September 7, 2005

Medicaid Reform Commission Hears Long-Term Care Testimony

(Week of September 2, 2005)
The Medicaid Reform Commission met in St. Louis to hear two days of testimony regarding long-term care.

During the first day of testimony, witnesses included long-term care providers and elder care attorneys, who were invited by the committee to offer recommendations. Testimony addressed numerous topics.

• Representatives of the PACE program operated by Alexian Brothers in St. Louis presented an overview of its delivery model. PACE serves the frail elderly, provides coverage of all medical services for a capitated rate and encompasses both Medicare and Medicaid. The program is responsible for care management, and witnesses said the program offers state and federal officials the ability to predict the program’s expenditures.
  
• The two major associations representing Missouri nursing homes, the Missouri Health Care Association and the Missouri Association of Homes for the Aging, joined the Missouri Association of Nursing Home Administrators in making joint recommendations to the commission. They called for a clear definition of the Medicaid patients that skilled nursing facilities should serve, a central gatekeeper to oversee moves within the continuum of long-term care, further tax incentives to promote private long-term care insurance coverage and adequate payments for nursing home services. They also proposed phasing out of the Nursing Home Federal Reimbursement Allowance, with the loss of funds to be replaced by state general revenue.
  
• The director of the Missouri Department of Social Services’ Division of Medical Services indicated he is working with the nursing home associations to develop payment changes that should improve the number of nursing homes willing to treat ventilator-dependent patients.
  
• Several elder law attorneys spoke on the state’s recent changes to limits on assets and income that may be held by a Medicaid nursing home patient’s spouse living in the community. They argued the new standard fails to protect against spousal impoverishment and likely will place a greater burden on the state to pay for nursing home care. They also asked legislators to enact greater protections of and financial incentives for those who make allegations of provider fraud.
  
• Several witnesses spoke in favor of greater use of and state support for technology in long-term care settings, including systems for electronic medical records and medication administration.
  
• A witness representing a large in-home services provider proposed transferring the Missouri Department of Mental Health, DMS and the Medicaid eligibility determination function to the Missouri Department of Health and Senior Services. The witness, Stephen Bradford, also co-chairs the Missouri State Government Review Commission, which is charged with recommending organizational changes in state agencies.
  
• Various witnesses and committee members described the certificate of need program as anticompetitive and having little benefit in controlling excess nursing home bed capacity. One witness urged legislators to reject nursing home rate rebasing until CON review is eliminated.
  
• Several witnesses favored capitated payments as an effective means of managing care but suggested those payments go directly to providers rather than to a third-party managed care provider.
  
• A residential care facility representative called for legislators to remove “pathway to safety” requirements that force patients to move to higher levels of care against their wishes. He and other witnesses voiced support for the concept of “negotiated risk” in which patients are informed of the potential risks and limitations of not moving to a higher level of care and then allowed to choose where they will reside.

On the second day of hearings, the commission heard the following testimony from the public.

• Enteral and parenteral nutrition services should be covered without prior approval through an exception process.
  
• The state should sponsor a consolidated source of information about long-term care options across the care continuum.
  
• Medicaid should be responsive to the special coverage needs of patients with multiple sclerosis.
  
• The state and nation should create a single-payer health care system.
  
• A representative from United Healthcare described an initiative to form a purchasing pool to provide coverage to 35,000 part-time and temporary workers who are ineligible for their employers’ group insurance.
  
• Legislators should allow in-home care providers to deliver case management services rather than delegating that responsibility to a third-party case manager.
  
• The state should create a uniform assessment tool to determine the care needs for all state programs.
  
• Area agencies on aging have the capacity and willingness to coordinate case management of the elderly in local communities.
  
• Access to Medicaid physician care is very limited partly because of low Medicaid reimbursements.
  
• The state should remove obstacles to allowing disabled persons on Medicaid to be employed without losing coverage.
  
• Disability services should be based on the patient’s degree of disability.
  
• The working poor Missourians with pre-existing conditions should be allowed to buy insurance policies through Medicaid that would provide partial coverage of hospital and pharmaceutical services.

Governors Association Updates Medicaid Reform Principles
The National Governors Association updated its principles for Medicaid reform this week, focusing on strategies to curb costs for prescription drugs and long-term care, as well as giving states more flexibility to implement higher cost-sharing for Medicaid beneficiaries. The updated list includes issues that Congress most likely will consider as it makes Medicaid policy changes that are designed to save the federal government $10 billion.

In its latest Medicaid report, the association has called for increased transparency for pharmaceutical pricing methods, which would include moving away from average wholesale pricing to average manufacturer pricing. Another priority involves giving states a greater ability to curb the inappropriate transfer of assets as a method of qualifying for nursing home care.

The U.S. House of Representatives Energy and Commerce Committee and the U.S. Senate Finance Committee are scheduled to report Medicaid reform bills by Sept. 16.

The NGA report, “Short-Run Medicaid Reform,” is available online at www.nga.org/Files/pdf/0508
MEDICAIDREFORM.pdf.

Census: 45.8 Million Americans Lacked Health Coverage In 2004
For the fourth consecutive year, the U.S. Census Bureau reported an increase in the number of Americans without health care coverage, reaching 45.8 million in 2004. Although the proportion of the U.S. population without coverage stayed essentially unchanged at 15.7 percent, officials said 860,000 more Americans lacked health insurance in 2004. In the previous year, a total of 45 million Americans were uninsured.The proportion of people with employer-sponsored coverage fell to 59.8 percent in 2004, from 60.4 percent in 2003. That loss was offset by an increase in the percentage of individuals covered by government health insurance programs from 26.6 percent of the population in 2003 to 27.2 percent in 2004. Overall, the number of Americans with health care coverage increased by 2 million in 2004 compared to 2003, reaching 245.3 million — 84.3 percent of the population.

The report is available online at www.census.gov/prod/2005pubs/p60-229.pdf.

Health Spending Could Increase To One-Third Of GDP By 2020
Health care spending currently represents 15 percent of the gross domestic product but could consume more than 33 percent of GDP by 2020, according to an Employment Policy Foundation report. As a result, health care expenditures could consume $6 trillion annually by 2020.

The report outlines various approaches employers are pursuing to contain their health care costs at a time when health care costs are increasing sharply — by 8.2 percent in 2004. This rate of increase was nearly twice as fast as the overall growth in the economy, according to the report.

The report details several cost-related health care challenges facing both U.S. employers and the government. The United States spends far more per person on health care each year than its major trading partners. The United States spent $4,631 per capita on health care in 2002, compared with $1,765 in the United Kingdom and $2,535 in Canada. Japan spent roughly $2,000 per capita on health care, according to researchers’ analysis of data obtained from the Organization for Economic Cooperation and Development.

An executive summary of the report is available online at www.epf.org/pubs/labordayreports/2005/AWR2005ExecSummary.pdf.

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