Insurance Executives Recognize Benefits of Integrating Care for Duals

According to a new report from the Kaiser Family Foundation (KFF), the market for managing care for dual eligible beneficiaries, people with both Medicare and Medicaid, is evolving as insurance companies work towards integrating Medicare and Medicaid services. Under provisions in the Affordable Care Act (ACA), the Centers for Medicare & Medicaid Services (CMS) is implementing a multi-state demonstration intended to enhance the quality of care for dually eligible individuals and achieve cost savings in both the Medicare and Medicaid programs. KFF interviewed senior executives at insurance companies in order to assess how these companies view the ability of the demonstration to better coordinate care for dual eligibles and how dual eligible beneficiaries are currently being served by Medicare Advantage (MA) plans.

According to the KFF report, nearly all of the executives interviewed believe the demonstration will have the potential to improve care for dual eligible beneficiaries and create new business opportunities in the dual eligible market. However, they admitted they did have some concerns. Many found development of contracts between CMS, the states and their health plans to be more challenging than expected. They attributed an absence of critical details in these contracts to making it difficult for them to plan ahead or negotiate with providers. And while they felt that the demonstration would potentially bring about savings, they believed it would take time before those savings were fully realized.

Executives of insurance firms with experience delivering both Medicare and Medicaid services admitted that the needs of dual eligible beneficiaries vary substantially, and one insurance plan may not adequately serve all dual eligibles enrolled. According to the KFF report, executives pointed out that older adults with low incomes who qualify for both Medicare and Medicaid have very different needs than beneficiaries who are under 65. And even younger beneficiaries have varying needs—there are different provider networks and management tools necessary for those with mental illness and developmental or physical disabilities.

Dual eligibles are among the most vulnerable people served by both the Medicare and Medicaid programs. Executives interviewed by KFF view the integration of Medicare and Medicaid financing as important to enhancing care for dual-eligible beneficiaries; however, they also state that the initiatives should be designed carefully and implemented thoughtfully due to high risks of failure and lengthy time required for full implementation.

Low-income California seniors to move into new managed care plan

The 500,000 patients, under Medi-Cal and Medicare, are among state's costliest. Officials hope the Cal MediConnect program will cut spending and improve care.

By Anna Gorman, Los Angeles Times

March 27, 2013, 9:55 p.m.

In a major shift triggered by the national healthcare law, nearly half a million low-income California seniors and disabled patients will begin moving into a new managed care program this fall.

The patients, who receive both Medi-Cal and Medicare, are among the most costly in the state. Officials believe that the program, Cal MediConnect, will reduce spending and improve care by shifting the patients out of a fragmented system and into one that is more coordinated.

The state and the federal government signed an agreement Wednesday officially establishing a test program for the patients, known as dual eligibles.

"We believe it will transform the state's healthcare system," Health and Human Services Secretary Diana Dooley said.

Advocates, however, continue to worry that the transition could affect patients' access to doctors and medications.

"We are concerned about how this is going to translate in the real world for beneficiaries," said Kevin Prindiville, deputy director of the National Senior Citizens Law Center. "There is a lot of change happening very quickly."

Deborah Doctor, legislative advocate for Disability Rights California, said many people will benefit from the transition. But she expressed concerns about whether the state or the health plans would be ready in time. She also said she wondered about the projected Medi-Cal savings, estimated to be just 1% in the first year.

"Why are we going ahead at this pace in California if the money savings are going to be so small?" she said.

Under managed care, health plans will be paid to coordinate all of a patient's care rather than doctors being paid based on the number of services provided. Experts say this could reduce costs by helping more patients stay in their homes and reducing unnecessary trips to nursing homes and hospitals.

The state plans to begin notifying beneficiaries this summer and enrolling them in October. The state had originally planned to transition 800,000 dual eligibles, but officials said Wednesday that they would cap enrollment at 456,000 patients, including a maximum of 200,000 in L.A. County.

The project is planned to last three years, but state officials hope to continue beyond that and to expand the number of participants.

In addition to getting medical and mental health services, beneficiaries in the program will have access to dental and vision care and nonemergency transportation.

Under the agreement, beneficiaries will be able to opt out of the project for their Medicare services and will have other protections designed to ensure continuity of care.

Cal MediConnect is the fifth such project approved by the federal government as part of the federal healthcare overhaul, according to the Centers for Medicare & Medicaid Services. The project will take place in eight counties: Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Alameda and Santa Clara.

http://www.latimes.com/health/la-me-healthcare-seniors-20130328,0,7334338.story?goback=%2Egde_84467_member_227198978

Regulators outline liquidation plan for Universal Health Care

Jeff Harrington, Times Staff Writer

Friday, March 22, 2013 6:57pm

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ST. PETERSBURG — Bob Buchanan, a 77-year-old retiree in New Port Richey, got a jolt when his favorite primary-care physician said he would no longer honor his Universal Health Care coverage.

Likewise, Universal member Joan Diamond of Apollo Beach worries about who will cover her when she goes in for eye surgery.

"I'm in my 80s, and stuff like this really throws me for a loop," she said.

Their saga is quickly coming to a close.

Florida regulators on Friday unveiled their fast-track plan to liquidate Universal Health Care Group by the end of the month, dispatching its 140,000 members to other health plans and putting hundreds of Universal employees out of work. As of earlier this year, Universal had nearly 1,000 employees, most of them at its St. Petersburg headquarters.

Two related Universal companies are slated to automatically go into liquidation at 12:01 a.m. April 1: Universal Health Care Insurance, which has about 37,500 Medicare policyholders, and Universal Health Care Inc., an HMO with about 60,000 Medicaid members and 40,000 Medicare members.

Separately, the Florida Agency for Health Care Administration said it is reassigning the approximately 57,000 Medicaid recipients who are enrolled in Universal to other health plans.

"The agency has made every effort to ensure that recipients will be assigned to a plan that will allow them to have the same primary-care physician," AHCA Secretary Elizabeth Dudek said in a statement.

Over the next week, Medicare and Medicaid members who were in either of the two plans will receive letters explaining their options from either AHCA or the federal Centers for Medicare and Medicaid Services.

The state launched a formal investigation into Universal's finances in August, and on Feb. 4 filed suit to take over the insurer, which it had deemed virtually insolvent at the time. State investigators accused Universal executives of a broad pattern of financial mismanagement, including fraud and diversion of funds.

Since then, Universal's status has been in flux as to whether it would be sold or liquidated. Founder and CEO A.K. Desai has maintained control of Universal, albeit losing a stream of both employees and health care providers willing to keep Universal in their network.

Thursday's ruling by a 2nd Circuit Court judge to place Universal into receivership ceded control to the Florida Department of Financial Services.

Buchanan, the New Port Richey Universal member, says he's getting tired of waiting for the state to act and might take matters into his own hands.

"I'm just going to go to Humana," he said, "and I'm done with it."

Jeff Harrington can be reached at jharrington@tampabay.com or (727) 893-8242.

http://www.tampabay.com/news/business/banking/regulators-outline-liquidation-plan-for-universal-health-care/2110756

Reform still baffling small businesses

By Kathryn Mayer

March 26, 2013

Even though it’s been three years since President Obama signed the Patient Protection and Affordable Care Act into law, most small business owners say they still don’t get how the law affects them.

The majority incorrectly believe health reform requires them to provide health insurance for employees in 2014, or that they’ll be taxed if they don’t offer health insurance next year, according to a new survey by eHealth, the parent company of eHealthInsurance.

The survey of 259 small business owners shows that awareness has improved slightly since last year, but 56 percent still misunderstand the employee mandate (down from 69 percent of survey respondents who misunderstood the mandate when eHealth conducted a parallel survey in August).

Beginning next January, PPACA requires businesses with 50 or more full-time employees to offer their employees health insurance or pay additional taxes. The rule doesn’t apply to businesses with less than 50 employees.

Another point of confusion among small business owners are exchanges.

The survey reveals that only 18 percent of small employers believe they can confidently define or explain what a health insurance exchange is. Nearly two-thirds (62 percent) admit to not understanding exchanges at all, while 20 percent say they have only a vague understanding of the role exchanges are expected to play.

The majority also say they don’t want to be forced to buy health insurance through any single source, whether through a government exchange or a private exchange. Most (71 percent) say they want the option to buy their health coverage through the source of their choice.

The survey also found that nearly a third of small businesses (27 percent) will consider dropping coverage for their employees in 2014. The majority, at 67 percent, say they don’t have plans to do so, while 6 percent say they plan to stop offering coverage.

As for what impact they think reform will have on health insurance costs, 59 percent expect costs to go up. Just 11 percent expect costs to decrease, while 21 percent aren’t sure.

Most small employers say they may turn to brokers and agents for help understanding reform as 72 percent say they most trust them as information sources. Others say they will turn to small business associations, insurance companies and government agencies for help.

http://www.benefitspro.com/2013/03/26/reform-still-baffling-small-businesses?eNL=51530895140ba02e43000337&utm_source=BenefitsProDaily&utm_medium=eNL&utm_campaign=BenefitsPro_eNLs&_LID=144817897

Data tool helps identify opportunities to improve care for beneficiaries with multiple chronic conditions

A new Medicare Chronic Conditions Dashboard announced today by Marilyn Tavenner, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS), furthers the Affordable Care Act’s goals for health promotion and the prevention and management of multiple chronic conditions. The dashboard offers researchers, physicians, public health professionals, and policymakers an easy-to-use tool to get current data on where multiple chronic conditions occur, which services they require, and how much Medicare spends helping beneficiaries with multiple chronic conditions.

“More than two-thirds of Medicare beneficiaries have multiple chronic diseases such as heart disease and diabetes, and that number will rise with an aging population,” said Acting Administrator Tavenner. “The Affordable Care Act addresses these health problems by making people with Medicare eligible for recommended preventive care without Part B deductibles or copayments. The health care law also promotes better health care coordination and management of chronic conditions through analysis of current data.”

The dashboard is part of the Department of Health and Human Services’ (HHS) Initiative on Multiple Chronic Conditions, established in 2009. The Multiple Chronic Conditions: A Strategic Framework was developed to serve as a national roadmap for HHS as well as public and private stakeholders to use to coordinate and improve the health of beneficiaries with multiple chronic conditions.

“The Dashboard is a major step forward to help people living with multiple chronic conditions,” said Assistant Secretary for Health Howard K. Koh, MD, MPH. “This web-based tool provides new and critical data that can help us develop better patient-centered approaches to improve health outcomes, lower costs, and maximize quality of life.”

In calendar year 2011, spending for Medicare beneficiaries with two or more chronic conditions was about $276 billion, about 93 percent of all Medicare spending. Analytics based on Dashboard data can be an important tool to support policies to help slow the growth in costs for beneficiaries with multiple chronic conditions in years ahead.

The Dashboard helps users find, analyze, and apply summarized data from CMS’ Chronic Conditions Data Warehouse. The Dashboard will promote better understanding of overlapping medical conditions related to overall patient health, helping to identify common concurrent conditions and areas where prevention and treatment can improve care and lower costs.

CMS’s Medicare Chronic Conditions Dashboard may be accessed at http://www.ccwdata.org/business-intelligence/chronic-conditions/index.htm

   

Along with other CMS reports, such as Chronic Conditions among Medicare Beneficiaries, Chartbook, the Dashboard’s analytics will help CMS and its stakeholders identify states and populations that demonstrate success in care and management of beneficiaries with MCCs. Findings can inform programs, policies, and best practices for Medicare and the entire health care system, which is an essential step in transforming Medicare from a fee-for-service based payer to a value-based purchaser of care that links payments to quality and efficiency of care, rather than sheer volume of services. The Dashboard’s summarized data also is easier to use and protects patients’ privacy by not releasing individually-identifiable health information.

The release of the Dashboard reflects the Administration’s continued commitment to increasing the accessibility and usability of federally held data wherever possible and appropriate. Previous initiatives include the Medicare Data Sharing for Performance Measurement program, the Health Data Initiative, and CMS’s provision of data to support care coordination to Accountable Care Organizations and State Medicaid programs.

CMS’s Medicare Chronic Conditions Chartbooks and other reports may be accessed at

http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Chronic-Conditions/index.html.

Information on HHS’s Initiative on Multiple Chronic Conditions may be viewed at http://www.hhs.gov/ash/initiatives/mcc/index.html.

Beware the Ppacasaurus

To your good health

By David A. Saltzman

March 25, 2013

I keep promising myself that I will not write another column on PPACA, but the near-daily revelations make it the gift that keeps on giving for commentators and pundits alike.

The steady tattoo that proves Mrs. Pelosi had it partially correct is unavoidable. As she prophesized, we did have to read it to learn what was in it. As it rolls over the country like a runaway steamroller, it is looking more apocalyptic with each passing day.

I do not use the word “apocalyptic” lightly, but watching this law and its avalanche of regulations unfold, it seems like the only word that actually fits. According to the Oxford English Dictionary, going back to the word’s ancient Greek roots, apocalyptic means “an uncovering or a disclosure of knowledge hidden from humanity in an era dominated by falsehood and misconception”. To paraphrase Johnnie Cochran during another famous miscarriage of justice, “If the word fits...”

If I ran a health insurance company today, I would be looking out the window of my corner office, watching for the arrival of the locusts. Perhaps the view from the many empty offices that used to comprise the underwriting department would be better. PPACA promised the removal of most of the rational pricing mechanisms would be offset by an influx of participants — many healthy — who would become a de facto price mechanism.

The theory is not dissimilar to community rating, the darling of earlier reformers. How did that strategy work out? A quick look at the seven states with community rating applied to individual and small group (two to 50 lives) policies makes quick work of any delusion of its efficacy. New York, Vermont, Massachusetts, New Jersey, Washington and Oregon tried that scheme, and it resulted in the some of the highest premiums in the nation. As we move toward a national variant of that motif, why are so many surprised that costs are beginning to rise exponentially?

The salient question is how could they not rise? Most of the indignation seems to be coming from PPACA supporters. It would be tempting to indulge in a little gloating and schadenfreude, but that would be like being happy because the leak is in your friend’s end of the canoe. Perhaps there is another — more sinister — explanation. More on that later.

Surprise: Serious conditions are expensive
Amidst what we have seen thus far are nuances that we have not yet even contemplated. Recently, I had a conversation with a friend who works in the structured settlement vertical. For the uninitiated, a structured settlement can be either (or both) a financial or insurance arrangement that is used to provide compensation to a claimant for a personal injury.

When you think about pre-existing conditions, these claimants (clients to my friend) may define the cohort. The very nature of their illnesses and/or injuries has shut them out of the traditional health insurance market. Many have had to seek care via Medicaid or Medicare, but that will all change under PPACA. These unfortunate individuals, generally through no fault of their own, have grievous chronic conditions that are expensive to treat.

When the doors to Insurance Land open for them next year, they will happily pay a community rate to purchase insurance in the same market as the rest of us. There is no risk adjustment mechanism for carriers who end up with these folks on their rolls. They will just have to eat the cost of care and pass them along — at least, to the extent they are permitted to do so.

Remember that PPACA treats insurance carriers as de facto public utilities. What they can offer and what they can charge for their offerings is tightly regulated and will likely become more so as we get further along the implementation road.

Though I have long been aware of structured settlements and the population they represent, until I had that conversation with my friend, I really had not thought about the avalanche of folks with serious (formerly known as pre-existing) conditions who would be entering the marketplace. Carriers are going to take serious hits at a time when universal participation is becoming more and more questionable. 

Tax-eating dinosaurs

If you did not think it could get worse, last month the IRS announced a proposal to raise billions through annual fees on health insurance companies. The fees begin “modestly,” at $8 billion in 2014. They jump to $14.3 billion in 2018 and increase every year thereafter. The Joint Committee on Taxation estimates the tax will exceed $100 billion over 10 years. Moreover, those evil carriers had better pony up on time. There is a penalty of $10,000 and $1,000 a day for late payment, the better to feed the beast.

We have previously noted that the federal government writ large is like a pack of giant tax-eating dinosaurs. The more they are fed, the larger they grow and the more food they require.

The health care component is not exempt. Adding the direct and indirect costs of PPACA — including the subsidies — and we may discover the largest and most voracious of those dinosaurs. It will be the Ppacasaurus Rex, terrifying all, consuming every bit of tax revenue in sight and still hungering for more!

In earlier columns, I have expressed my theory that the government did not understand the insurance marketplace because they wouldn’t have created such an anti-business landscape. I confess that I was wrong. Treating insurance companies like public utilities, forcing them to sell only benefit-rich plans, removing most, if not all, of the ratings mechanisms needed to assure stability, and burdening them with heaps of taxes and regulations leads to an inevitable conclusion. PPACA proponents’ real end game is to drive insurance companies out of business or to relegate them to fiscal intermediaries.

This is an apocalypse: a disclosure of knowledge hidden from humanity in an era dominated by falsehood and misconception.

No other word will do.

Ronald Reagan said it 48 years ago in an AMA-sponsored recording opposing the passage of Medicare. As we go down the PPACA path, it has become increasingly difficult to believe this entire exercise is not meant to create a population that is ever more dependent on government. This is single payer on the installment plan. The Ppacasaurus is being friendly, though. It is only eating us one bite at a time.

http://www.lifehealthpro.com/2013/03/25/beware-the-ppacasaurus?eNL=5150a37d140ba0940b000468&utm_source=HCRW&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=105824905&t=employee-benefits

Aetna’s ‘Good Fight’ Against Rx Abuse Sees Improved Adherence to Suboxone

Reprinted from DRUG BENEFIT NEWS, biweekly news, proven cost management strategies and unique data for health plans, PBMs, pharma companies and employers.

By Lauren Flynn Kelly, Editor

March 15, 2013 Volume 14 Issue 5

Through its in-house PBM unit, Aetna Pharmacy Management, Aetna Inc. has taken what Pharmacy Director Yrena Friedmann, Pharm.D., described as both a compassionate and diligent approach to managing prescription drug misuse, waste and abuse, with specific controls and case review around opioid dependence. As a result of its mail campaign to promote the use of Suboxone (buprenorphine HCl and naloxone HCl dihydrate), which has just gone generic and is indicated for opioid addiction (see box, p. 6), the insurer has seen a 16% jump in adherence, Friedmann said in a recent conference presentation.

Deaths related to drug overdose, including those involving prescription drugs, have steadily risen over the last 11 years, reports the CDC. Opioid analgesics (e.g., oxycodone, hydrocodone, methadone) were involved in about three out of every four pharmaceutical overdose deaths documented in 2010, or 16,651, up from 15,597 in 2009 and 4,030 deaths in 1999, according to a research letter published in the Feb. 20 issue of the Journal of the American Medical Association.

Moreover, opioid abusers have an average of eight times the health care costs compared with non-abusers, thanks to frequent physician visits, hospital stays and other outpatient costs such as emergency room visits, pointed out Friedmann, who spoke at the 2013 Pharmacy Benefit Management Institute Drug Benefit Conference, held Feb. 18-20 in Las Vegas. “In other words, treating opioid use, while it is labor intensive, can have a positive impact on total health care costs in the long run,” she suggested. “Also, this shows that we can’t rely on pharmacy costs alone to identify patients in need of help from prescription drug abuse.”

Aetna Tackles Rx Abuse With DUR

As part of a multilevel initiative aimed at tackling abuse, Aetna in January 2011 crafted a case review program that encourages the use of Suboxone with certain precertification requirements followed by a high-touch outreach component. The insurer covers Suboxone only when there is a diagnosis of opioid dependence, and requires a commitment from the member to be enrolled in a counseling program. Of Aetna’s decision to place the coverage restriction on Suboxone, Friedmann explained, “We found quite a few cases where the physicians were prescribing it for pain.” Despite the drug containing the narcotic buprenorphine, Suboxone is FDA-approved only for opioid dependence.

Following the precertification, Aetna performs a retrospective drug utilization review (DUR) with a system called Rx Check where Aetna monitors patients who have been diagnosed with opioid dependence but are not compliant with their treatment plan and are still receiving opioids, usually from other doctors, not the physician with whom they arranged a treatment plan. Aetna sends a letter to the physician and also has a specially trained pharmacist call the physician to describe the continued opioid use and encourage the provider to not discharge the member from practice and instead to work with the member privately. “We don’t want the member to run away. We want the member to continue to work with the Suboxone prescriber and get the help they need,” she said.

“After we have done everything we can to try to engage the members and the physicians to work together on a reasonable treatment plan, sometimes there is a time to limit access for patients who don’t respond to our support,” acknowledged Friedmann. Aetna employs a pharmacy case review committee to look at the really complex cases and make determinations as to when and how to deny coverage (e.g., locking the member into one physician, placing a quantity limit on a drug). In the case of Suboxone patients who are continuing to fill opioid claims, those patients are sent a denial letter with a two-week grace period letting them know their options, behavioral health resources and their appeal rights. “We don’t want to shut anybody off abruptly; we just don’t think that would be the right thing to do,” she asserted. After two weeks, the insurer blocks all opioid claims for that patient.

Friedmann added that Aetna has just updated its DocFind database to identify physicians in the network who are certified to prescribe Suboxone. (Under the Drug Addiction Treatment Act of 2000, physicians must meet certain qualifying requirements to be able to prescribe Suboxone in the treatment of opioid dependence.) That way, if a nurse working in its integrated case management program determines that a patient is ready for addiction services, he or she can recommend a physician in the network who can provide that type of service for the patient, she explained.

As of November 2011, 49.3% of patients who were approved for Suboxone continued to get opioids even though they received a letter from Aetna letting them know the insurer’s expectations to be opioid abstinent. However, for those whose physicians were engaged in the retrospective outreach, only 2.3% persisted in concurrent Suboxone/opioid use. In January 2010, when Aetna first introduced a mailing program, DUR and certain safety edits on opioids, about 42,000 opioid prescriptions were being processed a month. By January 2011, when the Suboxone mailing and case review program began, monthly opioid prescriptions totaled about 39,000, and dropped to 36,000 a year later for an overall two-year reduction of 15%. Preliminary analysis also shows Suboxone adherence rates have improved by 16%.

“With diligence, we’ve been able to fight the good fight against opioid misuse, waste and abuse, so it’s good to know that our labor is not in vain,” concluded Friedmann. “I was really pleased to see this since the trend in general in our culture is that opioid use is increasing.” The Suboxone program is available only to fully insured clients at this time.

http://aishealth.com/archive/ndbn031513-01

Difference Between Growth in Medicare Spending per Beneficiary and Growth in GDP per Capita

Year	Difference
2008	4.9%
2009	8.7%
2010	-1.6%
2011	-1.1%
2012	-0.6%
2013	-3.5%
2014	-2.1%
2015	-3.8%
2016	-1.0%
2017	-1.6%
2018	-0.5%
2019	0.0%
2020	-0.3%
2021	1.4%
2022	1.1%
2023	1.3%

Source: Kaiser Family Foundation

Tennessee Race for Medicaid: Dial Fast and Try, Try Again

By ABBY GOODNOUGH

Published: March 24, 2013

NASHVILLE — Two nights a year, Tennessee holds a health care lottery of sorts, giving the medically desperate a chance to get help.

State residents who have high medical bills but would not normally qualify for Medicaid, the government health care program for the poor, can call a state phone line and request an application. But the window is tight — the line shuts down after 2,500 calls, typically within an hour — and the demand is so high that it is difficult to get through.

There are other hurdles, too. Applicants have to be elderly, blind, disabled or the “caretaker relative” of a child who qualifies for Medicaid, known here as TennCare. Their medical debt has to be high enough that if they paid it, their income would fall below a certain threshold. Not many people end up qualifying, but that does not stop thousands from trying.

“It’s like the Oklahoma land rush for an hour,” said Russell Overby, a lawyer with the Legal Aid Society in Nashville. “We encourage people to use multiple phones and to dial and dial and dial.”

The phone line opened at 6 p.m. on Thursday for the first time in six months. At 5:58, Ida Gordon of Nashville picked up her cordless phone and started dialing. Ms. Gordon, 63, had qualified for TennCare until her grandson, who had been in her custody, graduated from high school last spring. Now she is uninsured, with crippling arthritis and a few recent trips to the emergency room haunting her.

“I don’t ask for that much,” Ms. Gordon said as she got her first busy signal, hanging up and fruitlessly trying again, and then again. “I just want some insurance.”

Gov. Bill Haslam, a Republican, has indicated that he will decide this week whether to support an expansion of Medicaid to cover more low-income adults, as called for in the federal health care law. Doing so would add more than 180,000 people to the TennCare rolls by 2019, according to the state, most of them adults like Ms. Gordon whose incomes are within 138 percent of the federal poverty level.

Ms. Gordon said she and her husband, who was injured on the job decades ago and is on Medicare, live mostly on his disability check of about $780 a month.

TennCare already provides health coverage to 1.2 million people, more than half of whom are children, at a combined state and federal cost of about $9 billion a year. Many in the Republican-controlled legislature, which includes a strong Tea Party element, opposes its expansion even though the federal government has promised to pay the full cost for the first three years and 90 percent after that.

Opponents of the health care law here, as in other states, say Washington cannot afford to keep that promise. In Tennessee, the debate over expansion is particularly contentious because of TennCare’s tumultuous history. It was once among the most generous Medicaid programs in the country. But costs spiraled, and 170,000 people were cut from the rolls in 2005 under Gov. Phil Bredesen, a Democrat. It was a painful episode that Mr. Haslam said was “weighing on a lot of people’s minds.”

Ms. Gordon hopes to qualify for a program known as a “spend down” — in which a patient’s qualifying income is determined after they subtract their medical costs from their total earnings. The program covers only a tiny portion of TennCare recipients — about 1,000 people, at a cost of $32 million a year. It is also something of an anomaly: while other states have similar programs, most do not limit the enrollment period to brief and infrequent call-ins. Advocates for the poor say the frenzy for the spend-down program is a reminder of the acute need for health coverage everywhere.

“At the end of the day, huge numbers of desperately ill people are being left out in the cold,” said Gordon Bonnyman, the executive director of the Tennessee Justice Center, an advocacy group for families in need that focuses on access to health care. “And that is a story in every state.”

Kelly Gunderson, a TennCare spokeswoman, said that the spend-down program had enough money to cover 3,500 people, but that only about 1,000 were enrolled at any given time because the screening process was so complicated. The screeners, she said, must examine medical bills and records, among other duties.

About 500 people are found to be eligible for the program each time the state opens the phone line. The line has opened six times since the program started in 2010.

Technical glitches can thwart callers’ chances. According to the Tennessee Department of Human Services, which operates the phone line, callers did not start getting through until 6:38 p.m., and 2,500 calls, the maximum, had been received by 7:23. The department is investigating what caused the glitch, a spokeswoman said.

“People started calling here panicked and crying,” said Michele Johnson, a lawyer with the Tennessee Justice Center. “We told them, ‘Just hang on, keep trying.’ ”

Adrian Casteel of Nashville, who said he owed $6,000 in medical bills, said he repeatedly got a recorded message but kept dialing. Mr. Casteel, 55, has a heart condition and a steel plate in his back, the result of a car accident years ago that left him in constant pain and unable to work. He has been on Medicare for nine years because of his disability, he said, but about 20 percent of his expenses are not covered.

“When you see as many doctors as I do,” he said, “that’s quite a bit.”

In her small brick home on the city’s north side, Ms. Gordon also heard the recording that enrollment was closed. But she, too, persisted, never looking up from the phone in her hand. Dusk fell and the room grew dark; she was too focused to bother turning on a light.

She had called about 50 times when, at 6:40, she got through. The woman on the other end of the line asked for Ms. Gordon’s name, birth date, Social Security number, telephone number and address. Ms. Gordon wrote down a confirmation number, thanked her and hung up. The application, she was told, should arrive in a few weeks.

“I still don’t know if I’m getting in,” she warned her husband, Arthur. “If it’s meant to be, it’s meant to be.”

If she is rejected for the spend-down program, Ms. Gordon said she would wait until next year, when President Obama’s health care law is supposed to make insurance more accessible to millions of low- and middle-income Americans. She does not know specifics, like the possibility that she could be covered by an expansion of Medicaid or qualify for federal subsidies to help cover the cost of private coverage. But she said she would eagerly pay what she could for insurance if it was within her limited budget.

“I can’t pay no $200, $300, $400 a month,” Ms. Gordon said. “But I’ll figure out how to pay something if I got to. I’ll squeeze.”

http://www.nytimes.com/2013/03/25/us/tennessee-holds-health-care-lottery-for-the-poor.html?pagewanted=all&_r=2&goback=%2Egde_84467_member_226230351&

GOP’s ‘no’ on Medicaid becomes ‘Let’s make a deal’

By David A. Lieb

March 25, 2013

JEFFERSON CITY, Mo. (AP) — Given the choice of whether to expand Medicaid under the Patient Protection and Affordable Care Act (PPACA), many Republican governors and lawmakers initially responded with an emphatic "no."

Now they are increasingly hedging their objections.

A new "no, but ..." approach is spreading among GOP states in which officials are still publicly condemning PPACA's Medicaid expansion yet floating alternatives that could provide health coverage to millions of low-income adults while potentially tapping into billions of federal dollars that are to start flowing in 2014.

The Medicaid health care program for the poor, which is jointly funded by the federal and state governments, already covers about one in five people in the U.S. Expanding it was the way Obama envisioned covering many more low-income workers who don't have insurance. The new Republican alternatives being proposed in states generally would go part of the way, but cover fewer people than PPACA, guarantee less financial help or rely more on private insurers.

But so far, many of the Republican ideas are still more wistful than substantive. It's uncertain whether they will actually pass. And even if they do, there's no guarantee Obama's administration will allow states to deviate too greatly from the parameters of PPACA while still reaping its lucrative funding. Yet a recent signal from federal officials that Arkansas might be able to use Medicaid money to buy private insurance policies has encouraged Republicans to try alternatives.

The GOP proposals could lead to another health care showdown between the White House and states, leaving millions of Americans who lack insurance waiting longer for resolution. Officials in about 30 states that are home to more than 25 million uninsured residents remain either defiant or undecided about implementing Obama's Medicaid expansion, according to an Associated Press survey.

Supporters of the Medicaid expansion have built coalitions of hospitals, business groups, religious leaders and advocates for the poor to try to persuade reluctant Republicans of the economic and moral merits of PPACA. But some Republicans believe the pressure ultimately will fall on Obama to accept their alternatives if he wants to avoid a patchwork system for his signature accomplishment.

"If the Obama administration is serious about innovative ways to bring down the cost of health care, it's going to cooperate with conservative ideas rather than continue down its one-size-fits-all, far-left-wing ideological path," said Missouri Rep. Jay Barnes, a Republican from Jefferson City.

A House committee led by Barnes already has defeated PPACA's Medicaid expansion. It is to hear public testimony Monday on his "market-based Medicaid" alternative that would award health care contracts to competing private insurers and provide cash incentives to patients who hold down their healthcare costs. His proposal would contain costs by covering fewer children than Medicaid now does and adding fewer adults than PPACA envisions.

Committees in Florida's Republican-led Legislature also have rejected a Medicaid expansion for roughly 1 million of the state's poorest residents, even though it is backed by GOP Gov. Rick Scott. Now Republican Sen. Joe Negron is pursuing an alternative that would use federal funds to provide vouchers for low-income residents to buy private policies. Negron said he still doesn't believe expanding Medicaid is the right decision, but he wants to help Florida residents get health coverage.

"We don't want to do it the Washington way. We want to do it the Florida way," Negron said.

Republican Ohio Gov. John Kasich also has been in discussions with the Obama administration about providing subsidized insurance instead of full Medicaid coverage for more adults. Republican governors in Texas, Nebraska and Indiana want the federal government to award Medicaid money as block grants to states.

"It's a two-step for many of these Republican governors. When they look at the numbers they want to do it, but they want to distance themselves from Obamacare at the same time," said Drew Altman, president of the Kaiser Family Foundation, a nonprofit that analyzes health care policies.

That might be fine with the Obama administration.

"There actually is quite a bit of flexibility on how they can approach this, and the federal government has indicated they want to get to 'yes' " said Joan Alker, co-executive director of Georgetown University's Center for Children and Families in Washington, D.C.

As originally enacted, PPACA required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, about $32,500 annually for a family of four. A Supreme Court decision last summer made the expansion optional for states but kept in place a powerful financial incentive. The federal government will fully fund the expansion for the first three years, with the states' share gradually increasing to 10 percent by 2020.

Health and Human Services Secretary Kathleen Sebelius said in December that getting full funding will still require a full expansion. Yet some Republicans in Missouri, South Dakota and elsewhere claim to see room for compromise.

LaTonya Jenkins, a 51-year-old laid off teacher's aide who lives in temporary housing for the homeless in Kansas City, recently enrolled in Medicaid but could lose coverage if her part-time job pushes her income over Missouri's strict eligibility limits. She recently traveled to Missouri Capitol to urge lawmakers to expand Medicaid.

"If they don't, and they cut it out, then what are we to do? We'll be lost," said a tearful Jenkins, who has diabetes and cares for her grandson. "I'll be sicker than ever and back in the hospital."

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