The mechanics of Medicaid expansion

Yesterday’s post about Healthy Pennsylvania brought up an interesting set of questions.  Would a straight up expansion of Medicaid instead of implementing Healthy Pennsylvania take less time to build the back-end infrastructure?  The logic is that the current Medicaid system is already working, so adding another 500,000 people would be “merely” an increase in scale.

It is a bit more complicated than that.

The biggest complication is provider network contracting.  Mayhew Insurance is a Medicaid managed care organization for the state(s) that we operate in.  Our provider contracts have an opt-out clause for individual networks when there is a material change to business model, population, reimbursement or other critical circumstances.  I am not a lawyer, but I have seen what our legal department considers a “material change” and a population increase of half a million people easily qualifies as a material change.  The provider network would need a ninety day opt-out period where providers could opt-out without penalty.

After the provider opt-out period ends, new providers are needed to both replace the lost providers and to give a decent possibility of good access to care.  This is another three to nine month process.  It is not a critical show-stopping step, it is an ongoing process.  More importantly, contracts will be revised with exisiting providers to insure that there is adequate capacity and adequate reimbursement to cover the newly insured people.  This means provider offices will need to hire more CRNPs, more physician assistants, more nurses (not many more docs would be hired is my guess).

In conjunction with network expansion, is a significant behind the scenes ramp-up.  Customer service reps need to be hried and trained.  Some companies have a three day training period, others have a three month training period (and you can quickly tell which company trains to what standard).  Medical management needs to be expanded and probably retrained as the expansion population is different in key aspects than the Legacy Medicaid population (expansion is more male, different age distribution, fewer comorbidities, fewer long term care problems). 

New benefit grids need to be designed, tested, modeled and disseminated.  My state covers a few populations that make more than 100% Federal Poverty Limit.  These sub-populations already have co-pays and minimal deductibles for services, so if my state was expanding, I would assume that at least the expansion individuals who make more than 100% FPL would also have some cost-sharing.  We could template off of exisiting plan designs which is faster than building from scratch, but it is still a significant process. 

A straight up Medicaid expansion to do it right needs at least six months of prep work.  I would prefer at least nine months to minimize stress, but six months is needed to get things done well the first time.  Three months could get an expansion to Initial Operating Capacity with a signficant four to six month Phase 2 clean up.  Simple expansion would probably save only a month or two over building out a brand new line of business.

17 replies
  1. 1
    rikyrah says:

    I can’t tell you enough how much I appreciate your posts on the different facets of Obamacare.

    You have been a gem throughout this entire process.

    PURE Medicaid expansion…

    none of these GOP schemes.

  2. 2
    Tommy says:

    @rikyrah: Agreed. My largest client works in the health care industry and between reading some stuff at Think Progress, Daily Kos, and Richard’s post, well I appear to know a lot more then my client would think. I mean I am just his web development, social media, and email marketing guy. Makes me look smarter then I am :)!

  3. 3
    Richard Mayhew says:

    @rikyrah: Agreed, in an ideal world without the Supreme Court monkey wrenching PPACA, straight up expansion is simple, straightforward, effective and efficient. However that is not the world we live in. The choice is not simple expansion or convoluted expansion; it is often convoluated expansion or nothing. I’ll take convoluted over nothing

  4. 4
    rikyrah says:

    @Richard Mayhew:

    Agreed, in an ideal world without the Supreme Court monkey wrenching PPACA, straight up expansion is simple, straightforward, effective and efficient. However that is not the world we live in. The choice is not simple expansion or convoluted expansion; it is often convoluated expansion or nothing. I’ll take convoluted over nothing

    I see what you mean. I understand it also, even if I just think it’s rotten. I know it’s cruel, but I honestly believe they should tell Pennsylvania to shove it and hold out until the November election. While waiting would be ridiculous in a state like Arkansas, I think waiting in PA will be worth it to not have to deal with a GOP bullshyt scheme.

  5. 5
    SometimesAnyonymous says:

    That’s in line with my experience. I was traveling all summer setting up call centers for state exchanges. We had to have our ducks in a row by June at the latest to be able to handle the call volume expected from October to March. Planning for the next open enrollment session is well underway.

  6. 6
    Elizabeth says:

    Putting in my agree as well. I see the process you describe just in the Mental Health part of Medicaid in my county. Our customer access line has been ramping up, hiring and training. Many providers, both individual and institutional, are in negotiations over who does and pays for what, with a number of significant changes from week to week. Our department has to keep up with all this to get callers the care they need. And at the state level here in California there has been a freeze on processing those who have signed up, simply because the system is overwhelmed. Many have waits of 2-4 months until their Medi-Cal (our Medicaid) is actually activated. We field lots of calls from people simply checking on the status of the health care they signed up for, and it is a nerve-wracking waiting game for many. Just one perspective from a grunt on the ground, in a state that was relatively prepared, welcomed the expansion, and where implementation has been a ‘success’.

  7. 7
    Freemark says:

    @rikyrah: As someone stuck in the Medicaid gap I’m willing to except anything at this point. I’ll take Corbett’s POS minus the worst of the poor shaming. Currently I’m going to Millersville University and I signed up for the exchanges w a subsidy. I’m going to have to take money from my 401k (about $7000) to increase my income so I don’t have to pay the subsidy back.

    If Governor Wolf can assure a better plan I’ll take it, but with our gerrymandered legislature I wouldn’t count on it.

    By the way I like Wolf’s chances. I’m from Mt.Wolf (named after his family and where he lives) and he is known as a good guy here. He is getting a large number of crossover votes in York County. We even share the same mechanic who is voting for Wolf and I guarantee he has never voted for a Democrat before.

  8. 8
    JoyfulA says:

    @Freemark: I’m hoping HHS holds it up till November and we see exactly how the capitol shakes out.

    I have little doubt that Wolf will win. On PennLive comments, even the most hard-nosed, backward teabaggers despise Corbett, but we are so gerrymandered—

  9. 9
    Richard Mayhew says:

    @JoyfulA: The big issue is if Wolf wins, there is at least a six to nine month gap from inaguruation before any Wolf Medicaid policy change can come into play. It might be announced on Day 1 but the plumbing will take a while.

  10. 10
    Richard Mayhew says:

    @Freemark: Talk to an accountant about the penalties of paying back subsidies because you overstated your income to qualify for subsidy instead of falling into the Medicaid gap. You might not need to take out as much. I’m not sure.

  11. 11
    karen says:

    I’m lucky that Maryland expanded Medicaid and under the new rules (no income because of being laid off) I’ve been able to get great care for my breast cancer and not having a huge bill make it easier to do what I need to without having to think about how much everything costs. So I’m super grateful.

  12. 12
    Freemark says:

    @Richard Mayhew: Yeah, I’m not sure either. I need to take some out to pay for school anyway and there is no penalty for that. I will also make $5000 this summer plus another $1000 or so from tutoring so we will see. But it would be nice to not need to worry about it next year. By the way I only pay $10 month with the subsidy so if it wasn’t for the damn Supreme Court gap I’d be happy with my Highmark Silver plan.

  13. 13
    narya says:

    One group that is pretty well-prepared to handle (even welcome) an influx of newly Medicaided folks is the FQHCs. Uninsured poor folks are who we are supposed (and do) serve, so Medicaid expansion basically has enabled us to get paid by Medicaid for care we’re already providing. What we did add, though–and we were an early-expansion locale–were people who helped to enroll eligible folks in Medicaid, and, eventually, insurance, and, now that everyone’s enrolled, the same staff are being “repurposed” to help people understand how to use insurance. (People who’ve never been insured don’t always understand about payments and co-pays and the like, and we must require proof of income, etc.) I can see how private provider networks would need ramp-up time, but FQHCs and LALs not so much, or, at least, not in the same way.

  14. 14
    300baud says:

    Thanks so much for these. With little to add, I rarely comment, but I really appreciate getting a glimpse into how complex things are, and the interrelationship between the many forces at work.

  15. 15
    Richard Mayhew says:

    @narya: big problem with FQHCs is scale — they are a great resource, but there are not enough of them with not enough docs and other providers to take care of need. But yes, FQHCs and other federally supported clinics should be a core component of basic care for areas with concentrated poverty.

  16. 16
    JoyfulA says:

    @Richard Mayhew: HHS probably won’t approve Corbett’s plan anyhow. It’s full of mandatory job search activities for those not working full-time and the like.

    It will supposedly require 753 new state employees for administration, compared with a few dozen for simple expansion. Just organizing that structure and hiring 700 people would take 6 to 9 months, I’d guess. (At least the unemployment rate should drop with all those new hires.)

    I haven’t heard anything about which health insurance companies are willing to participate, but I suspect they’re leery of this mess. Highmark is currently strangling itself in its fight with UPMC (the huge Pittsburgh hospital chain that claims it has no employees), and I think it’s the biggest in the state.

  17. 17
    Richard Mayhew says:

    @JoyfulA: From what I’ve heard/read — HHS and Corbett are playing ping-pong stripping out the worst of the poor shaming on each volley.

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