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State Profiles: Medicaid Patients and FQHCs in Region X

Monday, June 17, 2019  
Posted by: Thomas Johnson
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In the last data points article, we toured the relationship that exists between health center patient revenue and Medicaid. This month, we will look more broadly at the Medicaid programs that exist in each Region X state, and review how their policies impact health center operations.

Federal Policy

Before diving into the specifics of each state, however, it’s important to review some of the policy implications set at the Federal level. Medicaid is a public insurance program operated and funded by state-run health departments, with additional funding and oversight provided from the federal government. This means that policymakers at both the federal level and the state level have a broad impact on how Medicaid functions, what it covers, and who is eligible.

The Patient Protection and Affordable Care Act (ACA) has had a significant impact on Medicaid eligibility and enrollment. Originally, the law required that all states expand their Medicaid programs to adults with incomes up to 138 percent of the federal poverty line. The purpose of this requirement was to eliminate the coverage gap that would otherwise exist for adults that were not eligible for Medicaid or health insurance subsidies (another component of the law). To help states fund the expansion, the Federal government agreed to pay for the overwhelming majority of the costs associated with the new enrollees.

In 2012, the Supreme Court ruled that the requirement to expand Medicaid was unconstitutional, thereby making it optional for states to expand their programs. To date, most states have taken measures to expand Medicaid, although the paths taken have varied from state-to-state. Many (including Oregon and Washington) passed expansion legislation in 2014 to take advantage of the additional Federal funding. Others expanded their programs at a later date (like Alaska). In other states, expansion was delayed due to lengthy disputes between different branches of government (Maine), or only after the voters mandated by referendum that their governments expand their program (Idaho).

Since taking office, the Trump administration has shifted efforts away from increasing Medicaid enrollment, voicing concerns over increased costs, and federal policymakers are currently exploring options that would ultimately cut funding and reduce enrollment. In 2018, CMS invited states to submit proposals (in the form of 1115 waivers) to impose work requirements on Medicaid enrollees, which would cause an estimated 1.4 to 4.0 million adults to lose coverage. So far, eight states have had their work requirements approved by CMS, although a federal judge has blocked efforts in Arkansas and Kentucky. Federal policymakers have also renewed interest in funding Medicaid according to block grants. Currently, Medicaid funding operates as an entitlement program where the amount of federal dollars provided to each state varies according to program need and per capita income. As the number of Medicaid enrollees increases, the amount provided by the federal government to states also increases with no pre-set limit. Under a block-grant model, the amount of money provided to states would be capped at a set amount. This would make funding more predictable for Congress and give states more flexibility in how they operate their program, however it would also most likely force states to establish policies that keep enrollment under a set amount.

Medicaid Reimbursement for Health Centers

Because both programs aim to ensure access to health care for individuals who otherwise are unable to afford it, there is an overlap in values and motivations between the Health Center program and Medicaid. More than 50% of all patients served by health centers in Region X (Alaska, Idaho, Oregon, and Washington) are covered by Medicaid.

To ensure that health centers receive adequate reimbursement for care provided to these patients, health centers and Medicaid have a special relationship that governs how much revenue they receive. Unlike with other types of payers (like private insurers), rather than receive payment for individually billed services, health centers are paid a formula-determined encounter fee for delivering care to Medicaid patients. The encounter fee typically covers all qualified services, although in some cases health centers may bill Medicaid for additional services not covered. Known as the Prospective Payment System (PPS), the purpose of this reimbursement model is to prevent health centers from having to use grant funding to cover the cost of care for Medicaid patients.

In ideal scenarios, a health center's PPS rate is set to approximate the average cost of care for that health center. States have the flexibility to adjust health center PPS rates, however, depending on changes that have occurred since when the rate was first calculated. In some cases, this may backfire for health centers, resulting in lost revenue due to miscalculated adjustments.

Alaska

In 2017, 200,369 Alaskans were enrolled in Medicaid. 40,178 (20%) of those patients went to a health center. The western part of the state has the higher incidence of Medicaid patients, with more than 50% of the population of both the Kusilvak (Wade Hampton) and Bethel Census Areas enrolled in Medicaid.

Medicaid Rate by Borough/Census Area, Alaska

U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates


Although Alaska is now an expansion state, it did not expand its Medicaid program immediately after passage of the ACA. In August 2015, Governor Bill Walker issued an executive order to bypass the legislature (which resisted expansion initially). Since then, program enrollment has grown 68%, with 83,000 additional enrollees. 

The effect on health centers has been profound. Medicaid is now the leading source of insurance for Alaskan health center patients, surpassing both private insurance and individual self-pay starting in 2016.


Amidst the growing number of Medicaid enrollees, some Alaskan lawmakers have expressed concern over rising costs associated with the increased enrollment. Alaska policymakers are currently exploring additional reforms to their state's program in an effort to control costs, including adding work requirements to enrollees and becoming the first state to accept federal funding in the form of a block grant.

Until very recently, Alaska's Medicaid program did not contract with any Managed Care Organizations (MCOs). In April, the state launched a three-year pilot with United Health Care to explore managed care in Anchorage and the Matanuska-Susitna Borough.

Idaho

In 2017, 297,688 Idahoans were enrolled in Medicaid. 27,796 (9%) of those patients went to a health center. The distribution of the Medicaid population is more evenly spread across the state compared to Alaska, although Canyon County and the more sparsely populated Clark County have approximately 25-30% of the entire population enrolled.

Medicaid Rate by County, Idaho

U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates


Idaho has not yet expanded Medicaid. Voters directed the state to expand the program by ballot initiative last year,  and lawmakers did pass legislation in the most recently held legislative session that moves expansion forward. The legislation also includes work requirements for enrollees and a partial expansion provision that enroll adults eligible for expanded Medicaid in the ACA exchanges by default. It is uncertain whether CMS will approve either measure or if they will stand up in court to any legal challenge. that might results.

Despite not expanding Medicaid, health centers in Idaho are today serving more patients covered by Medicaid and private insurance than they were in 2012. The health exchanges set up by the ACA and the outreach and enrollment activities that it funded have reduced the overall number of health center patients without insurance. Self-pay is still the predominant type of payer method in the state, however, once Medicaid begins accepting new enrollees through expansion efforts, we expect the payer distribution in Idaho to resemble the other states in Region X.



Medicaid patients in Idaho are not enrolled in an MCO, however, the state does operate Primary Care Case Management (PCCM) through its Healthy Connection Program. The program grants providers a small per-member-per-month fee to act as the primary home for patients. Recently, a few health centers in Idaho have reported some revenue from Medicaid through managed care, however, this is most likely revenue reported from health centers that serve patients in Oregon and/or Washington.



Oregon

In 2017, 976,182 Oregonians were enrolled in Medicaid. 218,604 (22%) of those patients went to a health center. With robust and long-standing outreach and enrollment activities, the Medicaid penetration rates are estimated to be more evenly distributed throughout the state, with the counties in the Southern, and Central regions having a greater percentage of the public enrolled. Malheur and Jefferson counties have the highest rates, with more than 30% of each county's population estimated to be covered through Medicaid.

Medicaid Rate by County, Oregon

U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates


Oregon was one of the states to expand Medicaid as soon as it was permitted by the ACA. Lawmakers had already taken measures in years prior to increase enrollment, so the decision to expand was met with little resistance from either the legislature or executive branch. Since then, program enrollment has increased by 56%, with approximately 350,000 new enrollees.

Health centers were already serving more patients covered by Medicaid than any other insurance type, however, expansion has further pushed that distribution to more extreme levels. Today, approximately 57% of all patients seen by health centers in Oregon are covered by Medicaid.



Oregon has instituted Medicaid Managed Care through its 16 Coordinated Care Organizations (CCOs), which oversee the delivery of care and reimbursement for enrollees that reside within a geographic area. The goal of this model is to improve the health outcomes for the entire Medicaid population by focusing on care coordination and value-based payment. To achieve this, many CCOs reimburse health centers for delivering care to their Medicaid patients via capitated or fee-for-service payment models. These payment models have become more relied on in recent years, with non-managed care payments accounting for only 26% of all payments in 2017.



Washington

In 2017, 1,782,832 Washingtonians were enrolled in Medicaid. 218,604 (22%) of those patients visited a health center. Medicaid penetration is greatest in the counties of the North and South Central regions, notably Adams and Grant Counties.

Medicaid Rate by County, Washington

U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates


Washington was an early adopter to Medicaid expansion, having already expanded its program by 1115 waiver beginning in 2011. At the time, the state funded the costs of the additional enrollees, so switching funding to Federal sources in 2014 was a no-brainer for lawmakers. The expansion has dramatically increased Medicaid enrollment numbers, with close 700,000 new patients joining the program since 2013.

As with Oregon, Medicaid was already the largest insurance provider for Washington health center patients before the state officially expanded Medicaid as part of the ACA. Since then, the state's Medicaid population has grown dramatically, far surpassing estimates of analysts and policymakers. Today, Medicaid is the form of insurance for 58% of all health center patients.



Also similar to Oregon, care for patients enrolled in Washington's Medicaid program is managed by MCOs. There are five different MCOs that operate in the state, though not all of them are available in each county. Integrated managed care (which covers primary care, mental health, and substance use disorder treatment) became available to Medicaid patients in most counties this year, with the remaining counties covered by January of 2020.

Washington is also aggressively moving towards value-based payments, with a goal of 90% of all payments linked to quality by 2021. Since 2012, the percentage of non-managed payments made to health centers on behalf of Medicaid has declined dramatically. Today, managed care payments account for more than half of all revenue received by health centers from Medicaid, with the biggest increases occurring in the managed care fee-for-service category.


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