Say Ahhh!

Ever had an employer promise you a raise and not deliver? Sure, occasionally the payroll department delays getting the money in your paycheck, but generally speaking, you expect your employer to follow-through. Will this be the case with the mandatory bump-up in Medicaid payment rates to Medicare-equivalent levels for primary care services? Wonk-warning ahead - this discussion gets thickly into the weeds of Medicaid policy. (For a basic primer on the proposed rule that will increase primary care reimbursement in Medicaid, enacted as part of the Affordable Care Act, check out my earlier blog.)

Although the federal government is picking up 100 percent of the tab for the increase, the law establishes a point in time - July 1, 2009 - as a base for the increased federal reimbursement. In other words, states that have decreased primary care service rates since July 1, 2009, will need to restore payment rates for affected primary care physicians, subspecialists and practitioners. Given continuing fiscal challenges, we may well expect those states to be less than enthusiastic about implementing this critical increase intended to help assure adequate access to essential primary care services in Medicaid.

So who are those states? Well that's not so easy to determine. According the most recent annual Kaiser 50-State Medicaid Budget Survey, 11 states decreased payments to primary care physicians in 2011 and nine (9) did so in 2012. The survey doesn't list the states, but it does give some examples. However, because the survey did not collect these data in 2009, the simple fact that states decreased rates in the most recent two years doesn't tell us if those rates are below those in place on July 1, 2009. Regardless of whether states will need to restore cuts, the law requires all states to reimburse primary care services at levels equivalent to Medicare in calendar years 2013 and 2014.

So what are states required to do and what will the federal government do to make sure primary care physicians receive this much-needed boost, particularly given that some states may be reluctant to follow through?

States must file a Medicaid State Plan Amendment (SPA).

First, states must file a SPA to reflect the increase in applicable fee schedule payments in 2013 and 2014 unless, for each of the billing codes eligible for payment, the State currently reimburses higher than the respective Medicare rates in those years. Under existing Medicaid regulations which address federal authority to enforce state compliance (42 CFR 430.35), CMS has the authority to fully or partially withhold Medicaid payments to a state that has not met a state plan requirement or if, in practice, it is out of compliance with a federal requirement.

States must develop a methodology for increasing managed care rates and submit it for approval to CMS prior to 2013.

While it is relatively straightforward to implement the increased rates in a fee-for-service environment, it gets more complicated when states pay managed care entities on a full or partially capitated basis. In order to receive the enhanced federal matching rate, states must obtain information from managed care entities to make a reasonable estimate of the increased amounts to be paid for each of the specified services to eligible physicians. The state then must develop a methodology for calculating the differential to be paid to the managed care entity. This methodology must be submitted by the state to CMS for approval before January 2013.

States must amend their managed care contracts to ensure that primary care physicians benefit directly from the rate increase.

In amending these contracts, states also must require managed care entities to provide sufficient evidence, as determined by the state, that they have met the increased payment requirement. CMS plans to conduct a state-by-state review of managed care contracts to further assure compliance with federal regulations.

Primary care physicians and practitioners provide essential preventive and routine care services that keep kids and families healthy and save health care expenses down the road. We commend CMS for proposing a process to assure providers get the increased reimbursement rates they are entitled to by law. The proposed rule, which was published in the federal register on May 11, 2012, can be found here. The deadline for comments is June 11, 2012. As always with proposed regulations, it's just as important to let CMS know what you like as it is to suggest areas that can be improved. We'll be drafting comments on the proposed rule and will be happy to share with partners soon.

Since 2008, we've heard reports about growing Medicaid enrollment and consequently, a rise in its cost (which was mainly incurred by the federal government). Of course we now know that the increases in Medicaid enrollment, and subsequently Medicaid spending, coincided with the worst economic downturn since the Great Depression.

And by now, Say Ahhh! readers are familiar with our frequent efforts to get out the facts and to debunk the myths of out-of-control spending that are promulgated by some. That said, given the current threat to Medicaid and CHIP by the House-passed Sequester Replacement Reconciliation Act, it bears repeating that: 1) the enrollment increases in Medicaid have been recession driven 2) Medicaid is cost-effective and does a much better job of controlling health care costs than do other insurers in the health care sector. 

Three recent reports, and their accompanying info graphics, help illustrate these points.

The Kaiser Commission on Medicaid and the Uninsured's Enrollment-Driven Expenditure Growth: Medicaid Spending During the Economic Downturn FFY2007-2010 reveals that the 2.5 percent average annual spending growth in Medicaid is slower than per capita costs in national health expenditures, Medicare, and the private health sector.  With 5.5 percent average annual growth spending, the private sector outpaces all benchmarks with which it is compared and even doubles Medicaid spending. 

Urban Institute's analysis in Medicare, Medicaid and the Deficit Reduction, illustrates that Medicaid per capita expenditures on average were lower than the private sector throughout the last decade.  Compare the private sector's 9.1% growth in the first half of last decade and 4.5% growth in the latter half of the decade to Medicaid's per capita growth rates of 2.9% and 2.7%, respectively.  Authors Holahan and McMorrow note that Medicaid's lower costs are due to the fact that more enrollment was seen among adults and children than the aged and disabled, as the latter group costs more money.  However, continued growth of the disabled population in the program, is one reason for overall expenditure growth.  That is of course, in addition to the two economic recessions experienced in the last decade, during which times, enrollment increased.

Finally,an  analysis from Bloomberg Government finds that Medicaid spending has been mostly flat for the last decade, after adjusting for inflation and population growth.  At both the beginning and the end of last decade, per capital costs average out at about $350, having hit its highest per capita cost of $400 in 2005. Below, a graph summarizes spending for the five states with the highest Medicaid expenditures in comparison to the national average.

In sum, these recent analyses of Medicaid spending exhibit that Medicaid is better at controlling health care costs than other insurers, and increased spending in the program is driven by enrollment.

As policymakers across the country look to balance their budgets, some are turning to Medicaid, recycling the same harmful policies they've used year-after-year: eliminating coverage for vulnerable Americans, restricting critical benefits like prescription drug coverage, imposing premiums on those who can't afford them, and slashing already-low provider reimbursement rates.

By Cynthia Pellegrini, March of Dimes

It sounds like a rejected Hallmark card:  "Sending you wishes for high quality maternal and child health care, today and every day."  But on Mother's Day, it's especially appropriate to talk about healthy women, healthy pregnancies, and healthy babies and children.

For many of us in the health policy field, it would have been easy to miss the slow but steady increase in attention paid to the quality of obstetrical and maternity care.  Thanks to the efforts of the March of Dimes and other maternal and child health advocates, provisions related to the development of perinatal and pediatric quality measures were included in the Child Health Insurance Program Reauthorization Act of 2009 (CHIPRA), requiring the Agency for Healthcare Quality and Research to produce new measures on a specific timeframe.  Those provisions served, in turn, as a model for many of the broader quality initiatives included in the Affordable Care Act in 2010.  The National Quality Forum (NQF) has endorsed a growing list of perinatal measures over the past 3 years (currently over 30 for pregnancy and neonatal care), while the Joint Commission announced its Perinatal Care measures core set in late 2009 and began collecting that data in spring 2010.

Meanwhile, certain aspects of perinatal care were under additional scrutiny.  In particular, concern arose about the practice of scheduling elective deliveries before 39 weeks of complete gestation as a growing body of research indicated the importance of the final weeks in utero and the increased risk of the need for Neonatal Intensive Care Unit (NICU) care for newborns delivered before 39 weeks.  The March of Dimes identified this as a key actionable priority, developed and tested an extensive toolkit for hospitals to use in ending this practice, and urged its adoption through its network of chapters in every state.  Other organizations took up the cause as well; a 39 week quality measure was endorsed by NQF and is one of the five measures in the Joint Commission's Perinatal Care core set. 

In many communities, the results have been dramatic.  Some hospitals and systems that have implemented a "hard stop" on elective deliveries prior to 39 weeks have reported decreases of more than 20 percent in NICU days.  The March of Dimes recently completed development of a service package for hospitals seeking to implement a hard stop policy but interested in more support.  The service package includes access to a data portal that will provide real-time feedback, grand rounds, access to experts, and more.  This package is being made available at no cost to 100 hospitals in 2012; the request for applications recently closed with far more than that number having been received.

In mid-2011, the March of Dimes opened conversations with the Association of State and Territorial Health Officials (ASTHO) about setting goals for President David Lakey's presidential challenge around healthy infants.  It was calculated that, by implementing a set of targeted interventions, states could expect to reduce their preterm birth rates by 8 percent.  The target interventions are: a hard stop on elective deliveries before 39 weeks; access to the drug 17p to prevent preterm labor for women who have had a previous preterm birth; tobacco cessation for pregnant women; and changes in assisted reproductive technology to better manage the creation of high-order multiple births.  In 2011, Dr. Lakey challenged his fellow health officers to adopt the goal of reducing preterm birth by 8 percent by 2014.  And the response has been tremendous -- as of this writing, thirty states' health officers have publicly accepted the challenge and are moving forward to address it, with more still expected to join.

They say that nothing breeds success like success, and in this case the enthusiasm certainly continued to build.  In February 2012, the U.S. Department of Health and Human Services (HHS) took a major step toward helping to ensure healthy pregnancies and healthy babies for all women with the launch of the Strong Start program. Strong Start has two distinct but interrelated components:  first, an effort to reduce the scheduling of elective deliveries before 39 weeks of gestation for all women, and second, a $43 million grant program to test three promising approaches toward prenatal care for at-risk women on Medicaid.  HHS and the American College of Obstetricians and Gynecologists added their support to March of Dimes consumer education materials to produce a set of co-branded products that would reinforce the messages of the 39 weeks component of Strong Start.  States and other applicants have responded energetically to the Strong Start grants opportunity, forming coalitions of partners all dedicated to testing the models of group prenatal care, birthing centers, and maternity health homes.  Applications for the grant program are due soon, with funding announcements expected in September.

All of these and many other important initiatives are combining to create to a critical mass in the movement to improve perinatal health care.  It won't happen overnight, and there's obviously still much more to do.  But we are making meaningful progress - for the past three consecutive years, the rate of premature birth has registered small but significant declines after rising for more than three decades.  We can make a difference for healthier women, babies and families.

We're on our way to providing quality perinatal care to all women.  Happy Mother's Day to all the moms out there - past, present, and future!

Today the House of Representatives passed the "Sequester Replacement Reconciliation Act".  As we've mentioned before, the Senate is not planning to take up the measure and the Administration has issued a veto threat should the lopsided measure reach the President's desk.  Despite those assurances, it is worth looking into the measure as it telegraphs the House position on future discussions about circumventing the sequestration triggered by last year's bipartisan budget agreement.

CCF's Martha Heberlein has put together a fact sheet on the measure and the impact it would have on health care coverage for children and families. Her brief identifies two provisions as posing the greatest threat to children's health care coverage:

• The repeal of the Affordable Care Act's stability protections, also known as "maintenance-of-effort" provisions, that have helped children and families maintain access to affordable coverage and helped drive down the number of uninsured children to the lowest level on record.  If the stability provisions are rescinded, states could eliminate Medicaid for anyone who is covered at state option, as well as cut eligibility, shut down enrollment, or even abolish their CHIP programs, putting coverage at risk for more than a third of Medicaid and CHIP beneficiaries

• The cancelation of an innovative, pay-for-performance program that has encouraged states to connect eligible children to coverage. In the states that received rewards in 2011, an additional 1.1 million kids were enrolled above expected levels. While the incentive payments do not necessarily fully explain this increase in enrollment, they certainly help to support the states in reaching these children.

In other words, the measure would weaken the cost-effective Medicaid and Children's Health Insurance Program that have worked so successfully to help uninsured children.  With one in five children living in poverty and many parents unable to find affordable health coverage for their families, it does not seem to be an ideal time to undermine cost-effective programs that have helped protect the health of our nation's children.

Those supporting the cuts have justified their position by pointing to egregious examples of Medicaid "waste, fraud and abuse". Program integrity is vitally important to all publicly funded programs whether it is health care providers, transportation firms or defense contractors that are receiving the funding.  We don't walk away from defending our country or building roads because of a few bad actors.  Don't you think the same should hold true for programs that help protect the health of our nation's children and families?