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PPACA and Medicare Updates

Medicaid Expansions And Exchanges In Limbo

As we told you last week, in light of the Supreme Court’s declaration that states couldn’t be penalized for not implementing the Patient Protection and Affordable Care Act’s (PPACA) Medicaid expansion, advocates and the federal government are worried that many states will refuse to implement the higher income thresholds or only partially adopt them. Some states, too, oppose implementing the state Exchanges. This throws PPACA’s goal of a uniform healthcare access and subsidy system into limbo.
Speculation is that a good number of states will opt out of the full expansion to 133% of the federal poverty level (FPL). Advocates worry that as many as 30 states could refuse to participate. That may be overly pessimistic. It would appear that about a half a dozen states will likely opt out, with another dozen or so on the fence on the issue. The federal government cannot compel states to adopt the expansion by a given date. Centers for Medicare and Medicaid Services (CMS) Acting Administrator Marilyn Tavenner appeared before the Republican Governors Association (RGA) to try to address concerns and answer a long list of questions sent in by the association. The Governors argue that she was unable to provide detailed responses to most questions.

How many states eventually opt out or only partially implement could be driven by how liberal the CMS definition of “new eligibles” to Medicaid will be to help reduce the so-called “woodwork” effect (existing eligibles showing up in droves to enroll and states receiving only the regular federal match – not 100% initially) and whether block grants or global waivers are eventually adopted to reduce states’ cost exposure. The Obama administration has generally fought the changes that many states want to existing Medicaid benefits and cost-sharing.

In the meantime, Republican governors are challenging the Obama administration to address how individuals not eligible for the Exchanges will get covered if no Medicaid expansion occurs in their state. So far, the administration has only clarified that it will not financially penalize those targeted for Medicaid but remain uncovered due to no expansion in that state.

PPACA Commercial Drug Coverage Changes Likely

Faced with growing criticism from advocates, CMS may back track on its initial decision to only require one drug per class in the essential benefits standard for non-grandfathered plans and commercial Exchange coverage. CMS is now considering two approaches: (1) Adopting the Medicare Part D approach and requiring at least two drugs per class; and (2) Having the formulary standard be dictated by the benchmark approach in each state. The second option will likely be cheaper overall, but in both cases the health system will see greater expense because the overall drug benefit will likely have many more brands than under the original proposal.

Dual Eligible Demonstration Passive Enrollment Backed By MedPAC

In a somewhat surprising move, the Medicare Payment Advisory Commission (MedPAC), the statutory body that advises Congress on Medicare policy and payments, has backed letting states automatically enroll dual-eligible beneficiaries in the dual demonstration pilots with certain restrictions or conditions. Earlier MedPAC raised concerns not only with passive enrollment but with the scope of the dual demo project. Despite the endorsement of passive enrollment, MedPAC still wants guardrails built around the program. MedPAC recognized that passive enrollment is necessary to drive membership, which helps ensure robust investments in the clinical infrastructure needed to tackle the cost inefficiencies and quality challenges in both systems.

GAO Questions CMS’ Ability To Set Up Medicare Advantage Star Quality Demonstration

Another of Congress’ bodies, the Government Accountability Office (GAO), says CMS may have acted without the legal ability to push out the more rigorous PPACA Star quality bonus program and substitute a transition system. The objection from GAO and GOP lawmakers are not new. Whether politics played a role or not, implementing the PPACA program as envisioned might have put a stake through the heart of Medicare Advantage in many regions. The demo creates a good roadmap to get to the more rigorous standards in 2015.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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