Bill Description: House Bill 345 revises the Idaho Medicaid program to call for the Department of Health and Welfare to pursue waivers and repeals rules. It also imposes cost-control measures on Medicaid by altering sections of Idaho code.
Rating: +3
Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?
House Bill 345 requires the Department of Health and Welfare (IDHW) make a policy change that would end a practice that pays some medical providers more than others, depending on their ownership. Specifically, this bill requires IDHW to set “reimbursement rates for hospital-acquired physician practices at the same rate as physician-owned medical practices for all equivalent outpatient health services,” with limited exceptions.
Presently, Medicaid pays hospital-owned physician practices at a higher rate than others simply for being part of the hospital system. This makes Medicaid unnecessarily costly for taxpayers. It also encourages large hospitals to buy up small physician practices and unjustly picks winners and losers in the health care market. Making the change envisioned in this bill would reduce barriers to entry for small practice providers.
(+1)
Does it in any way restrict public access to information related to government activity or otherwise compromise government transparency, accountability, or election integrity? Conversely, does it increase public access to information related to government activity or increase government transparency, accountability, or election integrity?
This legislation fundamentally changes the way Idaho manages its Medicaid program. Medicaid would go from a government-administered, fee-for-service system to one managed by private insurance companies in a type of system called managed care. The state would pay a monthly, per-enrollee rate determined by actuaries instead of reimbursing providers directly for services.
Managed care would be administered by a private entity, introducing obstacles for transparency in how Medicaid spends public money. For example, Idaho’s current system allows visibility into how much is being spent at the provider level, but these arrangements are generally proprietary in a managed care system, invisible to the public. In essence, managed care makes Medicaid a “black box” program, reducing transparency.
(-1)
Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?
Though managed care systems take program administration out of the hands of the government, there is little evidence they save money or stabilize budgets when compared to the fee-for-service model. Some provisions in this legislation would have an eye for cost containment, but measures suggested in the bill like three-year contracts and performance incentives could have limited results rather than save substantial sums.
This bill also lacks some key program integrity measures, including limits on presumptive eligibility for able-bodied, working-age adults. Presumptive eligibility allows hospitals to treat patients in the emergency room and assume they are eligible for Medicaid coverage. If the person is later determined to be ineligible for the program, the state must pay the hospital anyway. A managed care system makes this worse because someone enrolled under presumptive eligibility will stay on the rolls for up to two months, even if that person was never eligible. Managed care organizations and hospitals alike would also be disincentivized to maintain the integrity of the rolls. In fact, they stand to gain financially from lax security, which increases fraudulent Medicaid spending.
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The Affordable Care Act — also known as Obamacare —- created health insurance exchanges to provide federally subsidized coverage through tax credits for insurance premiums. Exchange plans have more market accountability due to cost sharing like copays. This legislation would require Idaho to allow expansion enrollees above the poverty line to optionally enroll in an exchange plan instead of Medicaid. It is hard to envision a scenario where enrollees would voluntarily choose the added accountability of an exchange plan. Therefore, this doesn’t promise very many savings overall.
Additionally, this would also only reduce state costs, as the burden of these participants would shift to the federal taxpayer. Notably, if all enrollees above the poverty line switched to the exchange there are some savings to the federal government. This is because the cost of premium tax credits is somewhat less than the cost for Medicaid expansion coverage. But in Idaho’s case, however, these savings would not be very substantial in the near term.
(0)
House Bill 345 provides new authority for the IDHW to make necessary cuts to the Medicaid expansion plan to balance the state budget should the federal government change its participation level, such as reducing the federal government’s funding match for expansion enrollees. This is a positive change since Congress may pursue such cuts this year. IDHW currently has no authority to reduce the program in response, however. Allowing authority for the department to make cuts results in savings for the state since the program would be cut rather than unfunded expenses incurred under this scenario.
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Finally, this legislation ends the value-care pilot program. Value-care arrangements allow a primary care provider, known as value care organization, or VCO, to cooperate with the state as it treats Medicaid patients. VCOs get to select their risk level, which is their share of a patient's costs above the standard monthly payment they receive from the state. As they accept more risk, they could share some of the savings. The savings a VCO gets to keep are also tied to how well they manage the health of their patients.
The problem with this program is that virtually all VCOs decided to accept little to no risk, resulting in lackluster performance. Ending this failed program would save an estimated $24 million per year.
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Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?
This legislation requires the IDHW to start implementing work requirements for able-bodied, working-aged adults on the program. This is generally a positive reform since it discourages a sedentary welfare collection lifestyle and it encourages enrollees to earn some form of a living or better their lives through work. But the mode for implementing this policy is flawed. The recent federal case of Rose v. Becerra shot down a similar approach in Kentucky. This bill, then, may as well have no work requirements at all since they would not stand up to legal scrutiny.
(0)
House Bill 345 retains existing code authorizing the IDHW to establish state-directed payments — a type of supplemental payment through managed care organizations that grants additional funds for providers. The value of these payments is limited to Medicare rates for comparable services. State-directed payments are funded by a combination of taxes on providers and a federal match. This becomes a type of money laundering scheme where providers pay a tax but then they and the state get that money back with additional federal dollars attached.
This legislation does not change the tax. Instead, it continuously appropriates the revenues. This removes the threat of the Legislature redirecting the funds, which would thwart providers’ ability to recoup their tax contributions. Using a continuous appropriation removes a layer of oversight and accountability and drives more spending in the program.
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Finally, House Bill 345 would broaden cost-sharing requirements on certain enrollees. This would give these enrollees a stake in their use of services, likely reducing their use and reducing costs.
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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? Examples include citing federal code without noting as it is written on a certain date, using state resources to enforce federal law, and refusing to support and uphold the tenth amendment. Conversely, does it restore or uphold the principles of federalism?
This legislation stipulates that the IDHW may not “seek or implement” a “state plan amendment” that expands coverage, benefits, spending, or eligibility without first obtaining legislative approval. State plan amendments are agreements between the federal government and the state agency for operating the program. These are generally not determined by rule or statute, circumventing legislative accountability and giving undue influence to the federal government. This provision improves accountability and prevents unchecked growth of the welfare state.
(+1)
Does it promote the breakdown of the traditional family or the deconstruction of societal norms? Examples include promoting or incentivizing degeneracy, violating parental rights, and compromising the innocence of children. Conversely, does it protect or uphold the structure, tenets, and traditional values of Western society?
House Bill 345 stipulates that Medicaid may not cover gender-altering procedures for minors or adults. In the case of minors, providing these procedures is illegal under Idaho law. Medicaid should not provide coverage for these optional procedures that cause harm to the patients receiving the treatment. This provision upholds societal norms for the competent and prudent practice of medicine.
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