Will Post-Storm Medicaid Flexibility Include Expansion?

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By Victoria Pelham

Medicaid is promising flexibility to support crisis response as the Gulf Coast continues to grapple with the devastating effects of Hurricane Harvey.

The Department of Health and Human Services declared the situation a public health emergency in Texas and Louisiana, allowing providers to waive specific documentation requirements for beneficiaries to get care.

The storm is hitting two states that took different approaches on expanding Medicaid coverage under Obamacare—Texas refused, but Louisiana did expand coverage. A health policy analyst told Bloomberg BNA Aug. 29 that Texas could see things in a new light, based on the storm’s impact.

Sara Rosenbaum, a health policy professor at the George Washington University, warned that the safety-net health insurance program as it exists in Texas won’t be enough to handle the increased need from storm impacts. She foresees Texas seeking a Medicaid expansion as a desperately needed shot in the arm, despite the politics that have prevented it in the past. She called expansion “the fastest way for the state to secure a large infusion of public funding without having to wait for Congress to act.”

“The health-care delivery system down there is already buckling, and this is without thinking about all the uninsured people who are going to need health care for a long time,” Rosenbaum, the former leader of a federal advisory body on Medicaid policies, told Bloomberg BNA.

Urgent Need

The Lone Star State has the highest uninsured rate in the U.S., with 21.6 percent of adults ages 19 to 64 without coverage in 2015 and 8.6 percent of kids, according to the Texas Medical Association. And new estimates from the Centers for Disease Control & Prevention for the start of 2017 found the West South Central region, which includes Texas, Arkansas, Oklahoma, and Louisiana, maintained the highest total uninsured rate of 16.1 percent.

Texas is one of just 19 states that chose not to expand Medicaid coverage under the Affordable Care Act.

Now, that least-covered region will have to deal with the after-effects of a storm that has dumped more than 30 inches of rain, damaging health-care infrastructure, flooding care providers such as Houston’s safety-net Ben Taub Hospital and likely leaving lasting mental health effects on those in its path.

Rosenbaum pointed to the impact past hurricanes such as Katrina and Sandy left behind to underscore the amount of people who will be dealing with health effects years later. “The immediate and long-term impact on health and health care of a disaster of this magnitude is just incalculable,” she said.

Further, hospitals that serve large numbers of low-income patients, like Ben Taub in Houston, struggle to make ends meet, Shawn Gremminger, director of legislative affairs for America’s Essential Hospitals, told Bloomberg BNA.

The Harris County Health System has one of the worst reimbursement mixes of any hospital, with lots of uninsured and trauma patients, and it “just barely survives on a day-to-day basis,” he said. Harris Health paid nearly $650 million in charity care in fiscal 2016 with 62.4 percent of the patient base uninsured.

Hospitals like Ben Taub in a crisis still have to pay staff and pay everyday hospital maintenance costs but without the same level of incoming revenue.

"[It’s an] enormous financial hit on one of the most stressed hospitals in the country,” he said.

Medicaid ‘Working Closely’ With Texas

The Medicaid agency stressed that it’s working hard to respond to the public health emergency.

The Centers for Medicare & Medicaid Services “activated teams on the ground in Texas who are working with state and local officials to make sure that our beneficiaries, many of whom are some of our most vulnerable citizens, have access to the life-saving treatments they need,” Administrator Seema Verma said in a statement. “We will continue to work with those in affected regions to ensure that states, providers and facilities have all of the resources they need to ensure access to care.”

Separately, CMS spokesman Tony Salters told Bloomberg BNA Aug. 29 the agency is “working closely” with Texas to help the state administer Medicaid and Children’s Health Insurance Program benefits during the storm and its aftermath.

The Trump administration has waived certain mandates under Section 1135 of the Social Security Act in Texas following Harvey, including by allowing providers to practice in a state they’re not licensed in and exempting providers from penalties for specific patient privacy regulations. The waiver also tweaks deadlines and timetables to “ensure that sufficient health care items and services are available to meet the needs of individuals enrolled in the Medicare, Medicaid and CHIP programs” and to make sure providers can offer services without sanctions for noncompliance due to Hurricane Harvey.

Additionally, the CMS has waived the required three-day prior hospitalization for coverage of skilled nursing facility visits in Medicare.

“This will prevent gaps in coverage for beneficiaries that need to be evacuated from affected hospitals to skilled nursing facilities,” Salters told Bloomberg BNA.

He added that providers will continue to be updated through CMS guidance.

Christine Mann, spokeswoman for the Texas Health and Human Services Commission, told Bloomberg BNA, “We are working with our federal partners on obtaining greater flexibility for Texas Medicaid and CHIP. It’s too soon to share specifics but our conversations with CMS have been constructive and the Administration has been responsive in helping us ensure that our disaster and relief efforts meet the most pressing needs of Texans impacted by Harvey.”

A group representing states’ Medicaid directors could not be reached for comment.

Medicaid, a First Responder

The Medicaid safety net, which covers more than 4 million people in Texas, is a “first responder,” Rosenbaum said.

“This is what Medicaid is built for,” she said.

After Hurricane Katrina in New Orleans, the federal Medicaid program opted into the same waiver of licensing and patient privacy requirements the CMS is using now. The CMS also chose to pay for certain services for beneficiaries transferred to noncertified facilities and to waive out-of-network rules for managed care plans.

“It’s not enough just to loosen up the strings on the current program,” Rosenbaum said. “The state’s got to do something about the hundreds of thousands of low-income adults who, even if you loosened up some of the paperwork requirements, just are not eligible.”

Rosenbaum said she expects state leaders are already reconsidering Medicaid expansion and that the federal government would respond to a request by speeding it along.

“When you are facing the situation Texas is facing, all the kinds of political posturing about federal funding all falls away,” she added.

“It’s tragic that it’s taken the virtual destruction of the fourth-largest city in the U.S. to sort of bring to the fore the fact that you can’t operate a health-care system with so many uninsured people in it,” she said.

To contact the reporter on this story: Victoria Pelham in Washington at vpelham@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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