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Medicaid Overhaul Focused on Children Is Pared Back

By Erin Mershon, CQ Roll Call

July 5, 2016 -- A new draft of legislation aimed at improving care coordination for children with complex medical conditions simplifies changes to Medicaid that were included in earlier bills, outside groups said.

The discussion draft, released late last week, will be a central focus of a House Energy and Commerce Health Subcommittee hearing Thursday. It would allow states to opt in to a care coordination model for some of the sickest children on Medicaid, modeled on home health demonstrations currently in place in several states. Unlike an earlier bipartisan bill (HR 546) from Rep. Joe Barton, R-Texas, the new draft does not set up new, regional, or national Medicaid rules for eligible children.

The changes, in part, address concerns raised by Medicaid insurers that the earlier legislation would have inappropriately preempted state efforts to improve care coordination by using the private managed care organizations they represent. They also raised concerns about how much the program would cost both states and the federal government.

Children's hospitals, however, say the new draft won't set up as effective a network of care as the earlier drafts would.

Health Subcommittee Chairman Joe Pitts, R-Pa., said in a statement the changes enhance states' ability "to improve care coordination for these children, address access challenges and collect better data to help Medicaid programs."

The proposal and hearing come as Republicans in the House have increasingly focused on large scale changes to the Medicaid program. A white paper released by Speaker Paul D. Ryan, R-Wis., last month included dramatic changes to the program, and Rep. Brett Guthrie, R-Ky., is leading a separate task force aimed at overhauling Medicaid in the next several years.

The Medicaid Health Plans of America, which represents managed care organizations and other plans that operate within 39 states, argues that the financial solvency concerns that underpin those conversations should also help shape the discussion. While the plans contend the new draft is an improvement, they are still advocating for changes to the payment structure and the quality measures included in the bill.

In essence, the group believes Medicaid managed care plans will be better at coordinating the care needs of these complex patients than providers. The bill, they argue, should better align incentives between the new program for children and the managed care program, both through federal funding amounts and through quality measure requirements. Managed care plans should be allowed to participate in the coordination, they said.

"The new bill still has some pretty significant shortcomings, and really ignores the way in which Medicaid is evolving care for these complex care kids," said Jeff Myers, the group's president. Under this draft, "you have a system with no real measurement of quality and a possibility of an uncoordinated system of [fee-for-service] payments which won't drive incentives in the same direction. From that perspective, we have a pretty serious concern."

The hospitals, meanwhile, believe the care coordination efforts should be provider-led. They say the new proposal may prompt state-by-state variations that could complicate efforts to let children travel out of state to get care—an opportunity they say is especially crucial because there are fewer hospitals that specialize in pediatrics or rare childhood diseases.

The hospitals also take issues with the way the new draft defines the eligible population, the services that will be provided and the quality measures to which providers will be held accountable.

"It's a simplified version of what was out there, in many dimensions," said Mark Wietecha, president of the Children's Hospital Association. "The more we can make it about specialized pediatrics, the better it will be. It will work better, it will get to the right population, it will have a stronger result. ... The more we can get consistency, the more effective the network will be, and the current draft does leave more authority for the states."

Managed care plans are more adept at dealing with healthier populations, Wietecha said, not complex needs of patients the legislation is designed to help.

Both groups say congressional drafters have recognized a real issue and that they are committed to continuing to work with the committee on the legislation.

Publication Details

Publication Date: July 11, 2016