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House Bill 39

House Bill 39

Phil Haunschild
January 26, 2017

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

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

The bill adds to Idaho Code 56-265, saying, “Notwithstanding any other provision of this chapter, the department may enter into voluntary 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.

Furthermore, apart from the regulations that the agency might promulgate in the future, the Legislature isn’t required to review a waiver the department might enter into with the federal government to protect the state’s policymaking authority under the law. Unless this legislation is rewritten, it is very possible the federal government would assert too much authority implementing this provision. Rewriting this provision to protect the state’s interest in setting health care policy relative to the Medicaid program should not be too difficult. Until then, the bill invites problems that cannot fully be appreciated or anticipated. (-1)

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