Recession Takes its Toll on State Medicaid Programs

State Medicaid programs are feeling the effects of the current recession, according to a new report by the Congressional Research Service.

According to the brief report, state Medicaid enrollment and costs have risen since the COVID-19 pandemic began and states expect them to continue rising into their 2021 fiscal years.  State efforts to reduce spending are limited by provisions in the Families First Coronavirus Response Act, which provided additional federal Medicaid matching funds to the states to assist them with their Medicaid costs during the COVID-19 pandemic but impose maintenance-of-effort requirements in exchange for continued state access to the enhanced federal matching funds.

Learn more about how the COVID-19 public health emergency is affecting state Medicaid programs in the Congressional Research Service report “Impact of the Recession on Medicaid.”

MACPAC Meets

The Medicaid and CHIP Payment and Access Commission met for two days last week in Washington, D.C.

The following is MACPAC’s own summary of the sessions.

The October 2020 MACPAC meeting opened with a panel discussion on restarting Medicaid eligibility redeterminations when the public health emergency ends.  It included Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities; René Mollow, deputy director for health care benefits and eligibility at the California Department of Health Care Services; and Lee Guice, director of policy and operations at the Department for Medicaid Services, Kentucky Cabinet for Health and Family Services.

After a break, Commissioners heard a panel discussion with Kevin Prindiville, executive director at Justice in Aging; Mark Miller, executive vice president of healthcare at Arnold Ventures; and Charlene Frizzera, senior advisor at Leavitt Partners, on creating a new program for dually eligible beneficiaries. Later, staff presented preliminary findings from a mandated report on non-emergency medical transportation. The day concluded with a report on nursing facility acuity adjustment methods.

On Friday, the day began with a session on access to mental health services for adults in Medicaid. It was followed by a related panel discussion on mental health services with Sandra Wilkniss, director of complex care policy and senior fellow at Families USA; Melisa Byrd, senior deputy director for the District of Columbia Department of Health Care Finance; and Dorn Schuffman, director of the CCBHC Demonstration Project at the Missouri Department of Mental Health.

Next, the Commission considered the merits of extending Medicaid coverage for pregnant women beyond 60 days postpartum. Staff then provided an update on a statutorily required analysis of disproportionate share hospital (DSH) allotments, as well as an analysis of addressing high-cost drugs and the challenges they present to Medicaid.

The meeting concluded with comment on the Secretary’s report to Congress on Reducing Barriers to Furnishing Substance Use Disorder (SUD) Services Using Telehealth and Remote Patient Monitoring for Pediatric Populations under Medicaid. The Commission decided to send a letter to Congress and the Secretary commenting on this report.

Supporting the discussion were the following briefing papers:

  1. Mandated Report on Non-Emergency Medical Transportation: Work Plan and Preliminary Findings
  2. Changes in Nursing Facility Acuity Adjustment Methods
  3. Access to Mental Health Services for Adults in Medicaid
  4. Considerations in Extending Postpartum Coverage
  5. Required Annual Analysis of Disproportionate Share Hospital (DSH) Allotments
  6. Addressing High-Cost Drugs and Pipeline Analysis
  7. Comment on Secretary’s Report to Congress on Reducing Barriers to Substance Use Disorder Services Using Telehealth for Pediatric Populations under Medicaid

Because they serve so many Medicaid and CHIP patients – more than the typical hospital – MACPAC’s deliberations are especially important to private safety-net hospitals.

MACPAC is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department  of Health and Human Services, and the states on a wide variety of issues affecting Medicaid and the State Children’s Health Insurance Program.  Find its web site here.

Off-Again, On-Again Public Charge Rule is Off Again

A federal rule that would have limited immigration to the U.S. for people who might at some point become dependent on public aid programs has been put on hold again by a federal judge.

Implementation of the rule, delayed by several courts and then authorized by the U.S. Supreme Court until the merits of challenges could be heard, was delayed again by a federal court, which said the rule contained “numerous unexplained flaws” that made it “arbitrary and capricious.”

Health care advocates feared the rule would discourage some immigrants to whom the rule does not even apply from seeking to participate in certain public aid programs and even encourage some to whom the rule does not apply to disenroll from the public aid programs, such as Medicaid, in which they are already legally enrolled.  A recent study published in the journal Health Affairs found that the parents of a projected 260,000 children have disenrolled their children from Medicaid or the Children’s Health Insurance Program (CHIP) because of their fear of the rule’s implications for their families.

NASH has conveyed its opposition to the public charge rule on a number of occasions, including in this 2019 position statement.

Learn more about the rule and this latest court decision in the New York Times article “Trump’s ‘Public Charge’ Immigration Rule Is Vacated by Federal Judge

States Expect Medicaid Enrollment, Spending to Rise in FY 2021

States expect to see their Medicaid enrollment and spending rise in FY 2021, driven by increases in unemployment resulting from the COVID-19 pandemic and maintenance-of-effort requirements in legislation enacted earlier this year.

A Kaiser Family Foundation survey of state Medicaid directors found that those officials expect their Medicaid enrollment to rise 8.2 percent in FY 2021 and their Medicaid spending to increase 8.4 percent that same year.  Most states expect the 6.2 percentage point increase in federal Medicaid matching funds that was included in the Families First Coronavirus Response Act, passed this March, to expire at the end of 2020.

Learn more about how states see their Medicaid responsibilities changing in the coming year and the underlying causes of those changes in the Kaiser Family Foundation report “Medicaid Enrollment & Spending Growth: FY 2020 & 2021.”

Medicaid and CHIP Enrollment Rising in Pandemic

Medicaid enrollment rose 6.2 percent and CHIP enrollment 0.5 percent during the first four months of the COVID-19 public health emergency, the Centers for Medicare & Medicaid Services reports.

The enrollment increase can be traced to rising unemployment, with many people losing their employer-sponsored health insurance.  The new figures cover five months, from February through June, the latter four of which marked the beginning of the COVID-19 pandemic.

Private safety-net hospitals already serve significant numbers of Medicaid and CHIP patients; an increase in their rolls will prove financially challenging to them.

The information comes from CMS’s first monthly “Medicaid and CHIP Enrollment Trends Snapshot.”  Go here for CMS’s news release explaining its new initiative and here to see the trends snapshot itself.

Payer Mix to Change, Providers Anticipate

Health care providers expect to serve higher proportions of Medicaid and uninsured patients in the coming year, according to a new survey.

The shift will be driven by the COVID-19 pandemic, which as unemployment remains high is leading to fewer patients with commercial insurance and more with Medicaid or no insurance all, according to provider financial executives.

Such a shift would be especially challenging for private safety-net hospitals because they already serve higher proportions of Medicaid and uninsured patients than the typical community hospital.

Learn more about the reimbursement changes health care providers expect to see over the next twelve months in the Healthcare Dive article “Provider finance execs bracing for unfavorable shift in payer mix, survey finds.”

Medicaid Enrollment on the Rise

More people are enrolling in Medicaid, and much of the increase is driven by the COVID-19 emergency.

Or so reports the organization Families USA in a new study.

According to the study,

Over half of the 38 states reporting monthly enrollment through May or later have seen greater than 7% growth in enrollment since February. For the eight states reporting August enrollment, their average enrollment growth since February is approximately 11%.

But the implications are even greater, according to the analysis, which found that in large part because of COVID-19 job loss,

Medicaid enrollment among the 38 states reporting has already increased by 4.3 million people and is poised to increase much more in the near future. Analysis by Health Management Associates projects that up to 27 million people will lose their job-based insurance this year and that Medicaid will see an increase in enrollment of up to 18 million people by the end of 2020, depending on the severity of the economic downturn.

Growing numbers of Medicaid patients can pose a challenge for many private safety-net hospitals because of the inadequacy of the reimbursement they receive from many state Medicaid programs.

Learn more in the Families USA report “Rapid Increases in Medicaid Enrollment: A Review of Data from Six Months.

How Medicaid Managed Care Cuts Costs

Low-cost Medicaid managed care plans mostly cut their costs by reducing how much care, and how much high-quality care, their members receive.

That is the conclusion of a new study published by the National Bureau of Economic Research.

According to the study, Medicaid managed care plans succeed in reducing costs less by cost-sharing, negotiating lower provider rates, employing narrow networks, and doing a better job of managing their members’ high-cost chronic medical conditions than they do by leading their members to use fewer high-value, low-cost services such as cancer and diabetes screenings and fewer high-value drugs.

The researchers note that

Effects via quantities, rather than differences in negotiated prices, explain these patterns.  Rather than reducing “wasteful” spending, low-spending plans cause broad reductions in the use of medical services – including low-cost, high-value care – and worsen beneficiary satisfaction and health.  Supply side tools circumvent the classic trade-off between financial risk protection and moral hazard, but give rise instead to a cost/quality trade-off.

Learn more from the National Bureau of Economic Research report “Are All Managed Care Plans Created Equal?  Evidence From Random Plan Assignment in Medicaid.”

NASH Endorses Bill to Delay MFAR

Implementation of the Medicaid fiscal accountability regulation, opposed by NASH and many others since its introduction in November of 2019, would be delayed under a new bill proposed in the House of Representatives.

The MFAR Transparency Act (HR 7606), sponsored by representatives Roger Williams (R-TX) and Eddie Bernice Johnson (D-TX), would delay implementation of the MFAR rule until the Government Accountability Office had an opportunity to assess its impact on individual states and identify the Medicaid transparency issues that need to be addressed.

Most important, the bill would prevent implementation of MFAR without specific authorization from Congress.

In a letter to the bill’s sponsors endorsing their proposal, NASH wrote that “The MFAR rule could jeopardize access to care for millions of Americans.”

NASH first expressed its opposition to the MFAR rule in a January letter to the Centers for Medicare & Medicaid Services.  Read its endorsement of the Williams-Johnson bill here.

NASH Asks Senate for COVID-19 Help

Private safety-net hospitals need help with the challenges posed by the COVID-19 public health emergency, NASH wrote yesterday in a letter to Senate majority leader Mitch McConnell and minority leader Charles Schumer.

In its letter, NASH asked for:

  • An additional $100 billion for hospitals.
  • Forgiveness for money provided to hospitals through the federal CARES Act’s Accelerated and Advance Payment Program.
  • Action to prevent implementation of the Medicaid fiscal accountability regulation.
  • An increase in the federal Medicaid matching rate (FMAP).
  • An increase in states’ Medicaid disproportionate share (Medicaid DSH) allotments.
  • A moratorium on changes in hospital eligibility for the 340B prescription drug discount program, Medicare indirect medical education program, Medicare disproportionate share (Medicare DSH) program, and other programs.

See NASH’s letter here.