Medicaid and CHIP
New and Upcoming Developments
Kimberly Davis
Medicaid and CHIP Division
August 13, 2010
Presentation Overview
• Overview of Medicaid eligibility, enrollment, and
budget.
• Legislation from 81st Texas Legislature that impacts
clients.
• Updates on Texas’ managed care initiatives.
• Federal legislation impacting Texas’ Medicaid and
CHIP programs.
2
Overview Medicaid
• What is Medicaid?
• Medicaid is a jointly funded state-federal health-care
program, established in Texas in 1967.
• Medicaid is an entitlement program, which means the federal
government does not, and a state cannot, limit the number of
eligible people who can enroll, and Medicaid must pay for
any services covered under the program.
• Serves primarily low-income families, non-disabled children,
related caretakers of dependent children, pregnant women,
the elderly, and people with disabilities.
• Covers acute health care (physician, inpatient, outpatient,
pharmacy, lab, and X-ray services), and long-term services
and supports for aged and disabled clients.
3
Overview CHIP
• What is the Children’s Health Insurance Program
(CHIP)?
• CHIP is jointly funded state-federal health insurance
program for children, established in Texas in 1998.
• Provides health insurance to low-income, uninsured children
in families with incomes too high to qualify for Medicaid.
• Texas operates a separate CHIP program that requires all
benefits to be approved by the U.S. Secretary of Health and
Human Services.
• Benefit package includes a basic set of health-care benefits
that are cost effective and focuses on primary health-care
needs.
4
Medicaid Eligibility
5
Medicaid Eligibility
Medicaid Eligibility in Texas, 2010
Maximum Monthly Countable Income* Limit (family of three unless otherwise specified)
Medically
Needy
$275
$2,022
Long-Term Care at up to 300%of SSI federal benefit rate (FBR) (Individual)
SSI, Aged & Disabled up to
100%SSI FBR (Individual)
$647
Pregnant Women at up to 185%FPL (Eligible through 2nd month after delivery)
$2,823
Newborns up to age 1at up to 185%FPL
$2,823
Children ages 1-5 at up to 133%of FPL
$2,030
$1,526
Children ages 6-18 at up to 100%of FPL
TANF
0
$188
500
1000
1500
2000
2500
3000
* "Countable income" is gross income adjusted for allowable deductions, typically work-related.
Note: SSI does not certify families of three. SSI certifies only individuals and couples. SSI is not tied to the Federal Poverty Level, but is based
on the FBR, as indicated above.
6
Medicaid Enrollment
7
Medicaid Enrollment
• January 2009:
• 14 percent (1 in 7) of Texans received Medicaid.
• Fiscal year 2009 caseloads:
• 3 million individuals received Medicaid.
• 534,000 children received CHIP.
• Medicaid enrollment is projected to continue to
increase.
8
Medicaid Enrollment
Average Monthly Medicaid Enrollment
SFYs 1999 - 2009
3.2
3.00
3.0
Millions
2.8
2.88
2.79
2.83
2.87
2005
2006
2007
2008
2.68
2.49
2.6
2.4
2.2
2.0
2.10
1.81
1.81
1999
2000
1.87
1.8
1.6
2001
2002
2003
2004
2009
Source: HHSC, Financial Serivces.
Note: Average monthly Medicaid clients include the average number of clients in each month of the fiscal year. The average monthly
clients w ill alw ays be a smaller number than the unduplicated clients, as clients come and go from the system.
9
Medicaid Enrollment
100%
Texas Medicaid Beneficiaries and Expenditures
State Fiscal Year 2009
90%
80%
70%
Non-Disabled
Children
61%
Non-Disabled
Children
32%
Non-Disab led Adults 10%
60%
50%
40%
30%
Non-Disab led Adults 9%
20%
Aged & Disability
Related
30%
10%
Aged & Disability
Related
58%
0%
Caseload
Cost
Source: HHS Financial Services, 2009 Medicaid Expenditures, including Acute Care, Vendor Drug, and Long-Term Care.
Costs and caseload for all Medicaid payments for full beneficiaries and non-full beneficiaries (Women's Health Waiver, Emergency Services
for Non-Citizens, and Medicare payments) are included.
10
Medicaid Spending
11
Medicaid Spending
• Total Medicaid spending in 2009:
• Estimated $24.6 billion (all funds).
• Includes Disproportionate Share Hospital (DSH), Upper
Payment Limit payments, and administration.
• Medicaid spending increasing in both federal and
Texas budgets.
• In 2008-2009 biennium, Health and Human Services
was approximately 26.7 percent of the total state
budget (excludes DSH).
• Like Medicaid enrollment, Medicaid spending is
projected to continue to increase.
12
Medicaid Spending
Figure 7.2: Texas Medicaid Budget*
FFYs 1987-2009
30
Dollars in Billion
25
20
15
10
5
0
1987 1989
1991 1993
1995 1997
Total Medicaid Budget
1999 2001
2003 2005
Federal Portion
2007 2009
State Portion
*Includes DSH and UPL funds.
Source: HHSC, Financial Services, Form CMS 64-Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program.
13
81st Session Legislation
Impacting Clients
14
81st Session Legislation
Impacting Clients
• Medicaid Buy-In Program for Disabled Children – SB
187
• Allows families whose income does not exceed 300% of FPL
to buy-in to the Medicaid Program for their child with a
disability.
• Benefits will be the same state plan services as other
Medicaid children.
• Projected implementation is January 2011.
• Appropriation for Medicaid Services for Qualified
Alien Children
• CHIPRA allows states to cover Qualified Aliens in Medicaid
and CHIP with federal matching funds.
15
81st Session Legislation
Impacting Clients
• Obesity prevention pilot for Medicaid or CHIP
enrollees – SB 870
• Creates a pilot in at least one area of the state.
• Pilot is jointly conducted by HHSC and DSHS for children
enrolled in Medicaid in the Travis Service Area.
• Pilot goals include:
• Decrease rate of obesity in Medicaid children;
• Improve nutritional choices;
• Increase physical activity; and
• Decrease long-term costs to Medicaid incurred as a
result of obesity.
16
81st Session Legislation
Impacting Clients
• Electronic health information exchange (HIE) – HB
1218
• Directed HHSC to develop an electronic HIE system HHSC
will implement the HIE system, known as Medicaid Eligibility
and Health Information services (MEHIS) in 3 phases.
• Phase 1 – will replace paper Medicaid ID forms with magnetic
strip cards, implement rudimentary EHR, and evaluate options
for e-prescribing in 2010.
• Phase 2 – will provide EHR for CHIP clients, integrate state lab
data in the EHR, improve data gathering capabilities and
system enhancements.
• Phase 3 – will develop and integrate evidence-based
benchmarking for providers and expands HIE system to include
other data exchange partners.
17
81st Session Legislation
Impacting Clients
• Medicaid Substance Abuse Services – 2010-11
General Appropriations Act, S.B. 1
• Directs HHSC to implement a substance abuse benefit for
adults in Medicaid.
• The benefits are subject to approval by the Center for
Medicare and Medicaid Services (CMS) and will be
implemented in two phase.
• Phase I - will included a outpatient benefit and is
anticipated to be available in September 2010.
• Phase II - will included the addition of residential
detoxification and treatment services and are anticipated
to be available in January 1, 2011.
18
81st Session Legislation
Impacting Clients
• Health Home Pilot Project –strategic medical
initiatives under Frew v. Suehs corrective action order
• $20 million for pilot health home models for primary care
practices serving Medicaid children (through age 20).
• Pilot projects will be used determine which model(s) may be
appropriate for state-wide implementation.
• HHSC may select up to 8 different types of pilot health home
models to be operational for 24 months.
• Projects must focus on: (1) patient access; (2) quality
improvement; (3) patient/family centeredness; (4) population
approach to care; (5) coordinated and clinically managed
care; and (6) team-based comprehensive care.
19
Managed Care Initiatives
20
Managed Care Initiatives
• Elimination of Integrated Care Model in Dallas/Fort
Worth
• Operations ended on May 31, 2010.
• STAR+PLUS Expansion
• The STAR+PLUS program is expanding into the Tarrant and
Dallas Medicaid Service Areas.
• Projected implementation February 1, 2011.
21
Managed Care Initiatives
• CHIP Rural Service Area MCO Procurement
• Awards to Superior and Molina health plans.
• Both health plans will use Texas True Choice network.
• RSA has been expanded to include the Webb Service Area
in CHIP.
• Effective September 1, 2010.
22
Federal Legislation
23
Federal Legislation
• American Recovery and Reinvestment Act (ARRA)
• Prohibits states from implementing more restrictive Medicaid
eligibility standards, methodologies, or procedures than
those in effect on July 1, 2008.
• Establishes grant and loan programs for states and health
entities.
• Provides incentive payments for meaningful use of electronic
health (medical) records by qualifying Medicaid providers.
24
ARRA cont’d
• Medicaid Electronic Health Record (EHR) Incentive
Program
• Incentives payments are for meaningful use of certified
EHRs by qualifying Medicaid providers.
• The provider is responsible for payment of EHR costs and
certifying meaningful use of the HER.
• Authorizes a 100% federal match for incentive payments to
providers.
• Texas goal to begin provider enrollment is January 2011.
• Authorizes a 90% federal match for state’s administrative
costs to establish process for incentive payments.
• Eligible professionals must choose if they will receive the
incentive payment as a Medicaid or Medicare provider.
• Hospitals can receive both the Medicaid and Medicare
incentive payment.
25
ARRA cont’d
• Medicaid Electronic Health Record (EHR) Incentive
Program
• Payment is an incentive for using certified EHRs in a
meaningful way.
• Not a reimbursement and not intended to penalize early
adopters.
•
•
•
•
First year payment can be received in 2011 through 2016.
Final payment can be received up to 2021.
Incentive payments do not need to be for consecutive years.
Eligible professionals must meet certain criteria:
• Eligible provider type;
• Medicaid patient volume thresholds; and
• Meaningful use of certified EHRs for at least 50% of patient
encounters during the reporting period.
26
ARRA cont’d
Medicaid Electronic Health Record (EHR) Incentive Program
Provider
Physicians
- Pediatricians
Minimum Medicaid
Patient Volume
Threshold
30%
20%
Dentists
30%
Nurse Practitioners
30%
Certified Nurse
Midwives
30%
Physician Assistants
when practicing at an
FQHC/RHC that is led
by a PA
30%
Acute Care Hospitals
10%
Children's Hospitals
No requirement
OR
if the Medicaid EP
practices
predominantly in a
Federal Qualified
Health Clinic (FQHC) or
Rural Health Clinic
(RHC)
— 30% needy individual
patient volume
threshold
Not an option for hospitals
27
Federal Legislation
• CHIP Reauthorization Act of 2009 (CHIPRA)
• Reauthorized federal CHIP funding from 2009 - 2013.
• Reduces time-frame for states to use unspent federal
allotment from three years to two years for 2009 and
beyond.
• CHIP programs must comply with Mental Health Parity.
• Mandates dental services in CHIP.
• Allows for federally matched coverage of qualified alien
children in Medicaid and CHIP by removing the 5-year bar.
• Requires citizenship verification.
• Applies Medicaid managed care safeguards and standards.
• Prospective payment system for FQHCs and RHCs in CHIP.
28
CHIPRA cont’d
• Prospective payment system (PPS) for FQHCs and
RHCs in CHIP
• CHIPRA requires states to apply the Medicaid PPS for
federally qualified heatlh centers (FQHCs) and rural health
clinics (RHCs) to CHIP.
• In CHIP FQHCs and RHCs receive full encounter rates for
dates of services rendered to CHIP members on or after
October 1, 2009.
29
Federal Legislation
• Mental Health Parity and Addiction Equity Act of 2008
(MHPAEA)
• Requires group health plans that offer behavioral health
benefits (mental health and substance abuse) to provide
those services at parity with medical/surgical services.
• Parity requirements apply to financial requirements (e.g., copayments), treatment limitations (e.g., number of visits), and
out-of-network coverage.
• MHPAEA does not impact traditional Medicaid fee-forservice; however the requirements apply to Medicaid
managed care and state CHIP programs.
30
Federal Health Care Reform:
The Affordable Care Act
31
The Affordable Care Act
• The Patient Protection and Affordable Care Act
(PPACA), was enacted on March 23, 2010.
• The Health Care and Education Reconciliation Act of
2010 (HCERA) was enacted on March 30, 2010.
• Together, these two pieces of legislation are called the
Affordable Care Act (ACA).
• The Affordable Care Act will make significant changes
to the health care market.
32
The Affordable Care Act
• The Health Insurance Exchange
• Must be operational by January 2014.
• Failure to establish Exchange will result in HHS establishing
an Exchange within any non-participating state.
• State must be able to demonstrate by January 1, 2013, that
it will have Exchange operational by January 1, 2014.
• Must be administered by governmental agency or non-profit
organization.
33
The Affordable Care Act
• The Health Insurance Exchange
• Provides one-stop insurance shopping for individuals and
small businesses.
• All plans sold in the Exchange must be certified by TDI as
meeting minimum federal benefit standards.
• Exchange must provide a seamless application and
enrollment process for individuals who qualify for subsidies,
requiring coordination with HHSC for Medicaid and CHIP
inclusion.
• Federal funding: HHS will distribute implementation grants to
states within one year after date of enactment of legislation.
34
The Affordable Care Act
• Expansion of Health Insurance Coverage, Individual
Mandate
• Effective January 2014.
• Individuals (US citizens and legal residents) required to
obtain qualifying coverage that meets federal standards.
• Can be an individual or group health plan.
• Exemptions for individuals meeting any of the following:
• Earnings fall below tax filing threshold (currently $12,050
for individual and $18,700 for couple), religious
objections, members of Indian tribes, or not covered by
insurance for less than three months.
• Subsidies for families/individuals up to 400% of federal
poverty level (approx $43,000 individual, $88,000 family of 4)
to apply towards premium costs.
35
The Affordable Care Act
• Expansion of Health Insurance Coverage, Individual
Mandate
• Penalties for non-compliance:
• 2014 - $95/person
• 2015 - $325/person
• 2016 - $695/person
• Alternative: 2.5 % of income above tax filing threshold
(whichever is greater)
• Enforcement: individuals required to file with IRS must
include IRS form to verify qualifying coverage. Individuals
exempt from filing taxes also exempt from insurance
requirement.
36
The Affordable Care Act
• Medicaid Expansion and Caseload Impact
• Expands Medicaid eligibility to individuals under age 65 with
incomes up to 133% of the Federal Poverty Limit (FPL).
• Income deduction allowance of five percentage points creates
effective eligibility level of 138% FPL.
• New client populations in Texas include:
•
•
•
•
Parents and caretakers 14%- 133%.
Childless adults up to 133% FPL.
Emergency Medicaid in Expansion Populations.
Foster-care through age 25.
• Texas will experience caseload growth both from newly
eligible individuals and those individuals who are currently
eligible but not enrolled.
• With an individual mandate, enrollment of current eligibles is
projected to increase.
37
The Affordable Care Act
• Medicaid Expansion and Caseload Impact
• Changes Medicaid income eligibility requirements.
• Requires use of modified gross income and prohibits
assets test and most income deductions.
• Requires that states maintain existing eligibility until the
state’s exchange is fully operational.
• Optional populations covered above 133% FPL may be
moved to the Exchange upon implementation in 2014.
• Children’s Medicaid and CHIP eligibility levels must be
maintained until 2019.
38
The Affordable Care Act
Current & Future Medicaid/CHIP Eligibility Levels
225
200
CHIP
200% FPL
CHIP
200% FPL
CHIP
200% FPL
CHIP
200% FPL
175
133%
150
Current
Medicaid
125
185% FPL
Current
Medicaid
185% FPL
Current
Medicaid
133% FPL
NEW
Medicaid
133% FPL
Current
Medicaid
185% FPL
NEW
Medicaid
133% FPL
NEW
Medicaid
133% FPL
NEW
Medicaid
133% FPL
Current
Medicaid
220% FPL
100
Current
Medicaid
100% FPL
75
Current
Medicaid
74% FPL
50
25
14% FPL
0
Newborns (<1
yr)
Children (Age 1- Children (Age 65)
18)
Pregnant
Women
SSI, Aged,
Disabled
Parents
Childless Adults Long-Term Care
39
The Affordable Care Act
Patient Protection and Affordable Care Act (PPACA)
HHSC Medicaid/CHIP Caseload Estimates, 2010 - 2023 *
2,500
Adult Expansion
Eligible but Unenrolled
1,948
2,000
2,041
2,082
2,124
2,166
2,209
2,254
2,299
2,345
1,807
Enrollment (in thousands)
1,462
1,491
1,521
1,324
1,351
1,378
1,405
1,433
664
717
731
746
761
776
792
808
824
2015
2016
2017
2018
2019
2020
2021
2022
2023
1,500
1,284
1,232
1,000
500
574
2010 - 2013
Unknown
0
2010
*
2011
2012
2013
2014
Note: Due to rounding, some component totals may not equal their respective grand total.
40
The Affordable Care Act
Patient Protection and Affordable Care Act (PPACA)
HHSC Medicaid/CHIP Cost Estimates by Level of Implementation, 2010 - 2023
*
$5.0
$5
$4.6
Full Provider Rate Increase for Primary Care
$1.0
$4.2
Partial Provider Rate Increase for Primary Care
$0.8
Currently Eligible but Unenrolled
State Cost (in billions)
$0.8
$0.5
$0.5
$0.4
Adult Expansion
$3
$0.9
$3.9
$4
$0.4
$1.6
$2.3
$2.1
$2
$0.7
$1.8
$1.5
$1.3
$1.4
$0.6
$0.8
$1
Unknown
$0
2010
*
2011
2012
2013
$0.5
$0.4
$0.3
$0.3
$0.3
$0.8
$0.3
$0.7
$0.2
$0.2
$0.3
$0.2
2014
2015
2016
2017
$0.7
2010 - 2013
$1.0
$1.2
$0.5
$0.3
$0.3
$0.8
2018
$1.6
$1.7
$1.8
$1.4
2020
2021
2022
2023
$1.0
2019
Note: Due to rounding, some component totals may not equal their respective grand total.
41
The Affordable Care Act
• Medicaid Rate Increases
• States are required to increase Medicaid rates to 100% of
Medicare rates in 2013 and 2014 for certain services
provided by primary care providers (PCPs).
• The incremental rate costs for 2013 and 2014 are 100%
federally funded.
• Children’s Health Insurance Program (CHIP) Rates
• Historically CHIP and Medicaid provider rates have been
aligned.
• State will need to decide whether to provide the same
increase for CHIP rates as for Medicaid.
• Any increase in CHIP provider rates will be at the CHIP FFP
for all years.
• CHIP FFP increases by 23 points from 2016 to 2019.
42
The Affordable Care Act
• When to Implement Medicaid Expansion
• States may opt to expand Medicaid coverage to 133% FPL
on or after April 1, 2010 without a waiver at regular Federal
Financial Participation (FFP).
• Expansion is mandatory in 2014.
• Medicaid Expansion Benchmark Benefit Plan
• States are required to create a Secretary-approved
benchmark benefit package for newly eligible Medicaid
groups by January 2014.
• This could result in different benefit packages for existing
and expansion Medicaid populations.
• Potential differences in current Texas Medicaid benefits and
a benchmark plan include:
• Prescription Drug Limit
• In-Patient Hospitalization Limits
• Mental Health Benefits
43
The Affordable Care Act
• New Medicaid and/or CHIP Benefits
• Requires Medicaid coverage for freestanding birthing centers.
• Requires Medicaid coverage of tobacco cessation counseling
and pharmacotherapy for pregnant women.
• Requires Medicaid and CHIP to allow a child to elect hospice
care without waiving their rights to treatment services for the
child’s terminal illness.
44
The Affordable Care Act
• Medicaid Pharmacy Program Changes
• Federal Rebate Percentages for Outpatient Drugs: Increases
the minimum Medicaid federal rebate amount for drug
products.
• Rebates for Medicaid MCO Drugs: Allows states to collect
Medicaid rebates for drugs dispensed through managed
care organizations (MCOs).
45
The Affordable Care Act
• Impact to Texas Healthcare Delivery Systems
• Many of the state’s indigent care and charity statutes may
need to be restructured.
• Core functions of the Department of State Health Services
and the populations it serves will likely be altered.
• Public hospitals will have less uncompensated care.
• The role of city and county health departments may need to
be redefined.
• Unknown impact to Local Mental Health Authorities.
46
The Affordable Care Act
• Impact to Texas Workforce Planning
• Demand for primary care providers and specialists will
increase as more Texans are insured.
• State will need to examine this increased demand as it
relates to the supply of healthcare providers.
• Strategies for meeting increased demand will need to be
explored.
• Telemedicine
• Additional use of ancillary service providers
47
The Affordable Care Act: Texas
Uninsured Demographics Current
Current: Uninsured by Act Subsidy Type
Current: Insured & Uninsured
No Subsidy
KEY
¤
11%
‡
Undocumented
Medicaid Expansion
(adults <133% Federal Poverty Level (FPL))
13%
Insured
Uninsured
18,873,500
6,500,500
74%
26%
†
Eligible
Subsidy Eligible
◊
but Unenrolled
43%
12%
Eligible but Unenrolled
(children < 200% FPL)
†
◊
Subsidy Eligible
(adults and children <400% FPL,
including Lawful Permanent Residents (LPRs))
Medicaid
Expansion
21%
‡
¤
No Subsidy
(>400% FPL, including LPRs)
Source: U.S. Census Bureau. March 2009 Current Population Survey (CPS), Texas State Data Center at the University of Texas at San Antonio. Population projections for year 2010 based on
2000-2007 Migration Scenario. Published 2/2009.
Prepared by: The Center for Strategic Decision Support, Texas Health and Human Services Commission, April 2010.
48
The Affordable Care Act: Texas Uninsured
Demographics Post-Implementation
Under Act: Uninsured by Act Subsidy Type
Under Act: Insured & Uninsured
KEY
Undocumented
†
36%
Insured
23,024,861
91%
Eligible but Unenrolled
(children < 200% Federal Poverty Level (FPL))
Uninsured
2,349,139
9%
No Subsidy
and (adults <133% FPL)
Eligible but
¤
Unenrolled
16%
12%
†
◊
Subsidy Eligible
(adults and children <400% FPL,
including Lawful Permanent Residents (LPRs))
Subsidy Eligible
35%
◊
¤
No Subsidy
(>400% FPL, including LPRs)
Note: Due to rounding, percents may not total one hundred percent.
Source: U.S. Census Bureau. March 2009 Current Population Survey (CPS), Texas State Data Center at the University of Texas at San Antonio. Population projections for year 2010 based on
2000-2007 Migration Scenario. Published 2/2009.
Prepared by: The Center for Strategic Decision Support, Texas Health and Human Services Commission, April 2010.
49
Questions?
50