Utah's plan for reforming Medicaid is getting mixed reviews from the Obama administration.
Like many states, Utah is looking to redesign its Medicaid program to contain costs. A blueprint submitted in July for federal approval calls for moving Medicaid patients into managed care networks that would pay providers to keep patients healthy, instead of for more tests and treatment.
The meat of the proposal its payment reforms has been well received, said Utah Medicaid Director Michael Hales.
But officials with the Centers for Medicare and Medicaid Services (CMS) have indicated they don't support a controversial provision that would impose higher co-payments and deductibles on pregnant women and children enrolled in the low-income insurance program.
The charges $40 deductibles and co-payments ranging from $15 for inappropriate use of emergency rooms to $220 for hospital stays would far exceed what's allowed now. They are supposed to encourage patients to take responsibility for their health, but national child advocacy groups fear they will cause some to forgo needed care.
The feds have said Utah can charge more for bad behavior like misusing an ER and less for good behavior, such as quitting smoking, but those charges can't go above the current maximum, explained Hales. "We're still working on the specifics, but there's not much hope for flexibility there."
Medicaid co-payments now hover at $3 to $5, which some doctors don't bother trying to collect.
Other elements causing heartburn, but still up for negotiation between federal and state officials during weekly phone briefings:
• The anti-trust implications of handing the sizeable state-federal program over to a small number of private providers and insurers.
• A proposal to ration benefits whenever growth in the state's per capita Medicaid costs exceed growth in its general fund, a burden that would be disproportionately felt by children who comprise the largest share of enrollees, but who cost the least to cover.
• A surprise late addition that would allow eligible Utahns to forgo Medicaid in favor of subsidies to purchase private health policies on the state's online marketplace, the Utah Health Insurance Exchange.
Utah's request is still likely months away from getting the final thumbs up or thumbs down a time frame that frustrates Gov. Gary Herbert.
In a guest editorial published last weekend in The Salt Lake Tribune, Utah's Republican governor bemoaned the pace of CMS in taking three years to reject upgrades to the state's Premium Partnership for Health Insurance, or UPP.
The program provides low-income working families with a subsidy to help them afford workplace insurance. It has been plagued by low enrollment, initially because the grants were too small.
But even after lawmakers upped the grants, the program remained unpopular, partly because so few working poor have access to employer-based coverage. As of July 31, 2011, it had only 233 enrolled, far shy of the cap of 1,000.
To remedy that, the Utah Department of Health sought to allow families to use the subsidies to purchase individual health plans on the open market. But doing so would have locked their kids out of the Children's Health Insurance Program (CHIP), one reason for the Aug. 26 rejection by CMS chief Donald M. Berwick.
"Essentially, though they don't say it explicitly, they're saying we don't trust families to make that choice themselves," said Hales.
Herbert called the rejection after three years' delay, "absurd" and based on a "bureaucrat's opinion of what is right for Utah, practically treating Utahns like indentured servants."
But low-income advocates never had much hope for the request and say if Utah leaders wanted a speedier turnaround for the overhaul now on the table, they should have stuck to the basics.
"There are aspects of Utah's reform that are good ideas that everyone supports. But those pieces have been masked by some of these really harmful provisions," such as rationing care, said Lincoln Nehring, senior health policy analyst at Voices for Utah Children.