Tuesday, August 18, 2015

Everything you need to know about the state's deal with insurance companies on Medicaid cancellations

Posted By on Tue, Aug 18, 2015 at 8:31 PM

As we reported this morning, two of the three insurance companies offering private option plans have cut a deal with state agencies to help alleviate some of the potential problems as the state implements its troubled Medicaid verification system. Almost 50,000 Arkansans face coverage terminations — many or most of them eligible for the program according to the state's own data.

The state's deal with Blue Cross Blue Shield and Centene, the two biggest carriers of private option insurance plans, will provide relief for many beneficiaries by offering pharmacy coverage. Private option beneficiaries covered by one of those two companies will be able to get their meds this month even if DHS terminated their coverage. That's very good news. Unfortunately, this plan still leaves major gaps and major questions, with potentially dire consequences for some of the state's most vulnerable citizens. 

Now that we have more details, here's everything you need to know:

Blue Cross and Centene are stepping in to help with pharmacy coverage; they'll be on the hook if beneficiaries are not eligible and the state will reimburse if beneficiaries are eligible. 

Here's the way this will work: Many of the 35,668 who were kicked off of coverage on August 1 are private option beneficiaries who have a plan with either Blue Cross or Centene. The insurance companies will reinstate their pharmacy coverage for August so they can still go to to the pharmacist and get needed medication. 

If it turns out that the beneficiary is eligible, the insurance company will pay all claims (pharmacy or non-pharmacy) and DHS will reimburse the insurance company for the August premium. If it turns out that the beneficiary is NOT eligible, DHS will NOT pay the premium; the insurance company will pay the pharmacy claims and eat that cost, but won't pay the non-pharmacy claims (more on this last point in a minute). 

Note: if it turns out the beneficiary was eligible, DHS will reimburse the insurance company for the premium even if the beneficiary didn't use any health services in August. 

How does this work in terms of eligibility determinations? Keep in mind that under federal law, beneficiaries who have coverage terminated still have 90 days to send in their information (so in this case, the deadline would be October 30). If DHS looks at the info and determines that they're eligible, they get reinstated without having to start over with a new application. That same timeline applies for sorting out whether DHS has to reimburse insurance companies for the August premium. As stated above, if DHS determines that someone is not eligible (say they send in their paperwork and it turns out they make too much money), then DHS does not reimburse the premium; similarly, if the beneficiary never responds at all and the 90-day window elapses, then DHS will not reimburse the premium. 

QualChoice is out.  

QualChoice chose not to participate in this deal. QualChoice is the smallest carrier in terms of private option clients, but that still means that there will be a number of beneficiaries who get no relief, simply because they happened to have the wrong carrier. These folks may face gaps in coverage this month that prevents them from getting needed care or medications. 

Thousands of the most at-risk beneficiaries won't get any help from this deal at all.

This deal provides real relief for private option beneficiaries with Blue Cross or Centene plans. But it does nothing for the beneficiaries we should be most worried about. Any private option beneficiary deemed "medically frail" — beneficiaries with much greater medical needs according to a health screener that was part of the application process — gets routed to the traditional Medicaid program. DHS doesn't know for sure how many of the plan terminations impacted medically frail people, but the number could be around 3,000. These people — the highest-risk folks in the private option — are still facing a gap in coverage this month, with potentially dire consequences. 

Meanwhile, terminations also went out to Medicaid beneficiaries who aren't part of the private option population at all. These folks are in the "old Medicaid" program and we know that there are about 4,000 of them. These are kids in ARKids and parents of dependent children with extremely low incomes. Again, these are just about the last people that we would want to have a dangerous gap in health care coverage. But they won't be helped at all by the state's deal with Blue Cross and Centene. 

All told, that's likely around 7,000 (maybe a little more, maybe a little less) of the state's most vulnerable beneficiaries who are still left out in the cold. They could end up in the state's nightmare scenario: eligible beneficiaries who cannot get medicine this month that they desperately need. More on this problem in this post

Non-pharmacy coverage will be in limbo, and some providers may not be willing to offer services to these beneficiaries 

Blue Choice and Centene will cover pharmacy services for cancelled beneficiaries regardless, but when it comes to other services — like going to see a specialist or a hospitalization — things get more complicated. The insurance companies will only pay the non-pharmacy claims if the beneficiary turns out to be eligible. If not, no one will pay the claims, and the provider will simply have to bill the patient (and of course collecting money in that scenario would be no easy task; even among those phasing out of private option eligibility, these are mostly lower-income people).  

The catch here is that some providers in this scenario might choose not to provide non-pharmacy services at all. After all, it's not certain that they would get paid!

Some may choose to make a similar bet as the providers — they can offer services under the assumption that most of these patients will eventually be found eligible and reinstated, at which point the insurance companies will pay for the claims. A big provider like UAMS, a major stakeholder in the private option, could even plausibly institute a policy that they will see patients in this situation. But others may decide it's not worth the risk and turn them away, just as they would someone who didn't have insurance at all. 

Situations will vary, of course — something like emergency medical services have to be provided regardless, so then it would just be a matter of whether the provider got reimbursed. Some providers may have internal policies around having to provide certain services to all comers. But there will almost certainly be some who simply turn beneficiaries away. The silver lining? If they do turn them away, they'll likely tell them, "come back when you get reinstated!" Which leads us to...

Providers (and the insurance companies!) will push cancelled beneficiaries to send in their income verification paperwork to DHS ASAP

A provider who offers services to a cancelled beneficiary will be highly motivated to get that beneficiary to send in paperwork to DHS and get reinstated. After all, their only hope of being directly compensated for the claim by the insurance company is if the patient gets back on the private option. Meanwhile, even docs that say no will be motivated to encourage beneficiaries to get back so that they can return as fully insured customers. 

Meanwhile, the insurance companies themselves, already motivated to communicate with beneficiaries and get them re-enrolled, will be even more so now that they're on the hook for the pharmacy claims.

Ultimately, the way out of this mess is to get eligible beneficiaries reinstated. There is little evidence that state agencies are up to the task in terms of outreach (they're just trying to stay above water processing the paperwork). But carriers and providers may be able to help pick up the slack. 

The insurance companies believe the same thing we've been saying for weeks: most of beneficiaries whose coverage was terminated are actually eligible

The insurance companies obviously don't want to see these clients go without care, but...they're insurance companies! Ultimately they're going to protect their bottom lines. This deal only makes sense for them if they believe that most of these folks are eligible. That's worth remembering since this deal isn't protecting all beneficiaries...

The deal will avoid "churn" for beneficiaries with Blue Cross or Centene plans

In its application for a Medicaid waiver to pursue the private option, the state promised to avoid problems associated with "churn" — that's health wonk speak for when beneficiaries move back and forth across eligibility lines, which can shift them between private plans and public plans. That can lead to confusion, gaps in coverage, and other problems impacting access to care. Unfortunately, however, the Arkansas Medicaid verification mess is potentially a "churn" disaster. For example, if private option beneficiaries had their private plans terminated and then got reinstated, they would have an initial gap in coverage, then be placed in traditional Medicaid during the reinstatement process, and then finally, eventually, return to their original plan.

This deal will avoid those problems for Blue Cross and Centene private option beneficiaries.  Those who are in fact eligible for the program will simply remain in the same plan throughout the process. 

This deal only represents a fix for August, though a deal in September seems likely

So far, Blue Cross and Centene have only agreed to reinstate pharmacy coverage for the tens of thousands who had coverage terminated on August 1. There will be tens of thousands more come September 1. The carriers and state officials will review the situation at that time, though all indications point to a similar deal for next month. After that? If the situation is still a mess by then, the problem will be bigger than this temporary patch can fix. 

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