Affordable Care Act: State Action Newsletter
February 17, 2011
Federal Budget Discourse Begins
On Feb. 14, President Obama revealed his $3.73 trillion spending proposal for FY2012. The budget proposes $79.9 billion for the Department of Health and Human Services (HHS) in support of many of the White House priorities such as the Affordable Care Act (ACA). The Congressional Budget Office (CBO) estimates this budget will reduce the deficit by $230 billion over the next 10 years and $1 trillion over 20 years through provisions of ACA, such as:
- Reducing waste and fraud in Medicaid and Medicare by providing the Secretary of HHS authority to implement new and improve existing screening and data analysis tools.
- Expanding overpayment recovery activities by the Centers for Medicare and Medicaid Services (CMS) through Recovery Audit Contractor recoveries that were previously returned to the Department of the Treasury.
- Strengthening law enforcement authorities who target illegal distribution of Medicare and Medicaid beneficiary identification and billing privileges.
The budget immediately drew fire from both congressional Democrats as well as Republicans, who are still working on current spending levels for FY2011 and are crafting their own GOP budget reduction proposals. For several years, Congress has been unable to approve a full budget in time for the federal fiscal year, instead running the federal government through a series of continuing resolutions. Prospects for the FY2012 budget remain uncertain since Republicans control the House and Democrats retain control of the Senate.
State Entities Working on Implementation of the ACA
Among the first actions taken by states after the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act were enacted was the creation of entities to lead or assist in the implementation of the law.
As of February 16 2011, at least 31 states, the District of Columbia and the Virgin Islands have one or more entities. Eighteen were created by the legislature, 20 were created by the executive branch and in four states the governor and the legislature created separate entities.
Each task force, commission, committee or board is charged with specific duties and 23 states require the entity to make reports and recommendations to the legislature and/or the governor. Many states required those reports before the beginning of the 2011 legislative session, while others required reports before major provisions of the ACA take effect in 2014. For example, Maine’s Joint Select Committee on Health Reform Opportunities and Implementation completed its report in December 2010 for the Maine Legislature. The committee made many recommendations on the health insurance exchange, pursuing grant funding, health care cost containment and quality, and more. NCSL’s web site has more information about state implementation entities.
Inside This Issue
Final Home Visiting Funding Opportunity Announcement
On Feb. 8 2011, the U.S. Health Resources and Services Administration and the Administration for Children and Families released the final funding announcement for the ACA’s new federal Maternal, Infant, and Early Childhood Home Visiting Program. The announcement provides instructions for submitting an Updated State Plan, which is the last step for the release of home visiting grant funds. In addition, the announcement identifies criteria for establishing evidence-based models of home visiting and lists the models that meet those criteria. For additional information, including links to the funding announcements, view NCSL’s home visiting webpage: http://www.ncsl.org/?tabid=21644
Initiative to Curb Health Care Acquired Conditions
The Centers for Medicare and Medicaid Services (CMS) recently released a draft document highlighting its National Patient Safety Initiative. This initiative, a provision in the Affordable Care Act that aims to reduce hospital readmissions and health care acquired conditions (HACs), would establish a $70 billion “pay for performance” system to provide incentives to move hospitals towards meeting standardized measures for patient safety.
Medicare implemented a rule in 2008 that identified health care acquired conditions or events, sometimes called “never” events (e.g., wrong-site surgeries, transfusion with the wrong blood type, bedsores, falls or trauma, infections acquired while in the health care facility) that could result in full or partial denial of payment to hospitals where the events could have been prevented if the facility followed evidence-based guidelines.
The ACA prohibits federal payments to states for Medicaid services related to health care acquired conditions, effective July 1, 2011 and would further reduce Medicare payments. Following the Medicare rule, some states implemented similar payment strategies for their Medicaid programs. The ACA requires CMS to research current state Medicaid payment policies for health care acquired conditions and to issue regulations that are consistent with current state Medicaid policies as well as the Medicare regulations. CMS recently released guidance on Feb. 17.
ACOs Intend to Improve Quality and Savings
Federal health reform authorizes and encourages accountable care organizations (ACOs) pilot programs within Medicaid and Medicare. They are relatively new, but growing in popularity. Many believe they show great promise for improving the quality of health care while, perhaps, holding down the costs. Medicaid will allow pediatric medical providers organized as ACOs to share in cost savings, effective Jan. 1, 2012, through Dec. 31, 2016 (section 2706).
These groups are run by doctors, nurses and other providers who monitor care through physician offices, clinics or hospitals. Their pay is based partly on patient results and meeting cost targets—rewarding them for quality of care over quantity of tests and treatments. Through contracts, each ACO is jointly accountable to health payers (Medicaid or private insurers) for the overall cost and quality of their care for a certain group of patients. State lawmakers can authorize statewide or pilot programs or participation in federally supported Medicaid demonstration programs.
The Centers for Medicare and Medicaid Services is expected to release guidance on ACOs in the next few weeks. At a recent event held by the Brookings Institution on February 1, CMS Administrator Donald Berwick discussed key ACO goals with stakeholders. For more information on ACOs - http://www.ncsl.org/default.aspx?tabid=19927
HHS Announces Public Health Funding
On February 3, 2011, HHS announced a new $750 million investment in prevention and public health, funded through the Prevention and Public Health Fund created by the new health care law. Building on $500 million in investments last year, this new money will help prevent tobacco use, obesity, heart disease, stroke and cancer and increase immunizations. Fact sheets detailing how the initial $500 million was allocated in every state are available at: www.HealthCare.gov/news/factsheets/prevention02092011a.html
Feds Give Arizona Some Relief for Medicaid Enrollment
In a letter to Arizona Governor Jan Brewer, Health and Human Services Secretary Kathleen Sebelius wrote that the state does not require a federal waiver to proceed with its plan to cut some 250,000 people from Medicaid rolls. Sebelius did not approve Arizona’s maintenance of effort waiver (MOE) request, but would allow the state to drop enrollment when its 1115 Demonstration Waiver Program, the Arizona Health Care Cost Containment System (AHCCCS), expires on September 30, 2011.
Sebelius wrote, “Waivers are time-limited commitments—both for a state and for HHS—and neither the Affordable Care Act nor Medicaid law nor regulations prior to its enactment require a state to renew a demonstration beyond its expiration. Arizona may choose to terminate its current demonstration on September 30, 2011, and either not pursue a new demonstration or pursue a different demonstration.” In a statement issued following receipt of the letter, Governor Brewer said, “Secretary Sebelius’ letter clearly indicates that Arizona may take the steps it requires to manage its Medicaid program and balance its budget, without violating MOE requirements.” Most state Medicaid programs are not authorized through an 1115 Demonstration waiver.
- Coming Soon on NCSL’s Health Reform Web Pages! The Health Reform Legislative Tracking Database will be a 50-State Database designed to capture 2011 legislation filed in response to the Affordable Care Act.
- Are you interested in research and reports related to implementation of the ACA from other states? Visit NCSL’s State Reports and Research Web Page.
- Health Reform Information on the NCSL Web Page: http://www.ncsl.org/healthreform.