New rules will make Medicaid more flexible and efficient, helping states provide better care and lower costs
The U.S. Department of Health and Human Services (HHS) today announced four initiatives to give states more flexibility to adopt innovative new practices and provide better, more coordinated care for people with Medicaid and Medicare while helping reduce costs for states and families. The initiatives support the Obama administration’s work to make Medicaid more flexible and efficient and to address long-term cost growth. Several of the announcements also help implement provisions of the Affordable Care Act. Today HHS announced:
* Fifteen states will receive federal funding to develop better ways to coordinate care for people with Medicare and Medicaid coverage, also known as dual eligibles, who often have complex and costly health care needs.
* All states will receive increased flexibility to provide home and community-based services for more people living with disabilities.
* All states are eligible to receive more money to develop simpler and more efficient information technology (IT) systems to modernize Medicaid enrollment.
* A proposal by the state of New Jersey for flexibility to expand health coverage for nearly 70,000 low-income residents has been approved.
“Medicaid programs provide health coverage for millions of low-income Americans who otherwise would lack access to health care,” said HHS Secretary Kathleen Sebelius. “With these new resources and flexibilities, states will have new options to make their Medicaid programs work better for the people they serve, while helping lower their costs.”
Coordinated Care for People with Medicare and Medicaid
Under a new initiative funded by the Affordable Care Act, 15 states will receive up to $1 million each to develop new ways to meet the often complex and costly medical needs of the approximately nine million Americans who are eligible for both the Medicare and Medicaid programs, known as “dual eligibles.” The goal of the program is to eliminate duplication of services for these patients, expand access to needed care and improve the lives of dual eligibles, while lowering costs. The new Federal Coordinated Health Care Office, or the Duels Office, at the Centers for Medicare & Medicaid Services (CMS), was created by the Affordable Care Act to improve care for dual eligibles and will work with the states to implement the top strategies to coordinate primary, acute, behavioral and long-term supports and services for dual eligibles, improving quality and lowering costs.
The 15 states that will receive these funds are California, Colorado, Connecticut, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Vermont, Washington and Wisconsin.
“Beneficiaries who are in both Medicare and Medicaid can face different benefit plans, different rules for how to get those benefits and potential conflicts in care plans among providers who do not coordinate with each other,” said Donald M. Berwick, M.D., administrator of CMS. “This can be disastrous for those beneficiaries who are most vulnerable and in need of help.”
Helping People with Disabilities Live in their Communities
CMS proposed new rules today giving states new flexibility for their programs to help people with disabilities choose to live in their communities rather than in institutions. The proposed rules reduce administrative barriers for states seeking to help multiple populations, which may include seniors and/or people with different types of disabilities. They will also allow individuals to participate in the design of their own array of services and supports, including such things as personal care and respite services for caregivers.
“These long awaited rules will help people living with disabilities realize the promise of the ADA to live in the least restrictive environments possible for them—like their own homes,” said Henry Claypool, director of the Office on Disability at HHS. “With these new tools as well as incentives included in the Affordable Care Act, states, working closely with advocacy groups, beneficiaries, and other stakeholders, can more easily develop effective plans to improve options for people with disabilities. We hope states will take advantage of this new flexibility.”
The proposed rule, CMS-2296-P, can be found at www.ofr.gov/inspection.aspx.
Developing and Upgrading Medicaid IT Enrollment Systems
New rules issued today will provide 90-percent of the cost for states to develop and upgrade their IT systems to help people enroll in Medicaid or the Children’s Health Insurance Program (CHIP) – and 75-percent of ongoing operational costs. This increase over the previous federal matching rate of 50-percent will help states prepare for the Medicaid improvements and expansion that will come in 2014 from the Affordable Care Act, when many more Americans will be eligible for these programs, and to coordinate enrollment with the Exchanges. The rules establish performance standards for the improved eligibility systems to promote greater efficiency and a more consumer-friendly enrollment process.
The final regulation, CMS-2346-F, can be found at www.ofr.gov/inspection.aspx.
Expanding Health Coverage in New Jersey
HHS Secretary Kathleen Sebelius today approved a Section 1115 demonstration for New Jersey that will expand health coverage to nearly 70,000 uninsured, low-income people through the Work First New Jersey program. In addition, the state will increase care coordination to improve health outcomes for participants in the program.
“This demonstration is yet another example of the many flexibilities states have to adapt their Medicaid programs to better serve their residents,” said Secretary Sebelius. “I want to commend New Jersey for expanding coverage to people in need.”
For more information about these announcements, visit www.cms.gov/apps/media/fact_sheets.asp.
On February 28, President Obama reiterated his belief that States should have the power and flexibility to innovate and find the health care solutions that work best for them and announced his support for accelerating State Innovation Waivers and allowing states to apply for them starting in 2014.
Beginning in 2017, the law allows States the flexibility to receive a State Innovation Waiver so they may pursue their own innovative strategies to ensure their residents have access to high quality, affordable health insurance. These strategies – which must provide affordable insurance coverage to at least as many residents as the Affordable Care Act and must not increase the federal deficit – could include allowing large employers to purchase coverage through State Exchanges or increasing the number of benefit levels to provide more choices for individuals and small businesses.
Under the bipartisan “Empowering States to Innovate Act” introduced by Senators Ron Wyden, Scott Brown, and Mary Landrieu, State Innovation Waivers would be available three years earlier than under current law, so long as States meet certain criteria, including certifying that their proposals would cover at least as many of their residents as the policies in the Affordable Care Act would have covered.
The proposal offers States more flexibility while ensuring that all Americans, no matter where they live have access to affordable, accessible health insurance. Additionally, the proposal includes built-in protections to ensure that these waivers do not increase the Federal budget deficit.
The Affordable Care Act already creates a critical role for States. It provides them with the flexibility and resources necessary to innovate and implement reform in the manner that works best for them. The law has already made nearly $2.8 billion available to states and every State has taken steps – and, in some cases, bold actions – to implement the law and improve health insurance accountability and affordability for their citizens. States can design their own Exchanges, shape their Medicaid programs, and take the lead in enforcing patient protections and reviewing rates increases of private insurers.
Empowering States to Innovate
Under the Affordable Care Act, State Innovation Waivers allow States to propose and test alternative ways to meet the shared goals of making health insurance affordable and accessible to all Americans, including those living with pre-existing conditions. Specifically, State Innovation Waivers are designed to allow States to implement policies that differ from the new law so long as they:
• Provide coverage that is at least as comprehensive as the coverage offered through Exchanges – a new competitive, private health insurance marketplace.
• Make coverage at least as affordable as it would have been through the Exchanges.
• Provide coverage to at least as many residents as the Affordable Care Act would have provided.
• Do not increase the Federal deficit.
State Innovation Waivers are provided for up to five years, with the option of renewal. If a State’s innovation fails to meet the criteria outlined above, the policies outlined in the Affordable Care Act would take effect.
Potential State-Based Innovations
The Affordable Care Act offers considerable flexibility to States without waivers. It also recognizes that new, creative effective ideas may emerge. While States have the freedom to develop their own proposals that may qualify for a State Innovation Waiver, some proposals that could qualify include:
* A streamlined system that links tax credits for small businesses with tax credits for low-income families.
* Alternatives to the individual responsibility provision – such as automatically enrolling individuals in health plans – that achieve similar outcomes.
* Alternative health plan options to increase competition and provide consumers with additional choices.
* An increase in the number of benefit levels to provide more choices for individuals and small businesses.
* Immediately allowing large businesses interested in doing so to purchase health insurance through the new private marketplace, the State-based health insurance Exchange.
The law also allows States to submit a single application that includes Medicaid waiver requests which could, for example, seek to give people eligible for Medicaid the choice of enrolling in Exchange plans.
Maintaining Important Consumer Protections
The Affordable Care Act ends the worst insurance company abuses and gives Americans more freedom and control over their health care choices. Already, under the law, most insurance companies:
• Cannot impose lifetime limits on the dollar amount they will spend on health benefits.
• Must offer young adults without access to job-based coverage the option of remaining on their
parent’s plan until their 26th birthday.
• Must cover recommended preventive services without cost sharing.
• Must allow patients to choose their own doctor in their network.
• Cannot drop your coverage solely due to your getting sick.
• Must spend at least 80 percent of premium dollars on health care, rather than executive salaries
and administrative costs.
Starting in 2014, insurance companies cannot charge more, carve-out benefits, or deny coverage because of a pre-existing condition. States that receive a State Innovation Waiver would be required to maintain these important consumer protections that prevent insurance companies from denying, capping or limiting care.
Under the Affordable Care Act, the Secretaries of Health and Human Services and Treasury are responsible for evaluating State Innovation Waiver applications and ensuring proposals will meet the shared goals of making health insurance affordable and accessible to all Americans, including those with pre-existing conditions. Under the proposed legislation, the Secretaries would continue to play this role and be empowered to grant waivers beginning in 2014. Once complete, State Innovation Waiver applications must be reviewed within 180 days of being received. The Departments of Health and Human Services and Treasury will issue proposed regulations outlining the process for applying for a State Innovation Waiver this spring. The Departments will accept public comment, including comments from States, on this proposed regulation.
President’s Plan to Cut Red Tape, Give States Flexibility
President Obama will also take an additional important step to help States, improve outcomes, and lower costs for the American taxpayer. This week, the President will issue a memorandum directing Executive Departments and Agencies to work with State, Tribal, and local governments to reduce unnecessary regulatory and administrative burdens in order to focus resources on achieving better outcomes at lower cost. In this memorandum, the President is:
* Instructing the Director of OMB to lead a collaborative process of Federal agencies, State, Tribal, and local governments to coordinate and streamline procedures that cut across agency, program and geographic bounds.
* Requiring agencies to work closely with States, Tribes, and local governments to identify administrative, regulatory, and legislative barriers in Federally-funded programs that currently prevent them from efficiently using tax dollars to achieve the best results for their constituents.
The White House • 1600 Pennsylvania Avenue, NW • Washington DC 20500 • 202-456-1111
Nationally, $4.3 Billion in New Funds Announced to Help Establish and Expand Community-based Alternatives to Institutional Long Term Care
States will see significant new federal support in their efforts to help move Medicaid beneficiaries out of institutions and into their own homes or other community settings now and in the near future, Health and Human Services (HHS) Secretary Kathleen Sebelius announced today.
The Affordable Care Act provides additional funding for two programs supporting that goal, the Money Follows the Person (MFP) demonstration program and the Community First Choice Option program. Today, Secretary Sebelius announced thirteen States would together receive more than $45 million in MFP grants to start that program in their States, with a total of $621 million committed through 2016. In addition, HHS has proposed rules to allow all States to access a potential of $3.7 billion in increased federal funding to provide long-term services and supports through the Community First Choice Option program.
“Our country recognized in the Americans with Disabilities Act that everyone who can live at home or community-based setting should be allowed to do so,” Secretary Sebelius said. “The Affordable Care Act provides States critical new dollars toward achieving that goal.”
Thirteen States Receive Money Follows the Person Program Grants
The Money Follows the Person (MFP) demonstration program, which was set to expire in fiscal year 2011, is extended through the Affordable Care Act for an additional five years. The 13 States receiving awards today (see list and award amounts below) join the 29 States and the District of Columbia already operating MFP programs. Together, these States will receive more than $45 million in the first year of the program, and more than $621 million through 2016.
The MFP program provides individuals living in a nursing home or other institution new opportunities to live in the community with the services and supports they need. Groups benefiting from these home-and-community based programs include the elderly, persons with intellectual, developmental and/or physical disabilities, mental illness or those diagnosed with several of these conditions. To date, these programs have helped 12,000 individuals move out of institutions and back into their communities. Today’s grants are expected to help an additional 13,000 people.
“The Money Follows the Person program is hugely important to improving the lives of Medicaid beneficiaries,” said Donald Berwick, M.D., administrator of the Centers for Medicare & Medicaid Services (CMS), which will implement the demonstration program. “This helps bring everyone, even those who in the past may have had no choice but to live in an institution, into the community where they can become full participants in the activities most of us take for granted.”
New Community First Choice Option Available to States
Many of the same goals under the MFP demonstration are shared and supported by the Community First Choice (CFC) Option, created by the Affordable Care Act. Today, nursing homes and institutions are too often the first or only choice for people with Medicaid who need long term care. The goal of this new option is to give States additional resources to make community living a first choice, and leave nursing homes and institutions as a fall back option.
Starting in October, this option will allow States to receive a six percent increase in federal matching funds for providing community-based attendant services and supports to people with Medicaid. Over the next three years—through 2014—States could see a total of $3.7 billion in new funds to provide these services. States currently receive Federal Medicaid matching funds for these activities at the State’s normal matching rate.
Services and supports that can be provided under CFC include, but are not limited to, attendant services and supports that help individuals with activities of daily living such as bathing and eating, and health-related tasks through hands-on assistance or supervision. States may also cover costs related to moving individuals from an institution to the community, such as security and utility deposits, first month’s rent, and purchasing basic household supplies.
To qualify for the increased Federal funds, States must develop “person-centered plans” that allow the individual to determine how services are provided to achieve or maintain independence. States must also establish implementation councils with a majority membership consisting of persons with disabilities, elderly individuals and their representatives to advise in the design and implementation of Community First Choice option. The proposed rule, posted today, describes the details of this program and solicits public comment. The rule can be found at: http://www.ofr.gov/OFRUpload/OFRData/2011-03946_PI.pdf.
“There is more evidence than ever that people who need long-term care prefer to live in their own homes and communities whenever possible,” said Dr. Berwick. “To restrict these individuals to institutions where even the simplest decisions of the day such as when to get up, what to eat and when to sleep are made by someone else must no longer be the norm. This new Federal funding will make a difference in people’s lives.”
MONEY FOLLOWS THE PERSON DEMONSTRATION GRANTS
See below for the list of States receiving MFP grants today.
Money Follows the Person Grant Awardees
1st YR. Award
Funds committed through 2016
Colorado Department of Health Care Policy & Financing
Florida Agency for Health Care Administration, Medicaid
Idaho Department of Health and Welfare, Division of Medicaid
Maine Department of Health and Human Services
Massachusetts Executive Office of Health & Human Services, Office of Medicaid
Department of Human Services
Mississippi Division of Medicaid, Office of Health Services
Nevada Department of Health & Human Services, Division of Health Care Financing & Policy
New Mexico Human Services Department, Medical Assistance Division, Long Term Services & Supports Bureau
Rhode Island Department of Human Services, Division of Health Care Quality, Financing & Purchasing / Medicaid Division
Tennessee Bureau of TennCare
Vermont Department of Disabilities, Aging and Independent Living
West Virginia Department of Health & Human Resources, Bureau for Medical Services
The White House • 1600 Pennsylvania Avenue, NW • Washington DC 20500 • 202-456-1111