Public Notices

public_notices Wisconsin Administrative Register No. 671, 11/30/2011

Public Notices

Health and Family Services

(Medicaid 2014 Demonstration Project)

The State of Wisconsin reimburses providers for services provided to Medical Assistance recipients under the authority of Title XIX of the Social Security Act and ss. 49.43 to 49.47, Wisconsin Statutes. This program, administered by the State's Department of Health Services, is called Medical Assistance (MA) or Medicaid. In addition, Wisconsin has expanded this program to create the BadgerCare and BadgerCare Plus programs under the authority of Title XIX and Title XXI of the Social Security Act and ss. 49.471, 49.665, and 49.67 of the Wisconsin Statutes. Federal statutes and regulations require that a state plan be developed that provides the methods and standards for reimbursement of covered services. A plan that describes the reimbursement system for the services (methods and standards for reimbursement) is now in effect.

Section 1115 of the Social Security Act provides the Secretary of Health and Human Services broad authority to authorize Research & Demonstration Projects, which are experimental, pilot, or demonstration projects likely to assist in promoting the objectives of the Medicaid statute. Flexibility under Section 1115 is sufficiently broad to allow states to test substantially new ideas of policy merit.

In September, the Wisconsin Department of Health Services provided on its website an outline of its proposal to initiate what is now called the Medicaid 2014 Demonstration Project, which will be a Research & Demonstration Projects under the authority of Section 1115. Public comment was invited at that time as well as at the public hearings held on October 19 and 21. You may now receive the official waiver request and will have another opportunity to comment before it is legislatively approved and submitted to the federal government. The Medicaid 2014 Demonstration Project will be an initiative to test the policy impacts of the federal law on Medicaid to go into effect in 2014, including crowd-out policies, cost-sharing requirements, income determination methods, adverse selection provisions, the relevance of Transitional Medicaid and the impact of real-time eligibility on verification requirements and retroactive and presumptive determinations.

The Patient Protection and Affordable Care Act (PPACA) will fundamentally change policies that govern state Medicaid programs. Wisconsin is submitting this federal 1115 waiver to pilot several policies that will prepare our BadgerCare Plus programs to better align with the pending changes in federal law. The following paragraphs detail the key elements of this initiative.

Crowd Out

Lower-income families above the poverty line will be disqualified from eligibility for government-subsidized health coverage if they have access to an employer-sponsored plan that does not require cost sharing in excess of 9.5% of household income. The waiver evaluation will look at how individuals not eligible for BadgerCare Plus based on this crowd-out provision subsequently interact with the private health care market, in the hopes of determining whether or not individuals with access to an employer-sponsored plan follow through with maintaining coverage at the expected levels of cost-sharing.

In addition, lower-income young adults above the poverty line will be disqualified from eligibility for government-subsidized health coverage if they have access to coverage under a parent's employer-sponsored insurance plan. The Medicaid 2014 Waiver will implement BadgerCare Plus crowd-out provisions to test whether or not young adults subsequently enroll in their parents plan and maintain access to health coverage.

Cost Sharing

PPACA requires families and individuals to purchase insurance that will require premium and copayment contributions. According to a recent study released by the Urban Institute, the estimated average annual premium cost for families with incomes between 138% and 200% FPL is $1,559 in 2014, with additional estimated out-of-pocket expenses of $457.

Wisconsin's Medicaid 2014 waiver will move toward aligning BadgerCare Plus cost-sharing provisions with those authorized by PPACA. This will demonstrate the impact of cost-sharing provisions on lower-income families above the poverty line. Questions the waiver evaluation will address will include whether or not participants will pay cost sharing, as well as whether or not the cost-sharing requirements will slow the growth of health care spending. The demonstration will consider policy choices related to the alignment of benefits and the equity of cost-share provisions for Medicaid, the Basic Health Plan and subsidized insurance.

Transitional Medical Assistance

Transitional Medical Assistance (TMA) has existed for many years to support the transition from welfare to work. TMA allows individuals to maintain their Medicaid coverage for 12 additional months once their income changes from an amount that would have qualified them for benefits under the former Aid to Families with Dependent Children (AFDC) cash assistance program to an amount above that income threshold.

In Wisconsin, the AFDC income threshold is 100% of the federal poverty level (FPL). TMA policy in Wisconsin has never been adjusted to reconcile to expanded eligibility criteria for Medicaid. Beginning in 2008, parents with incomes up to 200% FPL became eligible for BadgerCare Plus.

Under PPACA, the program's authorization expires before 2014. Continuation of TMA will introduce inequities because it will result in families with the same income experiencing different eligibility outcomes.

Under the waiver, those who would otherwise be exempt from cost-sharing under TMA will be expected to make modest premium and other cost-sharing contributions to maintain their Medicaid coverage. This simulates how a Medicaid to subsidized insurance transition would work for these same individuals if TMA is ended nationally.

Restrictive Re-Enrollment

Currently under BadgerCare Plus, a member for whom a premium is owed for the current month who leaves BC+ by quitting or not paying a premium may be subject to a restrictive re-enrollment period. A restrictive re-enrollment period means the member cannot re-enroll in BC+ for six months from the termination date while their income remains high enough to owe a premium.

One of the issues a restrictive re-enrollment period is intended to address is the fact that consumers may have financial incentives to selectively purchase coverage for specific months in which they anticipate high utilization. This is true even with the tax penalties envisioned under PPACA for failure to comply with the insurance mandate. The Wisconsin 2014 waiver will test the impact of applying restrictive re-enrollment as a measure of protection against adverse selection.

The waiver will evaluate the impact of the policy on premium payment compliance and the overall PMPM for BadgerCare Plus members in populations subject to this policy.

Real-Time Eligibility

PPACA envisions an eligibility process for Medicaid and subsidized insurance to happen in as close to real-time as possible in 2014.

A key component of Wisconsin's Medicaid 2014 waiver will be to implement real-time eligibility during Demonstration Year 1. The Medicaid 2014 waiver will test the impact on eligibility by replacing retroactive and presumptive eligibility policies with a real-time, online application system designed to facilitate immediate access to Wisconsin's health care safety net.

The real-time system will redefine and modernize the logic of outdated methods used to calculate a recipient's eligibility begin date and end date. Wisconsin's Medicaid 2014 Waiver will demonstrate the potential efficiency of operating a real-time eligibility system and the potential savings states can achieve by avoiding the unnecessary costs associated with arbitrary backdating and end-dating.

To assure program integrity and the effective use of public tax dollars, the accuracy of online eligibility determinations must be supported by a strong back end quality control process. In our Medicaid 2014 Waiver, Wisconsin proposes to demonstrate the interaction of real-time eligibility with a back end verification process by strengthening our state residency verification requirements.

Redefining Household Income

“Modified Adjusted Gross Income" (MAGI) is a new method to measure income for Medicaid eligibility purposes. Based on Internal Revenue Service (IRS) rules, this method will be used under the authority of PPACA beginning in 2014.

To accurately capture the total sum of household resources available to applicants and recipients of Wisconsin's Medicaid program, Wisconsin will request authority to pilot an alternative methodology that considers the resources of all adults living in the household of the person who is filing the application. Income from grandparents and adults temporarily living in the household will be exempt.

In doing this, Wisconsin will gather data significant to assessing whether MAGI comprehensively captures household resources. This demonstration will also help Wisconsin assess the expected total Medicaid enrollment in 2014 based on a clearer picture of how the income methodology affects household eligibility.

Proposed Changes - Implementing Wisconsin's Medicaid 2014 Waiver

As previously noted, the Wisconsin Department of Health Services is proposing to initiate the Medicaid 2014 Demonstration Project, which will be a Research & Demonstration Projects under the authority of Section 1115.

As required under federal law, Early and Periodic Screening & Diagnostic Treatment Benefit (EPSDT) services are to be provided to individuals under 21 years of age as an additional benefit under section 1937 of the Act.

In addition to this public notice, Wisconsin's tribes were consulted at a meeting of the Tribal Health Directors on October 25, 2011. The effective date of this change will be July 1, 2012. The projected fiscal effect of this initiative is an annual savings of $54 million general purpose revenue (GPR) and $81 million federal match (FED) for a total savings of $135 million all funds (AF) beginning July 1, 2012.

Copies of Proposed Changes

A copy of the proposed Medicaid program changes may be obtained free of charge by calling or writing as follows:

Regular Mail

Marlia Mattke

Division of Health Care Access and Accountability

P.O. Box 309
Madison, WI 53707-0309

Phone

Marlia Mattke

[phone]

FAX

[phone]

E-Mail

[e-mail]

Written Comments

Written comments are welcome. Written comments on the changes may be sent by FAX, e-mail, or regular mail to the Division of Health Care Access and Accountability. The FAX number is [phone]. The e-mail address is [e-mail].

Regular mail can be sent to the above address.

The written comments will be available for public review between the hours of 7:45 a.m. and 4:30 p.m. daily in Room 350 of the State Office Building, 1 West Wilson Street, Madison, Wisconsin.

Health and Family Services

(Medical Assistance Reimbursement for Services Provided Under Benchmark Plans Implementing Medical Home Initiatives)

The State of Wisconsin reimburses providers for services provided to Medical Assistance recipients under the authority of Title XIX of the Social Security Act and ss. 49.43 to 49.47, Wisconsin Statutes. This program, administered by the State's Department of Health Services (the Department), is called Medical Assistance (MA) or Medicaid. In addition, Wisconsin has expanded this program to create the BadgerCare and BadgerCare Plus programs under the authority of Title XIX and Title XXI of the Social Security Act and ss. 49.471, 49.665, and 49.67 of the Wisconsin Statutes. Federal statutes and regulations require that a state plan be developed that provides the methods and standards for reimbursement of covered services. A plan that describes the reimbursement system for the services (methods and standards for reimbursement) is now in effect.

This serves as public notice for eight benefit plans: seven Section 1937 benchmark plans and one Section 1945 plan.

Section 1937 of the Social Security Act provides authority for States to provide for medical assistance to one or more groups of Medicaid-eligible individuals, specified by the State in an approved state plan amendment, through enrollment in coverage that provides benchmark or benchmark-equivalent health care benefit coverage. Wisconsin established a benchmark plan effective February 1, 2008. Wisconsin will establish several more benchmark plans.