By Chris Comisac
Capitolwire
HARRISBURG (Feb. 24) – A significant amount of the conversations during Monday’s Senate Appropriations Committee budget hearing for the Department Public Welfare focused, not surprisingly, on Medicaid expansion and the Corbett administration’s Healthy PA Medicaid waiver.
And while much of that discussion did not add to the existing knowledge base regarding the issue, it helped to reinforce the disconnect between Gov. Tom Corbett’s administration and legislative Democrats regarding efforts to provide health insurance to at least 500,000 Pennsylvanians.
Sen. Larry Farnese, D-Philadelphia, stepped into the role as chief Medicaid expansion critic of the administration with Senate Appropriations Committee Minority Chairman Vince Hughes, D-Philadelphia, absent from the proceedings.
“I don’t see how this Healthy PA program [fulfills] the governor’s commitment that these folks have access to health care when you look at, number one, that we’ve turned our back on over $630 million already, and, number two, when you look at the surrounding states – and I know you said Pennsylvania is different – but Ohio, Maryland, New York, New Jersey, Delaware, Virginia … why, during this period of time could we not have gone ahead with this program and at least taken advantage while you were trying to seek the waiver; why not take advantage of this, if we truly cared about these people?” Farnese asked DPW Secretary Bev Mackereth.
Mackereth said during the hearing that simply expanding the state Medicaid program would not have allowed for any reform of the current program. And with 70,000 people finding out that they are already eligible for Medicaid – sometimes referred to the “woodwork” effect – regardless of the expansion decision, and another 500,000 or more people that would have otherwise been added to the Medicaid program through a simple expansion, that represented a significant increase in costs to a system – even with higher federal matching funds for many of them – without any attempt to improve that system.
“This is a huge decision for Pennsylvania,” said Mackereth. “We were tasked with sitting down and going through and looking at what Medicaid looks like in Pennsylvania today and … [determine] what is the best way to move forward to ensure that those 500,000-plus Pennsylvanians receive health care.”
Mackereth explained the Healthy PA plan is much larger than just Medicaid, including efforts to improve care access, quality and affordability, “and we’re not looking at it for tomorrow, we’re looking at it for ten years from now, and twenty years from now, because if we fix it today and we have to go back to the drawing board in two to three years, what good is it.”
“We put together an approach that we believe will work for the sustainability of Pennsylvania, and we believe it’s the best solution for Pennsylvania,” she said later during the hearing.
And with regard to the $630 million Corbett critics claim the state has already missed out on by not expanding the state’s Medicaid program on Jan. 1, Mackereth clarified the situation.
“The money doesn’t just come to us,” she said. “The money comes to provide a service … I don’t want anyone to walk out of here and think we’re going to get a check from the federal government for $630 million, we’re not, that’s not how this works.”
She added during her testimony the federal government recently changed the formula it uses to determine how much money it sends to the state given the amount of state dollars spent on currently-eligible Medicaid participants. That formula change reduced the federal contribution to Pennsylvania by $322 million.
Senate Appropriations Committee Majority Chairman Jake Corman, R-Centre, agreed with the assessment that the department’s spending will continue to grow, indicating the federal government, without the waiver, would require Pennsylvania to continue to provide benefits at the level the state has been providing them since the federal stimulus was enacted, also known as “maintenance of effort.” He said the state is looking at the likelihood of the department budget increasing by $1 billion on an annual basis.
“I understand the delay [of a Medicaid decision] may be frustrating … but with maintenance of effort this is our only chance to reform the current Medicaid program, correct?” Corman asked Mackereth, who responded, “Correct.”
“So if we don’t do it now, then these billion dollar increases are going to be normal every year,” concluded Corman.
As part of Farnese’s criticism of the administration’s commitment, he noted the Senate did pass legislation in July, as part of a budget-related bill, that would have supplied the DPW with the tools to expand the state’s Medicaid program. However, those tools were later removed in the state House of Representatives, but no one from the Corbett administration spoke up in favor of the legislation, said Farnese.
Earlier during the hearing, responding to questions from Sen. John Blake, D-Lackawanna, Mackereth did acknowledge the legislation much of the Senate approved in July.
“You all voted a very similar bill last year; we took your bill, actually, to help craft Healthy PA, and I believe most of the Senate did vote for that [bill],” she said.
Farnese also slammed the one-time revenue included in Corbett’s proposed budget and devoted to the Department of Public Welfare.
Citing what he said was a total of $585 million in one-time funding for the department, Farnese said: “I don’t see how that is in the best interest of the people that this administration claims that they care so deeply for and cares so much for.”
Responding to Farnese’s criticism, Corbett spokesman Jay Pagni said the one-time funding was necessary to continue to ensure services without asking Pennsylvania taxpayers for more money. Pagni also noted an approved Healthy PA waiver would yield significantly more savings in future years to cover much of the one-time revenues used in 2014-15.
“Under our Healthy PA waiver, we would save $125 million this year, and then up to about $616 million in 2015-16, nearly $500 million in additional savings offsetting a significant portion of the one-timers,” said Pagni.
Farnese also questioned the Medicaid reforms proposed by the administration given that most of the department’s costs come from long-term care and the services for Pennsylvania’s elderly and disabled populations.
“We want to reform a system that is, apparently, broken, yet on the two issues, the two major cost drivers … we’re sorta scratching our heads on what to do,” said Farnese.
Mackereth acknowledged a large portion of the department’s expenditures are due to long-term care and caring for the disabled. According to the department, the elderly account for 33 percent of state’s Medicaid expenditures, while the disabled account for 45 percent of all expenditure.
She said the administration has been working on a plan to reduce long-term care costs by rebalancing the care that is provided to allow those who can receive that care in their home or in the community to do so, as opposed to in a more costly institutional setting, such as a nursing home.
“The proposal is about ready to go,” said Mackereth. “We have it all framed out and are ready to send that to the federal government. It will bring in about $75 million.”
She said the balancing incentive plan, which will likely be sent to federal officials in a few weeks, has three components: a uniform screening and application process – referred to as “No Wrong Door” – that allows individuals and their families to access the least restrictive and most appropriate level of long-term care service; development of a new long-term care assessment tool; and implementation of a long-term care case management process free of conflicts of interest, to ensure case managers aren’t making self-referrals.
The balancing incentive is one of two community- and home-based options made available to state Medicaid programs through the federal Affordable Care Act. The other one, the Community First Choice rule, encourages primary care practices to provide home-based care to chronically-ill Medicare patients. Mackereth said the department evaluated the First Choice option, but decided against pursuing it at this time since it would have imposed additional costs upon the state.
Another cost of concern, but of concern to lawmakers, the $125 million in savings, resulting from the Healthy PA Medicaid waiver, built into Corbett’s 2014-15 budget proposal, assuming the entire waiver is approved by federal officials.
“What if it’s not approved, what then?” Senate Public Health and Welfare Committee Majority Chairwoman Pat Vance, R-Cumberland, asked Mackereth.
“We don’t think that’s going to happen, senator, because they, too, agree we need to reform our current system of Medicaid … we’re not going to agree on everything, we know that, so when they come back to us, we’re going to try to negotiate what’s best for Pennsylvania, to get the best plan – we’re going to give a little, and I hope they give a little too to get there.”
The Centers for Medicare and Medicaid Services (CMS) has 15 days to review the plan submitted late last week by the Corbett administration, after which the real negotiations regarding the plan will begin, Mackereth said.
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