Dennis Olmstead, chief strategy officer for the Pennsylvania Medical Society, said doctors also are balking based on the rate issue. “Absolutely, some may decline being part of the networks if they are given a choice, while others may feel it's their moral duty to serve these individuals,” he said. But he added that some doctors may not be able to decline because they have “all product” clauses in their contracts with insurers, requiring them to serve members of all plans offered by that insurer, including a Healthy Pennsylvania plan.
The healthcare and political stakes are high. The Medicaid plans have until Oct. 17 to receive certification from the state that they have enough providers to offer adequate access to the expanded Medicaid-eligible population. Enrollment is scheduled to begin Dec. 1. The state needs the plans to be certified by Oct. 17 to begin outreach and enrollment.
Both Corbett, who is trailing in the polls in his November re-election contest, and the Obama administration have a lot invested in seeing Healthy Pennsylvania succeed. Corbett has been criticized by his Democratic opponent, Tom Wolf, for not promptly expanding Medicaid and costing the state hundreds of millions in federal Medicaid dollars. And the Obama administration badly wants more Republican-led states to follow Pennsylvania's example and expand Medicaid under the Patient Protection and Affordable Care Act, including through conservative-oriented models like Corbett's.
The CMS approved Corbett's alternative Medicaid expansion model in August. As part of the initiative, the state is building a second Medicaid managed-care system, separate from the existing Medicaid system serving about 1.6 million residents who are not part of the expansion population. Those currently in the state Medicaid program will not have access to these new plans. Starting in 2016, enrollees in Healthy Pennsylvania with incomes above 100% of the poverty level must pay monthly premiums of up to 2% of their household income.
There are nine designated regions of operation for the Healthy Pennsylvania plan across the state. The Corbett administration set a goal of having at least two plan options per region. As of Monday, there were some regions that had no plans certified as having adequate networks, said Michael Rosenstein, who coordinates the Pennsylvania Coalition of Medical Assistance Managed Care Organizations, an association of the state's Medicaid plans. He declined to identify those regions.
Leesa Allen, the state Medicaid director, said so far three or four plans have been certified as having adequate provider networks, but that she is confident the other plans also will qualify for certification. “They still have nearly two weeks and they're making good progress,” Allen said. “We're feeling confident at this point.”
Officials from other plans, including Geisinger Health Plan, confirmed they too were facing the problems in lining up an adequate provider network.
The four-hospital Lehigh Valley Health Network, based in Allentown, said it has not yet contracted with any of the five Medicaid plans covering its region.
It and other hospital systems say their rate expectations were based on procurement documents released by the state when it was looking for insurers to participate in the Healthy Pennsylvania program. In those documents, state officials said they were developing rates to allow plans to pay providers at “a midpoint between Medicaid and commercial pricing.” Pennsylvania officials said this was necessary because there would be limited buy-in from providers if plans offered the same rates as those paid by the state's current Medicaid managed-care insurers.
“Because reimbursement rates in Medicaid have been historically lower than Medicare or commercial rates, many providers in Pennsylvania accept only limited numbers of Medicaid patients,” the state said in its original waiver proposal to the CMS. “Other providers cross-subsidize their Medicaid patients by charging more to their privately insured patients. As such, the 1115 Demonstration will seek to stabilize provider payments across payers, expand provider access, and reduce the need for providers to cross-subsidize.”
Allen said that when the state initially developed rates for the Medicaid plans, it wanted enough so the plans could pay providers closer to what they were receiving from private health plans on the Obamacare insurance exchange. But she said that during the Corbett administration's negotiations with the CMS, the federal agency only agreed to allow plans to reimburse at levels slightly higher than what was currently being paid for Medicaid beneficiaries.
Corbett administration spokeswoman Christine Cronkright said “the original proposal to the federal government did request that rates be as close to private rates as possible” but that request ultimately did not get approved.
A CMS representative did not immediately respond to a request for comment.
Under federal law, the CMS can only approve waivers for demonstrations that are not projected to cost the federal government more on a net basis than the existing program. And private Medicaid managed-care plans have the leeway to set their provider payment rates based on their own business calculations of what's needed to earn a profit. So it's not clear how the Corbett administration thought it could ensure that providers would receive closer-to-commercial rates.
Officials from Corbett's office and the Department of Public Welfare did not respond to a request for comment on that issue.
Last month, Department of Public Welfare officials held a conference call with more than 150 hospitals around the state to discuss the rate issue, said Paula Bussard, senior vice president for policy and regulatory services at the Hospital & Healthsystem Association of Pennsylvania. On the call, state officials blamed the CMS, saying federal officials insisted that the state pay lower rates to the plans than what the state was seeking, Bussard said.
Nevertheless, Bussard said her organization's members and Medicaid plans are trying to work out deals allowing hospitals to participate in Healthy Pennsylvania.
Rosenstein, with the state health plan coalition, said some hospitals say they still expect plans to pay closer to commercial rates. “We feel that a written document from the department would clear up any misgivings and we've asked for that, and we've yet to see it,” he said.
Follow Virgil Dickson on Twitter: @MHvdickson
