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Medicaid Block Grants Hit Bump in Road

The drive toward encouraging states to implement Medicaid block grants hit a bump in the road last week when the formal guidance for states that Centers for Medicare & Medicaid Services administrator Seema Verma suggested was imminent apparently became not-so imminent.

At the time Verma spoke, draft guidance from CMS to the states was under review by the federal Office of Management and Budget.  Last week, however, CMS withdrew that draft, which also was to address state Medicaid per capita cap programs.

The bump in the road does not, however, appear to be more than a temporary detour.  While CMS has not explained why the draft was withdrawn, Verma indicated that the agency still intends to provide guidance to state on Medicaid block grants and per capita spending limits.

NASH has long had concerns about Medicaid block grants, writing in its 2019 advocacy agenda that

Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grant continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more from the McKnight’s Long-Term Care News article “CMS withdraws proposed guidance on Medicaid block grants, funding caps.”

Groups Seek to Block Medicaid Block Grants

Do not permit states to adopt block grants for their Medicaid programs, more than two dozen groups have asked the Centers for Medicare & Medicaid Services.

A letter signed by the American Diabetes Association, American Heart Association, COPD Foundation, March of Dimes, United Way, and others states that

Simply put, block grants and per capita caps will reduce access to quality and affordable healthcare for patients with serious chronic health conditions and are therefore unacceptable to our organizations.

The letter explains that

Per capita caps and block grants are designed to reduce federal funding for Medicaid, forcing states to either make up the difference with their own funds or make cuts to their programs that would reduce access to care for the patients we represent…  States under a block grant or per capita cap would struggle to respond to changes in standards of care, such as the development of ground-breaking but expensive treatment, and would have a greater incentive to impose additional barriers for treatments to manage their overall costs…  Additionally, per capita caps and block grants would cut Medicaid most deeply when the need is greatest, as these financing structures do not protect either states or patients from financial risk as the result of an economic downturn or other expected event.

NASH has long been skeptical about the use of block grants in state Medicaid programs.  The organization’s advocacy agenda for 2019 explains that

Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grant continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more about the groups that signed this letter and their objections to Medicaid block grants and per capita caps by reading their letter to CMS.

Medicaid Per Capita Caps Explained

In a new report, the Commonwealth Fund looks at Medicaid per capita caps, an idea that has been discussed for years, that was part of the as-yet unsuccessful American Health Care Act, and a proposal that is almost certain to resurface in the near future.

Among other things, the article

  • explains what per capita caps are and how they would work
  • describes how per capita caps differ from current Medicaid policy
  • considers how the implementation of per capita caps might affect low-income people, providers, and insurers

Learn more in the Commonwealth Fund article “Essential Facts About Health Reform Alternatives: Medicaid Per Capita Caps,” which can be found here.

New MACPAC Reports

The Medicaid and CHIP Payment and Access Commission has released several new reports, including:

  • a look at how states exercise flexibility in their individual Medicaid programs;
  • methodologies for setting Medicaid per capita caps;
  • a review of how states are addressing high-cost hepatitis C drugs in their Medicaid programs;
  • an analysis of Medicaid disproportionate share hospital payment (Medicaid DSH) allotments and payments; and
  • an analysis of when states will exhaust their CHIP allotments.

MACPAC is a non-partisan legislative branch agency that advises Congress, the states, and the administration on Medicaid and CHIP payment and access issues.

Find links to these and other MACPAC reports here, on the MACPAC web site.

Temporarily Gone But Not Forgotten

While last week’s withdrawal of the American Health Care Act at least temporarily halted talk of immediate repeal and replacement of the Affordable Care Act, at least one aspect of that proposed legislation, often discussed in the past, is sure to arise in the future as well:  replacing the current manner in which the federal government matches state Medicaid funding with Medicaid per capita limits or Medicaid block grants.

In a new issue brief, the Kaiser Family Foundation examines how a switch to per capita limits or block grants might affect low-income seniors served by both Medicare and Medicaid.  Among the issues the brief addresses are:

  • why such a switch would matter to low-income seniors at all
  • how it might change federal funding of Medicaid for low-income seniors
  • how states might react in ways that would affect low-income seniors
  • how it might affect the providers who serve low-income seniors
  • how such an approach might vary from state to state

Any move to Medicaid per capita limits or block grants could have serious implications for private safety-net hospitals and the communities they serve because these hospitals serve so many dually eligible Medicare/Medicaid patients.

Learn more about a possible change in how the federal government pays for its share of the Medicaid program that will surely find its way into future health policy discussions and debates in the Kaiser Family Foundation issue brief “What Could a Medicaid Per Capita Cap Mean for Low-Income People on Medicare?”

MACPAC Meets, Discusses Medicaid Issues

Members of the non-partisan legislative branch agency that advises Congress, the Secretary of Health and Human Services, and the states on Medicaid and Children’s Health Insurance Program matters met in Washington recently to discuss a number of issues.

On the agenda of the Medicaid and CHIP Payment and Access Commission were the following issues:

  • state Medicaid flexibility
  • state Medicaid responses to fiscal pressures
  • a study requested by Congress on mandatory and optional benefits and populations
  • current Medicaid parallels to per capita financing options
  • illustrations of state-level effects of per capita cap design elements
  • high-cost hepatitis C drugs
  • the role of section 1915(b) waivers in Medicaid managed care

Because private safety-net hospitals serve so many Medicaid and CHIP participants, MACPAC’s deliberations are especially important and relevant to them.

Go here for a link to overviews of these issues and the presentations offered at the MACPAC meeting.

MACPAC Meets, Discusses Medicaid, CHIP Issues

The non-partisan legislative branch agency that advises Congress, the Secretary of Health and Human Services, and the states on a variety of Medicaid and State Children’s Health Insurance Program issues met last week in Washington, D.C.

Among the issues on the agenda of the Medicaid and CHIP Payment and Access Commission were:

  • the flexibility of states in structuring and administering their Medicaid and CHIP programs
  • state Medicaid responses to fiscal pressures
  • studies requested by Congress on mandatory/optional benefits and populations
  • current Medicaid parallels to per capita financing options
  • illustrations of state-level effects of per capita cap design elements
  • high-cost hepatitis C drugs in Medicaid
  • the role of section 1915(b) waivers in Medicaid managed care

Because they serve so many Medicaid and CHIP patients, private safety-net hospitals are especially interested in what MACPAC has to say about these and other subjects.

Go here, to the MACPAC web site, for links to documents on all of these subjects.

Federal Medicaid Per Capita Spending Limits?

As they have in the past, some members of Congress have suggested of late that Medicaid might benefit from being transformed into a program with limited spending per capita: that is, such an approach would limit the amount of money the federal government would provide to states on a per capita basis.

Such an approach would almost certainly have serious implications for private safety-net hospitals.

What issues would need to be addressed to develop such an approach? What data would be needed?

gaoEarlier this year the chairmen of the Senate Finance Committee and the House Energy and Commerce Committee asked the U.S. Government Accountability Office to answer these and other questions. Now, the GAO has published its answers in a new report titled Key Policy and Data Considerations for Designing a Per Capita Cap on Federal Funding. Find that report here.