Policy Class 5

how does medicaid pay providers?

- in most states, hospitals are paid on a per admission basis (DRGs) while physicians and other services are paid on a ffs schedule - medicaid pays providers less than medicare does for the same services.

state is responsible for:

-Administration of the program -Decisions on optional eligibility and additional services to be covered

federal gov is responsible for establishing:

-Eligibility (who's covered) -Services (what's covered) -Payment methods (how are services paid for) -Largely, but not exclusively, an insurance program (but also provides some direct financing to hospitals)

dif bt. medicaid and medicare: enrollment

-medicaid: Most of the time you have to proactively enroll -medicare:Automatic when you apply for social security

dif bt. medicaid and medicare: funding source

-medicaid: federal-state combined -medicare: federally funded

dif bt. medicaid and medicare: program administration

-medicaid: mostly driven by state -medicare: federally administered

dif bt. medicaid and medicare: means-tested

-medicaid: yes -medicare: no

dif bt. medicaid and medicare: entitlement

-medicaid: yes -medicare: yes

dif bt. medicaid and medicare: whos covered

-medicaid:Low-income individuals and families -medicare:65+, disabled, those with ESRD

how much of medicaid does federal government finance?

50-80% of costs. mean rate is 57%

medicaid cost control: federal policy option: Per capita cap

Based on the previous state spending per capita, CMS would set a rate for each enrollee, which will increase annually based on a standard growth index.

SQ2 Identify two key stakeholder groups in Medicaid and discuss their interests and influence in achieving their goals.

CMS (Center for Medicare and Medicaid Services) - Federal agency within US DHHS; administers Medicaid, Medicare, and CHIP. Their interests include data analysis, research reports (effectiveness of federal health programs), and elimination of fraud/abuse within the healthcare system. State Legislature - Legislators are unique in their capacity to influence program design and budget allocation through the legislative cycle. State legislatures often require savings guarantees from care management programs. Demonstrated results, such as improved health outcomes, lower program costs, or higher beneficiary satisfaction, are required for states to continue funding allocations for social service health care.

SQ3 Describe some characteristics of Medicaid recipients. How do these characteristics affect Medicaid spending?

Characteristics of Medicaid Recipients : Low income children Low income adults (some), with incomes less than federal poverty line- Low income "able-bodied" adults, under 65, without children not eligible, unless the state has a waiver from the federal government to cover them Low income seniors: Medicare beneficiaries that are in long-term care facilities and have no other means to cover those costs (which are not covered by Medicare, aged dual-eligibles) People with some forms of disabilities and Medicare-covered disabled (dual-eligibles) Affect on Medicaid Spending: 42% of Medicaid budget is spent on Disabled individuals, but Medicaid Beneficiaries are mostly children 48%.

SQ6 What is the purpose of DSH payments paid by Medicare and Medicaid?

DSH payments finance safety-net hospitals (hospitals that serve a large number of medicaid or low-income uninsured patients) The hospitals that receive these payments care for "a disproportionate share of non-compensated or poorly compensated care" DSH payments have been a source of financial stability for many of these hospitals, especially when caring for people in the emergency department with non-emergency conditions. States determine which hospitals qualify for DSH payments and how these are allotted. i. Must have 2 OBGYNs who will see MCD patients (slide 47) DSH payments are a way to keep supply available to meet demand.

entitlement

Entitlement means so long as someone is eligible, the person is entitled to the government service/benefits. You are not taking benefits away from someone else if you apply.

medicaid cost control: federal policy option: Block grants

Feds will no longer just "match" spending per enrollee; instead, states would be given a fixed amount of lump sum money annually, pegged to a standard growth index

Medicaid

Hospital and physician coverage for low income patients

medicare part a

Hospital coverage for elderly

SQ5 How do Medicaid reimbursement rates affect access to care for beneficiaries? What measures of access does Decker investigate, and what evidence does she present regarding variation across states?

Increased reimbursement rates increase access to care, because physicians are more likely to accept Medicaid patients if the reimbursement rate is higher. When it comes to primary care office visits, "closing the gap between private insurance and Medicaid — a $45 increase in Medicaid payments for the median state — would close over two-thirds of disparities in access for adults and would eliminate such disparities among children." Nearly 16 percent of children with a significant health condition or development delay had a doctor's office or clinic indicate that the child's health insurance was not accepted in states with less than 60 percent of physicians accepting new Medicaid patients, compared to less than 4 percent in states with at least 75 percent of physicians accepting new Medicaid patients. Adjusted estimates and estimates for other measures of access to care were similar.

how is medicaid financed?

It is financed by general tax revenue at the state and federal levels.

what was medicaid like prior to ACA?

Medicaid was not universally available to low-income individuals prior to ACA, and even now it's not universally available depending on which state you live in. (didnt cover adults). before the ACA healthy adults with no children werent eligible

Medicaid: A Primer 2013

Medicaid: Health insurance for people with low income, covering more than 70 million Americans Provides significant financing for hospitals, community health centres, physicians, and nursing homes, and jobs in the health care sector States design and administer their own Medicaid programs with flexibility to determine covered populations, covered services, health care delivery models, methods for paying physicians and hospitals, and many other aspects States can get waivers to implement approaches that diverge from federal Medicaid rules Children make up about half of all Medicaid enrollees Before ACA, Medicaid excluded adults without dependent children from the program Unlike Medicare, Medicaid also covers long-term care, including both nursing home care and many home and community-based long-term services and supports Medicaid eligibility during childhood is also associated with long-term improvements, including reduced teen mortality, improved long-run educational attainment, reduced disability, and lower rates of hospitalization and emergency department visits later in life Medicaid is the third largest domestic program in the federal budget, after social security and Medicare Second largest in state budgets, after elementary and secondary education Medicaid per-enrollee costs are low, but total Medicaid costs are high because of the large number of people in the program and the high cost of minority of beneficiaries with high needs I.e. Seniors & people with disabilities make up 1 in 4 beneficiaries but account for almost 2/3rds of Medicaid spending Other factors that affect Medicaid spending are the economy, health care prices, including rising costs for prescription drugs and new technology, and state policy actions

Baker and Hunt describe Michigan's effort to implement work requirements and other "personal responsibility" requirements for beneficiaries. How was Michigan able to do this? ○Federal government required that they adopt this strategy. ○States have the ability to change eligibility requirements if their Governors decide to. ○Michigan received a waiver from the federal government to make these changes.

Michigan received a waiver from the federal government to make these changes.

medicare part d

Part D is prescription drugs.

Decker S, "In 2011 Nearly One-Third of Physicians Said They Would Not Accept New Medicaid Patients but Rising Fees May Help." Health Affairs. (August, 2012). 1673-1679.

Physician acceptance of Medicaid patients will increase as Medicaid payment rates increase, in turn increasing the # of times a pt sees a physician and decrease reliance on hospitals for outpatient care

Medicare part B

Physician services coverage for elderly. Part B requires premiums

medicare part c

Physicians may also be paid through Medicare Advantage (part C, which is A+B combined) which is an HMO. requires lower premiums than part b.

Price C, Eibner C. "For States That Opt out of Medicaid Expansion: 3.6 Million Fewer Insured and $8.4 Billion Less in Federal Payments." Health Affairs. (June 2013): 1030-1036.

Price and Eibner also examine the consequences for states that didn't expand Medicaid, and look at two proposals for such states to lure them into expanding access. They consider the implications of the two proposals against three different scenarios...compared to what would have happened without an expansion of Medicaid under the ACA, compared to what would have happened if all states had been compelled to expand Medicaid, and for the situation where 14 states don't expand Medicaid but 36 do. Look closely at this paper as well, and be sure you understand the access and cost implications of the proposals. If the 14 states that have said they will opt out of Medicaid expansion do so, 3.6 million fewer people will have health insurance than would otherwise be the case. This would save the federal government $$ compared to the full expansion of Medicaid, HOWEVER, the states that opted out would see a net increase in spending in the short term because they would spend more on uncompensated care The expansion of Medicaid has the potential to provide substantial benefits to adults with incomes below 138% of the poverty This is a population that is disproportionately uninsured and therefore has limited access to health care services Though expanding Medicaid eligibility would be costly, the majority of the cost would be borne by the federal government The cost of expanding Medicaid would generally be lower than the cost of uncompensated care borne by states and localities after the implementation of the ACA States that expand will have net savings on funds spend on the uninsured for the first several years after the expansion If federal policymakers allowed states to expand Medicaid eligibility for people with incomes of up to 100 percent of poverty, instead of 138, states would be able to shift costs to the federal government, but there would be only a minimal effect on total health insurance coverage

Baker AM, Hunt LM. "Counterproductive Consequences of a Conservative Ideology: Medicaid Expansion and Personal Responsibility Requirements." American Journal of Public Health. (July 2016). 107(7): 1181-1187.

Recent Medicaid expansions enacted waivers designed to promote conservative political values of personal responsibility and accountability - the Health Michigan Plan is an example of this with cost sharing and incentives for healthy behaviour "healthy behavior incentives" that are used in the state of Michigan, where Medicaid beneficiaries must see a physician who reviews their lifestyles with them, then creates a plan to improve that lifestyle - cutting down on drinking, eating healthier, losing weight, getting into drug treatment etc. Beneficiaries get a reducing in premiums for achieving such goals. Some policymakers would replace that carrot - the incentive to reduce premium payments - with a stick, so that if beneificiaries didn't achieve their goals their premiums would go up, or they would not be able to continue to receive benefits. Several other states have asked for approval to require Medicaid beneficiaries to work in exchange for benefits - although what counts as "work" could be pretty broad...taking care of an elderly relative, getting substance abuse treatment, enrolling in school could count.

CHIP

The Children's Health Insurance Program is a program administered by the United States Department of Health and Human Services that provides matching funds to states for health insurance to families with children.

Holahan J and Buettgens M. Block Grants and Per Capita Caps: The Problem of Funding Disparities among States. Urban Institute working paper. September 2016.

There are no politically easy ways to implement block grant or per capita proposals in Medicaid given the substantial variation in federal spending across states look at two proposals that would alter the way the federal government distributes its share of Medicaid funds to the states. They examine block grants, described in this slide, and per capita caps. They note the idea that states would receive monies pegged to a standard growth index. But as you know from Professor Billings video, health care expenditures have been outpacing every price index - whether consumer price index or another measure. So pegging increases to any of those types of measures is going to mean less of the costs are covered. Go over this paper and make sure you understand the equity issues involved for each of these alternatives. Higher income states would get larger block grants and higher spending per enrollee caps because they spend more today and thus receive larger allocations from the federal government despite having lower federal matching rates Block grants and per capita caps attempt to reduce the level and the rate of increase of federal outlays on Medicaid. The policies would also reduce states' authority to make policy decisions over their own programs. These mechanisms would threaten current coverage levels and benefits that low-income people often need yet cannot afford

why does medicaid have high per-enrollee cost by design?

because it is a program that pays for health needs for those with most extensive needs: disabled, long-term care.

covid and medicaid budget

during covid more people applied for medicaid but we didnt spend much more cause everyone stayed home and didnt really go to offices.we dont know what the impact is going to be. when there's unemployment, its a big problem for medicaid

medicaid federal state relationship

federal gov establishes whos eligible, whats covered, and how its paid for. the state administers the program.

SQ4 What are some policy options at the federal level to limit Medicaid spending? What are the equity trade-offs for these? What are some policy options at the state level to limit spending? What are the equity trade-offs for these?

federal: Block Grants 1. Feds would no longer just "match" spending per enrollee as they do now; instead, states would be given a fixed amount annually a. Remember, the match rate is dependent on how wealthy the state is generally..thus it re-distributes monies across states Per capita Caps:1. Based on previous state spending per capita, Feds would set a rate for each enrollee, and increased annually based on a standard growth index.a. States vary substantially in what they spend on Medicaid per enrollee (even more by type of enrollee)... state: reducing prices through regulation

medicaid evolution

first it provided aid to families with dependent children. then is expanded and included pregnant women and children under 6 in families with income up to 133% FPL. then CHIP created and covered children in families bt. 100% and 200% FPL and more coverage for children in households <100% FPL. then allows states to offer buy-in medicaid for beneficiaries with disabilities also states can now establish their own income standards.

are there premiums in medicaid

for people below 150% fpl, premium is not imposed but working disabled have to pay. for people at 150% fpl and up, premiums are allowed. Medicaid has premiums and co-payments. While these are very low - and are most often on a sliding scale - they still represent a burden to populations with little financial resources, and thus some people may decide they can't afford Medicaid.

who are very powerful stakeholders?

hospitals, physician groups, but also nationally organized constituents, including American Association of Retired Persons (AARP), who vote and have some political power.

means-testing

is financial testing. demonstrate how much money you make. demonstrate you dont make much so you can get medicaid.

who's enrolled vs. where we spend most money in medicaid

lots of children and parents are enrolled but we spend most expenditures on disabled and aged enrollees.

do medicaid and medicare have ffs?

medicaid, like medicare has fee for service.

SQ1 Describe the main ways in which Medicaid's structure differs from Medicare, and the implications of those structural differences for recipients.

medicare is funded by federal gov while medicaid is funded by both federal and state gov. medicare is paid for by trust fund and payroll taxes. medicaid is paid for by federal, state, local taxes. medicare is same program nationwide. medicaid differs state to state. medicare is for 65+ medicaid is for low income. medicare they pay deductibles medicaid pay very little or nothing. medicaid covers more stuff than medicare like dental and long term care.

does medicaid have higher per capita spending than medicare?

no. medicare is higher

did medicaid expansion lead to increased acceptance of medicaid among providers?

no. nor were providers in expansion states more likely to accept Medicaid than those in non-expansion states.

SQ7 How would moving Medicaid recipients into managed care plans reduce costs? What problems might result? What are some advantages of such a strategy?

reduce cost cause they take capitation payment, not fee for service. problems that may result is inefficent access to care cause they need to see a specific doctor in managed care plans. advantages is that it would decrease overutilization of resources since doctors are paid a capitated rate.

why is medicaid more politically divisive than medicare?

republicans dont like it. . Each year there are numerous proposals at state levels to restrict enrollment. Some political scientists note that the Medicaid population isn't particularly politically powerful. Still, while African Americans and Hispanics are disproportionately represented in the Medicaid population, over 40% of enrollees are white - the single largest group.

Decker suggests that higher reimbursement rates for physicians treating Medicaid patients would improve access to care. Is this a supply-side or a demand-side intervention?

supply

where does state revenue come from?

taxes

SQ8 How would you expect imposing work requirements for beneficiaries to receive Medicaid benefits would affect the costs and access to the program? Why? What arguments would states employ if they wanted to impose such requirements? What arguments would counter those?

this would decrease access to the program and decrease cost cause more people would get out of the program. this is because those unemployed would have a hard time getting a job and being trained for a position. states can argue that work requirements are necessary so that beneficiaries can be incentivized to try to gain financial independence and make it above the poverty level. this can be counterargued that the job market is terrible and getting a reasonable job especially if you have low education or a disability would be really difficult and this would just cause people to be disqualified from getting Medicaid cause they wouldn't work.

who is medicaid aimed at?

vulnerable populations. this can be vulnerability from social disadvantage or clinical disadvantage.

is variation in programs accross states meaninigful?

yes. unlike medicare.

The COVID epidemic has strained state Medicaid programs in which ways: •More people will apply for Medicaid because they are unemployed. •State tax revenue will be reduced because fewer people will be working and paying taxes. •Medicaid patients hospitalized for COVID-19 symptoms are more likely to require intensive treatment compared to those with private insurance. •All of the above.

•All of the above.

medicaid: who's covered?

•Low income children •Low income adults, with incomes less than federal poverty line. •Low income seniors: Medicare beneficiaries that are in long-term care facilities and have no other means to cover those costs (which are not covered by Medicare, aged dual-eligibles) •People with some forms of disabilities and Medicare-covered disabled (dual-eligibles) In total, Medicaid covers more than 1/5 of non-elderly Americans

safety net hospitals and DSH payments

●Safety net hospitals are those which serve a large number of Medicaid or low-income uninsured patients. ●These payments are called "DSH" payments, meaning these hospitals care for a disproportionate share of non-compensated or poorly compensated care. ●DSH payments have been a source of financial stability for many of these hospitals, especially when caring for people in the emergency department with non-emergency conditions. oMedicare pays DSH payments too. states manage DSH payments