Medicaid Innovation in Kansas Under the DRA


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Presented at the National Academy for State Health Policy's 20th Annual State Health Policy Conference in Denver, Colorado. Author: Andy Allison

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Medicaid Innovation in Kansas Under the DRA

  1. 1. Medicaid Innovation in Kansas Under the DRA Andy Allison, PhD Medicaid Director and Deputy Director, Kansas Health Policy Authority National Academy for State Health Policy Denver, Colorado October 15 , 2007
  2. 2. Health Policy Needs in Kansas <ul><li>Coverage of parents at only one-quarter to one-third of the federal poverty level </li></ul><ul><li>Children’s coverage at much higher levels, but some children will not be enrolled unless parents are also eligible </li></ul><ul><li>Many providers reluctant to expand services provided to Medicaid and HealthWave </li></ul><ul><li>Difficult transition for Medicaid families into private, and privately-funded, health coverage </li></ul>
  3. 3. Need for Flexibility to Address Health Policy Needs in Kansas <ul><li>Basic Federal mandates </li></ul><ul><ul><li>All-or-nothing, one-size fits all Medicaid benefits </li></ul></ul><ul><ul><li>Extends regulatory relationship with providers </li></ul></ul><ul><li>Kansas’ political environment unreceptive </li></ul><ul><ul><li>Though certainly not monochrome, Kansas is mostly red </li></ul></ul><ul><ul><li>Legislative funding on a quasi-entitlement basis </li></ul></ul><ul><ul><li>Difficult to extend the “entitlement” </li></ul></ul><ul><li>Bottom line  </li></ul><ul><ul><li>Kansas and other states leave Federal matching dollars on the table (and yield Federal taxes to other states)‏ </li></ul></ul>
  4. 4. Medicaid Provisions in the DRA <ul><li>DRA establishes flexibility through: </li></ul><ul><ul><li>Medicaid benefit design </li></ul></ul><ul><ul><li>Benchmark plans </li></ul></ul><ul><ul><li>Cost Sharing provisions </li></ul></ul><ul><ul><li>Health opportunity accounts </li></ul></ul><ul><li>Also… </li></ul><ul><li>Fraud, abuse, and integrity </li></ul><ul><li>Investments in innovation </li></ul><ul><li>Federal cost-saving financing measures </li></ul>
  5. 5. Benchmark Plans <ul><li>States may elect to move certain populations into benefit plans equivalent to: </li></ul><ul><ul><ul><li>Federal employee BC/BS </li></ul></ul></ul><ul><ul><ul><li>State employee benefit plan </li></ul></ul></ul><ul><ul><ul><li>Largest State commercial MCO </li></ul></ul></ul><ul><ul><ul><li>Secretary approved plan </li></ul></ul></ul><ul><ul><ul><li>Or, actuarial equivalent of these </li></ul></ul></ul><ul><li>States may design plans that reduce coverage options for some non-mandatory populations </li></ul><ul><ul><ul><li>Cannot cover new eligibility categories using DRA/SPA </li></ul></ul></ul><ul><ul><ul><li>Can cover de-linked, expanded 1931 parent population </li></ul></ul></ul>
  6. 6. Innovative DRA-based Reforms Underway in Kansas <ul><li>Work Opportunities Reward Kansans (WORK)‏ </li></ul><ul><li>Premium Assistance </li></ul>
  7. 7. <ul><li>WORK </li></ul>
  8. 8. Working Healthy Family of Programs for the Disabled <ul><li>In 2001, the Kansas Legislature approved the development of a “Buy In” program called Working Healthy: Making Health Care Work. </li></ul><ul><li>Working Healthy is now a family of programs </li></ul><ul><ul><li>Kansas’ version of Medicaid Buy-In, a work incentive authorized under “Ticket-to-Work” legislation </li></ul></ul><ul><ul><li>Designed for people with disabilities who are working, or interested in competitive, integrated employment </li></ul></ul><ul><ul><li>Allows those with severe disabilities to return to or increase their work effort – i.e., earn more -- without losing critical Medicaid coverage </li></ul></ul><ul><ul><li>Encourages people to work, increase their income and accumulate assets in order to reduce long term reliance on public supports </li></ul></ul><ul><li>Smoothes impact of all-or-nothing Medicaid benefits. Compare to: </li></ul><ul><ul><li>Earned income tax credits (for cash benefits)‏ </li></ul></ul><ul><ul><li>Transitional Medicaid assistance (6- or 12-month Medicaid benefits)‏ </li></ul></ul>
  9. 9. Working Healthy Eligibility Criteria <ul><li>Two Medicaid eligibility categories: </li></ul><ul><ul><li>Basic - applies to people who meet Social Security Disability definition (other than income)‏ </li></ul></ul><ul><ul><li>Medically improved - applies to people who no longer meet the SSA definition of disability due to medical improvement </li></ul></ul><ul><li>Designed for working-age (otherwise) disabled adults </li></ul><ul><ul><li>16-64 years of age </li></ul></ul><ul><ul><li>Determined disabled by SSA </li></ul></ul><ul><ul><li>Verified earned income subject to FICA/SECA </li></ul></ul><ul><ul><li>Kansas resident </li></ul></ul><ul><li>Meet financial tests less restrictive that HCBS </li></ul><ul><ul><li>Countable earned income up to 300% Federal Poverty Level </li></ul></ul><ul><ul><li>Cash assets up to $15,000 </li></ul></ul><ul><ul><li>Retirement accounts allowed (no limit)‏ </li></ul></ul><ul><ul><li>Individual Development Accounts allowed (no limit)‏ </li></ul></ul><ul><ul><li>Elimination of spend down requirements (premiums if above poverty)‏ </li></ul></ul>
  10. 10. Overview of Kansas’ New WORK Program <ul><li>Work Opportunities Reward Kansans (WORK) is a new, complimentary program called i mplemented on July 1, 2007 </li></ul><ul><li>Is a “package” of benefits for people who need personal assistance services and want to enroll in Working Healthy </li></ul><ul><li>Is the result of a Medicaid State Plan Amendment, approved under the Deficit Reduction Act – State Flexibility in Benefit Packages (Section 6044)‏ </li></ul><ul><li>Offers a Secretary Approved Benchmark Benefit Package </li></ul><ul><li>Incorporates a “Cash and Counseling” model in the benefit package, the first in the country to be done with a Medicaid State Plan Service </li></ul><ul><li>Allows consumers to directly manage their funds </li></ul><ul><li>Offers flexibility in which services are purchased, and how they are purchased </li></ul>
  11. 11. WORK Eligibility <ul><li>Eligible for Working Healthy, i.e., Medicaid Buy-In </li></ul><ul><li>Eligible for, on the waiting list for, or meet level of care for HCBS </li></ul><ul><ul><li>Physical Disability Waiver </li></ul></ul><ul><ul><li>Developmental Disability Waiver </li></ul></ul><ul><ul><li>Traumatic Brain Injury Waiver </li></ul></ul><ul><li>Competitively employed in an integrated setting </li></ul><ul><li>Reside in a home that is not owned, operated, or controlled by a provider of services, unless that provider is related by blood or marriage </li></ul>
  12. 12. Working Healthy/WORK Benefits <ul><li>Full Medicaid coverage </li></ul><ul><li>Personal care and other services if needed </li></ul><ul><li>Medicare coverage paid by Medicaid (in some instances employer premiums are paid)‏ </li></ul><ul><li>Benefits planning </li></ul><ul><li>Alternative and cost effective methods to obtain assistance </li></ul><ul><li>Work related support services </li></ul>
  13. 13. WORK Services Package <ul><li>Needs Assessment </li></ul><ul><li>Monthly allocation to purchase personal services </li></ul><ul><li>Assistive Services </li></ul><ul><li>Independent Living Counseling </li></ul><ul><li>Benefits Specialists Services </li></ul><ul><li>Temporary Unemployment Coverage </li></ul>
  14. 14. Advantages of Using DRA to Implement WORK <ul><li>The DRA Benchmark Benefits provision provided the greatest flexibility, enabling coverage of personal care assistance without need of a waiver. </li></ul><ul><li>WORK began as an 1115 Independence Plus waiver application </li></ul><ul><ul><li>CMS reviewed for three years; numerous requests for additional information; final decision never made </li></ul></ul><ul><ul><li>Following one TA call with Family and Children Health Programs Group, SPA submitted and approved one month later </li></ul></ul><ul><li>Unlike most waivers, WORK allows consumers with various disabilities, including developmental disabilities, to be served within the same program. KHPA believes this will promote competitive, integrated employment for adults with disabilities. Examples include: </li></ul><ul><ul><li>Encourages people to earn money while removing fear of losing needed personal attendant services </li></ul></ul><ul><ul><li>Eliminates the disincentive of having to spend earnings on medical services in order to maintain Medicaid coverage </li></ul></ul><ul><ul><li>For people with mental retardation, offers support services to live and work in the community instead of sheltered workshops and group homes </li></ul></ul>
  15. 15. Advantages of WORK <ul><li>WORK permits direct cash payments to consumers to pay for their services, which may facilitate more cost-effective decision-making regarding services and service providers. </li></ul><ul><ul><li>Purchase a service as a substitute to attendant care, e.g., laundry service versus attendant doing laundry </li></ul></ul><ul><li>WORK provides consumers with the ability to “control” their services, rather than just to “direct” them, potentially increasing consumer satisfaction. </li></ul><ul><ul><li>Purchase services that meet their unique needs and life style </li></ul></ul><ul><ul><li>Choose providers of services based on personal preference rather than limited to a disability specific agency or geographic location </li></ul></ul><ul><ul><li>Determine wages, potentially improving attendant retention </li></ul></ul><ul><li>May increase the number of Kansans with disabilities who are employed, contributing to the economy, paying taxes. Reducing poverty may also result in improved quality-of-life and health outcomes. </li></ul><ul><li>43 year old female, wheelchair mobile and employed part-time in a hospital clerical position. Currently on PD Waiver w/ client obligation of $500+. Premium for WH/WORK will be $69. Can now increase the number of work hours without having to give up those earnings. </li></ul>
  16. 16. <ul><li>Premium Assistance </li></ul>
  17. 17. Health Reform Legislation Passed Unanimously by Kansas Legislature May 2007 SB11 authorized a significant DRA expansion of coverage, and encourages the Kansas Health Policy Authority (KHPA), with consultation of the Joint Health Policy Oversight Committee, to consider as part of health reform in Kansas various Medicaid reform options provided through the Deficit Reduction Act (DRA).
  18. 18. Authorizing Language for Premium Assistance in SB11 <ul><li>The KHPA’s programs (now) include . . . “a phased-in premium assistance plan to assist eligible low income Kansas residents with the purchase of private insurance or other benefits that are actuarially equivalent to the Kansas state employee health plan under a program authorized under subsection (a)(1). . . The Kansas Health Policy Authority is authorized to seek any approval from the Centers for Medicare and Medicaid services necessary to accomplish the development or expansion of premium assistance programs for families.” </li></ul>
  19. 19. SB11 Objectives and the Proposal in Brief <ul><li>Ensure access to affordable healthcare for families living in poverty by extending coverage to parents of Medicaid-eligible children </li></ul><ul><li>Protect benefits currently offered to children </li></ul><ul><li>Bring parents and children into the same private health plans </li></ul><ul><li>Increase participation by eligible children </li></ul><ul><li>Expand coverage solely through private health plans </li></ul><ul><li>Put parental benefits on a par with privately-insured families </li></ul><ul><li>Provide health plan choices available to low-income families </li></ul><ul><li>Prepare the way for further reforms </li></ul><ul><li>Draw in Federal funds and take advantage of Deficit Reduction Act (DRA) flexibilities </li></ul>
  20. 20. Target Population <ul><li>The plan extends private coverage to parents (“caretakers”) living in poverty. </li></ul><ul><ul><li>Currently, only parents below 25-36% of the Federal Poverty Level (FPL) are eligible. </li></ul></ul><ul><ul><li>Expansion phased in FY 2008-2010 </li></ul></ul><ul><li>All Medicaid families under poverty will participate. </li></ul><ul><ul><li>Children will participate with their parents in the same health plans </li></ul></ul><ul><ul><li>Those eligible under current rules will receive supplemental benefits to ensure full Medicaid coverage </li></ul></ul><ul><ul><li>Disabled children under poverty are not expected to participate and will remain in Medicaid </li></ul></ul>
  21. 21. Populations Covered by Premium Assistance Not Available Enroll with children in an employer-sponsored or state-procured option Parents 37%-100% of poverty Provided to ensure Medicaid-equivalent benefits Enroll with children in an employer-sponsored or state-procured option Parents below 37% of poverty Provided to ensure Medicaid-equivalent benefits Remain enrolled with children in an employer-sponsored or state-procured option Pregnant mothers below 100% of poverty Provided to ensure Medicaid-equivalent benefits Enroll with parents in an employer-sponsored or state-procured option Non-disabled children under 100% of poverty Supplemental benefits Private benchmark coverage  
  22. 22. Employer-sponsored plan option <ul><li>For income-qualified families who have access to employer sponsored health insurance that meets minimum qualifications, Medicaid will pay the employee share of family coverage. </li></ul><ul><ul><li>Medicaid application forms will be modified to obtain information about job-based coverage options </li></ul></ul><ul><ul><li>The most successful buy-in programs reimburse families directly for their share of the premium </li></ul></ul><ul><ul><li>There is no requirement for employers to offer health plans that meet the minimum criteria </li></ul></ul><ul><ul><li>Minimum qualifications will be based on cost-effectiveness and actuarial value of state employee health plan </li></ul></ul><ul><ul><li>Exploring ways to make evaluations of employer plans simple </li></ul></ul>
  23. 23. State-procured plan options <ul><li>When a family does not have access to an employer-sponsored plan, Medicaid will pay the full premium for children and their parents to enroll in private plans that contract with the state for this purpose. </li></ul><ul><ul><li>Families will be given information about each plan and asked to select a plan for their family at the time they enroll </li></ul></ul><ul><ul><li>Requesting input on the nature and number of plan options </li></ul></ul>
  24. 24. Supplemental benefits <ul><li>Adults and children participating in premium assistance who are already eligible for Medicaid under current rules will receive supplemental assistance to maintain Medicaid benefits. </li></ul><ul><ul><li>For families enrolling in employer-sponsored plans, supplemental benefits are expected to be provided in the form of an additional Medicaid card for presentation to providers. </li></ul></ul><ul><ul><li>For families selecting a state-procured plan, supplemental benefits may be provided through behind-the-scenes coordination of benefits. </li></ul></ul><ul><ul><li>Soliciting input on ways to ease the burden of this coordination of benefits. </li></ul></ul>
  25. 25. Key Design Issues <ul><li>Employer contribution </li></ul><ul><li>Coordination of benefits </li></ul><ul><li>Provider payment rates </li></ul><ul><li>Allocation of risk and population </li></ul><ul><li>Opportunities to emphasize and/or test consumer-driven concepts </li></ul>
  26. 26. Timeline <ul><li>May 2007 Passage of SB 11 authorizing premium assistance </li></ul><ul><li>Summer 2007 Stakeholder input into the design of the premium assistance program </li></ul><ul><li>September 2007 Formal request for information from potential bidders begins the procurement process: begin CMS approval process </li></ul><ul><li>December 2007 Issue request for proposals from private plans for procured options </li></ul><ul><li>Spring 2008 KHPA procures private plans to be offered to those without access to employer-sponsored plans </li></ul><ul><li>January 2009 Implement phase I expansion for families up to 50% of poverty </li></ul><ul><li>July 2009 Implement expansion up to 75% of poverty </li></ul><ul><li>July 2010 Implement expansion up to 100% of poverty </li></ul>