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Negotiations Over Pennsylvania Medicaid Expansion Plan Intensify

By Rebecca Adams, CQ HealthBeat Associate Editor

April 10, 2014 -- The public has until early Friday to comment on a controversial Medicaid expansion plan in Pennsylvania. After the comment period closes, intense discussions between federal and state officials will determine whether the state will become the 28th jurisdiction, including the District of Columbia, to broaden eligibility under the health care law.

"Tomorrow the formal negotiations start," said Corbett spokeswoman Kait Gillis.

The informal conversations have been going on for a year, culminating recently in a tense phone call between state and federal officials. Gillis said that Pennsylvania officials detected a "shift toward a lack of flexibility and compromise in that conversation." Afterward, Republican Gov. Tom Corbett told state reporters on April 2, "Right now, the road is getting bumpier rather than smoother.... I am getting to my breaking point."

A review of some of the 740 comments filed by late last week shows that consumer activists and medical providers are actively lobbying the Centers for Medicare and Medicaid Services (CMS) to make changes to Corbett's plan. The comment period closes at 6 a.m. on Friday.

Consumer activists very much want Pennsylvania to broaden Medicaid. But they have a long list of changes they asked CMS officials to force the state to make to the waiver request.

The most high-profile part of Corbett's plan—and least likely to be approved—would allow beneficiaries to sign up for a one-year, voluntary job search program. People who did sign up under the pilot program would get discounts on the costs of their health care. State officials outlined their idea in a March 5 letter that modified a more stringent requirement in previous versions of the plan.

Several groups asked CMS officials not to approve that part of the waiver request.

"Programs aimed at connecting people to employment, however laudable, have no connection to the purposes of the Medicaid program, and Pennsylvania's proposal should be rejected on this basis," a group of 25 national consumer organizations and 10 state organizations stated in a latter. The group includes the March of Dimes, National Alliance on Mental Illness, Planned Parenthood Federation of America, the Center on Budget and Policy Priorities and the Georgetown University Center for Children and Families.

Forty advocacy groups for children also said that the work required to verify work-related activities would take away from staff time dedicated to enrolling children.

Both groups said that the premiums under Corbett's plan are too high. And the letters said that CMS officials also should modify the state's idea to prevent people who have failed to pay their premiums from getting Medicaid benefits for certain periods of time. The governor would disqualify people for three months the first time they fail to pay premiums, for six months the second time and for nine months the third time, the groups said.

Corbett also has said he wants to use Medicaid dollars to buy beneficiaries private health plans, such as those offered through the marketplace created by the health care law. CMS officials approved a similar idea in Arkansas, but advocates questioned why it is needed in Pennsylvania. In Arkansas, Medicaid recipients did not previously use managed care plans, but Pennsylvania beneficiaries do. The consumer advocates questioned whether Corbett is trying to bypass some of the protections that Medicaid managed care plans must comply with, such as appeals procedures for consumers when health plans deny coverage of services.

"We're happy that Corbett says he wants to move forward but his proposal has many flaws and certainly, really digging into it as we did, the proposal is vague and in many respects it's not clear why he wants to do what he says he wants to do," said Joan Alker, executive director of the Georgetown Center for Children and Families in an interview. "We don't think it's approvable in its current form."

Other groups that commented on the proposal were medical providers who said they were upset that their services would not be covered. The most vocal were podiatrists, optometrists and chiropractors.

Comments from individual practitioners flooded in, with many saying that their services could prevent more costly care in the long run. A number of the physicians said that diabetics would be particularly harmed.

CMS officials will evaluate the comments during a 15-day review period that can be extended.

The health care law (PL 111-148, PL 111-152) provides federal funds to cover 100 percent of the cost of covering people who become eligible under the expansion for the first three years and phases down after that to 90 percent of costs.

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