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REFORM- State senator suggests new health system with Medicaid block grants to local governments

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[MM Curator Summary]: A KY legislator has introduced a block grant approach for Medicaid.



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It’s time to invent a new health care delivery system in Kentucky, and it should be driven by health-care providers, state Sen. Stephen Meredith, of Leitchfield, said in the keynote address at the Foundation for a Healthy Kentucky’s 2023 Howard L Bost Memorial Health Policy Forum, held Oct. 11 in Lexington. 

Before making this assertion, Meredith pointed to a quote attributed to Abraham Lincoln and Peter Drucker: “The best way to predict the future is to create it.” Then he said, “Let’s do that. Let’s create a new health-care delivery system.” 

The address was titled “How Do You Fix an Irretrievably Broken Health-Care System?”

Meredith spent decades as a leader in health-care administration before being elected to the Senate in 2016. When he retired as boss of Twin Lakes Regional Medical Center, now a subsidiary of Owensboro Health, it was one of the four financially strongest hospitals with under 100 beds in Kentucky. He was also CEO of the Grayson County Hospital Foundation, which employed most of the local medical practitioners and managed their practices.

Meredith, a Republican, is chair of the Senate’s Health Services Committee, co-chair of the Government Contract Review Committee, and a member of other committees, including the recently formed Family and Children Committee.

“He knows the challenges facing our health-care delivery system, because he’s seen them firsthand,” Ben Chandler, CEO president of the foundation, said in introducing him. 

Meredith opened his address by listing several known challenges with the existing health-care system, including the “astronomical” cost of care that has resulted in the average person no longer being able to afford it. 

He also called the “mass” of health-care professionals who are leaving the system “alarming” and called one of the largest insurance companies in the U.S. making a profit of $86.4 billion in the last year one of the “most damning indictments of our current health-care delivery system. “

He noted that the U.S. is spending $1.2 trillion on health care, but has some of the worst health outcomes. 

“The problem is, we know what the issues are; we don’t act on the issues,” Meredith said. 

He went on to point out that the state’s move to a managed-care program for Medicaid has been in place since 2012, “and we have not improved the health of our population.” Further, he said the state Medicaid budget was $10 billion to serve 1.3 million people, and that is as large as it should ever be. 

“In inventing a new health-care delivery system in the future, we all have to agree and acknowledge,  there’s enough money already in the health-care delivery system to take care of every man, woman and child in this country if we spend it the right way,” he said.  

Further, he said, “If we’re truly improving the health of the population and we are getting people back to gainful employment, we should have enough money to take care of everyone.” 

To do this, he said we must have a clear mission and vision for how to fix the system. 

“If we’re all united in this, it’s quite simple,” he said. “We’re here to cure the sick, to help relieve pain and suffering, to give comfort to the dying and improve the quality of life for the people we serve. If we’re all united in that, doesn’t that move us in one direction.

“And one thing I haven’t mentioned is, it doesn’t say anywhere in there to make a profit. Now, I’m a capitalist to the nth degree, and I believe in making a profit. But it’s when you bring value to the system. You increase efficiencies, and you do it a better way. And we’re not doing that.” 

He said changes should be made on the local level by moving to a Medicaid block grant program, which would allow local governments to determine how Medicaid dollars are spent, with an incentive to save money for other local purposes.

“If you improve the health of population, whatever savings you achieve, you get to keep to improve your community,” he said. “If you want to invest in your school system, you want to invest in the infrastructure, you want to invest in broadband, it’s yours to keep.” 

Meredith said the main reason we don’t do such things is fear: “People don’t like risk. Fear keeps us from doing what we need to do.”

Melissa Patrick

Author at Kentucky Health News

Melissa Patrick is a reporter for Kentucky Health News, an independent news service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Media at the University of Kentucky, with support from the Foundation for a Healthy Kentucky. She has received several competitive fellowships, including the 2016-17 Nursing and Health Care Workforce Media Fellow of the Center for Health, Media & Policy, which allowed her to focus on and write about nursing workforce issues in Kentucky; and the year-long Association of Health Care Journalists 2017-18 Regional Health Journalism Program fellowship. She is a former registered nurse and holds degrees in journalism and community leadership and development from UK.

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REFORM (CA)- Health Care ‘Game-Changer’? Feds Boost Care for Homeless Americans

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: CMS approved new billing codes for “street medicine” for states wanting to deliver more care to homeless Medicaid members.



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Nurse Anna Cummings prepares an injection while Keri Weinstock, a psychiatric nurse practitioner, speaks with patient Linda Wood, who is homeless. Earlier this month, the federal government began allowing insurers to pay for care delivered outside hospitals and clinics, expanding funding for street medicine teams that treat homeless patients. (Angela Hart/KFF Health News)

The Biden administration is making it easier for doctors and nurses to treat homeless people wherever they find them, from creekside encampments to freeway underpasses, marking a fundamental shift in how — and where — health care is delivered.

Starting Oct. 1, the Centers for Medicare & Medicaid Services began allowing public and private insurers to pay “street medicine” providers for medical services they deliver anyplace homeless people might be staying.

Previously, these providers weren’t getting paid by most Medicaid programs, which serve low-income people, because the services weren’t delivered in traditional medical facilities, such as hospitals and clinics.

The change comes in response to the swelling number of homeless people across the country, and the skyrocketing number of people who need intensive addiction and mental health treatment — in addition to medical care for wounds, pregnancy, and chronic diseases like diabetes.

“It’s a game-changer. Before, this was really all done on a volunteer basis,” said Valerie Arkoosh, secretary of Pennsylvania’s Department of Human Services, which spearheaded a similar state-based billing change in July. “We are so excited. Instead of a doctor’s office, routine medical treatments and preventive care can now be done wherever unhoused people are.”

California led the nation when its state Medicaid director in late 2021 approved a new statewide billing mechanism for treating homeless people in the field, whether outdoors or indoors in a shelter or hotel. “Street medicine providers are our trusted partners on the ground, so their services should be paid for,” Jacey Cooper told California Healthline.

Hawaii and Pennsylvania followed. And while street medicine teams already operate in cities like Boston and Fort Worth, Texas, the new government reimbursement rule will allow more health care providers and states to provide the services.

“It’s a bombshell,” said Dave Lettrich, executive director of the Pittsburgh-based nonprofit Bridge to the Mountains, which provides outreach services to street medicine teams in Pennsylvania. “Before, you could provide extensive primary care and even some specialty care under a bridge, but you couldn’t bill for it.”

Under the new rule, doctors, nurses, and other providers can get reimbursed to care for patients in a “non-permanent location on the street or found environment,” making it the first time the federal government has recognized the streets as a legitimate place to provide health care. This will primarily affect low-income, disabled, and older people on Medicaid and Medicare.

“The Biden-Harris Administration has been focused on expanding access to health care across the country,” said CMS spokesperson Sara Lonardo, explaining that federal officials created a new reimbursement code at the request of street medicine providers who weren’t consistently getting reimbursed.

The White House unveiled an ambitious strategy earlier this year to reduce homelessness in America 25% by 2025, in part by plowing health care money into better care for those living on the streets.

Legislation pending in Congress would further expand reimbursement for street medicine, taking aim at the mental health and addiction crisis on the streets. The bipartisan bill, introduced earlier this year, has not yet had a committee hearing.


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Nearly 600,000 people are homeless in America, based on federal estimates from 2022, and on average they die younger than those who have stable housing. The life expectancy for homeless people is 48, compared with the overall life expectancy of 76 years in the U.S.

More than 150 street medicine programs operate across the country, according to street medicine experts. At least 50 are in California, up from 25 in 2022, said Brett Feldman, director of street medicine at the University of Southern California’s Keck School of Medicine.

Feldman spearheaded the state and national efforts to help street medicine providers get paid, alongside the Street Medicine Institute. They submitted a formal request to the Biden administration in January 2022 to ask for a new street medicine billing code.

In the letter, they argued that street medicine saves lives — and money.

“This is done via walking rounds with backpacks, usually working out of a pick-up truck or car, but is also done via horseback, kayak, or any other means to reach hard-to-reach people,” they wrote. “The balance of power is shifted to the patient, with them as the lead of their medical team.”

Street medicine experts argue that by dramatically expanding primary and specialty care on the streets, they can interrupt the cycle of homelessness and reduce costly ambulance rides, hospitalizations, and repeated trips to the emergency room. Street medicine could help California save 300,000 ER trips annually, Feldman projected, based on Medicaid data. Some street medicine teams are even placing people into permanent housing.

Arkoosh said there’s already interest bubbling up across Pennsylvania to expand street medicine because of the federal change. In Hawaii, teams are plotting to go into remote encampments, some in rainforests, to expand primary and behavioral health care.

“We’re seeing a lot of substance abuse and mental health issues and a lot of chronic diseases like HIV,” said Heather Lusk, executive director of the Hawai’i Health & Harm Reduction Center, which provides street medicine services. “We’re hoping this can help people transition from the streets into permanent housing.”

But the federal change, undertaken quietly by the Biden administration, needs a major public messaging campaign to get other states on board and to entice more providers to participate, said Jim Withers, a longtime street medicine provider in Pittsburgh who founded the Street Medicine Institute.

“This is just the beginning, and it’s a wake-up call because so many people are left out of health care,” he said.

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REFORM (VT)- Vermont officials seek Medicaid benefits for incarcerated people, but federal approval could be a long time coming

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: VT’s submission of its “Global Commitment to Health” waiver adds it to the list of 14 states trying to get federal funding to turn Medicaid on before inmates re-enter society.



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A hospital bed in the infirmary unit of Southern State Correctional Facility in December 2016. File photo by Phoebe Sheehan/VTDigger

Incarcerated people have long been ineligible for Medicaid. When the federally funded health care program began in 1965, it expressly excluded “inmate(s) of a public institution” from coverage.

In Vermont and other states, officials are now embarking on a potentially arduous, yearslong process to change that — by seeking a waiver from the federal government that would allow Medicaid coverage to kick in for people in their final 90 days of incarceration. 

Prison officials and reform advocates alike say the Medicaid exclusion sometimes leads to a gap in health care coverage when people are released from prison — a vulnerable period during which they are anywhere from 10 to more than 100 times more likely than their peers to die of a drug overdose. 

“We’re very much living today with the policy decision made in the mid-1960s,” said Isaac Dayno, policy director for Vermont’s Department of Corrections. “It’s an issue that really doesn’t get enough attention.”

There’s also a potentially sizable financial benefit for the state. Vermont currently pays about $33 million per year to a private prison health contractor, Wellpath. According to 2015 data, the most recent year for which national comparisons exist, Vermont spent the second most per capita on prison health care, a Pew study found. 

Allowing Medicaid to cover incarcerated people’s medical expenses would transfer some of the financial burden of prison health care to the federal government, which, according to Dayno, could be a “paradigmatic shift.”

‘Our system is just really clunky’

While states are barred, with few exceptions, from billing Medicaid for prison health care costs, they have the option of suspending, rather than terminating, a person’s Medicaid eligibility when they enter prison. 

In theory, suspension eliminates a mountain of paperwork for people exiting prison by allowing them to access Medicaid coverage with the push of a button.

Vermont, however, lacks the IT infrastructure needed to simply suspend Medicaid eligibility.

And in practice, how — or whether — someone loses eligibility in the state is haphazard. 

More than 30% of Vermont’s prison population are people who have been detained as their cases move through the courts, rather than convicted and sentenced, state data shows. Those individuals can have their Medicaid benefits terminated even if they enter the prison system for a short time and are quickly released while awaiting trial. 

Termination may occur when a person or their family member reports they are incarcerated or when a regular check of Medicaid eligibility determines that a person is incarcerated. The corrections department, according to its health team, does not notify the Department of Vermont Health Access — the state agency responsible for Medicaid enrollment —  to “turn off” a person’s Medicaid.

When an incarcerated person approaches their release date, the Department of Corrections contacts the Department of Vermont Health Access to prepare for Medicaid enrollment, officials said.

But with unpredictable release dates, a decades-old computer system and the inevitable mistakes of a human-powered bureaucracy, eligible people sometimes exit incarceration without being enrolled in Medicaid. 

“We are not blind to a lot of the issues people face as they exit incarceration,” Dayno said. He said the process is “more seamless” in states that suspend, rather than terminate, enrollment. 

Ashley Berliner, who leads Vermont’s Medicaid policy development within the Agency of Human Services, said the state works hard to ensure people exiting state custody have coverage, using an expedited enrollment process once someone is scheduled for release.

“Our system is just really clunky,” she said, adding that enrollment is a “pretty manual process.”

Berliner called eligibility suspension the “gold standard” but said Vermont’s system “is just not capable of that functionality.”

The state is in the process of working to procure a new system. It has hired a technical advisory group and plans to release a request for proposals “for federal partner review” before the end of the year. 

‘Historically very little help’

Tim Burgess, who was previously incarcerated in Vermont and now leads the state’s chapter of Citizens United for the Rehabilitation of Errants, said he’s seen many people eligible for Medicaid leave prison without being enrolled.

“There has been historically very little help for people to transition out of the system so they do have medical coverage,” he said.

Because incarcerated people receive health care in prison, they often wrongly expect a continuity of coverage upon release, Burgess said. 

Without health coverage, recently released people may accumulate medical debt or be unable to access care, including medically assisted opioid treatment, he said, adding that Medicaid can act as a safety net and even prevent recidivism.

Burgess said he supports the variety of efforts underway to enroll incarcerated people in Medicaid, whether that means allowing coverage in the months leading up to release or ensuring reenrollment when a person returns to the community.

Will Hunter, a Windsor County advocate who rents apartments to recently incarcerated people, said their experiences with Medicaid have varied widely. 

“It does not happen automatically that the (corrections) caseworker gets a (Medicaid) application in before the person walks out the door,” he said.

Sometimes people he works with have left prison with Medicaid, Hunter said. In one instance, a former tenant on Medicaid who became incarcerated continued to have prescriptions sent to one of Hunter’s properties even while in custody. 

For people who are released without health care coverage, Hunter said he’s had good luck getting people enrolled in Medicaid over the phone, a process that can take as little as 10 to 20 minutes. That contrasts his experience with mailed applications, which he said have sometimes disappeared into a bureaucratic “black hole.”

As for Vermont’s IT struggles, Hunter felt the state shouldn’t so quickly explain away its own dysfunction.

“There’s an old saying,” he said. “A poor workman blames his tools.”

‘Back to the drawing board’  

Corrections departments nationwide support efforts to bring Medicaid into the prison system, according to Dayno — at least in part because of the potential for financial savings.

And in Congress, a bipartisan group of federal lawmakers, including U.S. Sen. Peter Welch, D-Vt., and U.S. Rep. Becca Balint, D-Vt., have thrown their support behind legislation known as the Reentry Act, which proposes restarting Medicaid benefits 30 days prior to release for people who are otherwise eligible. This would help create “uninterrupted and comprehensive coverage” upon release, according to a white paper on the bill. 

Welch called the Reentry Act a common sense way to strengthen communities, particularly amid the rise of overdose deaths

“This bill is designed to limit gaps in health care coverage for eligible people about to reenter society and has broad, bipartisan support,” he said in a statement. 

Introduced in both the House and Senate this year, the bill currently sits in committee. Rather than wait for Congress to act, some states are pursuing a different route to ensure people leave prison with health insurance. 

The federal government allows states to pursue experimental and innovative projects that would not typically be covered by Medicaid through a waiver process. Vermont’s approved waiver is the 279-page “Global Commitment to Health.”

In January, California became the first state to receive federal approval to use its waiver to cover some health expenses for incarcerated people up to 90 days prior to their scheduled release. 

Vermont is among 14 states currently seeking similar approval, according to the Kaiser Family Foundation. 

According to Berliner, the Centers for Medicare and Medicaid Services — the federal organization that administers both programs — wanted to first negotiate California’s waiver before turning to the other states seeking similar coverage of incarcerated individuals. 

Based on the Centers for Medicare and Medicaid Services’ approval of California’s waiver, Vermont officials realized “we would have to come back to the drawing board and really do some planning and design work before we went to have conversations with CMS,” Berliner said.

Vermont could receive waiver approval in 2025, according to Berliner. The state has its work cut out in the meantime, such as updating its IT system to accommodate some of the federal requirements placed on California and conforming its proposal to the strictures the Centers for Medicare and Medicaid Services have already approved elsewhere.

“Right now is a really interesting time in the Medicaid space,” Berliner said. “This is the first time that states are really able to start thinking about how Medicaid can be leveraged inside the walls of a correctional facility.”

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MH/BH- Report Shows Discrepancies in MOUD Utilization Among Medicaid Enrollees

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[MM Curator Summary]: About 500,000 Medicaid members who needed meds to help with their substance use disorder did not get it.



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About one-third of the 1.5 million Medicaid enrollees with opioid use disorder (OUD) in 2021 did not receive medication for opioid use disorder treatment (commonly known as MOUD), and certain demographic groups were even less likely to receive MOUD, according to a recent report from the Department of Health and Human Services (HHS) Office of Inspector General.

“Access to MOUD is crucial to reduce overdose mortality and improve the quality of life of people with opioid use disorder,” the report’s authors wrote. “Medicaid is uniquely positioned to achieve these goals given that the program is estimated to cover almost 40% of nonelderly adults with opioid use disorder.

“Although CMS (Centers for Medicare and Medicaid Services) and states have taken several steps in recent years to increase MOUD access in Medicaid, our findings demonstrate that a significant number of enrollees with opioid use disorder may not be receiving this life-saving treatment.”

The findings were based on Medicaid and Medicare claims data to determine the extent to which Medicaid enrollees with OUD received MOUD in 2021. Medicaid enrollment and eligibility data were also examined to determine variances in treatment rates among demographic groups.

In 2021, about two-thirds of Medicaid enrollees with opioid use disorder received MOUD that year, either through Medicaid or, for some dually eligible enrollees, through Medicare. Buprenorphine was the most commonly administered medication (647,832 enrollees), followed by methadone (355,024), and naltrexone (69,001).

Meanwhile, more than 510,000 eligible enrollees with OUD did not receive MOUD through Medicaid or Medicare. Researchers noted that it is possible some of the enrollees in this group may have received medication treatment through self-pay or other sources or it was determined that MOUD was not an appropriate treatment for their circumstances. Still, the authors noted, their findings suggest that more effort is needed to improve access to treatment through Medicaid for all those who are eligible and in need of services.

Demographic Discrepancies

The OIG report showed that people of color and those with a disability and/or blindness were less likely to receive MOUD. Based on data from 15 states with reliable race/ethnicity data, just 53% of Black or African American enrollees with OUD received medication treatment. Other groups, including Asians, Native Hawaiian or other Pacific Islanders, and American Indians or Alaska Natives, also had lower-than-average utilization rates.

Meanwhile, 56% of enrollees with a disability and/or blindness received MOUD compared to 67% of those without.

Utilization rates also varied widely by state. For example, while just 37% of Medicaid enrollees with OUD in Illinois received MOUD, the rate was 89% for enrollees in Rhode Island. Ten states were found to have utilization rates below 50%.

Action Items

OIG concluded its report by recommending that CMS should help states—especially those with low rates of MOUD use— identify and reduce barriers to treatment by providing technical assistance, collaborative learning opportunities, webinars, toolkits, and other resources. Efforts should also be made to increase the number of states with valid and complete race and ethnicity data.

The authors also recommended that states and federal partners dedicate resources to educating Medicaid and Children’s Health Insurance Program (CHIP) enrollees about access to MOUD, including in office-based settings.



Many Medicaid Enrollees with Opioid Use Disorder Were Treated with Medication; However, Disparities Present Concerns. Department of Health and Human Services Office of Inspector General; 2023.

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OP-ED (FWA)-Medicaid’s Dark Money

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[MM Curator Summary]: This guy says the quiet parts out loud. Like all of them. Real loud.



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How states launder funds to evade program rules

A bipartisan group of 51 senators recently called for Congress to cancel an impending $8 billion cut to federal Medicaid allotments for “uncompensated” hospital care. No limit currently exists on the federal matching funds that states can claim to provide Medicaid benefits to eligible beneficiaries. The $8 billion cut would only trim the degree to which states can steer Medicaid funds away from the program’s covered benefits—often for purposes which Congress has specifically prohibited.

When Congress enacted Medicare in 1965 to provide health care for elderly Americans, it also established Medicaid, which gives states funds to provide health care to low-income Americans. For every $1 that states spent on health care for most eligible beneficiaries, the federal government gave them between $1 and $3—an enormously generous proposition, which all states were eager to exploit.

The federal government initially allowed hospitals to claim repayment for whatever broadly defined costs they incurred treating Medicare and Medicaid beneficiaries. Expenses surged. In the early 1980s, Congress responded by establishing specific Medicare fees for each hospital procedure and allowed states to set their own fees for hospitals to treat Medicaid patients.

Hospitals in low-income neighborhoods serving mostly Medicaid or uninsured patients struggled to cover their overhead costs by using revenues from privately insured patients, so Congress allowed states to claim additional federal matching funds as a lump sum to subsidize such “Disproportionate Share Hospitals” (DSH). In the early 1990s, states realized that the absence of a direct link between the ability to obtain matching funds and the obligation to deliver services gave them an opportunity to claim a windfall in federal funds. States would artificially inflate DSH costs by imposing taxes on hospitals, which would receive kickbacks for participating in the scam. DSH spending surged from $1 billion in 1990 to $17 billion in 1992, before Congress capped the funds that each state could claim. This entrenched an essentially arbitrary distribution of federal aid: in 2023, New Hampshire received $2,123 in DSH grants per poor resident; Wyoming, only $4.

After DSH allotments were capped, a similar supplemental supplemental-payment scheme was soon devised, whereby states that set base Medicaid fees for hospitals below Medicare rates could claim the difference as lump-sum grants. These “upper payment limit” federal funds could then be distributed to select hospitals to use for discretionary purposes, rather than in return for specific Medicaid-covered services. Hospitals then complained that they were underpaid for Medicaid patients—justifying additional subsidies.

Federal law allows states to finance up to 60 percent of their contribution to Medicaid from local government funds. As there is a constant flow of intergovernmental transfers between states, cities, and counties for various purposes, publicly owned hospitals are well suited to exploiting these rules by manipulating funding streams. Hospitals in New York, for example, receive more in Medicaid supplemental payments than those in any other state, and New York City’s municipal Health + Hospitals system has become particularly dependent on them. Medicaid supplemental payments accounted for 31 percent of all H+H revenues in 2016—a big deal for a system operating at an 8 percent loss.

Health + Hospitals runs 11 acute-care hospitals and 70 Community Health Centers, with a mission of delivering care to the city’s underserved and uninsured “regardless of race, immigration status, or ability to pay.” It treats 15 percent of Manhattan’s hospitalized patients but 72 percent of its uninsured. H+H delivers few lucrative surgical procedures to privately insured patients but provides the bulk of treatment for substance-abuse and psychiatric disorders.

H+H also uses its discretionary funds for an array of activities, ranging from “faith based initiatives” and “plant-based medicine” to after-school programs and housing aid, in an attempt to promote wellness and healthy living. Though federal law prohibits states from extending Medicaid benefits to even recent legal immigrants, supplemental payments have allowed H+H to deliver free health-care services to New York City’s half-million illegal immigrants. The city also uses H+H to fund health care for its jail inmates and prison staff—neither of whom are eligible for Medicaid.

Despite its supposed rationale, the bulk of Medicaid supplemental payments do not go to facilities serving low-income communities. Forty-three percent of all hospitals nationwide received DSH funds in 2017. In fact, a 2016 U.S. Government Accountability Office report concluded that “the bulk of supplemental payments to hospitals were made contingent on these hospitals or the relevant local government providing funds to finance the nonfederal share of the payments the hospitals received, rather than Medicaid services they provided.”

The 2010 Affordable Care Act sought to offset part of the cost of its insurance subsidy expansion by slashing DSH allotments. These cuts were to be concentrated on states with relatively high DSH expenditures, few uninsured residents, and weak targeting of funds at institutions providing uncompensated care—conditions that placed New York hospitals in the crosshairs for a $1.4 billion (66 percent) cut.

But Congress has repeatedly postponed the scheduled DSH cuts with broad bipartisan support, under the pretext that the ACA failed to reduce the number of uninsured as intended—with Republican legislators pointing to red states that had opted against expanding Medicaid, and Democrats eager to preserve grants that mostly went to blue states.

The hospital industry, which spent $125 million lobbying last year, has been eager to portray reduced DSH allotments as cuts to services. But in reality, the cuts would simply lead states to reallocate their DSH contributions to Medicaid base payments, which are not capped. Nothing prevents states from continuing to draw federal matching funds in return for state funds currently used for DSH, so long as they are used to pay for covered benefits.

The main consequence of allowing the scheduled cuts to take effect would therefore be to ensure that a larger proportion of Medicaid funds is reserved for eligible low-income beneficiaries, gets distributed to facilities serving such beneficiaries in a traceable manner, and is provided in return for delivering care for which the facilities can be held accountable. Medicaid dollars should be kept for Medicaid benefits, not diverted into a slush fund for states.

Chris Pope is a senior fellow at the Manhattan Institute.

Photo: clubfoot/iStock

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PHE- Got Insurance? You May Be on Medicaid Too

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[MM Curator Summary]: There may be 5M people who have insurance from their job- but are being used by MCOs to bill Medicaid cap rates.



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Thanks to pandemic-era policies, taxpayers foot the bill for some five million people who have enrolled in employer plans.


American taxpayers have been sending more than $6 billion a month to insurance companies for services provided under Medicaid to people who are ineligible—often because they’re enrolled in a private health plan. The Biden administration is pushing the boundaries of law and credulity by pressuring states to continue making these payments to insurers.

Medicaid is a joint federal-state welfare program originally intended to finance healthcare for the needy, but it has expanded significantly in recent decades. Federal Covid-19 policies caused enrollment to surge by about 20 million as states stopped reviewing enrollees’ eligibility when the pandemic hit. Many enrollees are now ineligible. They now make too much money, have access to employer coverage, have moved out of state or have died. They should be removed from Medicaid.

As states begin eligibility redeterminations and removals of ineligible enrollees, left-leaning media is attempting to delegitimize these state efforts by claiming anyone who is disenrolled for failing to respond to a renewal application is having his coverage taken away for “procedural” reasons. This is misleading, even deceitful.

Someone who is ineligible because he has other coverage or income well above eligibility thresholds is unlikely to make the effort to return a renewal application. This includes roughly five million people now dually enrolled in an employer plan and Medicaid, as per the Congressional Budget Office. Most of the incentives in the system are biased toward continued enrollment, particularly those for insurers, which want to maintain enrollment to keep the checks from the government flowing.

No one wants eligible Medicaid enrollees to lose coverage. But if they do, they’re still effectively covered. Medicaid-eligible recipients can go to the hospital, enroll on site when they need services and have the government pay expenses incurred, typically for the previous three months too.

The common characteristic of Medicaid enrollees is low income. But low incomes are often temporary as people gain new or improved employment, which leads to health insurance benefits and higher wages. Thus, frequent eligibility reviews are important.

During the pandemic, Congress was concerned that people would lose their jobs and health insurance and that states would need money to cope with the economic shutdowns. In March 2020, Congress passed legislation that offered states additional federal money if they refrained from taking steps to remove ineligible Medicaid enrollees from the program during the public-health emergency.

The Biden administration dragged out the emergency and the removal ban, despite an improved economy. Meantime, the number of ineligible Medicaid enrollees rose each month. In December 2022, Congress forced the administration’s hand by enacting legislation that phases out the extra federal money and permitted states to begin removing ineligible Medicaid enrollees in April. (President Biden finally ended the public-health emergency in May.)

The Urban Institute estimated that 18 million ineligible enrollees were in Medicaid in April. Most were in households that were temporarily poor during the pandemic while many businesses were shuttered and unemployment spiked. Most of the 18 million ineligible enrollees will likely enroll in an employer plan after they are removed from Medicaid. Most of the rest will enroll in a different government subsidized plan.

States have taken different approaches to Medicaid redeterminations. Some started earlier and focused on people most likely to be ineligible. Others started slowly. As a result, there is wide variation in disenrollment rates across reporting states. But all states have made efforts to update enrollees’ information and to use different methods to contact them. So far, more than four million people have been removed from Medicaid since April.

Removing people from welfare who aren’t eligible or who don’t provide evidence of eligibility after years without scrutiny is prudent governance. Spending on ineligible Medicaid enrollees means less state money for eligible enrollees and for other priorities, such as education. It also means higher federal deficits. The country can’t afford a permanent Medicaid Covid expansion, and the program is already too large to serve those who are eligible. It’s vital for the country that states return the program as quickly as possible to only those who are eligible.

Mr. Blase, who served as a special assistant to President Trump at the National Economic Council, is president of Paragon Health Institute.

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STATE NEWS (CA)- This is reform? California wants to let its billionaires go on Medicaid

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[MM Curator Summary]: There are very few limits on the wealth you can have and still get on Medicaid in CA if you are over 65.


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Politicians and investigative journalists have long complained about the billionaires that have no taxable income and pay no taxes despite their wealth. In response, politicians have advanced many constitutionally dubious proposals to tax wealth on grounds of equity and fairness.

It is odd, then, that there has been so little attention paid or protest given to the pending proposal in California — phase II of its 2021 reform — to strike all asset testing for those above age 65 in determining eligibility for long-term care benefits from Medicaid.

Lest anyone dismiss this as another crazy California idea that will never be enacted, like universal state government health insurance and racial reparations, this Medicaid expansion proposal is well on its way to approval, part of a series of incremental steps over the last several years that have already loosened Medicaid eligibility standards.

And this one offers a dangerous precedent for other states. Because Medicaid is jointly financed by the federal government, at fifty cents on the dollar or more, non-California taxpayers, including many middle-income workers living in states with stricter Medicaid rules, will actually end up paying a huge chunk of this costly California policy’s billion-dollar annual price tag.

Medicaid was designed as a jointly financed federal-state program to provide health care for the poor. It also pays for nursing-home care and increasingly for home healthcare for individuals, especially the disabled and elderly who spend down their assets before becoming eligible. Eligibility for various types of long-term care benefits is determined by medical need and a set of income and asset tests, which differ by state and have changed over time, but are within a federal framework.

California has long played loose with eligibility, benefits and other rules, even beyond the allowable leniencies in federal law. For example, under “Phase I” of the state’s 2021 reform legislation, its asset-test maximum for Medicaid eligibility is $130,000 (compared to just $2,000 in most states) for individuals and $195,000 (compared to $3,000) for couples.

Also, the “look-back” period to identify and disallow strategic transfers of assets to gain Medicaid eligibility is only 30 months, whereas federal law calls for 60 months. California’s look-back also does not apply if the applicant is not in a nursing home at the time of application. Federal law penalizes such strategic transfers, regardless of whether the person is institutionalized. California also turns a blind eye to as much as $12,000 in daily transfers of wealth to relatives per day, meaning that the wealthy can strategically shift as much as $4.4 million per year in order to pass the asset test.

California also completely disregards applicants’ net housing equity, which most states start to count as an asset after exempting the first $688,000 to $1,033,000. Retirement assets, including spousal retirement assets, are also disregarded, unlike in most other states.

Estate recovery from deceased recipients only applies to assets going through probate, thus bypassing retirement and insurance assets entirely. Unlike in some states, no liens are placed on housing. Despite the great wealth held in California, with home values averaging $750,000, the Medicaid program’s estate recovery efforts have lagged over the years, falling from $72 million collected in 2015 to $17 million in 2020.

Many of these leniencies directly contradict federal law, yet they were somehow approved by federal regulators at the Center for Medicare and Medicaid Services (CMS), without request for public comments, through a series of state plan amendments. Today, Phase II of California’s pending proposal — the total elimination of asset testing — is before CMS.

California officials told CMS that the total disregard of assets would annually cost the federal government only $115 million. Their own budget showed an increase of 37,000 newly eligible individuals and a $400 million total cost.

This is low compared to the approximately $35 billion that California spends on long-term care benefits through Medicaid. My own rough calculation, based on data from the Health and Retirement Study on asset holdings and another survey on long-term care needs, is that the annual additional cost to Medicaid from California’s disregard of assets will actually be at least $1.2 billion, with over 100,000 newly-eligible individuals.

Roughly half of this bill will be picked up by the federal government, not just by California taxpayers.

Even more concerning than the bad policy — which is contrary to the financial self-reliance of those who can afford it — is the poor precedent this circumvention of federal law would set for other states in designing their own Medicaid programs. Also, the complete lack of democratic process and bureaucratic transparency at a time of massive federal budget deficits is profoundly disturbing.

It is not too late for CMS and Congress to call these harmful actions into question and stop them.

Mark J. Warshawsky is a senior fellow at the American Enterprise Institute. He served as Vice-Chair on the federal Commission on Long-Term Care in 2013.

Tags California Medicaid

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REFORM- Home Visits With A Registered Nurse Did Not Affect Prenatal Care In A Low-Income Pregnant Population

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Sending a nurse in the home didn’t help.



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There is an urgent need to improve maternal and neonatal health outcomes and decrease their racial disparities in the US. Prenatal nurse home visiting programs could help achieve this by increasing the use and quality of prenatal care and facilitating healthy behaviors during pregnancy. We conducted a randomized controlled trial of 5,670 Medicaid-eligible pregnant people in South Carolina to evaluate how a nurse home visiting program affected prenatal health care and health outcomes. We compared outcomes between the treatment and control groups and found little evidence of statistically significant differences in the intensity of prenatal care use, receipt of guideline-based prenatal care services, other health care use, or gestational weight gain. Nor did we find treatment effects in subgroup analyses of socially vulnerable participants (46.9 percent of the sample) or non-Hispanic Black participants (52.0 percent of the sample). Compared with the broader Medicaid population, our trial participants had more health and social risk factors, more engagement with prenatal care, and similar pregnancy outcomes. Delivering intensive nurse home visiting programs to the general Medicaid population might not be an efficient method to improve prenatal care for those who need the most support during pregnancy.

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RX- Medicaid Drug Proposal Sets Up Likely Constitutional Challenge

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Pharma will argue that asking them to explain how the calculate their prices to CMS is stealing their private property under the 5th amendment.


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Provisions in a proposed HHS policy aimed at driving down drug costs to the Medicaid program overstep the agency’s authority and are likely to face a constitutional challenge, attorneys say.

The proposed rule (RIN: 0938-AU28), issued in May, aims to prevent the misclassification of drugs, particularly when brand-name drugs are inaccurately labeled as generic, which can result in lower rebate payments for states.

Lawyers representing drugmakers say the proposal would rewrite the rules of engagement for drug companies looking to do business with the Medicaid Drug Rebate Program, a partnership that allows drug makers access to the nation’s 94 million Medicaid and CHIP beneficiaries in exchange for offering Medicaid agencies the lowest possible price for prescription drugs.

They pointed to a move by the department’s Centers for Medicare & Medicaid Services to clarify ambiguous terminology that allowed drugmakers to avoid paying higher rebates to Medicaid. They also criticized a requirement that manufacturers of between three and 10 of the costliest drugs in the drug rebate program complete surveys detailing proprietary information such as production expenses, research costs, and international pricing.

The agency’s tightening grip on drug prices comes as costs associated with covering expensive specialty drugs like gene and cell therapies continue to spiral.

A report from the Magellan Rx Management, one of the nation’s largest Medicaid pharmacy benefit managers, found six drugs with an average cost per patient in 2021 of over $100,000. Two drugs, Novartis’ Zolgensma and Sarepta Therapeutics’ Exondys, used to treat muscular dystrophy, topped out at over $1 million per patient.

An earlier report by the Health and Human Services Office of Inspector General said that, without greater government oversight to control spending, the per-enrollee rates that state Medicaid agencies must pay to managed care organizations would continue to rise dramatically as more and more high-cost drugs enter the market.

The proposed rule’s reporting requirement would try to rectify this by requiring manufacturers to offer medicines priced within the top 5% to negotiate significant rebates either directly with CMS or with 50% of state Medicaid agencies.

Those that don’t would have to send CMS details of their proprietary pricing information. Manufacturers that fail to comply with the information requests within 90 days would be imposed fines of up to $100,000.

Takings Clause

William A. Sarraille, attorney at Sidley Austin LLP, a law firm that represents pharmaceutical companies including Pfizer and AstraZeneca, said that the CMS’s new drug price reporting rules violate legal protections for trade secrets. He also said mandating that companies share financially sensitive proprietary data breaches the takings clause of the Fifth Amendment, which bars taking private property for public use without just compensation.

“What the [drug companies] are saying is that since the statute doesn’t authorize the scope of the survey information that’s being mandated—and there’s concern regarding trade secret information being disclosed to the public and therefore the value of the trade secret being undermined—that this amounts to a regulatory taking without just compensation,” Sarraille said.

Edwin Park, a research professor at the Georgetown Center for Children and Families, pushed back against claims that the CMS lacks authority to require drugmaker surveys. Park said Section 1927(b)(3)(B) of the Social Security Act has allowed the CMS to survey manufacturers since the Medicaid Drug Rebate Program began in 1991. However, the CMS has refrained from exercising this power until now.

The act permits the CMS to “survey wholesalers and manufacturers that directly distribute their covered outpatient drugs, when necessary, to verify manufacturer prices,” Park said.

The takings clause argument echoes that made by several drugmakers challenging the Medicare drug pricing provisions of the Inflation Reduction Act. Merck & Co. and Bristol-Myers Squibb Co. argue in their lawsuits that patented drugs are “protected from uncompensated takings” under the takings clause. Johnson & Johnson and Astellas Pharma Inc. also cited the takings clause in their litigation against the IRA.

Top courts have stuck down such claims in challenges to other federal programs, including the Affordable Care Act, the No Surprises Act, and the 340B drug pricing program.

Park argues that the CMS survey, while not ideal for drug companies, would give state Medicaid agencies the information they need to negotiate fairer drug prices with manufacturers. That’s a better option than the alternative, where states looking to lower spending on drugs could implement a closed Medicaid formulary that would cover just one drug per class, excluding high-cost drugs based on price alone, he said.

‘Best Price’ Debate

Another contentious aspect of the proposed rule is the CMS’s move to redefine and clarify established terms within the Medicaid statute, lawyers say.

According to Sarraille, a provision within the proposed rule would fundamentally alter how drug manufacturers calculate Medicaid rebates by modifying the regulatory definition of “best price” to require manufacturers to stack, or aggregate, all discounts and rebates across the pharmaceutical supply chain when determining the lowest net price for a drug.

“Best price has historically been understood [by drugmakers] as the best price offered to any one included purchaser within the statute. So if there’s a 40% discount to a particular managed care entity, that would be one potential best price point. And then if there’s a 10% discount to a retail pharmacy chain that would be another potential best price point,” Sarraille said.

“What CMS is proposing to do is not to consider those different potential price points, but to say, if the pill goes through the retail pharmacy, and is ultimately paid by the managed care entity, then the best price is not the higher of 40 or 10% off. It’s both 40% plus 10% off,” he said.

Legal challenges by drug manufacturers argue the existing regulations are vague on whether stacking is required.

The US Supreme Court recently ordered the US Court of Appeals for the Fourth Circuit to rehear an appeal of a lower court’s decision in U.S. ex rel. Sheldon v. Allergan. The lower court dismissed a complaint alleging the drugmaker violated the False Claims Act because it chose not to stack discounts provided to separate entities.

The district court had ruled in favor of the manufacturer, finding the company’s interpretation against stacking was “objectively reasonable” since CMS regulations hadn’t explicitly required it.

To assuage any doubt over the agency’s intentions, the CMS proposed rule added explicit language to its regulatory statement that “manufacturer[s] must adjust the best price for a covered outpatient drug for a rebate period if cumulative discounts, rebates or other arrangements to best price eligible entities subsequently adjust the price available from the manufacturer for the drug.”

Need for Negotiation

Peter Pitts, president and co-founder of the Center for Medicine in the Public Interest and a former associate commissioner of the Food and Drug Administration under President George W. Bush, said it’s going to take negotiation on both sides in order to avoid litigation.

Pitts was critical of the CMS’s approach, saying it wasn’t “collegial.” Of the proposed rule, he said, “all they change is CMS’s ability to—not clarify the rules, but change the rules as they see fit.”

“The problem right now is that both sides aren’t negotiating in good faith,” he said.

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CMS Issues Proposed Rule Regarding Medicaid Drug Rebate Program

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: CMS pushes forward with the rule that will survey manufacturers on how they set prices AND penalize ones that incorrectly misclassify drugs in order to pay less rebates.



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In late-May, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (MDRP). The proposed rule addresses drug misclassification and drug pricing and product data misreporting by pharmaceutical manufacturers. Also important for manufacturers, the rules propose program integrity and program administration changes, including limiting the time within which a manufacturer can initiate an audit of a State Medicaid Program’s drug utilization for purposes of Medicaid rebate obligations; clarifying requirements to accumulate or “stack” price concessions when a manufacturer determines best price; and providing for drug price verification and transparency through data collection.

“With today’s proposed rule, we are advancing unprecedented efforts to increase transparency in prescription drug costs, being good stewards of the Medicaid program, and protecting its financial integrity. This proposed rule will save both states and the federal government money,” Department of Health and Human Services Secretary Xavier Becerra said in a statement.

Some Important Parts of Proposed Rule

CMS is proposing to verify certain drug prices reported by manufacturers through an annual Medicaid Drug Price Verification Survey. According to CMS, verifying drug prices and publishing non-proprietary information about drug prices will increase public transparency for high-cost drugs allowing state Medicaid agencies to negotiate covered outpatient drug (“COD”) prices more effectively with manufacturers.

Only a select number of manufacturers of single-source CODs would be surveyed. CMS would develop a list of high-priced CODs which it estimates would be approximately 160 drug products or 200 national drug codes (“NDCs”). It would then narrow the list to between three and 10 NDCs by excluding CODs for which a manufacturer participates in certain CMS drug pricing programs or pays a significant amount in supplemental rebates to at least 50 percent of states. The manufacturers of the three to 10 NDCs selected would receive a Medicaid Drug Price Verification Survey.

Additionally, the proposed rules also seek to address situations in which manufacturers incorrectly report or misclassify their drugs in the MDRP. Misclassifying a brand-name drug as a generic drug reduces a manufacturer’s Medicaid rebate payments. CMS intends to define the situations in which it would consider a drug misclassified for the purposes of the MDRP, as well as other situations in which a manufacturer is paying rebates to states that are different from the rebates that are supported by the drug data being reported. CMS also would develop a process and timeline to notify manufacturers that it has determined that a misclassification of a COD has occurred, and the process for correcting the misclassification.

The proposed rules would codify a manufacturer’s obligation to pay unpaid rebate amounts to states due to the misclassification(s) and describe actions CMS may take if a manufacturer fails to correct a misclassification, including CMS correcting the misclassification, suspension of the drug and/or its manufacturer from the MDRP, exclusion of the misclassified drug from being eligible for Medicaid reimbursement, and potential civil monetary penalties.

Further, CMS proposes to revise the rules governing the determination of best price, to require that “[c]umulative discounts, rebates or other arrangements must be stacked to generate a final price realized by the manufacturer for a covered outpatient drug, including discounts, rebates or other arrangements provided to different best price eligible entities”. CMS notes, as an example, that, “if a manufacturer provides a discount to a wholesaler, then a rebate to the provider who dispensed the drug unit, and then another rebate to the insurer who covered that drug unit, CMS has concluded that ‘best price’ must include (or ‘stack’) all the discounts and rebates associated with the final price, even if the entity did not buy the drug directly from the manufacturer.”

Among many other proposals, CMS is proposing to require Medicaid managed care plans that cover CODs “to structure any contract with any subcontractor [(e.g., PBMs)] for the delivery or administration of the COD benefit [to] require the subcontractor to report separately the amounts related to the incurred claims,” including amounts related to “reimbursement for . . . CODs, payments for other patient services, and the dispensing or administering providers fees, and subcontractor administrative fees.” CMS believes this information would improve the calculation and reporting of the Medicaid Loss Ratio and would also require PBMs to report to plans on the spread between reimbursement paid to pharmacies and amounts charged to Medicaid managed care plans.