President Trump campaigned heavily on repealing the Affordable Care Act (ACA), and Secretary of Health and Human Services Tom Price has advocated for transitioning Medicaid from a matching structure to a block grant system. Despite these statements, how the new administration will pursue Medicaid changes remains uncertain.
HIDA publishes a comprehensive policy outlook on Medicaid each year. This month’s column highlights some of the key insights from this report, factoring in the new administration’s intentions, ongoing trends, and market implications.
Seven of the 19 states that had been considering Medicaid expansion plans for 2017 have put those plans on hold, shifting to a “wait and see” approach and effectively halting any further national expansion of Medicaid for the time being.
Despite this uncertainty, three key shifts continue to occur at the state level:
- Enrollment is increasing rapidly;
- Spending is shifting from institutional care to home and community-based settings; and
- States are increasing their use of managed care organizations to run Medicaid programs.
These spending shifts provide key insight into what providers will be thinking about over the coming months, and can inform your sales conversations.
Healthcare Spending to Increase in Most States
Managed care and nursing home spending is generally increasing across the U.S. For nursing homes, 30 states are increasing reimbursement rates, while 20 states are decreasing reimbursement rates. Similarly, only four states are restricting outpatient hospital rates and specialty services, while the rest are either keeping rates the same or increasing them. Most states are tightening hospital spending; specifically, 35 have restricted reimbursement rates in the inpatient hospital setting, although 15 have increased rates.
As hospitals cope with lower reimbursements, they will likely seek solutions that allow them to accomplish more with less. Post-acute care providers, meanwhile, may use higher reimbursement rates to invest so they can cope with an aging and growing patient population.
Home and Community-Based Care to Grow
Individual states and the federal government each have taken steps to shift long-term services and supports (LTSS) from institutional settings to patient homes and communities. LTSS includes care in skilled nursing facilities, intermediate care facilities, and a range of other services. Presently, 47 states have expanded their waiver programs to allow Medicaid beneficiaries to receive LTSS in their homes and communities.
By 2016, over 1 million individuals were receiving LTSS in their homes and communities. The Centers for Medicare & Medicaid Services (CMS) projects community-based spending will reach 63% of all Medicaid LTSS spending by 2020.
As health systems look to shift more patients away from larger facilities and to community- and home-based settings, they will need to address the challenge of supplying caregivers operating in these new settings.
Managed Care to Increase Through 2018
As of December 2016, all but three states (Connecticut, Alaska, and Wyoming) have in place some form of managed care model. Of these states, 39 contract with comprehensive risk-based managed care organizations (MCOs) to serve more high-risk eligibility groups.
States are using managed care to advance quality and implement alternative payment models. The share of Medicaid beneficiaries enrolled in MCOs has steadily increased as states have expanded their managed care programs to new regions and new populations.
Presently, 23 states provide some or all LTSS through a managed care arrangement, and 15 states provide these services on a statewide basis for at least part of the patient population. This year, two states anticipate expanding the reach of their managed LTSS, while five states anticipate adding new populations to these programs.
These figures are expected to grow in 2018, based on the number of states that complete planning documents and submit proposals to CMS.
HIDA’s 2017 Medicaid 360: State Medicaid Report provides a state-by-state summary of Medicaid policies and changes. For more information on HIDA Government Affairs reports, email firstname.lastname@example.org.