Disclaimer: I think its great when MCOs make money. From my study of economics and history (and life itself), only a profit motive will change healthcare outcomes. This quick analysis is meant to point out that ACA/ObamaCare has its own capitalist underbelly, too.

Disclaimer 2: This isn’t really news. I’ve had it on my list to do this calculation a while now. Just now getting around to it.

 

 

ACA added at least $1.3B annual profit for Medicaid managed care plans

Based on CBO estimates, ACA Medicaid expansion added $68B in spending 2015. Assuming a 2% profit, that means ACA added $1.36B to Medicaid health plan profits for each year moving forward. If we only used 2015 as the starting point, that means roughly $4B in profits have been added to Medicaid health plan bottom lines the past 3 years.

 

ACA added at least $8.8B annual administrative revenues for Medicaid managed care plans and vendors

Assuming 13% administrative expense (continuing with an assumed 85% MLR; 13% admin and 2% profit), then an additional $8.8B in annual administrative spending is happening due to Medicaid expansion. That’s $8.8B now going to pay for case managers, technology firm salaries, transportation company costs and myriad other services that are included in the administrative costs component allowed under Medicaid health plan spending.

 

 

Helping you consider differing viewpoints. Before it’s illegal. 

 

Article 1:  

‘Medicaid-for-All’ Rapidly Gains Interest in the States, Mattie Quinn, Governing, June 4, 2018

Clay’s summary:  You silly gooses. Geese.

Key Passage from the Article

  

Six states — Iowa, Massachusetts, Minnesota, Missouri, New Jersey and Washington state — have active legislation to establish a Medicaid buy-in program. In four others, bills were proposed but stalled. New Mexico has set up a task force to study a Medicaid buy-in program, and Connecticut may do the same.

According to experts, each state likely has a different reason for considering this option.

“States are still exploring what it would even mean,” says Heather Howard, director of State Health and Value Strategies. “For one state, it could be about addressing a bare county. For another, it could be an affordability issue. For another, it could be about expanding competition. In the absence of federal legislation on health care, states are asking: ‘What tools do we have?'”

For left-leaning lawmakers, Medicaid buy-in is considered a step toward single-payer health insurance. But conservatives are wary of expanding the government’s role in health care and of funneling more money into Medicaid, which is already a huge slice of state budgets.

New Mexico state Sen. Jerry Ortiz y Pino — who co-sponsored a bill to study the issue — says Medicaid buy-in makes sense there because the majority of residents (54 percent) already have Medicaid or Medicare. It’s the only state where more than half the population uses government health care.

“Besides Medicaid, we have a high Medicare population, high VA [Veterans Affairs] population and high numbers in the Indian Health Service,” says Ortiz y Pino. “So when we talk about non-governmental insurance, it’s a small number. That small population means it’s hard to attract private insurers, particularly in the marketplace.”

New Mexico’s marketplace has four insurers covering the state, which is actually more than many part of the country. About half of Americans only had one or two insurers last open enrollment season. Still, like most other states, New Mexico’s marketplace is facing increased premiums and possible insurer dropouts this year.

 

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Read it here 

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Article 2:   

Fiscal Survey of the States, National Association of State Budget Officers, Spring 2018

Clay’s summary: Very important annual report that covers lots of insights from state budgets. Medicaid is always a big part of the analysis- starts on page 73 of this years report.

Key Passage from the Article

 In fiscal 2017, states reported total spending for Medicaid expansion of $87.7B, $6.7B in state funds, and $81.1B in federal funds. In fiscal 2018, states are estimated to spend $91.2B in all funds, $10.3B in state funds, and $80.9B in federal funds. 

Read it here

 

 

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Article 3:   

Lawmakers focus on flaws in Texas Medicaid program after Dallas Morning News investigation

Clay’s summary:  Things are heating up for MCOs in the LoneStar state after a reporter decided to look into Medicaid managed care.

Key Passage from the Article

   

Part of the investigation focused on twins D’ashon and D’asia Morris, who were born with severe birth defects and were placed in foster care after they tested positive for drugs at birth. While D’ashon Morris was a foster child under Superior HealthPlan — a managed care program for foster children — he was denied 24-hour nursing care that would prevent suffocation, according to The Dallas Morning News’ report.

The report said providing that care would have cost Superior Health as much as $500 a day. One day, when D’ashon was in temporary foster care while his foster mother, Linda Badawo, was traveling outside the country, he started choking. After nurses and medics performed CPR for 40 minutes, D’ashon was taken to the hospital, where doctors concluded that he had gone too long without oxygen to his brain — he would be brain dead for the rest of his life.

“Superior is 100 percent responsible,” Badawo, who has since adopted D’ashon, told lawmakers Wednesday, her voice shaking. “I strongly believe that they don’t have any passion for what they do.”

It wasn’t until after the accident that Superior gave D’ashon 24-hour care, the Morning News reported. 

“So my question to you was: ‘Was this a matter of life and death?'” state Rep. Mark Keough, R-The Woodlands, asked Superior’s representatives regarding 24-hour care for D’ashon. 

David Harmon, Superior’s chief medical director, said his company did not believe so, based on the information it had. “If we did, we would not have authorized to continue” with 17 hours a day of care instead of 24, he said.

The story, Harmon said, “misrepresented the facts in all of these cases to make us look very bad.”

David McSwane, one of the Morning News reporters who wrote the investigative series, defended the reporting.

“The data, docs and patients in the stories tell the story,” McSwane tweeted during the hearing.

Mark Sanders, CEO of Superior HealthPlan, said Superior proposed using a “soft splint” to prevent D’ashon from pulling out a tube that helps him breathe. Badawo said she was horrified because state regulations bar her from using physical restraint on foster children in many situations. 

Sanders, who showed an example of the soft splint to lawmakers, said the device was “in no way shape or form” like a restraint.

State Rep. Richard Peña Raymond, D-Laredo, told representatives from Superior that the company needed to become more aware that there were going to be members and patients who would need more attention than others. 

“We’re going to stay on you,” Raymond warned. “We don’t want these things to happen. But if we don’t do it right, these things will bubble up.” 

Representatives of private companies that manage Medicaid in Texas slammed the newspaper report for what they said were inaccuracies. LeAnn Behrens, west region president of AmeriGroup Medicaid, took issue with the report’s assertion that AmeriGroup is withholding care from patients in order to make a profit. 

“As you all know, the state of Texas has set up a system that restricts the amount of profits that a managed care can make,” Behrens said. “Members get the best care, they get the right care at the right place — and you have confidence that I am being wise with taxpayer money.”

 

 

Read it here

 

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Helping you consider differing viewpoints. Before it’s illegal. 

 

Article 1:  

State blew $1.3 billion on Medicaid coverage for people already enrolled in other plans, audit finds, Caroline Lewis, Crain’s NY Business, June 13, 2018

Clay’s summary: TPL is hard, and so is not overpaying cap to plans. But hey – what’s $1.3B?

Key Passage from the Article

 

Thanks to a lack of oversight, the state Health Department doled out $1.3 billion in six years in Medicaid premiums for people who were already enrolled in other comprehensive health plans, according to a new report from state Comptroller Thomas DiNapoli.

The report found that the state Health Department is not quick enough to disenroll people when they sign up for coverage with another insurer. The overwhelming majority of those funds—about $1.2 billion—are not recoverable.

“Glitches in the state Department of Health’s payment system and other problems led to over a billion dollars in unnecessary spending,” DiNapoli said. “The department needs to improve its procedures and stop this waste of taxpayer money.”

The waste in question, while considerable, accounts for a fraction of the annual Medicaid budget. New York’s Medicaid program, which is funded by federal, state and local governments, spent $58 billion for services for some 7.4 million members in fiscal 2017 alone.

The majority of Medicaid members in New York are enrolled in mainstream Medicaid managed-care plans, which are run by private companies or nonprofit organizations that receive monthly payments for each member from the government. The state Health Department is responsible for disenrolling members from those Medicaid plans as soon as it learns they have enrolled in another comprehensive health plan.

 

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Read it here 

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Article 2:   

WellCare to buy Meridian for $2.5 billion, boosting its Medicaid membership, Shelby Livingston, Modern Healthcare, May 29, 2018

Clay’s summary: WellCare continues the acquisition march and buys a stake in the hot mess that is the IL Medicaid market.

Key Passage from the Article

 

WellCare Health Plans has agreed to acquire Medicaid insurer Meridian Health Plan for $2.5 billion, it announced Tuesday.

The insurers expect the deal to close by the end of 2018. Tampa, Fla.-based WellCare said the acquisition will bolster its Medicaid business by boosting membership in several states. WellCare will also benefit from adding Meridian’s in-house pharmacy benefit manager MeridianRx to its portfolio.

The deal “will grow and diversify our Medicaid and Medicare Advantage businesses” and “add new and enhance existing capabilities,” WellCare CEO Kenneth Burdick said on Tuesday.

WellCare’s announcement comes amid rampant consolidation in the health insurance industry, as health plans pair up with other insurers, ambulatory care providers and PBMs. Anthem last week bought Aspire Health, a Nashville-based palliative care company. Humana has struck deals to buy stakes in home health services provider Kindred Healthcare and hospice operator Curo Health in recent months.

While MeridianRx is a relatively small operation serving mostly Meridian members, bringing a PBM in house could give WellCare a foundation to grow its pharmacy management capabilities as fellow insurers Aetna and Cigna Corp. pair up with PBM giants CVS Health and Express Scripts, respectively.

 

Read it here

 

 

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Article 3:   

AHCA, Health Plans Huddle Over Medicaid Challenges, News Service of Florida, May 17, 2018

Clay’s summary: Let’s start the protest music. Here we go again…

Key Passage from the Article

  

Agency for Health Care Administration Secretary Justin Senior is meeting with 12 managed-care companies that filed petitions with the state last week, as he tries to dissuade them from legal fights over the state’s decisions to award five-year Medicaid contracts that could be worth up to $90 billion.

Mallory McManus, an AHCA spokeswoman, forwarded a schedule to The News Service of Florida that showed Senior, Medicaid director Beth Kidder and three other staff members expected to meet with three companies on Wednesday: Aetna Better Health, which is challenging the state’s decisions in eight Medicaid regions; Magellan, which is challenging decisions statewide; and Prestige Health Choice, a plan that is partially owned by insurance company Florida Blue and is challenging decisions in nine Medicaid regions.

Senior kicked off the meetings with managed-care companies on Monday, talking with Lighthouse Health, a provider-sponsored plan hoping to get managed-care contracts in Medicaid regions 1 and 2.

 

 

Read it here

 

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GAO got intrigued by the amazingly low Payment Error Rate report for MCOs (0.3%) vs fee for service (10%). A report released in early May suggests the calculations for FFS and Managed Care are not comparable. Further- the managed care calculation does not go into much detail at all in reviewing charts or even data from MCOs to see if benefits were reimbursed in accordance with policy. We touched on this report in the 6/11/2018 news show.

Summary from report –

What GAO Found
The Centers for Medicare & Medicaid Services’ (CMS) estimate of improper payments for Medicaid managed care has limitations that are not mitigated by
the agency’s and states’ current oversight efforts. One component of the Payment Error Rate Measurement (PERM) measures the accuracy of capitated
payments, which are periodic payments that state Medicaid agencies make to managed care organizations (MCO) to provide services to enrollees and to cover
other allowable costs, such as administrative expenses. However, the managed care component of the PERM neither includes a medical review of services
delivered to enrollees, nor reviews of MCO records or data. Further, GAO’s review of the 27 federal and state audits and investigations identified key
program risks.

• Ten of the 27 federal and state audits and investigations identified about $68 million in overpayments and unallowable MCO costs that were not accounted
for by PERM estimates; another of these investigations resulted in a $137.5 million settlement.

• These audits and investigations were conducted over more than 5 years and involved a small fraction of the more than 270 MCOs operating nationwide as
of September 2017.

To the extent that overpayments and unallowable costs are unidentified and not removed from the cost data used to set capitation rates, they may allow inflated
MCO payments and minimize the appearance of program risks in Medicaid managed care.

 

Here’s the actual report –

 

2018 05 GAO rpt on MMC PERM 691618

 

Learn more about what we do to help health plans – Mostly Medicaid Health Plan Solutions Page

Helping you consider differing viewpoints. Before it’s illegal. 

 

Article 1:  

Why Medicaid work requirements could help persuade more states to expand coverage, Mark Pauly, The Inquirer, May 17, 2018

Clay’s summary: Medicaid advocates may be acting foolish to oppose work requirements- a small group of people are affected, and it may be the grease that makes non-expansion states expand.

Key Passage from the Article

Recent proposals for redesigning this part of Medicaid have identified this pervasive issue: work and policymakers’ attitudes toward it. Most Americans under age 65 at all income levels receive health insurance through their employment and are induced (through tax breaks and employer regulations) to take it as part of their compensation. Several states, including some that reluctantly implemented expansion and some contemplating it, have asked for federal permission to link Medicaid eligibility to labor force participation—working or looking for work.

As with everything in health policy these days, this idea is controversial, with disagreement even about the facts but more fundamentally about subjective social values. The factual questions are 1. how many people on Medicaid would be affected by this policy and 2. how many people who receive Medicaid would be able to work (or go to school) if they are not already, and how many would just choose not to?

The value question deals with the latter group—if some of them could find employment, but choose not to, would you as a taxpayer be willing to sacrifice some of your wages to pay for their health insurance? There can be no doubt that some politicians and the citizens who support them say no, while others say yes. There is no generally accepted principle that can tell analysts that one value system is better than the other.

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Read it here 

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Article 2:   

Disrupt this: Jettison Medicare and Medicaid, Marilyn Singleton, MD, Daily Press, May 17, 2018

Clay’s summary: A Stanford Doctor tells us that government healthcare should be only for soldiers, and anything beyond that only increases costs and decreases quality.

Key Passage from the Article

 

The Great Society’s social engineers would not be satisfied until the government burrowed deeper into medical care. Thus Medicaid for all the “medically indigent” and Medicare for all seniors (aka middle class welfare) were born.

And since money grows on third-party and government trees, medical costs were ignored, and expenditures dramatically increased from 5.0 percent of GDP in 1960 to 17.9 percent in 2016. And at 28 percent, healthcare expenditures are the single largest piece of the federal budget pie.

The ACA’s justification for commandeering the remainder of the health insurance market was to rid our nation of the uninsured. Yet six years later, the nation’s uninsured dropped a mere 3.8 percent, and premiums have more than doubled. The number one reason the current uninsured did not buy insurance was because the cost was too high. Of course it was. The ACA’s mandated “free” benefits had to be paid for somehow. Worse yet, it now takes a Herculean effort to find individual health insurance; nationally, there are only 3.5 issuers in the ACA marketplace.

Medicare and Medicaid began the upending of the health insurance business. These programs became the siren call, enticing us to cede control over our health to disinterested third parties and middlemen. Government largesse led us to accept blind pricing as the norm. Where else do you buy something before you know what it costs? Freebies lured us into relinquishing our privacy to government data banks and now leave us longing for the comfort and simplicity of a computer-free doctor visit.

 

Read it here

 

 

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Article 3:   

Medicaid and CHIP Scorecard, CMS, June 2018

Clay’s summary:

Key Passage from the Article

 What’s in the Scorecard?

Like Medicaid and CHIP beneficiaries, information in the Scorecard spans all life stages. This first version of the Scorecard includes information on selected health and program indicators. It also describes the Medicaid and CHIP programs and how they operate.

The Scorecard will evolve. Future iterations likely will allow year-to-year comparisons to help identify trends. The Scorecard will be flexible—CMS may add new areas of emphasis important to the Medicaid and CHIP programs or replace measures as more outcome-focused ones become available.

CMS worked with a subset of state Medicaid agencies to select measures for this first Scorecard. Many measures in the Scorecard come from public reports. For example, most measures in the State Health System Performance pillar come from the Child and Adult Core Sets. This approach allows CMS to align the Scorecard with existing reporting efforts.

Including measures from the Core Sets in the Scorecard builds on states’ investments in collecting and reporting these voluntary measure sets. While there are many reasons some states do not collect or report all Core Set measures, CMS hopes the Scorecard will draw attention to the importance of reporting on these measures. Core Set reporting methods also can vary among states. For example, some states have access to different data on populations covered under fee-for-service as compared to populations covered under managed care. This variation in data availability can impact measure performance. Readers should review the detailed measure notes located after the graph to better understand states’ reported rates.

The Scorecard also sheds light on important questions about the scope of Medicaid and CHIP. …

 

 

Read it here

 

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