Medicaid

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Do safety net hospitals provide care strategically?

April 23, 2012 in Health Insurance, Hospitals, Medicaid | No comments

It is widely known that safety net hospitals provide less intensive care than hospitals whose patient base is mostly commercially-insured.  One question is whether safety net hospitals discriminate the care provided based on their patients insurance status.  In other words, do commerically insured individuals who visit safety net hospitals receive more care than patients treated at these same hospitals with no insurnce or who are covered by Medicaid?

Based on data from Virginia looking at surgery wait times and rates of breast re-construction surgery, the answer appears to be ‘no.’  A 2012 study by Bradley and co-authors finds the following:

“There is little evidence to suggest that safety net hospitals attenuate treatment differences between insurance and racial groups. The time between diagnosis and surgery was longer in safety net hospitals for all patients, regardless of insurance source or race. Perhaps safety net hospitals are operating at capacity and are unable to schedule surgeries in a timely manner. If this is the case, their resources may be further stretched following the passage of the PPACA. Alternatively, as these hospitals are teaching hospitals, they may perform additional diagnostic tests prior to scheduling surgery or physicians who treat low-income patients may have a slower referral process.”

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Providers for Underserved Populations: RHC and FQHC

April 16, 2012 in Medicaid, Medicare, Supply of Medical Services | No comments

What is an RHC? An FQHC? Using a research from Health Resources and Services Administration (HRSA), this post provides the answer.

Rural Health Clinic (RHC)

The Rural Health Clinics Act (P.L. 95-210) was passed by Congress and signed into law by President Carter in 1977. The goal of this Act was twofold. First, it encouraged the utilization of PAs and NPs by providing reimbursement for services these health professionals provided to Medicare and Medicaid patients, even in the absence of a full- time physician. Second, it created a cost-based reimbursement mechanism for services when provided at clinics located in underserved rural areas.

Because of subsequent changes in the Medicare law authorizing Medicare Part B coverage for PAs and NPs in all practice settings, not just RHCs, the original incentive for utilizing PAs and NPs was diminished. However, because an RHC gets reimbursed the same amount from Medicare and Medicaid regardless of whether the patient is seen by a mid-level provider (MLP) such as a PA, NP, CMN, or physician, the facility continues to have a strong incentive to utilize these practitioners whenever it is clinically appropriate.

There are significant differences between the way Medicare pays RHCs and how Medicaid does it.  Medicare reimburses RHCs for “core services” on the basis of an All Inclusive Reimbursement Rate (AIRR) reflecting the cost of the services.  Using cost report submissions from RHCs, Medicare calculates the AIRR as the total RHC allowable costs divided by the number of RHC visits.  In 2011, the reimbursement rate cap was $78.07 for RHCs.  Medicare pays 80 percent of the AIRR and the patient is responsible for 20 percent.

Although Medicaid paid RHCs on a cost-of-service basis before 2000, the Benefits Improvement and Protection Act of 2000 (BIPA) now permits Medicaid now pays RHCs using a prospective payment system (PPS).  The PPS methodology and payment rates vary by State.  For instance, some State Medicaid plans pay for other ambulatory and dental services in addition to RHC core services.

Federally-Qualified Health Center (FQHC)

The term “Federally Qualified Health Center,” or FQHC, refers to three different types of clinics:

  • Health Centers (HCs) including Community Health Centers (CHCs), Migrant Health Centers (MHCs), Health Care for the Homeless Health Centers (HCHs), and Public Housing Primary Care Centers (PHPCs) that are funded under Section 330 of the Public Health Service (PHS) Act,
  • FQHC “Look-Alikes,” or FQHCLAs, that have been identified by HRSA and certified by CMS as meeting the definition of “Health Center” under Section 330 of the PHS Act, although they do not receive grant funding under Section 330; and
  • Outpatient health programs/facilities operated by tribal organizations or urban Indian organizations.

CMS pays FQHCs similarly to the way it pays RHCs.  Medicare pays RHCs based on estimated cost (i.e., AIRR=Total Allowable Cost/FQHC Visits), and Medicaid pays FWHCs using a PPS methodology, based on the historical reasonable costs of the center.  The Medicare reimbursement rate cap for FQHCs is higher than for RHCs.  In 2011, urban FQHCs had a reimbursement rate cap of $126.22 and rural FQHCs had a reimbursement rate cap of $109.24.

It is possible for a practice to be certified as both an RHC and an FQHC, although only one payer status is available for either Medicare or Medicaid. The most likely option for dual certification will be RHC status for Medicare and FQHC status for Medicaid.

A summary of the differences between RHCs and FQHC can be found here.
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Does expanding insurance coverage improve access to care?

February 27, 2012 in CHIP, Health Reform, Medicaid | 3 comments

Although Health Reform did little to reduce the cost of health care, it did make significant strides to expand access to care.  For low-income individuals, the increased access comes along two dimensions: expanded Medicaid eligibility and increased physician fees.  Specifically, Health Reform required to

  • Make all individuals with incomes below 138% of the Federal Poverty Line (FPL) eligible for Medicaid, and
  • Increase their Medicaid physician fee schedules, so that they are no lower than Medicare’s for evaluation and management services provided by primary care physicians.

Whereas the first provision is permanent, the second provision is to be in effect only for 2013 and 2014.

Which one will have a bigger effect? According to a paper by White (2012), paying doctors more improves access.

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Have States made any progress towards implementing Health Exchanges?

February 6, 2012 in CHIP, Health Reform, Medicaid | 2 comments

The answer depends on the state. Today, I examine an Urban Institute research paper that looks at this progress in more detail.

Dividing States into 3 Group

The most advance States fall into Group 1 (CA, CO, CT, DC, HI, IN, MA, MD, NV, OR, RI, UT, VT, WA, WV). These states have either enacted an exchange establishment law or in which the governor has established one by issuing an executive order. Massachusetts and Utah had already passed exchange laws before enactment of the ACA. All Group 1 states (except Colorado, Massachusetts and Utah) have received an exchange establishment grant.

Group 2 states (AL, AZ, DE, IA, ID, IL, KY, ME, MI, MN, MO, MS, NC, NE, NJ, NM, NY, PA, TN, VA, WI) have not yet established exchanges, but have demonstrated significant interest in doing so. Most notably, 17 of the 21 states have received level 1 federal establishment grants, which represent a second round of funding for state exchange development work beyond the initial state planning grants. Although Wisconsin has not received a level 1 federal establishment grant, Wisconsin is using federal funds to develop an IT system to fully integrate exchange eligibility determination and enrollment with state-based public insurance programs (i.e., Medicaid and CHIP). Recently, however, Wisconsin Governor Scott Walker has rejected all federal funding for implementation of the ACA. Of the remaining four states, Virginia and Wisconsin have passed legislation stating its intent to develop an exchange, although they have not yet passed exchange establishment legislation, New Jersey has establishment legislation pending in its legislature, and Pennsylvania’s governor has recently announced that his administration is taking steps to establish a state exchange.

Group 3 states (AK, AR, FL, GA, KA, LA, MT, ND, NH, OH, OK, SC, SD, TX, WY) do not meet any of the criteria for Groups 1 and 2 and are the furthest from successfully implementing the ACA provisions.

Correlation between Exchange Progress and Potential Increases in State Health Insurance Coverage

A research article from the Urban Institute finds that States with the ‘most to gain’ from the ACA are actually the most likely to fall into Group 3. States that currently have the least generous Medicaid programs and the largest share of uninsured workers are the least likely to have made significant progress in implementing the ACA provisions.

I can think of two reasons for this finding. The first is philosophical. These States began with less generous health insurance programs. Thus, the residents (or politicians) in these States may prefer to have less generous health insurance programs than other States. Hence the natural aversion to implementing the ACA provisions. The second reason is financial. Because these States have the largest share of uninsured individuals, they would also incur the largest percentage increase in cost to finance the ACA provisions. Although it is true that these States would likely receive the largest subsidies, these subsidies will not cover the full cost of the ACA implementation.

Questions States need to answer to implement an Exchanges

  • Should the exchange be run by an existing government agency, a new agency, a quasi-governmental entity or a not-for-profit private entity?
  • What should the composition of the governing board be?
  • How should the administrative costs of running an exchange be financed?
  • Should the exchange be able to actively negotiate with plans over premiums?
  • Can plans be excluded, or must all qualified plans be allowed to participate?
  • In computing premiums, should enrollees in the Small Business Health Options Program (SHOP) exchange and nongroup exchange markets be pooled together, or should their premiums be set separately?
  • What will be the role of agents and brokers in the exchange?
  • Should state insurance regulations be identical inside and outside the exchange?
  • How will Medicaid/CHIP eligibility and enrollment be integrated with the exchange?
  • Should the Basic Health Plan option be implemented?

Source: Blavin F, Buettgens M and Roth J “State Progress Toward Health Reform Implementation: Slower Moving States Have Much to Gain.” RWJF and Urban Institute Real Time Policy Analysis, January 2012.

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MEPS vs. NHEA

December 20, 2011 in CHIP, Data, Econometrics, Medicaid | No comments

Many researchers use household data sources to examine a variety of hypothesis.  The use of household data has many benefits including allowing for more detailed socioeconomic information (e.g., education, income) beyond what is contained in administrative claims files.  One drawback of household data is that extrapolations made from household survey data may not match national estimates.

For instance, this article examines how to align the Medical Expenditure Panel Survey (MEPS) to aggregate U.S. benchmarks provided in the National Health Expenditure Accounts (NHEA).  Today, I review some of these adjustments.

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What’s a ‘dual’?

December 15, 2011 in Medicaid, Medicaid/Medicare, Medicare | No comments

Nine million individuals qualify for both Medicare and Medicaid health insurance.  These individuals, known as dual-eligibles, rank among the most expensive Medicare and Medicaid beneficiaries.  Duals are frequently hospitalized and often need long-term care.  In fact, most state spending for dual eligibles focuses on long-term care supports and services.

The federal government pays the bulk of care costs for dual eligibles. Of the $319.5 billion estimated as spent on duals in 2011, 80 percent ($256.6 billion) are federal dollars, more than two-thirds of which flowed through Medicare.

Unnecessary hospital use is one of the main drivers of inflated Medicare spending on duals.  One reason for this is that Medicare pays for all hospitalizations.  Thus, State Medicaid Agencies have less of an incentive to prevent costly hospitalizations.  Further, nursing homes also have an incentive to hospitalize duals.  Nursing home who care for an individual after they are hospitalized receive a higher Medicare skilled nursing facility (SNF) rates rather than the lower Medicaid long-term care rates.  Thus, nursing homes can increase their rates just by admitting their residents to teh hospital periodically.

Additionally: Dual eligibles experience far higher rates of “potentially preventable hospital admissions” than other Medicare beneficiaries: more than twice as high for pressure ulcers, asthma and diabetes; 52 percent higher for urinary tract infection; and over 30 percent higher for chronic obstructive pulmonary disease and bacterial pneumonia.

Many dual eligible individuals are enrolled in Medicare Special Needs Plans (SNP).  [Dual eligibles constitute about a million of the 1.3 million people enrolled in SNPs.]  Medicare pays these pays a capitated rate in exchange for providing a host of services to these beneficiaries.

The Affordable Care Act established of the Medicare-Medicaid Coordinated Care Office (known internally at CMS as the Office of the Duals), which has launched a number of initiatives to better align the programs.  A paper by Feder et al. makes the following recommendations:

  1. finance nurse practitioners in nursing homes to coordinate frail residents’ care (United Healthcare’s Evercare program has already demonstrated, relative to control groups, that this strategy can cut hospitalizations and emergency room use in half);
  2. apply performance standards, like those now applied to hospitals, to penalize SNFs with excessive rates of preventable hospitalizations for their residents (whether or not they are receiving SNF care).

Source:

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Does California really love Managed Care?

November 28, 2011 in Current Events, Health Insurance, Managed Care, Medicaid, Medicare, Medicare Advantage | 1 comment

In short, yes. California is the land of managed care. Kaiser-Permanente–the managed care poster child–owns one third of the market.  Love for managed care is not just in the private market; in 2010, over half of all Medi-Cal and more than one-third of Medicare beneficiaries were enrolled in managed care plans.  Further, California managed care plans even have their own regulator.  Whereas the California Department of Insurance (CDI) regulates non HMOs, the California Department of Managed Health Care (DMHC) regulates HMOs.

A recent report by the California Health Care Foundation investigates managed care in California and provides a high quality overview of the California health insurance market.  Some of their findings include:

  • Five insurance carriers (Kaiser, Anthem Blue Cross, Health Net, Blue Shield, United Healthcare) accounted for three-fourths of the $105 billion health insurance revenues in California in 2010. Revenue growth has been slower for managed care plans in recent years, however.
  • The six largest managed care plans together lost more than 400,000 commercial enrollees. On the other hand, Medi-Cal and Medicare managed care enrollment grew.
  • Anthem Blue Cross and Blue Shield experienced enrollment decline in 2010, which reversed a previous growth trend.
  • Large majorities of HMO and PPO members rated their plan highly in terms of getting appointments quickly, finding a doctor, and getting the care they need. HMO enrollees more often rated their care highly than those enrolled in PPOs, while PPO participants were more likely to favorably cite their ability to get an appointment quickly.

Source: Katherine Wilson, “California Health Plans and Insurers” California Health Care Foundation, November 2011.

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State Governments Providing Health Insurance to More Children

October 28, 2011 in CHIP, HC Statistics, Medicaid | No comments

Of the 6.6 million uninsured children in the nation, 4.3 million are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). Approximately 2.8 million children come from families at or near the federal poverty line (FPL).

Despite the fact that millions of children are uninsured, children’s participation rates in Medicaid/CHIP are increasing. Today I will review the results of an Urban Institute study examining trends in Medicaid participation rates for children.

Data

The authors use data from the 2008 and 2009 American Community Survey (ACS). This large survey data set has replaced the Census long form. The authors use the Integrated Public Use Microdata Series (IPUMS) version of the ACS.

Determining Eligibility

Three main characteristics determine a child’s eligibility: family composition, income, and immigration status.  Medicaid eligibility depends on the family’s income as a share of the federal poverty level (FPL).  The FPL threshold changes based on how many individuals are in the household.  Further, many States restrict Medicaid and CHIP access to citizens or legal residents.  Although survey data often indicate whether the individual is foreign born, the data do not contain information on whether the individual is a citizen, legal resident, temporary resident, or lives in the U.S. illegally.  This paper describes one methodology to impute immigration status from these survey data.

Results

  • The share of children without health insurance coverage fell between 2008 and 2009,despite the ongoing economic downturn;
  • Nationally, the rate of Medicaid/CHIP participation among children rose by 2.7 percentage points to 84.8 percent and cross-state variation in Medicaid/CHIP participation rates narrowed, as larger improvements occurred on average for states that had the lowest participation rates in 2008;
  • Six states (DC, Hawaii, Maine,Massachusetts, Michigan and Vermont) had participation at or above 90.0 percent in 2008 and 2009
  • Six states (Florida, Montana, Nevada, North Dakota, Texas and Utah) had participation rates below 80.0 percent in both 2008 and 2009
  • Participation gains occurred between 2008 and 2009 for children in each race/ethnicity, language, income and age group examined;

Source: Kenney GM, Lynch V, Haley J, Huntress M, Resnick D and Coyer C. “Coverage Gains for Children,” Urban Institute, RWJF Report, Aug 16, 2011.

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Newly eligible Medicaid beneficiaries report poorer health than current enrollees

October 27, 2011 in Medicaid | 1 comment

According to Avalere Health the people who will be added to Medicaid through healthcare reform are more sick — and therefore will be more expensive to treat — than current beneficiaries.  This chart below uses data from the 2008 Medical Expenditure Panel Survey (MEPS) to demonstrate this point.

 

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Medicare & Medicaid Statistical Supplement

October 7, 2011 in HC Statistics, Medicaid, Medicaid/Medicare, Medicare | 1 comment

CMS has a wealth of publicly available summary statistics regarding enrollment, spending, treatment patterns, cost sharing and other topics for both Medicare and Medicaid beneficiaries.  This information can be accessed through the Medicare & Medicaid Statistical Supplement website.  The site includes statistics on the following topics:

  • Personal Health Care Expenditures
  • Medicare Enrollment
  • Medicare Program Payments
  • Medicare Cost Sharing
  • Medicare Short Stay Hospitals
  • Medicare Skilled Nursing Facilities
  • Medicare Home Health Agencies
  • Medicare Hospices
  • Medicare Physician Services
  • Medicare Hospital Outpatient Services
  • End Stage Renal Disease
  • Medicare Managed Care
  • Medicaid
  • Medicare Part D

There is data available from 2001 to 2010.

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