Blog Archives

Work Requirements for Medicaid?

Under the Trump Administration, some Republican governors may look to move their Medicaid programs in a more conservative direction. In his latest column for Axios, Drew Altman discusses the arguments about Medicaid “work requirements” and why few people are likely to be affected by them in practice.

via Don’t Expect Medicaid Work Requirements to Make a Big Difference — The Henry J. Kaiser Family Foundation

BREAKING: House and Senate appear close to a Medicaid deal!!

In our last post on Medicaid reform, we updated you on the recent bill passed by the North Carolina Senate relating to the long-standing thorn in the side of the General Assembly, especially regarding the states’ budget – the Medicaid program. The Senate’s version of Medicaid reform is quite different from what we have previously seen and is a hodge-podge of managed care and a new idea: “provider-led entities.”

In a strong sign that this proposal is a compromise between competing sides that could end up getting passed, both House and Senate leaders are speaking positively on the record to news media about the prospects for a deal. Given how public the issue is and how big it is (an expected $14.2 billion in North Carolina in the coming year), that means they expect to get a deal done soon. The fact that the issue is so tied up with the budget that is overdue to be passed is a further headwind to passing a bill.

Right now, the bill is in a conference committee of negotiators from the House and Senate to work out an agreement, given the differences between the two chambers.

One major issue that the committee needs to look at is whether there will be a whole new state agency: the “Department of Medicaid.” The Senate endorsed that idea last week.

Our prediction: The legislators will chart a cautious course and not erect a whole new agency at the same time they are overhauling the system.

With Wos having (coincidentally?) just stepped down as Secretary of the Department of Health and Human Services, perhaps the lack of a lightning rod for criticism of DHHS will let the air out of the proposal to remove Medicaid from DHHS’s hands.

Stay tuned.

By Robert Shaw

Robert

North Carolina Medicaid Reform Update – Round and Round She Goes

Given how long the Medicaid reform discussions have been going on at the legislature, you may be glazed over by now. Give me the memo when they pass something, right? Fair enough, let’s keep it brief. Where do things stand right now?

Last Wednesday, the Senate staked out its position in the ongoing debate between the House and the McCrory administration.

The Senate’s newest proposal is an unusual mix of different systems and new ideas. Not willing to commit to one model for the whole Medicaid program, the latest version of the bill includes something new called Provider Led Entities, or “PLEs.” PLEs are yet the latest in the alphabet soup of different alternatives to straight fee-for-service billing for Medicare/Medicaid. You’ve all heard of HMOs, PPOs, MCOs, and ACOs. PLEs appear to be similar to ACOs, but perhaps for political reasons the Senate bill sponsors saw the need to call the idea something different.  See Knicole Emanuel’s blog.

In any event, as the name suggests, such organizations would be provider-led and would be operated through a capitated system for managing the costs of the Medicaid program. The Senate bill would result in up to twelve PLEs being awarded contracts on a regional basis.

PLEs are not the only addition to the Medicaid alphabet soup that the Senate is proposing in its version of HB 372. The Senate has also renewed its interest in taking Medicaid out of the hands of the N.C. Department of Health and Human Services entirely and creating a new state agency, the Department of Medicaid (“DOM”).

(One wonders whether the continual interest in creating a new Department of Medicaid independent of the N.C. Department of Health and Human Services had anything to do with embattled DHHS Secretary Wos stepping down recently.)

The Senate also proposes creating a Joint Legislative Oversight Committee on Medicaid (“LOC on Medicaid”).

But creating the DOM and using new PLEs to handle the provision of Medicaid services is not the whole story. Perhaps unwilling to jump entirely into a new delivery system managed by a wholly new state agency, the Senate bill would keep LME/MCOs for mental health services in place for at least another five years. Private contractor MCOs would also operate alongside the PLEs. The North Carolina Medicaid Choice coalition, a group which represents commercial MCOs in connection with the Medicaid reform process, is pleased.

One very interesting item that the Senate has included in its proposed legislation is the following requirement: “Small providers shall have an equal opportunity to participate in the provider networks established by commercial insurers and PLEs, and commercial insurers and PLEs shall apply economic and quality standards equally regardless of provider size or ownership.” You can thank Senator Joel Ford of Mecklenburg County for having sponsored this amendment to the Senate version of House Bill 372.

By pulling the Medicaid reform proposal out of the budget bill, the matter appears headed for further negotiation between the House and the Senate to see if the two can agree this year, unlike last year.

By legislative standards, that counts as forward progress… Here come the legislative discussion committees to hash it out more between the two chambers. We will keep a close eye on the proposals as they continue to evolve.

By Robert Shaw

Lawyer photo

 

Consider Nominating This Blog for the 2015 Best Legal Blog Contest (Please)!

The 2015 Legal Blog Contest is here!

For all you that follow this blog, thank you!  I hope that you agree that I provide you with valuable and up-to-date information on Medicaid/care regulatory issues.  At least, that is my hope in maintaining this blog.  And maintaining this blog takes a lot of time outside my normal, hectic legal career and my time as a mom and wife.  Don’t get me wrong…I love blogging about these issues because these issues are near and dear to my heart.  I am passionate about health care, health care providers, Medicaid and Medicare, and access to quality care.

If you are a follower, then you know that I try to keep my readers current on Medicaid/care fraud, federal and state laws, legal rights for health care providers, bills in the General Assembly germane to health care, extrapolation issues, CMS rulings, managed care matters, reimbursement rates, RAC audits and much, much more!

If you enjoy my blog, I ask a favor. Please consider nominating my blog for the 2015 Best Legal Blog Contest.

If you want to nominate my blog, please click here.

Scroll down until you see this:

blog contest

Enter your name, email address, my blog address. which is:

https://medicaidlawnc.wordpress.com/

For category, click on “Niche and Specialty.”  I do not believe the other categories correctly describe my blog.

And type a reason why you enjoy my blog.  Much appreciated!

Massive Medicaid Metamorphosis: Providers Beware! Be Proactive NOT Reactive!

Medicaid is ever-changing. But every 5 years or so, it seems, that a substantial section of Medicaid is completely revamped. Sometimes to the detriment of many uninformed, un-suspecting providers. For providers, it is imperative to stay above the curve…to foresee the changes in Medicaid, to plan for those changes, and to morph your own practice into one that will persevere despite the changes to come.

We are on the brink of a massive Medicaid metamorphosis.

Medicaid modifications have happened in the past. For example, a substantial shift in Medicaid occurred when DHHS switched from HP Enterprises to Computer Science Corporation (CSC) as its billing vendor. When the NCTracks system went live, the new NCTracks system forced office managers to re-learn how to bill for Medicaid. It was a rough start and many office managers spent countless hours inputting information into NCTracks, only to get erroneous denials and high blood pressure.

Another example of a Medicaid modification was the implementation of the managed care organizations (MCOs) which came on the heels of the new CABHA certification requirements. Only a couple of years after the shellshock of CABHA certification and thousands of providers going out of business because they could not meet the demands of the CABHA standards, behavioral health care providers were again put through the wringer with new standards created and maintained by the MCOs.

Think about it…Ten years ago, we never used the acronym MCO.

Enter [stage left]: A NEW ACRONYM!!

PLE

Don’t you love acronyms? My family has this game called Balderdash. It is one of my favorite games. The object of the game is to have the best fabricated answer. For example, if the category is “Acronym,” the “Dasher” will read the acronym, say, “PLE.” All the players draft their fake renditions of what “PLE” really means.

Plato Learning Environment; or
Panel of Legal Experts; or
Perinatal Lethality.

You get the point. In the game, the players vote on which answers they believe are correct (BTW: All of the above are real definitions for the acronym “PLE” (according to Google).)

In the Medicaid/care world, we play alphabet soup constantly. MCO, DD, SAIOP, DHHS, BWX, MID CPT….Throw out a few letters, and, most likely, you will have said some acronym that means something to someone. See my acronym page for a list of those pertinent to us (and it is ever-growing).

The most recent new acronym to the Medicaid arena here in North Carolina that I have seen is PLE, which is the crux of the new, upcoming massive Medicaid metamorphosis.

House Bill 372’s short title is “Medicaid Modernization” and has passed in the House.

On June 25, 2015, the Senate passed the House Bill on its first read!

I waited to blog about HB 327 until the Senate had an initial reaction to it. If you recall, the Senate and House has been on contradictory sides when it comes to Medicaid reform. However, it appears that HB 327 may have some traction.

House Bill 372 defines PLE as “[a]ny of the following:

a. A provider.
b. An entity with the primary purpose of owning or operating one or more providers.
c. A business entity in which providers hold a controlling ownership interest.”

Over the last couple years, the Senate and the House have stood divided over whether Medicaid should be managed by ACOs (House) or MCOs (Senate). It appears from the definition of a PLE, that a PLE could be a much simpler version of an ACO, which has had my vote since day 1. The whole concept of an ACO is a provider-run entity in which the providers make the decisions instead of utilization reviews, which have little to no contact with the patients, and, sometimes little health care experience, especially on the provider side.

From my cursory review of the proposed PLEs, it seems that a PLE would mimic an ACO, except, and, further federal research is needed, without some of the highly-regulated mandates that the federal government requires for MCOs (it will still be highly-regulated).

Is this just a question of semantics?  Is this just a question of changing its name?

“What’s in a name? that which we call a rose, By any other name would smell as sweet.” Romeo and Juliet, Act II, Scene II.

Let’s look again at the definition of a PLE, according to Version 3 of House Bill 372.

a. A provider.
b. An entity with the primary purpose of owning or operating one or more providers.
c. A business entity in which providers hold a controlling ownership interest.”

A provider?

Any provider? Does that provider need to ask to become a PLE or is it automatic? Does being a PLE give enhanced benefits other than being just a provider?

The answer is that all providers are not PLEs and providers will need to undertake significant legal and administrative steps to become a PLE.

“PLEs shall implement full-risk capitated health plans to manage and coordinate the care for enough program aid categories to cover at least ninety percent (90%) of Medicaid recipients to be phased in over five years from the date this act becomes law.”

What is “full risk?”

“Full risk” is not defined in HB 372, although, I believe that the definition is self-evident.

Capitation payment is defined by reference to 42 CFR 438.2:

“Capitation payment means a payment the State agency makes periodically to a contractor on behalf of each beneficiary enrolled under a contract for the provision of medical services under the State plan. The State agency makes the payment regardless of whether the particular beneficiary receives services during the period covered by the payment.”

Interestingly, this definition for “capitation payment” is found in the same section of the Code of Federal Regulations (CFR) as all the managed care regulations. Part 438 of the CFR applies to managed care.

We have managed care organizations in our state now managing the behavioral health care aspect of Medicaid. Will the same provisions apply to MCOs…to ACOs…to PLEs?

A rose by any other name…

What else does House Bill 372 purport to do?

• Within 12 months, the Department shall request a waiver from CMS to implement the components of this act.
• Within 24 months, the Department will issue an RFP for provider-led entities to bid on contracts required under this act.
• Within 5 years, 90% of all Medicaid services must be provided from a PLE, except those services managed by the MCOs , dental services, pharmaceutical products and dispensing fees. The Department may implement a pilot within 3 years.

As a provider, if you want to continue to serve the Medicaid population, then you may want to insert your company or agency into the creation of the PLEs, whether you sell, merge, acquire, or create a conglomerate.

It is my prediction that those providers who are reactive, instead of proactive, will lose business, consumers, and, potentially, a lot of cash. It is my “predictive recommendation” [as you are aware, we do not have an attorney/client relationship, so no recommendation of mine is tailored for you] that those providers who proactively seek mergers, acquisitions, and/or business agreements with other providers to morph into PLEs will be more successful, both financially and in serving their consumers better.

What you need to know about the future PLEs:

  • Must cover at least 30,000 recipients
  • Must provide all health benefits and administrative services, including physical, long-term services and supports, and other medical services generally considered physical care
  • Must meet solvency requirements
  • Must provide for appeal processes
  • Will cover 100% of the NC counties

The PLEs will, effectively, absorb the Medicaid dollars for recipients across the entire state and provide care for all physical health needs of Medicaid recipients.

In this environment, providers need to be proactive, not reactive!

If House Bill 327 passes into law, our next Medicaid metamorphosis will be monumental!  And the state will issue an RFP for providers within 2 years!

NC MCOs and Consolidation: “When the Music Stops? Nobody Knows!”

Our General Assembly is pushing for the managed care organizations (MCOs) to consolidate and/or morph.  Consolidating the MCOs makes fiscal sense for our state, but if I were executive management at an MCO, I would be be anxiously awaiting direction from our General Assembly.  A metaphoric 3-4 chair game of”Musical Chairs” is proceeding with 9 (now 8) players.  Five to six players will have no chairs when the music stops.

What are MCOs?  See blog and blog.

Multiple bills have been proposed.

Senate Bill 703 proposes 3 statewide MCOs. Senate Bill 574 seems to incorporate provider-led capitated health plans, but is unclear as to the exact model. Senate Bill 696 seems to create a symphony of provider-led and nonprovider-led, risk-based entities. Senate Bill 568 contemplates licensed commercial health insurers offering health care plans.

No one really knows how many MCOs will remain in the end…if any. Regardless, what the number of existing MCOs in the future will be, there is little dispute that the number will be fewer than the number of MCOs that exist now.

In an atmosphere where there is supposition that there are too many people or companies and that only a few will remain, competition brews. People/companies are forced to strategize if they want to survive.

Think about the childhood game, “Musical Chairs.” You start with a large group of people, but with one less chair than the number of people. The music plays and the players meander around at a relatively slow pace, around and around, until the music stops. And what happens when the music stops? The people scramble for a chair.  The person left standing is “out” and must sit on the sideline.

We have 9, soon to be 8, MCOs in NC right now. And the music is playing. But which MCOs will be left standing when the music stops?

Here is a map of our current MCOs:

2014 mco

 

As of July 1, CoastalCare and East Carolina Behavioral Healthcare (ECBH) will be merged. We will be down to 8 MCOs. Which means that the light blue on the bottom right hand side of the map will merge with the bright yellow on top right hand side of the map.

Mecklenburg county, which houses most of the Charlotte area, was not always light purple. It recently merged with Cardinal Innovations.

Partners (light yellow) and Smokey Mountain (dark blue) had serious discussions of a merger until, recently, when both walked away from negotiations of merger.

Why should it matter which MCOs are in existence or how many? Theoretically, it shouldn’t. These MCOs are created in order to manage behavioral health care (Medicaid services for those suffering from substance abuse, mental illness, and developmentally disabled), not to make a profit, right? The only issue of importance should be that medically necessary behavioral health care services are rendered to Medicaid recipients in the most efficient and most effective manner.

Yet competing interests come into play.

Think about it…each MCO employs hundreds of people. Each MCO has a CEO, who is not working for free. Generally, unless other arrangements have been negotiated, there can only be one CEO per MCO. When there are 2+ MCOs merging with 2 CEOs and only 1 “chair” for 1 CEO, it can seem like “Musical Chairs.” Multiple people are vying for one “chair.”

The money at issue for behavioral health care in NC is not a small amount. It is likened to a fire hose spouting money. We have a Medicaid budget in NC of approximately 14 billion dollars. To put it in perspective, with $14 billion dollars, you could purchase the LA Lakers 14 times. This is how much money we spend on Medicaid every year. It is really quite staggering when you think about it.

As every North Carolinian learns in the 6th grade, North Carolina is composed of 100 counties. The estimated Medicaid budget of $14 billion is allocated across 100 counties and among approximately 1.9 million Medicaid recipients.

When it was decided to implement the MCOs across the state, about 2012-ish (we actually obtained permission from CMS for the waiver years prior to 2012, but we began with a pilot and did not implement the MCOs statewide until 2012-13), we found ourselves, initially, with eleven MCOs, and now we have 9…soon to be 8.

The newly merged entity of CoastalCare and ECBH (CC+ECBH) will manage state funds and Medicaid dollars for behavioral health services across 24 counties in eastern North Carolina. In other words almost ¼ of the Medicaid budget will be handed to CC+ECBH, leaving approximately ¾ of the Medicaid budget for 7 other MCOs (the budget is determined by number of recipients, so I am assuming, for the purpose of this blog, that more counties mean more people).

The amount of counties controlled by the remaining 7 MCOs are as follows:

Smokey: 23
Partners: 8
Centerpointe: 4
Cardinal: 16
Sandhills: 9
Eastpointe: 12
Alliance: 4

chart for mcos

Looking at the chart above, it would appear that Smoky and CC+ECBH will manage almost 1/2 the state’s behavioral health care for Medicaid.

Prior to the 1915 b/c Waiver allowing the MCOs to manage behavioral services for Medicaid recipients in NC, DHHS managed it. (Obviously ValueOptions and other vendors had a part in it, but not with actual management).  As the single state agency for Medicaid, DHHS cannot delegate administrative duties to contracted parties without a “Waiver,” or permission for an exception from the federal government, or, more specifically, the Center for Medicare and Medicaid Services (CMS).

Prior to the 1915 b/c Waiver, we did not have 9 companies with hundreds of employees managing behavioral health care for Medicaid recipients. We had DHHS, which employs approximately 18,000 employees.  To my knowledge DHHS did not terminate those employees who were in charge of behavioral health care issues in order to compensate the creation of new companies/employees.  In other words, say 1000 people at DHHS devoted their time to issues arising our of behavioral health care. Once we had an additional 9 (well, 11, at first), those 1000 employees were not asked to join the MCOs. Maybe some did, but, to my knowledge, there was no suggestion or incentive or requirement to leave DHHS and go to an MCO (to shift the administrative burden).

When we created an additional 9 (well, 11 at first) companies to, essentially, take over behavioral health care…

We created more administrative costs, in order to lift the risk of overspending the Medicaid budget off the state.  It is estimated that America wastes $190 billion in excess administrative costs per year.

Waste in health care

In theory, consolidating the MCOs would decrease administrative costs by having fewer paid employees, not dissimilar to why MCOs want a closed network.  See blog. Again, in theory, having fewer MCOs may create a more consistent statewide manner in managing behavioral health care.

Assume for the purpose of this blog that each MCO employs 100 people (which is a very low number) and each employee is paid $50,000, then the administrative cost associated with delegating behavioral health care to MCOs equals $500,000, counting only employee salaries. Multiple that number by 9 (number of current MCOs) and you get an increased administrative cost of approximately $4.5 million dollars per year, not counting the additional overhead each MCO bears (rent/mortgage, equipment, salary benefits, health care benefits, etc.). Plus you have to include the top management’s salaries, because you know the executives are receiving more than $50,000/year.

What motivated us to implement a MCOs system? With an MCO system, the General Assembly is able to allocate funds for Medicaid and place the risk of going over the budget on the MCOs, not the state. This is a completely understandable and reasonable objective. It is without question that the Medicaid budget is swelling to the point of unsustainability.

However, are we trading “control/supervision” for “knowability?” Are we also trading “risk” for “higher administrative costs,” which, in turn, equals less Medicaid dollars for providers and Medicaid recipients? Every dollar paid to an MCO employee is a dollar not going to a health care provider to reimburse for services.

For these reasons, the government’s push for consolidation of the MCOs is astute. Fewer MCOs = less administrative costs. Fewer MCOs = easier supervision by DHHS.

Less administrative costs = more Medicaid dollars going to providers…to serve our most needy. Because, at the end of the day, the most important issue when it comes to Medicaid is providing quality care for recipients.

It is no matter which entity controls/manages behavioral health care for Medicaid, because regardless the entity, that entity should be managing our tax dollars in the most efficient way that provides the best quality to services to those in need.

“Around and around we go, when we stop? Nobody knows…”  But we do know this…when the music stops, there will be scrambling!

New NC Senate Bill Proposes 4-6 MCOs!! And the Creation of ARPLOs!!

Senate Bill 568 was filed today!!! It is a bill that you should follow!

SB 568 reads: “It is the intent of the General Assembly to transform the State’s health care purchasing methods from a traditional fee-for-service system into a value-based system that provides budget predictability for the taxpayers of this State while ensuring quality care to those in need.”

It proposes, among other things, a consolidation of the 9 current managed care organizations (MCO) here in North Carolina to “not more than 6” and “no less than 4” MCOs.

It further establishes another acronym: ARPLOs.

“At-Risk Provider-Led Organizations (ARPLOs). ARPLOs are capitated health plans administered by North Carolina’s provider-led Accountable Care Organizations that will manage and coordinate the care for the Patient Population, outside of the PCMHs, pending waiver approval where appropriate for this transformation by the Center for Medicare & Medicaid Services.”

Remember, the House has pushed for ACOs and the Senate has pushed for MCOs.  See blog.

Is the Senate bending toward the House??????

More to come…

Medicaid Reform in a House Divided and MCO, ACO…Who Cares?

We are living in the most polarized society in recent American history. A recent study shows that the feeling of political partisanship has more than doubled over the past 2 decades. So since 1995, politically, America has parted the Red Sea with voters increasingly ebbing away from the middle.

Even more interesting is that, according to the same 2014 study, political animosity is at an all-time, recent high. I say “recent” because I cannot fathom a more polarized society than the society in the 1850s-1860s leading up to the Civil War. So, when I say “recent,” I mean post-invention of the telephone.

According to the Pew Research Center, “[i]n each party, the share with a highly negative view of the opposing party has more than doubled since 1994. Most of these intense partisans believe the opposing party’s policies “are so misguided that they threaten the nation’s well-being.””

partisanship

If BOTH parties express this identical sentiment, someone is wrong.

So, now, here, in this extremely polarized society, our NC General Assembly is tackling one of our most important and most divisive issues…Medicaid Reform.

But, you say, “Knicole, our General Assembly is an overwhelming Republican majority.  Our Governor is Republican.  How can this vast and deep political polarization prevent NC from creating a new, better, non-broken Medicaid system?”

In NC, even the Republicans are polarized, at least as to the issue of Medicaid reform.  The two differing opinions as to Medicaid reform can be found in our separate houses: the Senate and the House of Representatives (House).  As for our executive branch, Governor McCrory sides with the House.

The houses are divided by acronyms: ACOs (House) versus MCOs (Senate).

The House plan for Medicaid reform involves accountable care organizations (ACOs).  The ACO plan includes physicians, hospitals and other health care providers collaborating to serve Medicaid recipients and assuming the monetary risks.  For example, one ACO may be liable for 6000 Medicaid recipients.  The ACO would be given X dollars per Medicaid recipient to cover the person’s overall health care.  Say the ACO, via its health professionals, conducts a preventative breast exam on a woman and discovers a lump.  The ACO would pay to remove the lump and, hopefully, the woman is ok.  If the ACO fails to practice preventative medicine and the woman is diagnosed with breast cancer, then the ACO must finance the more expensive surgery and chemotherapy required.  The ACO’s incentive would be to provide the best, proactive health care because, regardless, the ACO will be liable for that individual’s care.  With ACOs, there is a financial incentive to keep people healthy and the profit is shared with the state.

The Senate plan for Medicaid reform involves managed care organizations (MCOs).  Unlike ACOs, MCOs will not be comprised of health care providers.  The MCOs will be large companies that will be charged with managing Medicaid by contracting with a network of providers.  Many Medicaid services require prior authorization, which would be in the hands of the utilization review team employed by the MCO.  Similar to the ACO, the MCO would be given an amount of money based on the number of Medicaid recipients within its network.  The profit for the MCO is the money remaining at the end of the fiscal quarter that was not spent on services for Medicaid recipients.

What is better?  Does better mean the most cost-savings?  Does better mean the best quality of care for Medicaid recipients?

In order to determine whether the MCO-model or ACO-model is better and what exactly “better” means, you have to follow the money.  For both models, you have to ask, “If the actual medical services provided cost double the anticipated amount, who bears the burden?” And, conversely, “If the actual medical services provided cost half the anticipated amount, who pockets the profit?”

There are numerous ways for an insurer to be paid.  At one end of the spectrum, you have capitation; while at the other end of the spectrum you have a more typical financial relationship in which the insurer simply pays the health care provider its reasonable and usual amount.

Capitation is how we currently have our MCOs set up for behavioral health care in North Carolina.  As we currently use capitation for our MCOs, I would assume that the Senate-model MCOs would also be capitated.  Capitation places the risk on the MCO because the MCO receives a fixed amount regardless of actual cost.  However, there is concern (or should be) that the MCOs will provide patients less care than needed in order to pocket a profit.

On the other hand, ACOs typically do not rely on full capitation.  The ACOs may share the risk, and, therefore, the profit, with the state.

Another HUGE difference between ACOs and MCOs is that, with MCOs, the insurer in effect dictates what a health care provider is allowed to do.  For example, say a dentist believes that a person is in need of dentures.  Maybe 4-5 teeth have already fallen out and the remaining teeth are suffering more mild rot.  The dentist requests prior authorization from the MCO to extract teeth, create a mold of the mouth, and order dentures to be custom-created.  The MCO denies the requests saying, for example, not enough teeth have fallen out or not enough rot is present in the remaining teeth.  The dentist’s hands are tied to the decision of the MCO, unless the patient can fork over the cost of care that the MCO refuses to authorize.  And, BTW, the person who denied the request may have graduated from college with a BA in History . . . or in any event something else other than a field of medical or dental care

An ACO, on the other hand, is run by physicians, hospitals, and other health care providers. Theoretically, the decisions to authorize services would be made by those same people who swore the Hippocratic Oath.

With regard to healing the sick, I will devise and order for them the best diet, according to my judgment and means; and I will take care that they suffer no hurt or damage.

(I doubt a History major ever swore to heal the sick).

There has also been contemplation as to whether the General Assembly should remove the responsibility of managing Medicaid from the Department of Health and Human Services (DHHS) completely.  Obviously, this suggestion is extreme and would require a Waiver from the federal government to transfer the “single state agency” requirement from DHHS to another entity.

Regardless of what decisions are made…whether the GA requires a private Medicaid panel to usurp Medicaid responsibilities from DHHS….whether NC adopts an MCO-model or an ACO-model for Medicaid reform….as it currently stands, our houses are divided.  No bills pass a divided legislature.

The Senate and House both indicate that Medicaid reform is a forefront issue during this long session, but, so far, there has been no indication of a Great Compromise.

Lordy, Lordy, Look Who’s Forty: A Review of Our 40-Year-Old Stalemate in Health Care Reform

40-birthday

Well, folks, it is official.  I am “over the hill.”  Yup.  My birthday is today, January 7, 1975, and I was born 40 years ago.

Instead of moping around, I have decided to embrace my 40s. For starters, let’s take a look at where we were 40 years ago. Obviously, personally, I was in utero. But what about the country? What about health care?

Not surprisingly, even 40 years ago, politicians were discussing the same issues with health care as we are now. Some things never change…or do they???

In my “40 years in review” blog, I want to discuss why we, as a nation, are still arguing about the same health care issues that we were arguing about 40 years ago.  And, perhaps, the reason why we have been in a 40-year-old stalemate in health care reform.

Today, we have a diverged nation when it comes to health care. Democrats want to expand public health insurance (i.e., Medicaid) and tend to favor a higher degree of government oversight of health care to ensure that health care is available to all people.  Republicans, on the other hand, believe that the financial burden of the Affordable Care Act (ACA) on the federal and state level is unsustainable, and people will receive less than adequate health care. Republicans tend to favor privatization of Medicaid, while liberals oppose such ideas.

Health care reform has been a hot topic for over 40 years…with some interesting differences…

Going back to 1975…

Gerald Ford, a Republican, was our nation’s president, and we were in a nationwide recession.

Under Ford, the American Medical Society (AMA) proposed a new plan for health care, an employer mandate proposal.

According to a 1975 Chicago Tribune journalist, the AMA’s new proposal pushed for a broader government role in health care.  See below.

“The new [ ] plan would cover both employees and the unemployed, along with poor people and those considered uninsurable because of medical or mental problems.  It would require employers to subsidize health care for employees and their families and pay at least 65 % of each premium.  It would also require the government to provide partially subsidized health insurance, financed from general revenues, for the poor and the unemployed. It calls for medical insurance benefits covering 365 days of hospital care during any one year, 100 days of nursing home care, and home health, mental, and dental service for children aged 2 and up.  All but the poorest beneficiaries would share premium costs and would pay 20 per cent for the services provided, but no individual would pay more than $1,500 a year and no family more than $2,000 a year for health care.”

Chicago Tribune, “The A.M.A.’s subsidy plan” April 19, 1975 (emphasis added) (no author was cited).

Interestingly, in that same newspaper from April 19, 1975, advertisements show towels for $1.89, pants for teenagers for $4.99, a swivel rocker for $88, and a BBQ grill for $12.88. My how times have changed!

Those prices also indicate how much buying power was involved with the AMA’s proposal, and what it meant to suggest that an individual might have to pay up to $1,500 a year, and a family up to $2,000 a year, for health care – a lot of money back then!

In 1976, Pres. Ford proposed adding catastrophic coverage to Medicare, offset by increased cost sharing.  These are examples of Pres. Ford (a Republican) creating more government involvement in health care and expanding health care to everyone.

After Pres. Ford, came Pres. Jimmy Carter from 1977-1981, a Democrat.

Pres. Carter campaigned on the notion of “universal health care for everyone;” however, once in office he decided instead to rein in costs, and not expand coverage.  In the prior decade (1960), the consumer price index had increased by 79.7%, while hospital costs had risen 237%.  President Carter proposed an across-the-board cap on hospital charges that would limit annual increases to 1.5 times any rise in the consumer price index.

Pres. Carter was also quoted from public speeches saying, “We must clean up the disgraceful Medicaid scandals.”

Pres. Carter’s stance on “universal” health care was: “that such a program would be financed through both the employer and the payroll taxes, as well as general revenue taxes. Patients would still be free to choose their own physician, but the federal government would set doctor’s fees and establish controls to monitor the cost and quality of health care.”

In May 1979, Senator Ted Kennedy, a Democrat, proposed a new universal national health insurance bill—offering a choice of competing federally-regulated private health insurance plans with no cost sharing financed by income-based premiums via an employer mandate and individual mandate, replacement of Medicaid by government payment of premiums to private insurers, and enhancement of Medicare by adding prescription drug coverage and eliminating premiums and cost sharing.

These are examples of Democrats, Pres. Carter, by not expanding health care coverage and reining in costs, and Sen. Kennedy, by proposing privatization of Medicaid, acting in a more conservative nature, or, as a conservative nature would be perceived today.

So when did the parties flip-flop? Why did the parties flip-flop? And the most important question…if we have been struggling with the exact same issues on health care for over 40 years, why has our health care system not been fixed?  There has certainly been enough time, ideas, and proposed bills.

While I do not profess to know the answer, my personal opinion is the severe and debilitating polarizations of the two main political parties have rendered this country into a 40-year-old stalemate when it comes to health care reform and are the reason why the solution has not been adopted and put into practice.

Maybe back in 1979, when Senator Kennedy proposed replacing Medicaid with private insurance, Republicans refused to agree, simply because a Democrat proposed the legislation.

Today when Republican candidates campaign on privatizing Medicaid and the Democrats vehemently oppose such action, maybe the opposition is not to the idea, but to the party making the proposal.

Just a thought…

And here’s to the next 40!!!

OIG Report: MCOs Cause Limited Access to Primary Care for Medicaid Enrollees!

With flu season well under way, access to care to primary care physicians for Medicaid recipients is (as it is always) extremely important.  During flu season, in particular, emergency rooms (ERs) are full of people suffering from flu-like systems.  Many of those in the ER are uninsured, but many of those in the ER have a valid Medicaid card in their wallet.

So why would a Medicaid recipient present themself to the ER instead of contacting a primary care physician?  In many instances, the Medicaid recipients do not have access to primary care. Many physicians simply refuse to accept Medicaid.  Some managed care organizations (MCOs) refuse to contract with a number of physicians sufficient to address the needs of its catchment area.

A December 2014 audit conducted by the Office of Inspector General (OIG) found that access to primary care for Medicaid recipients is in serious question…especially with the onslaught of states moving Medicaid to managed care systems.

32 states contract with 221 MCOs.   From each of the 32 states, OIG requested a list of all providers participating in Medicaid managed care plans.  Remember that, here in NC, our MCOs only manage behavioral health care. We have not yet moved to managed care for our physical health care.  However, this may change in the not so distant future…

Our Senate and House are attempting to pass Medicaid reform. The House is pushing for accountable care organizations (ACOs), which would be run by physicians, hospitals, and other health care organizations. The Senate, on the other hand, is pushing for MCOs. I urge the Senate to review this OIG report before mutating our health care system to managed care.

Federal regulations require MCOs to maintain a network of providers sufficient to provide adequate access to care for Medicaid recipients based on population, need, locations of providers, and expected services to be utilized.

However, as we have seen in NC, the MCOs are not properly supervised and have financial incentives to terminate provider contacts (or refuse to contract with providers). In NC, this has resulted in hundreds, perhaps thousands, of behavioral health care providers going out of business.  See MCOs Terminating Providers and Restricting the Freedom of Choice of Providers for Medicaid Recipients: Going Too Far? and NC MCOs: The Judge, Jury, and Executioner.

The consequences of MCOs picking and choosing to contract with a select few are twofold: (1) the non-selected providers go out of business; and (2) Medicaid recipients lose access to care and choice of providers.

Because of #2, OIG conducted this audit, which, sadly, confirms the veracity of #2.

To conduct the audit, OIG contacted 1800 primary care physicians and specialists and attempted to make an appointment.  OIG wanted to determine (1) whether they accepted Medicaid; (2) whether they were taking new Medicaid patients; and (3) the wait time for an appointment. OIG only contacted physicians who were listed on the states’ Medicaid plans as a participating provider, because Medicaid recipients rely on the states’ lists of participating providers in locating a physician.

Yet, the results of the OIG audit are disturbing, to say the least.

51% of the providers could not offer appointments to enrollees, which raises serious questions as to the adequacy of the MCO networks.

OIG chart

  • 45% did not accept Medicaid
  • 35%: could not be found at the location listed by the plan,
  • 8% were at the location but said that they were not participating in the plan.
  • 8% were not accepting new patients.

The average wait time was 2 weeks for those physicians accepting Medicaid. Over 25% had wait times of more than 1 month, and 10 percent had wait times longer than 2 months.

I guess they can always go to the ER.