commonwealth of kentucky cabinet for health and family services department for medicaid services...

COMMONWEALTH OF KENTUCKYCABINET FOR HEALTH AND FAMILY SERVICESDEPARTMENT FOR MEDICAID SERVICES

Medicaid Cost Containment Task Force

August 31, 2010

Neville Wise, Deputy CommissionerDepartment for Medicaid Service

Cabinet for Health and Family Services


SUMMARY OF MEDICAID AND CHIP PROVISIONS

Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) as amended by Health Care and Education Reconciliation Act

of 2010 (HCERA, Public Law 111-152)

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Maintenance of Eligibility• Requires states to maintain current income eligibility levels in place on

the date of enactment (March 23, 2010) for children in Medicaid and CHIP through September 30, 2019. (Mandatory)

• Requires states to maintain Medicaid eligibility levels for adults in place on the date of enactment (March 23, 2010) until the Secretary determines that the state exchanges are fully operational (expected to be January 1, 2014). (Mandatory)

• Exempts states from the maintenance of effort requirement for nondisabled adults with incomes above 133% FPL starting in January 2011 if the state certifies that it is experiencing a budget deficit or will experience a deficit in the following year.

• Conditions Medicaid payments on compliance with the maintenance of eligibility requirements. (Mandatory)

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Determination of Income

• Effective January 1, 2014, bases eligibility for most Medicaid recipients on modified adjusted gross income (MAGI) with no asset or resource test. MAGI includes total income plus tax exempt interest and foreign earned income. Applies a special adjustment of 5 percentage points to bring effective income eligibility to 140% FPL. (Mandatory)– Maintains existing income counting rules for the elderly and groups eligible through

another program like foster care, low-income Medicare beneficiaries and Supplemental Security Income (SSI).

. – Requires states to establish equivalent income thresholds to implement the MOE

requirements for children using MAGI that ensures that individuals eligible on January 1, 2014 do not lose coverage. MAGI would not apply to beneficiaries enrolled as of January 1, 2014, until March 31, 2014 or their next re-determination date. (Implementation: January 1, 2014) (Mandatory)

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Income Eligibility Standard Section 2001

• Establishes minimum income eligibility level at 133% FPL effective January 1, 2014. (Mandatory)

• Adds 3 new mandatory eligibility categories: single, childless adults under age 65 who are not disabled; parents; and former foster care children under age 26. (Mandatory)

• Allows states to cover these populations at 133% FPL effective April 1, 2010 at regular state matching rate. (Optional)

• Allows states the option to provide Medicaid coverage to individuals with income above 133% FPL at regular state matching rates. (Optional)

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Children Pregnant Women

Working Parents

Non-Work-ing Parents

Childless Adults

Elderly and Individuals

with Disabil-ities

200%

185%

64%38%

0%

75%

SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for Kaiser Commission on Medicaid and the Uninsured, 2009.

Median Medicaid/CHIP Income Eligibility Thresholds, 2009

Minimum Medicaid Eligibility under Health Reform = 133%FPL

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Benchmark and Benchmark Equivalent Plans

• Permits states the option to create a Basic Health Plan for uninsured individuals with incomes between 133-200% FPL who would otherwise be eligible to receive premium subsidies in the Exchange. – States opting to provide this coverage will contract with one or more standard

plans to provide at least the essential health benefits– Must ensure that eligible individuals do not pay more in premiums than they

would have paid in the Exchange and that the cost-sharing requirements do not exceed those of the platinum plan for enrollees with income less than 150% FPL or the gold plan for all other enrollees.

– States will receive 95% of the funds that would have been paid as federal premium and cost-sharing subsidies for eligible individuals to establish the Basic Health Plan.

– Individuals with incomes between 133-200% FPL in states creating Basic Health Plans will not be eligible for subsidies in the Exchanges.

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Federal Matching Payments

• Provides full federal funding (100% FMAP) for individuals newly eligible for Medicaid (includes those not eligible for full benefits, benchmark or benchmark equivalent coverage in Medicaid) for 2014-2016; 95% FMAP for 2017; 94% FMAP for 2018; 93% FMAP for 2019 and 90% FMAP for 2020 and beyond.

• Limits states’ ability to increase the share of Medicaid expenditures from political sub-divisions (like counties) beyond what was in place as of December 31, 2009 to be eligible for an increase in the FMAP. (Mandatory)

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CHIP• Extends authorization and funding for CHIP through

2015 (2 years beyond the current authorization) and requires states to maintain income eligibility levels in place on the date of enactment (March 23, 2010) for Medicaid and CHIP through 2019. (Mandatory)

• Requires that CHIP eligible children, who cannot enroll in CHIP due to federal allotment caps, must be screened to determine if they are eligible for Medicaid and if not would be eligible for tax credits in a plan that is certified to be comparable to CHIP in the exchange. (Mandatory)

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CHIP• Provides for a 23 percentage point increase in the CHIP

match rate up to a cap of 100% from FY 2016 to FY 2019.

CHIP eligibility, benefit package and cost-sharing rules will continue as under current law.

• Creates a new option for states to provide CHIP coverage to children of state employees eligible for health benefits if the state premium contribution for family coverage is less than 1997 levels (adjusted for inflation) or if the employee’s premiums and cost sharing exceed 5 percent of the family’s income (Implementation: Upon Enactment). (Optional)

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Enrollment Simplification and Coordination With the Health Insurance Exchange

• Requires states to: – Enable individuals to apply or renew Medicaid coverage

through a website with electronic signature; – Establish procedures to enable individuals to apply for

Medicaid, CHIP or the Exchange through a State run website – Include provisions for applying for eligibility for home and

community based services under the Medicaid state plan or a waiver; conduct outreach to enroll vulnerable and underserved populations in Medicaid and CHIP.

– Enrollment website must be operational by January 1, 2014 (Mandatory)

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Enrollment Simplification and Coordination With the Health Insurance Exchange

• Allows the state Medicaid and CHIP agency to enter into an agreement with the Exchange to determine eligibility for premium subsidies through the exchange. (Optional)

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Presumptive Eligibility

• Permits all hospitals participating in Medicaid (with state verification of capability) to make presumptive eligibility determinations and allows hospitals and other providers currently eligible to determine presumptive eligibility for all Medicaid eligible populations (Effective : January 2014, Mandatory)

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Payments to Primary Care Physicians

• Requires Medicaid payments to primary care physicians for providing primary care services be no less than 100% of Medicare payment rates in 2013 and 2014. Provides 100% FFP for the incremental costs to states of meeting this requirement. (Mandatory)

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Employer Sponsored Insurance

• Requires states to offer premium assistance and wrap-around benefits to Medicaid beneficiaries who are offered ESI if it is cost-effective.(Effective January 1, 2014) (Mandatory)

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Concurrent Care for Children

• Allows Medicaid and CHIP eligible children to receive hospice services concurrent with other treatment. (Mandatory)

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State Eligibility Option for Family Planning Services

• Creates a state option to provide Medicaid coverage for family planning services through a State Plan Amendment to certain low-income individuals up to the highest level of eligibility for pregnant women (Implementation: Upon enactment). (Optional)

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Community First Choice Option• Establishes the Community First Choice Option in Medicaid

to allow states to provide community-based attendant supports and services to individuals with incomes up to 150% FPL with disabilities who require an institutional level of care through a state plan amendment (SPA). Provide states with an enhanced federal matching rate of an additional six percentage points for reimbursable expenses in the program. Option sunsets after 5 years. (Implementation: October 1, 2011). (Optional)

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Removal of Barriers to Providing HCBS

• Requires states to establish a system which: – allocates resources in a manner which is responsive

to the changing needs of community-based long term care recipients;

– provides the support and coordination recipients need to design an individualized, self-directed, community-supported life;

– improves coordination among and regulation of community-based service providers across programs and funding sources.

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Removal of Barriers to Providing HCBS

• Provides states with new option for offering home and community-based services through a Medicaid State Plan Amendment rather than through a waiver for individuals with incomes up to 300% of the maximum SSI payment (or 225% of Poverty) and a higher level of need and permits states to extend full Medicaid benefits to individuals receiving home and community-based services under a state plan. – Statewideness requirement does not apply to this option and

services and eligibility may be phased in; services may be targeted to specific populations. (Implementation: October 1, 2010). (Optional)

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Incentives for States to Offer Home and Community-Based Services

• Creates the State Balancing Incentive Program to provide enhanced federal matching payments to eligible states to increase the proportion of non-institutionally-based long-term care services. – Selected states will be eligible for FMAP increases for

medical assistance expenditures for non-institutionally-based long-term services and supports with $3 billion in federal matching funds (Implementation: October 1, 2011 through September 30, 2015) (Optional)

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Money Follows the Person Rebalancing Demonstration

• Extends the Medicaid Money Follows the Person Rebalancing Demonstration program through 2016 and requires that individuals reside in a nursing home for not less than 90 consecutive days (Effective : 30 days after enactment).

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Prescription Drug Rebates• Increases the Medicaid drug rebate percentage for brand

name drugs from 15.1% to 23.1% (except for clotting factor and drugs for pediatric indications increase to 17.1%)

• Increases the Medicaid rebate for non-innovator, multiple source drugs to 13% of average manufacturer price

• Extends the drug rebate to Medicaid managed care plans and limits the total rebate liability to 100% AMP with revenue due to the federal government. – For purposes of applying the additional rebates, a new formulation of a

drug is a line extension of a single source or innovator multiples source drug that is an oral solid dosage form of the drug (Implementation: January 1, 2010 except for rebates for managed care plans which is effective upon enactment). (Mandatory)

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Elimination of Exclusion of Coverage of Certain Drugs

• Eliminates smoking cessation drugs, barbiturates, and benzodiazepines from Federal excluded drug list (States may currently cover these drugs, but subject to restriction—this removes the restrictions.) (Implementation: January 1, 2014). (Optional)

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Changes to Medicaid Payment for Prescription Drugs

• Calculates the Federal Upper Limit as no less than 175% weighted average AMP for therapeutically equivalent multiple source drugs (Implementation: 180 days after enactment). (Mandatory)

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Disproportionate Share Hospital Payments

• Reduces aggregate DSH allotments – $0.5 billion in 2014; – $0.6 billion in 2015; – $0.6 billion in 2016; – $1.8 billion in 2017; – $5.0 billion in 2018; – $5.6 billion in 2019 and – $4.0 billion 2020

• Requires the Secretary of HHS to develop a methodology to distribute the DSH reductions that imposes the largest reduction in DSH for states with the lowest percentage of uninsured, imposes smaller reductions for low-DSH states and accounts for DSH allotments used for 1115 waivers. (Mandatory)

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Adult health quality measures

• Establishes the Medicaid Quality Measurement Program for the development and advancement of quality measures for adults in Medicaid. Sets deadlines for development of measures, standardization of reporting formats, and requires a report to Congress in January 2014 and then every 3 years. States would receive grant funding to support the development and reporting of quality measures.

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Health Homes• Allows states the option to provide coordinated care through

a health home for individuals with chronic conditions. • Provides 90% match for 2 years for services including care

management, care coordination and health promotion, transitional care, patient and family support and referral to community and social support services and use of HIT where feasible and appropriate

• Provides $25 million for the Secretary to award for planning grants. (Implementation: January 1, 2011)

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Demonstration Project to Evaluate Integrated Care

• Establishes a demonstration project in up to 8 states to evaluate the use of bundled payments to hospitals and physicians for integrated care to Medicaid beneficiaries during a hospitalization. Demonstration project period from January 1, 2012 through December 31, 2016. (Optional)

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Improving Access to Preventive Services for Medicaid Adults

• Provides states with a 1% increase in the FMAP for preventive services recommended by the US Preventive Services Task Force and recommended immunization for adults if offered with no cost sharing (Implementation: January 1, 2013). (Optional)

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Incentives for Prevention of Chronic Diseases in Medicaid• Authorizes $100 million in grant funding for

states to establish programs for Medicaid beneficiaries to cease tobacco use, control weight, lower cholesterol, lower blood pressure and/or avoid or improve management of diabetes. Grants are for 3 years. (Implementation: January 1, 2011) (Optional)

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National and State Background Checks

• Requires the Secretary to establish a nationwide program for national and state background checks on direct patient access employees of certain LTC facilities or providers and to provide federal matching funds to states to conduct these activities. (Optional)

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Provider Screening and Other Requirements

• Requires the Secretary to establish procedures for screening providers and suppliers, with the level of screening based on the risk of fraud, waste and abuse by provider type. Procedures to be developed within 6 months of enactment.

• Requires providers and suppliers to disclose current or previous affiliations with providers which have uncollected debt, have had payments suspended or billing privileges revoked, or have been excluded from participation in a federal health care program.

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Provider Screening and Other Requirements

• Requires providers and suppliers to establish a compliance program with specified core elements.

• Requires the CMS Administrator to establish a process to notify Medicaid state agencies of any provider or supplier terminated under Medicare or CHIP.

(All mandatory)

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Enhanced Program Integrity Provisions

• Requires CMS to include Medicare, Medicaid, CHIP, VA, DOD, SSA and IHS in the integrated Data Repository (IDR) and requires the Secretary to enter into data-sharing agreements with these agencies to identify waste, fraud and abuse. Allows DOJ to access the IDR to conduct law enforcement activities.

• Requires that overpayments be reported and returned within 60 days from the date the overpayment was identified.

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Enhanced Program Integrity Provisions• Requires all Medicaid, Medicare and CHIP providers to

include their National Provider Identifier on enrollment applications and claims.

• Authorizes the Secretary to withhold payments to states when encounter data is not entered into the state’s MMIS timely.

• Authorizes the Secretary to exclude providers and suppliers from participation in any federal health care program for providing false information on an enrollment or participation application.

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Enhanced Program Integrity Provisions

• Establishes civil monetary penalties for individuals who provide false information on applications or contracts to participate in a federal health care program or know of an overpayment and do not return it.

• Appropriates an additional $10 million to health care fraud and abuse control each year from FY 2011 to FY 2020.

(All Mandatory)

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Expansion of the Recovery Audit Contractor (RAC) Program

• Requires states, by December 31, 2010, to establish a program to contract with one or more recovery audit contractors to identify Medicaid underpayments and overpayments and recoup overpayments. – Contract payment shall be made from amounts recovered on a

contingent basis for collecting overpayments and may be specified by states for identifying underpayments.

• Requires the state and RAC contractors to coordinate recovery audit efforts with other entities auditing providers, including law enforcement. (Mandatory)

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Exclusion From Participation for Providers

• Requires states to exclude providers from participating in Medicaid for a specified time period if the provider owns, controls or manages an entity that has failed to repay overpayments; is suspended, excluded or terminated from participation in any Medicaid program; or is affiliated with an individual or entity that has been suspended, excluded or terminated from Medicaid participation. Effective January 1, 2011 (Mandatory)

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Requirement to MMIS to Detect Fraud and Abuse

• Requires states to submit data elements from their claims processing systems that the Secretary determines are needed for program integrity, program oversight and administration.

• Requires Medicaid managed care contracts to require the contractor to maintain sufficient patient encounter data to identify the physician who serves a patient (as under current law) at a frequency and level of detail to be specified by the Secretary.

• Effective January 1, 2011 (Mandatory)

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Prohibition on payments entities located outside the US

• Requires a state Medicaid plan to prohibit the state from making any payments for items or services under a Medicaid state plan or a waiver to any financial institution or entity located outside of the United States. Effective January 1, 2011 (Mandatory)

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Overpayments• Extends the period for States to repay

overpayments to one year when a final determination of the amount of the overpayment has not been made due to an ongoing judicial or administrative process. When overpayments due to fraud are pending, State repayments of the Federal portion would not be due until 30 days after the date of the final judgment. Effective January 1, 2011 (Mandatory)

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Emergency Psychiatric Demonstration Project

• Authorizes a demonstration for stabilization of emergency medical conditions by Institutions for Mental Disease for individuals 21 to 65 who require stabilization in these settings as required by the Emergency Medical Treatment and Active Labor Act (EMTALA).

• Demonstration is to last 3 years. Appropriations of $75 million for fiscal year 2011 – 2015. (Optional)

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Other Provisions

• Waiver authority for dual eligible demonstrations, Section 2601– Clarifies that Medicaid demonstration authority for coordinating

care for dual eligibles is as long as 5 years.

• Federal coverage and payment coordination for dual eligibles, – Establishes the Federal Coordinated Health Care Office (CHCO)

within CMS to align Medicare and Medicaid financing, benefits, administration, oversight rules, and policies for dual eligibles (Implementation: March 1, 2010)

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Other Provisions

• Payment adjustments for health acquired conditions– Prohibits federal payments to states for Medicaid services

related to healthcare acquired conditions effective July 1, 2011. (Mandatory)

• Comprehensive Tobacco Cessation for pregnant women in Medicaid, Section 4107– Requires coverage for comprehensive tobacco cessation for

pregnant women without cost sharing (Implementation: October 1, 2010) (Mandatory)

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Other Provisions• Medicaid global payment system demonstration

project– Establishes a global payments demonstration project for up to

5 states for large safety-net hospital systems. Demonstration project period from FY 2010 – FY 2012. (Optional)

• Pediatric accountable care organization demonstration project– Establishes demonstration projects in Medicaid and CHIP to

allow pediatric medical providers organized as accountable care organizations to share in cost-savings. (Demonstration project period: January 1, 2012 – December 31, 2016).

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Other Provisions• Face to face encounter with patient required

before physicians may certify eligibility for home health services or DME under Medicare, – Requires that physicians certifying home health services

or DME for Medicare or Medicaid patients must have a face-to-face encounter with the patient within a specified period before the certification. Applies to certifications made after January 1, 2010. (Mandatory)

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Other Provisions• Termination of provider participation under

Medicaid if terminated under Medicare or other State Plan– Requires states to terminate providers from their Medicaid

program if they were terminated from Medicare or another state’s Medicaid program. Effective January 1, 2011 (Mandatory)

• Billing agents, clearinghouses or other alternate payees required to register under Medicare– State Medicaid agencies must require any billing agents,

clearinghouses, or other alternate payees that submit claims on behalf of health care providers to register with the state and the Secretary. Effective January 1, 2011 (Mandatory)

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Other Provisions• Mandatory state use of national correct coding

initiative– Requires state mechanized Medicaid claims processing and

information retrieval systems to incorporate methodologies compatible with Medicare’s National Correct Coding Initiative. Effective January 1, 2011 (Mandatory)

• Sense of the Senate regarding long term care services and supports– Includes a Sense of the Senate that Congress should address

long-term services and supports in a comprehensive way that guarantees elderly and disabled individuals the care they need and that care should be available in the community in addition to institutions.

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