Reform Update: States seek contested Medicaid alternatives, cuts

Proposals from conservative-led states looking to expand their Medicaid coverage in alternative ways have prompted worries among healthcare providers and patient advocates that proposed changes may mean some benefits are discontinued.

In traditional Medicaid, beneficiaries receive what are known as “wraparound” benefits, which include non-emergency transportation to provider offices, periodic vision, dental and hearing screenings for children and young adults under 21, and access to contraceptives.

Several states now moving to expand coverage to adults with incomes under 138% of the federal poverty level have asked HHS to waive the requirement that they provide these benefits. Wraparound benefits, which typically are not included in commercial health plans, are designed to help low-income people with no discretionary funds achieve better health outcomes.

In approving Iowa's alternative Medicaid expansion plan late in 2013, HHS allowed the state to eliminate non-emergency transportation for one year. Pennsylvania wants a similar waiver. Under pressure from Republican lawmakers, Arkansas also is seeking to drop payment for non-emergency transportation. Details have yet to be released.

The transportation benefit reportedly accounts for as much as 2% of a state's Medicaid costs. Providers and advocacy groups say transporting patients to appointments saves money by avoiding hospitalizations and emergency room visits.

According to a new report from the Community Transportation Association of America, about 32% of all the rides in 2013 were for behavioral health therapy. A significant percentage of Medicaid patients have mental health and/or substance abuse problems, which contribute to higher healthcare costs if those conditions are not adequately treated. Other leading transportation needs include rides to dialysis treatments (18%), routine visits to doctors' offices (6%), and cancer treatment (1.5%). Other destinations included adult day care, outpatient surgery facilities, pharmacies, smoking cessation and weight loss centers and physical therapy facilities.

A previous analysis found that 7% of Medicaid beneficiaries reported transportation as a barrier to accessing timely primary care.

Providers in Arkansas are concerned about the proposal to drop transportation benefits. “I'm not real happy about this,” said Sip Mouden, CEO of Community Health Centers of Arkansas Inc., which represents more than a dozen federal qualified community health centers that operate 88 sites serving many low-income patients. “These are Medicaid patients, no matter what the state says, and they should be receiving all the same services,” she said, whether or not patients are in traditional Medicaid or the private plan program.

Dropping transportation could be a big problem for disabled patients, said Patti Rogers, executive director of the Arkansas Spinal Cord Commission, a state agency that oversees the care of 2,400 people with spinal cord disabilities. When these patients develop pressure sores, they need to get to a doctor on almost a weekly basis to make sure they are healing properly, she said.

Physicians are taking a wait-and-see approach. “We should never do something because it's the way it's always been done. If we can find a better way to do something, that's what we should do, and I think that's the goal here,” said David Wroten, executive vice president of the Arkansas Medical Society.

Pennsylvania also is seeking to eliminate coverage for non-emergency transportation in its Medicaid expansion proposal, for which HHS currently is accepting public comments. The Pennsylvania Medical Society is split on the issue. “There's recognition of pros and cons. Some need [the service], but there has been past abuse by some as well,” said Chuck Moran, the medical society's director of media relations.

Pennsylvania also seeks to waive the Medicaid requirement that it pay for family planning services including contraceptives and the implantation of intrauterine devices.

Medicaid patient advocates are strongly opposing Pennsylvania's requests to drop those benefits. Joan Alker, executive director of the Center for Children and Families at the Georgetown University Health Policy Institute in Washington, is seeking co-signers for a letter she plans to send to the Obama administration ahead of the comment deadline on April 11. “Medicaid beneficiaries have unique needs because of their low incomes,” the letter reads. “They are unlikely to be able to obtain necessary healthcare services that are not covered by Medicaid.”

It's unclear how the Obama administration will respond. In the past, HHS has blocked states from dropping wraparound benefits. For example, it refused to allow Iowa to drop coverage for certain screenings that now are mandated for 19- and 20-year olds.

Today marks the kickoff of Michigan's expanded Medicaid program. An estimated 477,000 low-income adults are eligible for the expanded program. Republican Gov. Rick Snyder succeeded last year in convincing conservative lawmakers to approve the expansion of coverage to adults with incomes up to 138% of the federal poverty level.

The plan, called Healthy Michigan, is expected to cover 320,000 people in the first year. Participants will be on the hook for monthly premiums that will cost up to 2% of their income, which advocates for low-income people have criticized. Enrollees also will be responsible for co-pays. Providers are concerned about trying to collect these payments, and whether this will discourage low-income people from signing up for Medicaid and accessing needed services.

The state obtained a waiver from the Obama administration to be able to charge the premium. Failure to pay the premium will not result in loss of Medicaid coverage, but could result in providers declining to continue a patient's treatment, state officials say.

Out-of-pocket costs will be reduced if a beneficiary completes an annual health risk assessment and changes unhealthy behaviors such as smoking. This provision differs from a similar waiver provision in Iowa, which allows beneficiaries who participate in proactive healthy behaviors to be exempt from paying premiums.

Beneficiaries earning below 100% of the federal poverty level will only be responsible for co-pays, not for premium payments. But coverage can't be lost nor can services be denied for not paying the co-pay.

The American Academy of Family Physicians is planning to ask Congress to extend higher Medicaid payment rates for primary care services beyond Dec. 31, 2014, according to organization documents.

The program created under the health reform law, pays providers Medicare rates for the services they provide to Medicaid patients. The goal of the program was to get more doctors interested in working with Medicaid patients.

“This increased Medicaid payment for primary care services is an important signal that primary care is a valued and viable profession,” the AAFP said in a statement.

Follow Virgil Dickson on Twitter: @MHvdickson