for Medicaid and, because we do not have a waiver to cover them, they should be eligible for federal funding saving the state $133 million. Because CT does not have a Medicaid SAGA waiver, coverage of SAGA members would qualify for federal funding under the reform bill (sometimes it pays to procrastinate). It is also likely that many of the 6,077 Charter Oak residents in the lowest income band (0 to 150% FPL) as of March 1st will become eligible for Medicaid and full federal funding, saving the state what we spend on their subsidies.

Medicaid primary care providers will benefit under the reconciliation bill which increases their rates to Medicare levels in 2013. In 2008, CT primary care Medicaid rates averaged 0.78 of Medicare levels, according to the Kaiser Family Foundation. The incremental cost will be paid fully by the federal government from 2013 through 2014. In 2008, CT’s rates were better than most other states (weighted average of 1.44 compared to other state’s rates). CT would receive more if our provider rates were closer to the national average, but we will be getting more than we did in the past.

In January, the CT Health Policy Project outlined a list of questions CT’s Medicaid program needs to answer in implementing national health reform.
Ellen Andrews