Three proposals have been introduced this session to reform the state Medicaid program to address the increasing expenditures of the program. Each proposal has taken a different approach to reduce costs. The first, SB12-032, required the state to seek a federal waiver to allow the state more flexibility to determine eligibility categories and income levels and to add an asset test in the Medicaid and Child Health Plan Plus program. By changing eligibility rules and increasing cost sharing for premiums and services, the proposal would potentially reduce state expenditures. However, since the federal health reform law prohibits states from reducing Medicaid and CHP+ eligibility rules in effect prior to March 2010, it is unlikely such a waiver would be approved. The proposal died in committee last week.
A second bill, SB 12-085, would have repealed funding and eligibility levels for Medicaid and CHP+ services to levels that were in effect in 2006, including the expansions in the 2009 Colorado Health Care Affordability Act. The proposal, which died in committee yesterday, would have eliminated services that were in effect prior to the March 2010 and therefore would have risked losing the state share of federal matching funds for Medicaid.
A third bill, HB 12-1281, introduced February 7th, creates the Medicaid payment reform and innovation pilot program to build upon the payment reform projects within the Colorado Accountable Care Collaborative (ACC). The ACC is a patient-centered approach to improving quality and reducing costs through care coordination services provided by primary care providers and seven Regional Care Collaborative Organizations (RCCOs). In addition to the traditional fee-for-service funding for medical services, primary care providers and RCCOs receive a per-member, per-month fee to coordinate services to improve the use of preventive and primary care services and to reduce overutilization of hospitalizations and emergency department visits.
HB 12-1281 directs HCPF to create a process for interested RCCOs to submit proposals for pilot programs designed around payment reform using global payments, risk adjustment, risk sharing and aligned payment incentives. Preference will be given to proposals using global payments. Additional considerations will be for RCCOs that have the ability to coordinate among providers of physical, behavioral and oral health care and long-term services and supports. The intent of the legislation is to test whether global payments to RCCOs will reward quality care, improve the health of Medicaid members and contain health expenditures. In addition to quality measures and health outcomes, analysis of the pilots will include assessments of provider participation and satisfaction and client satisfaction. The pilot projects are to be selected by April 2013 and are to be implemented for 2 to 5 years.
The ACC is a new program that began enrollment last summer. HB12-1281 is a big initiative for a program that is just getting established. This week legislators voted against proposals to reduce eligibility and services as a cost containment strategy. The next conversations are likely to be about whether and how rapidly the state should implement new payment reform strategies.