A trade group representing Medicaid health plans claims that a bill allowing severely ill kids to receive Medicaid coverage across state lines would cost more, not less as previously touted by supporters of the measure.
A study released earlier by healthcare policy consulting firm Dobson DaVanzo & Associates estimated that if enacted, the bill could result in total state and federal Medicaid savings of $13 billion over 10 years.
The savings would come through increased efficiency, including reduced hospitalizations and emergency room visits.
Medicaid Health Plans of America, the organization representing health plans participating in Medicaid managed care, argues the legislation would actually increase Medicaid costs and could disrupt treatment for children who currently receive care through managed Medicaid plans.
The group hired Steve Lieberman, a consultant and senior adviser to the Health Policy Project at the Bipartisan Policy Center in Washington, D.C, who found problems with DaVanzo & Associates' methodology.
Lieberman did not believe savings would occur as quickly as the DaVanzo study asserted. Lieberman also raised concerns about the estimated savings based on acute care data but not long term care data, which many of these children receive.
“Adopting realistic assumptions about timing would change the Dobson/DaVanzo 10-year estimate from saving money to increasing Medicaid spending,” Lieberman said, though he did not estimate what the increase would be.
The CHA refuted Liberman's claims and noted the original estimates were actuarially validated.
“MHPA's memo findings represent its opinions on adoption and savings assumptions, absent the hands-on experience of the children's hospitals and pediatricians who actually take care of these children and their families,” said Mark Wietecha, president of the CHA in a statement. “The MHPA study further ignores the experience of the pediatric health care community as documented in the literature, in practice, and by Center for Medicare & Medicaid Innovation, and is not a credible assessment as currently offered.”
But MHPA is adamant the bill may not be needed at all.
"It seems to us this would lead to further fragmentation in the healthcare system, not more coordination,” Jeannine Bender, director of government affairs at MHPA.
Bender said the legislation assumes most affected children are in a fee for service system, but many of these kids are in managed Medicaid, and as such, are already able to get care across state lines.
The ACE act aims to provide uniform coverage. The current Medicaid system is different in every state and non-emergency procedures tend to be covered only if they are provided within the residential state. Because the medical needs of very ill children could require dozens of specialists across the country, parents often have to navigate a bureaucratic maze to cover medical costs.
An estimated 2 million of the nation's sickest children, those with leukemia and muscular dystrophy and similar illnesses, would be covered under the ACE act.
Under the legislation, states would volunteer into the initiative and eligible children would be assigned to a nationally designated children's hospital network. These networks would coordinate a full range of services, including home, primary, ambulatory, acute and post-acute care. Each participating state would continue to set payment rates, benefits and enrollment.
As the bill is currently written, states with managed care that opted into the ACE act would be, in effect, moving kids into a new and untested system, according to Bender.
Lawmakers, however, are standing by the law.
“I'm hopeful it will reach the President's desk in this Congress,” Reps. Joe Barton (R-Texas), lead sponsor of the bill in the House said in a statement.