Blog

The Policy, Implementation and Operations of Medicaid Personal Responsibility Initiatives: An Introduction

This week, our In Focus section highlights HMA Medicaid Market Solutions (MMS), formerly SVC, Inc., which is at the forefront in supporting state flexibility in designing and implementing initiatives including Section 1115 Demonstration Waivers promoting member engagement and personal responsibility. Over the coming weeks, HMA MMS will present a series of articles providing an in-depth look at the facets of these new Medicaid models. 

Flexibility to offer benefit and coverage variations existed prior to implementation of the Affordable Care Act, notably in targeted demonstration programs such as Indiana’s Healthy Indiana Plan or Rhode Island’s RIte Share. However, state experimentation with new coverage options vastly increased with the start of the state option to expand Medicaid to all adults with income up to 133 percent of the federal poverty level.  In most states this population had never previously been eligible for Medicaid coverage, and in general, states that elected to cover these individuals under Medicaid aligned the benefits, cost sharing, and eligibility requirements with the state’s existing Medicaid program.  A selection of states, however, including Iowa, Arkansas, Michigan and Indiana opted to request Section 1115 Demonstration Waivers[i] to gain more program flexibility and test new coverage models to address the unique needs of this new Medicaid population.  As these waivers moved forward, states including Kentucky and New Hampshire requested authority to incorporate increased program flexibility around coverage for those covered by the Medicaid expansion.  With additional flexibility promised by recent CMS guidance, [ii] the number of states exploring these coverage flexibilities may continue to increase.

The core concept underpinning these demonstrations is that non-disabled adult Medicaid recipients, particularly the expansion group authorized by the Affordable Care Act, are fundamentally different than the aged and disabled, children, and pregnant women historically covered by Medicaid.  For states exploring coverage models that vary for non-disabled adult Medicaid recipients, an underlying premise is that the non-disabled adult population has a greater ability to engage in and take responsibility for their health.  It is this expectation that underpins state program designs that align coverage for the non-disabled adults with coverage available outside of Medicaid and hinge access to certain benefits on member payment of premiums or engagement in healthy activities, including work and education.

The technical components that allow states to pursue these personal responsibility programs include modifications to the state’s existing state plan and, in many cases, receipt of Section 1115 demonstration authority, as described below.

  • Benefit Variation. To date CMS has not approved benefit variation for the non-disabled adult population without an aligned Alternative Benefit Plan.  The option also exists for states to vary benefits for the expansion population via an Alternative Benefit Plan without an aligning waiver demonstration.
  • Cost-Sharing Variation. Common cost-sharing variations include incorporating premiums or member contributions to health savings accounts as well as adding increased copayments for the non-disabled adult population.  Cost-sharing flexibility and the ability to target copayments to certain populations, and add premiums for individuals with income under 150% of the poverty level requires a CMS-approved 1115 waiver.
  • Member Incentive. Member incentive programs that incorporate member accounts, increase member benefits when members participate, or provide additional payments to Managed Care Plans for the provision of incentive programs require 1115 authority.
  • Community Engagement Requirements. Community engagement initiatives which require certain members in the non-disabled population to complete work or work-equivalent activities as a condition of eligibility requires 1115 waiver authority. This is a new flexibility authorized under the current administration and currently approved by CMS for Arkansas, Indiana, and Kentucky.

Personal responsibility Medicaid programs may incorporate only one of these design options or may weave these components together in an effort to achieve the state’s goals of more engaged and healthier Medicaid members.

As stand-alone components, each of these policies require distinct implementation, operational, and systems considerations for state Medicaid programs, managed care entities, system vendors, and other state stakeholders. When these components are implemented in concert, the complexity of these decisions increases exponentially.  In addition, while states may have similar policy goals that they are seeking to achieve through one or more of these policies, the decisions regarding the implementation, systems and operational considerations vary greatly across states.  This results from the unique resources and organizational structure of each state Medicaid program, and shows that there is not one approach for how to implement these initiatives. However, there are common set of operational hurdles and decisions for each distinct implementation, as well as lessons learned that can be shared across states.

Due to this needed variability, states and state partners seeking to understand the path forward in personal responsibility implementations will benefit from mapping the policy options, operational considerations, and potential systems challenges that may arise when incorporating these changes into the existing Medicaid program.  Further, states and state partners developing 1115 demonstrations will benefit from increased awareness of the enhanced reporting and evaluation requirements and consideration and planning for these requirements on the front end to ensure adequate data quality and availability.

In the coming series of articles and a supporting webinar, the HMA MMS team will leverage its expertise in supporting the design, implementation and ongoing operations of multiple personal responsibility demonstrations to provide unique insight into the various aspects of each distinct policy and program component making up the newest waive of Medicaid demonstration projects.

 

[i] Under Section 1115 Demonstration Waivers, states receive authorization to implement programs that may have different cost-sharing, benefits, provider networks, or eligibility requirements than allowed under the federal Medicaid statute.  States in receipt of these waivers must provide additional reporting to CMS on a quarterly and annual basis, and must engage an independent evaluator to conduct a rigorous program evaluation.

[ii] Department of Health and Human Services, Secretary of Health and Human Services. Price, Verma Letter. March 14, 2017. www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf.

Centers for Medicare and Medicaid Services, Section 1115 Process Improvements. November 6, 2017. www.medicaid.gov/federal-policy-guidance/downloads/cib110617.pdf.

Centers for Medicare and Medicaid Services Opportunities to Promote Work and Community Engagement. January 11, 2018. www.medicaid.gov/federal-policy-guidance/downloads/smd18002.pdf.

Leave a Comment