With ever-increasing costs and concerns about quality and efficiency within Medicaid, Senate President Michael Waddoups and House Speaker David Clark, have asked the community for input on how Utah’s Medicaid program can be improved. Please note: Input will be collected through a survey tool through July 31. The Utah Health Policy Project has prepared a report, Improving Medicaid in Utah, Controlling Costs while Improving Health Outcomes  to help answer the legislature’s concerns and guide the community in their response.    

Utah Medicaid is in desperate need of ideas to control costs and improve health outcomes.  Currently, the program is severely underfunded.  Enrollment has grown by over 70,000, to 225,000 over the last two years.  All of this growth has been funded using one-time resources, and no ongoing tax revenue has been identified to pay for these enrollees in future years.  Compounding Medicaid’s funding challenges is federal health reform’s requirement that Medicaid provide coverage to everyone with household income less than 133% of federal poverty starting in 2014. This is a major change for Utah Medicaid, which has to this point primarily served children and people with disabilities.  Given the generous federal match rates set aside for the coming Medicaid expansions (the feds will pay 100% of Utah’s costs in 2014, decreasing to a perpetual base of 90% in 2019), it will never been more cost effective for the state to extend health coverage to its uninsured low-income adults; however, this expansion still comes at a significant cost.  Beginning in 2014, when the Medicaid eligibility expansion begins, Utah Medicaid is expected to grow by 110,000.  In addition to the expansion to new populations, this growth is driven by the ‘woodwork effect.’ Due to the individual mandate and the culture of coverage the reform creates, states like Utah, who have relatively low participation in their current programs, will see many of their currently eligible, but not enrolled residents’ who sign up for coverage. Utah will have to cover its usual portion of the cost (about 30¢ on every $1) for these, the estimated 60,000 “currently eligible” Utahns, who enroll due to reform. Regardless of the sudden pressure on the state budget, we view this is a worthwhile and necessary expense: these individuals should have been covered all along and it’s about time we got them into the system. The Utah Department of Health estimates the state’s share of the enrollment growth will be $37 million in 2014, increasing to $125 million by 2020. This growth in enrollment and costs demands that we do things differently. Fortunately, there are many things the state can do that will both help control costs and improve health outcomes of Medicaid clients.

State leaders should consider payment methods known to bring down costs while improving the quality of care. The Medicaid benefit package should include all medically necessary care along with services like dental and vision care that will maximize integration in the workforce and independent living. The point we should drive home in the survey is that he state has myriad options to make Utah Medicaid work better for both clients and taxpayers. 

We need your help to help make the legislature aware of what these options are! The President and Speaker’s survey is open and waiting for you to share your input.  Please read our report and provide the legislature your ideas here by July 31, 2010.

Health Reform Task Force, 9:00 AM in Room 250

http://www.le.utah.gov/asp/interim/Commit.asp?Year=2010&Com=TSKHSR

This meeting is not to be missed! Hot topics include:

• Tax Consequences of Federal Reform 
• Federal Reform Update 
• Workgroups (Implementation Oversight and Cost Containment) will be constituted!
• The All Payer Database: a key tool for all of our work moving forward (and points we’ve been trying to make, like reforms should actually cover the uninsured with decent, affordable benefits, etc.

Health reform advocates will gather in cafeteria to process and discuss next steps.

 
Revenue and Taxation Committee, 9am, Room 445 http://le.utah.gov/asp/interim/Commit.asp?Year=2010&Com=INTREV

With Utah Medicaid facing a $50 million dollar structural deficit (i.e., too much of the program is funded using one-time source of money vs. more stable ongoing sources of funding) and the need for $100 to $150 million in additional funds to cover increased enrollment related to health reform, the state’s revenue situation and tax policy is going to be a key issue in the debate about health reform implementation for years to come.

The Revenue and Taxation Interim Committee studies the structure and administration of Utah’s state and local tax systems, including a wide range of policy issues and potential legislation..  Because of Medicaid’s need for new and ongoing revenue sources, this committee’s work will be important to the long-term future of the program.

This month the committee will hear a report on state’s revenue outlook and economic trends.

 
Health and Human Services Interim Committee, 2:30pm, Room 250

http://le.utah.gov/asp/interim/Commit.asp?Year=2010&Com=INTHHS

The Health and Human Services Interim Committee provides oversight to many of the programs administered by the Department of Health and the Department of Human Services.  In that capacity, it considers a wide range of issues related to public health, health care providers, healthcare facility licensing, health insurance, access to health care, mental health, services for seniors and persons with a disability, child abuse, and substance abuse.

This month the committee’s agenda focuses on tamper resistant prescription forms; the new prescription drug controlled substance advisory committee; and look at policy around concussions in sports and whether a medical professional should be required to give approval before an athlete with a concussion returns to play.

IT’S OUR TURN: Utah’s Legislature Seeks Input from Public on How to Improve Medicaid

Senate President Michael Waddoups and House Speaker David Clark, have asked for ideas on how Utah’s Medicaid program can be improved.  This is an opportunity to bring the myriad needs facing Medicaid and solutions to the attention of legislative leaders.  Please provide your ideas at http://survey.le.utah.gov/checkbox/UtahMedicaid.aspx by July 31, 2010. The original survey was intended only for providers and the legislature has not changed the language of the introduction and of some of the questions to reflect the now larger audience.  But rest assured, they do want to hear from everyone.  If you are uncertain where to begin—understandable given the vastness and complexity of the program—the Utah Health Policy Project has a number of ideas you may wish to put forward:

Question 1.  What areas of Medicaid could be improved?

While there are many areas that need improvement within Medicaid, arguably the most important place to start is with Medicaid’s benefit package.   Currently Medicaid does not provide dental, vision, or speech and hearing care to adults.  While these services do have an upfront cost, ensuring Medicaid beneficiaries have access to critical primary and preventive care services benefits the state by helping Medicaid beneficiaries improve their health and become self-sufficient.   Read UHPP’s Optional Service factsheet here.

2. What are we doing now that is working well and should be expanded?

Utah Medicaid does many things well.  However, two programs in recent years that have been particularly successful in containing costs and could be expanded are the preferred drug list and managed care risk based contracts. 

Over the last several years, Utah has worked hard to make Medicaid work more efficiently by establishing a preferred drug list (PDL).  Utah should expand the scope of the PDL to include additional drug classes. 

In addition, last year Utah moved one of its Medicaid managed care organizations to a capitated risk based contract.  Under this type of contract, the organization is paid a flat monthly premium for each individual enrolled in their managed care plan.  The organization is thereby incentivized to provide the most cost-effective care possible, because if expenditures exceed premiums, the organization, and not the state, is on the hook for those cost overruns. 

3.  What are we doing now that is not working well?

Utah’s Medicaid program could be much more efficient in how it handles Medicaid eligibility.  Utah continues to use eligibility barriers, like the asset test and requiring renewals too frequently, which have been shown to do little to weed ineligible individuals from the program.  Instead, they cause churning (when eligible individuals come on and go off program repeatedly because they are unable to comply with the renewal process).   By simplifying the eligibility process Utah can reduce administrative costs and allow Medicaid to better focus on its primary purpose:  providing access to cost-effective health care.

4.  How effectively are our current service models serving the needs of Medicaid clients?

Medicaid, like our health care system in general, needs to do a better job of managing an individual’s care and promoting wellness and preventive services.  For example, only 40% of children in Utah Medicaid see a dentist annually.  The failure to utilize this important preventive benefit often leads to harmful and expensive health conditions. 

5.  What service models would better serve the needs of Medicaid clients?

A medical home or ‘health home’ model helps people navigate a complicated healthcare system.  These models provide clients with comprehensive disease management and care coordination services that have been proven to improve health outcomes and reduce healthcare costs.  Under such a model Medicaid clients will receive more timely, appropriate, and cost-effective care, ultimately saving the taxpayer money.

6.  What improvements should be made to better deliver/administer Medicaid in the state?

This is another area of Medicaid that demands much improvement.  Lack of access to care due to low provider reimbursement, antiquated delivery models, insufficient disease management, are all things that need to be addressed.  However, one inexpensive thing the state can do immediately is adopt the Family Planning Service Medicaid State Plan Option.   26 states provide family planning services to low-income families.  Everyone of these states have realized significant cost-savings to their Medicaid programs due to a reduction in unintended pregnancies and better health outcomes for mothers and babies that result from making these services more widely available.  Further costsavings realized by provided from these services can be reinvested to bolster primary care provider reimbursement rates, thus improving access to care.   Read UHPP’s Family Planning State Option factsheet here.

 7.  How could the coordination of oversight responsibilities be improved?

Medicaid is housed in 3 different departments, the Department of Workforce Services, Department of Human Services, and the Department of Health.  As a result, three different systems and processes may be operating at cross-purposes. At the very least the state should explore a streamlined interface across these departments.

8.  How could we limit the administrative burden required?

 When compared to private health insurance, Medicaid is an administratively lean program.  One area in which it can improve, however, is by making the eligibility determination process simpler.  And in terms of eligibility simplification, the best place to start is to eliminate the asset test.  Unlike the majority of states, Utah looks at a family’s assets when determining a family’s eligibility for coverage.   The asset test, however, is bad policy.  It is expensive to administer, weeds out very few applicants, and sends the wrong message to families: that they should not save for their future.  National health reform requires that all states eliminate the asset test beginning in 2014.  Utah should remove the test earlier and capture the administrative cost-savings and efficiencies that will result.  Read UHPP’s Asset Test Removal factsheet here.

 9.  In your opinion which area of the Medicaid program is most abused?

 Last year, the Legislative Auditor General found that provider reimbursement was the largest area of fraud and abuse within Medicaid by far.  As a result, in order to save Medicaid the most money, the state should focus on provider fraud. 

If you would like more ideas about how Utah can create a more cost-effective, higher quality Medicaid program please contact Lincoln Nehring, lincoln@healthpolicyproject.org or (801) 433-2299. Stay tuned for our forthcoming report around the survey questions.

Utah Medicaid survived largely unscathed this session.  Despite declining state revenues and 12% enrollment growth over the last year (25% enrollment growth since 2008), the budget was brought into balance without any cuts in eligibility.  For most of the Session we stood to lose low-income women’s access to cost-effective prenatal care along with the medically needy program for critically ill and injured children.  Even better, ongoing funding was found in the last days to continue Medicaid physical and occupational therapy for adults and people with disabilities.

However, despite these remarkable victories, Utah Medicaid is left with serious challenges going forward, including:

(1)  Failure to restore critical services eliminated over the last two and half years;
(2) large fiscal structural imbalances in the program created by failing to fund enrollment growth with ongoing funds.

Critical Services Not Restored

Since the beginning of the recession in late 2007, Medicaid has lost a number of critical services for people with disabilities, low-income seniors, and parents, including dental, vision care and outpatient audiology.  None of these services were considered for restoration this session.  In order for Medicaid to provide high quality care as cost-effectively as possible, these services must be restored .

Medicaid’s Fiscal Imbalance

Since 2007, Utah Medicaid has grown by nearly 25% from 160,000 enrollees to over 210,000 enrollees today.  In the last two sessions the Legislature has funded this enrollment growth using onetime funds.  However, there is no indication that enrollment in Medicaid is slowing down; in fact, all indications suggest enrollment will continue to grow through FY2011.  Because of the Legislature’s decision to provide one-time funds for past enrollment growth and to provide no funds for future enrollment growth,  Medicaid will likely need funding in excess of $50 million in FY2012 in order to maintain current eligibility levels. Needless, to say, this sets us up for yet another defensive battle.

This fiscal imbalance makes it very difficult to pursue funding for other worthy needs in the program like the service restorations, increases in provider reimbursement rates, or investments in cost avoidance or cost-effective coverage expansions.

At first blush it may seem like Utah’s Medicaid program has fared well during the 2010 General Session.  Until late last week recommendations to restrict eligibility for Medicaid’s prenatal care program (Baby Your Baby), to eliminate the Medically Needy program for critically ill and injured children and to restrict dental and vision benefits to expectant mothers seemed unstoppable.  Happily, and thanks to your persistent efforts, all of these cuts were reversed.  However, a closer look at the budget will show that Medicaid has not escaped totally unscathed this session.

The scars to the program come in three forms this year:

(1) Failure to continue funding for services and provider reimbursement levels that were paid with one-time monies last year;

(2)  Failure to restore critical services that have been eliminated over the last two and half years;

(3) large structural imbalances in the Medicaid budget created by failing to fund enrollment growth with ongoing funds.

1. Services Yet to Be Restored this Session
   During the 2009 General Session, the Legislature decided to cut funding for outpatient occupational therapy and physical therapy and then backfilled this cut using onetime funds.  Given that state revenues were down once again in 2010, there was little appetite among legislators to restore programs that were saved last year through “backfill.”   While the Governor’s budget called for continued funding for physical therapy and occupational therapy services , the Legislature has not yet granted his (and our) request. In these final days of the Session, we will be working to get these restored: PLEASE HELP BY CALLING AND EMAILING MEMBERS OF LEADERSHIP. For talking points, check out our new Hot Spots factsheet
2. Other Critical Services not Restored
   Since the beginning of 2007, Medicaid recipients have lost a number of critical services, including dental, vision care and outpatient audiology services.  None of these services were restored this session.
3. Medicaid’s Fiscal Imbalance
   Since 2007, Utah Medicaid has grown by nearly 25% from 160,000 enrollees to over 210,000 enrollees today.  In the last two sessions the Legislature has funded this enrollment growth using onetime funds.  However, there is no indication that enrollment in Medicaid is slowing down; in fact, all indications suggest enrollment will continue to grow through FY2011.  Because of the Legislature’s decision to provide one-time funds for past enrollment growth and to provide no funds for future enrollment growth,  Medicaid will likely need funding in excess of $50 million in FY2012 in order to maintain current eligibility levels. Needless to say, this sets us up for yet another defensive battle in 2011.

This fiscal imbalance makes it very difficult to pursue funding for other worthy needs in the program like restoration of services, increases in provider reimbursement, much less any investments in cost avoidance or cost-effective coverage expansions.

With 10 days left in the Session, we wish we had better news about this particular item. It’s time to pull out all the stops. See our new issue brief on the public health and fiscal consequences of this cut.

To summarize, the Health and Human Services Appropriations Committee (HHS) completed its assignment to trim 5% from the HHS budgets.  Sadly, as part of the package of $23.5 million in cuts, HHS recommended reducing the asset limit for pregnant women from $5,000 to $3,000. An estimated 5,600 women will lose access to prenatal care benefits if this $3.2 million cut goes forward.  The fiscal note is considerable; however, the costs (and cost shifting) associated with diminished access to prenatal care, pre-term births, and infant mortality far exceed these short-term savings.

Studies show that women who do not receive prenatal care are significantly more likely to have poor birth outcomes. For example, 30% of women who go without prenatal care have preterm births, while only 9.4 of those entering prenatal care in the first trimester do.  The average cost associated with newborn care after uncomplicated deliveries is $1,741 compared to the average costs associated with care for a preterm infant, $79,793.

Some policymakers are concerned that BYU students may be disproportionately utilizing Medicaid for their prenatal care. There is no evidence for this. In fact, given the high poverty rate and high birth rate in Utah County relative to the rest of the state, Utah County appears to be under-enrolled in Medicaid.

Please call Executive Appropriations Committee members (the leadership of the Legislature) and encourage them to keep the asset limit where it is. For talking points, read our new issue brief.

Or, call these numbers while the legislators are in session, generally M-F 8:00 AM to 5:00 PM:

House:  (801) 538-1029                                  Senate: (801) 538-1035
Toll-free: (800) 613-0677                               Toll-free: (800) 908-4261