Affordable Care Act State Action Newsletter 33

Patient Protection and Affordable Care Act: State Action Newsletter

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May 18, 2012

Webinar Today on Oral Health—Friday, May 18, 2012

The Cost-Effective Investments in Children's Oral Health” Webinar will be held today, May 18, at 2 p.m. ET, and will feature presentations about investments in children’s oral health and areas for significant cost savings. Register now. An archive recording will be available next week on NCSL’s website.

A Boost in Pay for Medicaid Primary Care Physicians

Primary care physicians who take Medicaid patients will get paid more for their services under a rule recently announced by the Obama administration. This rule, however, will also be affected if the Supreme Court overturns the law in its entirety next month. The rule reflects a provision in the 2010 Patient Protection and Affordable Care Act that appropriated more than $11 billion over two years for higher payments to Medicaid providers. This increase, slated to go into effect in 2013 and 2014, would bring fees for Medicaid primary care services in line with those paid by Medicare. The increase will be financed entirely by the federal government with no state matching requirement.

Why primary care? Primary care services—an umbrella term for disease prevention, diagnosis and treatment of acute and chronic illnesses, etc.—currently are reimbursed by most payers at a lower rate than many specialty services, which contributes to the shortage of primary care providers. Yet, using preventive services more widely, some believe can help contain health care costs.

It is estimated that an additional 32 million Americans will have insurance coverage by 2019 under the PPACA and will be seeking services in a primary care setting. By 2020 the shortage of primary care doctors could be as high 45,000, according to the Washington Post. 

The federal law increased Medicaid payments to primary care doctors to address the pay disparity and to encourage doctors to stay in primary fields and motivate students to go into primary care. According to Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services, this rule “will help encourage primary care physicians to continue and expand their efforts to provide checkups, preventive screenings, vaccines, and other care to Medicaid beneficiaries.” 

Inside This Issue

HHS Announces New Guidance and Awards Additional Grants to States

Blueprint for State Exchanges

On May 16, 2012, the Department of Health and Human Services (HHS) released the Draft Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges, which will guide states seeking approval to operate a state-run exchange beginning in 2014. The blueprint gives states a specific deadline for submitting plans for approval. The draft blueprint says, “States seeking to operate a State-based Exchange or electing to participate in a State Partnership Exchange must submit a complete Exchange Blueprint no later than 30 business days prior to the required approval date of January 1 (November 16, 2012 for plan year 2014).” The state partnership exchange is an option for states and will allow the state and federal government to work together to operate certain functions of the exchange. The blueprint allows states to submit declaration letters any time prior to November 16, 2012.

Guidance on Federally Facilitated Exchanges

If a state decides not to create its own exchange, or cannot certify its readiness by 2013, the federal government will run that state’s exchange. To help states understand what this might mean, HHS also released general guidance on the federally facilitated exchange. According to the Center for Consumer Information and Oversight, the document organizes key policies by their exchange function and provides information on how HHS will involve a variety of stakeholders to develop an exchange, and how states can work with HHS on certain functions of the exchange.

Establishment Grants

HHS is providing establishment grants through 2014 to help states with planning and building exchanges. Additional establishment grants went to six states, Illinois, Nevada, Oregon, South Dakota, Tennessee and Washington on May 16th. Thirty-four states have received establishment grants to date. This round of awards brings the total of exchange-related grants provided to states over the last two years to more than $1 billion, according to CCIIO.


Report Explores the Needs of Medicaid’s Soon-to-be-Eligible Population  

The Patient Protection and Affordable Care Act will expand Medicaid eligibility in 2014 to everyone with an income at or below 133 percent of the poverty level—$23,050 for a family of four in 2012. This expansion, however, could be halted by the challenge to the law now under consideration by the U.S. Supreme Court. A ruling is expected in late June.

This potential expansion raises a number of questions for state Medicaid programs trying to anticipate the health needs of the newly eligible populations. Chief among these questions are the types of services childless adults will need and whether existing Medicaid programs have enough providers to handle them. Current Medicaid eligibility guidelines typically do not include childless adults, no matter their income.

A recent Kaiser Family Foundation report analyzed claims from Arizona’s section 1115 waiver that allows the state to cover some childless adults. The report offered some helpful information for all states in planning for the expansion population, including:

  • Overall, childless adults used health care services less than other groups, including parents and people with disabilities.
  • Of the small portion of childless adults using health care services often, mental illness was the most prevalent reason.
  • Hypertension and diabetes were the second and third most common conditions, and many of the newly eligible population have both. 

The report’s analysis echoed other research that predicts high need for mental health services—which often co-occurs with substance abuse treatment needs—among newly eligible populations. Many states already struggle to provide these services, as there is a shortage of mental health professionals and treatment for these conditions is challenging and time-intensive.

The Kaiser analysis also noted the broad array of services this population requires and the propensity to not access services at all. Medicaid programs may consider promoting medical homes for this population to help facilitate appropriate use of services and encourage use of preventive and primary care services.

State Health Insurance Exchange Update         

Last week, New Jersey Governor Chris Christie became the second governor to veto legislation that would have created a state-based health insurance exchange. New Mexico’s governor vetoed exchange establishment legislation in 2011. New Jersey joins 10 other states that have not yet enacted legislation on exchanges this year.

As of early May, 11 states have legislation pending to create a state health insurance exchange for individuals and small businesses. Many states are taking a ‘wait and see’ approach as the Supreme Court ruling looms. With the exception of the District of Columbia, no state has established an exchange through legislation in 2012. The map below provides additional information on the status of legislation to establish exchanges in each state.

Three states, Indiana, New York, and Rhode Island have established the state health insurance exchange by executive order. Indiana’s exchange may still require authorizing legislation, but in the meantime, the Department of Insurance, the Family and Social Services Administration, and the Office of Medicaid Policy and Planning is proceeding with exchange planning.

Other states have addressed certain components of their already established exchange. Maryland, Oregon, Vermont, Washington enacted laws this year that address certain details of exchange implementation. For example, on May 16th, Vermont’s governor signed HB 559, which will eliminate the market outside the exchange in the state for businesses with fewer than 50 employees beginning in 2014. Wyoming authorized a study commission to continue reviewing exchange options for the state. Maine enacted legislation that addressed the role of navigators if the state establishes an exchange.

For more information, visit NCSL’s State Actions to Address Health Insurance Exchanges web page. To review all bills related to PPACA, visit the legislative tracking database.



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