 National Conference of State Legislatures
NCSL Comments on Medicaid/SCHIP Reconciliation Provisions
Medicaid Prescription Drug Reforms
The current Medicaid prescription drug benefit is in transition. The Medicare Modernization Act (MMA) which established the new Medicare prescription drug benefit made a number of changes that will significantly change state Medicaid prescription drug programs. This provides an opportunity to review and revise the existing program. Because of changes enacted as part of the MMA, state Medicaid programs will no longer receive the “best price.” States will also likely find it more difficult to negotiate supplemental rebates. As a result, (1) states must have additional tools to properly manage this complicated and critical benefit; and (2) policy changes regarding the formula used to reimburse Medicaid prescription drug expenditures must be considered. It is important to make certain that all the affected parties are treated fairly and that proposed changes will not compromise patient access. NCSL can only support changes in the Medicaid prescription drug program that would yield at least as much savings to states as is provided for under current law.
In addition, we urge you to support state initiatives to manage the Medicaid prescription drug benefit that: (1) control costs; (2) improve patient access; and (3) improve patient outcomes. NCSL supports increased flexibility for states to: (1) impose prior authorization requirements as provided for under current law; (2) provide incentives for the use of generic prescription drugs when appropriate; (3) require utilization review; (4) reimburse pharmacists for pharmacy management services; and (5) to participate in multi-state pools to maximize states’ collective buying power. NCSL urges you to permit states to charge higher co-payments to higher income Medicaid beneficiaries in the Medicaid prescription drug program.
Finally, the current federal requirement for secrecy in Medicaid prescription drug purchasing should be removed to allow the states to make public the prices paid for individual drugs, the rebates received and the resulting net prices paid. Complex financial systems tend to drift out of compliance unless subject to regular audits. The rebate system provided under current law for Medicaid drug pricing is such a system. It should be subject to regular compliance audits either by the U.S. Government Accountability Office (GAO) or by the states acting individually or in cooperation.
Medicaid Long Term Care Reforms
The development of a comprehensive long-term care program for elderly and disabled people is critical. Without the development of such a program, long-term care expenditures will continue to overwhelm state and federal health care budgets, limiting needed expenditures for primary and preventive health care. States should be given new options for setting financial and functional criteria to qualify for long-term care services. In addition, NCSL supports the development of expanded options for private long-term care insurance, flexible life insurance products, and home equity sharing programs, such as reverse annuity mortgages. NCSL also supports initiatives to provide incentives to employers to offer and for individuals to establish health savings accounts and other innovative financing options to provide support for long-term care services. Finally, much of the long-term care services provided to individuals today are provided by family members. NCSL supports efforts to assist family members who are caregivers, including tax incentives and programs that provide support services, such as respite care, for family caregivers. It is critically important to acknowledge the important role of family caregivers as part of the continuum of care in the provision of long-term care services and to provide needed support to maintain this important component of our long-term care infrastructure.
Increasing Options for Home and Community-Based Care
NCSL continues to support the development of more home and community-based options under Medicaid to provide long term care services. States should be encouraged to develop innovative programs to improve the long-term care system. NCSL urges the Administration and Congress to work with states to develop assessment tools that will help states better identify what level of services individual clients need and the most appropriate settings for the client to receive care. These assessments should be made available to all elderly and disabled individuals to help them plan for their long-term care needs.
Long-Term Care Insurance
Recognizing that there is a percentage of consumers who can potentially benefit from the purchase of long-term care insurance, NCSL supports strong federal action to protect consumers of long-term care insurance from predatory pricing or inadequate benefit plans, and to speed the development of long-term care insurance as a viable alternative or complement to Medicaid support for long-term care services. At the same time, tax credits, partnership programs, and other incentives should not be seen as a tool for reduced funding for Medicaid. While the states will continue to take primary responsibility for the regulation of long-term care insurance, NCSL supports the development and evaluation of programs and initiatives that would:
- provide preferential tax treatment for individuals who purchase qualified long-term care insurance;
- provide tax incentives for private employers and a Medicaid bonus program for state and local government employers to encourage the them to offer long-term care insurance as a benefit;
- encourage and provide incentives to employers to offer long-term care insurance, as a condition of receiving federal benefits, such as business tax credits;
- make long-term care in policies portable;
- repeal the provision in the Omnibus Budget Reconciliation Act of 1993 that restricts the ability of states to develop programs that provide limited asset protection and other incentives within the Medicaid program to individuals who purchase long-term care insurance and the establishment of a new, updated “Long-Term Care Partnership” program to encourage more people to purchase long-term care insurance. NCSL urges Congress to study options for establishing reciprocal agreements between states to facilitate the portability of the new partnership products. NCSL also urges Congress to grandfather existing partnership states into any new partnership program.
Medicaid in the Territories
The funding for the Medicaid program in the U.S. territories and commonwealths is capped and the program includes a more restrictive set of benefits and services than is provided through the Medicaid program in the 50 states and the District of Columbia. As part of the broader discussion of Medicaid reform, NCSL urges Congress to review the federal partnership with the U.S. commonwealths and territories and to consider funding options that more adequately reflect the needs of the people in these jurisdictions and program changes that would provide services that are more comparable to those provided to similarly situated Medicaid beneficiaries in the states.
State Financing Reforms
Revise Definition of Targeted Case Management
NCSL is concerned about the proposal to redefine targeted case management. This change may require some states to make major funding and administrative adjustments to their Medicaid and child welfare programs. If this provision is enacted, we urge you to phase-in the requirement so that a smooth transition can occur.
Temporary Federal Matching Payments for Medical Assistance
NCSL supported S. 1716 because it provides an important package of supports to states, individuals and families, employers and health care providers. We were particularly pleased that the legislation provides support to states directly impacted by Hurricane Katrina, but also provides support to host states providing assistance to Katrina survivors and evacuees, recognizing the important role states will play in helping Katrina survivors and evacuees return to normal lives. The provisions in the proposed reconciliation package are important and needed, but are extremely modest in comparison.
Family Opportunity Act
NCSL supports state benefit and eligibility options. NCSL is particularly supportive of initiatives that permit states to partner with the private sector to provide health care coverage. We hope that the funding to support this new option will not result in reduced benefits to existing Medicaid beneficiaries or to reduced support to states for the Medicaid program.
State Flexibility in Cost-Sharing Requirements and Benefit Design
Improved Flexibility in Benefit Design
NCSL urges you to amend federal Medicaid law to allow states to design benefit packages for the populations being served. As an example, this would permit states to develop innovative, non-traditional benefit packages for Medicaid beneficiaries with special needs and to develop other more traditional benefit packages for higher income Medicaid clients where the Medicaid benefit may more appropriately provide coverage similar to coverage available in the private health insurance market.
Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Program
NCSL urges the you to provide more flexibility for states with regard to the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program. Under current law, states have almost no ability to manage this benefit. States should be authorized to utilize tools that other health insurance plans use to provide high quality services but to also control costs. The State Children’s Health Insurance Program (SCHIP), has successfully provided quality health care to low-income children across the nation without the EPSDT mandate. While we would like more flexibility, we urge you to continue to require states to provide early and periodic screening services recommended by the American Academy of Pediatrics, and treatment recommended by a health care provider for dental issues and recognized as the generally accepted standard of care for children. These services should be made available to children with the state permitted to establish a prior approval process. In addition, Medicaid beneficiaries would be permitted to appeal state decisions and to request and be authorized to obtain a second opinion when a service or treatment is denied.
Enhanced Co-Payments, Premiums and Deductibles for Higher Income Beneficiaries
States should be allowed to impose deductibles, premiums and co-payments on higher income program recipients.
Medicaid Waiver Reform
The Medicaid program should become less dependent on waivers and should provide statutory authority for successful programs developed through the waiver process to be implemented by states through the state plan amendment process. NCSL also supports the development of simplified, streamlined waiver applications and an expedited waiver approval process. It is also important to require a strong evaluation component so that successful programs can be identified and replicated by state plan amendment. NCSL supports consideration of utilizing Medicare savings as an offset to comply with budget neutrality requirements.
Medicaid in the Territories
The funding for the Medicaid program in the U.S. territories and commonwealths is capped and the program includes a more restrictive set of benefits and services than is provided through the Medicaid program in the 50 states and the District of Columbia. As part of the broader discussion of Medicaid reform, NCSL urges you to review the federal partnership with the U.S. commonwealths and territories and to consider funding options that more adequately reflect the needs of the people in these jurisdictions and program changes that would provide services that are more comparable to those provided to similarly situated Medicaid beneficiaries in the states.
Medicaid Program Integrity
Ensuring Program Integrity
NCSL supports the use of audits to ensure program integrity. Where states have made honest errors in interpretation, this information should be shared so that other states might benefit. In cases where an infraction was procedural in nature and did not affect the quality of care, medical necessity or the appropriateness of services, NCSL urges CMS to impose compliance on a prospective basis.
Health Information Technology
NCSL urges you to support efforts to increase the use of health information technology in the Medicaid program to: (1) improve safety and quality; (2) control costs (3) simplify program administration; and (4) improve efforts to collect data to evaluate program effectiveness. Medicaid service funds should not be reduced to support these activities. NCSL urges you to provide an enhanced administrative match for information technology services and enhancements
Medicaid/Medicare Coordination
The federal government should provide more support to states for the Medicaid costs associated with low-income persons enrolled in Medicare. This increased level of support should be provided in conjunction with efforts to improve care coordination and program management between the two programs. NCSL supports the development of new and innovative models of care that would combine Medicaid and Medicare funding and incorporate care management, managed care, disease management and quality improvement programs. This would include initiatives that would require participation in a care management program for certain individuals. In these new models of care, information sharing between the Medicare and Medicaid programs would be critical.
State Children’s Health Insurance Program (SCHIP)
NCSL supports efforts to extend the period states have to spend unexpended SCHIP funds and to keep the funds within the states providing benefits to low-income children instead of reverting back to the federal treasury.
Intergovernmental Transfers, Provider Taxes and Donations
It is extremely important that states feel confident that the basis for their Medicaid state matching payments can be sustained over the long-term. States must have clear guidelines if limitations on how they generate state Medicaid matching funds are to be imposed. Under current law, states are permitted to use intergovernmental transfers and provider taxes to generate state matching funds. Despite existing law and regulation, questions remain about the circumstances under which these funding tools may be utilized. States have been unfairly criticized for using these legal mechanisms to generate state Medicaid matching funds. NCSL opposes changes in the law that would further restrict states’ ability to impose intergovernmental transfers or provider taxes, limiting our ability to raise state matching funds. If changes are enacted, these changes in law, regulation or guidelines related to intergovernmental transfers, provider taxes and donations should be prospective, not retroactive. Finally, whatever approach is taken, briefings for state legislators, an opportunity for state legislators to provide feedback, and an opportunity for state legislatures to meet in regular session to address the changes, must be provided.
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