1. What’s Next?
State Health Care Policy
in 2012
2011 State Legislative Conference
Salt Lake City, Utah
November 5, 2011

2. State Governments
Where the action really happens.
…but having money helps.

3. State Budgets
YEAR CUMULATIVE BUDGET GAP
FY2002 $40,000,000,000
FY2003 $75,000,000,000
FY2004 $80,000,000,000
FY2005 $45,000,000,000
FY2009 $110,000,000,000
FY2010 $191,000,000,000
FY2011 $130,500,000,000*
FY2012 $103,000,000,000*
FY2013 $46,000,000,000**
$820,500,000,000
Source: Center on Budget and Policy Priorities Source: Center on Budget and Policy Priorities
(http://www.cbpp.org/cms/index.cfm?fa=view&id=711) (http://www.cbpp.org/cms/index.cfm?fa=view&id=2783)

4. State Governments
• Three ways to fill a budget hole:
– Use the rainy day fund
• Drained
– Cut programs
• Medicaid payments are a perennial favorite
– Raise revenues
• Never a popular option
• All within the context of health reform
implementation

5. What’s in ACA for States?
• Public Coverage
– Medicaid and CHIP
• Private Insurance
– Health Insurance Exchanges
– Interstate Insurance Commerce
– Co-Ops
• New Programs and Opportunities
– Alternatives to Liability Tort
– PC Extensions and Community Health Teams
– Demonstration Programs and Other Odds and Ends

6. Medicaid: Eligibility
• Eligibility Expansion
• About 16 million uninsured, non-elderly
citizens expected to qualify
• <133% of the Federal Poverty Level
– Household Income
– $29,326.50 for a family of four
• State may file a plan amendment to expand further
– Foster children through the age of 26

7. Medicaid: Benefits
• Concurrent hospice and curative treatment
for children
• Smoking cessation
– Comprehensive treatment for pregnant
women
– Prescriptions covered for everyone
• Adult preventive services option
– 1 point FMAP increase

8. Medicaid: Benefits
• Premium assistance for employer-
sponsored insurance
• Long-Term Care
– Remember Willie Sutton?
• Dual eligibles are 46% of Medicaid’s costs.
– Community First, 1915(i) revision
– Money follows the Person Demo
– Spousal Impoverishment Protection

9. Medicaid: Quality
• Prevention Incentives
– $100M in grants to states to implement
comprehensive, evidence-based incentive
programs in Medicaid for:
• Tobacco cessation
• Weight loss
• Lowering cholesterol or blood pressure, or
• Avoiding onset, or improving control, of diabetes
– States may apply for grants lasting 3 - 5 years

10. Medicaid: Waste, Fraud, Abuse
• Waste, Fraud, Abuse Provisions
– Screening of all Medicare, Medicaid, and
CHIP providers
• Suspension and termination of enrollment
• Booted from one, booted from all
– Overpayments
• Collection period expanded from 60 days to 1 year
– Program Integrity
• Recovery audit contractors

11. Medicaid: Payment
• Primary care physician payment will be
brought to parity with Medicare.
– Covers E&M codes and immunization codes
– Feds pay the difference between Medicare
and what your state’s Medicaid program paid
on June 30, 2009.
• States responsible for any difference between the
January 1, 2013 and June 30, 2009 levels
– Only lasts for two years: 2013 and 2014

12. Children’s Care
• CHIP
– Authorization extended through 2019
– Federal funding increased by 23 points
• Lowest current Fed Matching Rate: 65%
• Feds will pay 95%+ for nearly half of states
– Maintenance of effort required by states
• Pediatric ACO Demo
– Four-year demo (2012-2016)
– Allows pediatric providers who meet certain
criteria (TBD) to be recognized as ACOs

13. Medicaid: PCMH
• New State Option: Health Homes for Patients
with Chronic Conditions
– 90 percent federal match for first 8 quarters
– Focus on patients with asthma, diabetes, heart
disease, mental health condition, substance use
disorder, or overweight/obesity (BMI over 25)
• Patient must have two chronic conditions;
• One chronic condition and is at risk of having a second
chronic condition; or
• A serious and persistent mental health condition
– Simpler plan amendment process is all that’s needed

14. Health Insurance Exchanges
• States must make choices:
– Let the Feds do it or run it ourselves?
– Combine individual and small group markets?
– “Advanced” exchange planning
• Regional Multi-State / Regional Intra-State
• Exchanges must become self-sufficient
• In 2013, HHS will certify that exchanges
are prepared to begin operations

15. Health Insurance Exchanges
• What would FPs think an ideal insurance
market looks like?
• States are responsible for setting
guidelines and regulating products offered
on the exchange
– Get to know your Insurance Commissioner
– Get to know your state legislature’s
committees with jurisdiction over health
insurance

16. Health Insurance Exchanges
• Family Medicine’s Principles
1. Fair Representation of Stakeholders
2. Payment for PCMH & Enhanced Access
3. Standardized Contracting
4. Set Primary Care Targets
5. Require Robust PC-Based Essential Benefits
6. Presume Eligibility
7. Reward Quality
8. Protect Consumers & Physicians

17. Interstate Insurance Commerce
Interstate Insurance Compacts
• Cross-border sale/purchase of insurance
• National Association of Insurance
Commissioners to develop regulations with HHS
• General rules:
– Subject to general insurance and contract laws/regs
of state where policy is written
– Subject to consumer protection laws/regs of state
where policy is purchased

18. Interstate Insurance Commerce
• Multi-State Qualified Health Plans
– Contracts negotiated by Office of Personnel
Management (OPM)
– At least two multi-state plans to be offered on
every state exchange
• At least one must be non-profit
– Must be considered qualified coverage

19. Co-Ops
• Loans and grants to cover start-up and
solvency costs of starting Consumer
Oriented and Operated Plans (CO-OPs)
– Loans paid back in 5 years, grants in 15 years
• Non-profits that may not be run by any unit
of government, nor by private insurers
• Goal of at least one per state
• $2.2 billion (of $6B) rescinded in FY11 CR.

20. Liability: Tort Alternatives Demos
• Supposed to begin October 2010
• Grants for demonstration programs
– Grants made to states
• Similar to 2009 HHS-initiated program
• Funding would be nice, though…

21. Primary Care Extensions
• Grants to states or multi-state entities
• Creates upper-level hubs and local-level
extension agencies
– Hubs: State health department, Medicaid,
state Medicare administrator, departments of
at least one school training in primary care
• May also include professional societies
• Funding would be nice, though…

22. Community Health Teams
• Help states/state-designated entities to
establish community-based, inter-
professional, interdisciplinary teams to
support primary care physicians and
patients
– A model used very successfully in North
Carolina and Vermont, for example
• Funding would be nice, though…

23. Odds and Ends
• Medicaid Global Payment Demo
• Affordable Care Access 10-State Demo
• Reimbursement Data Collection/Analysis
• Community Transformation Grants
• School-Based Health Centers
• Increased Funding for Territories
• Consumer Information Office Grants
• State Innovation Waiver

24. But Wait, There’s More!
• ACA isn’t all that happened in 2011…
…nor will it be all that happens in 2012.
• States continue to deal with
– Scope of Practice
– Workforce
– Public Health
– Liability
…and much, much more

25. Scope of Practice
• Nurse Practitioners • Pharmacists
– Independence – Immunizations
• Psychologists • Lay Midwives
– Rx Authority – Independence
• Chiropractors • Naturopaths
– Rx Authority – Licensure
• Optometrists
– Surgery

26. Scope of Practice
• Truth in Advertising
– Model legislation and supporting materials
available from Scope of Practice Partnership
– Legislation passed in…
• California
• Illinois
• Oklahoma
• Texas

27. Workforce and Public Health
• Workforce
– Student Loan Repayment Programs
– Rural Training Programs
• Public Health
– Pseudoephedrine by Rx
– Clean Indoor Air
– Anti-Obesity

28. Liability
• The Wheel in the Sky (Keeps on Turnin’)
– Courts continue to strike down non-economic
damages caps
– 2010: Arkansas, Georgia, Illinois
• Damage Caps
– Utah lowered by $30k
• PC No-Fault Compensation Fund
– Failed in Vermont

29. 2012 Outlook
• More Budget Cuts = More Pain
– Medicaid provider payments
– Cuts to optional Medicaid/CHIP services
– Cuts to enrollment?
– New taxes/fees
– Programs (PCMH, workforce, medical school,
residency) may go un- or under-funded

30. 2012 Outlook
• Health Reform (not just ACA) Continues
– Health Insurance Exchanges
– Co-Operatives
– Accountable Care Organizations
– Public Options
– Single-Payer

31. AAFP State Government Affairs
• New Reports, One-Pagers
– ACOs, Co-Ops, Exchanges
– FP Education & Training versus
• NP, DNP and Naturopaths
• State Legislative Tracking
– aafp.org/online/en/home/policy/state.html
• Government Affairs Weekly Reports
– Submissions always welcome and wanted

32. AAFP State Government Affairs
• Chapter-Supported Legislation
• Ad Hoc Research
• Grassroots Advocacy for State Legislation
– Speak Out
– Legislator-Member Matching
• Scope of Practice Partnership
– Research and Reports
– Grant Applications

33. Thank You!
• Questions?
Greg Martin
Manager, State Government Affairs
American Academy of Family Physicians
gmartin@aafp.org
888.794.7481, x.2552