Transcript Medicaid and the DRA of 2005

Medicaid and the
Deficit Reduction Act
(DRA) of 2005
Dan Walter
Sr. Health Policy Analyst
AAP Division of State
Government Affairs
AAP National Conference and Exhibition
Resident Section Annual Assembly
October 7, 2006
Medicaid and Children
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Medicaid, a federal-state partnership, is the largest
children’s health insurance program in the country
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Medicaid insures 1 in 3 children in the US today – 29.7
million children
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Children make up over 50% of all Medicaid enrollees, but
account for less than 25% of total Medicaid spending
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The Early and Periodic Screening, Diagnosis and Treatment
(EPSDT) program specifically protects children in Medicaid
The Deficit Reduction Act (DRA)
of 2005
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Signed into law February 8, 2006 (P.L. 109-362)
Different versions agreed to by House and
Senate
AAP Analysis

Sent to AAP chapters
in March 2006
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Disseminated to State
Medical Societies via
AMA ARC in April
2006
Medicaid Provisions of
DRA Affecting Children
1. New options for state benefit packages
2. New options for raising cost sharing and
premiums
3. New requirements for citizenship
documentation
4. Reductions in coverage of case management
services
5. New options for “Health Opportunity Account”
demonstrations
1. New Options for
State Benefit Changes

States allowed to substitute “benchmark”
benefit packages for current benefits
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In benchmark coverage, mental health,
prescription drug, vision and hearing services
may be limited

EPSDT considered “wrap around” to
benchmark coverage for children
Implications for EPSDT
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EPSDT is still intact for children to age 19
CMS has clarified it will not approve State Plan
Amendments that do not provide EPSDT
through age 19
Chairs of Senate Finance and House Energy and
Commerce have clarified Congressional intent to
maintain EPSDT
Legal experts concur that EPSDT must be covered
Questionable from approved State Plan
Amendments
2. New Options for
Raising Cost Sharing
and Premiums

New options for states to raise
medical care, prescription drug,
and non-emergency ED service
cost sharing

Premiums allowed for children
over 150% FPL

Cost sharing for some
prescription drugs and medical
services may be as high as 20%
of the cost
3. New Requirements
for Citizenship Documentation

EVERY Medicaid applicant and reenrollee required to provide evidence of
identity and citizenship, starting July 1,
2006

CMS guidance and regulations – call for
tiers of documentation and originals

Regulations now require signed
declaration under penalty of perjury

Up to 3 million children may lose
coverage
4. Reductions in Coverage
of Case Management Services

Case management services especially important to
children and children with special health care needs
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DRA indicates federal government will no longer pay
for Medicaid funding of case management services
if another public program may pay for them

Other programs have policies against paying for
Medicaid enrollees’ case management services,
leaving coverage gaps
5. New Options for “Health
Opportunity Account” (HOA)
Demonstrations

HOAs are essentially Health Savings Accounts
(HSAs) in Medicaid

10 states allowed over first 5 years

Under HOAs, states will offer a contribution to
HOA + Medicaid coverage after deductible is met

Deductible may be 110% of HOA fund amount
resulting in possible gaps in coverage
CMS Approves Three
State Plan Amendments (SPAs)
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WV and KY received approval on May 3, 2006
ID received approval on May 19, 2006
All three (3) states had prior plans to seek Section
1115 waivers
All different proposals – questions surround EPSDT
SPAs approved very quickly
West Virginia SPA
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“Member agreement” requirements
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If met, “enhanced” benefits provided
If not met, “basic” benefits provided
Physicians must monitor activities and report
Liability concerns
Those who don’t sign will receive “basic” package
“Basic” benefits for children don’t include skilled nursing,
orthotics/prosthetics, nutrition education, diabetes care,
chemical dependency or mental health services, tobacco
cessation
EPSDT statements questionable
West Virginia SPA
“Member Agreement”
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I will do my best to stay healthy. I will go to health
improvement programs as directed by my medical home.
I will go to my medical home when I am sick.
I will take my children to their medical home for checkups.
I will take the medicines my health care provider
prescribes for me.
I will show up on time when I have my appointments.
I will bring my children to their appointments on time.
I will use the hospital emergency room only for
emergencies.
Kentucky SPA

Different benefit
packages for children
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$225 cap on cost
sharing for medical
services and additional
$225 cap on pharmacy
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Benefits limits are
considered “soft limits”
Idaho SPA
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Different benefit
packages for children
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Moves some children
from Medicaid to SCHIP
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Increases SCHIP cost
sharing
CMS Guidance
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CMS has issued 10 guidance
letters, 2 “roadmap” documents,
1 fact sheet, 1 plan document,
and 4 State Plan Amendment
forms since DRA passage
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Regulations on citizenship
documentation released July 11,
2006
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More to come…
AAP State Activity
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Encouraging chapters to monitor state SPA activity
Working with AAP chapters to ensure SPA proposals
protect children
Disseminating new information on DRA
Working with partners in Washington to ensure
appropriate interpretation of DRA
Advocating that CMS not approve any SPA that would
cut children’s services
AAP State Strategy
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Need for stakeholder involvement in SPA
development – including legislature
States must ensure that changes don’t harm
children
Legislative oversight as strategy
–
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Connecticut model
Involvement of Medicaid Assistance Advisory
Committees (MAACs)
AAP Chapter Advocacy
Pediatricians
Leadership
Residents
Lobbyist
Legislative Cmte.
ED
Advocacy Groups
AAP Chapter
Strategy
Legislature/
State
For More Information
Dan Walter
AAP Division of State Government Affairs
800-433-9016 x. 7799
[email protected]