Date: Sat, 24 Feb 1996 23:43:39 +500 From: Earl E. Appleby Jr. To: Managed Care List Subject: MCL6199: Re: NGA on Medicaid In MCL6187, Tommye Bell had provided an analysis of provisions in the National Governors Association's Medicaid proposal. Ann Lauritzen offers additional views from the disability coalition, Justice for All: NGA Medicaid Plan JFA has obtained a copy of the National Governors' Association plan to restructure Medicaid. The following is the text of what was disseminated at their semi-annual meeting in Washington, D.C.(For simplification the only portions that appear below will be what pertains to people with disabilities. For the full summary, please call BeckyO.) THE NEW PROGRAM Within the balanced budget debate, a number of alternatives to the existing Medicaid program have been proposed. The following outlines the nation's Governors proposal that blends the best aspects of the current program with congressional and administration alternatives toward achieving a streamlined and state-flexible health care system that guarantees health care to our most needy citizens. PROGRAM GOALS: The program is guided by four primary goals. 1. The basic health care needs of the most vulnerable populations must be guaranteed. 2. The growth in health care expenditures must be brought under control. 3. States must have maximum flexibility in the design and implementation of cost-effective systems of care. 4. States must be protected from unanticipated program costs resulting from economic fluctuations in the business cycle, changing demographhics, and natural disasters. ELIGIBILITY:Coverage remains guaranteed for: *Pregnant women to 133 percent of poverty; *Children to age 6 to 133 percent of poverty; *Children age 6 through 12 to 100percent of poverty; *The elderly who meet SSI income and resource standards; *Persons with disabilities as defined by the state in their state plan. States will have a funds set-aside requirement equal to 90 percent of the percentage of total medical assistance funds paid in FY 1995 for persons with disabilities. *Medicare cost sharing for Qualified Medicare Beneficiaries. *Either: -Individuals or families who meet current AFDC income and resource standards (states with income standards higher than the national average may lower those standards to the national average);or -States can run a single eligibility system for a new welfare program as defined by the state. Consistent with the statute, adequacy of the state plan will be determined by the Secretary of HHS. The Secretary should have a time certain to act. Coverage remains optional for: *All other groups in the current Medicaid program. *Other individuals or families as defined by the state but below 275 percent of poverty. Benefits: *The following benefits remain guaranteed for the guaranteed populations only.... -Inpatient and outpatient hospital services, physician services, prenatal care, nursing facility services, home health care, family planning services and supplies, laboratory and x-ray services, pediatric and family nurse practitioner services, nurse midwife services and Early and Periodic Screening, Diagnosis and Treatment Services. (The "T" in EPSDT is redefined so that a state need not cover all Medicaid optional services for children.) *At a minimum, all other benefits defined as optional under the current Medicaid program would remain optional and long term care options significantly broadened. *States have complete flexibility in defining amount, duration and scope of services. PRIVATE RIGHT OF ACTION: *The following are the only rights of action for individuals or classes for eligibility. -Before taking action in the state courts, the individual must follow a state administrative appeals process. -States must offer individuals or classes a private right of action in the state courts as a condition of participation in the program. -Following action in the state courts, an individual or class could appeal directly to the U.S. Supreme Court. -Independent of any state judicial remedy, the Secretary of HHS could bring action in the federal courts on behalf of individuals or classes but not for providers or health plans. *There should be no private right of action for providers or health plans. SERVICE DELIVERY *States must be able to use all available health care delivery systems for these populations without any special permission from the federal government. *States must not have federally imposed limits on the number of beneficiaries who may be enrolled in any network. PROVIDER STANDARDS AND REIMBURSEMENTS *States must have complete authority to set all health plan and provider reimbursement rates without interference from the federal government or threat of legal action of the provider or plan. *The Boren amendment and other Boren-like statutory provisions must be repealed. *"One hundred percent reasonable cost reimbursement" must be phased out over a two year period for federally qualified health centers and rural health clinics. *States must be able to set their own health plan and provider qualifications standards and be unburdened from any federal minimum qualification standards such as those currently set for obstetricians and pediatricians. *For the purpose of the Qualified Medicare Beneficiaries program, the states may pay the Medicaid rate in lieu of the Medicare rate. NURSING HOME REFORS *States will abide by the OBRA '87 standards for nursing homes. *States will have the flexibility to determine enforcement strategies for nursing home standards and will include them in their state plan. PLAN ADMINISTRATION: *States must be unburdened from the heavy hand of oversight by the Health Care Financing Administration. *The plan and plan amendment process must be streamlined to remove HCFA micromanagement of state programs. *Oversight of state activities by the Secretary must be streamlined to assure that federal intervention occurs only when a state fails to comply substantially with federal statutes or its own plan. *HCFA can only impose disallowances that are commensurate with the size of the violation. *This program should be written under a new title of the Social Security Act. FINANCING: Each state will have a maximum federal allocation that provides the state with the financial capacity to cover Medicaid enrolles. The allocation is available only if the state puts up a matching percentage (methodology to be defined). The allocation is the sum of four factors: base allocation, growth, special grants (special grants have no state matching requirement) and an insurance umbrella, described as follows: 1. Base.In determining base expenditures, a state may choose from the following-1993 expenditures, 1994 expenditures. Some states may require special provisions to correct for anomalies in their base year expenditures. 2. Growth.This is a formula that accounts for estimated changes in the state's caseload (both overall growth and case mix) and an inflation factor. The details of this formula are to be determined. This formula is calculated each year for the following year based on the best available data. 3. Special Grants. Special grant funds will be made available for certain states to cover illegal aliens and for certain states to assist Indian Health service and related facilities in the provision of health care to Native Americans. States will have no matching requirements to gain access to these federal funds. 4. The Insurance Umbrella. This insurance umbrella is designed to ensure that states will get access to additional funds for certain populations if, because if unanticipated population. Funds are guaranteed on a per-beneficiary basis for those described below who were not included in the estimates of the base and the growth. These funds are an entitlement to states and not subject to annual appropriations. POPULATIONS AND BENEFITS. Access to the insurance umbrella to cover the cost of care for both guaranteed and optional benefits. The umbrell