Comments re: 1115 Demonstration Application Community Legal Services, Inc. Page 24 of 24
January 13, 2014
VIA E-MAIL ()
Pennsylvania Department of Public Welfare
Attention: Healthy Pennsylvania Waiver
P.O. Box 2675
Harrisburg, Pennsylvania 17105-2675
RE: Draft Healthy Pennsylvania 1115 Demonstration Application
Dear Sir/Madam:
Thank you for the opportunity to comment on the Draft Healthy Pennsylvania 1115 Demonstration Application. Community Legal Services of Philadelphia (“CLS”) submits these comments on behalf of the 12,300 low income Philadelphians that we represent each year, as well as the nearly two million adults statewide who are current or future Medicaid recipients and are impacted by the 1115 Demonstration Application.
In addition to helping clients establish and maintain eligibility for public benefits, including public health insurance programs, CLS fights consumer fraud and predatory lending; prevents homelessness; ensures fair treatment in the workplace; and protects women, children, and the elderly. Many CLS clients fall into the health coverage gap created by the U.S. Supreme Court in National Federation of Independent Business v. Sebelius,[1] which affects very low income people who do not qualify for existing Medicaid programs.
CLS has been a staunch supporter of Medicaid expansion as a means of providing comprehensive health insurance coverage to our clients and other low income uninsured Pennsylvanians. We remain hopeful that Pennsylvania is on a path to offer meaningful coverage in the coming months. But we are profoundly troubled by the 1115 Demonstration Application, and we believe that it is a step backward, not a step forward, in covering Pennsylvania’s lowest income residents.
As we discuss in greater detail in Section I of our comments, we have eight broad concerns:
1. The 1115 Demonstration Application would slash benefits for more than 1.2 million Pennsylvania adults who already rely on the Medicaid program, most of whom are pregnant, elderly, sick, or have disabilities.
2. The 1115 Demonstration Application would create a Pennsylvania Medicaid system that is so complicated and difficult to navigate that it is unworkable.
3. The 1115 Demonstration Application would impose premiums that are unaffordable for Pennsylvania’s very low income families.
4. The 1115 Demonstration Application would impose work search requirements that create insurmountable barriers to coverage.
5. The premiums and work search requirements in the 1115 Demonstration Application would penalize Pennsylvanians simply for being poor.
6. The premiums and work search requirements in the 1115 Demonstration Application would be costly and difficult to administer.
7. The penalties in the 1115 Demonstration Application for inability to demonstrate compliance are unduly harsh on Medicaid recipients, and would burden hospitals in particular and Pennsylvania’s health care system in general.
8. The 1115 Demonstration Application would undermine Pennsylvania’s primary care system by defunding federally qualified and rural health centers.
For these reasons, we believe that Pennsylvania must rethink its proposed plans to alter its Medicaid program via the 1115 Demonstration Application.
We acknowledge that the Commonwealth is searching for a unique, state-specific way to cover the Medicaid expansion population. We do not believe that the 1115 Demonstration Application provides the answer. In addition to the concerns outlined above and below, we believe that Pennsylvania’s proposed application to the Centers for Medicare & Medicaid Services (“CMS”) for 23 distinct waivers of federal Medicaid law will create needless delay of many months. That delay means that hundreds of thousands of eligible Pennsylvanians will remain uninsured unnecessarily, and that millions of dollars in federal funding will not flow into the Commonwealth in that time. We urge Pennsylvania to either expand Medicaid immediately as contemplated by the drafters of the Affordable Care Act (“ACA”) or submit a plan to CMS that is likely to receive immediate approval, to allow coverage to begin as soon as possible, and no later than July 1, 2014.
At the same time, we are not dogmatic. For example, we do not categorically oppose the establishment of a “private option program” that would enable persons eligible for Medicaid expansion to purchase health insurance through the Federally Facilitated Marketplace, provided that the program is consistent with CMS guidance.[2]
In sum, drawing down millions of dollars in federal funding to provide health insurance coverage to the Medicaid expansion population is both sound fiscal policy and a matter of simple fairness for the low income Pennsylvanians who fall into the health coverage gap. We hope that the Commonwealth will consider these comments and act quickly to extend coverage to the Medicaid expansion population without erecting unnecessary barriers to coverage or undermining the existing Medicaid program.
Below, we provide more detailed comments. In Section I of our comments, we discuss our eight broad concerns more fully. In Section II of our comments, we discuss problems with particular provisions of the 1115 Demonstration Application.
I. General Concerns about the 1115 Demonstration Application
A. The 1115 Demonstration Application Would Slash Benefits for Existing Medicaid Recipients
While the 1115 Demonstration Application focuses on extending coverage to the Medicaid expansion population, its most extreme proposals are for deep benefits cuts that would affect more than 1.2 million adults in Pennsylvania who currently receive Medicaid, many of whom are seniors, individuals with disabilities, or pregnant women. The benefits cuts will harm Medicaid recipients greatly, and should not be part of the 1115 Demonstration Application.
In oral presentations on the 1115 Demonstration Application, Pennsylvania spokespersons have stated that the Commonwealth will not cut benefits for individuals that it identifies as “high risk,” and that the “low risk” benefits package will be consistent with the Essential Health Benefits (“EHB”) packages provided by Qualified Health Plans sold through the Federally Facilitated Marketplace. These statements are not accurate. Unlike both the EHB standard and current Medicaid plans, the proposed Medicaid benefits packages for current adult recipients include the following benefits limits:
1. Individuals deemed “low risk” would be limited to $500 per year of radiology services, and “high risk” individuals would be limited to $750. We understand those limits to apply to x-rays, ultrasounds, mammograms, CT scans, and MRIs. The limits may be insufficient to provide ongoing diagnostic services and treatment to an individual with just one badly broken limb.
2. “Low risk” individuals would be limited to $1,000 worth of medical equipment and medical supplies combined per year; “high risk” individuals would be limited to $2,500. These limits would apply to, among other things, hospital beds, wheelchairs, crutches, walkers, respirators, oxygen tanks, catheters, adult diapers, and ventilator tubing. The limits would force homebound individuals with significant medical needs to navigate the time-intensive and protracted benefits limit exception process or go without equipment and supplies that would allow them to stay out of long term care facilities. Every motorized wheelchair would require a special exception.
3. “Low risk” individuals would be limited to $250 per year of laboratory services, and “high risk” individuals would limited to $350 per year. These limits would preclude individuals with complicated diagnoses or difficult to manage conditions from receiving the full diagnostic and monitoring services that they need and would ensnare their medical providers in protracted paperwork.
4. “Low risk” individuals would be limited to 30 outpatient mental health visits per year, and “high risk” individuals would be limited to 40 per year. These limits are well below the current limit of five per month, or 60 per year, which allow individuals with serious mental health conditions to attend weekly therapy and monthly psychiatric appointments.
We outline our understanding of the full extent of benefits cuts in the Appendix at the end of these comments.
We reiterate that these eviscerated Medicaid benefits packages will not meet the needs of Pennsylvania’s Medicaid recipients. By virtue of their age and/or qualifying medical conditions, many existing Medicaid recipients require extensive medical care. Even the healthiest of Medicaid recipients face environmental factors that contribute to poor health, like poor nutrition and housing insecurity, because of their very low incomes. And many recipients have lacked health care access for years prior to qualifying for Medicaid, compounding their need for robust coverage. These social determinants of health have prompted Pennsylvania and CMS to design Medicaid benefits packages over the years that are tailored to the particular needs of the Commonwealth’s Medicaid populations.
We acknowledge that CMS has promulgated regulations that permit state Medicaid agencies to adopt Alternative Benefits Packages, or “benchmark” or “benchmark equivalent” health benefit coverage.[3] While the terminology used in the 1115 Demonstration Application is confusing, we understand that Pennsylvania intends for its “high risk” benefits package to serve as benchmark or benchmark equivalent coverage. Meanwhile, Pennsylvania appears to propose making the “low risk” benefit plan its Medicaid State Plan. But the “low risk” benefit plan is so restrictive that it violates the amount, duration, and scope requirements in federal Medicaid law, which regulate the restrictions that states may place on services.[4] The 1115 Demonstration Application asks CMS for a waiver of the applicable amount, duration, and scope provisions but offers no rationale for such a waiver. And the 1115 Demonstration Application does not provide any of the requisite information to CMS to justify its arbitrary and illegal limits on amount, duration, and scope in the “high risk” benefits package, or to show that the package is “appropriate for the proposed population.”[5] We believe that no such rationale or information exists that could justify adequately these drastic cuts in coverage.
In addition, the 1115 Demonstration Application violates the Mental Health Parity and Addiction Equity Act of 2008, which mandates that health plans that provide both physical and behavioral health benefits cannot apply more restrictive treatment limitations to mental health and substance abuse services than they do to physical health services of the same classification.[6] The 1115 Demonstration Application proposes coverage of three non-emergency admissions per year for inpatient physical health hospitalization. Inpatient psychiatric hospitalization is limited to 45 days per year. The distinction between admissions and days per year does not comport with the federal parity requirements because even one physical health admission could last longer than the 45-day psychiatric limit.
We are not reassured that the benefits limit exceptions process will render the proposed benefits packages adequate or lawful. The exceptions standard is extremely stringent, and only allows exceptions in dire circumstances. For example, we fear that our clients with as yet undiagnosed, or difficult to diagnose, health problems will be denied necessary diagnostic radiology or laboratory services because they do not yet have a definitive diagnosis of a “chronic systemic illness or other serious health condition,” as required by the exception standard.
Our fears are rooted in the Department of Public Welfare’s (“DPW’s”) current practices. The current exceptions process for dental care, for example, is notoriously difficult for medical providers to navigate and results in near-universal rejections. More commonly, harried medical providers simply lack the time to either request benefits limit exceptions or pursue appeals of denials, leaving Medicaid recipients without necessary care. Writ large, Medicaid recipients who will be affected by the proposed benefits limits in the 1115 Demonstration Application will either be forced to incur medical bills that they cannot pay or forgo necessary medical treatment, making them sicker and ultimately escalating the cost of their care. Either scenario hurts the Commonwealth by driving up health care costs for everyone.
We understand that Pennsylvania is concerned about the costs of its Medicaid program, but these benefits cuts are “penny wise, pound foolish.” Instead, we urge Pennsylvania to be far more thoughtful about realigning its Medicaid spending.
As the Commonwealth’s spokespersons have said repeatedly in defense of the 1115 Demonstration Application, 5% of Medicaid recipients account for 50% of Pennsylvania’s Medicaid expenses. While this statement may be something of an exaggeration, it is true that Medicaid recipients with very complicated cases account for much of the Medicaid program’s costs. But imposing arbitrary limits is not the way to control these costs and, in fact, restricting access to relatively inexpensive outpatient care may inadvertently increase utilization of more expensive inpatient care. Such limits will also have an adverse effect on innovative models meant to manage chronic conditions and prevent acute flare ups. Instead, we suggest that Pennsylvania pursue innovative case management approaches for “super-utilizers,” or patients with high risk, chronic, and expensive health care needs.
Pennsylvania also has not fully addressed the needs of its elderly and infirm population. Far too much of its budget is spent on nursing homes instead of allowing people to age in place, with needed services provided in the home. Pennsylvania ranks seventh, near the top among states nationally, in its per-person expenditures for long term care for older people and adults with physical disabilities.[7] This is due in part to its over-reliance on nursing home care, rather than less expensive home and community based services, which provide care to people in their own homes. Pennsylvania ranks near the bottom, 42nd among the 50 states, in its spending on home and community based services as a percentage of all long term care spending for older people and adults with disabilities.[8] Pennsylvania spends only 22% of its long term care budget on home and community based care, while the national average is 40%; instead, Pennsylvania directs the great majority of its long term care spending to more expensive nursing facility care.[9]
The ACA offers a number of funding opportunities to assist states in “rebalancing” their long term care budgets away from overreliance on expensive institutional care. Community First Choice and the Balancing Incentive Payments Program offer increased federal matching funds for home and community based services, while the Home and Community Based Services State Plan Option would make it possible to use Medicaid funds to serve individuals who are currently receiving services paid for entirely by state funds. These options should be given more serious consideration than they have been to date. The Commonwealth should also reduce the barriers which currently exist to accessing HCBS waiver programs. It takes at least three months, and sometimes more than six months, from the date of application to actually receive home and community based services. Medicaid recipients who cannot wait that long for help are forced to enter nursing homes instead. The Commonwealth could reduce nursing home usage by simplifying and improving its processing of home and community based services applications and reinstating the Community Choice program, which provided for expedited eligibility determinations for individuals at imminent risk of nursing home placement. These steps could achieve meaningful cost savings in Pennsylvania’s Medicaid program without decimating health coverage for all adults.