1. PHA 6280 – Medicare and Medicaid11
The University of Florida
College of Pharmacy
Department of Pharmaceutical Outcomes & Policy
PHA 6280 – Medicare and Medicaid
Course Coordinator:
Cody Wiberg, Pharm.D., M.S., R.Ph.

2. PHA 6280 – Medicare and Medicaid22
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts
Established 1965 – Title XIX of Social Security Act
Largest health insurance program in the United States – 16% of all health expenditures
Covers over 71 million people: 20% of total population, over 33% of all children (when CHIP is included)
Florida Medicaid and CHIP combined enrollment: 3,486,469 (Only NY, CA & TX have more)
Provides supplemental assistance to 9.9 million Medicare beneficiaries – elderly and disabled
Largest payer for long-term care coverage
Covers 1 million nursing home residents (>60% of NH residents)
Pays for 40% of all LTC expenditures in U.S.
Finances 45% of U.S. Births (approx. 49% of Florida births)

3. PHA 6280 – Medicare and Medicaid33
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts:
Florida Fast Facts –
Enrollment

4. PHA 6280 – Medicare and Medicaid44
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts

5. PHA 6280 – Medicare and Medicaid55
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts
Jointly funded by the federal government and the states: $475.9 billion in FFY 2014
Federal financial participation, or “match”, varies by state (50 – 75%).
Florida match: %
Florida Total Spending (FFY 2014): $20,425,755,781
FFP based on state’s per capita income relative to national average
Feds also pay portion of administrative costs (claims processing, eligibility determinations, IT infrastructure).
Usually 50% match (up to 90% for IT)
Admin costs – about 5% of total state Medicaid costs
State must pay its share
No limit on federal funding: up to whatever matching payments state can afford
On a per enrollee basis, Medicaid spending is growing more slowly than premiums for employer-sponsored insurance or national health care spending overall.
- Over past 10 years – 4.6% for Medicaid, 7.7% for employer plans, 5.9% overall national spending

6. PHA 6280 – Medicare and Medicaid66
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts
Accounts for 16% of all state government spending
Distribution of State General Fund Expenditures (millions – SFY 2013)

7. PHA 6280 – Medicare and Medicaid77
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts:
Spending by State

8. PHA 6280 – Medicare and Medicaid88
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts:
Annual Spending by State per Enrollee

9. PHA 6280 – Medicare and Medicaid99
PHA 6280 – Medicare and Medicaid
Medicaid Fast Facts:
Medicaid Spending – Comparative Rate of Increase

10. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Administration
States administer Medicaid – subject to CMS oversight
Every state must have a “State Plan” approved by CMS which specifies:
Who receives services;
Which services are covered;
Which providers can participate & how they will be reimbursed (including reimbursement rates; and
Numerous other details
If a state wants to change anything in its state plan, it must get a “State Plan Amendment” approved by CMS
States may also apply for waivers
Home and community-based waivers
Freedom of Choice Waivers
Section 1115 Research and Demonstration Waivers
If you've seen one state Medicaid program, you've seen one state Medicaid program

11. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility
Must meet income and asset guidelines and be categorically eligible
Mandatory categories
Pregnant women & children < 6 years old (below 133% FPG)
Children 6 to 18 years old (below 100% FPG)
Parents below state's July 1996 welfare eligibility income
Elderly & disabled on SSI (payments = < 74% FPG)
Entitlement - “any person who meets state's eligibility criteria has a federal right to Medicaid coverage”. State can't limit enrollment or establish a waiting list.
What typically happens to Medicaid enrollment during economic recessions?
What typically happens to state revenues during economic recessions?

12. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility
States can cover “optional” categories
Pregnant women, children & parents with incomes > mandatory thresholds (up to 185% for infants & pregnant women)
Elderly & disabled between 75 – 100% FPG
Nursing home residents below 300% of SSI standard
Medically needy
Categorically eligible but have income and/or assets > limits
High health care costs relative to income
Can “spend down” into Medicaid: out-of-pocket expenses are deducted from their income until they fall below threshold
Since states have great flexibility, eligibility standards vary widely across country

13. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility
Adults without dependent children
Categorically excluded per federal law – unless pregnant or disabled – no matter how poor (health reform legislation changes this)
2007 – over 40% of childless adults were uninsured
State programs – MN General Assistance Medical Care
Immigrants and Medicaid
Legal immigrants
Most NOT eligible for regular Medicaid during first five years in U.S
States may optionally cover after 5 years
Undocumented (illegal) immigrants
NOT eligible for regular Medicaid as long as they are in illegal status

14. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility
Immigrants and Medicaid
Emergency Medicaid Program
Eligibility
Legal immigrants (1st 5 years) & undocumented immigrants
Must meet other category, income & asset requirements
Must have an emergency
A medical emergency for EMA purposes occurs when a person:
Has a sudden onset of a physical or mental condition which causes acute symptoms, including severe pain, where the absence of immediate medical attention could reasonably be expected to do any of the following:
Place the person's health in serious jeopardy.
Cause serious impairment to bodily functions.
Cause serious dysfunction of any bodily organ or part.
Examples of such conditions include, but are not limited to, stroke, heart attack, abscessed teeth, broken bones, ear infections, and kidney failure.
Has a chronic medical condition which, if left untreated, could reasonably be expected to do any of the following:
Examples of such conditions include, but are not limited to, diabetes requiring treatment, HIV positive with complications, cancer, kidney disease, and tuberculosis.
Gives birth.

15. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility vs. Costs

16. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility vs. Costs

17. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Covered Services
Mandatory
Hospital services
Physician services
Pediatric and family nurse practitioner services
Nurse midwife services
Laboratory and radiology
Services at federally qualified health centers
Family planning services and supplies
Early and Periodic Screening, Diagnostic and Treatment services (under 21 years of age)
Nursing facility services for individuals 21 and older
Home health care services
Medical transportation services

18. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Covered Services
Optional (account for 1/3 of expenditures)
Prescription Drugs (but covered by all states)
Clinic services
Dental
Eyeglasses and hearing aids
ICF- MR
Hospice services
Nursing facility services for individuals under age 21
Prosthetic devices
Many others

19. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Covered Services
Services covered must be medically necessary
Determined by state agency or contracted managed care plan
States can manage utilization
Prior authorization
Case management
Restrictions on amount of a service covered
Cost-sharing

20. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Covered Services
States can manage utilization
Cost-sharing
Pre Deficit Reduction Act
Copays limited to $3.00 for most services
Providers could not deny service to recipients claiming that they could not afford copay
Limited ability to require premiums
Post Deficit Reduction Act
Individuals with family income between 100 – 150% FPG: can be required to pay up to 10% of costs. (Up to 20% for higher income)
Total of premiums/cost-sharing </= 5% of family income
Providers may deny services if copays not made
Copays may increase at medical inflation rate
Are the DRA changes reasonable? Why or why not?

21. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Covered Services
Payment of Providers
Fee-for-service
Providers paid for each service rendered
States establish payment rate
Must be high enough to attract sufficient # of providers
Providers must submit usual & customary cost
Medicaid reimbursement is payment-in-full (except for copays)
Managed Care

22. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Covered Services
Payment of Providers
Managed Care
States allowed to contract with managed care plans
Waivers prior to Balanced Budget Act of 1997
No waivers required now
72% of recipients in managed care plans (healthy kids and adults first, then disabled)
Two types
Risk
Capitated monthly payments
Primary care management
Recipient assigned to primary care provider (PCP) who acts as “gate-keeper” or manages care
PCP is paid FFS + plus small, additional monthly fee
Savings supposedly from increased use of preventative care and decrease use of emergency rooms, hospitalizations

23. PHA 6280 – Medicare and Medicaid
PHA 6280 – Medicare and Medicaid
Medicaid Eligibility Changes Related to Health Reform
Affordable Care Act (ACA) was projected to extend health insurance coverage to 32 million Americans - with16 million estimated to receive their coverage through Medicaid
Beginning on January 1, 2014, Medicaid began covering nearly all individuals under age 65 up to 133 percent of poverty ($15,654 for an individual or $32,252 for a family of four in 2016)
100% federal financing for those newly eligible for Medicaid from 2014 to federal contribution phased down to 90 percent by 2020
States covering non-Medicaid eligible adults prior to ACA enactment can receive matching funds now
Benefits for those newly eligible for Medicaid must at least match the essential health benefits required for coverage available through the Insurance exchanges.
Some services covered in the traditional Medicaid package like long-term care services will not be covered
National Federation of Independent Business v. Sebelius
U.S. Supreme Court Case
Basically upheld constitutionality of Affordable Care Act
However, ruled that states could not be required to expand Medicaid
31 states and DC have adopted expansion
16 states have not adopted expansion, including Florida
3 states considering expansion