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Medicaid Forecast: Cloudy with 100% Chance of Trump

Regardless how you voted, regardless whether you “accept” Trump as your president, and regardless with which party you are affiliated, we have a new President. And with a new President comes a new administration. Republicans have been vocal about repealing Obamacare, and, now, with a Republican majority in Congress and President, changes appear inevitable. But what changes?

What are Trump’s and our legislature’s stance on Medicaid? What could our future health care be? (BTW: if you do not believe that Medicaid funding and costs impact all healthcare, then please read blog – and understand that your hard-working tax dollars are the source of our Medicaid funding).

WHAT IS OUR HEALTHCARE’S FORECAST?

The following are my forecasted amendments for Medicaid:

  1. Medicaid block grants to states

Trump has indicated multiple times that he wants to put a cap on Medicaid expenses flowing from the federal government to the states. I foresee either a block grant (a fixed annual amount per state) or a per capita cap (fixed dollar per beneficiary) being implemented.

What would this mean to Medicaid?

First, remember that Medicaid is an entitlement program, which means that anyone who qualifies for Medicaid has a right to Medicaid. Currently, the federal government pays a percentage of a state’s cost of Medicaid, usually between 60-70%. North Carolina, for example, receives 66.2% of its Medicaid spending from Uncle Sam, which equals $8,922,363,531.

While California receives only 62.5% of its Medicaid spending from the federal government, the amount that it receives far surpasses NC’s share – $53,436,580,402.

The federal funding is open-ended (not a fixed a mount) and can inflate throughout the year, but, in return, the states are required to cover certain health care services for certain demographics; e.g., pregnant women who meet income criteria, children, etc. With a block grant or per capita cap, the states would have authority to decide who qualifies and for what services. In other words, the money would not be entwined with a duty that the state cover certain individuals or services.

Opponents to block grants claim that states may opt to cap Medicaid enrollment, which would cause some eligible Medicaid recipients to not get coverage.

On the other hand, proponents of per capita caps, opine that this could result in more money for a state, depending on the number of Medicaid eligible residents.

2. Medicaid Waivers

The past administration was relatively conservative when it came to Medicaid Waivers through CMS. States that want to contract with private entities to manage Medicaid, such as managed care organizations (MCOs), are required to obtain a Waiver from CMS, which waives the “single state entity” requirement. 42 CFR 431.10. See blog.

This administration has indicated that it is more open to granting Waivers to allow private entities to participate in Medicaid.

There has also been foreshadowing of possible beneficiary work requirements and premiums.Montana has already implemented job training components for Medicaid beneficiaries. However, federal officials from the past administration instructed Montana that the work component could not  be mandatory, so it is voluntary. Montana also expanded its Medicaid in 2015, under a Republican governor. At least for one Medicaid recipient, Ruth McCafferty, 53, the voluntary job training was Godsend. She was unemployed with three children at home. The Medicaid job program paid for her to participate in “a free online training to become a mortgage broker. The State even paid for her 400-mile roundtrip to Helena to take the certification exam. And now they’re paying part of her salary at a local business as part of an apprenticeship to make her easier to hire.” See article.

The current administration may be more apt to allow mandatory work requirements or job training for Medicaid recipients.

3. Disproportionate Share Hospital

When the ACA was implemented, hospitals were at the negotiating table. With promises from the past administration, hospitals agreed to take a cut on DSH payments, which are paid to hospitals to help offset the care of uninsured and Medicaid patients. The ACA’s DSH cut is scheduled to go into effect FY 2018 with a $2 billion reduction. It is scheduled to continue to reduce until FY 2025 with a $8 billion reduction. The reason for this deduction was that the ACA would create health coverage for more people and with Medicaid expansion there would be less uninsured.

If the ACA is repealed, our lawmakers need to remember that DSH payments are scheduled to decrease next year. This could have a dramatic impact on our hospitals. Last year, approximately 1/2 of our hospitals received DSH. In 2014, Medicaid paid approximately $18 billion for DSH payments, so the proposed reductions make up a high percentage of DSH payments.

4. Physician payment predictability

Unlike the hospitals, physicians got the metaphoric shaft when the ACA was implemented. Many doctors were forced to provide services to patients, even when those patients were not covered by a health plan. Many physicians had to  increase the types of insurance they would accept, which increased their administrative costs and the burden.

This go-around, physicians may have the ear of the HHS Secretary-nominee, Tom Price, who is an orthopedic surgeon. Dr. Price has argued for higher reimbursement rates for doctors and more autonomy. Regardless, reimburse rate predictability may stabilize.

Key Medicaid Questions Post-Election

Disclosure: This is the opinion/facts from the Kaiser Family Foundation, not me. But I found this interesting. My opinion will be forthcoming.

Kaiser Family Foundation article:

Medicaid covers about 73 million people nationwide.  Jointly financed by the federal and state governments, states have substantial flexibility to administer the program under existing law.  Medicaid provides health insurance for low-income children and adults, financing for the safety net, and is the largest payer for long-term care services in the community and nursing homes for seniors and people with disabilities.  President-elect Trump supports repeal and replacement of the Affordable Care Act (ACA) and a Medicaid block grant. The GOP plan would allow states to choose between block grant and a per capita cap financing for Medicaid. The new Administration could also make changes to Medicaid without new legislation.

1. HOW WOULD ACA REPEAL AFFECT MEDICAID?

A repeal of the ACA’s coverage expansion provisions would remove the new eligibility pathway created for adults, increase the number of uninsured and reduce the amount of federal Medicaid funds available to states. The Supreme Court’s 2012 ruling on the ACA effectively made the Medicaid expansion optional for states. As of November 2016, 32 states (including the District of Columbia) are implementing the expansion.  The full implications of repeal will depend on whether the ACA is repealed in whole or in part, whether there is an alternative to the ACA put in place and what other simultaneous changes to Medicaid occur. However, examining the effects of the ACA on Medicaid provide insight into what might be at stake under a repeal.

What happened to coverage? The ACA expanded Medicaid eligibility to nearly all non-elderly adults with income at or below 138% of the federal poverty level (FPL) – about $16,396 per year for an individual in 2016. Since summer of 2013, just before implementation of the ACA expansions, through August 2016 about 16 million people have been added to Medicaid and the Children’s Health Insurance Program.  While not all of this increase is due to those made newly eligible under the ACA, expansion states account for a much greater share of growth. States that expanded Medicaid have had large gains in coverage, although ACA related enrollment has tapered.  From 2013 to 2016 the rate of uninsured non-elderly adults fell by 9.2% in expansion states compared to 6% in non-expansion states.

What happened to financing? The law provided for 100% federal funding of the expansion through 2016, declining gradually to 90% in 2020 and beyond. Expansion states have experienced large increases in federal dollars for Medicaid and have claimed $79 billion in federal dollars for the new expansion group from January 2014 through June 2015.  Studies also show that states expanding Medicaid under the ACA have realized net fiscal gains despite Medicaid enrollment growth initially exceeding projections in many states.

What other Medicaid provisions were in the ACA? The ACA required states to implement major transformations to modernize and streamline eligibility and enrollment processes and systems.  The ACA also included an array of new opportunities related to delivery system reforms for complex populations, those dually eligible for Medicare and Medicaid and new options to expand community-based long-term care services.

2. WHAT WOULD CHANGES IN THE FINANCING STRUCTURE MEAN FOR MEDICAID?

A Medicaid block grant or per capita cap policy would fundamentally change the current structure of the program. These policies are typically designed to reduce federal spending and fix rates of growth to make federal spending more predictable, but could eliminate the guarantee of coverage for all who are eligible and the guarantee to states for matching funds.  States would gain additional flexibility to administer their programs but reduced federal funding could shift costs and risk to beneficiaries, states, and providers.

How would it work? Block grants or per capita caps could be structured in multiple ways. Key policy decisions would determine levels of federal financing as well as federal and state requirements around eligibility, benefits, state matching requirements, and beneficiary protections. Previous block grant proposals have determined a base year financing amount for each state and then specified a fixed rate of growth for federal spending. Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee.  Payments to states would be based on per enrollee spending multiplied by enrollees. Spending under per capita cap proposals fluctuate based on changes in enrollment, but would not account for changes in the costs per enrollee beyond the growth limit.  To achieve federal savings, the per capita growth amounts would be set below the projected rates of growth under current law.

What are the key policy questions? Key questions in designing these proposals include: what new flexibility would be granted to states, what federal requirements would remain in place, what requirements would be in place for state matching funds, what is the base year and growth rates, and how would a potential repeal of the ACA work with a block grant proposal?  Given the lack of recent administrative data, setting a base year could be challenging.  These financing designs could lock in historic spending patterns and variation in Medicaid spending across states, resulting in states deemed “winners” or “losers.”

What are the implications? Capping and reducing federal financing for Medicaid could have implications for beneficiaries, states, and providers including: declines in Medicaid coverage or new financial barriers to care; limited funding for children (the majority of Medicaid enrollees) as well as the elderly and those with disabilities (populations that represent the majority of Medicaid spending); reduced funding for nursing homes and community-based long-term care (Medicaid is the largest payer of these services); reductions in federal revenues to states and Medicaid revenues for safety-net providers.  A block grant would not adjust to increased coverage needs during a recession.  Block grants or per capita caps would not adjust to changes in health care or drug costs or emergencies.  Recently Medicaid costs have increased due to high cost specialty drugs and Medicaid has been used to help combat the growing opioid crisis.

3. HOW COULD MEDICAID BE CHANGED THROUGH ADMINISTRATIVE ACTIONS?

The Administration could make changes to Medicaid without changes in legislation.

How can changes be made through guidance? A new administration can reinterpret existing laws through new regulations and new sub-regulatory guidance. While there are rules that govern how to change regulations, a new administration has more flexibility to issue or amend sub-regulatory guidance, such as state Medicaid director letters. Rules promulgated by the Obama administration could be rolled back or changed.

How can changes be made through waivers? Throughout the history of the Medicaid program, Section 1115 waivers have provided states an avenue to test and implement demonstrations that, in the view of the Health and Human Services Secretary, advance program objectives but do not meet federal program rules. Longstanding federal policy has required waivers to be budget neutral for the federal government.

What kind of waivers may be considered?  Seven states are using waivers to implement the ACA Medicaid expansion, including Indiana.  The Indiana waiver, implemented under then Governor Pence, includes provisions to impose: premiums on most Medicaid beneficiaries; a coverage lock-out period for individuals with incomes above the poverty level who fail to pay premiums; health savings accounts; and healthy behavior incentives.  The Obama administration has not approved waivers that would require work as a condition of Medicaid eligibility.  It also has denied Ohio’s waiver request to impose premiums regardless of income and exclude individuals from coverage until all arrears are paid on the basis that this would restrict or undermine coverage from existing levels.  Many other states are using waivers to implement payment and delivery system reforms.  The incoming administration could decide whether or not to renew existing waivers and can approve a new set of waivers to promote its own program goals.

Medicaid Closed Networks: Can Waivers Waive Your Legal Rights?

Sorry for the lapse in blogging. I took off for Thanksgiving and then got sick. I hope you all had a wonderful Thanksgiving!!

While I was sick, I thought about all the health care providers that have been put out of business because the managed care organization (MCO) in their area terminated their Medicaid contract or refused to contract with them. I thought about how upset I would be if I could not see my doctor, whom I have seen for years. See blog for “You Do Have Rights!

Then I thought about…Can a Waiver waive a legal right?

Federal law mandates that Medicaid recipients be able to choose their providers of choice. Court have also held that this “freedom of choice” of provider is a right, not a privilege.

42 U.S.C. § 1396a states that Medicaid recipients may obtain medical services from “any institution, agency, community pharmacy, or person, qualified to perform the service or services required… who undertakes to provide him such services….” Id. at (a)(23).

So how can these MCOs restrict access?

First, we need to discuss the difference between a right and a privilege.

For example, driving is a privilege, not a right. You have no right to a driver’s license, which is why you can lose your license for things, such as multiple DUIs. Plus, you cannot receive a driver’s license unless you pass a test, because a license is not a right.

Conversely, you have the right to free speech and the right to vote. Meaning, the government cannot infringe on your rights to speak and vote unless there are extraordinary circumstances. For example, the First Amendment does not protect obscenity, child pornography, true threats, fighting words, incitement to imminent lawless action (yelling “fire” in a crowded theater), criminal solicitation or defamation. Your right to vote will be rescinded if you are convicted of a felony. Furthermore, you do not need to take a test or qualify for the rights of free speech and voting.

Likewise, your choice of health care provider is a right. It can only be usurped in extraordinary circumstances. You do not need to take a test or qualify for the right. (Ok, I am going to stop underlining “right” and “privilege” now. You get the point).

Then how are MCOs operating closed networks? For that matter, how can Blue Cross Blue Shield (BCBS) terminate a provider’s contract? Wouldn’t both those actions limit your right to choose your provider?

The answer is yes.

And the answer is simple for BCBS. As for BCBS, it is a private company and does not have to follow all the intricate regulations for Medicare/caid. 42 U.S.C.  § 1396a is inapplicable to it.

But Medicaid recipients have the right to choose their provider.  This “freedom of choice” provision has been interpreted by both the Supreme Court and the Seventh Circuit as giving Medicaid recipients the right to choose among a range of qualified providers, without government interference (or its agents thereof).

What does this mean? How can a managed care organization (MCO) here in NC maintain a closed network of providers without violating the freedom of choice of provider rule?

The “Stepford” answer is that we have our Waivers in NC, which have waived the freedom of choice. In our 1915 b/c Waiver, there are a couple pages that enumerates certain statutes. We “x” out the statutes that we were requesting to waive.

It looks like this:

waiver1

Furthermore, federal law carves out an exception to freedom to choose right when it comes to managed care. But to what extent? It the federal carve unconstitutional?

But…the question is twofold:

  • Would our Waiver stand up to federal court scrutiny?
  • Can our state government waive your rights? (I couldn’t help it).

Let’s think of this in the context of the freedom of speech. Could NC request from the federal government a waiver of our right to free speech? It sounds ludicrous, doesn’t it? What is the difference between your right to free speech and your right to choose a provider? Is one right more important than the other?

The answer is that no one has legally challenged our Waiver’s waiver of the right to freedom of provider with a federal lawsuit claiming a violation of a constitutionally protected right. It could be successful. If so, in my opinion, two legal theories should be used.

  1. A § 1983 action; and/or
  2. A challenge under 42 CFR 431.55(f)

Section 1983 creates a federal remedy against anyone who deprives “any citizen of the United States… of any rights, privileges, or immunities secured by the Constitution and laws” under the color of state law. 42 U.S.C. § 1983. The Supreme Court has explained that § 1983 should be read to generally “authorize[] suits to enforce individual rights under federal statutes as well as the Constitution.” City of Rancho Palos Verdes, Cal. v. Abrams, 544 U.S. 113, 119 (2005).

Section 1983 does not authorize a federal remedy against state interference with all government entitlements, however; “it is rights, not the broader or vaguer ‘benefits’ or ‘interests,’ that may be enforced under the authority of that section.” Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002). But the courts have already held that the freedom to choose your provider is a right.

In 2012, the Seventh Circuit confirmed that § 1983 authorizes Medicaid recipients to sue to enforce the right to freely choose among qualified health providers.

In Planned Parenthood, the court was confronted with an Indiana state law prohibiting state agencies from providing state or federal funds to any entity that performs abortions or maintains or operates a facility in which abortions are performed – regardless of whether there is any nexus between those funds and the abortion services. See Planned Parenthood, 699 F.3d at 967 (7th Cir. 2012). In other words, the law effectively prohibited entities that perform abortions from receiving any state or federal funds for any (non-abortion) purpose.

The Court found that the restrictions violated the Medicaid recipients’ right to freedom of choice of provider.

There are, as always, more than one way to skin a cat. You could also attack the Waiver’s waiver of the freedom to choose your health care provider by saying the NC is violating 42 CFR 431.55.

Notice the last sentence in subsection (d) in the picture above. In our Waiver, NC promises to abide by 42 CFR 431.55(f), which states:

(f) Restriction of freedom of choice—
(1) Waiver of appropriate requirements of section 1902 of the Act may be authorized for States to restrict beneficiaries to obtaining services from (or through) qualified providers or practitioners that meet, accept, and comply with the State reimbursement, quality and utilization standards specified in the State’s waiver request.
(2) An agency may qualify for a waiver under this paragraph (f) only if its applicable State standards are consistent with access, quality and efficient and economic provision of covered care and services and the restrictions it imposes—
(i) Do not apply to beneficiaries residing at a long-term care facility when a restriction is imposed unless the State arranges for reasonable and adequate beneficiary transfer.
(ii) Do not discriminate among classes of providers on grounds unrelated to their demonstrated effectiveness and efficiency in providing those services; and
(iii) Do not apply in emergency circumstances.
(3) Demonstrated effectiveness and efficiency refers to reducing costs or slowing the rate of cost increase and maximizing outputs or outcomes per unit of cost.
(4) The agency must make payments to providers furnishing services under a freedom of choice waiver under this paragraph (f) in accordance with the timely claims payment standards specified in § 447.45 of this chapter for health care practitioners participating in the Medicaid program.

Basically, to argue a violation of 42 CFR 431.55, you would have to demonstrate that NC violated or is violating the above regulation by not providing services “consistent with access, quality and efficient and economic provision of covered care and services.”

So, while it is true that NC has requested and received permission from the Center of Medicare and Medicaid Services (CMS) to restrict access to providers, that fact may not be constitutional.

Someone just needs to challenge the Waiver’s waiver.

Broken Promises and the NC Waiver: You Do NOT Get Your Choice of Provider!!

“One can talk good and shower down roses, but it’s the receiver that
has to walk through the thorns, and all its false expectations.” –Anthony Liccione

In the 1968 Presidential campaign, Richard Nixon stated that “new leadership will end the war” in Vietnam. Also, in a 1968 interview, Nixon said he had “no magic formula” or “gimmick” for ending the Vietnam War. Then, in his memoirs, Nixon stated he never claimed to have such a plan. This is called a broken election promise.

Sadly, Richard Nixon’s broken election promise was not the first, nor would it be the last. We have become used to politicians making election promises and breaking those same promises which got them elected once they are in office.

“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

“Read my lips: no new taxes.”

Over the last few years, I have written ad nausem about accountability and proper supervision when it comes to the Managed Care Organizations (MCOs) in North Carolina. The other day, I was reviewing some pertinent federal regulations and came across this:

§ 438.52 Choice of MCOs, PIHPs, PAHPs, and PCCMs.

• General rule. Except as specified in paragraphs (b) and (c) of this section, a State that requires Medicaid beneficiaries to enroll in an MCO, PIHP, PAHP, or PCCM must give those beneficiaries a choice of at least two entities.

Obviously, North Carolina is not adhering to the above-referenced requirement.

Pull up the Waiver. In order to offer Medicaid enrollees only one MCO or other such entity, North Carolina would have had to request a waiver of 42 CFR § 438.52.If you rely on Medicaid for behavioral health care and live in Wake County, you have no choice but to rely on the provider network of only entity, Alliance Behavioral Health (Alliance), to receive services. For example, you do not get to choose between Alliance’s provider network and Eastpointe Behavioral Healthcare’s (Eastpointe) provider network. Staying with the same theoretical hypothesis, if your provider was not anointed with the gift of being in Alliance’s network, then you do not get to stay with your provider.

“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

Similar to President Barack Obama’s contention quoted above, we made similar promises to the Center for Medicare and Medicaid Services (CMS). Our promises are found within our Waivers. We have two Waivers, one for the developmentally disabled population and one for the mentally ill/substance abuse population. Each Waiver waives certain federal exceptions. However, in lieu of the federal requirements, we make certain promises to CMS. In order to waive 42 CFR § 438.52, we made certain promises to CMS in order to circumvent the necessary provisions of 42 CFR § 438.52.

The State sought a waiver of section 1902(a)(4) of the Act:

“The State seeks a waiver of section 1902(a)(4) of the Act, which requires States to offer a choice of more than one PIHP or PAHP per 42 CFR 438.52. Please describe how the State will ensure this lack of choice of PIHP or PAHP is not detrimental to beneficiaries’ ability to access services.”

Here are our promises:

“Under these circumstances, the State does not believe that making only one plan available in each geographic area of the State will negatively impact recipients’ access to care.”

“The LMEs have decades of experience locating and developing services for consumers with MH/IDD/SAS needs, and over the years, have built strong and collaborative working relationships with the providers of these services.”

“These providers support this initiative and consumers have at least as much choice in individual providers as they had in the non-managed care environment.

“Enrollees will have free choice of providers within the PIHP serving their respective geographic area and may change providers as often as desired. If an individual joins the PIHP and is already established with a provider who is not a member of the network, the PIHP will make every effort to arrange for the consumer to continue with the same provider if the consumer so desires.

“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

My two personal favorites among the State’s promises to CMS are: (1) “consumers have at least as much choice in individual providers as they had in the non-managed care environment;” and (2) the PIHP will make every effort to arrange for the consumer to continue with the same provider if the consumer so desires.”

These promises, in reality, are utter horsefeathers.

Over and over my provider clients come to me because one of the MCOs has terminated their Medicaid contract, usually for absolutely no valid reason. Over and over my provider clients tell me that their consumers are devastated by the news that they may lose their provider. I have had consumers contact me to beg me to help the provider. I have had consumers appear in court stating how much they want that particular provider. I have had provider clients cry in my office because their consumers are so upset and regressing because of the news that they may have to find another provider.

Yet, we have promised CMS that consumers have just as much choice in providers than when there was no managed care.

In the words of Dorothy from the Wizard of OZ, “You ought to be ashamed of yourself. Frightening him like that when he came to you for help.”

Similarly, our Medicaid recipients go to their providers for help. They create relationships…trust…bonds. And the MCOs are terminating these very providers, most for invalid and erroneous reasons, and, certainly, without the consideration of our promise to CMS.

But, remember, we are told the PIHPs will make every effort to keep the consumer with the chosen provider…

It would be interesting to do a public records request as to how many providers have been terminated by the MCOs in the last 2 years. Because, even if only 1 provider were terminated in the past 2 years and its consumers still wanted to go to that particular provider, then our State has broken its promise.

Apparently, due to my outspoken positions, DHHS will no longer honor my public records requests, which I think is absolutely preposterous. I am, still, a paying taxpayer last time I checked, which is every pay-day when I only get 60% of my wages. If any of you would submit this public records request, please forward it to me. I would be grateful for the information.

MCOs Terminating Providers and Restricting the Freedom of Choice of Providers for Medicaid Recipients: Going To Far?

Who remembers Dennis Kozlowski?  He is the former CEO of Tyco International, and his net worth is estimated at $600 million.  However, his residence? A mansion? On his own island?

Nope.  He is currently serving 8.33 to 25 years at the Mid-State Correctional Facility in Marcy, New York.

In 2005 he was convicted of crimes related to $81 million in unauthorized bonuses and the payment by Tyco of a $20 million investment banking fee to Frank Walsh, a former Tyco director.  See Wikipedia.

So here you have this “rich-as-crap,” millionaire…going about his business, no doubt believing that he is smarter than anyone else and that he will never get caught.  Then all Hades breaks lose and he goes from Armani $10,000 suits to an orange, cotton jumpsuit.  Talk about riches to rags!

Now, I am by no means comparing Kozlowski’s criminal actions to NC managed care organizations (MCO).  By no means.  I am merely demonstrating that it is easy to continue doing the wrong thing…UNTIL you get caught.

Here’s a less dramatic example:

My eight-year-old has a hard time with food.  She eats slowly and we constantly have to tell her to eat.  (We think she has sinus problems and can’t taste the food…which we are looking into).  Anyway, last week when we cleaned her room, I found a stack of bags of carrots.  Like 10 bags of carrots.  I had been putting bags of carrots in her lunch and each day, she was hiding the carrots under the bed.  She didn’t want me to know that she wasn’t eating her carrots.  Again, she thought she wouldn’t get caught, so she kept doing the wrong thing….UNTIL she got caught.

Here in North Carolina, we have now set up this MCO system for Medicaid recipients needing behavioral health care services.

These MCOs have only gone live this past year.  These are new entities.  Our 1915 b/c Waiver (Waiver), which gives the MCOs the authority to do certain things is new. 

But, what if, these new entities are NOT following the Waiver?

Won’t they just keep not following the Waiver until they get caught?

That’s what Kozlowski did.  That’s what my 8-year-old did.

If you know Medicaid, you understand that federal law requires a “single state entity” to manage Medicaid.  In North Carolina the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) is our “single state entity.” 

The Center for Medicare and Medicaid Services (CMS) is the federal agency that has to “ok” our State Plan and all Waivers.  The State Plan outlines the organization and function of DMA.  CMS has to authorize our State Plan, including each and every amendment to our State Plan.  Our State Plan is basically “The Law of Medicaid in NC.”  NC is required to follow the State Plan or risk losing federal funding for our Medicaid system.

Our Waivers, on the other hand, are our allowable exceptions to “The Law of Medicaid in NC.”  Think of the State Plan as the general rule and the Waivers as the exceptions.  Generally, all cars must stop at a red light.  The exceptions are police cars, ambulances and fire trucks with the sirens blaring and lights flashing.

Our State Plan states, generally, DHHS, DMA is the single state entity for Medicaid and must make all administrative and managerial decisions for the program.  The 1915 (b)/(c) Waiver says…well, the exception is that the local management entities (LMEs) or managed care organizations (MCOs) have SOME responsibilities. 

BTW: People in NC keep calling the MCOs:”LME/MCOs.”  In fact, I was at a meeting during which a a representative from DHHS called the MCOs “LME/MCOs.”  The woman asking the question with the microphone asked, “Why don’t we just drop the “LME” portion and call them “MCOs,” not “LME/MCOs?”  To which the gentleman answered, “Old habits are hard to break.”

Our 1915 b/c Waiver “waives” Section 1902(a)(4) of the Social Security Act, the freedom of choice of providers.  Generally, a Medicaid recipient has the freedom to choose a provider from whom he or she wants to receive services.  Our Waiver says, “Ok, Medicaid recipient, you can choose from any provider within your MCO’s catchment area.”  Meaning, if Sally the Medicaid recipient lives in Wake county, Sally could choose any provider within Alliance’s catchment area, Cumberland, Durham, Wake and Johnson counties.

But the Waiver does not stop there.

In order for the federal government to allow NC to place this restriction on Medicaid recipients, because it is a restriction, NC had to make some promises.

We promised in our Waiver to the feds:

“These providers support this initiative and consumers have at least as much choice in individual providers as they had in the non-managed care environment.”

Hmmmmmm.

I do not have exact numbers, but I would wager that Alliance has terminated, refused to contract with, or denied a contract to at least 100 providers.  Considering in the recent RFP Alliance chose so few providers to serve its catchment area, I can only imagine how many providers no longer can provider services within Alliance’s catchment area.  100? 200?  See my blog: “An Ominous Cloud Looms Over NC’s Mental Health System! And Radix Malorum Est Cupiditas!”

Is terminating providers giving the consumers as much choice as they had in the non-managed care environment?

I think not.

 But who is going to stop them from continuing down this path of eliminating choice of providers within the catchment areas?

Obviously, DHHS has proved itself to be incapable of such a feat.

So the MCOs are going about their businesses…thinking no one will ever catch them…that they are free to do whatever they want…just like Kozlowski (without the criminal behavior…we hope)…just like my daughter hiding the carrots….

It’s human nature.

We just keep doing the same things over and over…UNTIL someone tells us we have to change. 

Who will tell the MCOs to follow the Waiver?  Will it take a judge?