2020 Outlook: Expect Push for Waivers, Medicaid Referendums This Year

 

Reprinted with AIS Health permission from the January 6, 2020, issue of Health Plan Weekly

 

Conservative states are likely to push hard in 2020 for CMS approval of Medicaid waivers that will allow them to implement policies such as work requirements, while voters in some of the 14 states that have not yet expanded Medicaid could tee up referendums that would require expansion, Medicaid observers say.

 

Jerry Vitti, founder and CEO of Healthcare Financial, Inc., a company that connects low-income elderly and disabled populations with public benefit programs, says he anticipates additional Medicaid waiver applications from red states.

 

“With the clock ticking on the [Trump] administration, they will want to get through as many waivers as possible with conservative principles [such as] work requirements and copayments, and things that discourage folks from staying on the rolls,” Vitti tells AIS Health.

 

Meanwhile, Medicaid expansion efforts in state legislatures may slow as the country approaches the 2020 election, notes Patricia Boozang, senior managing director at consulting firm Manatt Health. Still, she says Kansas is actively debating Medicaid expansion, and she expects some states to have referendums for expansion on the ballot next November.

 

Several states are in the process of expanding Medicaid in 2020 following successful ballot initiatives in the previous midterm elections.

 

✦ Idaho, where voters approved a Medicaid expansion referendum in 2018, was scheduled to expand Medicaid as of Jan. 1, 2020. The state began enrollment in November 2019, even though CMS had rejected its 1115 waiver plan, which included a work requirement and a provision allowing beneficiaries with incomes from 100% to 138% of the federal poverty level to choose between the public program and individual market plans (HPW 6/10/19, p. 1).

 

✦ Utah, another state that approved Medicaid expansion by referendum in 2018, has seen attempts by state lawmakers to pare back that expansion. On Dec. 23, CMS gave Utah the green light to fully expand Medicaid, though “some newly eligible adults will be required to participate in a self-sufficiency requirement in order to receive benefits.”

 

✦ Nebraska submitted a waiver request to CMS in December seeking approval for a plan to implement its own Medicaid expansion, which was approved by ballot initiative in 2018. Under the plan, enrollment would begin in August 2020 and coverage would begin in November. The waiver request would establish two tiers of coverage and a work requirement.

 

Finally, Tennessee is the first state to seek CMS approval to restructure its Medicaid program financing into block grants, which would give state officials more authority to determine who can enroll in TennCare, what services will be covered and how much the state will pay for them.

 

This is “a radically different approach,” Vitti says. “While times are good, you have money” to pay for care. “As soon as the economy goes south, utilization goes way up and you’re looking at a fixed amount of money, necessitating cuts in services.”

 

It’s difficult for states to cut services for children, but it’s easier for them to cut services and coverage for “able-bodied adults,” he says.

 

States also are holding off on implementation of already-approved Medicaid work requirements as litigation surrounding those requirements works through the court system.

 

Indiana is the only state that actually has implemented Medicaid work requirements. Ten states have received CMS approval for work-related provisions, while another nine states have waiver applications pending, according to the Kaiser Family Foundation. Three states that won approval from CMS — Kentucky, Arkansas and New Hampshire — have had their work requirements blocked by courts, and six others have not yet implemented the requirements.

 

Work Requirements Are in Limbo

“I do think the litigation around work requirements is something that states and the administration are watching really closely,” Boozang says. “While we may see additional states seek approval, we may not see any implemented.” South Carolina, where state officials just announced the approval of a partial expansion waiver that includes work requirements, could become an exception, she says.

 

Vitti adds: “If the courts say work requirements are fine, you’ll see the red states adopt them.”

 

Meanwhile, more than a dozen states are looking at conducting Medicaid managed care contract procurement in 2020, Boozang says. These states include: Georgia, Iowa, Indiana, Kentucky, Michigan, Missouri, Mississippi, Pennsylvania, Tennessee, Virginia, Washington, Wisconsin and West Virginia.

 

As states move through procurement, Boozang says she expects to see more value-based payment systems implemented, with plans’ help. In addition, she says, states that are paying accountable care organizations directly and sharing risk with providers are seeing pressure to make sure those payments are funded adequately.

 

Plus, states increasingly are turning to Medicaid managed care programs to help them implement policy priorities, such as those surrounding social determinants of health (SDOH), according to Boozang. “We see it in the form of new requirements on plans — states are asking plans to add value-added services. I see social determinants of health as one of those,” she says, adding that various state Medicaid agencies have asked insurers to implement programs targeting food insecurity, housing issues and family violence.

 

“These are the types of initiatives and programs that Medicaid doesn’t traditionally cover, but are really cost-effective and add value,” Boozang says. “Social determinants is an area where states are really turning to their plans.” Vitti agrees, adding that “states are going to leverage managed care companies to do more around transportation, food insecurity and housing.”

 

Medicaid insurers are finding connections between SDOH and improved outcomes in their own data. For example, UnitedHealthcare has invested some $400 million in new affordable housing, and reports that in one state, emergency department admissions dropped by 60% and total cost of care was 50% lower for people enrolled in a housing program.

 

States Look to ‘Closed Loop’ Referrals

An issue brief released by Manatt Health in April 2019 reported that states are increasingly requiring plans to provide so-called “closed loop” referrals (e.g., track what happens to someone referred to a social service provider); to maintain up-to-date information on community-based resources; and to integrate efforts to address SDOH into standard care management policies and practices.

 

The brief also found that some states, such as Michigan, are expanding SDOH interventions beyond high-needs populations, to include children, families and healthy adults.

 

In some instances, they also are addressing harder-to-tackle issues, such as social isolation and the impact of a history of incarceration on health expenditures and outcomes. For example, Virginia requires its managed care organizations to address “social cohesion” when assessing an enrollee’s SDOH needs, while Arizona alerts MCOs when they have a member being released from jail or prison and requires them to conduct outreach to establish community-based care options.

 

Boozang notes that these kinds of initiatives can spread to more states as early adopters see results from them.

 

She says that combatting the opioid crisis continues to be a high priority for states, which are turning to their Medicaid plans to expand their networks of providers specializing in treatment for substance use disorder. And “maternal health and mortality is another area where states increasingly are looking to plans to build new metrics.”

 

Contact Vitti via Joe Reblando at joe@joereblando.com and Boozang via Sam Eisele at seisele@manatt.com.

 

by Jane Anderson