Virginia Budget Conference Report on “Medicaid Reform and Expansion”
(adopted February 23, 2013)
With Governor’s Recommendations (March 26, 2013)
Item 307#20c Health And Human Resources Department Of Medical Assistance Services Language
Language:
Page 280, after line 14, insert: "JJJJ.1. The Department of Medical Assistance Services shall seek federal authority through any necessary waiver(s) and/or State Plan authorization under Titles XIX and XXI of the Social Security Act to implement a comprehensive value-driven, market-based reform of the Virginia Medicaid/FAMIS programs. This reform shall be implemented in three phases as outlined in paragraphs 2, 3 and 4. The department shall have authority to implement necessary changes when feasible after federal approval and prior to the completion of any regulatory process undertaken in order to effect such change. 2. In the first phase of reform, the Department of Medical Assistance Services shall continue currently authorized reforms of the Virginia Medicaid/FAMIS service delivery model that shall, at a minimum, include (i) implementation of a Medicare-Medicaid Enrollee (dual eligible) Financial Alignment demonstration as evidenced by a Memorandum of Understanding with the Centers for Medicare and Medicaid Services (CMS), signing of a three-way contract with CMS and participating plans, and approval of the necessary amendments to the State Plan for Medical Assistance and any waivers thereof; (ii) enhanced program integrity and fraud prevention efforts to include at a minimum: recovery audit contracting (RAC), data mining, service authorization, enhanced coordination with the Medicaid Fraud Control Unit (MFCU), and Payment Error Rate Measurement (PERM); (iii) inclusion of children enrolled in foster care in managed care; (iv) implementation of a new eligibility and enrollment information system for Medicaid and other social services; (v) improved access to Veterans services through creation of the Veterans Benefit Enhancement Program; and (vi) expedite the tightening of standards, services limits, provider qualifications, and licensure requirements for community behavior health services. 3. In the second phase of reform, the Department of Medical Assistance Services shall implement value-based purchasing reforms for all recipients subject to a Modified Adjusted Gross Income (MAGI) methodology for program eligibility and any other recipient categories not excluded from the Medallion II managed care program. Such reforms shall, at a minimum, include the following: (i) the services and benefits provided are the types of services and benefits provided by commercial insurers and may include appropriate and reasonable limits on services such as occupational, physical, and speech therapy, and home care with the exception of non-traditional behavioral health and substance use disorder services; (ii) reasonable limitations on non-essential benefits such as non-emergency transportation are implemented; and (iii) patient responsibility is required including reasonable cost sharing and active patient participation in health and wellness activities to improve health and control costs. To administer this reformed delivery model, the department is authorized to contract with qualified health plans to offer recipients a Medicaid benefit package adhering to these principles. Any coordination of non-traditional behavioral health services covered under contract with qualified health plans or through other means shall adhere to the principles outlined in paragraph RR. e. This reformed service delivery model shall be mandatory, to the extent allowed under the relevant authority granted by the federal government and shall, at a minimum, include (i) limited high-performing provider networks and medical/health homes; (ii) financial incentives for high quality outcomes and alternative payment methods; (iii) improvements to encounter data submission, reporting, and oversight; (iv) standardization of administrative and other processes for providers; and (v) support of the health information exchange. The second phase of reform shall also include administrative simplification of the Medicaid program through any necessary waiver(s) and/or State Plan authorization under Titles XIX and XXI of the Social Security Act and outline agreed upon parameters and metrics to provide maximum flexibility and expedited ability to develop and implement pilot programs to test innovative models that (i) leverage innovations and variations in regional delivery systems; (ii) link payment and reimbursement to quality and cost containment outcomes; or (iii) encourage innovations that improve service quality and yield cost savings to the Commonwealth. 4. In the third phase of reform, the Department of Medical Assistance Services shall seek reforms to include all remaining Medicaid populations and services including long-term care and home-and community-based waiver services into cost-effective, managed and coordinated delivery systems. The department shall begin designing the process and obtaining federal authority to transition all remaining Medicaid beneficiaries into a coordinated delivery system. A report shall be provided to the 2014 General Assembly regarding the progress of design and implementing such reforms. 5. The Department of Medical Assistance Services shall provide a report to the Medicaid Innovation and Reform Commission on the specific waiver and/or State Plan changes that have been approved and status of implementing such changes, and associated cost savings or cost avoidance to Medicaid/FAMIS expenditures. 6.a. The Department shall seek the approval of the Medicaid Innovation and Reform Commission to amend the State Plan for Medicaid Assistance under Title XIX of the Social Security Act, and any waivers thereof, to implement coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1)[2010] of the Patient Protection and Affordable Care Act. If the Medicaid Innovation and Reform Commission determines that the conditions in paragraphs 2, 3, 4, and 5 have been met, then the Commission shall approve implementation of coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1)[2010] of the Patient Protection and Affordable Care Act. b. Upon approval by the Medicaid Innovation and Reform Commission, the department shall implement the provisions in paragraph 6.a. of this item by July 1, 2014, or as soon as feasible thereafter. 7.a. Contingent upon the expansion of eligibility in paragraph 6.a., there is hereby created in the state treasury a special nonreverting fund to be known as the Virginia Health Reform and Innovation Fund, hereafter referred to as the "Fund." The Fund shall be established on the books of the Comptroller and any moneys remaining in the Fund at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. For purposes of the Comptroller's preliminary and final annual reports required by § 2.2-813, however, all deposits to and disbursements from the Fund shall be accounted for as part of the general fund of the state treasury. b. The Director of the Department of Medical Assistance Services, in consultation with the Director of the Department of Planning and Budget, shall annually identify projected general fund savings attributable to enrollment of newly eligible individuals included in 42 U.S.C. § 1396d(y)(1)[2010] of the PPACA, including behavioral health services, inmate health care, and indigent care. Beginning with development of the fiscal year 2015 budget, these projected savings shall be reflected in reduced appropriations to the affected agencies and the amounts deposited into the Fund net of any appropriation increases necessary to meet resulting programmatic requirements of the Department of Medical Assistance Services. Beginning in fiscal year 2015, funding to support health innovations described in Paragraph 3 shall be appropriated from the Fund not to exceed $3.5 million annually. Funding shall be distributed through health innovation grants to private and public entities in order to reduce the annual rate of growth in health care spending or improve the delivery of health care in the Commonwealth. When the department, in consultation with the Department of Planning and Budget, determines that the general fund expenses incurred from coverage of newly eligible individuals included in 42 U.S.C. § 1396d(y)(1)[2010] of the PPACA exceed any associated savings, a percentage of the principle of the Fund as determined necessary by the Department and the Department of Planning and Budget to cover the cost of the newly eligible population shall be reallocated to the general fund and appropriated to the department to offset the cost of this population. Principle shall be allocated on an annual basis for as long as funding is available. 8. In the event that the increased federal medical assistance percentages for newly eligible individuals included in 42 U.S.C. § 1396d(y)(1)[2010] of the PPACA is modified through federal law or regulation from the methodology in effect on January 1, 2014, resulting in a reduction in federal medical assistance as determined by the department in consultation with the Department of Planning and Budget, the Department of Medical Assistance Services shall disenroll and eliminate coverage for individuals who obtained coverage through 42 U.S.C. § 1396d(y)(1) [2010] of the PPACA. The disenrollment process shall include written notification to affected Medicaid beneficiaries, Medicaid managed care plans, and other providers that coverage will cease as soon as allowable under federal law from the date the department is notified of a reduction in Federal Medical Assistance Percentage. 9. There is hereby appropriated sum sufficient nongeneral funds for such costs as may be incurred to implement coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1)[2010] of the Patient Protection and Affordable Care Act. KKKK.1. The Director of the Department of Medical Assistance Services shall continue to make improvements in the provision of health and long-term care services under Medicaid/FAMIS that are consistent with evidence-based practices and delivered in a cost effective manner to eligible individuals. 2. In order to effect such improvements and ensure that reform efforts are cost effective relative to current forecasted Medicaid/FAMIS expenditure levels, the Department of Medical Assistance Services shall (i) develop a five-year consensus forecast of expenditures and savings associated with the Virginia Medicaid/FAMIS reform efforts by November 15 of each year in conjunction with the Department of Planning and Budget, and with input from the House Appropriations and Senate Finance Committees, and (ii) engage stakeholder involvement in meeting annual targets for quality and cost-effectiveness."
Explanation: (This amendment adds language to implement a comprehensive Virginia Medicaid/FAMIS reform. Language provides for phasing in reforms beginning with current efforts to reform the Medicaid program, service delivery system reforms for pregnant women and children, and elderly and disabled recipients who are not excluded from the Medallion II managed care program and who are not receiving long-term care services, and continuing for all remaining recipients and services. Reforms will include redesigning services and benefits to mirror those provided by commercial insurers, reasonable limits on nonessential benefits, imposition of reasonable cost sharing and active engagement in health and wellness activities to improve health and control costs. Authority is provided to the Department of Medical Assistance Services (DMAS) to contract with qualified health plans to offer a reformed benefit package that is mandatory to the extent allowed under the authority granted by the federal government. Language is added to allow for administrative simplification of the Medicaid program through any necessary waivers or State Plan authorization for the Medicaid/FAMIS programs and require the Department of Medical Assistance Services (DMAS) to seek necessary federal waiver(s) and/or State Plan amendments to implement Medicaid/FAMIS service delivery system reforms and report on those changes approved by the federal government, as well as plans for implementing reforms. Reform is to include administrative simplification of the Medicaid program through any necessary waiver(s) and/or State Plan authorization under Titles XIX and XXI of the Social Security Act. In addition, it will include agreed upon parameters and metrics to develop and implement pilot programs to test innovative models that improve service quality and yield cost savings to the Commonwealth. The Department is required to make recommendations to the 2014 General Assembly to implement managed and coordinated care for long-term care services, including home- and community-based Medicaid waivers. In addition, the agency is required to report to the Medicaid Innovation and Reform Commission, established in a companion amendment, on program changes that have been approved, the status of implementing the changes and attendant cost savings or cost avoidance to Medicaid or FAMIS expenditures. Language allows the Department to seek to amend the Medicaid State Plan to expand Medicaid to individuals with incomes up to 133 percent of the federal poverty level pursuant to the federal Patient Protection and Affordable Care Act (PPACA) upon approval by the Medicaid Innovation and Reform Commission if the Commission determines that the conditions for reforms have been met. A sum sufficient appropriation of nongeneral funds is provided for the costs of the expansion. Language creates the Virginia Health Reform and Innovation Fund with general fund savings attributable to enrollment of newly eligible individuals pursuant to the PPACA, such as behavioral health services, inmate health care, and indigent care. Savings from reduced appropriations to affected agencies and program would be deposited into the fund beginning with the development of the fiscal year 2015 budget. Language allows up to $3.5 million annually to be used from the fund for health innovations to reduce the annual rate of growth in health care spending or improve the delivery of health care. The Fund would be reallocated to cover the cost of the newly eligible population when it is determined that the general fund expenses for covering the new population exceed any savings attributable to Medicaid expansion. Budget language directs the agency to disenroll newly eligible individuals in Medicaid if the method for determining federal financial participation is modified from that in effect on January 1, 2014 and it results in a reduction in federal financial participation. Finally, language requires the Department to continue to make improvements in Medicaid/FAMIS to ensure the delivery of appropriate, cost effective services. In addition, the Department is required to conduct a five-year forecast of the expenditures and savings associated with Medicaid/FAMIS reform and engage stakeholders in meeting annual targets for quality and cost-effectiveness.)
Item 4-14.00#4c Effective Date Effective Date Language
Language:
Page 545, after line 41, insert: "4. That the Code of Virginia is amended by adding a section numbered 30-339 and reenacted as follows: § 30-339. Medicaid Innovation and Reform Commission; membership; terms; compensation and expenses; definition. A. The Medicaid Innovation and Reform Commission (the Commission) is established as a commission in the legislative branch of state government. The purpose of the Commission shall be to review, recommend and approve innovation and reform proposals affecting the implementation of Title XIX and Title XXI of the Social Security Act, including eligibility and financing for proposals set out in Item 307 of this act. Specifically, the Commission shall review (i) the development of reform proposals; (ii) progress in obtaining federal approval for reforms such as benefit design, service delivery, payment reform, and quality and cost containment outcomes; and (iii) implementation of reform measures. B. The Commission shall consist of 12 members as follows: the chair of the House Committee on Appropriations, or his designee, and four members of the House Committee on Appropriations appointed by the chair and the chair of the Senate Finance Committee, or his designee, and four members of the Senate Finance Committee appointed by the chair. In addition, the Secretaries of Finance and Health and Human Resources shall serve as ex officio, nonvoting members of the Commission. C. Members shall serve terms coincident with their terms of office. Vacancies for unexpired terms shall be filled in the same manner as the original appointments. Members may be reappointed for successive terms. D.1. The members of the Commission shall elect a chairman and vice chairman annually. A majority of the voting members of the Commission shall constitute a quorum. The meetings of the Commission shall be held at the call of the chairman or whenever the majority of the members so request. The Commission shall meet bimonthly beginning in June 2013, or as soon as possible thereafter. 2. An affirmative vote by three of the five members of the Commission from the House of Delegates and three of the five members of the Commission from the Senate shall be required to endorse any reform proposal to amend the State Plan for Medical Assistance under Title XIX of the Social Security Act, and any waivers thereof, to implement coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1)[2010] of the Patient Protection and Affordable Care Act. E. Legislative members of the Commission shall receive such compensation as provided in § 30-19.12, and nonlegislative members shall receive such compensation as provided in § 2.2-2813." Page 545, line 42, strike "4." and insert "5." Page 545, line 43, strike "and" and insert "," Page 545, line 43, after "third" insert ", and fourth".
Explanation: (This amendment establishes a Medicaid Innovation and Reform Commission in the Virginia General Assembly to review, recommend and approve innovation and reform proposals affecting the Virginia Medicaid and Family Access to Medical Insurance Security (FAMIS) programs, including those set forth in item 307 in the Department of Medical Assistance Services. Language requires an affirmative vote by a majority of the members appointed from each body to approval Medicaid expansion for newly eligible individuals pursuant to the Patient Protection and Affordable Care Act.)
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