Medicare & Medicaid Recent Advances

1. Medicare & MedicaidRecent Advances Mary B. Tierney, MD Keynote, International Society of Psychiatric-Mental Health Nurses April 2006 Denver, Colorado

2. Background and History Social Security Act • Title I — Old Age Assistance/Social Security • Title IV —TANF and Foster Care • Title V — Maternal and Child Health Block Grant • Title XVI — SSI/Aged Blind and Disabled • Title XVIII — Medicare • Title XIX — Medicaid • Title XXI — SCHIP

3. Medicare & Medicaid Eligibility Requirements and Options

4. Federally Funded Insurance and Eligibility Requirements • INSURANCE • Medicare/Title XVIII of the Social Security Act • ELIGIBILITY • Title I of the Social Security Act/Social Security • End Stage Renal Disease

5. INSURANCE Medicaid/TitleXIX of the Social Security Act State Children’s Health Insurance Program/Title XXI of the Social Security Act ELIGIBILITY TANF SSI Multiple other categories that are de-linked from “welfare” such as TANF Flexible eligibility Medicaid expansion Separate Program Combination of the two Federally Funded Insurance and Eligibility Requirements - Medicaid

6. MANDATORY TANF SSI Pregnant Women & Children Low Income Children under 19 years Foster Care and Adoption Assistance OPTIONAL Infants to age 1 year Non-institutionalized Disabled Children Home and Community Based Services Children meeting income requirements but not TANF eligible MANDATORY & OPTIONAL COVERAGE - Medicaid

7. SUMMARY • Medicare eligibility is relatively narrowly defined • Medicaid is complex, broad, expansive and variable

8. Medicare & Medicaid Services & Benefits

9. MEDICARE BENEFITS • Part A – Hospital & Skilled Nursing Facilities • Part B – Supplementary Services includes Physician Services, diagnostic services, supplies, PT, psychologists, radiology and therapeutic services • Therapeutic rather than preventive

10. MMA Benefit • One time initial wellness physical examination within 6 months of enrollment • Screening for heart disease and diabetes • Added to cancer screenings, bone mass measurement and vaccinations • Prescription drug benefit

11. Medicaid Services • Inpatient hospital services • Outpatient hospital services • Rural Health Clinic Services • Federally Qualified Health Centers • Nursing Facilities other than IMD for over age 21 years • EPSDT under age 21 years • Family Planning • Physician services

12. Medicaid Services • Medical and dental surgical services • Pediatric and Family Practice Nurse Practitioners • Nurse Midwives • Health care by licensed practitioners (e.g. Psychologists) • Laboratory and X-Ray • Home Health

13. Optional Services • Physical and Occupational Therapy • Prescription Drugs • Rehabilitation Option • Clinic Option • Targeted Case Management • Any other medical or remedial care recognized under State law and specified by the Secretary of HHS

14. EPSDT • A Benefit Under Medicaid: birth -21 years • Mandates a Set of Benefits Including Preventive, Diagnostic, and Treatment Services, Such as Health Histories; Physical Examinations; Developmental Assessments; Vision, Hearing and Dental Services; Immunizations • Mandates Screening for Both Physical and Mental Health Issues

15. EPSDT Diagnosis and Treatment • When screening examinations so indicate. • What services — all services covered under the state plan and any additional services (diagnostic or therapeutic) that are round necessary to diagnose and treat conditions found as a result of a screen regardless of any limitations under the state plan

16. WAIVERS • 1915 [b] mental health carve out • 1915[c] home and community-based waivers • 1115 waivers

17. SUMMARY • Medicaid services are much broader and deeper than Medicare and private health insurance especially for behavioral health services • Medicaid services for children and adolescents are much broader and deeper than those for adults over 21 years • Much of the differential is due to EPSDT

18. Trends in Medicare and Medicaid

20. Largest Health Care and Financing Program • Medicaid Spending in FY 2004 ~ $300 billion (compared to Medicare ~ $290 billion) • Health coverage for over 59 million in U.S. at some point during the year (Compared to Medicare: 43 million) • Medicaid covers more than 17% of the population • Medicaid funds over half of publicly financed mental health services in U.S. Sources: CMS, CBO Medicaid Baseline March 2006

21. Medicaid Enrollees by Eligibility Group Children historically represent the largest eligibility group of Medicaid enrollees. 2004 Total : 52 million Adults: 13 million Children Under Age 21: 25 million Blind & Disabled: 9 million Age 65 & Older: 5 million Note: “Adults” refers to non-elderly, non-disabled adults; disabled children are included in the blind & disabled category. **The ”Other” category was dropped in 1999. Source: CMS, CMSO, Medicaid Statistical Information System, CBO.

22. Section 1115 Waivers Expand Medicaid Eligibility (1991-1993) Medicaid Eligibility Expanded to Women and Children (1984-1990) SSI Enacted (1972) SCHIP Enacted (1997) Medicaid Enacted (1965) Medicaid Enrollment and Eligibility Milestones, 1965-2006 59 Million Beneficiaries Millions of Medicaid Beneficiaries during year Recession and State Fiscal Crisis (2001-2004) AFDC Repealed (1996) SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of data from the Centers for Medicare and Medicaid Services, 2004. CBO March 2005 Medicaid Baseline.

23. New Trends in Medicare Medicare Prescription Drug Improvement and Modernization Act of 2003(MMA)

24. MMA Drug Benefit • Full implementation of prescription drug benefit in 2006 • Choose a prescription drug plan and pay a premium of $35/month • Cost sharing with Medicare depending upon the amount spent • Managed Care Option

25. Source: Congressional Budget Office estimates

26. Source: Congressional Budget Office estimates

27. Source: Congressional Budget Office estimates

28. RECENT DEVELOPMENTS • Major problems with implementation • Multiple choices in drug coverage plans and variation in what drugs are covered by plan • Delay in ability to sign up for program due to bureaucratic “glitches” • Major problems in serving people eligible for both Medicare and Medicaid [“Dual Eligibles”]

29. RECENT DEVELOPMENTS • Major impact on the Medicaid budgets • State Medicaid agencies are continuing to cover the “dual eligibles” • Recent Federal response to Medicaid agencies continuation of coverage

31. RECENT CHANGES IN THE MEDICAID PROGRAM • Increased economic pressure on the States because of the: • Problems with the Medicare prescription drug benefit for “dual eligibles” and the “Claw Back” provision • The effects of “Katrina” and people losing health insurance through their jobs • Reduction in the Federal Medicaid match of $10 billion

32. RECENT CHANGES IN THE MEDICAID PROGRAM • Katrina: individuals and families lost private health insurance due to the devastation in the Gulf Coast • Medicaid will cover those individuals through an waiver of Federal Regulations • Individuals will be covered in the States in which they and their families will be living • Pressure could be on Medicaid programs that are “optional” including mental health services, especially those that are community based

33. RECENT CHANGES IN THE MEDICAID PROGRAM • $10 billion reduction in Medicaid: Federal legislative changes put financial pressure to cut services including behavioral health • Changes in eligibility and services provided to different categories of people who are enrolled in Medicaid • Also there are major changes in the Deficit Reduction Act that reducing the scope of important programs that serve children and adults with behavioral health issues including: - Targeted Case Management - EPSDT - Rehab option

34. Deficit Reduction Act:Major Implications for Medicaid • Requires proof of citizenship • Limits Targeted Case Management • Gives states authority (for some groups of children and adults) to • Offer alternative benefit packages • Require premiums • Require coinsurance • Require copayments to be paid before a service • Allows coverage of certain disabled children • Born in 2001 or after • Allows premiums up to 7.5% of income

35. TCM Changes • No Medicaid $ for foster care services -- whether paid thru Title IV-E or state (reinforces current rules) • Nor if any other third party liable to pay for service, including: • as reimbursement under a medical, social, educational or other program

36. S-CHP-Like Benchmark Plans • States may move certain groups into plans (requirements re plans same as under S-CHIP). Private insurance model • Exceptions: SSI, disabled, CW children, those with any spend-down requirements, TEFRA children and TANF-recipients • State must provide wraparound EPSDT benefit to children under 19 ; unclear for children 19+

37. Premiums & Copays • New state options • No cost sharing for those in poverty • 100-150% FPL no premium; 10% copays, capped at 5% family income • Over 150% FPL premiums, 20% copays; total capped at 5% family income • All indexed to medical inflation

38. Penalities for non payment • State may terminate Medicaid if some or all premium is unpaid • State may permit providers to deny services if copayments not met • Providers may waiver this requirement on a case by case basis

39. Who Can/Cannot be Charged • For children: • No premiums or cost sharing for children under 18 in mandatory eligibility groups (including IV-E & IV-B kids regardless of age) • No cost sharing for emergency services • For drugs: • Up to 20% of cost of drug for families 150% FPL or above, nominal amounts for others

40. Budget Bill Plusses • Family Opportunity Act phased in: • Family income above Medicaid but under 300% FPL ($58,500) can buy into Medicaid at state option for disabled child under age 19 • Phased in by age: those 6 or under in 2007; 13 or under in 2008, under 19 in 2009. • State can charge sliding scale premiums – no more than 5% income if under 200% FPL; 7.5% income if 200-300% FPL

41. Budget Bill Plusses • Authorizes 10 state demonstrations of home & community-based services waiver for children in RTCs • Begins in 2007 • For children in demo when it ends, state may continue to provide H&CB services • Budget neutrality and other rules the same as current H&CB waiver rules

42. Budget Bill Plusses • Authorizes 10 state demonstrations of home & community-based services waiver for children in RTCs • Begins in 2007 • For children in demo when it ends, state may continue to provide H&CB services • Budget neutrality and other rules the same as current H&CB waiver rules

43. YOUR THOUGHTS

44. Contact Information Mary B. Tierney, MD 202-403-5620 mtierney@air.org