Deficit Reduction Act of 2005 & Medicaid Reform. Mark Reagan, Esq. Janice Zalen December 5, 2006

Transcription

1 Deficit Reduction Act of 2005 & Medicaid Reform Mark Reagan, Esq. Janice Zalen December 5, 2006

2 Deficit Reduction Act of 2005 (DRA) Congress passed December 2005 Signed into law February 2006 $39.7 billion in spending reductions $4.7 billion in savings from Medicaid and SCHIP Includes $2.1 billion in expenditures for hurricane relief $8.3 billion in savings from Medicare

3 Who Pays For Long Term Care? What is clear is that Medicaid can no longer be the financing mechanism for the nation s long-term care costs and other costs for dual eligibles. - National Governors Association 2005 Medicaid, 47% Other Private Spending, 13% Medicare & Federal, 19% Out of Pocket Spending, 21%

4 Deficit Reduction Act of 2005

5 Ways to Cut Medicaid Eligibility Fraud Rebalance long term care (LTC) system More home and community-based services Less facility-based services Flexibility in cost sharing and benefits A new Medicaid program

6 Coming Soon: A New Medicaid OLD MODEL NEW MODEL Institutionally-based benefit/entitlement Continuum-based benefit/support Provider-centered & Provider driven Person-centered & Consumer controlled Federally defined benefit based on legal obligations No budget caps Mandates to states Open delivery system State controlled benefit with fewer strings, but cost certainty Budget caps State flexibility Managed care system

7 What Drives the Change? Cost containment New opportunities/choices/preferences Federal government willing to trade benefits for cost containment States willing to trade $$ for flexibility Public policy change in the historical idea of the Medicaid social contract

8 Rebalancing LTC

9 Money Follows the Person (MFP) Rebalancing Demonstration $1.75 billion over 5 years in competitive grants to states ( ) Supports targeted reforms to transition eligible individuals from institutions to community Enhanced FMAP rate for one year for each Medicaid beneficiary who transitions From an inpatient facility to a qualified residence Home that is owned/leased by individual/family Apartment with an individual lease Residence of no more than 4 unrelated individuals

10 HCBS State Plan Option States can offer HCBS as a state plan optional benefit starting January 2007 Breaks the eligibility link between HCBS and institutional care Eligibility criteria for NF must be higher than for HCBS Does not require budget neutrality Allows waiting lists Income may not exceed 150% of federal poverty level

11 State Plan Option for Self-Directed Personal Care Includes personal care by family members Beneficiaries purchase personal assistance services using an individual budget and service plan Covers items to increase independence or substitute for human assistance (e.g., accessibility ramps, microwave ovens, etc.) Allows states to: Limit geographically Limit by targeting Limit by number of individuals

12 Controlling Costs with HCBS Variety of cost controls available Waiting lists Enrollment caps Service limits Spending caps CMS goals regarding DRA and Medicaid reform Cover more people at lower cost Transform LTC from facility-based to consumer controlled Benefits and co-payment flexibility

13 Flexibility in Cost Sharing and Benefits

14 Flexibility in Delivering & Paying for Care* More premiums and cost sharing Premium assistance for employee-sponsored insurance Consumer-directed care (Florida waiver) Healthy lifestyle rewards/personal behavior (West Virginia) Defined contribution, not guaranteed benefit (Florida waiver) *Not necessarily long term care

15 Benchmark Benefits State Plan Option Benefit packages tailored to specific groups Medicaid coverage through benchmark and benchmark-equivalent plans Medicaid no longer a defined benefit Under DRA, certain vulnerable groups excluded: Blind or disabled individuals qualifying for SSI Dual eligibles Beneficiaries who qualify for Medicaid LTC Under CMS guidance, excluded groups must be able to opt out

16 Benchmark Benefits State Plan Option Four benchmark benefit package options Federal employees standard BCBS preferred provider plan State employees health coverage plan Largest commercial HMO in state Secretary approved coverage Benchmark-equivalent coverage Actuarially equivalent to benchmark plan Likely to foster managed care in LTC Coordinate and expand Medicare s Special Needs Plans

17 Approved Benchmark Benefit State Plan Amendments Kentucky: 4 new targeted benefit plans Children, disabilities, SNF populations, and general population State claims savings of $1 billion over 7 years West Virginia: Personal responsibility/member agreements Idaho: 3 new benefit plans disabled, duals, children

18 Responding to Change Partners in reform AHCA/NCAL Principles of Long Term Care Reform to help shape the future toward a sustainable array of LTC services Includes managed care principles AHCA/NCAL work group developing a sustainable LTC financing model AHCA representation on MFP review panel Diversification of services/business case for change edicaid/reform_principles.htm

19 Mark Reagan, Esq. Hooper Lundy & Bookman Chair, AHCA Legal Committee

20 Eligibility

21 Reform of Asset Transfer Penalty (Sec ) Lookback period extended to 5 years Start date for penalty periods delayed to the later of: First day of month when assets are improperly transferred, or Date on which individual otherwise would be eligible for Medicaid LTC benefits (but for the improper transfer)

22 Impact: Asset Transfer Reform Given restrictive transfer/discharge laws, facilities may find themselves caring for patients without reimbursement Hardship waivers Specific requirements for granting waivers and allows a 30-day payment while hardship application is pending NFs have standing to file hardship waivers New, more stringent hardship standards

23 Asset Transfer: Hardship Waiver Only granted upon a finding that penalty period would deprive the applicant of: Medical care such that the individual s health/life would be endangered, or Food, clothing, shelter or other necessities of life CBO estimates $2.4 savings over 10 years

24 Asset Transfer: Facilities Consider performing comprehensive financial background checks on incoming residents Attempt to transfer penalized residents to the extent permitted by law To meet the standard for hardship waiver To limit uncompensated care Seek waivers for all penalized residents Maintain records

25 Citizen Documentation Requirements July 1, 2006 All citizens must produce documentation proving citizenship and identity (Sec. 6036) July 6, 2006 Interim final rule with huge win for AHCA/NCAL: Exempts individuals entitled to or enrolled in Medicare or eligible for Medicaid by virtue of receiving SSI States where exemption does not work may cross match with the State Data Exchange and skip the hierarchical process CMS removed the requirement that institutional admission papers must pre-date Medicaid by 5 years

26 Citizenship Documentation Interim final rule may undergo changes AHCA/NCAL sent comment letter commending CMS, but also asking: For clarification; That state Medicaid agencies can recognize when a U.S. citizen without documents is in fact a U.S. citizen for purposes of Medicaid eligibility; and That tribal enrollment cards be recognized as primary evidence of citizenship

27 MEDICAID Fraud, Waste & Abuse

28 Fraud: False Claims Act (FCA) Encourages states to enact State FCAs with whistleblower provisions Increases state share of proceeds from claims by 10% Encourages looking for fraud in state Medicaid programs States must act by January 7, 2007 to get 10% State law must be as effective as federal statute

29 Fraud: Employee Education Mandates entities that receive at least $5 million in Medicaid payments to have education on FCAs and whistleblower laws that: Establish written policies and procedures for all employees of the entity (including management) and employees of contractors or agents of the entity about the: Federal FCA; Federal administrative remedies and State laws pertaining to civil or criminal penalties for false claims and statements; Whistleblower protections under Federal FCA and other state laws; and Role of such laws in preventing and detecting fraud waste and abuse

30 Fraud: Employee Education (continued) Include as part of written policies detailed provisions regarding the entity s policies and processes for fraud prevention and detection; and Include any employee handbook a specific discussion of: State and federal laws referenced in the previous slide Rights of employees to be protected as whistleblowers Entities policies and procedures for detecting fraud, waste and abuse Resources on AHCA Members Only web page

31 Fraud: Medicaid Integrity Program (MIP) Establishes extensive MIP Review actions of individuals/entities to determine whether fraud, waste, or abuse has occurred or is likely to occur Audit Medicaid claims and contracts Identify overpayments Education on payment integrity and quality of care

32 Janice Zalen Mark Reagan, Esq.