Final report of the Joint Study Committee on Medicaid Reform

Final Report of the
Joint Study Committee on Medicaid Reform

The Honorable Butch Parrish Co-Chairman State Representative District 158

The Honorable Tim Golden Co-Chairman State Senator District 8

The Honorable Craig Gordon State Representative District 163

The Honorable Gloria Butler State Senator District 55

The Honorable Barbara Sims State Representative District 123

The Honorable Dean Burke State Senator District 11

The Honorable Richard Smith State Representative District 134

The Honorable Jack Hill State Senator District 4

The Honorable Darlene Taylor State Representative District 173

The Honorable Fran Millar State Senator District 40

The Honorable Bruce Williamson State Representative District 115

The Honorable Renee Unterman State Senator District 45

Dr. Catherine Bonk Atlanta Gynecology and Obstetrics

Sheila Shann Cook CFO Pine Leaf Investments

Tony Herdener CFO Northeast GA Health System

Ed Painter Business Owner Whitfield County

Patrick M. Healy President PeachState Health Plan

Clyde L. Reese III Esq. Commissioner Department of Community Health

Joint Study Committee on Medicaid Reform

INTRODUCTION
House Resolution 107 created the Joint Study Committee on Medicaid Reform for the purposes of
evaluating the state s Medicaid program examining best practices and planning for future actions necessary to
sustain appropriate levels of services and funding.
Representative Butch Parrish Chairman of the House Health Appropriations sub-committee and Senator Tim Golden Chairman of Senate Health Appropriations sub-committee served as the Committee s Co-Chairmen. Other members of the Committee were Representative Craig Gordon Representative Barbara Sims Representative Richard Smith Representative Darlene Taylor Representative Bruce Williamson Senator Dean Burke Senator Gloria Butler Senator Jack Hill Senator Fran Millar Senator Renee Unterman Commissioner Clyde Reese III Dr. Catherine Bonk Mr. Tony Herdener Mr. Patrick Healy Ms. Sheila Shann Cook and Mr. Ed Painter.
The Committee held public hearings on four dates August 28 2013 at the Coverdell Legislative Office Building in Atlanta September 23 2013 at Wiregrass Technical College in Valdosta October 28 2013 at Georgia Southern University in Statesboro and November 18 2013 at the Coverdell Legislative Office Building. During these hearings the Committee heard testimony from the following individuals
Dr. Jerry Dubberly Medicaid Division Chief Department of Community Health
Dr. Jim Hotz Clinical Services Director Albany Area Primary Health Care
Charles Owens Director State Office of Rural Health

Blake Fulenwider Healthcare Reform Administrator Governor s Office of Planning and Budget
James Pettis President Assisted Living Association of Georgia
Randy Sauls CEO South Georgia Medical Center
Martin Miller Coastal Home Care Inc. Pepi Nelson ResCare Home Care Paula Guy CEO Georgia Partnership
for TeleHealth Inc. Denise Kornegay Executive Program
Director Statewide AHEC at Georgia Regents University Dr. Robert Phillips Jr. Vice President of Research and Policy American Board of Family Medicine Dr. Jean Bartels Provost Georgia Southern University Dr. Greg Evans Dean of the College of Public Health Georgia Southern University Jon Howell President Georgia Health Care Association Dr. Jacqueline Fincher Chapter Governor American College of Physicians Georgia Chapter John Sparks Chairman Georgia Charitable Care Network Inc. Dr. Adrienne Zertuche Emory University Bridget Spelke M.D. candidate Emory University School of Medicine Ajay Gehlot CEO Southwest Georgia Health Care Inc. Maggie Gill CEO Memorial University Medical Center Matt Crouch CEO Peachford Hospital HD Cannington former CEO Charlton Regional Hospital Dr. Kathryn Cheek Pediatrician Eddie Grogan Caremaster Medical and Jesse Petrea CHC/Altrus.
The testimony from the above-mentioned individuals coupled with submitted written comments led to the identification of the

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Joint Study Committee on Medicaid Reform

following issues and the formulation of the accompanying recommendations to address the state Medicaid program.

BACKGROUND

The Georgia Department of Community Health (DCH) is designated as the single state agency for the Medicaid program. Medicaid and the State Children s Health Insurance Program (SCHIP or Peachcare for Kids) are jointly funded and administered by the states and the federal Centers for Medicare and Medicaid Services (CMS) a division of the United States Department of Health and Human Services (USHHS). Currently Georgia Medicaid and PeachCare for Kids cover 1.8 million people accounting for 19 percent of the state s population. In 2013 Medicaid and PeachCare health benefits cost the state $2.8 billion in state funds representing 16 percent of the state budget. Combined state and federal health expenditures totaled $8.8 billion.

FY 2013 Average Monthly Members

Program
Aged Blind Disabled Low Income

Enrollees 463 569
1 117 640

Percent 26% 62%

Peachcare for Kids

218 265 12%

TOTAL

1 799 474 100%

Source Tim Connell CFO Presentation to DCH Board 8/22/13

Georgia Medicaid like nearly all states operates by both directly administering and contracting for the provision of member health services. DCH manages the Aged Blind and Disabled (ABD) population and pays for care at fee-for-service (FFS) rates. ABD utilizes an "any willing provider" model of access meaning any qualified provider can enroll. Care for the Low Income Medicaid (LIM) population is provisioned by one of three Care Management Organizations (CMO). The CMO is paid on a fixed per member per month (PMPM) basis and held financially at-risk. The CMOs are responsible for managing the benefits provider network and payment system for these members.

By 2020 one in four Americans or about 26 percent of the population is projected to be enrolled in Medicaid. DCH projects that by 2019 Georgia Medicaid enrollment will decline slightly as a proportion of the state population to 14.9 percent but will experience significant cost growth while experiencing flat enrollment. Medicaid enrollment trends are countercyclical as revenues decline and unemployment rises enrollment tends to increase. During the most recent economic downturn Georgia experienced significant increases in enrollment tracking well ahead of unemployment. Aside from an enrollment reduction in FY 2007 due to a change in citizenship verification requirements Georgia has largely mirrored national trends since 2006 in both enrollment and cost growth.

Georgia is spending relatively less than its border states. The following table outlines Georgia s enrollment and expenditures compared to the southern states averages for the same figures.

Expenditure
Recipients per 100 000 population Per capita Average Medicaid payment per recipient

Georgia
19 034
$831 $3 717

Southern Average 19 807
$1 114 $4 859

States can utilize three policy "levers" to control Medicaid spending. These are reimbursement (amount paid for a service) eligibility (who receives service) and utilization (which services will be paid and under what conditions). Many states reduced provider reimbursement to meet budget constraints during the Great Recession although this can reduce access to care. The Patient Protection and Affordable Care Act (P.L. 111-148 or PPACA) prohibits states from reducing Medicaid eligibility for adults through 2013 and children through 2019 effectively removing that policy option. Therefore

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Joint Study Committee on Medicaid Reform

Georgia avoided reductions in provider reimbursement by relying on utilization controls. Despite this among the states Georgia reimburses providers at a relatively low rate. Notwithstanding the temporary increase in some Primary Care Physicians reimbursement rates through 2015 Georgia s low payment schedule begs the question of whether the bottom of the list is a desirable location. Low rates can have a negative impact on access to care for Medicaid members as well contributing to a shortage of medical professionals available to serve the general public.

COST DRIVERS

In Georgia the ABD population is responsible for 58 percent of Georgia s Medicaid expenses yet comprises only 29 percent of the membership. Higher cost members within this population often suffer from chronic conditions and are more frequent users of emergency room and inpatient services which are the most expensive forms of care.

Distribution of Medicaid Payments by Enrollment Category FY20101

Location

Aged Disabled Adult Children Total

United

22%

42%

15%

21% 100%

States Alabama

23% 37%

8%

32% 100%

Florida

24%

42%

13%

20% 100%

Georgia

21%

39%

15%

26% 100%

Kentucky

17%

46%

12%

25% 100%

Mississippi 23% 43% 11% 24% 100%

N. Carolina 17% 45% 13% 24% 100%

S. Carolina

20%

43%

15%

22% 100%

Tennessee

15%

38%

21%

26% 100%

Source Kaiser Family Foundation kff.org

With the goal in mind of improving outcomes and reducing costs over time the Department

of Community Health recently outlined its vision of a care coordination program for the ABD population. Some features of the new program are that it will be voluntary for members (all members will have the ability to opt out) and will include care coordination case management and disease management services. Members will have access to a care coordination call center a nurse line and outreach and education relative to the member s disease state. High-risk highutilization members will access more intensive medical coordination services which may involve interdisciplinary treatment teams medical homes and promotion of member engagement. The program will be managed by a single statewide vendor but administrative functions such as claims payment rate setting and policy and denial or authorization of services will remain with DCH.
ACCESS
Not accounting for the impact of the PPACA the national primary care physician shortage stands at 46 000 a figure projected to increase to more than 100 000 by 2025. Medicare through the Department of Health and Human Services funds the vast majority of residency training programs in the United States. This tax-based financing covers resident salaries and benefits through payments called Direct Medical Education (DME) payments. However funding levels have remained frozen over the last ten years creating a bottleneck in the training of new physicians in the U.S. States have steadily expanded their medical school programs resulting in more residents needing training locations. In response a large number of teaching hospitals have begun funding resident training to increase the supply of residency slots.

1 NOTE The figures included in the table total 60% of expenses as attributable to the Aged and Disabled. The 58% figure in the column represents the ABD program. This slight discrepancy results from different classification methodology.
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Joint Study Committee on Medicaid Reform
Physicians per 100 000 working age population by State 2008-2010

The cap imposed on residency slots in the 1990s has prevented Georgia from developing and funding the expansion of residency slots the state needs. Nationally Georgia ranks 39th in total medical residents per hundred thousand people. For the 2012-2013 academic year the state could claim 2 345 residency slots of which 2 122 were filled.2 Concurrently the five medical schools reported enrollment of 2 377. Georgia has 20.8 doctors per hundred thousand citizens nationally there are 35.7 doctors per 100 000 citizens. To address the current physician shortage in Georgia would require an additional 1 450 physicians. The state of Florida in a similar situation with only 3 000 residency slots for 4 000 trained medical students is planning to invest $80 million over the next few years into expanding residency slots in the state.
2 GBPW GME Fact Sheet 2013
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Source HRSA The US Health Workforce Chartbook Part I Clinicians
The Georgia GME (Graduate Medical Education) Exit Survey Report continues to show the best way to retain a doctor is to grow your own. With only 16 percent of medical school graduates staying in Georgia residency programs the state is essentially investing in medical education only to see the students leave the state for their residency training. Access to quality care becomes an issue when Georgia residents train outside the state. Exacerbating the situation is the volume of chronic disease conditions and number of lowincome citizens.
The federal requirements for access are generic and vague however with the advent of Care Management Organizations (CMOs) DCH worked to make this more specific for each provider type including actual geographic areas. Geo-mapping software helps to determine an individual s distance from providers. CMO access requirements are contractually defined and based upon distance and the timeliness with which a member can get an appointment. Each standard varies by region and type of service. Other alternative means of increasing access to care in Georgia are greater utilization of telemedicine and nonemergency transportation (NET) as well as loan forgiveness programs for medical students in return for serving in medically underserved areas (MUAs) for a certain time period after they become licensed professionals.

Joint Study Committee on Medicaid Reform

Telemedicine is currently available in 50 nursing homes in Georgia and is a tool which helps avoid the trauma and expense of sending an elderly person to the emergency room. Telemedicine decreases transportation costs dramatically sending a nursing home patient to a psychiatric consult once a day would cost $400 for each visit. Such visits are now conducted remotely via telemedicine. Children are being diagnosed early with the use of telemedicine which helps keep those children in school. Many local school systems are using this technology school-based clinics are increasing from 16 to 41 this year. Follow-up appointments may be completed via telemedicine which greatly reduces the burden on rural patients with less access to care. Finally telemedicine can greatly increase access to specialty or sub-specialty providers that may otherwise only be available in more developed areas.
ADMINISTRATIVE SIMPLIFICATION
DCH has made significant strides to reduce the administrative burdens placed on providers but there is still opportunity for continued improvement. Many Georgia providers spend considerable time navigating confusing and varied rules related to obtaining precertification authorizations credentialing and reimbursement for care. Testimony to the committee revealed that much of this complexity results from the division of the Medicaid program into the state administered Fee-for-Service (FFS) model which exists alongside the capitated CMO arrangement for Low Income Medicaid (LIM). Each CMO can have different procedures for many common business processes. This can effectively mean that Georgia providers have to navigate four separate sets of requirements and procedures to see Medicaid patients. The following steps would help in streamlining these processes
publish a list of all authorization requirements among all CMOs detailed by current procedural terminology (CPT) code and/or a healthcare common
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procedure coding system (HCPCS) and place of service codes published on each CMO s web site and a common preferred drug list (PDL) among all CMOs and a consistent method for making changes and then filling prescriptions based on date of order and a credentialing process among fee-forservice (FFS) Medicaid and the CMOs to reduce the cost and timeframe for providers to join a CMO provider panel. In Georgia credentialing can take up to four months while a neighboring state Alabama credentials in 14 days.
RATES AND REIMBURSEMENT
As mentioned Georgia refrained from reducing provider rates even in the midst of the recent economic downturn but the state s provider rates still remain lower than the southeastern average. Low Medicaid rates and reduced private insurance reimbursement rates combined with high numbers of uninsured patients have affected many of Georgia s healthcare providers but probably the most adversely affected have been Georgia s rural hospitals. According to the Office of Rural Health rural hospitals in Georgia average 38 days of cash on hand and the recent closure of three rural hospitals is indicative of this financial strain. Reimbursement and its wider impact on the economy and job growth is also evident--when a select group of Medicaid providers were surveyed most of those surveyed expressed that they had no intentions of expanding their businesses.
FEDERAL ENVIRONMENT
The federal climate relating to healthcare is incredibly fluid at the moment with the longterm impacts of the PPACA still unknown. Uncertainty surrounds the implementation of the law including concerns about the ability of the federal government to fund Medicaid expansion at 100%-90% of cost continuing

Joint Study Committee on Medicaid Reform
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APPENDIX

Joint Study Committee on Medicaid Reform

1. Text of HR107

A RESOLUTION 1 Creating the Joint Study Committee on Medicaid Reform and for other purposes. 2 WHEREAS Medicaid serves a vital role in ensuring the health of the needy citizens of this 3 state who would otherwise be without access to necessary health care and 4 WHEREAS the cost of providing Medicaid continues to escalate and to require significant 5 amounts of state resources each year and 6 WHEREAS with Medicaid enrollment increasing at the same time that states are facing 7 unprecedented budget pressures there is widespread recognition that expanded access to care 8 is unsustainable without changes in how states deliver and pay for care and 9 WHEREAS for the purposes of determining an appropriate plan for Medicaid reform it 10 would be beneficial to study current policies and procedures of Medicaid and whether current 11 programs are being implemented in the most efficient and effective manner the federal 12 expansion of Medicaid as authorized under the federal Patient Protection and Affordable 13 Care Act and models in other states to enable the General Assembly to understand and 14 determine appropriate levels of service and expenses of Medicaid in order to ensure 15 sustainability of the Medicaid program. 16 NOW THEREFORE BE IT RESOLVED BY THE GENERAL ASSEMBLY that there is 17 created the Joint Study Committee on Medicaid Reform to be composed of 18 members as 18 follows 19 (1) Six members of the Senate appointed by the Lieutenant Governor at least one of which 20 shall be a member of the minority caucus 21 (2) Six members of the House of Representatives appointed by the Speaker of the House 22 of Representatives at least one of which shall be a member of the minority caucus and 23 (3) Six members appointed by the Governor as follows 24 (A) One representative from the Department of Community Health 25 (B) One member representing hospitals 26 (C) One member representing insurance providers 27 (D) One member representing nursing homes 28 (E) One physician and 29 (F) One consumer member. 30 The Lieutenant Governor and the Speaker of the House of Representatives shall each 31 designate one of their appointees to serve as cochairpersons. The committee may elect other 32 officers as deemed necessary. The cochairpersons may designate and appoint subcommittees 33 from among the membership of the committee as well as appoint other persons to perform 34 such functions as they may determine to be necessary as relevant to and consistent with this 35 resolution. The cochairpersons shall only vote to break a tie. The committee shall meet at 36 the call of the cochairpersons. A quorum for transacting business shall be a majority of the 37 members of the committee. 38 BE IT FURTHER RESOLVED that the committee may conduct its meetings at such places 39 and at such times as it may deem necessary or convenient to enable it to exercise fully and 40 effectively its powers perform its duties and accomplish the objectives and purposes of this
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Joint Study Committee on Medicaid Reform
41 resolution. Legislative members of the committee shall receive the allowances provided for 42 in Code Section 28-1-8 of the Official Code of Georgia Annotated. Members of the 43 committee who are state officials other than legislative members and state employees shall 44 receive no compensation for their services on the committee but they shall be reimbursed 45 for expenses incurred by them in the performance of their duties as members of the 46 committee in the same manner as they are reimbursed for expenses in their capacities as state 47 officials or employees. The allowances authorized by this resolution shall not be received 48 by any member of the committee for more than five days unless additional days are 49 authorized. The funds necessary for the reimbursement of the expenses of state officials 50 other than legislative members and state employees shall come from funds appropriated to 51 or otherwise available to their respective departments. All other funds necessary to carry out 52 the provisions of this resolution shall come from funds appropriated to the House of 53 Representatives and the Senate. 54 BE IT FURTHER RESOLVED that the committee shall make a report of its findings and 55 recommendations to the General Assembly and the Governor with suggestions for proposed 56 legislation if any on or before December 31 2013. The committee shall stand abolished on 57 December 31 2013.
2. Section 1115 Premium Assistance Waivers
Source KFF.org Medicaid Expansion Through Premium Assistance
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