Medicaid expansion moves forward

January 10, 2014

Three states prepare to handle mushrooming Medicaid enrollments

With the influx of new beneficiaries gaining eligibility for Medicaid through expansion - an option available to each state through the Affordable Care Act - health insurers are gearing up to provide adequate services, both medical and pharmacy.

The experiences of California, an early adopter of expansion, and Ohio, the last of the state holdouts to sponsor the program, offer perspectives on how the rollout is progressing.

While health plans across the country must follow carefully delineated guidelines outlining eligibility and benefits, insurers in both states have adapted services to fit their member populations.

Poverty level

One of the biggest changes for Medicaid expansion is the raising of the federal poverty level (FPL) tied to eligibility and coverage for childless adults, who previously were eligible only in a handful of states.

Before the Medicaid expansion, the eligibility level was 100% to 133% below the federal poverty level; this now has risen to a level that is equal to or below 138%, or about $15,856 in income per year for an individual adult.

Half of today’s uninsured has incomes below the new Medicaid limit of 138%, according to the Kaiser Family Foundation. Low-income individuals who make >138% of the poverty line will be eligible for tax credits.

In addition, many low-income parents in more than 30 states will qualify for Medicaid, along with their children, who are already beneficiaries.

Eligibility will apply to enrollees for a year, compared to the previous six-month reassessment of financial status.

Rx drug coverage

On the pharmacy side, Medicaid has also made a major change.

The final rule on Essential Health Benefits issued by the Centers for Medicare and Medicaid Services (CMS) states that the process for determining prescription drug coverage in the expanded Medicaid program would be the same as it is in the private insurance market. 

This ruling differs from traditional Medicaid coverage, in which beneficiaries had access to all drugs manufactured by companies that participate in the drug-rebate program.

The requirement means that formularies must include the greater of one drug per U.S. Pharmacopeia category/class or the same number of drugs per category/class as the chosen state Medicaid “benchmark” plan. Medicaid plans no longer have to provide access to all prescription drugs.

The final rule leaves some flexibility, allowing states to decide how to apply utilization management tools for prescription-drug coverage, such as tiers, refinements to prescription drug lists (PDLs), supplemental rebate programs, and monthly drug limits.

However, health plans have to put a procedure in place to allow beneficiaries to request access to clinically appropriate but uncovered drugs, and they must process prior authorization requests within 24 hours. At least a 72-hour supply of a covered outpatient prescription drug must be dispensed in an emergency situation.

Who gets

Medicaid provides health- and long-term care to more than 66 million low-income Americans, according to the Kaiser Commission on Medicaid and the Uninsured.

The Congressional Budget Office estimates that seven million people will join the ranks of Medicaid recipients through expansion by the end of 2014 and 11 million by 2020. Twenty-five states and the District of Columbia are on board for expansion.

On the other hand, the commission reports that 5.2 million Americans will go without Medicaid because of their states’ decisions not to expand the state program. The hardest-hit will be Alabama, Louisiana, Mississippi, and South Carolina.

In California

Anthony Cava, a spokesperson for the California Department of Health Care Services (DHCS) that oversees Medi-Cal, the state Medicaid program, said that in California, 8.5 million people receive Medicaid benefits, with one to two million - about 1.4 million more - expected to enroll by the end of 2014.

The demographics of Medi-Cal beneficiaries, according to the California DHCS, indicate the following:

  • Latinos represent more than half of Medi-Cal enrollees.

  • More than 40% of beneficiaries speak a primary or preferred language other than English.

  • Slightly more than half of beneficiaries are children.

  • Fifty-six percent of beneficiaries are women; 44% are male.

“California will be able to provide vital healthcare services to individuals who currently do not have, or have never had, health coverage,” Cava said.

“Our vision at DHCS is to preserve and improve the physical and mental health of all Californians, and our departmental mission is to provide Californians with access to affordable, high-quality healthcare, including medical, dental, mental health, substance-use treatment services, and long-term care,” he said.

Seamless care

L.A. Care, the nation’s largest public plan, will add 160,000 more beneficiaries to the Medicaid rolls through expansion, joining its current enrollment of 420,000.

Although Medicaid expansion will bring changes, said Sarita Mohanty, MD, MPH, MBA, senior medical director, medical management for L.A. Care, the health plan will continue to offer seamless care encompassing both medical and pharmacy benefits, and running the gamut from inpatient and outpatient medical services, to pharmacy, long-term care, mental health, vision care, and allied health services.

“Affirming our commitment to serve, our mission is to provide access to healthcare for Los Angeles’ vulnerable communities, including adults without dependent children,” she said. “We are excited to be able to provide high-quality services to a whole new group of people, while ensuring a smooth transition of care,” Mohanty said. “The expansion program will mean better and broader services than they receive now.”

L.A. County, Mohanty said, is working hard to ensure that once enrolled in Medicaid, no one slips through the system without access to safety-net hospitals and clinics, and that patients remain with their current primary-care physicians (PCPs) if they have one.

“The expansion is critical in making real improvements in the health of low-income Californians and will help the state achieve the triple aim - improving the patient experience of care, improving health outcomes, and reducing the cost of healthcare delivery,” she said.

She pointed to Covered California, the state’s health-insurance exchange, as the single point of entry for eligibility and enrollment, a process that is expected to be easier in every state facing expansion.

The pharmacy challenge

Helen Lee, PharmD, director of pharmacy and formulary, L.A. Care, believes that the biggest challenge may fall in the area of pharmacy, in ensuring that the newly eligible continue to have access to the drugs they need. 

L.A. Care is accomplishing this goal by collaborating with state, county, and provider partners to make it easy for members, Lee said.

Case management is high on the list of priorities for the public insurer, including identification of high-risk beneficiaries, navigation assistance through the system, and alternatives to visits to the emergency room. Pharmacists are able to review medications, manage potential interactions, monitor the use of opioids, and prevent drug-shopping.

Although pharmacists are in a prime position to collaborate more closely with providers under Medicaid, the Medi-Cal pharmacy benefit does not reimburse pharmacies for expanded services.

L.A. Care relies on San Diego-based MedImpact HealthCare Systems, its pharmacy benefits manager (PBM), to manage the provider network, including all major chains and a handful of independent pharmacies instead of a narrow network.

Janeen McBride, RPh, vice president, business development for MedImpact, said that in some cases, smaller pharmacies are compensated at higher rates, to encourage participation in the network. She considers pharmacists to be key to the continuity of care.

MedImpact also recommends that utilization be monitored through prior authorization and dispensing restrictions.

Lack of physicians

Molina Healthcare of California, based in Long Beach, serves 360,000 Medicaid beneficiaries in six counties, including Los Angeles. Richard Chambers, president, anticipates that by the end of 2014, the health plan will add 90,000 more through the expansion program.

He agreed with MedImpact’s McBride that along with expansion will come a need for more administrative and provider services, including case management, as some beneficiaries transition from a hospital to a home setting.

He believes that the biggest challenge, shared by Covered California, is the demand for more PCPs as more people gain insurance coverage. “We want to ensure timely access,” he said.

Chambers is also concerned about transitioning new beneficiaries into managed-care plans with which they are not familiar. “Many of them know only the emergency department as a means of getting care,” he said.

Medicaid is increasingly becoming a managed-care program, a significant trend as states gear up for expansion.

Because state and federal regulations clearly dictate rules for pharmacy benefits, Benjamin Schatzman, PharmD, vice president, pharmacy plan operations for Molina Healthcare of California, does not see too many changes ahead for the PDLs.

Molina does not encourage its Medicaid members to use a specific pharmacy, but Schatzman said it might be necessary to customize provider networks in various areas on the basis of access.  

Like many of his colleagues, Schatzman sees Medicaid expansion as an opportunity to offer medication therapy management, a requirement under Medicare, especially to aged, blind, and disabled members.

In this way, he said, pharmacists are taking a more active role and serving as important members of interdisciplinary teams that include nurses, physicians, case managers, and social workers.

“They are able to assume a more high-touch relationship with patients,” he said.

In New Mexico

Molina Healthcare is also represented in New Mexico as one of four managed-care organizations serving beneficiaries in the state. All of the plans will offer medical and pharmacy benefits, community benefits, behavioral health services, and long-term care. 

In this way, said Irene Krokos, MD, chief medical officer for Molina of New Mexico, all services are integrated under one waiver, something that took two years to accomplish, with cooperation from many different stakeholders, including community and tribal groups. 

The foundation of Centennial Care, the state’s Medicaid program, formerly titled Salud!, is care coordination based on comprehensive and integrated managed-care delivery system, payment for quality care and outcomes, achievement of greater efficiency, and employment of more streamlined administrative processes. 

In New Mexico, the expansion program will provide incentives to hospitals, for reducing readmissions, and to patients, for using healthy behaviors and primary-care facilities rather than the emergency room; a small cost-sharing assessment is applied to patients who resort to an emergency department for non-emergency problems.

New Mexico is one of three states - North Carolina and Montana are the other two - that certifies pharmacists as advanced practice clinicians, allowing them to initiate drug therapy as well as to prescribe drugs.

“This capability enables pharmacists to work side by side with physicians in a primary-care setting to potentially uncover why a patient might not be taking his or her medication, reach out to patients, and make necessary changes,” Krokos said.

Centennial Care will increase its current enrollment of 560,000 to 700,000 by 2015, Krokos said.

In Ohio

Ohio Medicaid estimates that 366,000 individuals will enroll in the expanded program, including 270,000 uninsured Ohioans by 2015. Five managed-care plans in the state will serve the population.

Unlike in California, Ohio’s non-elderly Medicaid beneficiaries are predominantly white. In addition, Ohio has set eligibility for adult parents between 91% and 138% of the FPL, said Sam Rossi, director of communications, Ohio Department of Medicaid.

Although Medicaid managed-care plans in Ohio must cover all medically necessary drugs, they may have different criteria for preferred drugs and prior authorizations, Rossi said.

Despite not being a supporter of the Affordable Care Act, Ohio Governor John Kasich approved Medicaid expansion in his state. He has said in several published newspaper articles that he believes the expansion is good for Ohio, promoting jobs and creating a healthy workforce, and he will take advantage of a federal law that is already in place.

The governor bypassed a resistant state legislature and went to the Ohio Controlling Board to push through expansion.

Bells and whistles

UnitedHealthcare Community Plan of Ohio is one of the five plans offering care to Medicaid beneficiaries across the state. Tracy Davidson, president of the plan, said that it has the capability of managing all Medicaid populations, including pregnant mothers and the disabled.

“We offer all the benefits we are required to and then add bells and whistles,” Davidson said.

For example, the plan has developed Baby Blocks, an interactive online incentive program to help pregnant women and new mothers with prenatal and well-baby care, and Community Rewards, which provides incentives to parents and children for adopting healthy habits.

Linda Post, MD, chief medical officer for Community Plan, said the insurer also takes advantage of several care-management programs targeting its Medicaid members, including a program overseeing the appropriate use of antidepressants and psychotropic drugs in children and ones for asthma and diabetes.

Its diabetes-control program helps improve blood glucose, low-density lipoprotein cholesterol levels, and blood pressure, and monitors body mass index, with pharmacists taking the lead role in ensuring appropriate use of medications, reviewing lab results, conducting quarterly one-on-one meetings with patients, and prescheduling appointments.

Davidson said the primary challenge is finding sufficient time to enroll newly eligible Medicaid beneficiaries online and helping them fully understand the program.

As do her colleagues, she realizes that new beneficiaries coming on board will demand more services and administrative and clinical staff, but that, she believes, is both a challenge and an opportunity.

Mari Edlin is a freelance writer in Sonoma, Calif.