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Virginia: Legislative Update Brent Rawlings and Keith Hare VHHA and VHCA March 11, 2015.

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Presentation on theme: "Virginia: Legislative Update Brent Rawlings and Keith Hare VHHA and VHCA March 11, 2015."— Presentation transcript:

1 Virginia: Legislative Update Brent Rawlings and Keith Hare VHHA and VHCA March 11, 2015

2 Outline for Today’s Discussion I.Introductions II.Overview of VHHA and VHCA –Who we are –Focus of state legislative activities III.Overview of Political Environment IV.Review of 2015 General Assembly –Key legislation tracked by VHHA and VHCA –VHHA and VHCA state budget priorities –Studies (Medicaid, COPN, and Provider Tax) V.State Health Reform Initiatives –Why reform is needed –Medicaid reform objectives –Medicaid Expansion VI.Q&A

3 Overview of VHHA and VHCA:

4 Trade association of hospitals and health systems Advocacy Policy Patient safety and quality improvement Health care data and information Top tier performance and health care value/population health Emergency preparedness “The Virginia Hospital & Healthcare Association is an alliance of 110 hospitals and 36 health delivery systems that develops and advocates for sound health care policy in the Commonwealth. Its vision is to achieve excellence in both health care and health.” VHHA at a Glance

5 Virginia’s hospitals and health systems contributed $34.8 billion to the economy and directly and indirectly supported 913,636 jobs in The health care industry as a whole directly employs 444,298 professionals, while hospitals alone employ 123,508 Virginians. Hospitals and health systems are among the top five employers in 60% of cities and counties in Virginia, among top three employers in 45% of cities and counties. For every $1 dollar spent by a Virginia hospital, $1.61 is spent in other parts of the economy. Virginia hospitals accounted for $200 million in state and local taxes in The total value of community support provided by Virginia’s hospitals and health systems exceeded $2.6 billion in Virginia hospitals provided over $600 million in charity care in Virginia hospitals are implementing evidence-based best practices to improve quality of care by reducing central line-associated blood stream infections, preventable readmissions and early elective deliveries, saving millions of dollars in the process. VHHA at a Glance

6 VHHA Focus of State Legislative Activities “Closing the Coverage Gap” –Medicaid Expansion –Enrollment in Exchanges Budget and fiscal priorities dominate –Medicaid payments to hospitals have not kept pace with inflation –Significant Medicare payment cuts under ACA and Sequestration Focus on rural health –More than half of rural hospitals had negative operating margins in 2012 –Rural hospitals one of top 5 employers in 82% of rural Virginia communities Healthcare workforce –Supporting existing and incentivizing more health professional graduate training Provider Assessments? Certificate of Public Need (COPN) Reform?

7 VHCA - Virginia’s Nursing Facilities Virginia’s 286 nursing facilities employ over 36,000 people and care for over 28,000 residents every day. Nursing facilities often are among the largest employers in many Virginia towns and communities and have an annual statewide payroll of approximately $1.5 billion Overall, all long term care facilities, of which nursing facilities represent a vital component, along with their suppliers represent about 2% of Virginia’s economy Long term care providers provide additional economic support through their significant role as taxpayers at the local, state and federal levels

8 VHCA - Challenges By 2030 Virginia will have 1.8 million citizens age 65 or older Citizens age 65 and older will make up 19 percent of the total population Average life expectancy is almost 80 years old compared to 70 years in the 1960s –Life expectancy will continue to rise with advances in medical technology and healthier lifestyles The public and private sector will need to work together to meet the growing demands of an aging population

9 VHCA - Challenges VHCA members are caring for residents with more complex medical needs than in the past Residents in Virginia’s nursing facilities have some of the most complex medical needs in the United States due to strict eligibility criteria The average age of a nursing home resident in Virginia almost 80 years old Reimbursement rates from Medicare and Medicaid are not keeping pace with the cost of providing care

10 Overview of Political Environment:

11 Political Environment With 2015 being an election year for all 140 members of the General Assembly, the political environment remains challenging on many fronts High turnover in last five years in General Assembly Key retirements of knowledgeable health care leaders since 2010 The Commonwealth’s budgetary challenges continue to play a large role in what the Governor and General Assembly do and do not do Republicans likely to maintain strong majority in House, but majority control of Senate uncertain heading into elections

12 Virginia’s Political Environment General Assembly is losing over 150 years of experience with the retirements of Senators Colgan, Stosch, Watkins and Puller Since 2010, there have been 57 new members elected to the House of Delegates and 14 new members elected to the Senate If you go back to 2008 they are 63 new members of the House and 21 new members of the Senate. –That is a combined turnover rates of 58% in 8 years. *Source: Virginia Free

13 Review of 2015 General Assembly: VHHA Key Legislation

14 VHHA Key Legislation No movement on Medicaid Expansion -Recognition that substantive movement on this issue in 2015 was unlikely -Virginia can still develop and implement a program to draw down 100% federal funding through FY Should be done in fiscally responsible manner that promotes value, improves access to preventive services, elevates quality, and further reduces costs Governor’s introduced budget authorized Medicaid Expansion, but eliminated from House and Senate budget HB 2212 (Hope) Healthy Transitions Program (tabled) HB 1830 (Plum) State Plan Eligibility (tabled)

15 VHHA Key Legislation COPN –HB 2030 (Byron) - remove certain projects to obtain medical equipment with a minimum value below $1 million from COPN requirements (tabled) –HB 2177 (Orrock) - remove capital expenditures, bed additions, additional operating rooms, NICUs and open heart surgery from the requirement to obtain a COPN and eliminate regional health planning agency for Northern Virginia Subsequently amended to only remove capital expenditures –SB 1283 (Martin) – Senate companion bill to HB 2177 Subsequently amended to conform to HB 2177 as amended –SB 1415 (Dance) - remove capital expenditures from the requirement to obtain a COPN (incorporated into SB 1283)

16 VHHA Key Legislation COPN (cont.) –VHHA supports a comprehensive, system-wide approach to any efforts to reform the COPN law that takes into account the effects of any changes on charity care, patient safety and quality of care, access to essential health care services, and other critical aspects of our health care delivery system –Procedural reforms and improvements are necessary and appropriate, but piecemeal deregulation of COPN that fails to address the principles above may not yield a better system for Virginians –HB 2177 (Orrock) and SB 1283 (Martin) (as amended) presented a compromise that allows Virginia hospitals and health systems to work with the General Assembly and the Secretary to undertake a comprehensive review of the COPN process and avoid piecemeal deregulation

17 VHHA Key Legislation Behavioral Health –SB 1265 (Deeds) and HB 2118 (Cline) clarify definition of “real time” for psych bed registry (when there is a change or if no change, at least daily) –SB 773 and SB 779 (McWaters) and HB 1717 (LeMunyon) modify law governing inpatient psychiatric admission of objecting minors between the ages of 14 and 18 –SB 1114 (Barker) – Provides that a TDO for medical testing, observation and treatment may be issued for a person who is also the subject of an ECO as a way to reconcile the 8-hour limit on an ECO with a hospital’s EMTALA obligations –SB 1410 (Deeds) – establishes new requirement for the CSB employees who conduct evaluations of persons held under ECOs

18 VHHA Key Legislation Workers Compensation –HB 1820 (Farrell) initially directed the Workers’ Compensation Commission to develop a prevailing community rate fee schedule based upon representative charges for services on an annual basis, subject to a cap on growth tied to CPI –Final bill simply authorizes the Commission to establish “communities” for purposes of determining a prevailing community rate and directs the Commission to study possible data sources for determining charges to be used in developing prevailing community rate fee schedule and to report back to the House and Senate Commerce and Labor Committees by December 15, Drug Prior Authorization –HB 1942 (Habeeb)/SB 1262 (Newman) –Requires provider contracts with insurers to include specific provisions for practices pertaining to prior authorization of drugs

19 VHHA Key Legislation “CARE (Caregiver Advise, Record, Enable) Act” Bills –HB 1413 (Filler-Corn)/SB 851 (Favola) –Requires hospitals to follow specified procedures to identify and educate “caregivers” who will be providing post-discharge care for patients –Part of AARP national initiative Observation Status Bills –HB 1509 (Sullivan)/HB 1561 (Rust)/SB 750 (Black/Barker)/ SB 857 (Ebbin) –Requires hospitals to give observation patients notice of their status and the potential for higher patient costs, hospital, post-discharge skilled nursing and pharmaceutical services

20 VHHA Key Legislation “Right to Try” Laws –Permits prescribing of experimental drugs for terminally ill patients –HB 1750 (Ransone)/SB 732 (Stanley) –Part of national initiative (Goldwater Institute) Stillbirth Policies –SB 1197 (Norment) requires hospitals with obstetrical services to have a policy for managing stillbirths and incorporates into existing reporting requirements for congenital birth anomalies the reporting of stillbirths Telemedicine –HB 2063 (Kilgore)/SB 1227 (McWaters) amends definition of “telemedicine” and authorizes prescription of Schedule VI drugs via telemedicine –SB 718 (Stanley) establishes a 3-year telemedicine pilot program to reduce ED visits for low-acuity services (left in Appropriations)

21 Review of 2015 General Assembly: VHCA Key Legislation

22 VHCA Legislation of Interest - PASSED Criminal History Check for Nurse Licensure - SB1018 (Dance) Establishes state and federal criminal history background check requirements for applicants for licensure as a practical nurse or registered nurse beginning January 1, 2016 Hospice - HB1738 (Hodges) The bill requires every hospice licensed by the Department of Health or exempt from licensure to notify every pharmacy that dispensed drugs to a hospice patient for the purpose of pain management of the patient's death within 48 hours

23 VHCA Legislation of Interest - FAILED Staffing Standards - HB1396 (Leftwich) Was tabled by the House Committee on Health, Welfare & Institutions. The bill had a large fiscal impact to the Medicaid program in future years Would have required the Boards of Health and Social Services to set staffing standards for nursing facilities and assisted living facilities CNA Training Hours Increase - HB1583 (Watts) Would have increased the minimum duration of education programs to prepare nurse aides for certification from 120 to 200 hours was also tabled in the House Committee on Health, Welfare & Institutions. Concern was expressed that the cost of training would increase and be burdensome on potential CNAs who paid for their own training and for facilities that provided the training free for potential CNAs

24 VHCA Legislation of Interest - FAILED Punitive Damages Cap - HB2360 (Toscano) Would have changed the punitive damages cap, including for medical malpractice, from $350,000 to $750,000 Paid Sick Leave - HB2008 (Kory) and HB2387 (Sickles) Would have required private employers to give to each full-time employee paid sick days, to be accrued at a prescribed schedule Minimum Wage Bills Several minimum wage bills were introduced, but all were tabled

25 Review of 2015 General Assembly: VHHA Budget Issues

26 VHHA Budget Priorities Support Governor’s introduced budget authorizing Medicaid expansion Recognizing that hospitals have not received inflation updates to Medicaid payment in recent years, focused on additional funding in critical areas of need Rural Health Amendment –Item 301 #8s (Carrico) directed DMAS to pay costs for Medicaid services provided by Virginia's 37 rural hospitals –Cost approx. $10 million GF ($20 total) Health Care Workforce/GME Amendment –Item 301 #12s (Howell) and #22s (Watkins) directed DMAS to rebase Medicaid GME payments (which haven’t been updated in 15 years) to strengthen current programs and support further growth in residencies with incentive fund program in FY17 –Cost $6.5 million GF (yielding $13 million in support) in FY16 Provider Assessment Amendment –Item 278#1s (Watkins) directed the Secretary of HHR to develop a process to study and design a mutually beneficial program that meets certain criteria –Report and implementation plan to the Governor and General Assembly for FY16 if such criteria are met

27 VHHA Analysis of Budget Results Medicaid Expansion / Closing the Coverage Gap Eliminates Governors’ language authorizing Medicaid expansion Healthy Virginia Plan Retains coverage for medical services included in Governor’s Access Plan (GAP). Reduces income eligibility criteria for severely mentally ill from 100 percent of the federal poverty level (FPL) to 60 percent FPL, but includes “grandfather” provisions for individuals covered under original 100 percent FPL criteria. Estimates number of individuals to be covered at 21,600. Healthcare Workforce and Rural Health Items Neither body included VHHA’s proposed amendments for additional funds to address rural health or GME payment improvements Senate recommends study of the GME issues, but not included in final bill

28 VHHA Analysis of Budget Results Provider Assessment Directs Secretary of HHR to develop a plan with options for a hospital provider assessment program and report back to the General Assembly by November 1, 2015 Eliminates provision that sought to redirect “at least 20 percent” of potential assessment away from supporting supplemental provider payments Adds language incorporating the VHHA suggested design proposal with additional provisions directing that the plan consider the other related proposals that were offered COPN Adds evaluation of COPN process by a work group convened by the Secretary of HHR, using language equivalent to that included in HB2177/SB1283 Safety Net Services Adds $3.1 million to support for free clinics in fiscal year (FY) 2016 (moving General Fund support from $1.7 million to $4.8 million) Adds $1 million to support community health centers in FY16 (from $1.8 million to $2.8 million) Other Items Adds $2.2 million General Fund to avoid a cut to non-emergency professional emergency department claims

29 Review of 2015 General Assembly: VHCA Budget Issues

30 What Happened in Last Year’s Budget Nursing facilities were poised to receive an additional $123 million (total funds) over the course of the biennium And THEN, the floor dropped of the Commonwealth’s Budget – The discussion became one of holding onto as much of the “gains” for nursing facilities as possible through a full court press with legislators and other policy-makers. It meant re-emphasizing the importance of the rebasing and inflationary adjustments in order to support the change in payment methodology and our challenges for facilities as they transitioned to managed care under CCC It also meant reminding them of the previous savings ($150 million, since 2009) extracted from nursing facility payments

31 What Happened in Last Year’s Budget (continued) VHCA protected full rebasing and inflationary adjustments for SFY 2015 However, the Budget as passed last year removed the inflation adjustment for SFY 2016, meaning Medicaid nursing facility rates would essentially be level funded from 2015 to 2016 The Budget also accelerated the scheduled reduction in capital reimbursement (Fair Rental Value) under the new payment methodology This represented a reduction in Medicaid funding of approximately $14 million for 2015 and 2016 combined

32 What Happened in Last Year’s Budget (continued) The Bottom Line Last Session, we held onto $81.4 million (total funds) in new money to Medicaid nursing facility providers despite a very significant revenue shortfall in the Commonwealth This represented two-thirds of the previously anticipated increase and importantly, 85 percent of the anticipated 2015 increase to nursing facilities which was viewed as vital in implementing both Commonwealth Coordinated Care (CCC) and Price-Based rates

33 This Year’s Budget The General Assembly closed the revenue gap that had arisen last Spring, however the gap had widened by the Fall Thus, we entered this year’s Budget cycle with two main goals: –Hold onto the gains made last year as they carry through to 2016 in terms of base funding –Seek restoration of inflation for 2016 in the event revenue became available

34 This Year’s Budget (continued) Several factors were working against our two goals: Sequestration was significant due to Virginia’s reliance on the defense industry (and our general reliance of federal government spending) The Governor and General Assembly tapped Virginia’s “Rainy Day Fund” in order to balance the budget. Items, such as State employee and teacher raises had been eliminated to achieve savings last year; these were priorities for funding should revenue become available. NFs had been largely spared in 2015, so becoming a priority in front of programs that had been cut was an uphill battle

35 This Year’s Budget (continued) On Thursday, February 26 th, the General Assembly passed their budget amendments VHCA was successful in avoiding additional reductions to reimbursement for Medicaid services by nursing facilities However, the revenue situation had not improved to the point of restoration of 2016 inflation.

36 Review of 2015 General Assembly: Studies

37 Studies: Medicaid Reform SJR268/HR637 directs the Joint Legislative Audit and Review Commission (JLARC) to conduct a study of Medicaid –Look at eligibility screening processes and fraud and abuse –Look at appropriateness and cost-effectiveness of services –Look at evidence-based practices and strategies used successfully in other states –Report is due November 30, 2016 House bill initially called for a comprehensive financial audit of DMAS while the Senate version was limited to a study of long term care Conference bill narrowed the House version to include a more limited review of the program focusing on areas not previously audited Relevant to ongoing debate over Medicaid Expansion

38 Studies: Provider Assessment The Secretary of Health and Human Resources shall conduct an analysis and develop a plan with options for a hospital provider assessment program, including a review of other issues deemed necessary, for consideration by the General Assembly in the 2016 Session, that: (i) complies with applicable federal law and regulations; (ii) is designed to operate in a fashion that is mutually beneficial to the Commonwealth and affected health care organizations; (iii) addresses health system challenges in meeting the needs of the uninsured and preserving access to essential health care services (e.g. trauma programs, obstetrical care) throughout the Commonwealth; (iv) supports the indigent care and graduate medical education costs at hospitals in the Commonwealth; (iv) advances reforms that are consistent with the goals of improved health care access, lower overall costs and better health for Virginians; and (v) takes into account the extent to which it provides equity in the assessment and funding distribution to affected health care organizations. In the development of this program, the Secretary’s office shall be assisted by the Department of Medical Assistance Services, the Virginia Center for Healthcare Innovation, the Virginia Hospital and Healthcare Association and other affected stakeholders.

39 Studies: Provider Assessment Provider assessment is a mechanism by which the state can raise revenues needed to fund the state Medicaid program and obtain a federal match A growing interest in provider assessments among the Governor, the General Assembly, and our members has made this a policy priority for VHHA Virginia is one of 8 states without a hospital assessment or tax program (TX and Louisiana are listed as not having hospitals taxes, but they have local authority or inter- governmental transfer programs which are functionally equivalent)

40 Studies: Provider Assessment CA WI WA OR ID WY CO UT AZ NM NV TX MN IA MO OK NE KS SD NDMT MA AL LA FL TN MI IN OH IL PA AK WV VA KY NC SC GA AR MS NH VT HI DE ME NY MD CT NJ RI Has Hospital Provider Tax Exploring Hospital Provider Tax No Hospital Provider Tax DC Source: Health Management Associates

41 Studies: Provider Assessment CMS requires that such assessments be broad-based, uniformly applied and, after any resulting payment increases back to affected providers, that there be winners and losers (42 CFR ) Experience in other states shows that assessment programs, if implemented, should have clear parameters that specify who is taxed, how it is assessed, and how the proceeds will be used The current federal limitation on provider taxes is 6 percent of net patient revenue of taxed entities.

42 Studies: Provider Assessment Complex issue, with both political and technical judgments to make PROsCONs Federal parameters and tests must be satisfied Protections against diversion for other funding priorities is key  Creates state share to leverage additional Medicaid reimbursement  Enhances relationship with Medicaid agency  Enhances base rates under expansion  Can help address inequities within current reimbursement structure  Mitigation may occur naturally within systems or facilitated by the association  Assessment programs must be redistributive and therefore not all hospitals will gain, or gain equally  Assessment programs don’t usually go away and therefore providers become permanent source of financing  Not unusual to have administrative fee paid to the state  Limited direct payments under managed care

43 Studies: COPN SB1283/HB2177 and budget direct the Secretary of HHR to convene a workgroup of stakeholders to review the current COPN process Work group to develop specific recommendations for changes to the COPN process to address any problems or challenges identified, which shall include recommendations for changes to the process to be introduced during the 2016 Session of the General Assembly The Secretary shall report on the recommendations developed by the work group by December 1, 2015

44 Studies: COPN In 2000, the General Assembly directed the Joint Commission on Health Care (JCHC) to develop a plan for phasing out the COPN program (SB 337 – 2000) After comprehensive study, a VHHA-supported plan for responsible deregulation was developed and submitted to the 2001 General Assembly (HB 2155/SB1084 – 2001). Each phase associated with improvements in access to care for low- income uninsured, Medicaid payment improvements, and funding for graduate medical education While broadly endorsed, the state’s fiscal difficulties precluded the plan’s adoption

45 Studies: COPN Efforts to change COPN law are cyclical in nature occurring every five years or so Last significant changes made in 2009 (HB1598 – Hamilton) –Streamlining and reducing the criteria for determining need from twenty down to eight criteria –Transitioning the review process for psychiatric beds to a Request for Application process –Expediting the review process for certain capital projects –Other changes to COPN process

46 Studies: COPN 36 states and the District of Columbia have a CON law Virginia ranks 24th out of 36 states and the District of Columbia based upon the number of different types of facilities and services regulated by certificate of need –Tied with Alaska at 19 different types –The highest number of types is 30 and the lowest is 1, with an average of states have eliminated or drastically curtailed their CON laws Eleven (11) of those states repealed their CON laws after 1983 and before 1990 Only states to repeal after 1990 and North Dakota and Pennsylvania Pennsylvania experience suggests that deregulation could, at least initially, result in a decrease in general hospitals and an increase in ASCs and imaging centers

47 Studies: COPN COPN law allows Commissioner to attach charity care condition to COPN approval –About 2/3 of COPNs have charity care conditions with an average of 3.3% of gross revenues –In FY 2011 $856,950,546 was reported as provided in meeting the obligations of COPN conditions plus $15,528,163 of in-kind and cash donations to safety net providers Health care is not a “free market” –Hospitals required to treat patients who need immediate medical attention regardless of ability to pay –Largest payors – Medicare and Medicaid set payment amounts below cost for health care services –No incentive to provide certain specialized, low-profit or money- losing, but essential health care services

48 State Health Reform Initiatives: Why reform is needed

49 Source: Institute of Medicine: The Healthcare Imperative: lowering costs and improving outcomes Health Care Reforms - Why they matter

50 Source: Institute of Medicine: The Healthcare Imperative: lowering costs and improving outcomes Health Care Reforms - Why they matter

51 Source: Institute of Medicine: The Healthcare Imperative: lowering costs and improving outcomes Health Care Reforms - Why they matter

52 Source: Institute of Medicine: The Healthcare Imperative: lowering costs and improving outcomes Health Care Reforms - Why they matter

53 Source: Institute of Medicine: The Healthcare Imperative: lowering costs and improving outcomes Health Care Reforms – Why they matter

54 Source: Institute of Medicine: The Healthcare Imperative: lowering costs and improving outcomes Health Care Reforms – Why they matter

55 State Health Reform Initiatives: Medicaid Reform

56 Health Care Reforms – DMAS Specific Dual Eligible Demonstration Pilot – Commonwealth Coordinated Care Program Reduce Medicaid Fraud and Increase Administrative Efficiencies ( Recovery Audit Contract, Fraud, Waste and Abuse Contract, MFCU Program and PERM Rate Review) Inclusion of children enrolled in foster care in managed care

57 Health Care Reforms – DMAS Specific eHHR efforts to overhaul Virginia’s Medicaid and Social Service enrollment systems Improve Veterans Access to Services Behavioral Health tightening of standards, service limits, provider qualifications and licensure requirements Governor’s Access Plan (GAP)

58 One system to coordinate care for Medicare and Medicaid enrollees High-quality, person-centered care for the Dual Eligible that is focused on their needs and preferences All the same benefits currently available under Medicaid and Medicare Single program with built-in Care Coordination for primary, preventive, acute, behavioral, and long- term services and supports Promotes improved transitions between acute and long-term facilities Commonwealth Coordinated Care

59 Commonwealth Coordinated Care - Eligibility Medicare-Medicaid Enrollees (entitled to benefits under Medicare Part A and enrolled under Medicare Parts B and D, with full Medicaid benefits) Participants in the Elderly or Disabled with Consumer Direction Waiver Residents of nursing facilities Live in designated regions (Northern VA, Tidewater, Richmond/Central, Western/Charlottesville, and Roanoke)

60 Commonwealth Coordinated Care - Duals Receive both full benefit Medicare and Medicaid coverage 58.8% age 65 or older 41.2% under age 65 Often have multiple, complex health care needs

61 Commonwealth Coordinated Care - Participation Blue Circles / Diagonals : Opt-in Only Red Circle/Gray: No Participation Everywhere Else: Auto-Enrollment

62 Commonwealth Coordinated Care - Enrollment Enrollment has been less than expected For nursing facilities, 40.9% of the eligible population has been enrolled (not including Northern Virginia); 42.6 percent have opted-out Primary Care Physician “mis-assignment” has lead to Opt-Outs Service denials / authorization delays lead to Opt-Outs Enrollee identification has been difficult CCC has increased the administrative complexity, adding significant administrative burden on nursing facility staff at the expense of other administrative functions

63 Commonwealth Coordinated Care - Nursing Facility Enrollment Region Original Estimate Revised Estimate Actual Enrollment Difference (Revised to Actual)% Uptake Central/Richmond 4,4302,9991,263(1,736)42.1% Northern 1,9351,355172(1,183)12.7% Tidewater 3,0312,3481,045(1,303)44.5% Western/C’ville 1,4771,026438(588)42.7% Roanoke 2,8331,998680(1,318)34.0% TOTAL 13,7069,7263,769(5,702)37.0%

64 Commonwealth Coordinated Care - Enrollment Trends

65 Governor's Access Plan (GAP) In early January, the Governor launched the Governor’s Access Plan (GAP) The three key goals of the GAP plan were are to: –Improve access to care for uninsured Virginians with significant behavioral health needs –Improve physical and behavioral health outcomes –Serve as a bridge to closing the insurance coverage gap for uninsured Virginians with serious mental illness

66 Governor's Access Plan (GAP) Eligibility Screened and meet the criteria for GAP SMI Uninsured and age 21 through 64 years old Resident of Virginia Household income that is 60 percent of the (FPL) Not otherwise eligible for any state or federal full benefits program including: Medicaid, FAMIS, Medicare, or TriCare Not residing in a long term care facility, mental health facility, long-stay hospital or penal institution

67 State Health Reform Initiatives: Medicaid Expansion

68 Short History of the Affordable Care Act “Obamacare” –Reduce the Uninsured –Reform Insurance Practices –Reduce Costs Expand Access to Affordable Health Care Coverage –Expand Medicaid eligibility to 133% of FPL –Implement Exchanges –Pay or Play Employer Mandate Individual Mandate Supreme Court makes Medicaid expansion optional

69 Coverage Options before the Affordable Care Act Medicare 65+ Employer Sponsored Insurance Children Individual Market Medicaid UNINSURED

70 Coverage Options under the Affordable Care Act Medicare 65+ Employer Sponsored Insurance Children Health Insurance Marketplace Medicaid Expansion

71 Coverage Options after Supreme Court Decision Medicare 65+ Employer Sponsored Insurance Children Health Insurance Marketplace Medicaid Expansion OPTIONAL

72 ACA "Coverage Gap" in States Not Expanding Medicaid

73 Source: Kaiser Family Foundation, The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid (October 2013) Most are working or live in working families (60% in a family with one worker, 54% are working themselves) Below poverty (≤ $11,940 individual / $23,550 for a family of four) ACA "Coverage Gap" in States Not Expanding Medicaid

74 State Action to Close Coverage Gap

75 PA, IN, and NH recently expanded under alternative plan. UT has also recently adopted plans to move forward. TN close to approving alternative plan, but ultimately failed to get votes needed. In total 30 states and DC are oriented in some way towards a solution to closing the coverage gap. 29 states and DC have taken action to close the coverage gap through Medicaid expansion or alternative plans approved by CMS. ACA "Coverage Gap" in States Not Expanding Medicaid

76 Source: Profile of Virginia’s Uninsured, 2011, The Urban Institute, prepared for the Virginia Health Care Foundation, October Live in families with income below 100% FPL 43% Live in working families with at least one full or part-time worker 70% Live in working families with at least one full-time worker 47% Of uninsured adults are U.S. Citizens 78% Of Virginians in rural areas are uninsured compared to 15% statewide 25% Are nonelderly adults 19 to 64 years of age 89% Are 19 to 34 years of age 41% Live in families with income below 200% FPL 71% Profile of Virginia’s Uninsured

77 Source: The Virginia Atlas of Community Health

78 To Expand or Not to Expand? Proponents Argue: 400,000 Virginians are without access to affordable health care Failure to act threatens the financial stability of hospitals in our communities The status quo is crippling businesses in Virginia Opponents Argue: Medicaid is the fastest growing segment of the budget Need to reform broken system first Federal government cannot continue to fund growth in entitlement programs

79 2014 Action on Medicaid Expansion Governor Senate House Budget included Medicaid Expansion under 2-year pilot Budget included Marketplace Virginia Audit and Reform No Coverage Gap Provision Decouple Medicaid Expansion from Budget

80 Budget Showdown A deal in Senate to include a path forward for closing the coverage gap, but... Black or Bust: Senate conservatives rebel –Black/Stanley amendment: no funds for Medicaid expansion without legislative approval

81 Budget Showdown Governor vetoes Stanley amendment Override requires 2/3 vote of both chambers Speaker rules veto of Stanley amendment out-of- order “Clean” budget passed Governor vows to move ahead with efforts to close the coverage gap

82 McAuliffe Plan – A Healthy Virginia A Healthy Virginia 10-step incremental approach –Governor’s Access Plan – limited benefit to 20,000 with serious mental illness –Improve care coordination –Spur enrollment to Medicaid, FAMIS, and Marketplace –Dental benefits to pregnant moms –New website Not a comprehensive approach to closing the coverage gap, but makes meaningful strides in right direction

83 Special Session Debate over Medicaid Expansion “Fair and honest” debate over Medicaid Expansion Virginia Health Care Independence Act (Rust) –Alternative to traditional Medicaid Expansion –Block grant-like approach –Failed on 3 rd Reading Other Medicaid reform bills proposed, but not debated

84 Key Message: Find a Path Forward Virginia knows better than Washington Pro-business, common sense solution We are already paying for this – return the dollars A lot of smart people working together should be able to find a path forward for Virginia

85 Q&A Brent Rawlings – Keith Hare


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