Monthly Archives: May 2014
I have always believed in the concept to think first, act second. I rarely react; I try to act. In politics, generally, this mantra is not followed. If a public poll states that the public is in favor of X, then the leaders need to consider X. If it is an election year, then the politicians will do X.
I’m reminded of an awful book I read a couple of years ago. I can’t remember the name of it, but it began with a young teen-age couple at a lake. The boyfriend dives off of a dock into the lake and dies because his head hit a rock underneath the water. (I do not suggest reading the book). But I remember thinking… “How tragic,” then… “Why in the world would this guy dive head-first into a lake without knowing the depth or pitfalls? This was a preventable death.”
This is a perfect example of why we should think first, act second.
However, in politics, the polarization of the two parties, Republican and Democrat, sometimes causes politicians to RE-act according to the party lines. Nowhere is this polarization more prevalent than the concept of Medicaid expansion. See my blog: “To Expand, Or Not To Expand, A Nationwide Draw?” It seems that if a state has a Republican governor, without question, that state will refuse to expand (I know there are few exceptions, but there are few). If a state elected a Democratic governor, then the state has elected to expand Medicaid.
Are these issues so black and white? Or have we become so politically polarized that true intellect and research no longer matters? Doesn’t that actual state of the state matter in deciding to expand?
For example, according to a 50-state survey by USA Today, North Dakota is the best run state. North Dakota has zero budget deficit, and an unemployment rate of 3.1%, the lowest of all 50 states. North Dakota has opted to expand Medicaid.
On the other hand, according to the same study, North Carolina has an unemployment rate of 9.5%, which is the 4th highest in the nation. What does high unemployment mean? A large number of Medicaid recipients.
North Dakota has approximately 82,762 Medicaid recipients, according to the Kaiser Foundation for FYE 2010. Conversely, North Carolina, for the same year, had 1,813,298 Medicaid recipients.
So my question is: Can, or should, a state with 1.8 million Medicaid recipients adopt the same Medicaid eligibility rules as a state with 82,000 Medicaid recipients?
And how can we know the consequences of expansion prior to deciding to expand? Because, after all, shouldn’t we think first, act second? Who wants to dive into an unknown lake?
But issues that apparently no one had contemplated are cropping up…
States across America are seeing unexpected Medicaid costs increase. According to the Associated Press, prior to Medicaid expansion there were millions of Americans who were eligible for Medicaid but who, for whatever reason, had never signed up. Now that there has been so much publicity about health care, those former un-insured but Medicaid-eligible people are signing up in droves.
In California, State officials say about 300,000 more already-eligible Californians are expected to enroll than was estimated last fall. See article.
Rhode Island has enrolled 5000-6000 more than its officials expected. In Washington State, people who were previously eligible represent about one-third of new Medicaid enrollments, roughly 165,000 out of a total of nearly 483,000.
While the Feds are picking up the costs for Medicaid recipients now eligible because of the expansion (at least for a few years), state budgets have to cover these new Medicaid recipients signing up who had been eligible in the past.
For states blue or red, the burden of these unanticipated increased costs will be on the shoulders of the states (with federal contribution).
Going back to the extremely polarized view of Medicaid expansion (Democrats expanding and Republicans not expanding)…maybe it’s not all black and white. Maybe we should shed our elephant or donkey skins and actually research our own states. How many Medicaid recipients do we have? What does our budget cover now?
Maybe we should research the consequences before diving in the lake.
It’s that time of year again. The legislators are back in town. Moral Mondays resume. And all eyes are on the General Assembly. But, this is the short session, and the General Statutes limit the powers of legislative law-making in the short session.
For those of you who do not know how our General Assembly (GA) works and the difference between the short and long sessions, let me explain:
In odd-numbered years, the GA meets in January and continues until it adjourns. There is no requirement as to the length of the long session, but it is normally about 6 months. In the long session, everything is fair game. New laws or changes to the existing laws can be proposed in long sessions for all of the subjects on which the GA legislates.
The short session reconvenes every even-numbered year and typically lasts 6 weeks. Last year the long session adjourned July 26, 2013, and the GA reconvened May 14, 2014.
There are limits as to what measures may be considered in the short session. In fact, at the end of the long session, the GA passed Resolution 2013-23, which states exactly what topics/bills may be considered in the short session.
So…the question is: What Medicaid bills may be considered during this short session?
Now there are of course, exceptions. For example, any bill that directly and primarily affects the State Budget can be introduced. Obviously, a Medicaid bill could, arguably, directly and primarily affect the budget.
The bills I enumerated above, however, are the bills that are allowed to be considered in the short session because they constitute a crossover bill, that is, these bills were passed one house and were received in the other during last year’s long session and are considered “still alive” for consideration during the current short session.
So what do these Medicaid bills propose?
House Bill 674 could be a game changer for Medicaid providers. The bill, which passed the House last year with a vote of 116-0, would direct the Program Evaluation Division to study the contested case process in regards to Medicaid providers. There are 3 key components in this study according to the bill:
1. The Division must review the procedures for a contested case hearing under NCGS 150B and determine whether there is a way to streamline the process and decrease backlog.
2. The Division must consider alternative methods of review other than the contested cases.
3. The Division must review NCGS 108C-12 to determine whether any amendments to the law would improve the cost-effectiveness and efficiency of the Medicaid appeal process. (NCGS 108C-12 is the statute that allows providers to appeal adverse decisions to the Office of Administrative Hearings (OAH)).
Whew. The Program Evaluation Division would have its work cut out for it if the bill passes!
House Bill 674 was received by the Senate on May 5, 2013, and it passed its first reading.
House Bill 867 is named “An Act to Allow for the Movement of Certain Medicaid Recipients,” and it purports to allow those recipients with an 1915(c) Innovations Waiver slot to move about the State and for the slots to be recognized uniformly across the State. This way a person with an Innovations Waiver would not need to re-apply in another county if he or she moves there. However, for those served by the managed care organizations (MCOs), residency is determined by the county in which the recipient currently resides.
Then we come to House Bill 320. See my blog,”HB320: The Good News and the Bad News for NC Medicaid Providers.”
House Bill 320 mainly speaks to Medicaid recipient appeals, but imbedded within the language is one tiny proposed change to NCGS 108C-1. Just an itty, bitty change.
NCGS 108C-1 provides the scope of 108C (which applies to providers) and currently reads, “This Chapter applies to providers enrolled in Medicaid or Health Choice.”
If House Bill 320 passes, NCGS 108C-1 will read, “This Chapter applies to providers enrolled in Medicaid or Health Choice. Except as expressly provided by law, this Chapter does not apply to LME/MCOs, enrollees, applicants, providers of emergency services, or network providers subject to Chapter 108D of the General Statutes.”
If House Bill 320 passes, what, may I ask, will be a Medicaid provider’s appeal options if NCGS 108C does not apply to MCOs? And would not the new scope of NCGS 108C-1 violate the State Plan, which explicitly gives OAH the jurisdiction over any contracted entity of the Department of Health and Human Services (DHHS)? See my blogs on MCOs: “NC MCOs: The Judge, Jury and Executioner,” and “A Dose of Truth: If an MCO Decides Not to Contract With You, YOU DO HAVE RIGHTS!”
I also wonder, if House Bill 320 passes, what effect this revision to NCGS 108C-1 will have. Arguably, it could have no effect because of the above-mentioned language in the State Plan, the 4th Circuit Court of Appeals case that determined that MCOs are agents of the state, and the fact that the Department is defined in 108C-2 to include any of its legally authorized agents, contractors, or vendors.
On the other hand, in every single lawsuit that I would bring on behalf of a provider against an MCO, I would have another legal obstacle to overcome. The MCO’s attorney would invariably make the argument that OAH does not have jurisdiction over the MCO because the scope of 108C has been changed to exclude the MCOs. They have been arguing already that OAH lacks jurisdiction over the MCOs since NCGS 108D was passed, but to no avail.
Needless to say, the MCO lobbyists will be pushing hard for H 320 to pass. H 320 passed its 3rd reading on May 15, 2013, by a vote of 114-0, and the Senate received it on May 16, 2013.
Medicaid, Medicare, Nursing Facilities, and Death and Taxes: Our Uncertain Future for Our Aged Population
There are few “knowns” in life. In 1789, Benjamin franklin penned a correspondence to Jean-Baptiste Leroy, in which he wrote, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Certainly the phrase “death and taxes” had existed prior to Franklin’s 1789 usage, but considering how famous Franklin became in history for our country, many people attribute the phrase to Franklin.
Think about it. Nothing is certain, but death and taxes. It is a rather bleak view of the world. Why not “nothing is certain except happiness and sadness?” Or “nothing is certain but you being alive and dying?” Why do both “certain” items have to be bleak?
For purposes of this blog, I am using my own phrase:
“Nothing is certain except old age, unless you die early.”
For one day, we will all be old (unless we die early). And when we age, as much as we would love to ignore the fact, the fact is that most of us will be placed in an assisted living facility (ALF) or a nursing home of some sort.
But what will the world of ALFs look like 20…30…40 years from now? With the low Medicare and Medicaid reimbursement rates for personal care services (PCS), how many nursing homes will exist in the future?
Already, in Massachusetts, nursing homes are dropping like flies due to low reimbursement rates. What does this mean to the aged population?
In NC, our PCS reimbursement rate continues to be slashed. What will this mean for our aged population?
In the past few years, with approval from the Center for Medicare and Medicaid Services (CMS), NC Department of Health and Human Services (DHHS) has lowered the reimbursement rates for non-medical PCS provided both in the home and in a facility.
In October 2013, DHHS officials proposed to CMS a cut in the Medicaid PCS hourly rate by $2.40 per hour, down to $13.12 per hour, retroactive to July 1 (At the time, the PCS hourly rate was $15.52 and allowed up to 130 hours of care per month or, roughly, 4 hours a day).
Interestingly, DHHS has the PCS reimbursement rate for facilities and for home health care providers the same. Yet, facilities face much higher overhead, staffing costs, and building and equipment costs than does a home care provider. So why do both different types of providers receive the same reimbursement rate?
Prior to 2010, DHHS had two separate PCS rates, one for facilities and one for home health care providers. Obviously, the reimbursement rate in facilities was higher than the PCS rate for home health care providers to account for the additional overhead costs.
However, Disability Rights of NC warned DHHS that paying lower reimbursement rates for people living in the home versus a facility violated the Americans with Disabilities Act (ADA). The U.S. Department of Justice (DOJ) agreed, and, in 2012, the General Assembly (GA) had to make a decision: (1) lower the reimbursement rate for PCS in facilities; (2) increase the reimbursement rates for PCS in the home; (3) or come up with some innovative way to not violate the ADA.
Feeling pinched, the GA passed legislation that made it more difficult for recipients to qualify for PCS and decreased the number of allowable hours of PCS to from 130 to 80 hours per month, although if a person suffered from dementia, the PCS provider could get an extra 50 hours/week.
Plus, starting January 1, 2014, the shared savings plan went into effect, which decreased reimbursement rates by 3% across the board.
What does all this mean? It points to a couple of things.
Nursing facilities are facing financial distress.
In Massachusetts nursing facilities have already begun to close down. As of May 19, 2014, within 5 months, 4 nursing homes have gone out of business. According to The Boston Globe, the 4 nursing homes closed because they were “unable to make ends meet with the money they get from Medicaid because reimbursement rates have not increased in nearly a decade, according to the Massachusetts Senior Care Association, the industry trade group. Scores more are on the edge of shutting down.”
Scores more are on the verge of shutting down? For those of you who do not recall Lincoln’s speech, “Four scores and seven years ago…,” a score equals 20. According to the Boston Globe scores are on the verge of shutting down??? 40? 60?
With our aged population growing by the day, what does the future look like for nursing homes and the aged population?
Nothing may be certain except death and taxes, but I think it is certain that you will grow old, unless you die early.
As NC Morphs to ACOs, the Brains (The Mental Side of Medicaid) Remain With MCOs: Perfect for the Headless Horseman
ACOs could be the answer to Medicaid budget problems. At least for physical services for the neck down. The brain, for now, will continue with the MCOs.
I understand that Medicaid services for physical needs will be within the parameters of the ACOs and that MH/DD/SA will remain with MCOs. But it seems that we are cutting the head off the body. This system would be perfect for the Headless Horseman; I assume the Headless Horseman did not suffer from any mental afflictions being that he had no head.
The shift to the ACO system is an attempt to revamp the fee-for-service payment method and dissuade physicians from ordering more procedures and services than are actually necessary.
According to a new Harvard study, as many as 42 percent of U.S. Medicare patients were subjected to procedures providing little if any medical benefit, costing the government program up to $8.5 billion in wasteful spending.
What could be the cause of this needless spending? You could argue that plaintiffs’ lawyers are at fault because of creating a fear of medical malpractice lawsuits. Doctors become so concerned about being the subject of a medical malpractice lawsuit that the physician is over-inclusive as to tests/procedures rather than risk being accused of medical malpractice by failing to test. This is commonly referred to as practicing “defensive medicine.”
But you could also argue that the entire fee-for-service payment method currently used by physicians gives a financial incentive to providers to recommend more services, more testing, more procedures. For example, ordering a test a patient doesn’t really need, in an effort simply to have the results show up in her records, would be considered practicing defensive medicine.
It is without question that defensive medicine is better for physicians, and very understandable. If I were a physician, knowing as much as I do about health care law, I would definitely practice defensive medicine. And purchase the Cadillac of the liability insurances, one that covers 100% of attorneys’ fees for my choice of attorney. Those plaintiff lawyers would scare me, too!
But defensive medicine is not the best approach for the Medicaid budget. One possible way to eliminate defensive medicine practices is to implement the accountable care organizations (ACOs). While ACOs do not completely do away with a fee-for-service payment system, they creates incentives to be more efficient by offering bonuses when physicians keep costs down. Providers get paid more for keeping patients out of the hospitals.
North Carolina is implementing the ACO model for physical health care (not for MH/DD/SA).
North Carolina Department of the Health and Human Services (DHHS) has announced that the NC Medicaid system will be changed over to the ACO model by July 2015, although some question whether the deadline is a bit unrealistic.
However, in NC, there are already ACOs, whose experience can give us an idea of what the NC Medicaid system’s ACO experience will resemble. Here is a list of active ACOs in NC (according to one website):
Physicians HealthCare Collaborative
Cornerstone Health Care, PA
Meridian Holdings, Inc.
Triad Healthcare Network, LLC
Coastal Carolina Quality Care, Inc.
Accountable Care Coalition of Caldwell County, LLC
Accountable Care Coalition of Eastern North Carolina
Another article cites that in NC we have 14 ACOs currently active.
Our ACOs in NC service MediCARE patients, not MediCAID.
I am not aware of a single other state in USA that has implemented ACOs to Medicaid, which seems odd, considering the number of ACOs across the nation for Medicare and the touted success of ACOs in Medicare. Could NC possibly be the leader in ACOs for Medicaid? There is no question that, when we implement the ACOs, all eyes will be on NC to determine the success or failure of the program.
The ACOs will not, however, manage behavioral health. We will continue with the MCOs behavioral health care. So the ACOs will be in charge of everything the neck down. But is the ACO system going to replicate the MCO system? (As everyone knows who has read my blogs, I am not a fan of the MCO system).
ACO…MCO….What’s the difference?
Hopefully, and I believe it is correct to say, the ACOs will be vastly different from their counterpart, the MCO (in a good way).
In essence, I have high hopes for the ACOs. I believe that the brain (MH/DD/SA) should have been included with the rest of the body, but, maybe, in time it will be.
Computer systems have come a long way. I remember my Tandy3000 when I was growing up (which had Lotus Notes on it). I also remember the best video game was Pong. Yes, slowly, we advanced to Pac Man, Q-bert and Frogger. But when I bought (actually when my parents bought) my Atari, it worked as expected. When I wanted to play the Decathlon, if I wiggled my joy stick fast enough, I could be an Olympian. When I pushed the jump button for Donkey Kong, Mario jumped.
So, now in this day and age of computer advancement, someone please tell me why computer systems put into place in NC for DHHS simply do not work, have glitches, and fail. Seriously! Why, with a price tag of $21 million and counting (although one journalist cites the price tag at $48 million), why does NCFast not work??? NCFast is simply not fast. NCSlow would be more apropos.
NCFast has a Medicaid eligibility backlog of approximately 86,000 applications.
While the food stamp backlog has mostly been cleared, an even larger backlog is looming. Acting Medicaid Director Sandy Terrell warned lawmakers that nearly 86,000 Medicaid applications are delayed beyond federal processing timelines.
Why is a backlog of Medicaid eligibility important?
Imagine you are on Medicaid and pregnant. You apply for Medicaid for your unborn child. And the Department of Health and Human Services (DHHS) tells you that there is a backlog. Your child is born (healthy), but you cannot take your baby to the pediatrician for the first check-up because the baby has not received a Medicaid card.
Or imagine you are an adult on Medicaid suffering from cancer. April 1, 2014, the Department of Health and Human Services (DHHS) re-processes your Medicaid eligibility. You have been on Medicaid for years and depend on Medicaid to get your monthly prescriptions for pain, etc. But now it is May 6, 2014, and your Medicaid eligibility has not been processed. You go to the pharmacy that you go to every month and the pharmacist says, “Sorry. We cannot give out medication hoping to get paid in the future. Your Medicaid application has not been processed.”
Are we as North Carolinians just doomed to hire contractors who cannot meet the standards required? Or are we poorly choosing contractors? Are these contractors overstating their abilities? Or are we not conducting due diligence to determine whether these contractors are overstating their abilities?
What if Superman told us, “Trust me! I can fly! I am super strong! I will foil all of your villains!” Only to find out that Superman is Verne Troyer in costume?
Why should we care?
1. People are not getting food stamps in a timely way.
2. People are not getting Medicaid eligibility applications timely processed.
3. We, as taxpayers, paid for this computer system and expect it to run reasonably well.
My Atari, at least, met expectations!
There are more people on Medicaid than Medicare.
Think about that. There are more people in America who qualify for Medicaid than Medicare. Yet, as a nation, we spend more on Medicare than Medicaid. (I assume because the older population requires more expensive services). 58 million people relied on Medicaid in 2012 as their insurance.
And Medicaid is growing. There is no question that Medicaid is growing. When I say Medicaid is growing, I mean the population dependent on Medicaid is growing, the demand for services covered is growing, and the amount of money required to satisfy the demand is growing. This means that every year we will spend more and more on Medicaid. Logically, at some point, at its current growth pattern, there will come a point at which we can no longer afford to sustain the Medicaid budget.
If you think of the Medicaid budget as a super, large balloon, imagine trying to inflate the balloon more and more. At some point, the balloon cannot withstand the amount of air being put into it and it…POPS.
Will Medicaid eventually POP if we keep cramming more people into it, demanding more services, and demanding more money to pay for the increased services?
First, let’s look at the amount of money spent on Medicaid last year.
The Center for Medicare and Medicaid Services (CMS) just released the 2013 Actuarial Report on the Financial Outlook on Medicaid and its report considers the effect of Obamacare.
The CMS report found that total Medicaid outlays in 2012 were $431.9 billion.
The feds put in $250.5 billion or 58%. States paid $181.4 billion or 42%. In 2011, the federal government’s percentage of the whole Medicaid expenditure was 64%.
The CMS report also made future projections.
“We estimate that the [Affordable Care] Act will increase the number of Medicaid enrollees by about 18 million in 2022 and that Medicaid costs will grow significantly as a result of these changes starting in 2014.”
The 10 year projection, according to the report, is an increase in expenditures at an annual rate of 7.1%. By 2022, the expenditures on Medicaid will be $853.6 billion.
Just for some perspective…a billion is a thousand million.
If you sat down to count from one to one billion, you would be counting for 95 years (go ahead…try it!).
If I gave you $1000 per day (not counting interest), how long would it take you to receive one billion dollars? Answer: 2,737.85 years (2,737 years, 10 months, 7 days). Now multiply 2,737.85 years by 853.6.
That’s a lot of years!!
In the next ten years, average enrollment is projected to reach 80.9 million in 2022. It is estimated that, currently, 316 million people live in America.
So the question becomes, how can we reform, change, alter (whatever verb you want to use) Medicaid so that we can ensure that the future of Medicaid is not a POPPED balloon? While I do not have the answer to this, I do have some ideas.
According to the CMS report, per enrollee spending for health goods and services was estimated to be $6,641 in 2012. I find this number interesting because, theoretically, each enrollee could use $6,641 to purchase private insurance.
Remember my blog: “A Modest Proposal?” For that blog, I used the number $7777.78 per enrollee to purchase private insurance, which would require an increase in Medicaid spending assuming we give $7,777.78 to each enrollee. But think of this…the amount would be a known amount. Not a variable.
My health care, along with health care for my husband, costs $9,000/year. My cost includes two people. If I wanted individual insurance it would only have cost $228/month or $2,736/year.
What are other options to decrease the future Medicaid budgets and to avoid the big POP:
- Decrease Medicaid reimbursements (really? Let’s make LESS providers accept Medicaid);
- Decrease covered services (I would hope this idea is obviously stupid);
- Decrease the number of recipients (I believe the ACA shot this one out of the water);
- Create a hard cap on Medicaid spending and refuse to allow services over the cap regardless of the medical necessity (Again, I would hope this idea is obviously stupid);
- Decrease administrative costs (this is apparently an impossible feat);
- Create more difficult standards for medical necessity (I believe the ADA would have something to say about that); or
- Print more money (Hmmmm…can we say inflation?).
Please, if anyone else has a good idea, let me, or, better yet, your General Assembly, know.
Because without question the future of Medicaid is larger and more expensive than today. We want to avoid that…