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Advancing Comprehensive Primary Care in Medicaid

Executive Summary

Access to primary care can help individuals live longer and help avoid or delay the onset of costly chronic conditions such as diabetes, heart disease, and cancer. Access to primary care can also help reduce more expensive care, including hospitalizations and emergency department visits. As health care policymakers seek to move away from volume-driven fee-for-service health care toward better integrated systems of care, they recognize the importance of primary care providers to improve health outcomes and lower overall healthcare costs.

As evidence builds on best practices, primary care providers—who are among the lowest paid health professionals—are being asked to do more than just see patients and treat their illnesses. Effective primary care models incorporate physicians, nurses, pharmacists, social workers, and other professionals to address a broad range of patient needs. New payment and delivery models that have proven effective include patient-centered medical homes and Medicaid health homes. Historically, those payment models have included additional payments to coordinate care, enhanced payment rates, and payments or grant funding to help cover the up-front costs of building a comprehensive primary care practice. Some care models receive a share of savings generated through better coordination. The majority of Medicaid-enrolled individuals under age 65 receive care through Medicaid Managed Care Organizations. Despite the benefits of these new models, only about half of all states include language in their managed care quality assessment and improvement strategies to improve primary care through payment reform.

While this report identifies barriers to the provision of primary care in Medicaid, all payers would benefit from a more comprehensive approach to improving primary care. Improving access to health insurance coverage is not the focus of this report, but lack of access to health insurance coverage is a significant barrier. Another barrier is a lack of nurses, physicians, and other providers who choose to go into primary care—in many cases because of lower payment rates across payers. The difference in payment between primary and specialty care is even more problematic for those who choose to serve low-income populations, given historically lower payments in Medicaid. BPC also identified as a barrier to primary care in Medicaid—and across our health care system — the need to address racial, ethnic, and economic barriers to care. Many of these recommendations will increase Medicaid spending in the short-term. However, failure to address the lack of good primary care will lead to even higher state and federal costs in Medicaid over time.

Health Management Associates evaluated each of the proposed legislative options to determine the potential costs or savings to the federal government over the next 10 years. Current expectations in Medicaid, including the assumed impact of the COVID-19 economic downturn over the next several years were accounted for in these calculations. It was found that two of the proposed options, namely allowing non-expansion states an opportunity to expand their Medicaid programs with an enhanced Federal Medical Assistance Percentage as well as auto-enrolling individuals in Medicaid or Marketplace plans, could increase the federal budget by $100-200 billion over 10 years, while also reducing the number of uninsured by 2.5-6.0 million. Other proposed options, including allowing states to offer 12 months of continuous Medicaid eligibility for adults, increasing Federal Medical Assistance Percentage for primary care services in Medicaid if paid at the same level as Medicare, or reauthorizing funding for community health centers for 10 years, could each increase the federal budget by $25-40 billion over 10 years. Finally, some of the proposed options would likely have an uncertain impact on the federal budget, as evidence of costs or savings is not well established.

BPC’s efforts to develop policy recommendations to overcome these barriers began in August 2019. COVID-19 has amplified the barriers to primary care in Medicaid. Primary care providers are increasingly worried about their ability to continue to manage their practices. Two million Americans have filed unemployment claims, resulting in an increase in the number of individuals without employer-sponsored health insurance. The resulting increase in Medicaid eligibility and decrease in tax revenues will force states to make difficult choices in the coming year. BPC’s recommendations seek to address both the short-term and long-term barriers to primary care in Medicaid.

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A. Support for a Comprehensive Framework for Improving Primary Care

To promote a comprehensive framework for improving primary care, Congress should:

  1. Direct the secretary of HHS to work with existing learning collaboratives and researchers to elevate primary care as a priority for Medicaid and share best practices on primary care among states
  2. Direct the secretary of HHS to work with states and other stakeholders to promote measurement and report of spending on primary care as a percentage of total health care spending.
  3. Appropriate funding for the Primary Care Extension Program

B. Improve Access to Insurance Coverage

To improve access to affordable health insurance coverage, Congress should:

  1. Permit non-expansion states to expand Medicaid coverage under one of these options:
    • Provide coverage to adults with incomes up to 138% of the federal poverty level with 100% Federal Medical Assistance Percentage phased down over five years to 90%; or
    • Provide coverage to adults with incomes up to 100% of the federal poverty level with 88% Federal Medical Assistance Percentage, provided they expand coverage within two years of enactment.
  2. Permit states to auto-enroll individuals eligible for coverage under Medicaid, Children’s Health Insurance Program (CHIP), or Marketplace subsidies in the appropriate programs. Marketplace auto-enrollment should only apply if the individual’s subsidy meets or exceeds Marketplace premium costs.
  3. Create a new state option for 12-month continuous Medicaid eligibility for adults.

To ensure preventive services are affordable and accessible, Congress should:

  • Require coverage of preventive care services for adults in traditional Medicaid without cost-sharing.

C. Strengthen the Medicaid Primary Care Workforce

To ensure that reimbursement for primary care providers is sufficient to support access to primary care services in Medicaid, Congress should:

  • Increase state Federal Medical Assistance Percentages to 100% for primary care services for states that reimburse at Medicare rates for five years.

To strengthen MCO network adequacy requirements, Congress should:

  • Direct the HHS secretary to delay proposed changes to managed care organization network adequacy requirements and direct CMS to develop data-driven access standards, taking into account the impact on medically underserved populations, including rural residents. Congress should direct the secretary to promulgate regulations based on the new data-driven standard.

To increase primary care workforce capacity by addressing health professional shortages, Congress should:

  1. Direct the HHS secretary to establish a comprehensive plan to ensure oversight and coordination of all federal programs that address healthcare workforce needs.
  2. Reauthorize the Conrad 30 program and expand the number of J-1 Visa Waivers each state receives through the program from 30 to 50, with priority given to those in rural areas.
  3. During a public health emergency, revise restrictions on international medical graduates on H-1B visas to permit an employer to deploy an international medical graduate from an assigned site of service to another within the health system and permit an international medical graduate to provide telehealth services outside that location.
  4. Reauthorize federal funding for the Community Health Center Fund at the current level of $5.6 billion annually, including both mandatory and appropriated funding.

D. Address Racial, Ethnic, and Economic Disparities in Medicaid

To prevent discrimination and to encourage states to address disparities in Medicaid, Congress should:

  1. Block implementation of the June 2020 final rule eliminating nondiscrimination provisions, and direct GAO to determine the impact of the rule.
  2. Direct the secretary of HHS to provide CMS guidance to states on defining and reimbursing community health workers, where evidence has demonstrated improved outcomes for those with chronic conditions.

To increase accountability for ensuring nondiscrimination and access to Medicaid benefits for individuals with disabilities, Congress should:

  • Direct the HHS secretary to require states to establish monitoring and enforcement mechanisms that ensure providers who receive Medicaid and CHIP funding comply with laws prohibiting discrimination against individuals with disabilities.

To improve the financing and coverage of proven cost-effective interventions to address social needs for high-risk populations, Congress should:

  • Provide the HHS secretary with the authority to approve Medicaid coverage of non-medical services that address social needs if the secretary certifies the following:
    1. Peer-reviewed evidence demonstrates the benefit improves or maintains health or function for the targeted population.
    2. The CMS Office of the Actuary certifies coverage of the defined benefit for the defined population would result in no net increase in Medicaid spending over the long-term.
    3. Additional benefits apply only to patients who are enrolled in Medicaid managed care or other health care payment and delivery models that include a comprehensive team-based approach to care management.
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