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Patient Protection and Affordable Care Act: State Action Newsletter
October 12, 2012
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24 States Select or Recommend an Essential Health Benefit Package
At least 24 states and D.C. selected or recommended an Essential Health Benefits (EHB) package, which will serve as a baseline of covered services in and out of health insurance exchanges and state Medicaid plans by 2014. The benefits had to cover 10 broad categories—e.g., hospitalization and prescription drugs—as outlined in the Patient Protection and Affordable Care Act (PPACA). Most states selected one of the state’s three largest small group health plans as their benchmark plan, though they arrived at these decisions very differently. Arizona, Maryland and Utah selected or recommended their state employee health coverage as the benchmark. Some had a very intensive process with months of public comment, where others relied on a small group of legislators or state agency officials. In Montana, the decision rests with the legislature, which is not in session again until January.
According to the HHS bulletin on EHBs, the deadline for selecting the EHB package was September 30. States that missed this deadline expected the federal government would choose an essential health benefit plan for them, but HHS has signaled its willingness to continue working with states that wish to choose their own plans. Some states have expressed frustration with the lack of guidance from the federal government in this process. West Virginia’s Governor Earl Ray Tomblin sent a public letter requesting more information before the state could make a decision. Still other states, including Louisiana, have declared their intentions not to participate in the implementation of PPACA and did not designate a benchmark plan.
Visit NCSL’s online State EHB tracking table of additional actions, updated weekly.
Arkansas Rolls Out New Payment System
In an effort to control costs and promote quality health care, the Arkansas Medicaid program is partnering with the state's two larger insurers, Arkansas Blue Cross and Blue Shield and Arkansas QualChoice, to change the way they pay providers. The effort is called the Health Care Payment Improvement Initiative and because it involves the largest health care payers in the state, likely has enough influence to change the way health care is delivered. Arkansas’ Medicaid plan amendment was approved by the Centers for Medicare and Medicaid Services (CMS).
“The new system is the first of its kind in the nation, giving the Arkansas and CMS teams the rare opportunity to bring fresh ideas to the table,” said Andy Allison, Arkansas Medicaid Director.
Providers still submit claims for services and get paid, like the fee-for-service model, but now will enter information about the patient's condition into a statewide database. In time, the Medicaid program and private insurers will use the data to pay providers by the episode of care. If the data reveals providers delivered efficient, quality care, they will receive a "commendable" rating and share in a portion of the payer’s savings. A rating of “acceptable” means no payment changes and if the provider does not provide the expected standard of care they will owe the payer a portion of the excess costs.
The episodes of care eligible for this new system are upper respiratory infections, total hip and knee replacements, congestive heart failure, attention deficit/hyperactivity disorder (ADHD) and prenatal care. The state Medicaid program expects to save $4.4 million in FY ‘13 and $9.3 million in FY ’14.
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Inside This Issue
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Tools for Calculating the Medicaid Expansion’s Fiscal Impact
The Supreme Court left the decision to expand Medicaid, as outlined in PPACA, up to the states. Even with incentives such as a 100 percent federal match rate from 2014 to 2016, states are working through complex cost analysis models to ensure they have a good understanding of what an expansion will mean to their budgets long-term. Resources are available from the Robert Wood Johnson Foundation’s State Health Reform Assistance Network to help states forecast the expansion’s fiscal impact.
Simulation Study Predicts Quality Improvement with Medicare ACOs, Less Cost Control
A recent study published by Health Affairs used a simulation, based on Centers for Medicare and Medicaid Services regulations, to predict how well the Accountable Care Organization-model pilot programs will improve quality and lower costs in the health care system. The pilots, called Medicare Shared Savings Program, started under PPACA in 2012. They have not yet released data.
The study’s simulation model was based on Medicare beneficiaries age 65-75 with Type 2 diabetes. Results showed a 10-point improvement on diabetes quality measures, but only a 1 percent savings to Medicare. Study authors predict these savings will eventually go away and could even become cost increases once initial quality improvements, such as smoking cessation, are implemented.
Will Legal Challenges Continue for Health Reform Law?
On October 1, in one of the first moves of its 2012-2013 term, the Supreme Court asked the Department of Justice to review a request for a lower court to rehear Liberty University’s constitutional challenges to the federal health care law (docket 11-438). Liberty University is a Christian university located in Lynchburg, VA.
The university’s original lawsuit, one of the first filed against the federal health reform law, was dismissed after the Supreme Court ruled on the individual mandate. The school’s lawsuit challenged the constitutionality of the individual mandate but also included a challenge related to the employer requirements and the free exercise of religion. The Supreme Court ruled on the individual mandate in June, stating that the government had the power to levy the mandate as a tax, but did not hear objections to the PPACA clause which requires large employers to offer their employees health insurance or pay a penalty. Liberty wants their day in court on the employer requirements and the free exercise of religion.
The federal government has 30 days to respond to the Court. The request does not have a legal effect on the current federal statute or the Supreme Court decision of June 28, 2012. Once the Justice Department responds, the court can weigh in and order a rehearing or deny it without explanation. For more information, see the SCOTUS Blog.
States Use the Ballot to Challenge PPACA
Voters in five states—Alabama, Florida, Missouri, Montana and Wyoming—will weigh in on the federal health reform debate through legislative referendums on the ballots in November. The measures vary, but most prohibit their citizens or businesses from being compelled to purchase health insurance or participate in other PPACA-based programs. A story in an earlier edition described Missouri’s measure, which would prohibit state officials from setting up a health insurance exchange unless approved by the legislature or voters. For more information, please visit NCSL’s State Ballot Measures Database.
The Medical Home Model of Care: Reducing Costs and Improving Quality
This new NCSL publication highlights an innovative model of health care used by many state Medicaid programs to reduce costs and improve the quality of care. The medical home model relies on a team of health professionals—such as physicians, nurses, nutritionists, pharmacists and behavioral health specialists— to coordinate all levels of a patient’s care, through collaboration and communication. As of January 2012, 41 states had policies promoting the medical home model for some beneficiaries of Medicaid or CHIP. The brief highlights examples from a few states – and results appear promising. Medical home initiatives in Alabama, North Carolina and Vermont, for example, have all demonstrated significant costs savings. This is due, in part, to the fact that patients in medical homes access necessary services earlier compared to others, who may use an emergency room or delay care until complications arise. The Patient Protection and Affordable Care Act contains various provisions that support the medical home model, such as an enhanced federal match for developing or expanding health homes (similar to medical homes) for Medicaid enrollees with chronic conditions. For more information on the medical home model of care, click here. Click here for a free copy for legislators and legislative staff.
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