Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Findings from the Annual Kaiser 50-State Medicaid Budget Survey

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1 Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Findings from the Annual Kaiser 50-State Medicaid Budget Survey Robin Rudowitz Associate Director, Kaiser Commission on Medicaid and the Uninsured The Henry J. Kaiser Family Foundation Vern Smith Managing Principal Health Management Associates Washington, DC October 15, 2015

2 Figure 1 Today we are releasing 3 reports that draw on findings from our 15 th annual survey of Medicaid Directors. 15th Annual Survey of Medicaid directors in all 50 states and DC Conducted in July and August 2015 Study findings and other research used for 3 reports Medicaid Enrollment & Spending Growth: FY 2015 & 2016 provides an analysis of national trends in state Medicaid enrollment and spending; Medicaid Reforms to Expand Coverage, Control Costs and Improve Care, jointly released with NAMD, provides a detailed look at the policy and program changes in Medicaid programs in all 50 states; and Putting Medicaid in the Larger Budget Context: An In-Depth Look at Three States in FY 2015 and 2016 uses case studies to examine Medicaid programs in Alaska, California and Tennessee.

3 Figure 2 Economic conditions and policy changes drive growth in Medicaid enrollment and total spending. Annual Percentage Changes, Medicaid Total Spending 12.7% 10.4% 9.3% 8.7% 8.5% 7.5% 7.7% 6.8% 6.4% 5.6% 4.7% 4.3% 3.2% 3.2% -1.9% 0.4% 1.3% 9.7% 5.8% 7.6% 4.8% 3.8% 6.6% 0.2% -0.5% 3.1% Medicaid Enrollment 7.8% 7.2% 2.3% 6.9% 1.5% -4.0% 9.6% 13.9% 8.3% 13.8% Proj. NOTE: Percentage changes from June to June of each year. Data for FY 2016 are projections based on enacted budgets. SOURCE: Historic Medicaid enrollment growth rates are as reported in Medicaid Enrollment June 2013 Data Snapshot, KCMU, January Historic Medicaid spending growth rates are derived from KCMU Analysis of CMS Form 64 Data. FY data are derived from the KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October % 4.0%

4 Figure 3 Total and state Medicaid spending generally grow at similar rates, except when statutory changes impact FMAP: State Medicaid Spending Growth Total Medicaid Spending Growth Enhanced FMAP / Federal Fiscal Relief ( ) ARRA Enhanced FMAP ( ) 20.1% ACA Enhanced Match Rate 10.4% 9.9% 12.9% 12.7% 8.5% 7.7% 5.5% 4.9% 10.1% 6.4% 3.0% 1.3% 4.0% 3.8% 5.8% 5.7% 7.6% 6.6% 16.1% 9.7% 7.3% 6.9% 9.6% 13.9% 6.9% 5.2% 4.5% 4.2% -10.9% -4.9% -4.0% Expiration of ARRA Enhanced FMAP * NOTE: *Data for FY 2016 are projections based on enacted budgets. State spending for years includes all non-federal spending. State Medicaid spending for FYs refers to state spending, largely general fund. SOURCE: Historic Medicaid spending growth rates are derived from KCMU Analysis of CMS Form 64 Data. FY data reflect changes in state spending derived from the KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2015.

5 Figure 4 Over half of states have adopted the ACA Medicaid expansion. WA OR NV CA ID AZ UT MT** WY CO NM ND SD NE KS OK MN WI* IA* IL MO AR* MS MI* OH IN* KY TN AL VT NY PA* WV VA NC SC GA ME NH* MA CT RI NJ DE MD DC AK HI TX LA FL Implementing the Expansion (31 States including DC) Adoption Under Discussion (1 States) Not Adopting at this Time (19 States) NOTES:*AR, IA, IN and MI have approved Section 1115 waivers for Medicaid expansion. WI covers adults up to 100% FPL in Medicaid, but did not adopt the expansion. **Montana has passed legislation adopting the expansion; it requires federal approval. SOURCE: Status of State Action on the Medicaid Expansion Decision, KFF State Health Facts, updated September 1,

6 Figure 5 FY 2015 enrollment and total spending growth in expansion states far exceeded non-expansion states; state spending growth was lower. Medicaid Enrollment Total Medicaid Spending State Medicaid Spending 18.0% 17.7% 13.8% 13.9% 4.5% 3.4% 5.1% 6.1% 6.9% All States Expansion States Non-Expansion States NOTE: Data show the year over year change in enrollment FY 2014 to FY Expansion States for FY 2015 include 29 states. Total Medicaid spending includes federal, state and local spending.

7 Figure 6 For FY 2016, Medicaid enrollment and total Medicaid spending growth are projected to slow. Medicaid Enrollment Total Medicaid Spending State Medicaid Spending 8.6% 6.9% 4.0% 4.2% 4.5% 3.7% 2.8% 3.6% 5.2% All States Expansion States Non-Expansion States NOTE: Data show the year over year change in enrollment from FY 2015 to FY Expansion States for FY 2016 include 31 states; Alaska and Montana reported plans to adopt the Medicaid expansion in FY 2016.

8 Figure 7 The report focuses on the following major policy areas: Traditional Medicaid Policy Actions Eligibility and Enrollment Benefits Changes Provider Rates and Taxes Medicaid Strategies and Reforms to Expand Coverage, Control Costs and Improve Care Managed Care Payment and Delivery System Reforms Medicaid Priorities for 2016

9 Figure 8 States with Eligibility Expansions / Enhancements FY FY 2016 Other Eligibility Expansions ACA Medicaid Expansion FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Adopted FY 2016 SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October

10 Figure 9 Benefit Changes Reported by States, FY Number of States Reporting Benefit Enhancements/ Additions FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY FY 2016 (adopted) Number of States Reporting Benefit Restrictions/ Eliminations 5 NOTES: States were asked to report benefit restrictions, eliminations, enhancements, and additions in FY 2015 and FY Excluded from these changes are the implementation of alternative benefit plans for the Medicaid expansion group. SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2015.

11 Figure 10 Provider Rate Changes Implemented in FY FY 2015 and Adopted for FY FY 2013 FY 2014 FY 2015 Adopted FY 2016 States with Rate Increases Any Provider Inpatient Hospitals MCOs Nursing Homes States with Rate Restrictions NOTE: Provider payment restrictions include rate cuts for any provider or freezes for nursing facilities or hospitals. FY 2016 rates had not been determined for MCOs in Florida at the time of the survey. Illinois and North Carolina did not provide responses for any FY 2016 rates as budgets had not been enacted in these states

12 Figure 11 Physician Rate Changes Implemented in FY FY 2015 and Adopted for FY 2016 FY 2013 FY 2014 FY 2015 Adopted FY 2016 States with Rate Increases Outpatient Hospital Physicians (Specialists) Dentists States with Rate Restrictions NOTE: Provider rate changes for select physician types; rate changes for primary care providers were not included in this figure. Illinois did not provide responses for any FY 2016 rates as budget discussions continued in that state at the time of the survey.

13 Figure 12 States with Provider Taxes or Fees in Place in FY 2015 WA OR NV CA ID AZ UT MT WY CO NM ND SD NE KS OK MN WI IA IL MO AR MS MI OH IN KY TN AL VT NY PA WV VA NC SC GA ME NH MA CT RI NJ DE MD DC AK TX LA In place in FY 2015 FL HI 3+ provider taxes/fees (32 states including DC) 2 provider taxes/fees (12 states) 1 provider tax/fee (6 states) No provider taxes/fees (1 state) NOTES: Includes Medicaid provider taxes as reported by states. It is possible that there are other sources of revenue from taxes collected on health insurance premiums or health insurance claims that are not reflected here.

14 Figure 13 Comprehensive Medicaid Managed Care Models in the States, 2015 AK CA OR WA NV ID AZ UT MT WY NM HI CO ND SD NE TX NOTES: ID s MMCP program, which is secondary to Medicare, has been re-categorized by CMS from a PAHP to an MCO by CMS but is not counted here as such. CA has a small PCCM program operating in LA county for those with HIV. Wyoming s PCMH program uses PCCM authority to make PMPM payment but is not counted here as such. KS OK MN IA MO AR LA WI IL MS MI IN TN AL KY OH As of July 1, 2015 WV GA SC PA VT VA NC FL NY ME CT NJ DE MD DC MCO only (29 states including DC) MCO and PCCM (10 states) PCCM only (9 states) No Comprehensive MMC (3 states) NH MA RI

15 Figure 14 MCO Managed Care Penetration Rates for Select Groups of Medicaid Beneficiaries as of July 1, 2015 Excluded <25% 25-49% 50-74% 75+% Children 39 states All States 39 States Adults 39 states Elderly and Disabled 39 states ACA Expansion Adults 26 states NOTES: Limited to 39 states with MCOs in place on July 1, Elderly and disabled includes dual eligible beneficiaries. Of the 29 states that had implemented the ACA Medicaid expansion as of July 1, 2015, 26 had MCOs in operation.

16 Figure 15 Medicaid programs continue to add and expand payment and delivery system reforms in FYs 2015 and FY 2015 FY Managed Care Expansions to New Groups Managed Care Quality Initiatives Emerging Delivery System Initiatives HCBS Expansions NOTE: Managed Care Expansions to New Groups refers to expansions to new groups, new regions, increasing the use of mandatory enrollment, and new RBMC programs. Other Delivery System Initiatives include new or expanded initiatives related to PCMH, Health Homes, ACOs, Episodes of Care, DSRIP and initiatives focused on dual eligible beneficiaries.

17 Figure 16 Medicaid directors reported many key priorities for FY 2016 and beyond. Medicaid Priorities ACA Implementation Cost Control Payment and Delivery System Reform Systems and Administration Population Health and Social Determinants of Health

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