This data note reviews the Medicaid estimates included in the American Health Care Act prepared by the Congressional Budget Office (CBO) and staff at the Joint Committee on Taxation (JCT).
Recently, Montana became the 31st state, including D.C., to expand Medicaid. Discussion regarding Medicaid expansion is ongoing in one state: Utah. Nineteen (19) states have rejected Medicaid expansion, including NC.
When Medicaid expansion was first introduced, it was a highly polarized, political topic, with Republican governors, generally, rejecting expansion and Democrat governors, generally, accepting expansion.
Now, however, many Republican governors have opted to expand Medicaid. There are currently 31 Republicans, 18 Democrats, and one independent that hold the office of governor in the states. Yet, 31 states have expanded Medicaid. Here is an extremely, difficult-to-read chart outlining the states that have opted to expand, those that have opted to reject expansion, and the one state (Utah) still discussing:
I know, it’s hard to read. Feel free to go to the actual Kaiser website to see the chart readable by humans. (Microsoft’s “Snipping Tool” leaves much to be desired; Apple’s “Screen Shot” is much better, in my opinion).
An interesting fact is that, in its first week with Medicaid expansion, Montana had over 5,500 people sign up for Medicaid.
Another interesting fact is that, approximately 18,078 physicians graduate from medical school in America per year. But in Montana?
N/A…as in, none. Not applicable. You see, Montana does not have a medical school. It does participate in the Washington, Wyoming, Alaska, Montana, and Idaho collaborative program. However, the collaborative program does not do a stellar job at recruiting physicians to Montana. It tries. But the statistics are stacked against Montana.
“Sixty-eight percent of doctors who complete all their training in one state end up practicing there,” according to the Association of American Medical Colleges.
Yet Montana has no medical school. And expanded Medicaid. If any of you ever took economics, there is this accepted theory called, “supply and demand.”
Supply and demand dictates that, when supply is low and demand is high, the product, whatever it is, can be sold at the highest price. Medicaid expansion, however, is creating an anomaly. Medicaid expansion expects a higher demand to meet the lower supply without increasing the reimbursement rates. This is a fundamental flaw in Medicaid expansion. If, on the other hand, Medicaid expansion was premised on an increase in reimbursement rates, we may see an uptick in supply. When demand is high and supply is low, many people “demanding” get nothing.
Let’s think about how many patients each primary care physician can handle.
“According to a 2013 survey by the American Academy of Family Physicians, the average member of that group has 93.2 “patient encounters” each week — in an office, hospital or nursing home, on a house call or via an e-visit. That’s about 19 patients per day. The family physicians said they spend 34.1 hours in direct patient care each week, or about 22 minutes per encounter, with 2,367 people under each physician’s care.” See article.
“The baseline projections from BHPr’s physician supply and requirements models suggest that overall requirements are growing faster than the FTE supply of physicians (Exhibits 51 and 52). Between 2005 and 2020, requirements are projected to grow to approximately 976,000 (22 percent), while FTE supply is projected to grow to approximately 926,600 (14 percent). These projections suggest a modest, but growing, shortfall of approximately 49,000 physicians by 2020 if today’s level of health care services is extrapolated to the future population. ” See article.
This is not the first time I have noted the increasing physician shortage with Medicaid expansion. There is a huge difference in giving someone a Medicaid card and providing a person with quality health care. A card is a piece of paper. If you cannot find a physician..or psychiatrist…or pulmonologist….or neurosurgeon who will accept Medicaid, then your Medicaid card is simply a piece of paper, not even worth the paper upon which it is printed. See blog. And blog. And blog.
The same can be said with the shortage of dentists. See blog.
With a shortage of approximately 49,000 physicians in 2o20, I pray that I am not holding a Medicaid card.
If I am, I will be another victim of high demand with low supply.
Obama’s Executive Order, Its Impact on Health Care Costs, and the Constitutionality of Executive Orders
Pres. Barack Obama will address the nation tonight at 8 pm (Thursday, November, 20, 2014). He is expected to discuss his executive order that will delay deportations of up to 5 million migrants.
What does an executive order on immigration have to do with Medicaid? Well, you can bank on the fact that almost none of the 5 million people has private health care coverage….which means, there is a high likelihood that most, if not all, the people would qualify for Medicaid.
With the expansion of Medicaid in many states, adding another 5 million people to the Medicaid program would be drastic. Think about it…in NC, approximately 1.8 million people rely on Medicaid as their insurance. 5 million additional Medicaid recipients would be like adding 3 more North Carolinas to the country.
So I looked into it…
The Kaiser Family Foundation website states that even immigrants who have been in America over 5 years are sometimes still barred from getting Medicaid and those people would remain uninsured. The Kaiser website states that under current law “some lawfully present immigrants who are authorized to work in the United States cannot enroll in Medicaid, even if they have been in the country for five or more years.”
By law, only immigrants who have green cards are entitled to enroll in Medicaid or purchase subsidized health care coverage through the ACA. Usually those immigrants with green cards are on the course to become citizens.
Regardless of whether Obama’s executive order tonight will or will not allow the 5 million people Medicaid coverage (which it will not), the executive order absolutely will greatly increase health care costs
The truth is that, with or without Obama’s executive order, the government already funds some health care for undocumented immigrants. We have an “emergency Medicaid” program and it pays hospitals to provide emergency and maternity care to immigrants if: 1) he or she otherwise would be Medicaid eligible if they weren’t in the country illegally or 2) he or she are legally present in this country for less than 5 years. (Which is the reason that ER wait times are so long…if you have no health insurance and you get sick, the ER is precisely where you go).
However, with the additional 5 million people living within the borders of USA, it is without question that the “emergency Medicaid” funds will sharply escalate as hospitals provide more emergency care. ER waits times will, inevitably, increase. Health care costs, in general, surge as the population increases. And the addition of 5 million folks in America is not a “natural” increase in population. It will be like we added additional states. Overnight and with the stroke of a pen, our population will grow immensely. I guess we will see whether we get “growing pains.”
An act of Congress will still be required before the undocumented immigrants impacted by the executive order would be allowed to participate in the Medicaid programs and the Children’s Health Insurance Program (CHIP) coverage.
As to the Constitutionality of executive orders…
Executive orders are not specifically mentioned in the Constitution. Many people interpret the nonexistence of executive orders in the Constitution as barring executive orders.
Article I Section I of the Constitution clearly states that all legislative powers reside in Congress. However, an executive order is not legislation. Technically, an executive order is a policy or procedure issued by the President that is a regulation that applies only to employees of the executive branch of government.
Nonetheless, our country has a vast history of president’s issuing executive orders. Abraham Lincoln issued an executive order to engage military in the Civil War, Woodrow Wilson issued an executive order arming the military before we entered World War I, and Franklin Roosevelt approved Japanese internment camps during World War II with an executive order.
Regardless of your political affiliation, in my opinion, it is very interesting that Obama would initiate an executive order regarding immigration given his past statements over the years complaining about past presidents’ executive orders being unconstitutional.
In 2008 campaign speeches, Obama regularly emphasized the importance of civil liberties and the sanctity of the Constitution.
In fact, in speeches, Obama stated, “most of the problems that we have had in civil liberties were not done through the Patriot Act, they were done through executive order by George W. Bush. And that’s why the first thing I will do when I am president is to call in my attorney general and have he or she review every executive order to determine which of those have undermined civil liberties, which are unconstitutional, and I will reverse them with the stroke of a pen.”
Whether or not people believe that executive orders are constitutional, it is indisputable that presidents on both sides of the aisle have issued executive orders.
Reagan and Bush issued executive orders. Although there is an argument that those executive orders came on the heels of congressional bills, as adjustments. Neither Reagan nor Bush simply circumvented Congress.
Going back to tonight’s anticipated executive order allowing 5 million migrants to remain in America…
While the executive order will not allow the 5 million people immediate access to Medicaid and other subsidized health care, it will allow 5 million more uninsured people to exist in America, which will, undoubtedly, increase health care costs and ER visits. And, eventually, the additional 5 million people will be eligible for Medicaid, subsidized health care, and all other benefits of living in America.
PCS Medicaid Reimbursement Rates Are TOO LOW to Maintain Adequate Quality of Care, in Violation of the Code of Federal Regulations!
I recently spoke at the Association for Hospice and Home Care (AHHC) and the NC Association for Long Term Care Facilities (NCLTCF) conferences. At issue at both conferences was the reimbursement rate for personal care services (PCS), which is extremely important to both home health agencies (HHAs) and long-term care facilities (LTCFs).
Both AHHC and NCLTCF, as associations, are vital to the HHAs and LTCFs across the state. Associations provide a network of peers, up-to-date information, and lobbying efforts. The old saying, “United we stand, divided we fall,” comes to mind.
The saying, “United we stand, divided we fall,” was originally coined by Aesop, one of my favorite storytellers of all time, in the story “The Four Oxen and the Lion,” which goes like this:
“A lion used to prowl about a field in which four oxen used to dwell. Many a time he tried to attack them; but whenever he came near they turned their tails to one another, so that whichever way he approached them he was met by the horns of one of them. At last, however, they fell a-quarrelling among themselves, and each went off to pasture alone in a separate corner of the field. Then the lion attacked them one by one and soon made an end of all four.”
“UNITED WE STAND, DIVIDED WE FALL.”
I think “The Four Oxen and the Lion” is indicative as to the importance of an association, generally. An association is truly essential when it comes to lobbying. There are two times during which we have a potential impact as to the wording of statutes: (1) During the forefront, by lobbying efforts; and (2) At the backend, through litigation. Obviously, if the forefront is successful, then there becomes no need for the backend.
Much to my chagrin, in my explanation above, I am the “backend.” Hmmmm.
Because I am a litigator and not a lobbyist, I am only called upon if the forefront fails.
In the last session, the General Assembly enacted Session Law 2014-100, which reduced the Medicaid reimbursement rates for all services by 3%.
“SECTION 12H.18.(b). During the 2013-2015 fiscal biennium, the Department of Health and Human Services shall withhold reduce by three percent (3%) of the payments … on or after January 1, 2014” (emphasis added).”
The PCS reimbursement rate became $13.88. Session Law 2014-100 was signed into law August 7, 2014; however, Session Law 2014-100 purports to be effective retroactively as of October 2013. (This brings into question these possible recoupments for services already rendered, which, in my opinion, would violate federal and state law, but such possible violations (or probable or currently occurring violations are a topic for another blog).
It is without question that the Medicaid reimbursement rate for PCS is too low. In NC, the PCS reimbursement rate is currently set at $13.88/hour (or $3.47/15 minutes). It is also without question that there is a direct correlation between reimbursement rates and quality of care.
Because Medicaid pays for approximately 67% of all nursing home residents and recipients of home health care in USA, the Medicaid reimbursement rates and methods are central to understanding the quality of care received by PCS services and the level of staffing criteria expected.
PCS for adults are not a required Medicaid service. As in, a state may opt to provide PCS services or not. As of 2012, 31 states/provinces provided PCS services for adults and 25 did not. Most notably, Florida, Virginia, and South Carolina did not provide PCS services for adults. See Kaiser Family Foundation website.
According to Kaiser Family Foundation, “For the personal care services state plan option, the average rate paid to provider agencies [across the nation] was $18.19 per hour in 2012, a slight increase from $17.91 per hour in 2011. In states where personal care services providers were paid directly by the state or where reimbursement rates were determined by the state, the average reimbursement rate was $16.31 per hour in 2012. Medicaid provider reimbursement rates are often set by state legislatures as part of the budget process.”
See the below chart for a state by state comparison:
Why should we care about the Medicaid PCS reimbursement rates?
1. Low reimbursement rates directly, and negatively, impact quality of care.
2. The aides who provide the PCS services, whether in someone’s home or at a LTCF, are often, him or herself on Medicaid.
3. It is in our best interest as a public for home health care agencies and LTCF to continue to accept Medicaid recipients.
4. It is in our best interest as a public for home health agencies and LTCF to stay in business.
#1: Low reimbursement rates directly, and negatively, impact quality of care.
42 U.S.C.A §1396a requires that a state provide Medicaid reimbursement rates at a level to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population…”
In an article entitled “Nurse Staffing Levels and Medicaid Reimbursement Rates in Nursing Facilities,” written by Charlene Harrington, James H Swan, and Helen Carrillo, the authors found that the Medicaid nursing home reimbursement rates were linked to quality of care, as to both RN hours and total nursing hours.
“Resident case mix was a positive predictor of RN hours and a negative predictor of total nursing hours. Higher state minimum RN staffing standards was a positive predictor of RN and total nursing hours while for-profit facilities and the percent of Medicaid residents were negative predictors.”
Numerous other articles have been published in the last few years that cite the direct correlation between reimbursement rates and quality of care.
The argument can be made that $13.88 is too low a reimbursement rate to ensure adequate quality of care. However, again, because this rate was not prevented at the forefront, it would entail a “backend” act of litigation to adjust the current reimbursement rate. (It is important to note that beginning next year, there will be an additional reduction of rate by another 1%).
#2: The aides who provide the PCS services, whether in someone’s home or at a LTCF, is often, him or herself on Medicaid.
According to the Paraprofessional Healthcare Institute, an advocacy group for home care workers, 1 in 4 home health workers has a household income below the federal poverty line and more than 1 in 3 do not have health insurance.
Think about this…home care workers provide PCS to the elderly, disabled, and needy, many of which are on Medicaid and Medicare. Home care workers work full-time changing diapers, assisting with ambulation, dressing, and grooming for the elderly, yet 1 in 4 home care workers are eligible for Medicaid themselves.
Currently, federal minimum wage is $7.25/hour. 18 states have minimum wage equal to the federal minimum wage, including North Carolina. 23 states set minimum wage higher than the federal level. Washington D.C. pays the highest minimum wage at $9.50/hour.
PCS reimbursement rates in NC are $3.47/15 minutes, or $13.88/hour. $13.88 is above the federal and NC minimum wage of $7.25. However, just because the PCS reimbursement rate is $13.88/hour does not mean that the PCS workers are receiving $13.88/hour. The owners of HHAs and LTCFs pay their workers much less than $13.88/hour; they have overhead, insurance, taxes, salaries, etc. to pay…not to mention a percentage of the $13.88/hour needs to be allocated to profit (albeit, however, small).
According to the Bureau of Labor Statistics, in 2013, the average PCS worker’s salary in NC is $19,392/year, or $1,660/month. Working 40 hours a week, a salary of $17,280 equates to approximately $10.10/hour. Obviously, $10.10 is well-above our $7.25 minimum wage, although difficult to make ends meet.
The average fast food worker’s hourly wage is $7.73.
In order for an increase of hourly pay, of any amount, for home health workers, the Medicaid PCS reimbursement rate would need to be increased.
With the current PCS rate at $13.88/hour, home health workers are getting paid between $8.00-11.00/hour. In order for PCS workers to receive $15.00/hour, the PCS rate would need to be increased by $2.00-5.00/hour.
#3: It is in our best interest as a public for HHAs and LTCFs to continue to accept Medicaid recipients.
What if HHA and LTCF refused to accept Medicaid recipients because the reimbursement rates are simply too low?
With the number of people dependent on Medicaid, if HHAs and LTCFs refused Medicaid recipients, our elderly and disabled would suffer.
Perhaps the average length of life would decrease. Perhaps we would implement legal euthanasia. Perhaps the suicide rate would increase. Perhaps the homelessness percentage would reach an all-time high. Is this the world in which you want to live?? Is this the world in which you want to age??
In my opinion, the way we treat our elderly, disabled and needy population is a direct reflection on the level of civilization or educated sophistication.
Here is an excerpt of an article published in 2013 when China passed its new Elderly Rights Law:
“Korea: Celebrating old age
Not only do Koreans respect the elderly, but they also celebrate them. For Koreans, the 60th and 70th birthdays are prominent life events, which are commemorated with large-scale family parties and feasts. As in Chinese culture, the universal expectation in Korea is that roles reverse once parents age, and that it is an adult child’s duty — and an honorable one at that — to care for his or her parents.
The U.S. and U.K.: Protestantism at play
Western cultures tend to be youth-centric, emphasizing attributes like individualism and independence. This relates back to the Protestant work ethic, which ties an individual’s value to his or her ability to work — something that diminishes in old age. Anthropologist Jared Diamond, who has studied the treatment of the elderly across cultures, has said the geriatric in countries like the U.K. and U.S. live “lonely lives separated from their children and lifelong friends.” As their health deteriorates, the elderly in these cultures often move to retirement communities, assisted living facilities, and nursing homes.”
#4: It is in our best interest as a public for HHAs and LTCFs to stay in business.
Or we can become more like the Koreans. At least, in this one respect, would emulating the Korean attitude be so bad?
Obviously, we cannot shift the American attitude toward the elderly, disabled and needy within one generation.
But we CAN increase the PCS reimbursement rate.
Here, the forefront was not as effective as needed. Maybe there is a need for a “backend” act of litigation…