NEBRASKA MEDICAID REFORM PLAN December
1, 2005
Prepared Under the Authority of LB 709 (2005) Submitted to Honorable
Dave Heineman, Governor of the State of Nebraska Patrick J.
O’Donnell, Clerk, Legislature of the State of Nebraska
Prepared
by Richard P. Nelson, Director, Department of Health and Human Services
Finance and Support, as Designee Jeffrey W. Santema, General Counsel,
Health and Human Services Committee of the Legislature of the State of
Nebraska, as Designee Reprinted February 2006 Nebraska Medicaid Reform
Plan LB 709 (2005) I. Executive
Summary Medicaid reform was mandated by the Nebraska Legislature in LB
709 (2005), the Medicaid Reform Act. (Neb. Rev. Stat.
§§68-1087 to 68-1094; LB 709,
§§1-8). The act
mandated “fundamental reform” of the
state’s Medicaid
program and a significant rewriting of Medicaid-related statutes. It
required the preparation of a Medicaid reform plan to make specific
recommendations for reform. The motivation for Medicaid reform is both
personal and financial. Many Nebraskans have health care and long-term
care needs and are unable, without assistance, to meet those needs.
More than 200,000 persons are currently eligible to receive Medicaid
benefits in Nebraska each month. Medicaid is a state program
administered as a public assistance entitlement program under broad
federal guidelines applicable to all state Medicaid programs. The cost
of the Medicaid program is shared by the state and federal government.
Medicaid costs are affected by (1) caseload (determined by eligibility
criteria), (2) utilization (determined by services covered and service
limits), and (3) unit price (determined by provider reimbursement
rates). Total Nebraska Medicaid expenditures now exceed $1.4 billion
annually. The rate of growth in Medicaid expenditures continues to
exceed the growth in General Fund revenues, and is not sustainable,
raising serious concerns about the availability of Medicaid for future
generations of Nebraskans. The growth in Medicaid expenditures can be
attributed to many causes, including demographic and economic factors,
personal lifestyle choices, health care system factors, and the
structure of Medicaid as a public assistance entitlement. Medicaid
reform is difficult because the Medicaid program is extremely complex,
and changes to the program are dependent on state and federal
administrative and legislative actions for their enactment and
implementation. But substantial reform is needed. The reform
recommendations in this plan are based on a significant amount of
research and public input. The reform approach taken in the plan is
both short-term and long-term. In the short term, the plan suggests
immediate changes to moderate the growth of Medicaid spending without
significantly impacting current eligibility, provider reimbursement, or
covered services. In the long term, the plan emphasizes the necessity
of addressing the underlying structure and public policy of the
Medicaid program, and incrementally identifying and implementing other
necessary and appropriate reforms. The plan concludes that the Medicaid
Program in Nebraska, as it is currently structured, is not fiscally
sustainable. The plan recommends the adoption of a public policy
statement that recognizes the appropriate role of the state in
assisting low-income persons to access necessary medical services, but
does so in a manner that allows the state to maintain control over its
Medicaid budget. The plan recommends, as a short-term strategy, that
Nebraska retain the existing Medicaid defined benefit program and
promptly implement changes within the current structure, including the
use of additional waivers. The plan offers 28 recommendations with
related strategies, which can be implemented over the next few years.
These recommendations are 1 estimated to reduce projected state fund
expenditures by more than $30 million a year by State Fiscal Year 2008
and more than $74 million a year by State Fiscal Year 2015. The plan
recommends, as a long-term strategy, that the reform experience of
other states implementing defined contribution programs and other
reform models be closely monitored with a view toward adopting an
improved
structure when it is proven effective. The Medicaid Reform Plan is
presented to Governor Heineman, the Legislature, and the public as the
starting point for the reform. The recommendations propose essential
decisions that need to be made now. The strategies propose actions to
be taken in the next few years. Both are necessary to moderate the
unsustainable growth of Medicaid. The Medicaid Reform Plan, however, is
not the end. It is the beginning of an ongoing process. II.
Introduction A. Motivation for Medicaid Reform The motivation for
Medicaid reform is both personal and financial. In LB 709 (2005), the
Legislature underscored the importance of Medicaid for Nebraskans, and
expressed concern about its future financial sustainability. In Neb.
Rev. Stat. §68-1089 (LB709, §3), the Legislature
found that
“(1) The Medicaid program under Title XIX of the Social
Security
Act, 42 U.S.C. 1396 et seq. provides essential health care and
long-term care coverage to low-income children, pregnant women, and
families, individuals with disabilities, and senior citizens serving
over one in ten Nebraskans; (2) The Medicaid program covers one in four
children in rural areas; (3) The Medicaid program is the largest single
purchaser of maternity care and pays for over one-third of the births
in the United States each year; (4) Medicaid is America’s
single
largest purchaser of nursing home services and other long-term care,
covering the majority of nursing home residents; (5) In Nebraska, the
elderly and individuals with disabilities comprise twenty-three and
three-tenths percent of the Medicaid population and represent
sixty-seven and two-tenths percent of Medicaid expenditures; (6) In
Nebraska, low-income children and their parents comprise seventy-six
and seven-tenths percent of the Medicaid population and represent
thirty-two and eight-tenths percent of Medicaid expenditures; (7)
Medicaid pays for personal care and other supportive services necessary
to enable individuals with disabilities to remain in the community, to
work, and to maintain independence; and (8) Medicaid is the single
largest source of revenue for the nation’s safety net
hospitals
and health centers and is critical to the ability of these providers to
continue to serve Medicaid enrollees and uninsured
Americans.” In
Neb. Rev. Stat. §68-1088 (LB709, §2),, the
Legislature found
that “(1) The medical assistance program has resulted in
significantly increased expenditures by the State of Nebraska; (2) In
response to such increased expenditures, the Legislature has taken
various actions affecting the availability and adequacy of medical
assistance benefits to Nebraska residents under the program; (3) As a
result of such increased expenditures, the medical assistance program
may become fiscally unsustainable; and (4) Fundamental reform of the
medical assistance program is necessary in order to ensure future
sustainability of the program for the benefit of Nebraska
residents.” Many Nebraskans have health care, long-term care,
and
related needs, and are unable, without assistance, to meet those needs.
In the future, as the population of Nebraska changes and the number of
elderly Nebraskans increases, more Nebraska residents will require more
health 2 care, long-term care, and related services. As more Nebraskans
require more services, total Medicaid General Fund appropriations will
continue to grow at a rate faster than the growth in state General Fund
revenues. Total Medicaid appropriations grew from $201 million in SFY
1987 to $1.4 billion in SFY 2005 and from 8.8% of state General Fund
appropriations to 17.2%. The average annual growth in Medicaid
appropriations during the period was 10.8%. Average annual growth in
state General Fund revenues during the period was 6.9%. If Medicaid
expenditures remain at their current percentage of General Fund
appropriations, the Nebraska Health and Human Services System (HHSS)
has estimated that, at the present rate of growth, total Medicaid
expenditures will increase to almost $5.6 billion in 2025. The state
General Fund portion of Medicaid expenditures will increase to
approximately $2.2 billion. Compared with the projected growth in
General Fund Revenues over the period, the result will be a $785
million gap in 2025 between projected Medicaid expenditures and
projected appropriations available for Medicaid in Nebraska.1 The
number of persons eligible for Medicaid benefits in the most recent
twenty-year period (1985 – 2005) grew from a monthly average
of
88,000 eligible persons to almost 200,000, almost 11.5% of the
state’s population, or one in every nine Nebraskans. The
Nebraska
Medicaid program is not currently in a fiscal crisis. The Nebraska
Legislature in recent years has acted to moderate the growth of
Medicaid to a limited extent, which has now permitted the opportunity
for thoughtful and informed decisions about Medicaid reform, before a
crisis occurs. The Medicaid program as currently structured and
operated, however, will not effectively moderate the growth of Medicaid
spending and cannot be fiscally sustained. While a program as large and
complex as Medicaid cannot be rebuilt in an instant, the time for
reform-minded decisions is now. B. Medicaid Reform Issues and
Considerations With the passage of LB 709 (2005), the Governor and the
Nebraska Legislature have made Medicaid reform a high priority. Neb.
Rev. Stat. §68-1090 (LB709, §4) calls for reform of
the
Medicaid program and a substantive recodification of Medicaid statutes,
“including, but not limited to, the enactment of policies to
(1)
moderate the growth of Medicaid spending; (2) ensure future
sustainability of the medical assistance program for Nebraska
residents; (3) establish priorities and ensure flexibility in the
allocation of medical assistance benefits; and (4) provide alternatives
to Medicaid eligibility for Nebraska residents.” Neb. Rev.
Stat.
§68-1091(2) (LB709, §5) requires the Medicaid reform
plan to
“consider and address (a) the needs of low-income, disabled,
and
aged persons currently receiving Medicaid services; (b) avoiding the
shifting of the primary costs of health care services to providers of
care; (c) the appropriate role of county government in providing health
care services; (d) the availability and affordability of private health
care insurance and long-term care insurance; (e) the personal
responsibility of persons, who are able, to select and provide for all
or a portion of the payment for their health care services; (f) the
fiscal sustainability of such plan; and (g) alternatives to increase
federal funding for services in order to reduce dependence on General
Funds and maintain or increase the total amount of funding for such
services, and the possible utilization of national consultants to
assist in the consideration of such alternatives.” 3 C. The
Medicaid Reform Process LB 709 (2005) requires development of a
Medicaid reform plan by two persons, one appointed by Governor Dave
Heineman and one appointed by Senator Jim Jensen as chair of the
Legislature’s Health and Human Services Committee. (Neb. Rev.
Stat. §68-1092; LB 709, §6). The designees are
Richard
Nelson, Director of HHS Finance and Support, appointed by Governor
Heineman; and Jeff Santema, legal counsel to the Health and Human
Services Committee of the Nebraska Legislature, appointed by Senator
Jensen. The designees are required to: (1) consult with the Governor,
the Health and Human Services Committee, the HHSS Policy Cabinet, and
the federal Centers for Medicare and Medicaid Services (CMS); (2)
solicit public input; (3) conduct at least one public meeting in each
congressional district; (4) provide monthly reports to the Governor and
the committee; (5) meet monthly with the Medicaid Reform Advisory
Council and (6) develop and submit a Medicaid reform plan to the
Governor and the Legislature by December 1, 2005. The Health and Human
Services Committee of the Legislature is required to conduct a public
hearing on the plan by December 15, 2005 (Neb. Rev. Stat.
§68-1092; LB 709, §6). The chair of the Health and
Human
Services Committee, in consultation with the committee, may introduce
legislation in 2006 to implement the plan (Neb. Rev. Stat.
§68-1094; LB 709, §8). LB 709 establishes a Medicaid
Reform
Advisory Council consisting of ten persons, five appointed by the
Governor and five appointed by Senator Jensen as chair of the
Legislature’s Health and Human Services Committee, and
representing health care providers, health care consumers/advocates,
business, insurers, and elected officials (Neb. Rev. Stat.
§68-1093; LB 709, §7). Members of the Medicaid Reform
Advisory Council are Senator Don Pederson, chair (Appropriations chair,
Nebraska Legislature); Kathy Campbell, vice chair (Executive Vice
President, CEDARS Home for Children Foundation); Gayle-ann Douglas
(Executive Vice President, Douglas Manufacturing Corp.); Mary Lee
Fitzsimmons (Iowa/Nebraska Primary Care Association); Steve Martin
(President/CEO, Blue Cross/Blue Shield of Nebraska); Ron Ross (Nebraska
State Treasurer); Wayne Sensor (CEO, Alegent Health); Cory Shaw (CAO,
University Medical Associates); Pat Snyder (Executive Director,
Nebraska Health Care Association); and Tony Sorrentino (Executive Vice
President, Silverstone Group). The Medicaid Reform Advisory Council is
required to (1) meet monthly with the Medicaid reform designees; (2)
review monthly reports submitted to the Governor and committee by the
designees; and (3) review the Medicaid reform plan and provide
recommendations relating to the plan to the Governor and the committee
by December 14, 2005. The council is not required to develop the plan,
and is only one source of input to the designees during development of
the plan. During development of the plan, the Medicaid reform designees
met with CMS representatives from Kansas City; met both formally and
informally with members of the Health and Human Services Committee of
the Legislature, participated in regular meetings with the HHSS Policy
Cabinet and HHSS staff, and provided regular briefings to Governor
Heineman. Designee monthly reports may be accessed at
www.hhss.ne.gov/med/reform (Nebraska Health and Human Services System),
or www.unicam.state.ne.us/committees/hhs.htm (Nebraska Legislature).
Medicaid reform public input meetings were conducted by the designees
in Omaha (10- 25-05), Lincoln (10-26-05), Grand Island (10-27-05),
Scottsbluff (11-1-05), and North Platte 4 (11-2-05). Medicaid
legislative public forums were conducted in Broken Bow (11-3-05),
O’Neill (11-3-05), and Columbus (11-4-05). Preliminary
findings
and recommendations were provided in advance of the meetings and forums
and presented for public input. Eight members of the Nebraska
Legislature and three members of the Medicaid Reform Advisory Council
attended one or more of the meetings or forums. 2 In addition, the
Medicaid reform designees have received significant feedback regarding
Medicaid reform in the form of (1) written reports, recommendations and
other feedback,3 (2) meetings with various individuals and groups,4 and
(3) HHSS internal work groups.5 The Medicaid reform designees have also
reviewed Nebraska Medicaid and related statutes6 and Medicaid reform
proposals from other states, and conducted other research on the topic
of Medicaid reform. The implementation of LB709 and preparation of this
plan have been both deliberate and deliberative. Considerable effort
has been made to ensure that recommendations and other information in
the plan are based on accurate and objective data, rather than
subjective perception or emotion. Great care has also been taken to
ensure that the Medicaid reform process has been open, and carefully
attentive to a wide variety of opinions and perspectives. III.
Discussion A. Nebraska's Medicaid Program General: On July 30, 1965,
President Lyndon B. Johnson signed H.R. 66757 which created Title XVIII
(Medicare)8 and Title XIX (Medicaid)9 of the federal Social Security
Act. Legislation to establish a medical assistance (Medicaid) program
in Nebraska was enacted in 196510 and became effective on July 1,
1966.11 Since their original adoption, Nebraska Medicaid statutes12
have been amended at least forty-six times in twenty-six different
legislative sessions.13 Other Medicaid-related provisions include Aid
to Dependent Children (ADC) statutes,14 the Early Intervention Act for
children and toddlers with disabilities,15 the Nebraska Telehealth
Act,16 and the Welfare Reform Act,17 among others.18 Medicaid is a
public assistance entitlement program administered by the state within
broadly established federal guidelines. The cost of the program is
shared by the state and federal government. Medicaid federal financial
participation (FFP) applies to program services and to Medicaid-related
administrative expenses. The FFP, calculated as a Federal Medical
Assistance Percentage (FMAP), for Medicaid program services in Nebraska
is approximately 60%. Approximately 40% of Medicaid costs are paid with
state General Funds.19 The FMAP for Medicaid administration expenses is
50%, with some exceptions.20 The federal Balanced Budget Act of 1997
(BBA)21 created a new Title XXI of the federal Social Security Act
(SSA) to establish a state children’s health insurance
program
(SCHIP)22, and applied a higher FMAP to such programs.23 Under the BBA,
states had the option to formulate their SCHIP programs as a Medicaid
expansion, a separate children’s health insurance plan, or a
combination of the two. The Title XXI SCHIP program in Nebraska was
established as a Medicaid expansion.24 The combined Title XIX and Title
XXI children’s health insurance program in Nebraska is called
Kid’s Connection. 5 Titles XIX and XXI of the federal Social
Security Act and related rules and regulations establish certain
minimum mandatory standards for state Medicaid programs. Elements of
the state Medicaid program must be approved by the federal Centers for
Medicare and Medicaid Services (CMS). The Medicaid “state
plan” is a comprehensive written document, developed and
amended
collaboratively with CMS, that describes the nature and scope of the
state’s Medicaid program, and gives assurances that the state
will administer the program in compliance with federal requirements.25
The state establishes its own eligibility standards; determines the
type, amount, duration, and scope of services; sets payment rates for
services; and administers the program on a day-to- day basis. Core
federal requirements applicable to all state Medicaid programs include
statewideness,26 comparability,27 freedom of choice,28 and sufficiency
in amount, duration, and scope of Medicaid services.29 Portions of
federal Medicaid authorizing legislation may be
“waived” to
provide states with greater Medicaid flexibility.30 Medicaid is (1) a
chronic and long-term care program for low income seniors and persons
with disabilities; (2) a supplement to Medicare for this same
population; (3) an insurance-like program for low income pregnant
women, children and some parents; and (4) a funding source for safety
net hospitals and community health centers that serve a
disproportionately high share of uninsured persons. Medicaid in
Nebraska is shaped by public policy established by the United States
Congress and the Nebraska Legislature and the complex interaction of
four interrelated elements: (1) eligibility, (2) benefits, (3)
reimbursement, and (4) administration. Medicaid coverage includes both
federally mandated and state optional services and eligible persons.
Medicaid program costs are affected by (1) caseload (determined by
eligibility criteria), (2) utilization (determined by services covered
and service limits), and (3) unit price (determined by provider
reimbursement rates). Total state and Federal expenditures for the
Medicaid program in Nebraska approached $1.4 billion in state fiscal
year 2005 (SFY05), an increase of 41.9 percent in the last five years,
for an average increase of 7.2% per year. General fund expenditures for
the Medicaid program increased almost 48.1% from SFY00 to SFY05, for an
average increase of 8.2% each year. During the same time period, state
revenues increased only about 3.5% per year. The majority of Medicaid
beneficiaries in SFY 2005 were children and pregnant women (66.0%), but
the majority of Medicaid expenditures (62.4%) were made on behalf of
the elderly and persons with disabilities (Figure 1). The highest
Medicaid expenditures in SFY 2005 were for nursing home care, inpatient
hospital services, and prescription drugs. Total Medicaid long- term
care expenditures were approximately 36.3% of the Medicaid budget in
SFY 2005. 6 Figure 1 Percent of Monthly Eligibles and Expenditures by
Population Group State Fiscal Year 2005 25.4% 5.0% 10.4% 7.2% 12.2%
35.9% 26.5% 66.0% 2.2% 9.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Eligibles Expenditures Children & Pregnant Women Children w/
Disabilities Adults Adults w/ Disabilities Aged Children &
Pregnant
Women Children w/ Disabilities Adults Adults w/ Disabilities Aged
Eligibility The following persons are eligible for medical assistance
in Nebraska:31 (1) dependent children under age 19;32 (2) aged, blind
and disabled persons,33 (3) persons under age 19 who are eligible under
§1905(a)(i) of the federal Social Security Act (SSA),34 (4)
children and pregnant women with family incomes up to 185% of the
federal Office of Management and Budget income poverty guideline
(federal poverty level, or FPL),35 (5) medically needy caretaker
relatives,36 (6) employed persons with disabilities with incomes up to
250% FPL,37 and (7) women under age 65 needing breast or cervical
cancer treatment who are not otherwise Medicaid eligible.38 Medicaid
coverage is also provided for disabled children,39 and ADC families.40
Figure 2 shows federal poverty level (FPL) guidelines applied to
current Nebraska Medicaid mandatory and optional eligibility
categories.41 7 Figure 2 Medicaid Eligibility Categories in Nebraska by
Percent of Federal Poverty Level (FPL) 0 50 100 150 200 250 ADC CashMN
(ADC AABD) ADC 1931 AABD QMB QI1 SAM MAC EMAC Pregnant Women TMA P e rc
en t o f P ov e r ty Mandatory Limited Coverage Mandatory Medically
Needy Spenddown CHIP Optional Families cannot be
“subdivided,” or “stacked,” for
purposes of
determining Medicaid eligibility,42 and special “spousal
impoverishment” provisions apply to allow higher income and
asset
deductions for “community spouses” of
Medicaid-eligible
long-term care facility residents.43 An “earned income
disregard” of $100 per month, along with other allowable
“disregards,” are also deducted from an
applicant’s
gross income before application of the appropriate federal poverty
standard to determine his or her Medicaid eligibility.44 Services
Medicaid-covered services are addressed in Neb. Rev. Stat.
§§
68-1019 to 68-1019.09. Medical assistance payments are made directly to
vendors, and the following services must be covered: (1) care in an
institution for mental diseases for persons over 65; (2) inpatient and
outpatient hospital care; (3) laboratory and X-ray services; (4)
nursing home services; (5) care home services; (6) home health care
services; (7) nursing services; (8) clinic services; (9) services by
state-licensed practitioners; and (10) drugs, appliances, and health
aides prescribed by state-licensed practitioners.45 In 1993,46 the
Legislature provided for the establishment of premiums, copayments and
deductibles, and limitations on the amount, scope and duration of
Medicaid services.47 Medicaid payments for hearing screening for
infants and newborns,48 telehealth consultations,49 and school Medicaid
administrative activities50 are also covered. Services covered by
Medicaid in Nebraska include both federally mandated services and state
optional services. Federally mandated services include inpatient
hospital, outpatient hospital, rural health clinics, laboratory and
X-ray, nursing facility for persons age 21 and older, early and
periodic screening for children (EPSDT), family planning services and
supplies, 8 physician services, dental medical and surgical, home
health, medical supplies, nurse-midwife, and nurse practitioner
services. State optional services include intermediate care facilities
for the mentally retarded (ICF- MR/MR), case management for persons
with mental retardation/developmental disabilities (MR/DD), MR/DD
waiver services, rehabilitation services, medical transportation,
prescription drugs, personal care aides, aged and disabled waiver
services, chiropractic, dental, durable medical equipment, occupational
therapy, optometry, physical therapy, podiatry, speech therapy, vision
related services, and home and community-based waiver services. Table 1
Federal Medicaid Mandatory and Optional Services Covered in Nebraska
Mandatory Services Nebraska Optional Services • Nursing
facility
services for individuals aged 21 or older • Inpatient hospital
services (other than Institutions for Mental Diseases) •
Physician’s services • Outpatient hospital services
and
rural health clinic services • Home health services •
Laboratory and X‐ray services • Early and periodic screening
and
diagnosis and treatment (EPSDT) • Medical supplies •
Family
planning services and supplies • Nurse practitioner services
• Medical and surgical services of a dentist •
Nurse‐midwife
services • Prescribed drugs • Home and
community‐based
services (HCBS) for persons with mental retardation/developmental
disabilities (MR/DD) • Intermediate care facilities for
persons
with mental retardation (ICF‐MR) • HCBS for older adults and
persons with disabilities • Dental services •
Rehabilitation
services • Case management for persons with mental
retardation/developmental disabilities • Personal care
services
• Durable medical equipment • Medical transportation
•
Vision related services • Speech therapy • Physical
and
occupational therapy • Chiropractic services •
Podiatric
services • Optometric services • Hospice services
Reimbursement The Nebraska Medicaid program provides reimbursement for
medically necessary covered services, generally without the imposition
of premiums, copayments, or deductibles. It includes no lifetime
maximum, no calendar year deductible, no calendar year coinsurance
maximum, no maximum/total out of pocket per calendar year, and no
overall contract maximum. The state applies different levels of
reimbursement to various Medicaid services. Practitioner services are
reimbursed according to a fee schedule based on “relative
value
data” for the particular services provided. Prescription
drugs
are reimbursed according to product cost, expressed as a discounted
“average wholesale price” (AWP), plus a pharmacy
dispensing
fee. Urban inpatient hospital services are reimbursed on a
“per
discharge” basis (based on “diagnostic 9 related
group” 51 classifications). Rural “critical
access”
hospitals are reimbursed according to a per diem rate based on actual
cost and special federal rules applicable to such hospitals. Outpatient
services are reimbursed at 82.45 percent of cost as indicated on the
provider’s Medicare cost report. Nursing facility services
are
reimbursed according to a “prospective payment
system,” at
reasonable cost as determined from cost reports filed by the provider
and using 19 different levels of payment rates based on acuity. ICF-MR
facilities are reimbursed prospectively based on their cost reports but
subject to a cost model. Laboratory and radiology services are
reimbursed according to a federally established fee schedule. Federally
qualified health centers (FQHCs) and rural health clinics (RHCs) are
reimbursed according to actual cost per service provided (encounters),
at a rate determined from provider Medicare cost reports and adjusted
annually. Home and community-based waiver services are reimbursed at
“reasonable fees” determined by the Nebraska
Department of
Health and Human Services Finance and Support. Federal law prohibits
waiver payments to exceed a public provider cost. Administration
Medicaid in Nebraska is administered by the state Medicaid Division
within the Department of Health and Human Services Finance and Support.
Medicaid eligibility determinations are processed through the
Department of Health and Human Services under a Memorandum of
Understanding with the Department of Health and Human Services Finance
and Support. The Nebraska Department of Justice maintains a separate
unit under the False Medicaid Claims Act to identify and investigate
cases of alleged Medicaid fraud. The Nebraska Health and Human Services
System (HHSS) currently (1) establishes policy and procedures for the
Medicaid program through the adoption and promulgation of rules and
regulations; (2) determines Medicaid eligibility; (3) determines the
amount, scope, and duration of Medicaid-covered services; (4) receives,
processes, and pays Medicaid claims; and (5) oversees the day-to-day
management and operation of the program. Various administrative issues
have been addressed in Nebraska law since 1965 to control Medicaid
costs, including assignment of rights provisions,52 contracting and
purchasing guidelines,53 nursing facility screening requirements,54
transfer of assets provisions,55 estate recovery requirements,56 the
Managed Care Plan Act,57 garnishment provisions,58 and the False
Medicaid Claims Act.59 Various cost-saving administrative procedures
have also been established and implemented by the department under its
broad state and federal statutory authority. The Medicaid Division has
recently enhanced its management capabilities through the installation
of a new decision support software program. The software enables
management to improve its monitoring and analysis of claims by
population and service, surveillance and utilization review, and
federal reporting. Drawing on a complete data base of claims starting
with SFY 2000, it also allows the Division to trend data. The
management capabilities of the state Medicaid Division will also be
improved with the creation of a new Medicaid Management Information
System (MMIS). The new system will replace the decades-old system
currently being used to process most Medicaid claims. The new system is
expected to be operational in SFY 2009, and will allow providers web
based access to recipient eligibility status, and claims status. It
also will improve the submission and processing of electronic claims.
10 The decision support software and MMIS, together, will enable
Medicaid to more efficiently oversee the entire Medicaid reform
process. Expenditures Total Federal and State expenditures to Medicaid
vendors in Nebraska increased from $943.2 million in SFY00 to almost
$1.4 billion in SFY 2005. This increase may be attributed, in part, to:
(1) increases in the number of Medicaid eligibles; (2) changes in the
type or amount of services used; and (3) increases in the cost of
services. Table 2 shows the changes in the number of Medicaid eligibles
and expenditures between SFY 2000 and SFY 2005 for each eligibility
category. The number of eligibles increased in all five population
categories, except the Adults population, which decreased 16.7%. Adults
with Disabilities is the fastest growing category of Medicaid-eligible
persons. The number of Medicaid-eligible adults with disabilities
increased 16.8% from SFY 2000 to SFY 2005, compared to a 9.8% increase
overall. Expenditures increased from SFY 2000 to SFY 2005 for all five
categories, ranging from an increase of 23.9% for the Aged to an
increase of 69.5% for the Children & Pregnant Women. Table 2
Change
in Average Monthly Eligibles and Expenditures By Population Group State
Fiscal Years 2000 and 2005 SFY00 SFY05 % Change from SFY00 Population
Group Eligs. Exps. Eligs. Exps. Eligs. Exps. Children &
Pregnant
Women 114,502 $208,845,485 132,547 $354,041,638 +15.8% +69.5% Children
with Disabilities 4,075 $46,588,277* 4,330 $69,712,266 +6.3% +49.6%
Adults 25,205 $70,429,802 20,984 $101,121,518 -16.7% +43.6% Adults with
Disabilities 20,896 $318,845,366* 24,405 $501,951,861 +16.8% +57.4%
Aged 18,203 $298,523,461 18,522 $369,853,967 +1.8% +23.9% Total 182,881
$943,232,391* 200,788 $1,396,681,250 +9.8% +48.1% * These numbers have
been adjusted to include DD waivers paid manually. In SFY 2005, the
adults with disabilities had the highest average cost per person
($20,568), followed by the aged ($19,968). Children & pregnant
women and adults had the lowest average cost per person (Table 3). 11
Table 4 Average Medicaid Expenditures (Cost) per Eligible By Population
Group State Fiscal Years 2000 and 2005 Average Cost per Eligible
Population Group SFY00 SFY05 Change from SFY00 to SFY05 Children
&
Pregnant Women $1,824 $2,671 +46.4% Children with Disabilities $11,433
$16,100 +40.8% Adults $2,794 $4,819 +72.5% Adults with Disabilities
$15,259 $20,568 +34.8% Aged $16,400 $19,968 +21.8% Total $5,158 $6,956
+34.9% Figure 3 shows the breakout of total Medicaid expenditures in
SFY 2005 by type of service. The largest share of expenditures in SFY05
was for nursing facility services, followed by prescribed drugs,
inpatient general hospital services, and HCBS waiver services. 12
Figure 3 Nebraska Medicaid Vendor Expenditures by Service State Fiscal
Year 2005 Drugs $241,356,347 17.3% Managed Care Capitation $69,866,370
5.0% Comm Based Mental Health Clinics & Day Treatment
$60,796,098
4.4% HCBS Waiver Services $169,035,622 12.1% Nursing Facilities
$278,948,853 20.0% ICF‐MR $58,417,498 4.2% Other $62,295,450 4.5%
Physicians, Practitioners & EPSDT $127,730,331 9.1% Dental
$30,583,014 2.2% Home Health $32,117,870 2.3% Inpatient Hospital
$192,632,364 13.8% Outpatient Hospital $72,788,420 5.2% 13 Medicaid has
grown, in part, because of the increase in overall health care costs
and deliberate choices to expand Medicaid, both nationally and in
Nebraska. Many factors contribute to the increase in health care costs
generally, and to increased Medicaid costs specifically, including, but
not limited to, (1) demographic factors, (2) economic factors, (3)
lifestyle factors, (4) health condition factors, (5) health care system
factors, and (6) other demand factors. Demographic factors include
population increases generally; increases in the over age 65 and over
age 85 populations; and an increasing proportion of immigrants to
Nebraska from other countries (language barriers and unfamiliarity with
the U.S. healthcare system sometimes result in greater use of higher
intensity, higher cost, but more visible and accessible services such
as emergency rooms). Economic factors include the rising cost of health
insurance that causes some employers and employees to drop coverage;
and weakened economies which result in people losing their jobs and
their employer-provided health insurance. Behavioral/lifestyle factors
that contribute to poorer health, include smoking; overweight or
obesity; sedentary lifestyles; and poor or unhealthy diets. Health
condition factors include an increased prevalence of certain diseases,
including diabetes, asthma, and hypertension; increased diagnosis of
mental disorders, particularly depression; and increased survival rates
for infants with complex medical conditions. Health care system factors
include the increased cost of prescription drugs, including new
generation medications; spending on new health care technology;
malpractice costs, including the cost of malpractice insurance; the
increased number of diagnostic tests performed; and the lack of
availability and accessibility of lower-intensity or lower cost
services (e.g., assisted living, home health care, nurse
practitioners). Other demand factors include inappropriate use of
higher intensity services; response to direct-to-consumer advertising
of prescription drugs (television advertisements that encourage the
viewer to “talk to your doctor about...”); and
decline in
the effectiveness of older antibiotics. Many of the factors
contributing to the increase in Medicaid costs are external to, and
beyond the control, of the state Medicaid program. The greatest
potential long-term impact on Medicaid expenditures also requires
profound changes in, among other things, personal behaviors,
prescribing practices, or the availability of, and access to,
lower-intensity health care services. Medicaid Cost Drivers The
greatest increases in Medicaid expenditures are in the categories of
prescribed drugs and long-term care. Prescribed drugs, including
over-the-counter medications increased almost $114 million from SFY00
to SFY05, or 89.1%. Expenditures for nursing facility services
increased $29.2 million, or 11.6%. Expenditures for home and
community-based waiver services (HCBS) increased 120.8% from SFY00 to
SFY05, reflecting the expanded availability of HCBS, which has resulted
in less expensive, less restrictive community services for many elderly
and persons with disabilities. Despite cost containment efforts in
Nebraska that have slowed the growth of prescribed drug expenditures,
Medicaid prescribed drug expenditures nearly doubled in the past five
years, from $127.6 million in SFY00 to $241.4 million in SFY05.
Prescribed drugs now represent more 14 than 17% of all Medicaid
expenditures. By population group, more than 44% of all prescribed drug
expenditures were for adults with disabilities. Expenditures for
prescribed drugs for children and pregnant women increased 142.6%, from
$19.3 million in SFY00 to $46.7million in SFY05. Prescription drug
expenditures for children with disabilities and adults with
disabilities increased 111.3% and 100.5%, respectively. In SFY 2005,
more than 3.9 million prescriptions, including refills and new
prescriptions, were filled for Medicaid-eligible persons, for an annual
average of 19.6 prescriptions per person. A person receiving a 30-day
supply and five refills of a single drug would have six prescriptions
for the year. The average number of prescriptions filled per person in
SFY05 ranged from 6.4 prescriptions for children and pregnant women to
70.4 prescriptions for persons aged 65 and older. In terms of total
expenditures, the top two therapeutic classes of prescribed drugs in
SFY05 were mental health drugs: ataractics (tranquilizers) and
psychostimulants (antidepressants). These two therapeutic classes
accounted for 26.6% of all prescribed drug expenditures in SFY05, and
over 30% of the prescribed drug cost increase from SFY00 to SFY05. This
situation may change when Medicare Prescription Drug Coverage (Part D)
becomes available for dual-eligible (Medicare and Medicaid) persons on
January 1, 2006.60 Long-term care services, including home and
community based services (HCBS), nursing facility services, and
intermediate care facilities for the mentally retarded (ICF/MRs),
accounted for more than one-third of Medicaid expenditures in SFY05.
Between SFY00 and SFY05 there was a shift in the locus of long-term
care services, from more intensive nursing facility services to less
expensive, generally less intensive, assisted living or home and
community-based services. Expenditures on nursing facilities increased
11.6% from SFY00 to SFY05, for an average increase of only 2.2% a year.
61 At the same time, expenditures for assisted living services
increased from $4.8 million to $23.9 million, an average annual
increase of 37.6%. Expenditures for other home and community-based
waiver services increased from $71.3 million in SFY00 to $145.1 million
in SFY05. Nursing facility services continue to account for a large
share of Medicaid long-term care costs, but nursing facility share of
long-term care costs continues to decrease. B. Medicaid Public Policy
and the Role of Government The State of Nebraska currently provides a
program of medical assistance for its residents, but the underlying
public policy of the program is unclear. Medicaid was established forty
years ago to provide publicly (i.e., taxpayer) funded medical
assistance for needy individuals. What began as a relatively small
program to provide access to medical and long-term care for a mandatory
population of low income children, families, elderly and persons with
disabilities, has become a rapidly growing program for mandatory and
optional populations that consumes an ever-increasing portion of state
and federal budgets. The program has become increasingly complex and
difficult to administer. The fundamental question of Medicaid reform
still remains: What is the role and responsibility of government in
helping to meet the health care and long-term care needs of its
citizens? In an environment of unlimited needs and limited resources,
government can only do so much, and others will be left to do the rest.
It is not only a question of how much assistance, but of what kind of
assistance should government provide, and to whom. 15 Medicaid is
imposing unrealistic demands on state government and has created
unrealistic expectations. It has undermined the willingness of those
who are able to save for and provide for their own health care and
long-term care needs. Unless realistic and appropriate limits can be
placed on government’s role in the provision of medical
assistance, Medicaid will never be truly reformed. Medicaid cannot meet
all Nebraskans’ health care and long-term care needs, just as
state welfare assistance programs, by themselves, cannot eliminate
poverty. Medicaid reform should not seek to expand the role of
government to meet a goal that is ultimately unattainable. Placing
limits on the role of government is fundamentally a question of setting
priorities. How can government best expend resources entrusted to it by
Nebraska taxpayers to achieve the greatest good for the greatest number
of people, with maximum flexibility and controlled expenditure growth?
Medicaid, as a matter of public policy, should emphasize core
principles of access, prevention, shared participation and
responsibility, and sustainability. State General Funds, cash funds,
and federal funds under the federal Medicaid program should be used to
provide a program of medical assistance for truly needy Nebraskans
that: (1) will assist Nebraska residents to access appropriate health
care services when needed; (2) encourage and enable Nebraska residents
to live healthy lives and avoid the utilization of more intensive and
more costly health care services; (3) encourage personal independence
and freedom of choice and greater personal and private sector
responsibility and accountability for the provision and prudent
utilization of health care services; and (4) be appropriately managed
and fiscally sustainable. Medicaid must become more of a public-private
partnership, in which government is not seen as the dominant partner.
Government should function rather as a strong, but limited, partner in
helping to facilitate the creation of an environment in which the
health and welfare of its citizens is most effectively and efficiently
promoted. Medicaid plays a vitally important role, and therefore cannot
be abandoned. The goal of fiscal sustainability is important so that
Medicaid will be a strong and stable resource for future generations of
Nebraskans. C. The Direction of Reform Public Assistance Entitlement
Medicaid’s underlying foundation must be carefully examined
in
any serious consideration of Medicaid reform, and the potential
benefits of a different model should be thoroughly explored. Medicaid
is fundamentally a public assistance entitlement, or “defined
benefit” program, in which eligibility and benefits are
essentially fixed, but costs are variable. In other words, a person
determined to be Medicaid “eligible” is then
“entitled” to all medically necessary Medicaid
services,
regardless of cost. In a “defined contribution”
model,
eligibility and costs are fixed, but benefits are variable, and
targeted to meet individual needs. It is essentially a model in which
the medically necessary care of patients is managed within a
“defined,” or fixed, expenditure amount. This could
theoretically be done in a variety of different ways. In discussing the
difference between a defined benefit and a defined contribution
approach, one writer has noted that, in a defined benefit environment,
cost containment becomes 16 a priority rather than quality and access
to care. In a defined contribution model, more attention can be given
to quality assurance and patient satisfaction.62 Some states are
beginning to explore ways of shifting their Medicaid programs from a
defined benefit to a defined contribution model, in an effort to
provide greater quality and access to care, within reasonable
expenditure limits. In the long term, Medicaid reform in Nebraska must
explore ways to make a similar paradigm shift. True reform cannot be
achieved unless the underlying premise of Medicaid is reformed. The
defined benefit nature of Medicaid is arguably the single greatest
contributor to uncontrolled expenditure growth in the program. Changing
the public assistance entitlement structure of Medicaid is very
complicated, however, and requires a great deal of intensive planning
and extended negotiation with the federal Centers for Medicare and
Medicaid Services (CMS), and should be approached with caution.
Short-Term Reform In the short term, several things can be done to
achieve necessary expenditure controls, without dramatically cutting
eligibility, benefits, or provider reimbursements. 1. Focus on
high-cost areas and populations. The greatest Medicaid expenditures are
for long-term care, inpatient hospital services, and prescribed drugs.
The highest percentage of Medicaid expenditures are made on behalf of
the elderly and disabled. Appropriate changes should be made to
encourage the further development of lesser intensive home and
community-based services, and greater attention should be given to
managing the care and expenditures on behalf of the program’s
most costly recipients. 2. Focus on personal choice and responsibility.
The goal of Medicaid reform is the provision of necessary and
appropriate health care and long-term care to needy Nebraskans. As much
as possible, Medicaid should provide such care in an environment that
discourages dependence on government public assistance and encourages
the prudent exercise of personal decision-making and personal
responsibility, to the extent able, for contributing to the cost of
one’s health care and long-term care needs, for making
appropriate health care decisions, and for making healthy lifestyle
choices. 3. Focus on access and the private sector. Medicaid reform
should explore and encourage the development of more federally
qualified community health centers to meet the primary health care
needs of low income Nebraskans. In addition, immediate reforms should
focus on enhancing private sector participation in providing access to
needed health care services for Nebraskans. This could take the form of
encouraging the provision of more employer-sponsored health insurance,
encouraging the purchase of long-term care insurance and the
utilization of other personal long- term care financing strategies, and
encouraging the passage of state mental health parity legislation. 4.
No program expansions in eligibility, benefits, or provider
reimbursements. Great anxiety and concern has been expressed over the
possibility of making drastic cuts in Medicaid eligibility, benefits,
or provider reimbursements as part of Medicaid
“reform.”
These concerns arise from the assumption that Medicaid reform is only
about cutting the Medicaid 17 budget. While it is true that the budget
is important and must be considered, the effect of any proposed fiscal
constraints on current Medicaid eligibles must also be a top priority.
Medicaid reform, therefore, should identify and implement appropriate
expenditure controls, without imposing any contractions in current
eligibility, benefits, or provider reimbursements, and without
expansions that would result in increased costs to the Medicaid
program. Medicaid reform must consider necessary and appropriate
improvements, however, that should be made to methodologies and
processes used in determining eligibility and provider reimbursements.
5. Focus on administration. Short-term reforms should focus on
strengthening and making administrative improvements to the program.
Program administrators need access to adequate technology, expertise,
and other supports to do their work effectively. Enhanced oversight and
more effective management will require some additional resources in the
short term, but will result in greater short-term and long-term savings
to the program overall. Reform should also strive to achieve
administrative simplification and the removal of any unnecessary and
burdensome complexity and rigidity from the program. 6. Explore
alternative funding mechanisms to offset increases in General Fund
expenditures. Alternative financing strategies should be explored to
offset the growth in Medicaid General Fund expenditures, but
appropriate
caution must be exercised in their implementation. Statutory
Recodification Medicaid statutes in Nebraska were first adopted in
1965, and became effective on July 1, 1966. Nebraska state law now
contains several disparate provisions, in Chapter 68, and article 10,
that have been added since the program’s inception. Medicaid
reform legislation in 2006 should focus on both technical and
substantive goals. Technical goals should include repealing obsolete
and unnecessary provisions, reformatting existing provisions, and
making clarifying changes to existing statutory language. Substantive
goals should include (1) an explicit statement of public policy for the
Medicaid program, (2) changes to provide more flexibility and permit
the implementation of administrative and other reforms to the program,
(3) explicit directives for the exploration and implementation of
long-term reforms, and (4) necessary and appropriate changes in
Medicaid- related statutes to accomplish other reform objectives.
Medicaid reform legislation in 2006 must be clearly substantive in
order to comply with legislative intent in LB 709 (2005). IV. Findings,
Recommendations and Strategies Based upon: a) an analysis of the data
by the Medicaid Reform Work Groups; b) input from the Medicaid Reform
Advisory Council; c) input from the public meetings held in each
Congressional District; d) input from various professional, provider
and consumer organizations, advocacy groups and the general public; and
e) independent research, the designees present the following findings
and recommendations as the bases for the Medicaid Reform Plan, and an
outline of the strategies to address them. 18 These recommendations and
strategies reflect essential decisions that should be made and actions
that should be taken now. They do not reflect all of the input received
during the planning process. That input has been compiled and is a part
of the public record. It is available to build upon in the future. This
Medicaid Reform Plan is the beginning of the process, not the end. A.
FINDING 1: The Medicaid Program in Nebraska, as it is currently
structured, will not be fiscally sustainable in the future. 1.0 Fiscal
Sustainability Background: State and Federal expenditures for the
Medicaid program in Nebraska approached $1.4 billion in SFY 2005, an
increase of 41.9% over the last five years, for an average annual
increase of almost 7.2%. General fund expenditures increased 48.1%, for
an average annual increase of almost 8.2%. During the same time period,
state revenues increased only about 3.5% per year. Medicaid and the
State Children’s Health Insurance Program (SCHIP) consumed
17.2%
of state General Fund appropriations in state fiscal year 2004- 05 (SFY
2005), more than twice the rate of twenty years ago (6.3% in SFY 1985).
Other budget programs that provide state Medicaid match include:
Program 38 – Behavioral Health Aid; Program 365 –
Regional
Centers ; Program 421 – Beatrice State Developmental Center;
and
Program 424 – Developmental Disabilities. When these programs
are
included, the Medicaid and State Children’s Health Insurance
Programs consumed 20.1% of state General Fund appropriations in SFY05.
The Nebraska Health and Human Services System (HHSS) projects that,
adjusting for demographic changes in the population and projected
medical inflation over the next 20 years, total federal and state
Medicaid expenditures in Nebraska would increase to nearly $5.6 billion
by 2025. The state's share of these expenditures would increase to
about $2.2 billion by 2025. The General Fund appropriation available
for the Medicaid program will increase to only $1.4 billion by 2025,
assuming Medicaid maintains its proportion of projected general fund
revenues of 20.1%. The result is a $785 million gap between projected
Medicaid General Fund expenditures and the projected appropriations
available for Medicaid in Nebraska in 2025 (Figure 4). At this rate,
unless efforts are taken to curb the growth in Medicaid and CHIP
expenditures, they will significantly outpace the projected growth in
state revenues.63 19 Figure 4 Projected Increase in Medicaid State
General Fund Expenditures and Appropriations Available for Medicaid in
Nebraska 2005 – 2025 0 500,000,000 1,000,000,000
1,500,000,000
2,000,000,000 2,500,000,000 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0
1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0
1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 HHSS GF Medicaid
Projection Appropriation Available for Medicaid Variance in 2025 = $785
million This report is recommending a number of short-term changes to
the existing defined benefit program. These changes will moderate the
growth of Medicaid, but they are inadequate to assure fiscal
sustainability of the program in the long-term. Without any changes,
the Medicaid program is projected to consume 25.0% of the general fund
budget in 2015 and 31.2% in 2025. The estimate of cost-savings from the
recommended changes is enormous in dollar terms but is still calculated
to consume 23.2% of the general fund in 2015 and 28.1% in 2025. While
it is imperative to take immediate, short- term steps to moderate the
growth of the program, it is also necessary to pursue more aggressive
changes in the long-term. Nebraska’s response to the issue of
fiscal sustainability should start with a statement of public policy
that frees the state from uncontrollable cost increases that can wreak
havoc on the state budget and priorities for other essential state
services. 20 Recommendation 1.0a: We recommend that a reasonable and
well-articulated Medicaid public policy be developed and adopted for
inclusion in the Nebraska Revised Statutes to guide future Medicaid
program decisions. Such policy should assist needy Nebraskans to access
necessary medical services in a manner that allows maximum flexibility
and controlled expenditure growth and does not create any entitlement
under state law. Strategy 1.0a1: In SFY2006, the designees will
recommend that the state of Nebraska adopt in statute the following
language: The purpose of the Nebraska Medicaid Program is to assist
low-income persons to obtain access to needed health care and related
services. Funding for the program will be based on an assessment of
state resources and the competing needs of other state-funded programs.
Strategy 1.0a2: As part of each biennial budget preparation, HHSS will
update demographic and health cost inflationary projections and prepare
an analysis of the long-term cost impact of the Medicaid program. This
information will be made publicly available as a part of the budgeting
and appropriations process. 1.1 Medicaid Program Structure (Defined
Benefit vs. Defined Contribution) Background: States have many options
for reforming Medicaid. Some options call for major changes to existing
Medicaid programs; other options call for changes within the current
structure of existing Medicaid programs. Some states, like Florida and
South Carolina, for example, have embarked on major reform efforts
intended to substantively change their Medicaid programs. While their
strategies vary, the intent is to transform their Medicaid programs
from “defined benefit” to “defined
contribution” plans. The current Medicaid entitlement program
in
Nebraska is a “defined benefit” program. Under a
“defined benefit” program, eligibility and benefits
are
fixed, but costs are variable. In other words, once an individual is
determined to be eligible for Medicaid, he or she becomes entitled to
receive all of the medically necessary services available through the
state’s Medicaid program, regardless of cost.
“Defined
contribution” programs can be set up in a variety of ways;
however, in general, under a defined contribution program, eligibility
and costs are fixed, but benefits are variable and targeted to meet
individual needs. Making this kind of substantive change to a
state’s Medicaid program requires the submission and approval
of
a state waiver from the Centers for Medicare and Medicaid Services
(CMS). To date, CMS has approved only one such waiver, for the state of
Florida, but it has yet to be implemented. 21 One of the most
attractive features of a defined contribution program is the
predictability of the expenditures for the Medicaid program. In
general, under a “defined contribution” program,
the state
allocates a risk-adjusted sum of money to each Medicaid recipient. This
risk-adjusted sum is typically based upon the age, health status, and
health care spending history of the individual. The Medicaid recipient
can then use that money to purchase a health insurance policy.
Typically, the recipient would have several health care plans from
which to choose. Some plans may carry a high premium, but have low
cost-sharing requirements; others plans may have a low premium, but
higher cost-sharing requirements. Service coverage may vary from plan
to plan. The individual, with the assistance of a benefits counselor,
would select the plan most appropriate for his or her situation. The
defined benefit nature of Medicaid is a contributor to uncontrolled
growth in the program. Changing to a defined contribution approach,
however, is very complicated and requires a great deal of intensive
planning and extended negotiation with the federal Centers for Medicare
and Medicaid Services, and should only be done with great care.
However, the potential exists for greater predictability of future
Medicaid expenditures with a defined contribution program.
Recommendation 1.1a: We recommend at this time that Nebraska retain the
existing Medicaid defined benefit program and implement changes within
the current structure, including the use of additional waivers.
Strategy 1.1a1: A description of the proposed strategies follow in
sections 1.2 through 7.1. Recommendation 1.1b: We recommend that over
the next few years HHSS closely monitor the Medicaid reform experience
of other states with defined contribution programs and other reform
models to determine the effects on Medicaid recipients, their health
outcomes, and the cost-effectiveness of the services, with a view
toward adopting an improved structure when it is proven effective.
Strategy 1.1b1: In SFY 2008, HHSS will retain the services of a
consultant to evaluate the health outcomes and cost effectiveness of
alternative Medicaid reform approaches in other states, including but
not limited to, defined contribution programs. Depending upon the
results of the evaluation, HHSS may make additional recommendations for
legislative reform of Medicaid. 1.2 Medicaid Eligibility Background:
Eligibility in the Nebraska Medicaid Program is already quite
restrictive. Mandatory eligibility ranges from 37% to 70% of the
Federal Poverty Level (FPL) for adults, and 22 from 100% to 133% of the
FPL for children. With the exception of two small programs (the
women’s breast and cervical cancer program, and the working
disabled buy-in program), and a small number of dual-eligible persons
(i.e., persons eligible for both Medicaid and Medicare), optional
eligibility in Nebraska falls into two areas: medically needy and the
State Children’s Health Insurance Program (SCHIP). •
Medically Needy Program – This option allows states to extend
Medicaid eligibility to persons who have more income than allowed to
qualify under the mandatory or optional categorical needy groups, but
have medical expenses that exceed their income. In order to be covered
under the medically needy program, persons with income above the
mandatory level must: 1) meet the resource test (i.e., have resources
below $4,000 for an individual or below $6,000 for a family); and 2)
have medical expenses that exceed their excess income. Under the
medically needy program, these persons are required to contribute their
income above the Medicaid Medically Needy eligibility level64 to their
cost of care, and Medicaid pays the difference. • The State
Children’s Health Insurance Program (SCHIP) covers children
without creditable insurance coverage up to 185% of the FPL. In
Nebraska, SCHIP is a Medicaid expansion program so, under federal
Medicaid rules, there are no cost sharing requirements for
children’s programs. Children who qualify for SCHIP are
entitled
to all Medicaid services that are considered medically necessary. Both
of these populations are within the priority populations that should
receive assistance in obtaining health care. The designees have
received no specific recommendations from the public to reduce
eligibility for Medicaid services. We have received recommendations to
expand eligibility for certain populations, e.g., an expanded Buy-in
Program for persons with disabilities who are working. Because of the
current projections of increased Medicaid expenditures for the existing
eligible population, no expansions should be undertaken until other
cost-saving recommendations in the Medicaid Reform Plan have been
implemented and future cost savings initiatives have reduced the growth
of expenditures to a fiscally sustainable level. Eligibility changes
should only be considered when it can be established that the changes
will not add to the demand on state general funds. While we are not
recommending changes in eligibility, we have become concerned that some
people may be taking improper advantage of the federal Medicaid
residency rules to qualify for Nebraska Medicaid to obtain medical
services in Nebraska that should be paid for by the state of their
actual residence. Only U.S. citizens and legal aliens are entitled to
Medicaid eligibility. Although HHSS currently requires proof of legal
alien status before adding non-citizens to the eligibility roles, there
also is concern that some illegal immigrants may be successfully using
false documents to obtain Medicaid benefits. 23 Recommendation 1.2a: We
recommend that there be no immediate substantive change to current
eligibility requirements, either by expanding or reducing eligibility
standards. Residency standards, however, need further study to
determine if they are being abused. Documentation of eligibility needs
to be closely monitored to determine if false documents are being used.
Strategy 1.2a1: In SFY2006, HHSS will conduct an investigation to
determine whether persons from other states are abusing the residency
rules that provide a person can not move to this state for the purpose
of obtaining eligibility for Medicaid services. Based upon its
findings, HHSS will seek the cooperation of Nebraska providers in
obtaining reimbursement from the appropriate state of residency and
will modify Nebraska regulations to strengthen the residency
requirements to the extent allowed by federal law. Strategy 1.2a2:
Beginning in SFY2006, HHSS will increase its monitoring of eligibility
documents for the purpose of detecting false documentation. The
existing rules denying eligibility will be applied where false
documents are identified. 1.3 Partial-Month Eligibility Background: One
administrative change to the eligibility rules that could be
implemented is to convert from full-month to partial-month eligibility.
Federal regulations require that Medicaid coverage be effective three
months prior to the date of application (i.e., retroactive eligibility)
and until the date an individual is no longer eligible. Nebraska has
elected to follow a more generous federal option to provide eligibility
for the full month if an individual is eligible at any time during the
month. Therefore, during the first and last month of eligibility,
Medicaid covers services for the entire month, rather than for the
portion of the month when coverage is federally mandated. Some states
have elected partial month coverage during the first and last months of
eligibility, which is allowable under federal regulations. Converting
from full- to partial-month eligibility would save Medicaid dollars,
but would require substantial expenditures up front to modify existing
computer systems to support this change. However, over the long term,
Medicaid should see savings by converting to partial-month eligibility.
Recommendation 1.3a: We recommend that HHSS implement partial-month
eligibility for the first month of eligibility. Implementing
partial-month eligibility for the last month, however, would place an
unreasonable administrative burden on providers to check continuing
eligibility for each day of service. 24 Strategy 1.3a1: In SFY 2006,
HHSS will prepare and submit a State Plan amendment to CMS, and an
amendment to state Medicaid regulations, implementing partial month
eligibility for the first month of eligibility. HHSS will implement
changes to the N-FOCUS system to identify partial-month eligibility and
make that information available to providers through the current
eligibility verification process. 1.4 Medicaid Covered Services
Background: To examine the appropriateness of services covered under
the current Medicaid program in Nebraska, HHSS completed a comparative
analysis of the Medicaid program and the basic health, dental, and
vision coverage available to Nebraska state employees. One area of
difference is in the co-payment requirements. Under the Blue Cross/Blue
Shield plans, many services require a co-pay (e.g., $11 for generic
drugs; $15 for in-network office visits, $27 for brand name drugs, $50
for an outpatient surgery center). Federal law establishes Medicaid
co-pay limits. For many services there is no Medicaid co-pay
requirement in Nebraska. Other services, like physician office visits
and prescribed drugs, require a $2 co-pay. The analysis revealed that,
with the exception of long-term care services for the aged and persons
with disabilities, which are not normally covered under commercial
health insurance policies, the other health care services covered by
the Nebraska Medicaid program are roughly equivalent to those available
to State employees through employer- sponsored health plans, with the
following exceptions: a) cost-sharing, through premiums, deductibles,
and co-payments, are widely used in commercial employer-sponsored
plans, but are allowed to be used only to a very limited extent in
Medicaid;65 b) mental health services are more available in the
Medicaid plan; c) some services are more limited as to total service,
or total expenditures, in the employer-sponsored plan; and d) Medicaid
covers more home and community-based services that are intended to be
cost effective. The Medicaid Program does require prior authorizations
for specific services. To assist the Department in making coverage
decisions for the Medicaid program, and individual authorization for
specific medical procedures and tests, Nebraska will be partnering with
other states and the Center for Evidence-Based Policy at the Oregon
Health and Science University. This is a collaboration among state
Medicaid programs for the purpose of making accessible high quality
evidence to support benefit design and coverage decisions made by the
Medicaid Program. The project includes high quality systematic reviews
of existing evidence, technology assessments of existing and emerging
health technologies, a web-based clearing house and communications tool
to keep states informed of relevant developments, support in designing
rapid evaluations of products where no evidence 25 exists, and the
support of highly qualified research staff to assist states in applying
the evidence to their own needs. Recommendation 1.4a: We recommend that
there be no change to covered services for most Medicaid populations in
Nebraska. Limitations similar to those found in commercial health,
dental and vision insurance policies should be implemented for optional
services. Children and recipients of mental health services should be
exempt from these limitations. Strategy 1.4a1: In SFY 2006, the
designees will recommend the State enact a bill authorizing additional
limitations on covered services. The principle will be to align
limitations on services in Medicaid with those customarily found in
commercially available health, vision and dental insurance policies.
HHSS will prepare and submit a State Plan Amendment to CMS, and
amendments to the state Medicaid regulations, identifying and
implementing limitations on selected optional services. HHSS will file
reports with the Governor and the Legislature as required by Neb. Rev.
Stat.; §68-1019.01 and §68-1019.03. 1.5 Cost-Sharing
Background: Cost sharing, in the form of co-pays, premiums and
deductibles, is customary in the private insurance market. In the
traditional Medicaid program, however, cost sharing is very limited
and, just as importantly, unenforceable. Medicaid recipients cannot be
denied services because they do not pay the co-pay. Federal regulations
allow only minimal cost sharing for Medicaid eligible persons. The
federal rules can only be changed through a federal waiver or, in the
case of SCHIP, by establishing a separate, state SCHIP program.66 There
are several specialized Medicaid programs for children that do not
presently require parents or other responsible parties to contribute to
the costs of Medicaid, regardless of their income; i.e., the
eligibility rules for these programs disregard parental income in
determining the child’s eligibility. These programs include:
the
Katie Beckett program that pays for in-home acute (hospital) level of
services; the Aged and Disabled Home and Community-Based Waiver (as
applied to children); the Children’s Developmental Disability
Waiver; the Early Intervention Waiver; and the State Ward program.
Co-pays are controversial because of the argument that they not only
limit utilization of services to what is appropriate, but also reduce
access to necessary health care. Clearly, there is a level of income at
which individuals can begin to pay premiums and make co- payments. In a
separate state SCHIP program, for example, a co-pay of up to 5% of
family income is allowable. In a waiver program, cost sharing can be
imposed through co-pays and deductibles, or through a
“premium
buy-in” program. While cost sharing 26 strategies may be
unpopular, they are an important option for state Medicaid programs to
consider. Recommendation 1.5a: We recommend that a separate state SCHIP
program be established for children in families between 150% and 185%
of FPL. The separate state SCHIP program in Nebraska would allow
coverage to be tailored to the needs of that population and would allow
additional cost-sharing to be required. Strategy 1.5a1: In SFY 2006 the
State will adopt a statute establishing a combination SCHIP program:
children and pregnant women between 100% and 150% of FPL will remain in
the SCHIP expansion program, and children and pregnant women between
150% and 185% of FPL will be placed in a separate state SCHIP program.
In SFY2008, HHSS will submit a State Plan Amendment to CMS and revise
state regulations. The separate state SCHIP program will include
limitations on covered services similar to those customarily found in
commercially available health, dental, and vision policies. Mental
health services will be administered through the Medicaid
Administrative Services Organization and will be managed by prior
authorization and not by limitations. Sliding fee cost-sharing will be
established within federal limits, up to 5% of family income.
Cost-sharing will be managed through a monthly premium rather than
co-payments and deductibles. Implementation of a new Medicaid
Management Information System (MMIS) in SFY 2009 will enable Medicaid
to efficiently manage covered services and premium payments.
Recommendation 1.5b: We recommend that parents of children in the Katie
Beckett program, the Aged and Disabled Waiver program, the
Children’s Developmental Disability Waiver, the Early
Intervention Waiver, and the State Ward program, whose income exceeds
150% of the FPL, be required to contribute to the costs of Medicaid for
their children, on a sliding scale basis. Strategy 1.5b1: In SFY 2007,
HHSS will submit waiver amendments to CMS, and amend state regulations,
to require families whose children receive specialized
children’s
Medicaid services and whose income exceeds 150% of poverty to make
premium payments to Medicaid to participate in the program. Premium
payments will be established on the basis of a sliding income scale. In
SFY 2006, the designees will recommend that the Legislature amend the
state ward statutes to require imposition of the sliding income scale
premium by courts of appropriate jurisdiction. 27 B. FINDING 2: The
fastest growing expenditure category in the Medicaid program is
prescribed drugs. 2.0 Prescribed Drugs Background: Medicaid
expenditures on prescribed drugs in Nebraska increased from $127.6
million in SFY00 to over $241 million in SFY05, for an average annual
increase of 13.6%. Cost containment strategies already implemented in
the Nebraska Medicaid drug program, including mandatory generics and
prior authorization for certain classes of drugs, have shown some
success in controlling prescription drug costs.67 Other strategies hold
promise for further reduction in prescribed drug costs. For example,
one strategy is to require prior authorization for all new brand name
drugs until the efficacy and comparability with older drugs can be
established. Other strategies for controlling prescribed drug costs,
including preferred drug lists and use of purchasing pools, can be
considered by the Medicaid program. Prescribed drugs used to treat
mental health disorders are among the highest cost, and fastest
growing, classes of drugs in the Medicaid program. Medicaid
expenditures on ataractics-tranquilizers, for example, grew an average
of 16.1% per year over the past five years, from almost $16.2 million
in SFY00 to $34.1 million in SFY05. Expenditures for antidepressants
grew an average of 18.9% per year over the past five years. Figure 5
shows the percent increase, from SFY00 to SFY05, in the number of
persons eligible for Medicaid for each of the five population groups,
and the percent change in the number of Medicaid recipients receiving
prescribed drugs, specifically tranquilizers and antidepressants. The
number of persons eligible for Medicaid increased 9.8% from SFY00 to
SFY05, but the number of persons eligible for Medicaid who received
prescribed drugs through the Medicaid program increased 18.9%, and the
number of Medicaid recipients receiving tranquilizers and
antidepressants increased 30.1% and 39.7%, respectively. Even though
the dual-eligible population will no longer be a part of the Medicaid
prescribed drug program after January 1, 2006, this is clearly an area
where opportunities for savings in the Medicaid program could be
considered for the remaining populations. 28 Figure 5 Percent Change in
Medicaid Eligibles and Prescription Drug Recipients SFY00 to SFY05
-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Children
& Pregnant Women Children withDisabilities Adults Adults
withDisabilities Aged Total P e rc en t C h an g e Eligibles
Prescription Drug Recipients Recipients - Tranquilizers Recipients -
Antidepressants One option for controlling expenditures on psychotropic
medications is to replicate a program recently implemented in Missouri
- the Mental Health Medicaid Pharmacy Partnership Program (MHMPPP). The
MHMPPP has been successful in improving care for Medicaid recipients
with severe mental illness while, at the same time, producing cost
savings of $7.7 million for the Missouri Medicaid program in state
fiscal year 2004. The Program identifies inefficient and ineffective
prescribing patterns for Medicaid recipients with mental illness, based
on evidence-based “best practice” standards for
mental
health drug therapy. Some of the inefficient and ineffective
prescribing patterns identified through this evaluation include:
prescribing multiple medications from the same therapeutic class;
duplicate prescribing of medication by different physicians for the
same patient; children on three or more psychotropic medications; and
premature, rapid switching from one medication to another. Under the
Program, prescribers whose prescription practices vary from
“best
practices” are notified by letter and provided with
information,
in a non-threatening educational format, to help them make patient care
decisions based on current medical evidence. The Program has resulted
in changes in prescribing patterns to conform to standards of practice,
and brought about improved quality of care and cost savings to the
Missouri Medicaid program. Recommendation 2.0a: We recommend that
Nebraska adopt a program, similar to the Missouri Mental Health
Medicaid Pharmacy Partnership Program model, to improve the use of
drugs used to treat mental health conditions and to control the growth
in Medicaid spending. This approach does not rely on prior
authorization, but uses monitoring and education of prescribers
regarding best practices. 29 Strategy 2.0a1: In SFY06, HHSS will review
the research on best practices and work with professional organizations
and health care providers to identify best practice standards for the
prescribing of mental health drugs. Strategy 2.0a2: In SFY07, HHSS will
analyze the data on current prescribing practices for mental health
drugs in the Nebraska Medicaid Program and compare them to the best
practice standards identified in Strategy 2.0a1. Based upon that
analysis, and in consultation with professional associations, the
behavioral health Administrative Services Organization and the Drug
Utilization Review Board, HHSS will establish best practice and
screening standards for the prescribing of mental health drugs in the
Medicaid Program. Strategy 2.0a3: In SFY 2007, HHSS will make the
determination whether to issue a contract for the management of the
Medicaid Mental Health Drug Program or to manage the Program within the
existing structure and processes of the Medicaid Program.
Recommendation 2.0b: We recommend that the HHSS implement prior
authorization for those new, brand name drugs, through the established
Drug Utilization Review Board process, where it is deemed appropriate.
Strategy 2.0b1: Beginning in SFY 2006, for all new drugs, HHSS will
require drug manufacturers to provide standard written product
information to the Drug Utilization Review (DUR) Director and the HHSS
Pharmacy Consultant. The DUR Director and the HHSS Pharmacy Consultant
will review each product and forward those products recommended for
prior authorization review to the DUR Board. The DUR Board will review
the product at their earliest meeting. The DUR Board will determine the
products appropriate for prior authorization, develop criteria for
prior authorization, and forward their recommendations to HHSS. HHSS
will make the final decision on which drugs will require prior
authorization, will finalize the criteria for prior authorization, and
notify providers. Recommendation 2.0c: We recommend that HHSS contract
with a consultant to: a) review the existing prior authorization and
mandatory generics programs within the Nebraska Medicaid pharmacy
program, and b) advise HHSS on whether the establishment of a preferred
drug list (PDL) would be clinically appropriate and cost-effective for
various drug classes and whether participation in a purchasing pool
would result in additional savings to the Nebraska Medicaid Program. 30
Strategy 2.0c1: In SFY2007, HHSS will contract with a consultant to
study the existing Medicaid pharmacy cost containment strategies and
determine whether establishment of a preferred drug list or purchasing
pool would result in additional savings to the Nebraska Medicaid
Program. If a preferred drug list appears to be cost-effective, HHSS
will submit research regarding efficacy of drugs within appropriate
classes to an independent board of physicians, pharmacists, and
consumers for their recommendations. Their recommendations will be
based on efficacy alone. HHSS will determine whether these
recommendations can achieve cost-savings and, if so, add them to a
preferred drug list and explore the cost-effectiveness of joining a
purchasing pool. C. FINDING 3: Long-term care services for the elderly
and disabled are the largest expenditure categories in the Medicaid
program. 3.0 Long-Term Care Background: “Long-term
care,”
which includes nursing facility services, Intermediate Care Facilities
for persons with Mental Retardation (ICF-MRs), home health services,
and Home and Community Based Services (HCBS), including assisted
living, is the largest cost category in the Nebraska Medicaid program.
The age 65+ population in Nebraska, the population with the highest
utilization of long- term care services (Figure 6), is expected to grow
75% over the next 25 years, and the age 85+ population is expected to
grow 53%.68 Because of the projected increase in the age 65+ population
in Nebraska, long-term care will continue to be a major cost center for
Medicaid in the future. Although the number of adults with disabilities
is not projected to increase significantly, many of those with
disabilities will be aging into the age 65+ population. Current
expenditures for persons with disabilities in a nursing facility
average $44,260 annually, compared to $34,908 per year for the aged
population. For these reasons, Medicaid reform must address long-term
care services. 31 Figure 6 Average Medicaid Expenditures per Eligible
By Acute and Long-Term Care Services – SFY05 $0 $5,000
$10,000
$15,000 $20,000 $25,000 Children & Pregnant Women Children with
Disabilities Adults Adults with Disabilities Aged Long‐Term Care Acute
Care Nebraska has a proportionately high number of nursing facility
beds and nursing facility residents. According to AARP data from 2003,
Nebraska ranked sixth among the states in the number of nursing
facility beds per 1,000 persons age 65 and over (71 beds per 1,000
elderly persons in Nebraska compared to 49 beds nationally). Nebraska
also ranked sixth in the number of nursing facility residents as a
percentage of the elderly population (5.9% in Nebraska versus 4.0%
nationally). Nursing facilities still represent the majority of
long-term care expenditures, but assisted living and in-home waiver
services are receiving a growing share of dollars. While institutional
care may be necessary and appropriate for some individuals, less
restrictive environments should be preferred. Nursing facility services
represent the highest cost service category in the Medicaid program.
Medicaid expenditures for nursing facility services in Nebraska
exceeded $278.9 million in SFY05. ICF-MR services cost the Medicaid
program over $58 million in SFY05. Home and Community-Based Services
(HCBS), including Assisted Living, are a lower- cost alternative to
nursing facility or ICF-MR care for those persons who can be safely and
appropriately served there. For example, during the last six months of
2004, the average cost per day for Aged individuals to the Medicaid
program for the seven lowest 32 nursing facility care levels was $74,
compared to a statewide average of $41 per day for assisted living, and
$30 per day for all other in-home HCBS waiver services69. For persons
with disabilities, the average cost per day for the seven lowest
nursing facility care levels was $83, compared to a statewide average
of $45 for assisted living, and $63 for in-home services. In SFY 2005,
the average cost for services in an ICF-MR was $95,635 and in a
Comprehensive Developmental Disability Waiver was $54,461. A
comprehensive restructuring of the long-term care system is essential
if the Medicaid program is to be fiscally sustainable in the future.
The inherent bias in favor of institutionalization that currently
exists needs to be replaced with a continuum of care that allows older
adults and persons with disabilities to receive safe and appropriate
services in the least restrictive and most cost-effective environment.
Recommendation 3.0a: We recommend that HHSS seek approval from CMS to
incrementally expand the capacity of the Aged and Disabled Home and
Community-Based Services waivers in Nebraska as Nebraska’s
population ages. Strategy 3.0a1: In SFY2006, HHSS will submit a waiver
to CMS to expand the Home and Community- Based Services waiver
capacity. Based on current population projections, the Medicaid Program
estimates that approximately 180 slots will be added each year from
2005 through 2015, and 360 slots will be added each year from 2016
through 2025. Recommendation 3.0b: We recommend that HHSS contract with
a consultant to evaluate existing comprehensive assessment tools for
determining the appropriateness of persons for nursing facility,
assisted living, and home health care. The consultant will also assist
the Medicaid program to identify quality based performance measures to
adequately assess the quality and effectiveness of care in assisted
living and in-home settings. Strategy 3.0b1: In SFY2007, HHSS will
contract with a consultant to evaluate existing comprehensive
assessment tools, or if necessary, to develop comprehensive assessment
tools, for determining the appropriateness of persons for nursing
facility, assisted living, and in- home services. The assessment tool
will include social as well as medical components to identify safe and
appropriate environments and necessary services. While a result of the
assessment tool will be to eliminate the existing bias in favor of
institutional care, the purpose of the contract will be to identify
what is appropriate for the individual, based on his or her medical and
social needs. This strategy continues to recognize that some
individuals may be most appropriately served in an institutional
setting. Strategy 3.0b2: HHSS will include in the
consultant’s
contract provisions for evaluating existing quality- based performance
measures, or if necessary, to develop such performance measures. 33
When implemented, the performance measures will be used to evaluate and
improve the quality of care in each setting. Recommendation 3.0c: We
recommend that HHSS contract with consultants to revise the current
reimbursement methods for long-term care providers of nursing facility,
ICF-MR, assisted living, and in-home services. Strategy 3.0c1: In
SFY2007, HHSS will contract with a consultant to help update and revise
the level of care system used in nursing facility reimbursement. Based
on the revised levels of care, with the help of the consultant, the
Medicaid program will develop reimbursement methodologies that are
reasonable and appropriate for services provided in a nursing facility,
assisted living facility, and in-home setting. Strategy 3.0c2: In
SFY2008, HHSS will contract with a consultant to help update and revise
the reimbursement methodology for both ICF-MRs and Community-Based
Developmental Disability Services. Recommendation 3.0d: We recommend
that HHSS establish an advisory committee to work with HHSS to
encourage the development of Home and Community-Based Services under
the Aged and Disabled Waiver, particularly in rural areas of the state.
Strategy 3.0d1: In SFY2006, HHSS will establish an advisory committee
that includes representatives of the Area Agencies on Aging, consumers,
providers of long-term care services, and local public officials, to
identify the need for and barriers to the provision of Home and
Community-Based Services. HHSS, in conjunction with the advisory
committee, will consider cost-effective ways to allow existing facility
providers and their trained personnel in rural areas to provide in-home
services, in addition to facility-based services. Recommendation 3.0e:
We recommend that HHSS collaborate with the Area Agencies on Aging
(AAAs) to better inform older adults of available, appropriate and
cost-effective alternatives to nursing facility care. Strategy 3.0e1:
Beginning in SFY2007, and building on the existing information program
for aging persons, the new assessment tool, and increased availability
of assisted living and in- home services, the AAAs will be better able
to assist non-Medicaid eligible persons to make informed choices
concerning the most appropriate and cost-effective services 34
available. In communities with stable or increasing real estate values,
clients also can be educated on the availability of reverse mortgages
to enable them to remain in their own homes and pay for in-home
services, where appropriate. 3.1 Technological Innovations Background:
Another possible strategy for controlling costs within the Medicaid
program is to take greater advantage of recent innovations in
technology as they relate to health care. One such innovation is
telemonitoring that connects the individual with his or her health care
provider. Via the telemonitoring device, the individual can transmit
vital health information (e.g., blood glucose, heart rate, blood
pressure) to their health care professional, who monitors the
individual’s condition. The goal of telemonitoring is to
trigger
interventions at the earliest possible stage, thereby reducing overall
health care costs. A recent study found that home telemonitoring led to
a 26% decrease in total hospital days per patient, and a 34% decrease
in length of stay per hospitalization. The telemonitoring device would
not replace routine visits to health care providers, but would provide
valuable information to health care providers between visits, when
interventions may be required. Recommendation 3.1a: We recommend that
HHSS identify available, cost-effective technologies to improve
distance delivery of health care services to Medicaid recipients,
especially those in rural areas. Strategy 3.1a1: In SFY 2007, HHSS will
contract with a consultant to evaluate emerging technologies, such as
telemonitoring, which can increase the ability of persons to remain
safely and appropriately in their own homes. These technologies are
rapidly changing and becoming increasingly cost-effective. As they are
identified, they can be included through State Plan Amendments or
Waivers as covered expenditures. Strategy 3.1a2: Medicaid currently
covers services provided by telehealth communications. HHSS will
identify those facilities and providers that have telehealth
capabilities and work with them to promote appropriate, cost-effective,
and expanded use of telehealth services. D. FINDING 4: Consistent with
the experience of commercial health insurance companies, a small
percentage of Medicaid recipients account for the majority of Medicaid
expenditures. 35 4.0 High-Cost Medicaid Recipients Background: High
cost clients across eligibility categories spend a disproportionate
share of the Medicaid dollars. The reasons for the high medical costs
are often complex and involve many factors. A plan is needed to ensure
that these clients have access to appropriate services and that these
services are used in the most cost-effective way possible. One option
would be to implement a Medicaid Enhanced Care Connection (ECC) model
for high cost Medicaid clients. The ECC model builds on accepted
standards of health care and disease management strategies as well as
on the unique strengths in the state to lower the costs of medical care
while maintaining and enhancing client’s health. The focus of
the
ECC model is on persons with multiple medical conditions that can and
do result in high costs. Under the Medicaid ECC model, the primary
physician authorizes specified Medicaid services as appropriate and
medically necessary. An assigned public health nurse works closely with
both the physician and the client to: a) establish and maintain a
medical home; b) establish a medical plan of care; c) support
compliance with the medical care plan; and d) connect clients with
other needed local resources. Each plan of care is based on health
assessments by the physician and by the public health nurse, joint
planning with the client for appropriate cost-effective medical care,
and enhanced support to the client to maintain health and reduce
medical costs. Quality of care and utilization are systematically
monitored on a regular basis to ensure appropriate use of Medicaid
services. Successful development and implementation of the Enhanced
Care Connection model depends upon the expertise, cooperation, and
collaboration of many persons in the health care and academic
communities, including: 1. the medical community and their professional
organizations to ensure that appropriate standards of medical care and
disease management are used; 2. the public health nursing community and
their professional organization to ensure that appropriate standards of
public health nursing are used; 3. the local health departments and
other local public health agencies to ensure that local management is
provided and community resources are identified; 4. the university
system in the state, including the medical schools to provide needed
specialty support and updates on the current standards of care; 5. the
state school of nursing to provide objective measurements of outcomes
and quality of care; and 6. the hospitals and their professional
association to ensure access to quality services as well as access to
telehealth linkage with specialty services not available locally. Under
the Enhanced Care Connection model, primary physicians would be paid a
monthly management fee for each Medicaid recipient enrolled in the
plan. The primary physician most often will be a primary care
physician. In some cases, the primary 36 physician may be a specialist.
Primary care physicians will be enrolled in a Primary Care Case
Management (PCCM) program and specialty physicians will be enrolled in
a Specialty Care Case Management (SCCM) program. The public health
nurses in the client’s local area would assist the client in
identifying appropriate physician managers and communicating with both
the client and the physician, as well as the local HHSS office and
other local community resources as needed. Clients could receive small
incentives to join the ECC plan and to adhere to their medical plans of
care. Some Medicaid recipients with multiple medical conditions are
currently in managed care plans in Douglas, Sarpy and Lancaster
counties. The strategies for coordinating their care will differ from
the strategies for coordinating the care of non-managed care Medicaid
recipients in other areas of the state. Recommendation 4.0a: We
recommend that HHSS contract with a management entity to prepare,
implement, and manage the Enhanced Care Connection model for high-cost
Medicaid recipients with multiple medical conditions. HHSS will provide
close medical and administrative oversight of the contracted management
entity to ensure that the goals of the program are met and maintained.
Strategy 4.0a1: In SFY 2006, HHSS will contract with a management
entity to design, implement, and manage the Enhanced Care Connection
model for high-cost Medicaid recipients with multiple medical
conditions. The work of the management entity will include ensuring
appropriate client and provider enrollment, public health nursing
protocol development, articulation of current standards of care for
disease management, training and ongoing oversight of daily operations.
The management entity will consult with providers, public health
organizations and consumers on the design of the program. Strategy
4.0a1: Beginning in SFY 2006, HHSS will identify Medicaid recipients
with multiple medical conditions for enrollment in the Enhanced Care
Connection model. Recommendation 4.0b: We recommend that enhanced care
coordination services, for those Medicaid recipients with multiple
medical conditions who are currently in managed care plans in Douglas,
Sarpy and Lancaster counties, be provided by their current managed care
providers. Strategy 4.0b1: Beginning in SFY 2007, HHSS will incorporate
new expectations, requirements, and measurements for providing enhanced
care coordination to Medicaid recipients with multiple medical
conditions into the new managed care contracts. HHSS will also address
the issue of high cost clients in the behavioral health managed care
contract, 37 emphasizing better coordination between mental health and
other medical service providers. 4.1 Enhanced Home Visitation Program
for Pregnant Teens Background: Good prenatal care is essential in
preventing adverse birth outcomes, such as low birthweight infants and
developmental disabilities, that impair lives and result in large,
long-term health care costs. Studies estimate that every dollar spent
on prenatal care yields between $1.70 and $3.38 in savings by reducing
neonatal complications. The savings increase dramatically when the
long-term costs of caring for newborns with physical and developmental
disabilities are considered, and are even greater when unforeseen
maternal complications are avoided.70 Prenatal care shows immediate
cost benefits in caring for both the mother and the baby. Currently, a
woman who receives Medicaid because of her pregnancy is eligible for
prenatal care, and for 60 days of postnatal care. For some mothers,
this may not be enough to ensure a healthy baby. One program that has
been effective in improving the outcomes of high-risk pregnancies is
the enhanced home visitation program. It can be designed in a variety
of ways, but it emphasizes nurse visits with the pregnant woman and
then with the mother and child. Visits with the pregnant woman are more
frequent during the early part of the pregnancy and with the mother and
child in the period immediately following the birth. Visits become less
frequent over time and can extend a year or more. During the visits,
the nurse discusses the elements of a healthy pregnancy, general health
issues, child development and parenting, safety and home environment,
community resources and reaching personal goals. The purposes of the
nurse home visitation program are to improve the outcomes of pregnancy,
improve the child’s health and development, and improve
family
self-sufficiency through goal setting. Short-term and long-term results
of this type of program in other states have been positive. Nurse home
visitation programs are not new to Nebraska. Variations of this program
have been established in Omaha, Lincoln, Hastings, Grand Island, and
North Platte. Recommendation 4.1a: We recommend that HHSS include, as a
covered service, a nurse home visitation program for high-risk pregnant
teens and work with providers to help establish such programs in those
parts of the state where those services do not currently exist.
Strategy 4.1a1: In SFY2007, HHSS will file a waiver request with CMS to
establish a home visitation program as a covered service for high-risk
pregnant teens. HHSS will consult with existing home visitation
programs regarding the parameters of the program. 38 Strategy 4.1a2: In
SFY2007, HHSS will work with community health centers, local health
departments, or other public health entities to organize home
visitation services in those areas of the state where they do not
presently exist. E. FINDING 5: Persons receiving Medicaid have
responsibility, to the extent able, to contribute to the cost of health
care, to make informed decisions about the use of health care services,
and to make healthy lifestyle choices. 5.9 Personal Responsibility
Background Medicaid is a public assistance program. In
Nebraska’s
case, the source of the general funds that pay the state’s
share
of Medicaid comes from sales tax and income tax revenues paid by
residents from every income level. Nebraska’s taxpayer are
prepared to assist low-income residents to obtain access to necessary
healthcare, but they also reasonably expect Medicaid-eligible persons
and families to assume personal responsibility, to the extent they are
able. Personal responsibility means a number of things. When people
have an income that allows them to help pay for access to healthcare
for themselves or their family, they should do so. People who are able
to accumulate assets also have the responsibility to use those assets
for their own healthcare and not transfer those assets to others in
order to qualify for Medicaid. Personal responsibility also means that
people receiving Medicaid need to make responsible choices of effective
services and products that are more cost-effective. Many eligible
persons do so now. Others may not because they do not understand how to
make appropriate choices or do not know that there is a legitimate
expectation that they will do so. Recommendation 5.0a: We recommend
that the cost-sharing recommendations found in section 1.6 be adopted
and implemented according to the strategies proposed there as an
appropriate part of personal responsibility. Recommendation5.0b: We
recommend that HHSS prepare and distribute educational materials that
will assist Medicaid-eligible persons to better understand the
healthcare system and how to make informed consumer choices. 39
Strategy 5.0b1: In SFY2007, HHSS will prepare culturally competent
video and written materials that describe the healthcare system and how
it is accessed, the role of the primary care physician or clinic, how
Medicaid determines what services will be paid for, and the role of
personal responsibility in making good choices. These materials will be
generally available through service area offices, public health
departments, and consumer and provider organizations. The video and
written materials will be available for downloading from the HHSS
website. The materials will be prepared initially in English and
Spanish and then prepared in other languages as appropriate. Strategy
5.0b2: In SFY2007, within HHSS, the Medicaid Program will collaborate
with the Health Services Division to identify public health conditions
particularly prevalent in the Medicaid population and to distribute
culturally competent public health educational materials for consumers
to address those issues. The materials will be distributed through the
service area offices, public health departments, and consumer and
provider organizations. Video and written materials will be available
for downloading from the HHSS website. The materials will be prepared
initially in English and Spanish and then prepared in other languages
as appropriate. Recommendation 5.0c: We recommend that Nebraskans be
encouraged to plan to provide for their own long-term care services as
a part of their retirement planning Strategy 5.0c1: In SFY2007, HHSS
will initiate a public service campaign to inform Nebraskans of the
need to plan for long-term care services. The campaign will include an
explanation that Medicare does not pay for most long-term care and that
options are available to people in their planning. Strategy 5.0c2: On
December 1, 2005, HHSS is issuing a separate report in cooperation with
the Department of Insurance on the subject of Long-term Care
Partnership Insurance. That report includes recommendations that are
contingent on a change in federal law. If and when the federal law is
changed, the state can implement those recommendations. 5.1 Cash and
Counseling Background: Cash and Counseling places responsibility on the
consumer to obtain appropriate services. Under the Cash and Counseling
model, Medicaid beneficiaries are provided a flexible monthly allowance
that allows them, or a designated personal representative, to directly
purchase their personal care services and other needed support. They
can draw on this account only to pay for Medicaid approved services.
This is a client-directed service model where clients are trained to
recruit and monitor providers. Average service 40 costs are calculated
by the state and the state then determines the amount of funds that
would be allocated to clients to purchase their own services. Extensive
studies sponsored by the Robert Wood Johnson Foundation in New Jersey,
Arkansas, and Florida have demonstrated that the Cash and Counseling
model, where responsibility for the provider recruitment, approval and
payment process was transferred to clients resulted in decreased
Medicaid expenditures for the state in some cases. Studies also found
that client demand for service quality increased and that providers
were more responsive to client needs. The experience of the states that
have implemented these programs has been that the program is at least
cost neutral considering both waiver and other Medicaid expenditures.
Over time, any savings would be realized by encouraging and supporting
home and community based-services to avoid institutional long-term
care. It is also a positive move toward personal responsibility for the
number and cost of services to consumers. Recommendation 5.1a: HHSS
should develop a service delivery model of consumer directed home and
community based care. This service delivery model would improve
recipient satisfaction by giving them the opportunity to direct a cash
allowance to purchase home and community based services as an
alternative to nursing facility care. Strategy 5.1.a1: In SFY 2007,
HHSS will develop a pilot program of cash and counseling that will
identify specific services to be included. The targeted population
would include selected recipients with physical disabilities and high
cost service needs. Strategy 5.1.a2: HHSS will monitor the success of
the pilot program, including consumer satisfaction and cost
effectiveness. Successes and failures in other states will be studied.
HHSS will continue to analyze the appropriateness of cash and
counseling for additional services and populations in Nebraska and
expand the program as its benefits are demonstrated. F. FINDING 6:
Nebraska should encourage alternatives to Medicaid. 6.0 Alternatives to
Medicaid The Medicaid Reform Act also required the Medicaid designees
to consider alternatives to Medicaid that should also be pursued. Some
of those alternatives include the following. 41 6.1 Small Employer
Insurance Coverage In Nebraska, approximately 145,000 persons under the
age of 65 are uninsured. The uninsured are more likely to have low
incomes and to work for small employers. With the increasing costs of
employer-sponsored health insurance coverage, small employers are
having difficulty providing health insurance coverage to their
employees. In Nebraska, only 45% of private sector employers offer
health insurance to their employees, significantly below the national
average of 56%. This places Nebraska 47th among the 50 states and the
District of Columbia in the percent of private sector employers that
offer health insurance to their employees. In the private sector
establishments that offer health insurance to their employees, only 71%
of the employees are eligible for health insurance, significantly below
the national average. By size of firm, employers with 100-999 employees
have the lowest proportion of employees eligible for health insurance
(62%), significantly below the national average for employers of that
size (77%). The “take-up rate” for these employees
is only
76%, also significantly below the national average. The
“retail
and other services” industry grouping in Nebraska has the
lowest
proportion of employees eligible for health insurance (55%),
significantly below the national average of 64%.71 Where health
insurance coverage is available, the employee’s contribution
to
employer health plans in Nebraska exceeds the national average.
Recommendation 6.1a: We recommend that HHSS work with the State
Department of Insurance to explore the possibility of creating a
public/private partnership with small employers to offer insurance
coverage to employees. Strategy 6.1a1: In SFY 2007, HHSS and the
Department of Insurance will jointly create an advisory committee
consisting of small employers, employees, and insurers to identify ways
of improving the environment for affordable basic group health
insurance plans. The agencies will consider the cost impact of various
proposals on the general fund budget of the state. 6.2 Community Health
Centers Community Health Centers (CHCs) are an important part of the
primary health care network. CHCs can provide improved access to
primary and preventive care, discounted prescription drugs, behavioral
health care, and usually dental care for low income, Medicaid-eligible
and uninsured persons. They can be operated by local health departments
and non-profit organizations. Channeling persons without a medical home
into community health centers has been demonstrated to result in fewer
emergency room visits and less specialty and hospital care because
these persons receive timely clinical and preventive services. 42
Currently, in Nebraska, five community health centers are designated as
Federally Qualified Health Centers (FQHCs), including two in Omaha and
one each in Columbus, Gering, and Lincoln. Since they receive federal
funds, they are required to provide care to all persons, regardless of
an individual’s ability to pay or health insurance status.
FQHCs
receive cost-based reimbursement from Medicaid and collect some fees on
a sliding fee scale. The Iowa/Nebraska Primary Care Association has
estimated that the community health centers in Nebraska have saved the
state Medicaid program over $1.5 million a year. Recommendation 6.2a:
We recommend that HHSS establish a technical assistance committee to
work with local health providers, elected officials, and other
community leaders to establish community health centers, satellites of
existing community centers and, where possible, to help them qualify as
Federally Qualified Health Centers. Strategy 6.2a1: In SFY 2007, HHSS
will establish a technical assistance committee to promote the
establishment of community health centers and satellite operations. The
committee will consist of persons with experience in public health,
federal and state laws governing community health centers, financing,
funding and grant writing, and administration of community health
centers. The technical assistance committee will prepare materials to
facilitate the understanding and establishment of community health
centers and will work with appropriate delegations representing local
communities interested in establishing such centers. Efforts will be
made to encourage the establishment of comprehensive community health
centers and to coordinate their efforts with those of other public and
private health clinics, with licensed health professionals, and with
health care facilities. 6.3 Federal Discount Prescription Program
– “340B” The 340B program is a federal
program that
requires manufacturers to sell covered outpatient drugs at a lower cost
to certain “covered entities”. Covered entities
include
community health centers, Federally Qualified Health Centers (FQHCs)
and FQHC look- alikes, migrant health centers, urban Indian clinics,
and sexually transmitted disease clinics. Currently, the community
health centers in Nebraska are taking advantage of the 340B program,
but it is estimated four to six other eligible entities in Nebraska
could be taking advantage of the program and reduce the cost of
prescription drugs by 10 to 70 percent. As other community health
centers are established, they can become eligible to participate in the
program. Recommendation 6.3a: We recommend that HHSS encourage eligible
providers to participate in the federal 340B program to reduce the cost
of prescription drugs for low-income persons, including Medicaid
recipients. 43 Strategy 6.3a1: In SFY 2006, HHSS will identify entities
potentially eligible for but not currently enrolled in the 340B
program. HHSS will contact all such entities, provide them with any
needed information on the 340B program, encourage them to apply for the
program, and provide technical assistance in the preparation of the
application and the establishment of an effective 340B program. As new
entities are established, they also will be encouraged to apply for the
program. G. FINDING 7: Alternative Medicaid funding strategies are
possible sources of additional federal funds, but they must be employed
carefully to avoid holding state appropriations hostage to future
changes in federal policy. 7.0 Alternative Funding Strategies
Background The Medicaid Reform Act required the Medicaid designees to
consider alternatives to increase federal funding for services in order
to reduce dependence on state General Funds. Funding strategies
Nebraska has used in the past to maximize federal funds include:
intergovernmental transfers (IGTs), provider taxes, certified public
expenditures (CPEs), and certain disproportionate share hospital (DSH)
payments. These strategies, which are regulated by the federal Centers
for Medicare and Medicaid Services (CMS), rely on sources other than a
direct state General Fund appropriation to the Medicaid program to
satisfy the required non-federal share of the Medicaid match.
Establishing alternative funding programs can be complex. CMS examines
all such proposals carefully, whether they are established under a
state plan amendment or a waiver. There are stringent auditing
requirements that must be met. Several organizations have indicated
that they were researching the possibility of establishing a provider
tax for nursing facilities and for hospitals or certified public
expenditures. No formal proposals have been submitted to the designees
for review at this time. Any proposal involving Medicaid funding
strategies must be reviewed prudently. First, we must determine whether
the proposal will require an increase in general funds to support it.
Next, we must consider the effect of a cutback in future federal
funding as a result of a change in federal policy. The proposals need
to be constructed in such a way that a change in federal policy will
not require increased general fund expenditures to replace the federal
funds. 44 Intergovernmental Transfers Intergovernmental transfers
(IGTs) involve the transfer of funds from one level of government to
another to qualify for additional federal funds. CMS was originally a
strong supporter of the IGT program, but has recently withdrawn its
endorsement of these kinds of arrangements. Nebraska, along with many
other states, is now phasing out its operation. Provider Taxes Provider
taxes involve the levying of a state tax on an entire category of
health care providers as a method to generate revenue. The tax must be
applied uniformly to all providers in the category, but providers may
be reimbursed for the portion of the tax allocated to Medicaid clients
if their reimbursement is cost-based. Nebraska currently applies a 6%
net revenue tax to ICF-MR providers, whose clients are largely Medicaid
eligible. The Medicaid-related portion of the tax expense is paid back
to the facilities as an allowable cost of doing business, and the
reimbursement of this expense draws 60% federal funding. A portion of
the tax proceeds is then freed up for other funding uses.
Nebraska’s provider tax generates $3.5 million in tax revenue
annually. The Legislature directed that the net proceeds of the tax,
after the Medicaid share of the tax expense has been paid back to the
providers, be used to support increased payments to non-state- operated
ICF-MR providers and to community-based programs for persons with
developmental disabilities. An additional $1.4 million of the revenue
earned is transferred to the state General Fund. The Legislature
previously authorized a provider tax on managed care providers, but
because Nebraska lacks a broad-based industry to tax, it has not been
able to meet the requirements for implementation. CMS established a 6%
maximum on provider tax arrangements, and a number of states have used
this mechanism. As a part of federal Medicaid reform, the federal
administration has proposed lowering this maximum to 3%. Therefore, the
implementation of new provider taxes, in excess of 3%, runs the risk of
disapproval or being short-lived. Certified Public Expenditures (CPEs)
Certified public expenditures (CPEs) use public funds provided through
a public entity other than the Medicaid agency to satisfy state
(non-federal) matching requirements to leverage federal funds. Other
state agencies or local public entities incur a Medicaid-eligible
expense and provide the public funds for the required non-federal
match. The Medicaid Agency then includes the expense on federal claims
and passes the federal matching share through to the certifying entity.
Nebraska has utilized this mechanism to provide federal fund support
for Medicaid-related activities carried out at the local level (e.g.,
public health nurses in local health departments, Medicaid services
provided in public schools, city- or county-owned nursing facilities
serving Medicaid residents). CPE also is used to pull in federal
funding for state obligations that would otherwise be financed
primarily with state dollars. The Behavioral Health Reform project has
reduced the need for additional state funding by substituting use of
Medicaid-covered community-based services for state regional center
institutional care. State Regional Centers qualify for very 45 limited
Medicaid funding. This strategy allows the state to provide a wider
variety of less intensive and less expensive services without
increasing the level of appropriated General Funds. Developmental
Disability services that had been funded with only state General Funds
have also been moved to Medicaid-covered community services for those
persons eligible for Medicaid. Together with increased state General
Fund appropriations over a period of years, the leveraging of federal
Medicaid matching funds have enabled the state to serve a larger
population of persons with developmental disabilities than would have
been possible with state funding alone. Recommendation7.0a: We
recommend that HHSS carefully study possible ways to leverage federal
funds without increasing the burden on the state general fund. Strategy
7.0a1: In SFY2006, HHSS will review any proposals for leveraging
federal funds to determine their legality and feasibility. Any proposal
that increases the expenditure of state general funds will be rejected.
The proposal must also contain an exit strategy that will provide for
the eventuality of a change in federal policy that limits or eliminates
the strategy. Legislation and a state plan amendment would be required
to implement any provider taxes. Strategy 7.0a2: In SFY2007 and future
years, HHSS will review opportunities to leverage federal funds as they
arise and may employ a consultant to assist. V. Projected Cost Savings
from Recommendations The Medicaid Reform Plans recommendations are
intended to moderate the growth of Medicaid in Nebraska and to reduce
the amount of additional state dollars that are currently projected to
be needed. Each recommendation was analyzed to determine the effect the
proposed reform would have on current eligible populations and current
expenditures. Historical paid claims and eligibility data from
Nebraska’s MMIS were used whenever possible. The Internet was
also used to research proposed reforms that have been patterned after
existing programs in other states. Using this information, estimated
savings were calculated based on the current Medicaid program.
Estimated savings were estimated for future years using the same
methodology used to project Medicaid expenditures over the next 20
years72 This methodology incorporates demographic changes in the
population and projected medical inflation. In order to estimate the
cost associated with the proposal, assumptions were made about how the
reform would be implemented. These estimated costs were subtracted from
the estimated savings to report net savings. It is anticipated that the
first full year of implementation for many of the recommended Medicaid
reforms will be SFY 2008. Many of the recommended reforms will have
up-front costs, particularly in the early years. Below (Table 4) are
the estimated net savings to the Medicaid program for SFY 2008, SFY
2015 and SFY 2025. 46 Table 4 Estimated Net Savings for SFY 2008, SFY
2015 and SFY 2025 Estimated Net Savings Recommendation SFY 2008 SFY
2015 SFY 2025 Partial-month eligibility for first month $797,000
$1,186,000 $2,606,000 Cap on optional services 1,742,000 2,914,000
5,856,000 Separate state SCHIP program 0 10,080,000 10,766,000 Parents
of children in special waiver programs be required to contribute to the
costs of Medicaid 5,159,000 6,182,000 7,803,000 Mental health drug
initiative 1,360,000 2,929,000 8,395,000 Prior authorization for new
brand name drugs 1,113,000 1,932,000 4,250,000 Reduction of nursing
facility utilization/ expansion of HCBS waiver slots 41,066,000
121,641,000 437,972,000 Savings from new rate structure for NF and
ICF-MR 3,256,000 4,582,000 7,563,000 Enhanced Care Connection Plan
12,900,000 20,714,000 40,747,000 Enhanced Home Visitation Program
4,333,000 7,498,000 16,414,000 Expansion of CHCs/FQHCs 1,111,000
1,830,000 3,801,000 Total $72,837,000 $181,488,000 $546,173,000
Estimated General Fund Reduction $30,781,000 $74,298,000 $219,902,000
Benchmark General Fund Reduction $37,645,000 $205,745,000 $785,099,000
These projected expenditures provide a benchmark by which the State can
monitor the progress of Medicaid reform. 47 IV. Appendices Page
Appendix A: Written Recommendations Received From External
Organizations....... Appendix B: Medicaid Reform
Meetings/Presentations................................................
Appendix C: HHSS Medicaid Reform Work Group
Recommendations....................... Appendix D: Medicaid Public
Input Meetings and Legislative Public Forums............. Appendix E:
Glossary of Medicaid Related
Terms........................................................ 49 63 65
68 71 48 Appendix A Written Recommendations Received from External
Organizations as of November 15, 2005 Source Subject Recommendation
Nebraska Medical Association (NMA) Long Term Care Pharmacy Prevention/
Education Chronic Illness Cost Containment (1) Nursing Facilities/HCBS
Waiver Services – support for community services, which allow
the
elderly to remain at home or in assisted living arrangements should
help keep these costs down. Monitoring these programs for cost
effectiveness will be important. (2) Support for a long-term care
insurance program which is simple and affordable could make a
significant impact in these costs in the future. Coverage for even two
years of care would have a significant impact if a large percentage of
people were covered. (3) A restricted formulary with generic drugs
should be evaluated. Most of the time generic drugs are as effective
and safe as branded products. (4) A low-hassle way to obtain a branded
drug when clearly needed should be part of this program. (5) Many of
the costly drugs are for psychiatric problems. A recent FDA advisory
suggests that older antipsychotic drugs are safer than some of the new
drugs b