Rga Healthcare Letter July

8/12/2019 Rga Healthcare Letter July

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July 22, 2014

The Honorable Mitch McConnell317 Russell Senate Office BuildingWashington, D.C. 20510

The Honorable Lamar Alexander455 Dirksen Senate Office BuildingWashington, D.C. 20510

The Honorable John Barrasso307 Dirksen Senate Office BuildingWashington, D.C. 20510

Dear Leader McConnell and Senators Alexander and Barrasso:

Thank you for your interest in working with Republican governors to devise solutions to our countrys ongoing healthcarecrisis. We agree that a state-centric approach would have been far more successful in improving health outcomes andcontaining unsustainable healthcare costs. Unfortunately, neither Republican nor Democratic governors were offered aseat at the table during the drafting of the Affordable Care Act (ACA).This is unfortunate because governors haveinnovative, bold ideas andpolicy preferences that could have informed our nations actions on this critical issue.

As governors, we do not have the luxury of sitting out this debate. We must make things work for the people we serve.We commend and support our colleagues proposalsto repeal and replace the federal health law; however, we recognizethat this endeavor is unlikely to succeed without a willing executive in the White House. In the meantime, the RepublicanGovernors Public Policy Committee (RGPPC) puts forth the following framework to address these challenges.

The ideas contained in this letter provide solutions to challenges that the ACA has created or has failed to address.Through policy priorities that encourage market-based principles and an improved federal-state partnership in healthcareprograms, governors will be able to decrease healthcare costs while addressing the unique healthcare needs of their states.The need for true healthcare reform remains, and Republican governors are bringing solutions to the table.

The state-federal partnership needs to be revisited.

States should not be considered a stakeholder by the federal government. States need to be genuine, full partners.Instead of adhering to a one size fits all approach to administering Medicaid, states should be able to tailor theirprograms to fit the needs of their unique populations and align incentives to achieve their target outcomes. The federalgovernment should be a willing partner, allowing governors the flexibility to design innovative, patient-centered programswhile holding them accountable for improved health outcomes.


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Republican governors are ready to act. The federal government must embrace this leadership and work with us to improveour health systems. It is time for a genuine partnership that will empower chief executives who know how to make thingswork in their states.

Governors across the country are facing increased Medicaid enrollmentboth in expansion states and non-expansionstates. An American Action Forum analysis of the latest CMS enrollment report estimated that the increase in previously-eligible Medicaid enrollees will cost non-expansion states $700 million in 2014 alone.iWithout state-led reform, thegrowing cost of Medicaid, which is already the largest portion of total state expenditures, threatens to crowd out otheressential government services such as education, transportation, and public safety. We believe the following reforms willcurb this unsustainable trajectory and lead to better health outcomes.

Program Design

First and foremost, states need full flexibility to incorporate market-based innovations into their Medicaid programs. Theconvoluted federal financing system should be reformed to promote innovative, patient-centered program design and notbe tied to obsolete benefit requirements. With additional regulatory flexibility, states can add components to their

Medicaid programs that promote personal ownership of health decisions and incentivize individuals to seek employment.Unfortunately, the ACA is hindering state efforts to design programs that incorporate market-based provisions, such asHealth Savings Accounts, job training incentives, and wellness initiatives to the extent states find necessary.

Waiver Reform

One area of the Medicaid program in desperate need of flexibility and reform is the antiquated Medicaid waiver approvalprocess. As a process that has long impeded state innovation, it must be reformed to increase efficiency, transparency, andpredictability. A true, state-federal partnership would empower states with greater autonomy to design their programs,allowing them to focus on quality of care, patient outcomes, and stewardship of taxpayer dollars, rather than oncompliance with authoritative protocols imposed by the federal government.

The waiver process should be reformed by streamlining funding to give states more flexibility coupled with federalaccountability reform. The Center for Medicare and Medicaid Services (CMS) is granted with the authority to approveMedicaid waiver programs, and should be accountable to states for a timely review and approval process. In particular,CMS should fast-track approval of waivers already approved in other states. States should be held accountable forfinancial management and improvements to health outcomes, not processes. Additionally, Congress should replace the"state plan amendment" process, which requires states to get permission from CMS for changes to their Medicaidprograms, with a "file and use" process based on state designed "Program Operating Agreements" (POAs).

Medicaid Eligibility Determination

Medicaid was designed to serve the most vulnerable Americans. The ACA undermines that premise by pressuring statesto add more people to an entitlement program that already faces serious access issues. Because Medicaid reimburses

doctors at a rate lower than private insurance, many doctors do not accept Medicaid patients. According to a 2011 study,nearly one-third of physicians said they would not accept new Medicaid patients.iiTo ensure that the neediest Americanshave access to care, states should be able to move lower-income families out of low-access, low-quality Medicaid acutecare plans and enroll them in the private health insurance market, which offers patients greater access to doctors andspecialists.

Program Integrity


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healthcare when their circumstances improve and they move to market-based plans. Additionally, health plans shouldpromote the use of transparency tools that encourage cost-conscious behavior while ensuring the confidentiality of patientidentities and sensitive information.

Private-sector Options for Medicaid

Just as incentives must be leveraged in the private sector, changes to Medicaid policy must promote better healthoutcomes while allowing states to rein in costs associated with a perpetually growing program. As stated inRGPPCs2011 Medicaid report,the Medicaid program has evolved into a cumbersome, complicated, and unaffordable burden onnearly every state.vUnfortunately, the Affordable Care Act has only exacerbated timeworn Medicaid issues, such aslimited access to care, inadequate physician reimbursement, and poor health outcomes. The time is ripe for the federalgovernment to allow states the flexibility to modernize Medicaid -- to replace the concept of entitlement with theconcept of opportunity.For example, the federal government could permit (and encourage) states to transition low-income families and able-bodied adults into private insurance. By design, this would increase access, ensure portability,and reduce the perverse incentives that thwart economic mobility. Additionally, by increasing the degree of private sectoroptions for Medicaid, beneficiaries will gain a better understanding of how to utilize the system more efficiently as they

achieve upward mobility and enroll in plans with deductibles.

For Medicaid beneficiaries with disabilities and those in need of long-term care, states should be empowered to create amore integrated and coordinated approach for beneficiaries through the expansion of managed care. This arrangementwould be mutually beneficial; states would benefit from reduced budgetary exposure and patients would benefit frombeing able to receive at-home care in more cases,vias well as improved quality of care. The implementation of managedcare for Medicaids most vulnerable would ensure the coordination of care for a fragile population while allowing statepolicy makers to plan more confidently for Medicaid expenditures. Instead of paying doctors and nursing homes directlyfor individual services, moving to a model of managed long-term services and supports would bundle all of the costsassociated with a patient into one payment that incentivizes coordination and communication.viiIt would also enhanceopportunities to better align payment with value, including outcomes related to health, healthcare, and quality of life.Congress should allow states to take the lead in strengthening the safety net for the most vulnerable by appropriating a

predictable federal funding stream for long-term services and supports and acute care services for people with disabilitiesthat is indexed for inflation and population growth.

The framework outlined in this letter illustrates how market-based principles and state flexibility can be adopted toaddress the major challenges facing our healthcare system. In practice, these reforms will help create a more sustainablehealthcare system, spearheaded by states, which serves the most vulnerable, while preserving a vibrant and competitivemarketplace for the private sector. We look forward to working with you to evaluate these commonsense measures thatempower states to improve health outcomes and rein in healthcare spending.

Sincerely,

Governor Bill Haslam Governor Gary HerbertChairman Healthcare Taskforce ChairmanRGPPC RGPPC
http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/


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ihttp://americanactionforum.org/insights/the-woodwork-effect-costing-non-expansion-states-up-to-700-million-in-2014iihttp://content.healthaffairs.org/content/31/8/1673.abstractiiihttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlivhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014_Feb.pdfvhttp://rgppc.com/rgppc-medicaid-report/
http://americanactionforum.org/insights/the-woodwork-effect-costing-non-expansion-states-up-to-700-million-in-2014http://americanactionforum.org/insights/the-woodwork-effect-costing-non-expansion-states-up-to-700-million-in-2014http://americanactionforum.org/insights/the-woodwork-effect-costing-non-expansion-states-up-to-700-million-in-2014http://content.healthaffairs.org/content/31/8/1673.abstracthttp://content.healthaffairs.org/content/31/8/1673.abstracthttp://content.healthaffairs.org/content/31/8/1673.abstracthttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlhttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlhttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlhttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014_Feb.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014_Feb.pdfhttp://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014_Feb.pdfhttp://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://rgppc.com/rgppc-medicaid-report/http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014_Feb.pdfhttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlhttp://www.washingtonpost.com/local/crime/more-than-20-charged-in-federal-crackdown-on-dc-medicaid-fraud-services-not-delivered/2014/02/20/22d19c48-9a5c-11e3-b88d-f36c07223d88_story.htmlhttp://content.healthaffairs.org/content/31/8/1673.abstracthttp://americanactionforum.org/insights/the-woodwork-effect-costing-non-expansion-states-up-to-700-million-in-2014

Documents

Rga Healthcare Letter July