New law lets states get tough on benefits for Medicaid patients

Idaho, Kentucky and West Virginia reform their Medicaid programs, limiting benefits and demanding healthy lifestyles.

By Elaine Monaghan — Posted June 12, 2006

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States have begun to take advantage of a new federal injection of flexibility into Medicaid programs. Physicians are supportive of the goal -- to preserve Medicaid systems near the breaking point. But proposals to limit benefits to vulnerable patients, including children, are causing concern.

Idaho, Kentucky and West Virginia are the first to respond to the Medicaid provisions in the Deficit Reduction Act, signed into law in February.

The Dept. of Health and Human Services last month announced that the states had received approval for Medicaid reforms that would offer incentives for healthy lifestyles, impose new patient co-pays or, in the case of Idaho, offer a voluntary alternative to the existing Medicaid program.

West Virginia had the most controversial plan, requiring patients to sign an agreement promising to obtain screenings as directed by doctors, adhere to health programs, attend doctors' appointments and take prescribed drugs. In return they would get coverage for tobacco cessation programs and nutritional education, diabetes care, and mental health and chemical dependency services. Those who break the contract could lose these benefits by being demoted to a "basic" package.

Idaho offered similar incentives but no punishments.

Kentucky, meanwhile, provoked concerns from its state medical association by limiting the number of prescriptions to a monthly allowance of four, only three of which could be brand-name drugs. West Virginia's plan has similar restrictions. Waivers are available, but doctors are concerned about a lack of detail on how such exemptions will be made.

"Having physicians obtain pre-approval for a patient to exceed the minimum number of medications allowed would be enormously burdensome and, quite frankly, unworkable on a population plagued by chronic conditions, some of which are interrelated with behavioral health issues," Patrick T. Padgett, director of socioeconomic affairs and staff counsel at the Kentucky Medical Assn., wrote to the state's health department.

Co-pays are another concern. Kentucky plans to charge enrollees, with some exemptions, for various services, including doctor visits. There currently is no plan to list the co-pay on the enrollee's Medicaid card, so it would be hard for doctors to know when to ask for the fee, Padgett said. "Our biggest concern is going to be, administratively, knowing how much to collect," he said.

Joan Phillips, MD, president of the West Virginia chapter of the American Academy of Pediatrics, worries about the impact of the prescription limit. "If a child is on four medications for asthma then has an ear infection, does that mean the parent won't be able to get the prescription?" she asked. "Even if there is a way around the plan, how difficult is that going to be?"

Dr. Phillips also has concerns about the contracts for adults. "If they miss an appointment because they didn't have gas money or their employer wouldn't let them off, does that count against them?"

This aspect of the plan is also unfair for children, she said. "I agree that patients need to have some level of responsibility, but unfortunately the children have to rely on their parents for that."

As a retired physician of 22 years who still works in a clinic for sexually abused children in Charleston, W.Va., Dr. Phillips expressed particular concern about the loss of mental health coverage that would result from patients' failure to follow the contract. She also worries how physicians would enforce the agreement, the details of which are still being worked out.

The governor's proposal in November 2005 required patients to promise to try not to use drugs, smoke, drink too much alcohol and be overweight, and to live a healthy lifestyle. To qualify for the better plan, the patient also must pledge not to use the emergency department unnecessarily. Parents had to vow to be responsible by not smoking and taking children to the doctor on time.

The West Virginia State Medical Assn. participated in work groups running up to the approval of the state's reforms, said Executive Director Evan Jenkins, who is also a state senator.

"The devil is in the details," he said. "But we are supportive of the efforts that the state is taking to try to encourage and instill greater personal responsibility in the Medicaid population." Many physicians like the idea of a "personal responsibility contract" as a way to reduce the number of Medicaid no-shows, he said.

"CMS has very strict guidelines in their evaluation of these plans, and this is not all stick and not all carrot," he said, adding that he is participating in a work group looking at the member agreement and as of just a few weeks ago, it was still being modified.

The WVSMA wants the state Medicaid program, not physicians, to assume responsibility for compliance with patient contracts, Jenkins said. Doctors could provide literature explaining the advantages of abiding by the agreement. He also recommended that Medicaid cards show whether the patient had signed such a pact.

In Idaho, outgoing Gov. Dirk Kempthorne, briefing reporters in a conference call, said the reforms there represent a "shift away from the one-size-fits-all approach of the past" by dividing the Medicaid populations into separate categories. While the program is voluntary, enrollees would be offered incentives, such as access to nutritional programs and more preventive care, to switch over.

Bob Seehusen, CEO of the Idaho Medical Assn., said his group supports the governor's plan. "We still have a number of questions about what the final product will look like, but we are motivated in that the amount of money spent in this very small state on Medicaid would surpass what we pay in education in the next 10 years, and currently education represents almost two-thirds of our state budget."

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State reforms

Idaho. The state introduced new Medicaid packages tailored to specific populations. The changes go into effect July 1. The plans are:

  • "Benchmark Basic," which offers most traditional benefits to adults. Excluded are long-term care, organ transplants and intensive mental health care. It also covers children younger than 19.
  • "Enhanced Benchmark," which covers elderly and disabled people. It includes long-term and institutional care.
  • "Coordinated Benchmark," which is tailored for people also eligible for Medicare.

Kentucky. The state's Medicaid reforms began in May. They include:

  • A benchmark plan called Global Choices, Family Choices for children, Comprehensive Choices for nursing facility patients and Optimum Choices for facilities for adults with mental retardation.
  • Extra services are available for those adopting a healthy lifestyle.
  • Cost sharing varies between plans. Some populations are exempt from co-pays.

West Virginia. The state's Medicaid reforms were approved late last month. They include:

  • "Basic" and "enhanced" benefits packages. Both include screening programs for children offered by traditional Medicaid but only enhanced includes smoking cessation, nutrition education, diabetes care programs, and addiction treatment and mental health services.
  • Patients qualify for the enhanced plan if they sign an agreement promising to adopt a healthy lifestyle.

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