Bill description: This bill would allow the state Medicaid program to make value-based payment arrangements intended to reduce health care costs. The bill also allows the state to pursue Medicaid waivers with the federal government.

Rating: -1

Analyst’s note: This bill is a revised version of House Bill 39 from earlier this Legislative session, removing the word “voluntary” from the agreement’s language.

Does it violate the principles of federalism by increasing federal authority, yielding to federal blandishments, or incorporating changeable federal laws into Idaho statutes or rules?

House Bill 39 begins with a premise that is noteworthy and noble: it promotes and rewards positive patient outcomes by changing the state’s Medicaid program to a “value-based” healthcare system from its current fee-for-services model.

HB 39 adds to Idaho Code 56-265, saying, “Notwithstanding any other provision of this chapter, the department may enter into agreements with providers to pay for services based on their value in terms of measurable health care quality and positive impacts to participant health. (a) Any such agreement shall be designed to be cost-neutral or cost-saving compared to other payment methodologies.” This might be a good idea, although many of the policy components would be administered by the agency.

Subsection (b), however, is problematic. “The department is authorized to pursue waiver agreements with the federal government as needed to support value-based payment arrangements, up to and including fully capitated provider-based managed care.” The emphasis here is ours. This bill is not specific about which of the multitude of federal government waivers the department would be authorized to pursue. Waivers are likely to change as the Trump administration and Congress consider the future of Medicaid.

Unless this provision is rewritten, the federal government very well could assert too much authority. Rewriting the legislation to protect the state’s interest in setting Medicaid policy should not be too difficult. Until then, the bill invites problems that cannot fully be appreciated or anticipated. (-1)

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