• Adding a work requirement to Medicaid is a bad idea

    Some red states are considering whether they should accept the ACA’s Medicaid expansion, but only if they can get a waiver from the federal government allowing them to attach a requirement that recipients have or seek paid employment. In The New Republic, I offer five reasons why this is a terrible idea.


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  • Sidelining the courts in Medicaid enforcement

    The legal dispute at the core of last week’s Supreme Court decision in Armstrong v. Exceptional Child Center, Inc. is arcane, but the real-world consequences are not. After Armstrong, it’ll be easier for states to slash their Medicaid payment rates, even where the cuts make it difficult or impossible for Medicaid beneficiaries to find a doctor.

    What’s Armstrong all about? The states have loads of discretion in how they run their Medicaid programs and, specifically, in how much to pay for medical services. But that discretion is cabined by the terms of the federal Medicaid statute, which says, in section 30(A), that states can’t drop their payment rates so low that Medicaid beneficiaries find it harder than the rest of us to get needed care. (I first wrote about Armstrong-type cases a couple of years ago.)

    The question in Armstrong is whether the courts can enforce section 30(A) at the behest of private parties—typically providers who are upset at payment cuts. Before Armstrong, the answer was yes. The circuit courts were generally willing to invoke their equitable powers to enjoin state Medicaid officials from implementing spending cuts that conflicted with 30(A). The idea, conventionally traced back to the 1908 case of Ex parte Young, is that the federal courts won’t stand for it when state officials flout federal law.

    When it comes to Medicaid, however, neither the states nor the federal government were happy with this arrangement. In their view, the federal government—specifically, the officials within CMS who review and approve state Medicaid plans—has sole responsibility for holding states’ feet to the fire. If CMS says that state payment rates comply with 30(A), courts can’t second-guess that determination in a lawsuit against state officials.

    That argument makes a lot of sense to me. It also made a lot of sense to a five-justice majority on the Supreme Court. How are judges supposed to know if payment cuts will drive too many providers out of the Medicaid market? To decide that question, as Justice Breyer explained in a concurring opinion, you’d have to know something about “the actual cost of providing quality services, including personnel and total operating expenses; changes in public expectations with respect to delivery of services; inflation; a comparison of rates paid in neighboring States for comparable services; and a comparison of any rates paid for comparable services in other public or private capacities.”

    Courts aren’t well-equipped to undertake this kind of inquiry. Better to leave the question to an agency with expertise in payment rates. The decision in Armstrong elevates that idea into a holding: given the open-endedness of 30(A), Congress must have “implicitly preclude[d]” private enforcement.

    That’s where I start to have qualms about Armstrong—qualms that the four dissenting justices emphatically share. When Congress enacted 30(A) in 1989, it did so knowing that Ex parte Young would allow courts to enforce the provision directly against state officials. Congress could have—but did not—close the courthouse doors to such lawsuits. Nor has it done so in the twenty-six years since.

    A compelling amicus brief from former HHS officials explains that, as a result, “[e]very aspect of [CMS’s] administration of the Medicaid program—from its regulations to its annual budget—is premised on the understanding that private parties will shoulder much of the enforcement burden.” With private enforcement as a backstop, Congress hasn’t funded CMS at anywhere near the levels necessary to enforce 30(A).

    In other words, it’s fine and good to say that CMS should enforce the Medicaid statute. But what if it doesn’t? What if it can’t? And what if Congress never expected it to?

    That’s the quandary of Armstrong. For what it’s worth, I think it’s a genuinely hard case. I’m sympathetic with the view that the courts shouldn’t be responsible for enforcing 30(A) against the states. The question of how much to spend on Medicaid beneficiaries ought to be hashed out in negotiations between the states and the federal government, not in a courtroom.

    But I fear that the Supreme Court may have substituted its own views about sound enforcement strategy for the strategy that Congress actually adopted. In so doing, the Court has created an enforcement vacuum—one that cash-strapped states could exploit to make life even harder for Medicaid beneficiaries.


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  • AcademyHealth: How do changes in Medicaid affect access for kids?

    A lot of time, and a lot of ink, has been spent talking about access and Medicaid. Many who oppose the expansion of the program will point to the fact that sometimes evidence shows that fewer doctors accept Medicaid insurance than other types of coverage. There’s some truth there. Medicaid does often reimburse at a lower rate than other insurance coverage, and sometimes doctors don’t want to accept those lower rates. But there’s more to the story.

    That’s me in my latest post over at the AcademyHealth blog. Go read the rest!


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  • Healthcare reform is a marathon, not a sprint

    King v. Burwell will be argued before the Supreme Court this week. It won’t be decided, just argued. Then, we’ll parse how well the arguments went, and whether we can predict what will happen from that show. Last time, by the way, we couldn’t. Then, in June, we’ll get a decision.

    I know lots of people (including possibly everyone else at this blog) think the plaintiffs will win. Putting my cards on the table – I’m not one of them. I think the Justices will rule for the government, but I admit that’s a gut feeling. I may be wrong.

    But the world won’t end overnight, and neither will the ACA. It will still function in a subset of states. I think even more will take quick action to fix their exchanges. I have a hard time believing that any state that accepted the Medicaid expansion won’t find a way to accept subsidies for their citizens who are working. So we’ll be left with a minority of states that don’t have subsidies and have a broken individual insurance market.

    That’s where history comes in. I’ve said it before, but it bears repeating: All of this has happened before and will happen again. Medicare was, at one time, the death of freedom. Go read this piece on what people thought when “traditional” Medicaid was first passed in 1965. Then remember that Arizona, the last state to accept Medicaid, finally did so in 1982.

    Between 1965 and 1982, we had a country where a program existed to cover all poor children, all poor pregnant women, the poor elderly, and many poor parents – but only in some states and not in others. The Earth continued to spin on its axis. The country survived. It was ridiculously unfair for some people who lived in states that refused to accept Medicaid, but eventually, all the states did.

    The same can be said of the US if the Supreme Court finds for the plaintiffs. But, as with Medicaid, I think it’s likely the ACA will survive. I also believe, someday, that someday the Supreme Court will view the removal of the ACA as “coercive” as it viewed the removal of traditional Medicaid just a few years ago.


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  • Medicaid fees and access to care

    A new paper in NEJM by Daniel Polsky and colleagues sheds light on the impact of an increase in Medicaid payment rates to selected providers in 2013 and 2014. The increase of fees, which bumped up Medicaid payments to Medicare levels, was part of the ACA and designed to increase access to primary care for Medicaid enrollees. The fee increase expired on January 1, 2015.

    The fee bump was substantial. On average it raised Medicaid reimbursement for primary care by 50%.

    The investigators used the secret shopper method, calling providers to assess the availability and wait times for appointments for either new Medicaid or new privately insured patients in ten states. Their data spanned November 2012 through July 2014. They found that

    [t]he availability of primary care appointments in the Medicaid group increased by 7.7 percentage points, from 58.7% to 66.4%, between the two time periods. The states with the largest increases in availability tended to be those with the largest increases in reimbursements, with an estimated increase of 1.25 percentage points in availability per 10% increase in Medicaid reimbursements (P = 0.03). No such association was observed in the private-insurance group. During the same periods, waiting times to a scheduled new-patient appointment remained stable over time in the two study groups.

    Some comments:

    • One of the chief, longtime complaints about Medicaid, heard across the political spectrum, is that it pays too little, harming access and care. There’s even a big lawsuit about it.
    • This study is strong evidence that the bump down in payment that occurred at the start of this year will adversely affect access. “Currently, only 16 states plan to continue the reimbursement increases,” the authors wrote.  So, a problem has been identified (Medicaid pays too little), a solution tested (pay more), with clear outcomes (better access, by one measure). The policy implications are fairly clear.
    • There are a number of limitations discussed in the paper. I want to add or emphasize two:
      • I believe the observed effect is causal, at least in direction. It’s completely reasonable that higher payment begets greater access, as it was measured. It’s possible, though, that other factors also affected Medicaid access, even relative to privately insured patients. Perhaps greater education and outreach as part of coverage expansion played a role, differentially affecting providers’ willingness to offer care to Medicaid vs. privately insured patients. We can’t be sure. Still, a stronger study design for the policy as implemented is hard to develop. We didn’t randomize states to fee increases, for instance.
      • There are other, important ways to measure access, as I have discussed. It is possible that the degree of access as it was measured in this study (via secret shoppers) differs from that as measured in other ways (like surveying patients, both with new or continuing coverage). It’s important to examine both aspects of access, as well as consider access to specialists. This study only considered one type of access to primary care.

    For all that, it’s a very good study. To be sure, we should continue to collect data and study access. Still, about the Medicaid fee bump, I’m ready to say to policymakers, it’s your move.

    (See also Harold Pollack’s post, which makes some of the same points, only with a lot more style.)


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  • AcademyHealth: The return on investment for Medicaid

    My latest at AcademyHealth:

    There are many arguments as to why Medicaid is a good thing for children. Many studies have been done comparing outcomes for children with and without Medicaid. Many more have looked at how access to the health care system is different for kids with Medicaid.

    But concerns about Medicaid, and arguments about whether to expand it, inevitably devolve to the cost. Implicit in that concern is whether it’s “worth it” to have children on Medicaid. Are the benefits worth the cost? Might they be achieved by more efficient means? Perhaps money put into Medicaid could be used for other things.

    Many of these discussions, however, ignore some of the potential long-term return on investment of the program for children. In a recent NBER paper, David Brown, Amanda Kowalski, and Ithai Lurie attempted to get at that question. “Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?”

    I discuss this paper, and what the results mean. Go read!


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  • Medicaid’s return on investment

    It’s time to face the fact that I’m not going to be able read, let alone write a full post on every interesting looking paper in my pile. But you’re hungry for content and want to know what’s potentially worth reading, right? So, expect a few posts that are little more than abstracts of papers I’ve at most skimmed. Maybe they contain a fatal flaw. Maybe they’re awesome. I just don’t have time to find out. Take with a grain of salt.

    Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?” by David Brown, Amanda Kowalski, and Ithai Lurie:

    We examine the long-term impact of expansions to Medicaid and the State Children’s Health Insurance Program that occurred in the 1980’s and 1990’s. With administrative data from the IRS, we calculate longitudinal health insurance eligibility from birth to age 18 for children in cohorts affected by these expansions, and we observe their longitudinal outcomes as adults. Using a simulated instrument that relies on variation in eligibility by cohort and state, we find that children whose eligibility increased paid more in cumulative taxes by age 28. These children collected less in EITC payments, and the women had higher cumulative wages by age 28. Incorporating additional data from the Medicaid Statistical Information System (MSIS), we find that the government spent $872 in 2011 dollars for each additional year of Medicaid eligibility induced by the expansions. Putting this together with the estimated increase in tax payments discounted at a 3% rate, assuming that tax impacts are persistent in percentage terms, the government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60. This return on investment does not take into account other benefits that accrue directly to the children, including estimated decreases in mortality and increases in college attendance. Moreover, using the MSIS data, we find that each additional year of Medicaid eligibility from birth to age 18 results in approximately 0.58 additional years of Medicaid receipt. Therefore, if we scale our results by the ratio of beneficiaries to eligibles, then all of our results are twice as large.

    So maybe, all in, Medicaid could be break even. Maybe. (Yes, this is the pure economist point of view, as if lives and quality thereof can be easily, unambiguously converted to dollars. And, yes, the framing here suggests — though does not demand — that things are worth doing only if they pay for themselves, which is ridiculous. Good things are worth spending money on.)


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  • Medicaid patients have better access to primary care than you might think

    The following originally appeared on The Upshot (copyright 2014, The New York Times Company).

    One longstanding concern about Medicaid is that too few doctors will accept it, because it tends to pay providers less generously than private plans do. This concern shows up in news articles about Medicaid, driven by evidence from doctors’ offices. But if you ask Medicaid enrollees directly, they reveal that access to primary care is comparable to that for private plans.

    A report from the inspector general at the Department of Health and Human Services released in late September reinforced concerns about access to care for Medicaid enrollees. As my colleague Robert Pear reported, the inspector general found wide variation across states in access standards. For instance, the maximum travel distance states allow varies from five to 60 miles; the maximum appointment wait times vary from one to 60 days; and the minimum provider density varies from one in 100 to one in 2,500 enrollees, among other standards.

    Worse, the inspector general found that only eight of the 33 states it examined conducted tests to assess whether Medicaid patients’ access to care met their standards.

    Access problems could be exacerbated by the Affordable Care Act, which extends Medicaid coverage to millions more Americans, and expands coverage through private plans. To at least partly address this concern, the law includes an increase in funding for primary care training and in Medicaid payments for primary care visits through this year, and Congress is considering extensions. In its waiver application to allow residents eligible for Medicaid to participate in its state exchange, Arkansas argued thathigher payments to providers were necessary to encourage the supply of care to meet the new demand.

    Medicaid enrollees may, in fact, have to work a bit harder to find a primary care doctor who will see them, but almost all are still able to find one. Using data from a large, nationally representative survey, Genevieve Kenney and colleagues did find that a substantial minority, 11 percent, of new Medicaid enrollees said that they had difficulty making an appointment. But only 2.8 percent said that they could not do so at all. To be sure, the program ideally would provide access for all its enrollees, but a 2.8 percent failure rate is probably a lot lower than most people think and suggests modest improvements may be sufficient to bring that number to zero.

    The researchers also found that Medicaid enrollees who had been covered for at least a full year had no more difficulty obtaining care than those with employer-sponsored coverage. However, Medicaid enrollees were more likely to experience delays in care, but still at a fairly low rate — 8.4 percent, compared with 5.2 percent of low-income adults with employer-sponsored insurance. With one exception, Medicaid and employer-sponsored insurance enrollees were just as likely to receive key types of preventive care. (Those insured through work were five percentage points more likely to receive a flu shot.)

    In 2012, the U.S. Government Accountability Office published similar findings. Based on a large survey of patients, not providers, Medicaid offered comparable access to care as private insurance for consumers with full-year coverage.

    One reason people may think Medicaid primary care access is poor is because of the results of so-called secret shopper calls, the type of assessment the H.H.S. inspector general recommended. These are calls to doctors’ offices from people pretending to be patients, seeking to learn whether appointments can be made and, if so, how soon. Though secret shopper assessments are informative as to the breadth of provider choice Medicaid patients have — an important consideration — they can also mislead.

    Publishing in JAMA Internal Medicine, Karin Rhodes and colleaguesconducted about 11,400 secret shopper calls in late 2012 through early 2013. Primary care offices in 10 states were contacted, accounting for one-third of the Medicaid population. On average, private plan callers were offered an appointment 85 percent of the time and Medicaid callers only 58 percent of the time, suggesting significantly worse access to primary care for Medicaid patients. However, the researchers also found that median wait times were five to eight days for private and Medicaid callers alike, with the exception of Massachusetts, where they were 13 days for private and 15 days for Medicaid callers.

    A prior secret shopper study published in the New England Journal of Medicine by Joanna Bisgaier and Karin Rhodes examined specialty clinics in Cook County, Ill., in 2010. Callers pretended to be either insured by Medicaid or Blue Cross Blue Shield. On average, 66 percent of Medicaid callers were denied an appointment, compared with only 11 percent of privately insured callers. Other secret shopper studies also found worse access to care for Medicaid relative to private coverage.

    But secret shopper studies have important limitations. One is that they tend to compare Medicaid to private plans with the most expansive networks, which may not be a representative standard. Many Americans are enrolled in private plans with more narrow networks, perhaps almost as narrow as that of Medicaid. Another limitation is that differences in the proportion of offices accepting patients do not, by themselves, tell us anything about differences in the quality of health care received or in health outcomes. Such results don’t even reveal the extent to which variations in providers’ willingness to make new appointments translate into patients’ ability to obtain them. This is a subtle, but important, distinction. Asking patients directly paints a more optimistic picture.

    Though doctors may be less willing to accept new Medicaid patients than private patients in some plans, in general Medicaid patients seem to obtain nearly the same access to primary care. Perhaps they do so because they learn which providers to call or they make more calls. Assuming comparable quality, it’s not as worrisome that fewer doctors accept Medicaid if Medicaid patients can still reliably find some doctors who do in a reasonable amount of time.

    Medicaid surely can be improved. It very likely pays some providers too little in some areas, and some of its patients probably experience access problems because of that. No doubt that’s true of some private plans as well. And the results I’ve written about here don’t address access to specialty care, which may be more difficult for Medicaid patients. But Medicaid is also a popular and valuable program, contributing to the health and well-being of many Americans who rely on it.

    The secret shopper approach is undoubtedly the right strategy to assess compliance with state standards written in terms of proportion of doctors accepting patients within certain time and distance margins. But relying on secret shopper calls alone also understates access and provides a ready way to attack the program as woefully inadequate. The direct experience of patients needs to be considered as well.


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  • AcademyHealth: Three false claims about Medicaid

    The July 2014 Milbank Memorial Fund Issue Brief examined and dismantled erroneous claims about Medicaid including that it’s worse for health than being uninsured. My latest post at AcademyHealth has the details.



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  • Should the Arkansas Medicaid program cover a $239,000/year treatment?

    Chris Conover says it should have the freedom not to do so:

    Last week, an advisory board recommended that Arkansas’s Medicaid program cover Kalydeco, a cystic fibrosis drug [which would cost the program] $239,000 per patient year.  [… B]ecause “ Arkansas appears to be the only state preventing patients who meet the eligibility criteria established by the U.S. Food and Drug Administration” the state is being sued on grounds that its policy violates a federal statute requiring state Medicaid programs to pay for all medically necessary treatments. […]

    [P]art of the reason the Arkansas lawsuit is getting leverage is because of evidence that cost appeared to be a factor underlying the decision to deny coverage for Kalydeco. […]

    The WHO considers a medical intervention to be “not cost-effective” if it costs more than three times a nation’s per capita GDP per year of life saved. With U.S. GDP per capita currently at $51,749, it is pretty obvious that $239,000 lies pretty far outside the bounds of what WHO would deem cost-effective.  […]

    [T]his 7-page National Health Law Program summary of medical necessity under Medicaid highlights the complexity of the problem. The upshot is that “medical necessity” is never defined explicitly either in the Medicaid statute or regulations. It has been fleshed out in case law and administrative rulings.  The Stanford definition of medical necessity which has been adopted by a number of state Medicaid programs [has] a very restrictive definition: “An intervention is considered cost effective if the benefits and harms relative to costs represents an economically efficient use of resources for patients with this condition.” [Link no longer works.]

    Such a definition does not permit administrators to do what the Oregon Medicaid program did many years ago: rank order all treatments by their cost-effectiveness and eliminate from coverage all treatments above a certain cost per added year of life threshold. [Here’s one,* of many, papers on Oregon’s experience with cost-effectiveness ranking.] So how did Oregon get away with adopting cost-effectiveness rankings? By getting a waiver. […]

    Chris goes on to argue that Arkansas, and all states, should be able to apply cost-effectiveness criteria without waivers. More at the link.

    * Apart from the link in brackets, all others are in Chris’s original. They are not mine.


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