States Seek a Middle Ground on Medicaid

Some Governors Aim to Curtail Program’s Expansion, Steer More People Toward Federally Subsidized Private Insurance

 

By LOUISE RADNOFSKY and CHRISTOPHER WEAVER

A handful of states are considering only partially expanding their Medicaid programs under the federal health-care overhaul—a new twist on how states are interpreting the Supreme Court’s ruling on the law.

Indiana, New Mexico and Wisconsin are among the states asking the federal government to let them omit from the Medicaid expansion residents whose incomes put them just above the poverty level. The states hope to take advantage of provisions in the Affordable Care Act that offer a federal subsidy to help these residents buy private insurance, starting in 2014.

The strategy is the latest fallout fromthe Supreme Court’s June decision, which let states opt out of expanding Medicaid without losing federal funding for the program. A half-dozen governors have already said they would opt out, worried their states will be saddled with extra costs.

State Medicaid-eligibility levels currently vary. Under the law, all states were to open their Medicaid programs to Americans who earned up to 133% of the federal poverty level, which is currently set at $11,170 for a single person. The law also made those with incomes 100% to 133% of the poverty level eligible to buy federally subsidized, private insurance through exchanges.

Some states, however, are asking the Centers for Medicare and Medicaid Services if they can include people in Medicaid up to 100% of the poverty level, but keep people with incomes between 100% and 133% of the poverty level out of the program and instead funnel those people toward the exchanges.

Their main reason: States wouldn’t haveto contribute to the costs of the subsidies to purchase private insurance.

“It’s more expensive for the federal government, but it’s cheaper for the state,” said Seema Verma, a top adviser to Indiana Republican Gov. Mitch Daniels. “Obviously the costs are going to play into it, not just for Indiana, but for every state.”

Allowing partial Medicaid expansions could have broad implications for how the law covers uninsured Americans and add to the cost of the overhaul. The nonpartisan Congressional Budget Office has estimated the federal government would pay about $9,000 of subsidies for each person enrolled in the exchanges, compared with $6,000 for those enrolled in Medicaid.

Federal officials are under pressure tokeep states from opting out of the Medicaid expansion. Hospitals are warning it would leave them with a high number of nonpaying customers, at the same time they are having to absorb federal payment cuts, as a result of the law. Around half of the 30 million Americans expected to gain coverage from the health-care law as it was passed were to gain it through Medicaid.

A report for Indiana’s Family and Social Services Administration by actuaries Milliman, to be released Tuesday, found the state would pay nearly $1.1 billion between 2014 and 2020 to enroll alladults with incomes up to the federal poverty level in Medicaid, but that the full expansion would cost another $326.5 million.

The Department of Health and Human Services has yet to say whether it would let states deviate from the Medicaid expansion as it stated in the law. In other standoffs with the states over the health-care law, the department has tried a conciliatory approach, including offering them the option of jointly running new insurance exchanges.

Erin Shields Britt, a spokeswoman for the department, said it was “evaluating” the question. She pointed out the law covers states’ full Medicaid expansion costs for the first three years and at least 90% in subsequent years. That offers “significant new resources” to states that the administration was “hopeful” they would accept, she said.

Edmund Haislmaier, a fellow at HeritageFoundation, a conservative think tank, criticized Republican-led states forseeking to shift health costs onto taxpayers. “You have the tragedy-of-the-commons phenomenon, where everyone does something in their own interest, but in the aggregate, it’s harmful,” he said, adding that he is advising states not to expand Medicaid at all.

Wisconsin officials have run calculations to figure out the costs of a partial expansion, among other scenarios, saidDennis Smith, health secretary to Republican Gov. Scott Walker. He said thescenario could be attractive to health providers, who want to see the number of uninsured patients reduced but would prefer to be reimbursed by private insurers rather than the government, since private insurers typically pay more.

Officials in New Mexico, led by Republican Gov. Susana Martinez, are also considering a partial expansion, along with other options, said a spokesman for the state’s human services department, Matt Kennicott.

Write to Louise Radnofsky at louise.radnofsky@wsj.com and Christopher Weaver at christopher.weaver@wsj.com

A version of this article appeared September 18, 2012, on page A6 in the U.S. edition of The Wall Street Journal, with the headline: States Seek a Middle Ground on Medicaid.

 

http://online.wsj.com/article/SB10000872396390443720204578002583908495660.html

Doctors billing Medicare patients at higher rates, report finds

By NBC News staff

Thousands of doctors and other medical professionals have added $11 billion or more to fees for elderly Medicare patients over the last decade by choosing to use more expensive billing codes and ignoring cheaper ones, a new study says.

The report “Cracking the Codes” from the non-profit investigative journalism organization Center on Public Integrity analyzed Medicare claims for a year and found thousands of providers “upcoding,” which is “the practice of charging for more extensive and costly services than delivered, according to Medicare experts, analysis of the data and a review of government audits.”

Controlling rising Medicare costs has been a hot topic in the presidential campaign. The center’s report, which was released Saturday, suggested that reforms should start with a close look at the way hospitals and doctors submit bills for patient care. For example, the study found that 7,500 doctors charged the two most expensive paying codes for three out of four visits in 2008, up sharply from the number who did so at the beginning of the decade.  The CPIs’ report said medical groups argue that treating seniors has grown more complex and time-consuming because of new technology and because seniors are living longer.  But the report found little evidence that Medicare patients as a whole are older or sicker than in past years, or that the amount of time doctors spent treating them on average was rising.  Health care providers also said the rise in fees may be a reaction to years of under-charging, and that the higher costs reflect more accurate billing. The fees are based on a system of billing codes that is structured to make higher payments for treatments that take more time and effort.  Medicare regulators worry that the coding levels may be accelerating in part because of increased use of electronic health records, which make it easy to create detailed patient files with just a few mouse clicks, according to the report.  “This is an urgent problem,” Dr. Mark McClellan, who directs the Engelberg Center for Health Care Reform at the Brookings Institution in Washington, told the CPI. McClellan, a former director of the Centers for Medicare and Medicaid Services, or CMS, said the agency must send a message that it “won’t stand by and do nothing … that they are paying attention to this.”

New Medical Care Networks Show Savings

By ABBY GOODNOUGH
Published: September 11, 2012
The New York Times
  
 

A new model for delivering medical care, one promoted by the federal health care law, holds promise for slowing the cost of treating the sickest, most expensive patients, according to a new study.

 

The sweeping law, enacted in 2010 and upheld by the Supreme Court this summer, encourages the creation of “accountable care organizations” — networks of hospitals, doctors groups and other health care providers that collaborate to keep a defined group of patients healthier. The groups share in the savings if they meet quality and cost targets.

The study, which is being published Wednesday in The Journal of the American Medical Association, found that a predecessor to accountable care organizations achieved particular savings in caring for patients eligible for both Medicare and Medicaid.

Many of those patients have multiple, severe health conditions and are especially expensive: The nation’s nine million “dual eligibles,” as they are known, make up 15 percent of the Medicaid population but account for 39 percent of the program’s spending.

In the predecessor program, a Medicare experiment that ran from 2005 to 2010, 10 doctors groups from around the country received bonus payments if they met quality targets and achieved lower cost growth compared with Medicare spending on other patients in their region.

The study, conducted by researchers from the Dartmouth Institute for Health Policy and Clinical Practice, found that the growth in spending per “dual eligible” patient slowed by $532 a year, or 5 percent, after doctors groups joined the demonstration program.

Over all, spending on dual eligibles in the program grew at only 60 percent of the rate of the control group.

“The fact that they saved any money at all is a pretty significant finding,” said Carrie H. Colla, the study’s lead author. “It shows promise in that they did significantly improve quality while modestly improving spending.”

The study found that for dual eligibles, the savings came largely from reducing hospital stays.

Savings for the overall patient population in the experiment was more modest: Spending per patient slowed by $114 a year after the 10 doctors groups joined the demonstration program.

The groups varied significantly in how much they spent per patient and how much they slowed the growth of spending over time. The doctors group that spent the most before joining the program — the University of Michigan Faculty Group Practice, based in Ann Arbor — also saved the most, an average of $2,499 per dual eligible patient annually.

But the group that spent the least on such patients before entering the program — Marshfield Clinic, in Wisconsin — also achieved notable savings, the study found, slowing the growth of spending per dual eligible patient by an average of $987 per year.

The findings come as accountable care organizations are forming around the country. According to the Department of Health and Human Services, morethan 150 such groups now serve about 2.4 million Medicare patients.

In the predecessor program, the Medicare Physician Group Practice Demonstration, participating doctor groups were eligible for up to 80 percent of any savings they generated if they could also show improvement on 32 quality measures.

http://www.nytimes.com/2012/09/12/health/policy/medical-care-networks-show-savings-study-finds.html?_r=1

(A version of this article appeared in print onSeptember 12, 2012, on page A22 of the New York edition with the headline: New Medical Care Networks Show Savings.)