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Medicaid 101Damon Terzaghi

Senior Director

NASUAD

[email protected]

mailto:[email protected]

Contents

• Overview & History of Medicaid

• How Medicaid is Administered

• Overview of Eligibility

• Overview of Services

• Medicare Savings Programs

• Medicaid LTSS

• Medicaid Managed Care

• Current Issues in Medicaid

Medicaid Overview

Medicaid Overview

• Created in 1965, along with Medicare (P.L. 89-97),

under the Social Security Amendments of 1965;

• State & Federal partnership for funding and policy;

• Intended to be a health plan for low-income

individuals on welfare;

• Does not provide the care – pays medical

professionals (providers) to deliver the care;

Medicaid Overview

• Optional program for States – last State (AZ) began

participation in 1982;

• Medicaid is unique in that it covers more Americans than

any other health insurance program;

• In FY2014, $494 billion dollars were spent on the

Medicaid program in the states & territories;

– 15.1 percent of U.S. health care spending in 2012

• Roughly one fifth of all Americans are covered by

Medicaid.

Medicaid Enrollment & Expenditures

Medicaid Enrollment & Expenditures

• Older adults and persons with disabilities represent a

majority of Medicaid expenditures despite being less

than half of enrollees.

• Chronic care and significant health conditions are a

major component of these expenses, as are Long-

term Services and Supports (LTSS).

• Medicaid is the largest source of LTSS financing in

the USA, paying for over $144 billion in 2013 which

represented 42% of overall expenditures on LTSS1

– Medicare ($74B) and out-of-pocket ($57B) were

the next two largest sources of LTSS expenditures

1 Congressional Research Service, 2015. See: https://fas.org/sgp/crs/misc/R43483.pdf

https://fas.org/sgp/crs/misc/R43483.pdf

Medicaid Operations and

Administration

Medicaid Governing Policy

• Medicaid is funded and administered jointly by the Federal Government and states.

• The Federal Government establishes rules and parameters for the program.

• Primary direction is provided through statute and regulation:

– Social Security Act (Title XIX);

– Code of Federal Regulations (Title 42)

• The Centers for Medicare and Medicaid Services (CMS) also issues other guidance to states:

– State Medicaid Director’s Letters;

– State Health Official Letters;

– Informational Bulletins; and

– Frequently Asked Questions (FAQs).

The Medicaid State Plan

• Every state must have an approved “Medicaid State

Plan” that describes its program; the program must be

operated according to the State Plan.

• Among other components, state plans include:

– Groups of individuals to be covered;

– Services to be provided;

– Methodologies for providers to be reimbursed; and

– Administrative activities.

• States must submit and receive approval of a “State

Plan Amendment” (SPA) to change how its Medicaid

program is operated.

Medicaid Financing

• HHS calculates a “Federal Medical Assistance

Percentage” (FMAP) – the Federal share of any medical

costs paid by Medicaid;

– Different for each state;

– Based upon per capita income of residents;

– Minimum of 50% & Maximum of 82%;

• Average FMAP across the U.S. is 57% (not

including ACA enhanced match rate)

– Adjusted on a 3-year cycle, and published annually

• All states receive a 50% match for administrative costs.

• Certain other expenses, such as information systems

and family planning, receive higher match rates.

Federal Matching Funds (FFY 2015) for

Pre-ACA Covered Populations

Source: Kaiser Commission on Medicaid & the Uninsured, “Medicaid Moving Forward,” March, 2015

60-66.9% (13 states)

50.1-59.9% (14 states)

50% (13 states)

AK

HI

CA

AZ

NV

OR

MT

MN

NE

SD

ND

ID

WY

OK

KSCO

UT

TX

NMSC

FL

GAALMS

LA

AR

MO

IA

VA

NCTN

IN

KY

IL

MI

WI

PA

NY

WV

VT

ME

RICT

DE

MD

NJ

MA

NH

WA

OH

D.C.

67-73.6% (11 states including DC)

Role of CMS and the States

• Federal law and regulation (administered by CMS)

specify core requirements all states must meet to

receive federal funding.

• Within federal guidance, states define how they will

run their program:

– State laws and regulations;

– State budget authority and appropriations

– Medicaid State Plan; and

– Waivers.

• Subject to review/approval by CMS, states have

flexibility regarding eligibility, benefits, provider

payments, delivery systems and other aspects of their

programs.

• Each state must have a “single state agency” that

administers Medicaid.

Medicaid Eligibility

Medicaid Eligibility

• Categorical Eligibility – people must fit into a pre-defined group of individuals:

• Children;

• Parents;

• Pregnant women;

• Seniors;

• People with Disabilities; and

• Childless, non-elderly, adults (ACA expansion)

• Eligibility is based on the person, so some people in a family may be covered

and some may not be eligible (commonly: kids are covered; parents are not)

• Income Eligibility – people must also have income below defined limits, usually

set by Federal Poverty Level (FPL)

• Medically Needy Eligibility – individuals can become Medicaid eligible if they

spend their own money on health care expenses (Spend-down)

• Non-financial eligibility requirements generally include residency in the state

and always include citizenship (undocumented immigrants are NOT eligible for

Medicaid; documented immigrants have a 5-year waiting period before

becoming eligible except in specific cases)

Medicaid Eligibility: Mandatory

And Optional Groups• Mandatory Groups:

• Categorical Groups that a State must include if they participate in Medicaid;

• Over 25 mandatory groups, including:

– Supplemental Security Income (SSI) eligible (except in 209(b) states);

– Children 0-5 below 133% FPL; and

– Young adults formerly in foster care (until age 26) within the same state

– Low-income Medicare beneficiaries (not always full Medicaid services).

• Optional Groups:• Groups that a State can choose to include;

• Includes all Medically Needy Groups;

• Over 25 optional Categorical groups, including:

– Medicaid Buy-ins;

– Affordable Care Act (ACA) expansion;

– Higher income eligibility for Medicaid categories.

• Other:

– States sometimes have individuals enrolled in state-only (non-Medicaid) programs that are very similar to Medicaid

ACA Changes

• ACA expanded Medicaid eligibility to childless adults and raised eligibility to 138% FPL, and eliminated asset tests (except for elderly and disability categories)

• ACA also changed how income is counted moving to modified adjusted gross income (MAGI)

• Supreme Court rules the eligibility expansion could be at state option (other changes still are required)

• ACA simplified the eligibility process • Electronic verification of income

• No wrong door

• Integration with state exchanges

• “Simplified” but still not simple.

Current Status of State Medicaid Expansion

Medicaid Services

Medicaid Services: Mandatory

And Optional• Mandatory services include:

• Hospital services & Nursing homes;

• Physician Services, nurse practitioners;

• X-rays, clinics, lab services;

• Free standing birth centers;

• Tobacco cessation for pregnant women.

• Optional services include:

• Prescription Drugs;

• Dental;

• Case Management;

• Rehabilitation (both physical and psychosocial);

• Personal Care.

• Other considerations:• Other sources of health care do NOT impact Medicaid eligibility:

– If a person has other coverage (such as Medicare or private insurance), Medicaid only pays for services not provided through the other coverage;

• Medicaid often assists with copays/premiums associated with other coverage.

Medicaid Services

• Once a person comes into Medicaid, they have access to all

of the services that the state covers and are medically

necessary;

• Services must be statewide, comparable, delivered with

reasonable promptness, and allow individuals to choose

providers;

• States can define the “amount, duration and scope” of

services to reasonably achieve their purpose;

• Some services are specifically excluded (Hyde amendment)

• Early and Periodic Screening, Diagnostic, and Treatment

(EPSDT): Children under 21 can get all medically necessary

optional and mandatory services, regardless of whether the

state covers them for other individuals.

Medicaid Waivers

• Allow the state to “waive” certain Medicaid requirements, including state-wideness, freedom of choice, and comparability;

• Not an “entitlement” – can have enrollment limits or waiting lists;

• Cost-neutrality requirements;

• Most common include:

– 1115: Waiver of variety of Medicaid policies for “research and evaluation”;

– 1915(b): Waiver of “freedom of choice”

– 1915(c): Waiver of comparability allows states to target diagnoses, and option to waive state-wideness;

Medicaid Waivers

• 1115 Waivers provide broad flexibility:

– Can expand coverage to “non-categorical” groups;

– Can implement managed care;

– Can test new service-delivery methods.

• 1915(b) Waivers:

– Can limit which providers individuals can utilize;

– Allows states to enroll people in managed care.

• 1915(c) Waivers:

– Provide Home and Community-Based Services (HCBS), including:

• Habilitation;

• Transportation;

• Personal Care.

– Allows states to create a robust service package for individuals with an institutional level of care (ie: a person with a disability or a senior with significant health care needs).

Medicare Savings

Programs

MSP Program Eligibility Criteria Benefits Provided

Qualified Medicare

Beneficiary (QMB)

Below 100% FPL; Resources below

$7,390 (individual) or $11,090

(married couples)**

**These are adjusted annually

Assistance with:

• Part A premiums

• Part B premiums

• Deductibles,

coinsurance, and

copayments

QMB Plus Below 100% FPL; Resources below


(married couples)** and meet state

Medicaid eligibility criteria

All Medicaid-covered

services and all QMB

benefits

Specified Low-

Income Medicare

Beneficiary (SLMB)

Between 100%-120% FPL;

Resources below $7,390 (individual)

or $11,090 (married couples)**

Assistance with Part B

premiums

Qualified Individual

(QI)

Between 120%-135% FPL;

Resources below $7,390 (individual)

or $11,090 (married couples)**

Assistance with Part B

premiums

Qualified Disabled

and Working

Individuals (QDWI)

Below 200% FPL; resources below


(married); Lost eligibility for

premium free Part A due to working

Assistance with Part A

premiums

Medicare Savings Programs

• Section 1902(r)(2) of the Social Security Act allows states to “disregard” certain types of income and/or assets for eligibility determination

– This can result in higher eligibility limits than discussed on the prior slide in states that choose to use this provision

– Disregards can be “blanket” (i.e. disregarding all income or assets up to a higher level, or removing asset tests) or targeted (i.e. disregarding specific types of assets otherwise counted)

• For more information on MSP programs, visit: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Medicare-Beneficiaries-Dual-Eligibles-At-a-Glance-TextOnly.pdf

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Medicare-Beneficiaries-Dual-Eligibles-At-a-Glance-TextOnly.pdf

Medicare Savings and Part D

Low-income Subsidy • Individuals who qualify as QMB, SLMB, QI, as well as

other fully Medicaid eligible beneficiaries are deemed eligible for the Part D low-income subsidy

• This deemed eligibility means that these individuals do not have to actively apply for LIS eligibility; the LIS should begin in the month after determination of eligibility for the other programs

– Note: when providing assistance to individuals, it may be beneficial to apply for both programs simultaneously even if eligibility for one triggers eligibility for the other. See: https://www.ncoa.org/wp-content/uploads/simultaneous-lis-and-msp.pdf

https://www.ncoa.org/wp-content/uploads/simultaneous-lis-and-msp.pdf

Conditional QMB Status• Some individuals may not qualify for Premium-free Part A services, due

to a lack of work history and/or payment of Medicare taxes

• In order to be eligible for QMB, a person must be enrolled in both Part A and Part B – thus, a conundrum is created since most individuals are unable to afford the Part A premium prior to QMB eligibility determination

• SSA can process a “conditional” application that will enroll the individual in Part A once QMB status is determined, or be discarded if QMB is denied

• This can enable the person to enroll outside of the standard initial or open enrollment period (provided that they are in a Part A buy-in State. In States without a Part A buy-in agreement, this does not apply)

• For information on conditional enrollment: http://www.medicareadvocacy.org/old-site/Projects/AdvocatesAlliance/IssueBriefs/09_10.19.QMBsWithoutPartA.pdf

• For information on Part A buy-in States: https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801140

http://www.medicareadvocacy.org/old-site/Projects/AdvocatesAlliance/IssueBriefs/09_10.19.QMBsWithoutPartA.pdf

https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801140

Medicaid LTSS

Medicaid LTSS

• A variety of programs exist that provide Long-term Services and supports in Medicaid, which could be accessed by individuals with Alzheimer’s and/or dementia

• LTSS in Medicaid includes institutional services in nursing homes (mandatory) as well as HCBS (optional)

• Each state sets their own standards for clinical eligibility, known as “level of care”

• LTSS can also have different eligibility criteria

– The “special income group” allows individuals who require LTSS to qualify with income at 300% of SSI (approximately 225% FPL) instead of lower levels for non-LTSS groups

– Special income group exists in many states, but not all cover up to 300% SSI

– State-by-state listing of Special Income Rule policies: http://kff.org/other/state-indicator/medicaid-eligibility-for-long-term-care-through-the-special-income-rule/?currentTimeframe=0

http://kff.org/other/state-indicator/medicaid-eligibility-for-long-term-care-through-the-special-income-rule/?currentTimeframe=0

Medicaid LTSS

• The most common type of HCBS is authorized via 1915(c) – nearly 300 waivers nationwide

• Requirement that individuals meet institutional LOC criteria

• States must demonstrate cost neutrality

• Allows comprehensive and flexible services –including “other services”

• Cannot pay for room and board expenses –individuals must have other means of financing housing

– Leads to barriers for community living for some individuals

HCBS Authority Comparison§1915(c) §1915(i) §1915(k) §1115(a)

ClinicalEligibility Criteria

Must meet state’s institutionallevel of care

Must be “less stringent” than the comparable institutional criteria for the population

Must meet state’s institutionallevel of care

State can implement various criteria if approved by CMS

Financial Eligibility Criteria

Special income group applies. Other Medicaid groups can be included.

150% FPL or 300% SSI if meet LOC. Special income group does not apply. State can establish separate eligibility group with own income test.

In an eligibility group that includes nursing home services. If not, then 150% FPL.

State can implement various criteria if approved by CMS

Enrollmentlimits

Enrollment limits and waiting lists allowed

Not allowed. All eligible must be able to access services.

Not allowed. All eligible must be able to access services.

Enrollment limits and waiting lists allowed

HCBS Authority Comparison

§1915(c) §1915(i) §1915(k) §1115(a)

Cost neutrality

Required Not required Not required Required

Approval Timeframe

No timeline 90 days 90 days No timeline

Approval Period

Five years Can be indefinite; can be five years

Indefinite 5 years

Services Included

Wide range of HCBS, including habilitation,personal care, adult day health, and other CMS-approved

Same as 1915(c) Attendant Care services; items substituted for human assistance

Can include various services proposed by State and approved by CMS

Managed Care

Overview – FFS vs. MMC

Fee-for-service (FFS)

• Relationship: State contracts directly with health care providers.

• Payment: Providers receive payment for each health care service provided to consumers.

• Accountability: Providers do not bear financial risk for the provision of services.

• Note: FFS has historically been the predominant delivery system.

Overview – FFS vs. MMC (Cont.)Medicaid Managed Care (MMC)

• Relationship: State contracts with a Managed Care Organization (MCO), not a direct service provider.

• Service Delivery: Consumers receive part or all of Medicaid services from health care providers that are paid by a MCO that is under contract with the state.

• Payment: MCOs receive capitated payment from the state for a specified benefit package on a per member per month basis.

• Accountability: The MCO is responsible for the provision and coverage of Medicaid services.

Managed Care Plan RequirementsKey requirements

• Sufficient providers to ensure access to services (network approved and monitored by state);

• Coordinate care for members who have special needs or use long term services and supports (LTSS);

• Measure and report to the state on quality of care;

• Provide access to member services by phone, web, and email;

• Authorize (when appropriate) and pay providers timely for services;

• Have an appeal process for disagreements on service access;

• Spend at least 85% of payments from the state on services and quality activities (effective 7/1/17);

• Implement activities to minimize fraud, waste and abuse.

Managed Care Authorities

• Social Security Act (SSA) provides four ways that states may operate their programs (numbers refer to SSA sections):• §1915(a) - Voluntary Program;• §1932(a) - State Plan Amendment (SPA);• §1915(b) - Managed Care Waiver;• §1115(a) - Research & Demonstration Project.

• States may use multiple authorities depending on the program’s design and the populations receiving benefits.

• CMS will provide technical assistance to direct states to the proper authority for their program’s design. CMS must also approve state plans for managed care.

Authority Comparison§1915(a) §1932(a) §1915(b) §1115(a)

Ability to MandateEnrollment

No Yes; except special needs children, AI/AN, dual eligibles

Yes Yes

Service Area

Statewide or limited to certain areas

Statewide or limited to certain areas; Can also offer different benefits to enrollees



SelectiveContracting

Not allowed Allowed Allowed Allowed

Cost-test Not required Not required Required Required

Approval Timeframe

No timeline 90 days 90 days No timeline

Approval Period

Indefinite Indefinite 2 years 5 years

RI

OR

NV

UT

AZ

SD

NE

KS

AR

LA

WI

IN

KY

TN

GA

SC

VA

ME

MS AL

WVCA

ID

MT

WY

NM

TX

ND

OK

MN

IA

MI

IL

MO

OH

FL

PA

NY

CO

NC

WA

VTNH

MD

DE

NJ

DC

RI

CT

Acute care MC program - MCOs only

Acute care MC program – both MCOs AND limited benefit plans

Acute care MC program - only limited benefit plans

State has both acute care & MLTSS programs

HI

Source: NASUAD survey; CMS data

All Managed Care Programs

Medicaid and ACA Considerations

• Current discussions regarding the broader healthcare system are centered around ACA repeal, but may have significant impacts on Medicaid and other public insurance programs

• Current policy ideas under consideration include:

– Keeping Medicaid “as-is”;

– Repealing the ACA expansion and/or increased Federal funding for expansion:

• This might include some ACA LTSS options, such as the 1915(k)

– Establishing ‘per-capita’ limits on Medicaid spending; or

– Repealing Medicaid’s entitlement and converting to state-operated block grants.

• Other discussions involve an expansion of CMS/HHS waiver authority to allow state innovation

Questions?

For more information, visit www.nasuad.org

http://www.nasuad.org/

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