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Volume 27, Issue 468 |
May 29, 2006 |
GEORGIA MOVES TO RECOVER ESTATES
Anna C. Spencer
On May 1, Georgia became the 49th state to launch a Medicaid estate recovery program, which means the Peach State can now begin recouping the costs of long-term and home- and community-based Medicaid services from the estates of beneficiaries after their death.
States have long had the option to recover Medicaid costs from the estates of beneficiaries who have been in nursing facilities, intermediate care facilities for the mentally retarded, or other medical institutions, and from individuals who were older than 55 when they started receiving Medicaid coverage. The 1993 Omnibus Budget Reconciliation Act mandated estate recovery, requiring states to, at a minimum, recover the amounts spent by Medicaid for long-term care and related drug and hospital benefits (28 states had programs in place in 1993).
But the process of implementing estate recovery programs has not been uniform across the country, nor has it been without controversy. Some states have expanded estate recovery to include physician services, hospice care and technology assistance, while other states have tried to remove themselves from the process altogether, on grounds that estate recovery may impoverish decedents’ families. In October 2001, West Virginia filed suit against the U.S. Department of Health and Human Services (HHS), challenging the constitutionality of the estate recovery law. In May 2002, the Fourth Circuit Court of Appeals ruled in favor of HHS, and noted that if a state failed to comply with Medicaid requirements it could risk losing all or part of the federal matching money. Michigan still has no estate recovery program in place.
According to federal rules, estate recoveries may not exceed the total amount spent by Medicaid on the individual’s behalf. States also are required to exempt or defer estate recovery in certain situations, such as when there is a surviving spouse, a surviving child who is under 21, blind or disabled children living in the home, or when a sibling or caretaker adult child lives in the home.
However, states are given tremendous latitude in what and how they collect. For example, states differ in their use of hardship waivers, which exempt families from estate recovery. The range of criteria for determining undue hardship may include whether the estate is an income-producing asset, for example, the family far, and whether recovery would deprive survivors of the “necessities of life.” The timing and clarity of estate recovery notices also vary from state to state.
Georgia’s new program makes individuals enrolled in Medicaid since August 2001 subject to estate recovery. The retroactive nature of this provision has caused confusion and worry, consumer advocates and trade groups say. “While we’re supportive of the concept [of estate recovery], it’s unreasonable not to notify people in advance that the state could put a lien on the family property” for Medicaid long-term care services, said Fred Watson, president of the Georgia Health Care Association.
Since Georgia’s estate recovery rules went into effect, over 100 nursing home residents have left facilities in order to avoid becoming subject to the estate recovery rules. “Families got very nervous and didn’t want to take a chance on losing their homes,” Watson said. Many other families kept loved ones in nursing homes but withdrew from Medicaid coverage, while others disenrolled from in-home care in order to circumvent estate recovery.
The Peach State recently enacted legislation that seeks to protect lower-income individuals by raising the asset threshold that is subject to recovery from $25,000 to $100,000. The Legislature also exempted individuals already in nursing homes and other long-term care programs. The state is now waiting for the Center for Medicare and Medicaid Services to approve or deny the new rules.
Modest Returns
As states continue to struggle to restrain their rising Medicaid costs, policymakers have become increasingly interested in estate recovery. However, research shows that, in general, such programs provide only modest returns. “What states collect versus what they spend (on estate recovery) is very small,” said Wendy Fox-Grage, senior policy advisor with AARP’s Public Policy Institute (PPI).
In 2003, states recovered more than $347 million nationwide, with amounts ranging from $86,000 in Louisiana to close to $54 million in California, according to a PPI report published in May 2006. Only eight states have gained more than 1 percent of their Medicaid long-term care expenses from estate recovery. The three states that recouped the largest share of their nursing home spending were Arizona (10.4 percent), Oregon (5.8 percent) and Idaho (4.5 percent). Alaska, Georgia, Michigan and Texas reported no recoveries in 2003.
The rationale behind estate recovery is that individuals should spend their own money before calling on the government; however, critical questions remain about whether recovery is an equitable mechanism. “There is very limited understanding of the societal and policy implications of estate recovery on low-income families,” Fox-Grage said. As states ramp up their estate recovery efforts, lawmakers may want to consider providing “adequate consumer protections, such as reasonable hardship waivers and sufficient and timely notices so that enrollees and their families are treated fairly,” she added.
Nevertheless, interest in estate recovery remains strong. At the time of the PPI report, 13 states were proposing changes to their programs – generally to expand or facilitate recovery.
For a copy of the PPI report, Medicaid Estate Recovery: A 2004 Survey of State Programs and Practices, click here.
MASSACHUSETTS LAW SEEKS TO ELIMINATE ETHNIC, RACIAL DISPARITIES
Much of the attention given to Massachusetts’ new universal coverage law has focused on the measure’s goal of reaching near-universal coverage, in part by offering premium assistance programs to lower-income residents and requiring every individual in the state to purchase coverage by July 1, 2007. Less well-known but equally far-reaching are provisions within the bill that mandate quality improvement – in part by eliminating ethnic and racial health disparities.
Signed by the governor in April, the law mandates the creation of a Health Care Quality and Cost Council that will seek to promote high-quality, effective and patient-centered care by developing performance measurements, and publishing information comparing the cost and quality of health-care services on a new consumer Web site.
And in a landmark effort to reduce racial and ethnic inequalities in health services and outcomes, hospitals will be required to collect and report on health-care data related to race, ethnicity and language. The data will be used in a pay-for-performance program that will be created in Medicaid. Acute-care hospitals will have to meet performance benchmarks in order to receive Medicaid rate increases.
The Legislature established a special commission on health disparities two years ago, and the commission has been developing recommendations aimed at eliminating inequities ever since. “Clearly, legislation aimed at promoting near universal access to care and improving health-care quality was an appropriate means of beginning to focus on such an important concern,” said Sen. Richard Moore, a member of the commission and chair of the Senate Health Committee. “Access to care has to include everyone, regardless of race, ethnicity, poverty, etc. and the care provided must be of equally high quality.” A new Health Disparities Council will continue the work of the special commission by recommending legislative steps to reduce health disparities.
Historically, many health plans and providers have been wary of collecting racial and ethnic data, concerned that patients will see this as a determinant of the kind of care they should receive. But Moore noted, “There was never any discussion of the potential for profiling in the health bill regarding data collection. Quite the contrary, the data is needed to provide evidence of differences in access to and quality of care so that the problem can be addressed.”
State laws vary significantly in their endorsement or prohibition of ethnic and race data collection. While the vast majority of states do not prohibit collection of patients' racial and ethnic data, some may impose restraints on when and how such data may be collected, the Institute of Medicine said in a 2002 report. A separate study, conducted by the federal Office of Minority Health, found that only four states specifically prohibit the collection of data on race and ethnicity.
Confusion over what information is allowed to be collected may be one of the chief impediments to better data collection. Aetna, perhaps the first health plan to collect racial and ethnic data in an effort to ensure that all enrollees get care of equal quality, surveyed its employees to better understand their beliefs about the permissibility and usefulness of collecting data on race and ethnicity. Not surprisingly, concerns about the privacy measures in the 1996 Health Insurance Portability and Accountability Act (HIPAA) and the Civil Rights Act were high on the list, along with perceived cost and information technology barriers. Neither HIPAA nor the Civil Rights Act appear to actually prohibit the collection of data, but concerns about appearing insensitive, and not having extensive enough ethnic “options” for patients to choose among may prove to be more difficult problems to solve. In California, legislators are seeking to address the latter issue with SB 1615, which would require any state agency collecting data to allow multiple races on a selection form.
By Paul DeYoung, an intern with NCSL’s Forum on State Health Policy and Leadership
CMS URGES STATE MEDICAID PROGRAMS TO ADOPT PAY-FOR-PERFORMANCE
In a letter to state health officials last month, the Centers for Medicare & Medicaid Services (CMS) encouraged state Medicaid programs to adopt quality-based purchasing strategies known as “pay-for-performance” (P4P) as a way of improving the quality and efficiency of medical care provided to beneficiaries. P4P systems increase reimbursements to providers who improve their performance on defined quality measures, such as chronic disease management and reductions in hospital readmissions for certain conditions.
CMS said that at least ten states have implemented P4P in Medicaid, referring to a chart compiled by the Center for Health Care Strategies that outlines programs in California, Maryland, Michigan, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, North Carolina and Iowa.
One of the more established of these initiatives is New York’s, which since 1997 has been rewarding high-performing Medicaid managed-care plans by auto-assigning them more enrollees and providing higher capitation rates. A thorough assessment of New York’s program by the Urban Institute is forthcoming this fall.
Meanwhile, Massachusetts will adopt Medicaid P4P as part of its new health reform legislation (see related story in this issue of SHN). And Minnesota recently passed HF 4162, which requires the development and implementation of P4P systems for providers who run chronic disease management programs for individuals in state-administered health plans. This is in addition to the state’s existing law requiring P4P-based reimbursement for nursing facilities.
CMS notes that P4P is in its infancy, so only a few studies have assessed whether performance incentives improve quality. But recent studies found hospitals that participated in a Medicare P4P demonstration project did enhance their care.
States that implement Medicaid P4P programs may receive a federal financial match of no less than 50 percent for incentive payments. Administrative services associated with quality-based purchasing also are generally available at the 50 percent match.
CMS currently is designing a Medicare nursing home P4P demonstration. The agency wants to talk to states about developing parallel programs for Medicaid, noting that states that participate would be able to test a program that may improve care, receive technical assistance from national experts and help shape the design of a national program prior to its rollout.
Public Reporting of Quality Data
Meanwhile, a growing number of states are developing programs that encourage or require providers to collect data on quality of care. To date, the evidence has been mixed on whether making this data public is more effective than allowing providers to keep it private.
According to at least one expert who spoke at a recent forum held by the Agency for Healthcare Research & Quality, making quality reports public is more effective than keeping the data in-house. “Nobody wants to look bad,” explained Dr. Adams Dudley, a professor of health policy at the University of California/San Francisco. He cited a recent study in Health Affairs that found publicity stimulates progress in areas where performance is poor. Judith A. Hibbard and colleagues looked at the experiences of a coalition of employers in Madison, Wisconsin, that produces and disseminates hospital performance reports based on publicly available inpatient data sets from the Wisconsin Bureau of Health Information. The researchers found that poorly performing hospitals whose scores were not only made available to the hospital but were also publicly reported in the local media were over nine times more likely to adopt efforts to improve quality – at a probability of 88 percent, compared to only 9 percent in the absence of public reporting.
Unfortunately, such strong positive effects may be only short-term, according to another study on which Dudley collaborated. Researchers found that public reporting got hospitals’ and employers’ attention initially, but interest in improving quality waned when money was not available to encourage improvement efforts. Despite this finding, public reporting of hospital quality indicators may be gaining staying power, since the media have become more savvy about this issue, Dudley said.
The Health Affairs researchers urged that performance reports be widely disseminated, that hospitals be informed that future reports will be required and that the public reports be easy to understand, with obvious indications of who the top and bottom performers are. Such easy to-understand rankings have “the potential to affect hospitals’ public image,” they wrote.
Coupling P4P programs with public reporting can maximize quality improvement, Dudley said. “You might as well do as much with that data as you can – you really do need both.”
By Rachel Burton, an intern with NCSL’s Forum on State Health Policy and Leadership
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