medicaid and chip new and upcoming developments kimberly davis medicaid and chip division august 13,...

Medicaid and CHIPNew and Upcoming Developments

Kimberly DavisMedicaid and CHIP Division

August 13, 2010

2

Presentation Overview

• Overview of Medicaid eligibility, enrollment, and budget.

• Legislation from 81st Texas Legislature that impacts clients.

• Updates on Texas’ managed care initiatives.• Federal legislation impacting Texas’ Medicaid and

CHIP programs.

3

Overview Medicaid

• What is Medicaid?• Medicaid is a jointly funded state-federal health-care

program, established in Texas in 1967. • Medicaid is an entitlement program, which means the

federal government does not, and a state cannot, limit the number of eligible people who can enroll, and Medicaid must pay for any services covered under the program.

• Serves primarily low-income families, non-disabled children, related caretakers of dependent children, pregnant women, the elderly, and people with disabilities.

• Covers acute health care (physician, inpatient, outpatient, pharmacy, lab, and X-ray services), and long-term services and supports for aged and disabled clients.

4

Overview CHIP

• What is the Children’s Health Insurance Program (CHIP)?• CHIP is jointly funded state-federal health insurance

program for children, established in Texas in 1998. • Provides health insurance to low-income, uninsured children

in families with incomes too high to qualify for Medicaid.

• Texas operates a separate CHIP program that requires all benefits to be approved by the U.S. Secretary of Health and

Human Services. • Benefit package includes a basic set of health-care benefits

that are cost effective and focuses on primary health-care needs.

5

Medicaid Eligibility

6

$275

$2,022

$647

$2,823

$2,823

$2,030

$1,526

$188

0 500 1000 1500 2000 2500 3000

Medically Needy

Long-Term Care at up to 300% of SSI federal benefit rate (FBR) (Individual)

SSI, Aged & Disabled up to 100% SSI FBR (Individual)

Pregnant Women at up to 185% FPL (Eligible through 2nd month after delivery)

Children ages 6-18 at up to 100% of FPL

TANF

Children ages 1-5 at up to 133% of FPL

Newborns up to age 1 at up to 185% FPL

* "Countable income" is gross income adjusted for allowable deductions, typically work-related.Note: SSI does not certify families of three. SSI certifies only individuals and couples. SSI is not tied to the Federal Poverty Level, but is based on the FBR, as indicated above.

Medicaid Eligibility in Texas, 2010Maximum Monthly Countable Income* Limit (family of three unless otherwise specified)

Medicaid Eligibility

7

Medicaid Enrollment

8

Medicaid Enrollment

• January 2009:• 14 percent (1 in 7) of Texans received Medicaid.

• Fiscal year 2009 caseloads:• 3 million individuals received Medicaid.• 534,000 children received CHIP.

• Medicaid enrollment is projected to continue to increase.

9

Medicaid Enrollment

Average Monthly Medicaid EnrollmentSFYs 1999 - 2009

2.873.00

2.88 2.79 2.83

2.68

2.49

2.10

1.871.811.81

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

s

Source: HHSC, Financial Serivces.Note: Average monthly Medicaid clients include the average number of clients in each month of the f iscal year. The average monthly clients w ill alw ays be a smaller number than the unduplicated clients, as clients come and go from the system.

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Medicaid Enrollment

Texas Medicaid Beneficiaries and ExpendituresState Fiscal Year 2009

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Caseload Cost

Source: HHS Financial Services, 2009 Medicaid Expenditures, including Acute Care, Vendor Drug, and Long-Term Care. Costs and caseload for all Medicaid payments for full beneficiaries and non-full beneficiaries (Women's Health Waiver, Emergency Servicesfor Non-Citizens, and Medicare payments) are included.

Non-Disabled Children

61%

Non-Disabled Children

32%

Non-Disab led Adults 9%

Aged & Disability Related

30%

Non-Disab led Adults 10%

Aged & Disability Related

58%

11

Medicaid Spending

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Medicaid Spending

• Total Medicaid spending in 2009:• Estimated $24.6 billion (all funds).

• Includes Disproportionate Share Hospital (DSH), Upper Payment Limit payments, and administration.

• Medicaid spending increasing in both federal and Texas budgets.

• In 2008-2009 biennium, Health and Human Services was approximately 26.7 percent of the total state budget (excludes DSH).

• Like Medicaid enrollment, Medicaid spending is projected to continue to increase.

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Medicaid Spending

Figure 7.2: Texas Medicaid Budget* FFYs 1987-2009

0

5

10

15

20

25

30

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Do

llars

in B

illio

n

Total Medicaid Budget Federal Portion State Portion

*Includes DSH and UPL funds.Source: HHSC, Financial Services, Form CMS 64-Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program.

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81st Session Legislation Impacting Clients

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• Medicaid Buy-In Program for Disabled Children – SB 187• Allows families whose income does not exceed 300% of FPL

to buy-in to the Medicaid Program for their child with a disability.

• Benefits will be the same state plan services as other Medicaid children.

• Projected implementation is January 2011.

• Appropriation for Medicaid Services for Qualified Alien Children • CHIPRA allows states to cover Qualified Aliens in Medicaid

and CHIP with federal matching funds.

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• Obesity prevention pilot for Medicaid or CHIP enrollees – SB 870• Creates a pilot in at least one area of the state.• Pilot is jointly conducted by HHSC and DSHS for children

enrolled in Medicaid in the Travis Service Area.• Pilot goals include:

• Decrease rate of obesity in Medicaid children;• Improve nutritional choices; • Increase physical activity; and • Decrease long-term costs to Medicaid incurred as a

result of obesity.

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• Electronic health information exchange (HIE) – HB 1218• Directed HHSC to develop an electronic HIE system HHSC

will implement the HIE system, known as Medicaid Eligibility and Health Information services (MEHIS) in 3 phases.

• Phase 1 – will replace paper Medicaid ID forms with magnetic strip cards, implement rudimentary EHR, and evaluate options for e-prescribing in 2010.

• Phase 2 – will provide EHR for CHIP clients, integrate state lab data in the EHR, improve data gathering capabilities and system enhancements.

• Phase 3 – will develop and integrate evidence-based benchmarking for providers and expands HIE system to include other data exchange partners.

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• Medicaid Substance Abuse Services – 2010-11 General Appropriations Act, S.B. 1• Directs HHSC to implement a substance abuse benefit for

adults in Medicaid.• The benefits are subject to approval by the Center for

Medicare and Medicaid Services (CMS) and will be implemented in two phase.

• Phase I - will included a outpatient benefit and is anticipated to be available in September 2010.

• Phase II - will included the addition of residential detoxification and treatment services and are anticipated to be available in January 1, 2011.

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• Health Home Pilot Project –strategic medical initiatives under Frew v. Suehs corrective action order• $20 million for pilot health home models for primary care

practices serving Medicaid children (through age 20). • Pilot projects will be used determine which model(s) may be

appropriate for state-wide implementation. • HHSC may select up to 8 different types of pilot health home

models to be operational for 24 months. • Projects must focus on: (1) patient access; (2) quality

improvement; (3) patient/family centeredness; (4) population approach to care; (5) coordinated and clinically managed care; and (6) team-based comprehensive care.

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Managed Care Initiatives

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• Elimination of Integrated Care Model in Dallas/Fort Worth• Operations ended on May 31, 2010.

• STAR+PLUS Expansion• The STAR+PLUS program is expanding into the Tarrant and

Dallas Medicaid Service Areas.• Projected implementation February 1, 2011.

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• CHIP Rural Service Area MCO Procurement• Awards to Superior and Molina health plans.• Both health plans will use Texas True Choice network.• RSA has been expanded to include the Webb Service Area

in CHIP.• Effective September 1, 2010.

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Federal Legislation

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Federal Legislation

• American Recovery and Reinvestment Act (ARRA)• Prohibits states from implementing more restrictive Medicaid

eligibility standards, methodologies, or procedures than those in effect on July 1, 2008.

• Establishes grant and loan programs for states and health entities.

• Provides incentive payments for meaningful use of electronic health (medical) records by qualifying Medicaid providers.

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ARRA cont’d

• Medicaid Electronic Health Record (EHR) Incentive Program• Incentives payments are for meaningful use of certified

EHRs by qualifying Medicaid providers.• The provider is responsible for payment of EHR costs and

certifying meaningful use of the HER.

• Authorizes a 100% federal match for incentive payments to providers.

• Texas goal to begin provider enrollment is January 2011.

• Authorizes a 90% federal match for state’s administrative costs to establish process for incentive payments.

• Eligible professionals must choose if they will receive the incentive payment as a Medicaid or Medicare provider.

• Hospitals can receive both the Medicaid and Medicare incentive payment.

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ARRA cont’d

• Medicaid Electronic Health Record (EHR) Incentive Program• Payment is an incentive for using certified EHRs in a

meaningful way.• Not a reimbursement and not intended to penalize early

adopters.

• First year payment can be received in 2011 through 2016.• Final payment can be received up to 2021.• Incentive payments do not need to be for consecutive years.• Eligible professionals must meet certain criteria:

• Eligible provider type;• Medicaid patient volume thresholds; and• Meaningful use of certified EHRs for at least 50% of patient

encounters during the reporting period.

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ARRA cont’d

Medicaid Electronic Health Record (EHR) Incentive Program

Provider Minimum Medicaid Patient Volume

ThresholdOR

if the Medicaid EP practices

predominantly in a Federal Qualified

Health Clinic (FQHC) or Rural Health Clinic

(RHC)— 30% needy individual

patient volume

threshold

Physicians 30%

- Pediatricians 20%

Dentists 30%

Nurse Practitioners 30%

Certified Nurse Midwives

30%

Physician Assistants when practicing at an FQHC/RHC that is led by a PA

30%

Acute Care Hospitals 10% Not an option for hospitalsChildren's Hospitals No requirement

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Federal Legislation

• CHIP Reauthorization Act of 2009 (CHIPRA)• Reauthorized federal CHIP funding from 2009 - 2013.• Reduces time-frame for states to use unspent federal

allotment from three years to two years for 2009 and beyond.

• CHIP programs must comply with Mental Health Parity.• Mandates dental services in CHIP.• Allows for federally matched coverage of qualified alien

children in Medicaid and CHIP by removing the 5-year bar.• Requires citizenship verification.• Applies Medicaid managed care safeguards and standards.• Prospective payment system for FQHCs and RHCs in CHIP.

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CHIPRA cont’d

• Prospective payment system (PPS) for FQHCs and RHCs in CHIP• CHIPRA requires states to apply the Medicaid PPS for

federally qualified heatlh centers (FQHCs) and rural health clinics (RHCs) to CHIP.

• In CHIP FQHCs and RHCs receive full encounter rates for dates of services rendered to CHIP members on or after

October 1, 2009.

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Federal Legislation

• Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)• Requires group health plans that offer behavioral health

benefits (mental health and substance abuse) to provide those services at parity with medical/surgical services.

• Parity requirements apply to financial requirements (e.g., co-payments), treatment limitations (e.g., number of visits), and out-of-network coverage.

• MHPAEA does not impact traditional Medicaid fee-for-service; however the requirements apply to Medicaid managed care and state CHIP programs.

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Federal Health Care Reform:

The Affordable Care Act

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• The Patient Protection and Affordable Care Act (PPACA), was enacted on March 23, 2010.

• The Health Care and Education Reconciliation Act of 2010 (HCERA) was enacted on March 30, 2010.

• Together, these two pieces of legislation are called the Affordable Care Act (ACA).

• The Affordable Care Act will make significant changes to the health care market.

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• The Health Insurance Exchange• Must be operational by January 2014.• Failure to establish Exchange will result in HHS establishing

an Exchange within any non-participating state. • State must be able to demonstrate by January 1, 2013, that

it will have Exchange operational by January 1, 2014. • Must be administered by governmental agency or non-profit

organization.

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• The Health Insurance Exchange• Provides one-stop insurance shopping for individuals and

small businesses. • All plans sold in the Exchange must be certified by TDI as

meeting minimum federal benefit standards.• Exchange must provide a seamless application and

enrollment process for individuals who qualify for subsidies, requiring coordination with HHSC for Medicaid and CHIP inclusion.

• Federal funding: HHS will distribute implementation grants to states within one year after date of enactment of legislation.

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• Expansion of Health Insurance Coverage, Individual Mandate• Effective January 2014.• Individuals (US citizens and legal residents) required to

obtain qualifying coverage that meets federal standards.• Can be an individual or group health plan. • Exemptions for individuals meeting any of the following:

• Earnings fall below tax filing threshold (currently $12,050 for individual and $18,700 for couple), religious objections, members of Indian tribes, or not covered by insurance for less than three months.

• Subsidies for families/individuals up to 400% of federal poverty level (approx $43,000 individual, $88,000 family of 4) to apply towards premium costs.

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• Expansion of Health Insurance Coverage, Individual Mandate• Penalties for non-compliance:

• 2014 - $95/person• 2015 - $325/person• 2016 - $695/person• Alternative: 2.5 % of income above tax filing threshold

(whichever is greater)• Enforcement: individuals required to file with IRS must

include IRS form to verify qualifying coverage. Individuals exempt from filing taxes also exempt from insurance requirement.

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• Medicaid Expansion and Caseload Impact• Expands Medicaid eligibility to individuals under age 65 with

incomes up to 133% of the Federal Poverty Limit (FPL).• Income deduction allowance of five percentage points creates

effective eligibility level of 138% FPL.• New client populations in Texas include:

• Parents and caretakers 14%- 133%.• Childless adults up to 133% FPL.• Emergency Medicaid in Expansion Populations.• Foster-care through age 25.

• Texas will experience caseload growth both from newly eligible individuals and those individuals who are currently eligible but not enrolled.

• With an individual mandate, enrollment of current eligibles is projected to increase.

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• Medicaid Expansion and Caseload Impact• Changes Medicaid income eligibility requirements.

• Requires use of modified gross income and prohibits assets test and most income deductions.

• Requires that states maintain existing eligibility until the state’s exchange is fully operational.

• Optional populations covered above 133% FPL may be moved to the Exchange upon implementation in 2014.

• Children’s Medicaid and CHIP eligibility levels must be maintained until 2019.

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0

25

50

75

100

125

150

175

200

225

Newborns (<1yr)

Children (Age 1-5)

Children (Age 6-18)

PregnantWomen

SSI, Aged,Disabled

Parents Childless Adults Long-Term Care

CHIP200% FPL

CHIP200% FPL

CHIP200% FPL

CHIP200% FPL

Current Medicaid185% FPL





14% FPL

NEW Medicaid133% FPL






133%

Current & Future Medicaid/CHIP Eligibility Levels

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* Note: Due to rounding, some component totals may not equal their respective grand total.

Patient Protection and Affordable Care Act (PPACA)HHSC Medicaid/CHIP Caseload Estimates, 2010 - 2023 *

Enr

ollm

ent (in

tho

usan

ds)

574 664 717 731 746 761 776 792 808 824

1,2321,284

1,324 1,351 1,378 1,405 1,433 1,462 1,491 1,521

0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Adult Expansion

Eligible but Unenrolled

1,807

1,9482,041 2,082

2,124 2,166 2,209 2,254 2,299 2,345

2010 - 2013

Unknown

41


* Note: Due to rounding, some component totals may not equal their respective grand total.

Patient Protection and Affordable Care Act (PPACA)HHSC Medicaid/CHIP Cost Estimates by Level of Implementation, 2010 - 2023 *

Stat

e Cos

t (in

billio

ns)

$0.2 $0.2

$0.7$1.0

$1.6$1.8

$0.7$0.8

$0.3

$0.3$0.3

$0.3

$1.3$1.4

$1.5$1.6

$0.3

$0.3$0.3

$0.4

$0.4

$0.4

$0.5

$0.5

$0.5

$0.6

$0.7

$0.8

$0.8

$0.9

$1.0

$0.2

$0.8

$1.4$1.7

$0.5

$0

$1

$2

$3

$4

$5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Full Provider Rate Increase for Primary Care

Partial Provider Rate Increase for Primary Care

Currently Eligible but Unenrolled

Adult Expansion

2010 - 2013

Unknown

$0.8

$2.1

$4.2

$4.6

$5.0

$3.9

$2.3

$1.8

$1.2$1.0

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• Medicaid Rate Increases• States are required to increase Medicaid rates to 100% of

Medicare rates in 2013 and 2014 for certain services provided by primary care providers (PCPs).

• The incremental rate costs for 2013 and 2014 are 100% federally funded.

• Children’s Health Insurance Program (CHIP) Rates• Historically CHIP and Medicaid provider rates have been

aligned. • State will need to decide whether to provide the same

increase for CHIP rates as for Medicaid.• Any increase in CHIP provider rates will be at the CHIP FFP

for all years.• CHIP FFP increases by 23 points from 2016 to 2019.

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• When to Implement Medicaid Expansion• States may opt to expand Medicaid coverage to 133% FPL

on or after April 1, 2010 without a waiver at regular Federal Financial Participation (FFP).

• Expansion is mandatory in 2014.• Medicaid Expansion Benchmark Benefit Plan

• States are required to create a Secretary-approved benchmark benefit package for newly eligible Medicaid groups by January 2014.

• This could result in different benefit packages for existing and expansion Medicaid populations.

• Potential differences in current Texas Medicaid benefits and a benchmark plan include:

• Prescription Drug Limit• In-Patient Hospitalization Limits• Mental Health Benefits

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• New Medicaid and/or CHIP Benefits• Requires Medicaid coverage for freestanding birthing centers.• Requires Medicaid coverage of tobacco cessation counseling

and pharmacotherapy for pregnant women.• Requires Medicaid and CHIP to allow a child to elect hospice

care without waiving their rights to treatment services for the child’s terminal illness.

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• Medicaid Pharmacy Program Changes• Federal Rebate Percentages for Outpatient Drugs:

Increases the minimum Medicaid federal rebate amount for drug products.

• Rebates for Medicaid MCO Drugs: Allows states to collect Medicaid rebates for drugs dispensed through managed care organizations (MCOs).

46


• Impact to Texas Healthcare Delivery Systems• Many of the state’s indigent care and charity statutes may

need to be restructured.• Core functions of the Department of State Health Services

and the populations it serves will likely be altered.• Public hospitals will have less uncompensated care.• The role of city and county health departments may need to

be redefined.• Unknown impact to Local Mental Health Authorities.

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• Impact to Texas Workforce Planning• Demand for primary care providers and specialists will

increase as more Texans are insured.• State will need to examine this increased demand as it

relates to the supply of healthcare providers.• Strategies for meeting increased demand will need to be

explored.• Telemedicine• Additional use of ancillary service providers

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The Affordable Care Act: Texas Uninsured Demographics Current

Current: Insured & Uninsured Current: Uninsured by Act Subsidy Type

Uninsured

6,500,500

26%

Insured

18,873,500

74%

No Subsidy ¤

11%

Undocumented

13%

Subsidy Eligible ◊

43%

Eligible

but Unenrolled †

12%

Medicaid

Expansion ‡

21%

Source: U.S. Census Bureau. March 2009 Current Population Survey (CPS), Texas State Data Center at the University of Texas at San Antonio. Population projections for year 2010 based on

2000-2007 Migration Scenario. Published 2/2009.

Prepared by: The Center for Strategic Decision Support, Texas Health and Human Services Commission, April 2010.

KEY

‡ Medicaid Expansion

(adults <133% Federal Poverty Level (FPL))

† Eligible but Unenrolled

(children < 200% FPL)

◊ Subsidy Eligible

(adults and children <400% FPL,

including Lawful Permanent Residents (LPRs))

¤ No Subsidy

(>400% FPL, including LPRs)

49

The Affordable Care Act: Texas Uninsured Demographics Post-Implementation

Under Act: Insured & Uninsured Under Act: Uninsured by Act Subsidy Type

Uninsured

2,349,139

9%

Insured

23,024,861

91%No Subsidy ¤

16%

Undocumented

36%

Subsidy Eligible ◊

35%

Eligible but

Unenrolled †

12%

Note: Due to rounding, percents may not total one hundred percent.

Source: U.S. Census Bureau. March 2009 Current Population Survey (CPS), Texas State Data Center at the University of Texas at San Antonio. Population projections for year 2010 based on

2000-2007 Migration Scenario. Published 2/2009.

Prepared by: The Center for Strategic Decision Support, Texas Health and Human Services Commission, April 2010.

KEY

† Eligible but Unenrolled

(children < 200% Federal Poverty Level (FPL))

and (adults <133% FPL)

◊ Subsidy Eligible

(adults and children <400% FPL,

including Lawful Permanent Residents (LPRs))

¤ No Subsidy

(>400% FPL, including LPRs)

50

Questions?

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