We are excited to introduce NASTAD’s Health Reform Watch. As health reform implementation continues, NASTAD will share analysis and information and highlight state implementation efforts.
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Health Reform Watch

Volume 1, January 11, 2013

Introducing Health Reform Watch

In our continuing efforts to provide more ways for you to receive timely, accurate, and high quality content, we are excited to introduce NASTAD’s Health Reform Watch. As state and federal health reform implementation continues, NASTAD will use the Health Reform Watch to share analysis and information and to highlight state implementation efforts. For questions, please contact Amy Killelea.

The reelection of President Obama combined with modest Democratic gains in the House and Senate remove much of the uncertainty about the future of the Affordable Care Act (ACA), as wholesale repeal is virtually impossible given the current make-up of Congress. The removal of this uncertainty means that full implementation of the law will occur on an extremely fast timeline, and both states and the federal government have a lot of ground to make up in the coming weeks and months. The most recent federal updates as well as state implementation highlights are discussed in detail below.


In This Edition

NASTAD Blog: The Latest Health Reform Posts

In our ongoing efforts to improve NASTAD communications, we are piloting a new web blog to provide more ways for you to receive timely, accurate, and high quality content. Please stay tuned for more details as we complete this transition. Below are the latest health reform blog posts. Please send questions, comments, and suggestions to Meico Whitlock.

Health Reform Blog Posts

Federal Implementation Updates

Essential Health Benefits (EHB)
In November 2012, the Department of Health and Human Services (HHS) published a much-awaited proposed rule on the Essential Health Benefits (EHB) and affordability requirements for private insurance plans sold in the individual and small group markets in 2014. HHS also appended the proposed benchmark plans for each state to the proposed rule. NASTAD submitted comments to the proposed rule, highlighting ongoing coverage concerns, including:
  • Health departments, consumers, insurers, and other stakeholders must have access to detailed benefit plan information that includes detailed prescription drug formularies and cost-sharing tiers, benefits exclusions, and utilization management techniques and service limits.
  • HHS must set a floor for benefits coverage that includes a definition of EHB categories and minimum coverage standards. This is particularly important given the fact that several benchmark selections fall below the HIV and viral hepatitis standards of care (e.g., include formularies that do not cover all antiretrovirals or viral hepatitis medications).
  • Substitution of benefits within categories should be strictly regulated to ensure that insurers do not use this flexibility to limit access to benefits for high-cost beneficiaries.
  • HHS should detail processes for identifying and monitoring discriminatory insurance practices and for enforcing the ACA’s non-discrimination mandates. These processes must include detailed descriptions of what constitutes discriminatory plan designs and appropriate federal oversight and enforcement.
  • HHS should closely monitor access to essential care and treatment through EHB-governed plans over 2014 and 2015 and should reevaluate its approach in 2016. This evaluation should include assessment of whether the benchmark approach is appropriate to meet HIV and viral hepatitis prevention, care, and treatment needs and whether national standards for benefits coverage are needed.
The proposed rule on EHB and affordability requirements does not include discussion of how EHB will be applied to Medicaid benefits for newly eligible beneficiaries in 2014, and future regulations on this topic are expected. However, the Centers for Medicare and Medicaid Services (CMS) recently sent a State Medicaid Director Letter to states with some preliminary guidance on this issue. Key points from the letter include:
  • Summary of existing federal law allowing state Medicaid programs to implement “benchmark” coverage based on private insurance plans (called “Alternative Benefit Plans”) for certain Medicaid populations.
  • ACA requires newly eligible Medicaid beneficiaries to have access to coverage that includes the ten categories of EHB (previous guidance indicates that states may provide either traditional Medicaid benefits to the expansion group or provide “benchmark” coverage).
  • Several benchmark plan options for Medicaid overlap with the benchmark plan options for private insurance, meaning that the benchmark plans for private insurance and Medicaid could be the same in some states. However, existing Medicaid protections will still apply for Medicaid beneficiaries. For benchmark plans that are missing categories of coverage, the same supplementation process as set forth in the private insurance proposed regulation will apply.
  • Under existing Medicaid benchmark provisions, states have flexibility to design a number of benchmark plans to meet the needs of targeted populations. States will be required to submit state plan amendments to CMS beginning in the first quarter of 2013 outlining the benefit plan it will offer for newly eligible beneficiaries.
Exchange Design
In November 2012, HHS announced new deadlines for state decisions on whether to operate their own exchanges or allow the federal government to operate the exchange. States had until December 14, 2012 to indicate that they would run their own exchange and to submit a Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges to HHS. As of the end of December 2012, 24 states had submitted plans to HHS for a state-based or partnership exchange. Thus far, the following states have approved plans for state-based exchanges:

  • California
  • Colorado
  • Connecticut
  • District of Columbia   
  • Hawaii
  • Idaho
  • Kentucky
  • Maryland
  • Massachusetts
  • Minnesota
  • Nevada
  • New Mexico
  • New York
  • Oregon
  • Rhode Island
  • Utah
  • Vermont
  • Washington

States have until February 15, 2013 to submit a blueprint for a partnership exchange, in which the state and federal government share responsibilities for exchange operations. Arkansas and Delaware have been approved for state partnership exchanges. HHS recently published additional guidance on the partnership exchange model, detailing the breakdown of federal and state activities over plan certification, data collection and monitoring, and consumer outreach and enrollment functions. The guidance indicates that HHS plans to maximize the insurance regulatory activities already undertaken by state departments of insurance. States that do not opt for the state-run or partnership exchange will have a federally facilitated exchange. Details on the federal roll-out plan for these exchanges (which are expected to be operating in over half of all states) are forthcoming. Kaiser Family Foundation is tracking state declarations with regard to state-run, partnership, or federally facilitated exchanges.

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Medicaid Expansion
In December 2012, CMS released guidance on a number of health reform implementation issues, including whether states would be allowed to enact a partial Medicaid expansion in 2014. The Supreme Court’s decision last June greatly limited the ability of the federal government to enforce the ACA’s Medicaid expansion, creating a question of whether and when every state would comply with the coverage expansion. Following the decision, several governors petitioned CMS to be allowed to enact a partial expansion to an income level below 138 percent FPL and still receive the enhanced federal funding for this population. In the newly released guidance CMS clarified that in order to receive the enhanced federal funding for the expansion population, a state must expand to the full 138 percent FPL as stated in the law. A state could choose to cover a population below this income level, for instance through a section 1115 Medicaid waiver, but such a waiver would be subject to the state’s regular federal match rate and not the enhanced ACA match rate. The guidance suggested that there may be more flexibility around partial expansion in 2017. Finally, the guidance reiterated that there is no date by which states must indicate to CMS whether they intend to expand and they may choose to expand after 2014. However, the state would only be entitled to the enhanced federal matching rate available at the time of expansion (e.g., 100 percent in 2014 through 2016 and gradually lowering every year starting in 2017 to 90 percent in 2020 and beyond).

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Medicaid Health Homes
The ACA’s Medicaid health home program, which provides states with enhanced federal funding to offer a set of care coordination services to Medicaid beneficiaries living with chronic conditions, provides an opportunity to leverage the expertise and “whole person” models of care that are the hallmark of the Ryan White Program. The health home option allows states to draw down an enhanced 90 percent federal match for two years for provision of “care coordination services” (such as referrals, peer support services, and treatment management services) to Medicaid beneficiaries with specified chronic conditions.
On World AIDS Day, the Secretary of the Department of Health and Human Services (HHS) announced the Department’s increased support and commitment to working with states to ensure that this program includes people living with HIV, including by codifying inclusion of HIV as a qualifying condition in formal rulemaking (HIV is currently included as qualifying condition through informal guidance). New York, Oregon, and Wisconsin are moving ahead with the implementation of the program for people living with HIV. Because states have flexibility to add to the list of eligible chronic conditions with federal approval, some states are also using the health home program to offer care coordination services for people living with hepatitis C (for example, Oregon’s proposal lists Hepatitis C and HIV/AIDS as qualifying conditions). The Centers for Medicare and Medicaid Services (CMS) has published a list of all approved and pending state plans.

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Enhanced Medicaid Reimbursement Rate for Primary Care Providers
CMS published a final rule implementing the Medicaid reimbursement bump, which went into effect January 1, 2013. This provision allows primary care providers to receive Medicaid reimbursement rates that are pegged to the Medicare rate for specified evaluation and management services provided in 2013 and 2014. The federal government will cover the cost of the difference between the regular Medicaid rate and the enhanced rate. The final regulation indicates that the enhanced rate will be available to physicians with a specialty designation of family medicine, general internal medicine, or pediatric medicine (as well as non-physician providers working under the supervision of qualified physicians). Importantly, subspecialists (including infectious disease) will also be eligible for the enhanced rate. The final rule allows providers to self-attest to their specialty. States have until March 2013 to submit plans to CMS for how they will implement the reimbursement bump, and many will likely make retroactive payments to providers for services provided before these plans are in place. Importantly, the enhanced payment does not apply to services provided under another Medicaid benefit category such as a Federally Qualified Health Center (FQHC) or Rural Health Clinic (RHC).

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State Implementation Updates

Following the 2012 election many states that had been in a holding pattern on health reform implementation activities began to ramp up planning efforts. The following are examples of activities happening in states.
Planning Activities
  • Minnesota is working closely with the state’s Health Care Reform Task Force, including participating on work groups to prepare a range of safety net providers and programs for ACA implementation. The health department has also convened provider and consumer meetings aimed at preparing the HIV community for full implementation of health reform. The presentation from these meetings is available here.
  • Illinois has been working closely with the state Medicaid office to inform implementation of the state’s section 1115 Medicaid waiver, which will expand coverage to people with income up to 133 percent of the federal poverty level (FPL) who seek care at Cook County facilities. These planning activities – including discussion of Ryan White payer of last resort requirements and ADAP and Medicaid formulary comparisons – will also serve to inform the ACA Medicaid expansion in 2014.
  • Kentucky has been in conversation with the Kentucky Health Benefits Exchange, particularly around the state’s benchmark plan choice. The HIV/AIDS program shared program information and data, including the ADAP formulary, to help inform the choice of benchmark plan.
  • New Mexico is working with the state’s high risk pool to identify transition options for clients currently enrolled in high risk pool coverage but who may be eligible for subsidized private insurance through the exchange in 2014. Analysis has included a detailed comparison of premium costs for the high risk pool and exchange coverage.

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Medicaid Expansion Advocacy
The Supreme Court’s decision weakens the ability of the federal government to enforce compliance with the ACA’s Medicaid expansion and creates a question of whether and when every state will expand Medicaid. The Center on Budget Policies and Priorities (CBPP) has been tracking state decisions with regard to expansion, and at this point many states are weighing their options. To help inform state decisions around expansion, state health departments are collecting data to document the impact on the HIV population, including those with income below 100 percent FPL who are not eligible under traditional Medicaid rules and who will not be eligible for federal subsidies to purchase private insurance in 2014 (people with income under 100 percent FPL will still be eligible to purchase private insurance through the exchanges at full cost, but the federal subsidies are only available to those with income above 100 percent FPL).
Coverage Gap for People Living with HIV in States that Do Not Expand Medicaid

Medicaid Coverage Chart
(Click to enlarge the image)

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AIDS Drug Assistance Program (ADAP) Planning
ADAPs in several states are beginning to talk with their state departments of insurance and exchange bodies to develop processes for coordinating application and enrollment as well as ADAP insurance assistance activities. These conversations include discussion of how to streamline ADAP payment of client premium and co-payments and how to best coordinate ADAP payments with federal subsidies (e.g., federal premium tax credits and co-payment subsidies). Determining whether the ADAP will be able to pay premiums for clients enrolled in exchange plans through the exchange and developing information sharing mechanisms to allow easy determination of affordability gaps will be crucial to ensure uninterrupted access to care as people transition to private insurance coverage. NASTAD is developing a fact sheet on this issue and we welcome specific questions or concerns on this issue.

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Health Reform Resources

For questions or for suggestions for NASTAD health reform resources that would be helpful to your program, please contact Amy Killelea.

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