Kaiser Report Brief

The Kaiser Commission on Medicaid and the Uninsured released their 11^th annual state Medicaid budget survey entitled Moving Ahead Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage and Policy Trends. The report indicates that notable fiscal challenges across the county include the weak economy and the expiration of substantial funding (28.7%) from the American Recovery and Reinvestment Act (ARRA) are resulting in cost containment strategies, service delivery changes and program improvement initiatives. These activities are occurring at the same time the country will face considerable changes in information technology requirements and planning for the implementation of the Affordable Care Act requirements in 2014.

NATIONAL COST CONTAINMENT INIATIVES

Cost containment appears as a dominant theme as states are prohibited from enacting new restrictions on eligibility or enrollment procedures upon acceptance of ARRA funds. Cost containment efforts include:

• Provider rate restrictions (39 states in FY 2011; 46 states in FY 2012)
• Restrict benefits (18 states in FY 2011 and 2012)
• Implement cost containment for pharmacy
• Raise or impose new copayments on recipients (five states in FY 2011; 14 states in FY 2012)
• Shift longer-term care away from institutions to community settings (32 states in FY 2011; 33 states in FY 2012 expanded home and community-based services) (14 states in FY 2012; 11 states in FY 2012 restricted long term care services)
• Expand managed care (17 states in FY 2011; 24 states in FY 2012)
• New initiative to integrate care for Medicare-Medicaid eligible (37 states sent letters of intent to CMS)
• Pursue 1115 Medicaid Demonstration Waivers to make program changes currently prohibited

PENNSYLVANIA SPECIFIC COST CONTAINMENT INITIATIVES

The details of each state are included in the report’s appendices. Pennsylvania did not make any co-payment or benefit changes in 2011, but there were changes anticipated for FY 2012. Pennsylvania details from the appendices in the report include:

• Copayments increase with the implementation of a sliding scale copayment to reflect changes in medical care component of the consumer price index in 2012
• Implement new copayment as per Deficit Reduction Act of 2005 for cost-sharing for certain disabled children under age 18 in 2012
• Reduction in adult dental benefit by eliminating endodontic services, one denture per lifetime and two cleanings per year (September 2011)
• Potential actions (unspecified in report) containing pharmacy costs are to be taken in FY 2012
• Expansion of mandatory managed care program statewide with exiting AccessPlus during FY 2012
• In FY 2011 started care management after discharge from hospital to reduce readmission with expansion in 2012
• Poly-pharmacy initiative with clinical review and case management to assure compliance with guidelines
• FY 2012 plans to implement Enhanced Medical Home involving nurse care mangers embedded in high volume practices and hospitals focusing on chronic conditions and transition of care
• Continued participation in Multi-payer Advanced Primary Care Practice Demonstration
• FY 2011 expanded number of diseases (from 6 to 21) covered in enhanced primary care case management
• FY 2012 implementation of evidence-based nursing facility reimbursement rate

CONCERNS MOVING FORWARD

The report indicates that the current fiscal challenges are occurring while states are planning their new role as ACA develops. States indicated to Kaiser that the fiscal constraints and move to reduce the national deficit may shift more Medicaid costs to the state level. Such a shift will make it more difficult for states to fulfill their role under ACA while maintaining their commitment to access and high quality care.

An executive summary and the report are available at http://www.kff.org/medicaid/8248.cfm