The Medicaid expansion was supposed to be the least controversial part of the health reform lawsuit. But since the Supreme Court essentially made broadening its eligibility voluntary for states, not a day goes by without news reports guessing how Medicaid will fare in the future.
“But it’s all to the good,” said Cindy Mann, director of the Center for Medicaid and Children’s Health Insurance Program (CHIP) Services.
“The importance of states’ decisions going forward about whether to take up the Affordable Care Act Medicaid expansion can’t be overstated,” she said. States are crunching the numbers, consulting with stakeholders and, in many instances state legislatures will be actively engaged.
“There is no particular time deadline for a state to declare its intentions, unlike the need for a state to determine by later this fall whether or not they will build a state-based health insurance exchange or doing a partnership model or a federally facilitated exchange,” she said at a July 30 conference sponsored by the Bipartisan Policy Center.
The Centers for Medicare and Medicaid Services is still sorting through the implications of the June Supreme Court decision. For states that decide to move forward with expansion, CMS will pay 100 percent in matching funds for the first three years through 2016 and notch down to 90 percent in subsequent years.
“We expect states will be taking the next several months to make their decisions. But we believe that when states look at the factors and consider the impact on coverage relative to their state, financial support that the federal government will provide, the impact on uncompensated care, the impact on hospitals, health plans, providers and employers, one way or the other, they will decide that it is in the state’s interest to move ahead,” Mann said.
With or without the Medicaid expansion, CMS is working with every state on implementation of the Patient Protection and Affordable Care Act by 2014.
States are modernizing eligibility systems for Medicaid, simplifying the way they determine eligibility and advancing toward a data-driven system of verifying eligibility and for accommodating online applications. States also have to make sure that Medicaid and CHIP are well coordinated with the insurance exchange and have established interfaces so consumers can experience a seamless system of coverage.
CMS has recently established operational technical assistance teams for each state that are made up of subject matter experts who know the financing rules, benefits, eligibility, outreach and enrollment for states to call on when they have questions or seek solutions.
CMS has notified governors that that the enhanced 90 percent matching with federal funds provided to states to modernize their systems will continue to be available to states whether or not they move forward with the Medicaid expansion.
“Nearly every state now has approval to draw down on this 90 percent funding to build their modernized eligibility system, but we know that the timetable for states is very challenging. We’re collecting state artifacts and putting them on an IT platform for states to share information, so no state has to reinvent the wheel as they move forward in their systems development,” she said. It could be an RFP or their business process rules.
“We’re also aggressively matching states with each other when they have similar plans for their eligibility systems and using the same vendor to achieve efficiencies around procurement or joint development or shared solutions,” she said.
“It will not be your grandmother’s Medicaid program in 2014,” Mann said. CMS is changing the way it does business with the states and modernizing its business processes.
For example, CMS is developing templates, which will be available soon, to make it more routine and streamlined to seek waiver authority for changes or flexibility in the Medicaid program.
CMS is also moving online its business processes with states, including waivers and state plans, “which will not only make it simpler but also will create a database so other states and interested parties can see what’s going on in the world of eligibility, waivers, delivery system reforms, and move forward from that in their own ways,” Mann said.
For many states, the increased costs for Medicaid will be the deciding factor for whether they take up the expansion or not, Mann said.
“But the people who are in the expansion of coverage by and large are not likely to be the cost drivers in the program. In Medicaid, 5 percent of our beneficiaries account for 54 percent of our costs. One percent of our beneficiaries account for one quarter of all costs in the system. These individuals who drive those costs are not the parents or the childless adults that states now cover,” she said.
They are the elderly, the people with disabilities, chronic illnesses and high medical needs, she said. The emergency room and hospital readmissions all too often define their healthcare experiences. So focusing on how to improve care for these individuals and delivering care in the most effective way for them will not only improve health outcomes but also lead to lower costs for Medicaid.
“The savings achieved by preventing one hospital readmission for one Medicaid beneficiary who is disabled can cover the cost of coverage for a parent in the Medicaid program for three years. That gives you a sense where the money goes in the Medicaid program and where the opportunities are in terms of how to change the trajectory of costs in the program,” Mann said.