F17 Budget & Impact for MAHP members
We finished the legislative session before summer recess and the results of several key legislative decisions were in play: the budget for FY 17, Senate passage of “repurposing” use tax on Medicaid health plans, and the final adoption of the Insurance Code package.
Individually, each of these items were important to MAHP members, but taken together during this last week, they represented a strong endorsement for future viability for our members in various product lines and it is a testament to the advocacy efforts of MAHP members and our team that such actions are taken. Let me describe why — and thank the Legislature for the actions they have taken.
FY 17 Budget and Impact for MAHP Members
We view the development and implementation of the state budget each year as one of the milestones for our industry. As Medicaid has grown into managed care in Michigan, the overall Medicaid health plan line has now become one of the largest line items in the state budget.
That is the good news as it reflects the confidence gained over time of the legislative and various administrations. It is also bad news as it becomes a target for any reduction and any year-to-year change necessary will dwarf other budget items.
Our strategic plan development and annual Medicaid white paper hone in on the key budget and boilerplate provisions that we see as critical to the ongoing management and efficiency of our members and overall viability. We were pleased again to see that once again, the fiscal recommendations are largely supportive. The tenets of “actuarial soundness” assure that appropriate fiscal changes are considered in both the budget and rate development phases. This principle was met in this budget as a 1.5 percentage increase for traditional Medicaid and a 2 percentage increase for healthy Michigan were adopted.
Related to the fiscal changes, are instructions for how overall funding should be allocated —or budget boilerplate. Among the key MAHP recommendations on boilerplate adopted in the budget were the following items:
Health Plans to assist in redetermination — this will help avoid breaks in enrollment
Use of NCQA/URAC compliance — or deeming — as way to save on both health plan expense and that of the Michigan Department of Health and Human Services in its oversight
Performance standards and capitation withhold to use HEDIS data, continuous enrollment criteria, and notification of standards at least 3 months before implementation
Reporting on cost of Michigan Health Information Network participation by health plans due to the requirement of the contract between plans and the network.
Creation of a new demonstration project for incentives between consumers and providers that capitalizes on medical literacy
Provisions governing the “Common Formulary” that provides means for health plans management techniques that are evidence based and emphasizes e-prescribing
Integration of the Physical and Behavioral Medicaid benefit.
The issue receiving the most attention in the budget this year was the focus on “integration”—that is, how best to serve the overall health needs of the “whole person.”
Historically, Michigan has administered a split benefit in Medicaid that too often results in poor coordination and lost opportunities for total health care. As a follow-up to the Medicaid rebid of last year and consistent with the policy changes occurring across the country, Gov. Rick Snyder recommended a move toward integrating the Medicaid benefit, within the Medicaid Health Plan contract as part of the FY 17 budget recommendation. While there is ample justification for such a recommendation, the impact on the legacy system of CMHSPs and PIHPs was large. The recommendation raised confusion and fear among consumers regarding accessing services through an abrupt change.
As we well know now, a large stakeholder group was assembled to work through key concepts and principles for integration and improvement in the overall delivery of services and the final FY 17 budget has taken those recommendations into account. While still advocating movement toward integration, the final budget anticipates the following:
Continuation of a stakeholder group, including Medicaid Health Plans to help shape a report/plan to be submitted to the legislature that will guide the movement toward integration;
Production and submission of final report by January15, 2017;
Inclusion within the report of benchmarks to measure progress toward implementation of integration over a three period;
Consideration of the use of one or more pilot programs; and
Detail on outcomes, including core values adopted by the Stakeholder group, person centered planning, community based services, and savings to be redirected for services.
Fundamentally, the decision and urgency on integration continues to rely on MDHHS leadership. Moreover, the impact on the implementation of the new Medicaid “Mega Rule” and Medicaid parity rules cannot be understated and will undoubtedly require contract and policy changes that will positively impact movement toward integration. MAHP has communicated our support for the overall budget and the direction of the language on integration, and looks forward to working with the various stakeholders, providers, and representatives of the MDHHS to bring this vision to fruition.
Next week’s blog post will cover the Senate passage of “repurposing” use tax on Medicaid health plans.