California: Law Limits Medicaid Asset Recovery from Deceased Enrollees

Governor Jerry Brown (D) signed into law a rule that prohibits the State from claiming assets, such as cars and homes, of deceased Medi-Cal recipients, effective January 1, 2017, as part of the 2016-2017 State budget. The new law will still allow the State to recover assets from Medi-Cal recipients above the age of 55 who received long-term care services through Medi-Cal, unless the individual is survived by a spouse or registered domestic partner. Additionally, the new law prohibits estate recovery if a home is of "modest value" (has a fair market value of 50% or less of the average price of homes in the county where it is located). The State has claimed $1.1 billion in assets through recovery since its 1993 inception.

Kentucky: Draft 1115 Waiver Application Includes Premium and Lockout Requirements for Medicaid Expansion Population

The Department for Medicaid Services released a draft 1115 demonstration application to transform the coverage options available under Medicaid expansion (named "Kentucky HEALTH"), as well as introduce delivery system reforms targeting substance use disorder (SUD), chronic disease management, and managed care. Kentucky HEALTH proposes two coverage options for the expansion population: a premium assistance program for employer-sponsored insurance, and a "consumer driven health plan," a high-deductible plan with managed accounts to fund the deductible and enhanced healthcare benefits, such as vision, dental, over-the-counter medications and gym membership. The proposal would require monthly premiums (from $1 to $15) and impose a six month lockout period for those who fail to pay, which can be obviated by participation in a financial or health literacy course. Enrollees who are disenrolled for failure to comply with redetermination requirements are subject to the same lockout period. Able-bodied adults without dependents would also be required to participate in "community engagement and employment development" programs, a provision that goes beyond what CMS has approved in any state thus far. The waiver also includes delivery system reforms such as: a multi-county pilot program to improve access to mental health and SUD services; the adoption of chronic disease management programs best practices by Medicaid managed care programs; and cost control mechanisms and payment incentives for managed care organization to improve quality. The Kentucky HEALTH proposal, which is modeled after Indiana's Medicaid program, estimates $2.2 billion in savings over five years. The proposal is open to public comment through July 22, after which it will be submitted to CMS for approval. The proposal makes good on Governor Matt Bevin's (R) December announcement that he would overhaul the State's Medicaid expansion program.

Michigan: Study Finds Correlation between Medicaid Expansion and Drop in Uninsured Hospital Discharges

A new University of Michigan study found a rapid and sustained drop in uninsurance among nonelderly hospital patients in the first eight months of the State's Medicaid expansion program (April through December of 2014), compared with the corresponding months in 2012 and 2013. Uninsured patients accounted for approximately 6% of nonelderly adult discharges in 2012 and 2013 but only 2% in 2014. The study also showed the number of discharges for nonelderly adults with Medicaid increased from 23% in 2012 to 30% in 2014. Hospitals experienced a uniform shift in patient payer mix during that time: 88% had more Medicaid-covered patients in 2014 compared with the same time period in each of the two years preceding expansion. The study's authors analyzed data from 130 hospitals using the Michigan Health and Hospital Association's Michigan Inpatient Database.

New York: Legislature Passes Safety-Net Rate Adjustment Bill, Though No Funding Allocated

The legislature passed a bill refining the definition of safety-net hospitals and raising reimbursement rates for hospitals that fall under the new definition shortly before the end of the 2016 legislative session. The bill provides for an "enhanced safety net hospital supplemental rate adjustment" for hospitals whose patient population is more than 50% Medicaid enrollees or uninsured, have no less than 40% of its inpatient discharges covered by Medicaid, and are a public or federally-designated critical access or sole community hospital, among other criteria. The bill has no funding attached to it and is written to take effect after next year's budget negotiations occur. A signature from Governor Andrew Cuomo (D) would represent the Governor's support for safety-net hospitals, but funds would still need to be allocated through budget negotiations.

South Dakota: Governor Will Not Call a Special Session to Consider Medicaid Expansion

Governor Dennis Daugaard (R) announced that he will not call a special legislative session to address Medicaid expansion, despite weeks-long efforts to rally enough support from lawmakers to approve a proposal. Governor Daugaard said he had heard from legislators that they needed more time to evaluate the proposal, though the Governor felt the plan would "increase healthcare access at no additional state cost and guarantee that the federal government won't shift its responsibility to pay for Native American healthcare to the state." The administration suggested the possibility of a special session as recently as last month, after CMS updated its reimbursement policies for care delivered through the Indian Health Service, which increased the State's projected cost savings from expansion by $18 million.