The Center's work on 'Medicaid' Issues


States Can Use Smart Strategies to Curb ER Visits

April 16, 2015 at 12:52 pm

We often hear that Medicaid beneficiaries use the emergency room (ER) for too much of their health care.  In response, some states have tried to reduce non-emergency use of the ER by charging beneficiaries co-pays.  As we explained in a recent paper, however, this approach is flawed — and other states have found better ways to connect beneficiaries with the care they need and avoid unnecessary ER use.

Medicaid beneficiaries do use the ER more frequently than adults with other health coverage, but their visits are almost always for serious medical problems.  Only about 10 percent of ER visits paid by Medicaid in 2008 were for non-emergency conditions — slightly more than the share of ER visits by people with private insurance (7 percent).  And a recent study shows that charging co-pays for non-emergency use of the ER didn’t change beneficiaries’ use of either the ER or primary care.

Several states have had significant success in curbing unnecessary ER use, however, by expanding access to primary care and targeting interventions at the people who frequently use the ER.  For example, New Mexico created a statewide 24/7 nurse advice hotline for all state residents, which diverted 65 percent of callers from the ER and has saved the state $68 million.  And in the year after Washington moved Medicaid beneficiaries to managed care and required hospitals to adopt seven best practices, non-emergency ER use fell by 14 percent and the state saved $34 million.

Indiana has also implemented a successful strategy, but curiously now is imposing co-pays for ER use.  Under the state’s Right Choices Program, which focuses on preventing unnecessary and inappropriate use of care by beneficiaries who use the most services, one of Indiana’s managed care plans has seen a 72 percent drop in ER use.  Despite this success, Indiana received approval in its recent Medicaid waiver to impose a $25 co-pay the second time a beneficiary uses the ER for non-emergency care in a 12-month period, purportedly to test whether the approach will reduce unnecessary ER use and increase use of health care in other settings — a theory that’s already been disproven, as I mentioned above.

It’s hard to see why Indiana wants to incur administrative costs for this experiment when we know that co-pays don’t work — and that targeted interventions like the Right Choices Program do.

States Can Use Medicaid Flexibility to Boost Health and Cut Costs

April 9, 2015 at 4:40 pm

Update, April 9: We have made a correction to this post.

States can help improve Medicaid beneficiaries’ health and cut costs by promoting personal responsibility and work and ensuring appropriate use of health care.  As our new paper explains, however, the most successful strategies don’t include premiums, cost-sharing charges, and work requirements that some states have sought to implement.

In fact, a robust body of research shows that imposing premiums and cost-sharing charges on people with low incomes doesn’t ensure appropriate use of health care, but instead keeps people from enrolling in coverage or from getting necessary care.  And work requirements aren’t appropriate for Medicaid, a program intended to provide health care services to people who couldn’t otherwise get the care they need.  Most adult Medicaid beneficiaries are already working,  and many of those who aren’t could benefit from the access to health services that Medicaid provides, which in some cases may help them get or keep a job.

States can use Medicaid’s flexibility to ensure appropriate use of health care services and encourage work without creating barriers to coverage and care.  Many of these approaches have improved health outcomes for beneficiaries and lowered spending, research shows.

Among the strategies states have employed:

Reducing Emergency Room (ER) use without excessive co-pays.  A relatively small number of Medicaid beneficiaries’ ER visits are for non-emergencies; most ER visits are for serious problems, the evidence shows.  Recent efforts in states including Georgia, Indiana, Minnesota, New Mexico, Washington, and Wisconsin show, however, that states can reduce ER use by expanding access to primary care services and targeting interventions to populations that frequently use the ER.

Coordinating care for individuals with chronic conditions.  States can lower Medicaid spending by improving the care and health outcomes for individuals with chronic conditions who use a lot of health care services.  About 1 percent of Medicaid beneficiaries account for 25 percent of total Medicaid expenditures.  Within this group, 83 percent have at least three chronic conditions, and more than 60 percent have five or more.  Several states, including Missouri, North Carolina, and Vermont, have lowered their Medicaid spending by improving health care service use (and beneficiary health outcomes) through models that help coordinate care for these patients.

Encouraging work through supportive employment services.  Many Medicaid beneficiaries who aren’t working have some underlying reason, such as a disability or a chronic condition, that makes it difficult for them to find and keep a job.  The unemployment rate in 2012 for individuals with mental illness was 17.8 percent.  States can offer supportive employment services to individuals with mental illness through Medicaid.  In 2007, Iowa became the first state to receive approval to amend its Medicaid state plan to include a supportive employment program.  Under Iowa’s program, the state receives federal Medicaid dollars to help such individuals find and maintain employment.  Other states have followed Iowa’s lead, including California, Delaware, Mississippi, and Wisconsin.

Click here to read the full paper.

A Congressional Budget Dictionary

March 27, 2015 at 10:03 am

Congressional Republicans are using complicated — and likely poll-tested — language to make their budget plans’ deep spending cuts and dramatic structural changes in key programs for low- and moderate-income people sound benign and even positive.

As Budget Committee member Sen. Chuck Grassley (R-IA) noted before the plans’ release, “From the standpoint of a budget, the less words of the English language you use, the better off you are.”

While it’s common practice for lawmakers to use language that puts their plans in the best possible light, it’s important to understand exactly what they mean.  Here are three key “translations”:

The House budget summary says:
It will make Pell Grants, which help more than 8 million students from low- and modest-income families afford college, “permanently sustainable.”

This turns out to mean:
The House budget would institute sharp funding cuts in Pell Grants, which in turn would make it harder for millions of students to afford college at a time when those costs are rising quickly.  Over time, this likely would reduce economic opportunity and the readiness of the U.S. workforce.

The House budget summary says:
The budget would convert both the Supplemental Nutrition Assistance Program (SNAP) and Medicaid to “State Flexibility Funds.”  It states that this would give state governments “the power to administer [SNAP] in ways that best fit the needs of their communities with greater incentives to achieve better results,” and also would “empower state policymakers to tailor their Medicaid programs based on the unique challenges they face.”

This means:
The budgets would convert SNAP and much or all of Medicaid to “block grants,” with fixed — and sharply reduced — federal funding.

The programs would no longer respond automatically to increased need due to rising poverty and unemployment during economic downturns.  And the combination of block grants and big funding cuts would leave states having to figure out whose benefits to cut or terminate.  The magnitude of the cuts would leave them without good options.  The SNAP cuts would force states to shrink or eliminate food assistance for millions of low-income families, while the Medicaid cuts would force them to make eligibility and benefit cuts that would likely leave millions of beneficiaries uninsured or underinsured (on top of the loss of coverage that millions of poor Americans would face due to the House and Senate budget plans’ repeal of health reform and its Medicaid expansion).

Finally, sometimes even silence needs a translation.  The House and Senate budgets make no mention of extending crucial provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) for low- and modest-income working people now slated to expire at the end of 2017.

This means:
The plans would allow these provisions to expire,  thereby pushing more than 16 million people — including almost 8 million children — into or deeper into poverty and squandering the opportunity to help promote work, reduce poverty, and support children’s development.

Once you get beyond the euphemisms and flowery language, a clear agenda stands out in these plans:  shrinking government in substantial part through steep reductions in programs for low- and moderate-income Americans that, in turn, would lead to higher levels of poverty and inequality, less opportunity, and a future workforce that’s less able to compete with its counterparts overseas.

Despite Anti-Fraud Rhetoric, Republican Budgets Omit Funding to Combat Fraud and Abuse

March 25, 2015 at 5:00 am

Update, April 13:  We’ve updated this post to reflect more recent information. 

The budgets that the House and Senate will consider this week leave out the funding that the 2011 Budget Control Act (BCA) specifically allows for “program integrity” activities to fight fraud and abuse in Medicare, Medicaid, and disability programs, despite the fact that these activities have a proven track record of saving money.  This action stands in contrast to Republican claims that their budgets will make government spending more “efficient and effective.”

Both the House and Senate budgets fail to include the $1.166 billion in additional funding the BCA sanctions in 2016 for reducing overpayments and fraud in the Social Security Disability Insurance and Supplemental Security Income (SSI) programs, and the $395 million for combatting Medicare and Medicaid fraud.  Congress provided the allowed amounts for fiscal year 2015 — $1.123 billion to combat fraud and overpayments in the disability programs and $361 million to address Medicare and Medicaid fraud — but under the new House and Senate budgets, this funding would end.

These program integrity activities have been found to save substantial sums, reduce program costs, and thereby lower budget deficits.  For example, a key use of program integrity funding for Social Security and SSI is to conduct “continuing disability reviews” to weed out beneficiaries who have recovered from their impairments.  The Social Security actuaries have found that these reviews save about $10 for every $1 they cost.

Similarly, program integrity activities to detect and stop erroneous payments and outright fraud in Medicare and Medicaid (including payments to doctors and hospitals that improperly bill or overbill the programs) saved about $8 for each dollar spent on such efforts in 2012-2014.

The funds in question are the amounts the BCA specifically allows for designated program integrity activities with a proven track record of saving money.  Because these activities yield savings significantly exceeding their cost, the BCA allows specified amounts for these program integrity efforts that don’t count against the BCA’s austere appropriations caps.

The House budget expresses support for program integrity activities but states that they must be funded within the caps — meaning that fully funding them would require even deeper cuts in other non-defense discretionary programs, which already must adhere to the austere sequestration levels in 2016.  And after 2016, the House budget proposes to cut non-defense discretionary programs below sequestration levels, leaving even less room for program integrity funding.

Many Republican lawmakers have been vocal in criticizing various programs for people who have disabilities or low-income families by charging that the programs are marked by fraud and abuse.  This can make good political and campaign rhetoric.  Now comes the question:  will they put their money where their mouths are?

Even if the budget resolutions do not include these additional funds, the Appropriations Committees may still be able to provide them when they write the annual appropriations bills.  That would be the right thing to do.

House Bill Makes Permanent Medicare Premium Assistance for Low-Income Beneficiaries

March 24, 2015 at 11:24 am

The compromise legislation that House Republican and Democratic leaders unveiled today to permanently fix Medicare’s flawed physician payment formula and extend funding and current policy for the Children’s Health Insurance Program (CHIP) through 2017 has another important feature — it would also make permanent the Qualifying Individuals (QI) program, which helps low-income Medicare beneficiaries pay their premiums and is otherwise slated to expire at the end of March.

QI is one of the Medicare Savings Programs (MSPs) through which Medicaid helps low-income Medicare beneficiaries pay their Medicare premiums and/or other cost-sharing charges.  QI covers the annual Medicare Part B premiums for beneficiaries with incomes between 120 percent and 135 percent of the poverty line (roughly $14,100-$19,100 for singles and $15,900-$21,500 for couples).  The program helps more than half a million near-poor seniors and people with disabilities pay their premiums.

Policymakers periodically need to extend QI — unlike the other MSPs, which are permanent features of Medicaid — and it’s once again scheduled to expire.  In finally making QI permanent, the House legislation would ensure that QI beneficiaries can continue to receive benefits, which are worth about $1,260 in 2015, over the long run.  Moreover, because people enrolled in QI are automatically enrolled in the Medicare drug benefit’s Low-Income Subsidy, which helps low-income beneficiaries with their premiums and cost-sharing for their drug coverage, they’d be assured of continuing to receive that assistance as well.