Featured in Health Business Daily, Dec. 5, 2017

As CMS Considers Demos, Plans Must Prep for Work Provisions

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. Subscribe today!

By Lauren Flynn Kelly, Managing Editor
November 16, 2017Volume 23Issue 22

In her first major speech on the Medicaid program, CMS Administrator Seema Verma on Nov. 7 informed attendees of the National Association of Medicaid Directors fall conference that the agency is streamlining its approach to reviewing and approving Section 1115 demonstration requests to test innovations in states’ Medicaid programs. And in discussing the various changes, she emphasized CMS’s interest in waiver proposals that promote “community engagement” among working-age, able-bodied Medicaid recipients and encourage them to “rise out of poverty.”

In other words, CMS is likely to approve waiver amendments containing work requirements, which the prior administration viewed as antithetical to the objectives of the Medicaid program. And although not all states that want work requirements have moved to managed Medicaid, such provisions have the potential to create a special set of issues for plans from both a financial and a care coordination perspective. As a result, plans are advised to begin strengthening care management initiatives and community partnerships to address employment, says one industry expert.

According to new CMS policies unveiled by Verma and outlined in an informational bulletin issued Nov. 6 by the CMS Center for Medicaid & CHIP Services (CMCS), the agency is looking to reduce the burden for states throughout the approval process for Section 1115 demonstration waivers. Efforts will include creating a more simplified demonstration application template that removes duplicative information and working with each state to develop a timeline for the process that includes regularly scheduled meetings and anticipated deliverables.

Medicare Advantage News

CMS Reviews Work Requirements

CMS also will develop parameters for the expedited approval of certain waivers that are substantially similar to those approved in other states, and has established a “fast track” process for reviewing proposals from states to extend established Medicaid and CHIP demonstrations that “reauthorize longstanding policies with proven program outcomes,” according to the bulletin from CMCS Director and CMS Deputy Administrator Brian Neale. CMS also may approve certain 1115 demonstrations for up to 10 years and will reduce some reporting requirements.

“As Medicaid has expanded to able-bodied individuals, the needs of this population are even more imperative. These are individuals who are physically capable of being actively engaged in their communities, whether it be through working, volunteering, going to school or obtaining job training,” stated Verma. “Let me be clear to everyone in this room, we will approve proposals that promote community engagement activities.”

To date, no state has a work-requirement provision, although it is a condition of participation in the Supplemental Nutrition Assistance Program and Transitional Assistance for Needy Families. Seven states have demonstration waiver requests pending with CMS that include work requirements (see box, p. 8) and two more — Arizona and Ohio — are preparing to submit similar requests to CMS.

“The work requirement and to a lesser extent, drug testing and other items, all go with this idea of community involvement. The plans are fiduciaries of state and federal taxpayers, so if the state wishes to enforce a work requirement or other items, the plans will do their level best to make sure that that is as effective as possible,” Jeff Myers, president and CEO of Medicaid Health Plans of America (MHPA), tells AIS Health. “Having said that, I think there are some real concerns about linking the two that the states should really consider.”

What New Duties Would Plans Have?

For one, it is the job of the state and not the managed care organization to make eligibility determinations and “presumably, the state will build the infrastructure” to keep track of who is meeting their hourly work requirements and so on, points out Myers. “But if it is implemented in a way where the plans are required to make sure someone is working or to determine their work eligibility status, presumably it would be part of the administrative cost. That is expensive and is also not something the plans are designed to do,” he asserts.

“Understanding which of your members are actually going to be subject to the requirements is important because potentially the plans now run the risk of having those individuals turning off and on, or maybe just off because they’re not meeting those requirements, so I think it puts the plans in a place of having more of a vested interest in helping their members meet those requirements, gain employment, gain work training, and be more engaged in the community,” observes Jim Hardy, specialist executive with the State Health Transformation Services division of Deloitte Consulting LLP. “And I think it’s kind of given some teeth to the plans that are focusing their work now on social determinants of health, and employment is a social determinant, so it’s an interesting intersection.”

Adults who are likely to be impacted by such provisions tend to go in and out of employment because they generally work temporal or seasonal jobs or often have illnesses that prevent them from working, adds Myers. And the challenge created by that churn not only impacts plan revenue by taking away the per-member per-month payment associated with that member, but it eliminates the plan’s ability to coordinate the patient’s care on a consistent basis, points out Hardy.

“One of the things that the state should consider is that the plans using state and federal taxpayer dollars invest a lot of money in creating care management programs for these enrollees who have chronic diseases — and generally more than one — and as those individuals either no longer work or no longer meet the requirements because they’re not working, is it really for the program a savings to have someone with chronic conditions rolling in and out of Medicaid instead of being treated for those issues regardless of their work history?” asks Myers. “It isn’t that we’re opposed to it, but I think that is a legitimate thing that the state should really consider before implementing [work-requirement provisions].”

In the meantime, Hardy advises that plans begin exploring options to better engage their members in the community, “from developing more structured relationships with job training programs to looking at working with their community partners to create volunteer opportunities if the state’s going to count volunteer time” toward meeting the requirements. Additionally, plans could integrate employment support into their care management or case management programs so that care managers have access to a registry of resources and are “engaging with individuals” to make sure they are aware of their options.

“I think all the plans are thinking about it; they’re in various stages of evolving toward it,” he adds. “I don’t know that anybody is clearly that far out in front, but they are all thinking about how to support their members and how they’re going to roll [employment support] into their care management and social determinant strategies.”

Verma added that CMS is planning the creation of state-by-state Medicaid and CHIP scorecards. While supportive of the idea, Myers suggests that the “limitations of the data need to be taken into consideration.”

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