Consultant’s Report to the Legislative Health Care Reform Task Force

On Wednesday, October 7, AMS staff attended a meeting of the Legislative Health Care Reform Task Force to hear the report of the task force’s consulting firm, The Stephen Group (TSG).  As expected, the recommendations were focused on a replacement for the Private Option and reforming the current traditional Medicaid program.  Here are a few of the provisions recommended by TSG:

• Traditional Medicaid – Acknowledging the success and support for patient-centered medical homes and the potential for episodes of care to become a national “best practices,” TSG put forth three alternatives for reforming Medicaid.  Option 1 would expand these existing payment and delivery reforms to the high cost areas of the budget, specifically, behavioral health and long term care services.
• Option 2 would carve out those two high cost areas and place them into a fully capitated, private, managed care program, allowing the remainder of the program (i.e. physician and hospital services) to continue the payment reforms already underway.
• Option 3 would place the entire Medicaid program under a capitated managed care system.  TSG stressed that the high cost areas mentioned above represent three-quarters of Medicaid spending and are out of line with what other states are spending.
• Private Option – TSG recommends replacing the private option with a new program known as the Transitional Health Insurance Program (T-HIP).  Some of the primary differences between T-HIP and the private option center on a shift in focus to more personal responsibility and accountability while creating incentives for going to work (the study found that 40% of PO enrollees were unemployed).  Some of the recommended features of the new program are as follows:

• Improving the Eligibility Verification Process – A no-brainer given the enormity of problems seen in just over the last two months.
• Retention of Employer Sponsored Coverage – Would use wrap around funds to pay premiums for employer sponsored plans to cover deductibles and copayments for those who would otherwise be eligible for Medicaid/T-HIP.
• Introduce Mandated Work Referral – Beneficiaries not working a set number of hours per week, would be required to participate in employment-related activities like job training.  Failure to participate would trigger maximum federally allowed premium and co-payment levels.
• Enhance Cost Sharing – Beneficiaries with substantial assets (primary residence worth over $200,000 or cash equivalent assets of $50,000) would be required to pay $100 per month in premiums plus $4 per month for each $1,000 above the limits mentioned above.
• Carrier Requirements – TSG recommends establishing publicly available scorecards on T-HIP carriers, benchmarked against other carriers and national data.  Would also require carriers to offer education about appropriate use of emergency departments, primary care physicians, and treatment for chronic conditions.
• Employer Support – Employers who offer employer sponsored insurance, who hire individuals receiving T-HIP, would receive a one-time payment of $1,000 to help defray the cost of traditional health insurance.
• Other Patient/Beneficiary Requirements – T-HIP participants would be required to sign a “membership” agreement.  This agreement would require the beneficiary to visit his or her PCP within the first 6 months of signing, comply with follow-up instructions and agree to the work referral requirements.  Failure would trigger several penalties including maximum premiums and co-pay levels.  For those who violate the member agreement or fail to pay premium or other cost-sharing requirements, they would be “Locked Out” of the program for a specified period of time.

Again, these are just some of the major provisions in the recommendations but by no means are they the only ones.

Click here for more information and to view the entire report.