Fiscal Fitness: How States Cope
West Virginia undergoes changes throughout its Medicaid program in a 4-year overhaul
West Virginia was one of the first states to take advantage of increased Medicaid flexibility offered through the Deficit Reduction Act of 2005 that was signed into law earlier this year. Some observers, particularly Center on Budget and Policy Priorities senior fellow Judith Solomon, tell State Health Watch the state's changes probably are illegal, while West Virginia Department of Health and Human Resources assistant secretary John Law tells SHW Solomon is "scaring people" with her comments on a program that has been approved by federal officials.
Law says the West Virginia Medicaid program costs about $2.3 billion a year in state and federal dollars, with the total cost increasing with the natural growth of the program.
"Even with moves to control utilization and paying our providers less than they would make in other states, the system is unsustainable," he says.
The state's May 2005 waiver proposal said its goals were to 1) streamline administration; 2) tailor services to meet the needs of enrolled populations; 3) coordinate care, especially for those with chronic conditions; and 4) provide members with the opportunity and incentives to maintain and improve their health.
Under the Deficit Reduction Act, states have an opportunity to scale back health care benefits for children and parents enrolled in Medicaid. CMS approved West Virginia's plan in May, allowing the state to provide a scaled-back basic benefit package for most children and parents in Medicaid, while providing access to an "enhanced" benefit package if they sign and follow an agreement with the state.
In a Center on Budget and Policy Priorities issue brief on the changes, Ms. Solomon says West Virginia's state plan amendment was submitted without any opportunity for public comment and was approved by CMS less than two weeks after it was submitted for review. However, Mr. Law said before the state plan amendment was submitted, interested individuals and groups developed a concept paper for state officials to follow in preparing the redesign. He also pointed out that unlike other states such as Tennessee, no groups were eliminated from Medicaid coverage.
West Virginia had 191,316 children in Medicaid as of June, slightly more than half the total number of beneficiaries but accounting for only 27% of program costs. There were 60,233 adults in its programs, about 24% of the beneficiaries covered and accounting for 44% of the cost of the program. Other eligibility groups comprise the remainder of the program.
Four-year phase-in
Implementation began in three rural counties July 1 and the program is to be phased-in statewide over four years. According to Ms. Solomon, some 75% of affected beneficiaries are children. Because of the state's Medicaid eligibility requirements, the two groups affected by the changes are low-income children and very low-income parents.
West Virginia Gov. Joe Manchin III said the changes "will help bring down program costs while helping to prevent disease." But Ms. Solomon counters that the plan is unlikely to lower the amount the state spends on Medicaid, largely because the affected groups account for less than one-quarter of the state's Medicaid costs, and also is unlikely to improve beneficiaries' health.
Under the new plan, she says, the basic benefit package for parents and children who enroll in Medicaid will have fewer benefits than the Medicaid program used to offer. For children, for example, the new basic benefit package limits them to four prescription drugs a month and imposes new limits on dental, hearing, and vision services. It also eliminates coverage for skilled nursing care, orthotics, prosthetics, tobacco cessation programs, nutrition education, diabetes care, and chemical dependency and mental health services.
The West Virginia plan includes Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services for children in the basic benefits but excludes certain services that EPSDT covers and limits other such services.
"There is a basic inconsistency here," Ms. Solomon says, "since under EPSDT, children who need them are supposed to be entitled to the very services that are contained in West Virginia's current benefit package but are being eliminated or scaled back under the state's new plan."
She says the state has redefined EPSDT to include only the screening exams and some dental, vision, and hearing services that are part of the EPSDT benefit.
"The definition the state has adopted fails to include the follow-up diagnostic and treatment services that a health care provider prescribes for a child, on the basis of the child's screening examination," she says. "Under West Virginia's definition of EPSDT, services such as diabetes care and mental health services thus would not be covered for children under the basic benefit package. This definition of EPSDT is contrary to federal law."
No negative impact seen
Law disagreed on the impact, saying children still will be screened for diabetes and will receive treatment regardless of the reduced benefits for those who don't sign contracts with the state.
"Kids are still going to get that screening," he says. "Whatever they need as a result of that screening they are still going to get."
For parents as well, according to Solomon, the revised basic benefit package will cover fewer health care services than the current Medicaid program. Thus, parents will no longer have coverage under the basic benefit package for emergency dental services, diabetes care, physical or occupational therapy, or mental health services. And the basic benefit package will cut the number of prescription drugs for parents from 10 per month to four, and will impose a limit of five on transportation for nonemergency trips a year.
The carrot that goes with the revised plan is an enhanced benefit package made available to parents who, for themselves or their children, sign a Medicaid Member Agreement with the state committing to "do my best to stay healthy," to "go to health improvement programs as directed by my medical home (health care provider," and to "go to my medical home when I am sick."
The state plan amendment says if people sign the agreement and then fail to live up to it, their coverage will revert to the basic benefit package. Health care providers will be expected to monitor and report on patients' compliance with the member agreements. In the first year of implementation, providers will be asked to monitor whether beneficiaries receive health screening exams, follow health improvement programs, show up for scheduled appointments, and take medication as directed. The state plan amendment suggests that beneficiaries who are sent back to the basic benefit program for noncompliance with their member agreement can reapply for enhanced benefits after 12 months or when their Medicaid coverage is renewed.
For children, Ms. Solomon says, the enhanced benefit package does not limit dental, hearing, or vision services, prescription drugs, or medically necessary transportation. And it includes a number of services not in the basic package, such as diabetes care, tobacco cessation programs, nutrition education, and chemical dependency and mental health services.
For parents, the enhanced benefit package does not limit the number of medically necessary prescription drugs or use of medically necessary transportation. It also includes several services not in the basic package such as cardiac rehabilitation, diabetes care, and chemical dependency and mental health services.
"Because children and parents will not be covered for the services in the enhanced plan until they can see a health care provider to sign a member agreement, they could be left without a way to pay for critical services until an agreement is signed," Ms. Solomon says. "Moreover, children and parents could lose access to the services provided under the enhanced package if a decision is made that they did not comply with their member agreement." She says the state's underlying assumption that the requirement to sign a member agreement to receive enhanced benefits will lead beneficiaries to use preventive care more and use the emergency department and other costly services less is unproven and untested and the state has not provided any information to show that substantial numbers of Medicaid beneficiaries are not already following provider's instructions or not taking their children for checkups. Nor, she says, has the state presented data to show that large numbers of beneficiaries are using the emergency department inappropriately.
"West Virginia's plan actually could lead to poorer health for some beneficiaries," Ms. Solomon contends. "Those receiving the basic benefit package would not have access to critical health care services such as diabetes care and mental health services and might not be able to get all the prescriptions they need. Faced with these limits, some of these beneficiaries may end up using more costly services such as inpatient hospital care, which would be an unfortunate outcome both for beneficiaries and for the state."
She says an additional risk is that having health care providers monitor and report on compliance with member agreements could lead to uneven enforcement.
Department of Health and Human Resources spokeswoman Shannon Riley has countered that the new system will encourage many parents to make it to their child's medical appointments and follow the doctor's advice.
"And a parent who fails to take their child to an immunization, who fails to pick up the prescriptions, that child is already suffering," she told West Virginia news media. "Even though the services are available, the child isn't getting them because the parent isn't responsible."
Ms. Riley, Mr. Law, and other state officials also argue the plan is legal because it has been approved by CMS.
When parents are dysfunctional
West Virginia pediatrician Joan Phillips told The Washington Post she worries that because of the member agreements, children could be denied medical services if "the parent is not motivated or is dysfunctional." And she said doctors who report to the state that a patient is not following the rules will face an ethical bind knowing that the patient will lose benefits as a result.
Ms. Solomon tells State Health Watch she doesn't disagree with the goal of promoting parental responsibility and accountability, but believes there are better ways than the path chosen by West Virginia, including through managed care contract requirements.
"You first should have a good diagnosis of the problem," she says. "You can't make changes just because you think they might work."
Ms. Solomon says she had positive conversations with the state's Ms. Riley about the issues, but the program was already in place and moving forward. She hopes to be able to work with local groups to monitor implementation and evaluate the impact of the changes.
Officials from many other states also will be monitoring what happens in West Virginia and in Kentucky, which also received early approval for significant changes to its Medicaid program. Kentucky is dividing Medicaid beneficiaries into four categories, depending on their health and age, and establishing different benefits for each group. Most adults there will face higher copayments for medical services and new limits on prescription drugs. Beneficiaries who sign up for a disease management program eventually will be able to earn credits toward extra "get healthy" benefits such as eyeglasses or classes to quit smoking.
Ms. Solomon's analysis is available on-line at www.cbpp.org/5-31-06health.htm. Contact her at (202) 408-1080. Contact Mr. Law at (304) 558-7899 or e-mail [email protected]. E-mail Ms. Riley at [email protected].
West Virginia was one of the first states to take advantage of increased Medicaid flexibility offered through the Deficit Reduction Act of 2005 that was signed into law earlier this year.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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