Utah Receives CMS Support for Small Business Health Option Program (SHOP)
Utah Governor Gary Herbert wants to implement the Affordable Care Act’s (ACA) health insurance exchanges in a unique way. He proposes that Utah continue to run its small business exchange, which has been in place since 2008, while the federal government runs the individual exchange in the state.
The governor received a letter from Gary Cohen, director of the federal Center for Insurance Information and Insurance Oversight, which stated, “CMS intends to propose an amendment to its Exchange Final Rule (45 CFR 155) that, if finalized, would permit Utah to operate a state-based SHOP-only marketplace starting in 2014, building on the framework of Utah’s existing small business exchange, while the federal government operates the federally facilitated marketplace for the individual market for 2014.”
Federal law and guidance currently permits three types of exchanges: a state-based exchange, where the state runs the individual and SHOP exchange; a federally facilitated exchange; or a partnership exchange.
According to Mark Andrews, a policy analyst with the Utah Legislature, the state has found a fourth door for exchange implementation
In 2008, Utah created a small business health insurance exchange, called Avenue H, which allows small employers to make “defined contributions” towards their employees’ health insurance coverage and compare, select, and enroll in health insurance through an online web portal. This put the state in a unique position when the ACA was enacted in 2010. Avenue H meets the requirements for a SHOP exchange, but not for an exchange (or marketplace) serving individuals.
The Center for Medicare & Medicaid Services (CMS) agreed to allow Utah to maintain oversight of the insurance market and to make the final determination on Medicaid eligibility for the federally facilitated exchange. The response letter states, “CMS would rely on Utah’s recommendations in certifying QHPs [qualified health plans] for the federally facilitated individual marketplace.”
Inside This Issue
New Funding for Community Health Center Outreach and Enrollment
Health and Human Services (HHS) Secretary Kathleen Sebelius announced new funding this week to help community health centers enroll people in new coverage options made available by the ACA—subsidized health insurance through the exchange or Medicaid. Approximately $150 million in grants will be distributed to community health centers to provide in-person enrollment assistance. About 1,200 health centers nationwide qualify for this funding regardless of whether or not their home state chooses to implement the ACA Medicaid expansion. About 72 percent of patients seeking care at community health centers have incomes at or below poverty, 36 percent are uninsured and 40 percent are covered by Medicaid. Many of these current patients will become eligible for new coverage in 2014. Therefore, HHS identified community health centers as an important partner for outreach efforts. Several states—including Connecticut, Montana, New Mexico, Ohio, Oregon, Pennsylvania, Vermont, West Virginia and Wisconsin—currently use safety net providers for Medicaid and Children’s Health Insurance Program (CHIP) enrollment.
QUICK FACT: The Congressional Budget Office reported that 25 million uninsured people are expected to gain coverage due to the ACA, down from an earlier estimate of 27 million.
Proposed Rule on Disproportionate Share Funds
On May 13, CMS released a proposed rule that reduces federal payments to states for hospitals that provide care to a “disproportionate” number of low-income and uninsured patients, which results in high uncompensated care costs. The federal law cuts these payments, known as Medicaid Disproportionate Share Hospital (DSH) allotments, by a total of $18.1 billion through 2020, beginning with a $500 million cut in 2014. DSH spending totaled $11.2 billion in 2011.
The DSH cuts help the federal government fund the ACA-related coverage programs for the uninsured—the Medicaid expansion and health insurance exchanges.
The law directs HHS Secretary Kathleen Sebelius to create a DSH reduction methodology that levies the steepest reduction on states with the lowest percentage of uninsured individuals and on states that do not target DSH payments to hospitals with high levels of uncompensated care and Medicaid patients.
The CMS proposed rule applies to DSH allotments for 2014 and 2015. According to the HHS fact sheet, the proposed rule also contains a procedure for protecting allotments that support Medicaid 1115 demonstration coverage expansions. It also encourages states to target payments to hospitals that serve high numbers of Medicaid beneficiaries and have high levels of uncompensated care.
“Once finalized, this rule will go into effect starting Oct. 1 unless Congress enacts the President’s Budget proposal to begin the Medicaid DSH allotment reductions in FY 2015 instead of FY 2014, while retaining the same total amount of reductions through 2020,” according to HHS. CMS is seeking comments on the proposed rule through July 12.
HHS Announces More Innovation Grants
This week, HHS announced $1 billion in grant funding for the second round of the Health Care Innovation Awards to test and evaluate new payment and service delivery models to improve the quality of care and reduce costs in Medicaid, Medicare and CHIP. The grants will be awarded to public and private organizations that focus on reducing costs in outpatient settings for Medicare and Medicaid beneficiaries, improving care for special needs populations, testing financial and clinical models and linking clinical care to prevention and better health.
According to the announcement, “the Health Care Innovation Awards provide another opportunity to improve the quality of health care and bring down costs for taxpayers and patients. The health care law includes many tools to avoid costly mistakes and readmissions, keep patients healthy, reward quality instead of quantity, and create health information technology infrastructure that enables new payment and delivery models to work.”
The first round of innovation grants were awarded last year.
Mississippi governor Phil Bryant says he will continue to run the state’s Medicaid program without a legislative appropriation after a protracted debate in the legislature about whether to expand Medicaid eligibility under the ACA ended in a stalemate. The legislature adjourned without dedicating funds to operate the existing program.
According to media reports, some assumed the governor would call a special session, which would extend the debate and resolve the Medicaid appropriation issue. The governor, who opposes the Medicaid expansion, said he may not call that session and will continue to run the state’s Medicaid program without the legislature’s appropriation. The big question is how? To complicate matters, the hospital tax that funds a portion of Mississippi’s state match expires on June 30.
Rate Review and Price Transparency
HHS has made $87 million in grants available to states for their health insurance rate review programs and to facilitate health care pricing transparency. The grants, announced on May 8, will range from $500,000 up to $5 million per state, with applications accepted until Aug. 1. Previously, HHS awarded $170 million to states for rate review programs.
Currently, 43 states have federally approved rate review programs. (See map). Since the passage of the ACA, which requires review of premium rate increases greater than 10 percent, the proportion of insurance company requests for rate increases higher than 10 percent fell significantly—from 75 percent in 2010 to 14 percent (so far) in 2013.
In a related announcement, HHS has posted detailed information on hospital prices and Medicare reimbursement rates for 100 frequently used inpatient stays at 3,000 hospitals across all 50 states.
Two NCSL Health Webinars Next Week
Rural Telehealth Webinar
Wednesday, May 22, 2013 at 2 P.M. Et
The health care workforce in rural America is stretched to its limits. When compared to non-rural areas of the country, only about 11 percent of the nation’s physicians work in rural areas, despite nearly 20 percent of Americans living there. Physicians providing care in rural areas often serve large geographic areas that require long travel times. These areas may be substantially underserved by hospitals and other health care facilities.
States are increasingly turning to telehealth networks as a solution to this problem. This webinar will feature presentations from national telehealth experts who will discuss advances states have made in recent years to expand access to telehealth services in rural areas and what challenges still lay ahead for state policymakers.
Register Now for the ‘Opportunities And Obstacles in Rural Telehealth’ Webinar
Cultural Competency And Health Workforce Webinar
Friday, May 24, 2013 at 2 P.M. ET
Culturally appropriate health care may improve the quality and potentially reduce the cost of care for a diverse array of patients—and can contribute to the elimination of racial and ethnic health disparities. Over the last decade, policymakers have explored options to increase cultural competency among health care providers. The ACA, for example, requires federal loan repayment preference be given to individuals who have cultural competency training or experience. This webinar will review best practices for improving cultural competency among a state’s health care workforce.
Register Now for the ‘Best Practices for Improving Cultural Competency in the Health Care Workforce’ Webinar