NYAPRS Note: Medicaid and consumer advocates will be listening closely to this week’s Senate confirmation hearing for the Centers for Medicare and Medicaid Services (CMS) Secretary Seema Verma.
Here are several key observations taken from the articles below:
- Verma will likely advocate that Medicaid recipients be more financially involved in their coverage. Enrollees can wind up being cut off from the program for six months if they fail to make small monthly payments
- In her words: "The Medicaid program has not kept pace with the modern healthcare market," Ms. Verma said while giving testimony at a Congressional hearing in 2013, according to NPR. "Its rigid, complex rules designed to protect enrollees have also created an intractable program that does not foster efficiency, quality or personal responsibility."
The specter of block grants and other changes to Medicaid in a post Affordable Care Act world will be a front and center topic for NYAPRS’ upcoming April 27-8 Annual Executive Seminar, “All Hands on Deck! Ensuring a Recovery Focus in a Changing Healthcare Environment” at the Albany Hilton. More program details and registration link shortly. See you at the Seminar!
Senate to Consider New CMS Chief as Price Takes Over at HHS
By Harris Meyer Modern Healthcare February 11, 2017
This may be the week Republicans start putting policy details behind their rhetoric on repeal and replacement of the Affordable Care Act.
Newly confirmed HHS Secretary Dr. Tom Price, who has strong ideas on shaping a conservative new system, is expected to take rapid steps to stabilize the individual insurance market and roll back some ACA rules. One likely move is allowing insurers to sell cheaper plans with leaner benefits. President Donald Trump and some congressional Republicans also are looking to him to lead the effort to craft an ACA replacement package.
On Thursday, the Senate Finance Committee is scheduled to hold a confirmation hearing for Medicaid consultant Seema Verma, whom President Donald Trump nominated as CMS administrator. While she has no Medicare experience, she helped Indiana, Iowa, Kentucky and Ohio develop conservative models for Medicaid expansion. Those plans featured premium payments, work search requirements, health savings accounts, and lock-out periods for nonpayment of premiums.
It's widely expected that the CMS under her leadership would greenlight similar Medicaid waiver proposals from other GOP-led states. Patient advocates say that while they oppose many of these features, Verma's approach offers a politically palatable path for conservative states to move forward with coverage expansion.
It's also possible Verma may push back on a wholesale repeal and replace of the ACA. Some believe she will seek replacement insurance for the estimated 12 million people who gained coverage through Medicaid expansion provisions in the ACA.
But much depends on whether Price and congressional Republicans move forward with plans to repeal the Medicaid expansion and cap federal Medicaid spending.
Trump’s HHS Could Prompt Brief Medicaid Enrollment Boom, Tighter Eligibility Rules
Steve Davis aishealth.com December 12, 2016
The future of the Affordable Care Act (ACA) is in limbo, but the Medicaid program might be the insurance industry’s biggest uncertainty. Given President-elect Donald Trump’s selections to lead HHS and CMS (HPW 12/4/16, p. 4), it’s expected that states will be granted greater autonomy to experiment with their Medicaid programs. For managed care companies, that could mean enrollment gains if states shift more risk to the private sector.
But that boost in business could be short-lived if lawmakers approve moving Medicaid from a federal entitlement program to federal block grants (see box, p. 6), in which the annual appropriations process would determine lump-sum payments to the states to cover elderly, low-income and disabled beneficiaries.
Jeff Myers, president of Medicaid Health Plans of America (MHPA), says his members see potential opportunity with the incoming administration. Medicaid managed care companies are looking for a Medicaid structure that gives the states flexibility to make “good decisions for their most disadvantaged people,” he says. Most states, he notes, already have abandoned the fee-for-service system in favor of a more integrated and capitated program run by Medicaid managed care plans.
Managed care penetration in Medicaid grew from 55% in 2013 to 73% in 2016 (that’s 54.7 million members out of the 75 million covered by Medicaid), according to MHPA and PwC.
Myers says the momentum could pick up speed during the new administration.
Medicaid Managed Care to Grow
Bruce Merlin Fried, a partner in Dentons’ health care practice in Washington, D.C., agrees managed care penetration in Medicaid will grow as states push administrative functions to the private sector. He also agrees states will gain more freedom to consider alternate approaches for providing health coverage to the poor. But he’s dubious that it will be good news for carriers or beneficiaries.
“There is a conservative ideological desire to reduce federal involvement in anything perceived as state decisions,” Fried says. He notes that the CMS administrator has very significant discretion to use waiver authority, and the authority of the Center for Medicare and Medicaid Innovation to allow states to develop Medicaid programs that vary from the standard model.
Industry observers contacted by HPW agree that consultant and Medicaid innovator Seema Verma, Trump’s pick for CMS administrator, will give states freedom to try new ideas within their Medicaid programs. Verma worked with Indiana Gov. and Vice President-elect Mike Pence (R) on that state’s Medicaid expansion plan, which includes health accounts, out-of-pocket costs for enrollees and work-for-benefit requirements.
Will Indiana Be a Model?
In early 2015 Indiana received HHS approval to implement its Healthy Indiana Plan (HIP) 2.0 as an alternative to the Medicaid expansion called for by the ACA. The program, which reimburses doctors at Medicare rates rather than lower Medicaid rates, is available to 350,000 Hoosiers. HIP 2.0 is an expanded and updated version of a program that has been serving 60,000 low-income enrollees for eight years.
Based on HIP 2.0, Verma will likely advocate that Medicaid recipients be more financially involved in their coverage. Enrollees can wind up being cut off from the program for six months if they fail to make small monthly payments. While several states have considered following Indiana’s model, they’ve seen how difficult it has been to win CMS approval. Verma was the architect behind Kentucky’s rejected Medicaid expansion proposal, and has consulted for other states.
Government officials in Arkansas say Gov. Asa Hutchinson (R) sees Verma’s appointment as “a great opportunity.” The state’s expansion program uses federal Medicaid funds to provide subsidies to low-income individuals — up to 138% of the federal poverty level — that can be used to buy private coverage through the federally run exchange.
If Verma is confirmed as administrator, proposals that she wrote — and that CMS rejected — will wind up on her desk, says Dennis Smith, the governor’s senior advisor for Medicaid and health care. Hutchinson, he adds, has a number of ideas that would encourage low-income people to receive employer-sponsored insurance. Smith was head of Medicaid under President George W. Bush.
Industry consultant John Gorman, executive chairman of Washington, D.C.-based Gorman Health Group, LLC notes that both Price and Verma have pushed to reduce the scope of Medicaid eligibility.
CBO Missed Mark on Medicaid
While the Congressional Budget Office (CBO) came close in predicting the impact the ACA would have on the uninsured population, it missed the mark on predicting how many of those uninsured would qualify for Medicaid, and how many would buy coverage through the exchanges. Medicaid covers 73 million people, about 17 million more than CBO predicted after the ACA expanded eligibility for all states. Only 31 states and Washington, D.C., have expanded Medicaid. Smith says an additional 8 million people would have enrolled if all states had expanded the program. CBO’s expectation for exchange enrollment was short by about 10 million.
The ACA’s authors initially wanted Medicaid to be available to those with incomes of 133% of the federal poverty level. That percentage was increased to 138%. Smith says eligibility was expanded because lawmakers needed to find additional savings, and Medicaid coverage is less costly than federal premium subsidies. But the move significantly boosted Medicaid enrollment and kept many young and healthy people from buying coverage through the exchange. As a result, Medicaid managed care companies have done very well with the expansion, he says.
States need to be at the table to determine what replacement looks like, he adds.
9 Things To Know About Seema Verma, CMS Administrator Nominee
by Tamara Rosin February 10, 2017
President Donald Trump nominated Seema Verma, president, CEO and founder of national health policy consulting company SVC, to head CMS. There, she would support confirmed HHS Secretary Rep. Tom Price by taking a hands-on role in the Trump administration's plan to repeal and replace the ACA.
The Senate Finance Committee will hold Ms. Verma's confirmation the week of Feb. 13.
Here are seven things to know about Ms. Verma.
1. At the helm of SVC, Ms. Verma has worked extensively on a variety of policy and strategic projects involving Medicaid, insurance and public health in conjunction with the Governor's office, state Medicaid agencies, State Health Departments, State Departments of Insurance, the federal government and private companies and foundations.
2. She is most widely known for her role as the architect of the Healthy Indiana Plan — the state's version of Medicaid expansion under the ACA. Indiana received a waiver from the Obama administration to implement the program, nicknamed HIP 2.0, in 2015.
Ms. Verma was also a key figure in Medicaid transformation in several other states, as detailed in point No. 7. Ms. Verma has said she considers Medicaid outdated. In her words: "The Medicaid program has not kept pace with the modern healthcare market," Ms. Verma said while giving testimony at a Congressional hearing in 2013, according to NPR. "Its rigid, complex rules designed to protect enrollees have also created an intractable program that does not foster efficiency, quality or personal responsibility."
3. Vice President Mike Pence — then governor of Indiana — hired Ms. Verma to design the Republican-friendly version of Medicaid expansion. The state paid her nearly $5 million over four years through 2017 through contracts of the arrangement, according to NPR.
4. HIP 2.0, which expanded coverage to about 246,000 previously ineligible for Medicaid, emphasizes enrollees' personal responsibility. For example, it requires Medicaid beneficiaries to make monthly payments for their insurance or otherwise lose benefits. Payments range from $1 to $27 and go into individual health savings accounts, to which the state also contributes. If enrollees get preventive care and vaccines, they are eligible for a discount on their premiums the next year, according to NPR.
5. HIP 2.0 also imposes penalties on beneficiaries. Those with incomes above the poverty line can be cut off from the program for six months if they miss a payment to their HSA. Those below the poverty line who fail to pay are moved to a plan with fewer benefits.
6. Ms. Verma received praise for garnering buy-in to her plan while working with both Republican and Democratic state legislators, the Obama administration and health system leaders, according to CNBC. "She was a very good listener and was able to put a lot of different perspectives into the mix," said Sarah Stelzner, MD, a pediatrician with Indianapolis-based Eskenazi Health, according to the report.
7. In addition to HIP 2.0, Ms. Verma and SVC have developed several other Medicaid reform programs, including 1115 Medicaid waivers for Iowa, Ohio and Kentucky. Her firm helped design Tennessee's coverage expansion proposal and also provided technical assistance to Michigan when the state implemented its Medicaid waiver. Ms. Verma and SVC helped guide the transition of Iowa's Medicaid program to a managed care program, and supported strategy efforts for Maine's Medicaid plan.
8. Before founding SVC, Ms. Verma served as vice president for the Health & Hospital Corporation of MarionCounty in Indiana and as a director with the Association of State and Territorial Health Officials in Washington, D.C.
9. Ms. Verma received her master's degree in public health with concentration in health policy and management from Baltimore-based Johns Hopkins University and a bachelor's degree in life sciences from the University of Maryland in College Park.