Beginning approximately one year ago, state officials from Idaho began discussions with the Centers for Medicare and Medicaid Services (CMS) about a possible Section 1115 waiver to reform the Idaho Medicaid program. In April of 2006, Idaho submitted a Section 1115 wavier to CMS. During the waiver design process, Congress passed and President Bush signed into law, the Deficit Reduction Act (DRA) of 2005 that gives states the ability to make changes to their Medicaid programs via the State Plan Amendment (SPA) process. In response to a recommendation from CMS, Idaho tabled waiver activities and made changes using the new administrative powers granted in the DRA.
Benefit Package Flexibility: Recently, CMS issued regulations to guide the implementation of the DRA and specifically Section 6044, State Flexibility in Benefit Packages. States have the option to amend their respective state plans and provide certain Medicaid populations with alternative benefit packages. Generally, mandatory enrollment in these alternative benefit packages is restricted to healthy adults and healthy children.
Within approved benefit packages created through the DRA, states may waive traditional requirements such as statewideness, freedom of choice, and comparability. In addition, states may select one option out of four benchmark benefit packages: Federal Employees Health Benefit Plan Standard Blue Cross Blue Shield PPO, State Employees plan, non-Medicaid Health Maintenance Organization plan, or a plan approved by the Secretary of the Department of Health and Human Services (DHHS). States may also create actuarially equivalent benefit packages to one of these benchmarks. Idaho has selected the Secretary approved benchmark coverage option for its redesign.
Idaho Reform: Using Section 6044 of the DRA, Idaho has redesigned its Medicaid program via the State Plan Amendment process. Idaho has split the Medicaid and SCHIP population into three major benefit plans, each of which has separate approval from the Secretary of DHHS:
- Low-income children and working-age adults: the Medicaid Basic Plan
- Individuals with disabilities or special health needs: the Medicaid Enhanced Plan
- Elders or those otherwise dually eligible for Medicaid and Medicare who are enrolled in certain Medicare Advantage plans: the Medicare-Medicaid Coordinated Plan
Upon enrollment or annual re-enrollment into Medicaid or SCHIP, enrollees are placed into the Basic Plan. Enrollees are given a health screening and placed into a primary care case management system (PCCM). Idaho has three different systems of triggers that move an individual into the Enhanced Plan: physician diagnosis of special health needs; utilization of mental health services up to the limits in the Basic Plan; or receiving other forms of assistance from the Idaho Department of Health and Welfare. Any one of these three triggers would move the enrollee into the Enhanced Plan. Both of these benefit packages (Medicaid Basic Plan and Medicaid Enhanced Plan) remain fee for service.
The final benefit plan and enrollment category is for persons eligible for both Medicare and Medicaid who are enrolled in participating Medicare Advantage plans. In an effort to coordinate services with Medicare Part D, Idaho has created a partially capitated system with major insurance carriers that provide Part D services. Idaho will pay a capitated rate per enrollee to carriers for integrated services in addition to Medicare-excluded drugs, and will also provide fee for service “wrap-around” benefits. The new coordinated plan will likely begin in late 2006.
Future Directions: The DRA grants states new flexibility that remains largely untested. The early DRA adopters, Idaho, West Virginia, and Kentucky, have all used different aspects of the legislation to reform their respective Medicaid programs.
For additional information on Idaho’s Medicaid Modernization including a full description of the benefit packages, please visit www.modernizemedicaid.idaho.gov.
For additional information on Kentucky’s Medicaid reforms, please visit: http://www.statecoverage.net/cyberseminar/0606/completepackageky.pdf.
For additional information on West Virginia’s Medicaid reforms, please visit:
http://www.wvdhhr.org/bms/.
