Healthcare Associations React Negatively to CMS’s “Healthy Adult Opportunity” Announcement

Feb. 3, 2020
The immediate reaction of the nation’s leading healthcare professional associations, on both the provider and health plan sides, to CMS’ “Healthy Adult Opportunity” program announcement, was almost entirely negative

The announcement on Thursday, January 30 by Seema Verma, Administrator of the federal Centers for Medicare & Medicaid Services (CMS), via a press release on the CMS website and in a telephonic press briefing, that states would be allowed to receive the flexibility to reshape their Medicaid programs for healthy adults, under a program christened the Healthy Adult Opportunity (HAO), has triggered an almost universally negative response from the national professional associations representing hospitals, physicians, and health plans, with some associations expressing open condemnation of the plan, and others cautioning CMS officials to think carefully about their next moves. Some associations also went out of their way to dismiss Verma’s insistence that “HAO” did not in fact represent some version of the Medicaid block grants idea that has long been championed by those who would like to drastically reduce access to the program nationwide.

The Chicago-based American Medical Association released a terse statement on Thursday on its website, attributed to AMA president Patrice A Harris. M.D. “The AMA opposes caps on federal Medicaid funding, such as block grants, because they would increase the number of uninsured and undermine Medicaid’s role as an indispensable safety net,” the association said. “The AMA supports flexibility in Medicaid and encourages CMS to work with states to develop and test new Medicaid models that best meet the needs and priorities of low-income patients. While encouraging flexibility, the AMA is mindful that expanding Medicaid has been a literal lifesaver for low-income patients. We need to find ways to build on this success. We look forward to reviewing the proposal in detail.”

Meanwhile, the Chicago-based American Hospital Association (AHA) and the Washington, D.C.-based American Health Care Association (AHCA), representing hospitals (AHA) and long-term care facilities (AHCA), released a statement on the AHA website, attributed to AHA president and CEO Rick Pollack and AHCA president and CEO Mark Parkinson, which said, “We appreciate CMS’ responsibility to oversee appropriate Medicaid financing and service delivery. However, the bleak reality is that Medicaid funding is already inadequate. Enacting this proposed rule would cut up to $50 billion nationally from the Medicaid program annually, further crippling Medicaid financing in many states and jeopardizing access to care for the 75 million Americans who rely on the program as their primary source of health coverage. Entire communities could lose access to care under this proposal, especially in rural areas where 15 percent of hospital revenue and nearly two-thirds of nursing facility revenue nationwide depend on Medicaid funding.”

Further, the two association presidents noted, “The supplemental payment programs targeted in this rule are also a critical lifeline at hospitals, health systems and nursing facilities that serve some of the most vulnerable Americans. CMS has provided little to no analysis to justify these policy changes, nor has the agency assessed the impact on providers and the patients they serve. Many of the proposed changes would also violate federal laws, including the current Medicaid statute. The AHA and AHCA request that the agency withdraw the proposed rule in its entirety.”

The Washington, D.C.-based Federal of American Hospitals (FAH) released a brief statement attributed to its president and CEO, Chip Kahn, which said, “The CMS Healthy Adult Opportunity announcement means neither health nor opportunity for Americans who depend on Medicaid for their health care. The plan will create roadblocks for patients to access care and will threaten Medicaid coverage for millions more. Medicaid block grants have rightly been rejected by Congress. Rebranding them under the thin veil of a demonstration doesn’t change the fact they would lead to arbitrary cuts that will weaken Medicaid for those most in need.”

Among the harshest statements was that released by the Philadelphia-based American College of Physicians. In a statement attributed to Robert McLean, M.D., ACP’s president, and posted to its website on Thursday, the association of primary care physicians said, “The American College of Physicians (ACP) is greatly concerned that the new Healthy Adult Opportunity plan announced by the administration today will put access to health care at risk for Medicaid beneficiaries.  ACP strongly opposes transforming Medicaid’s existing financing structure into a block grant approach because it will increase the number of people without health insurance coverage for essential health care services. Likewise, the per-capita cap option will restrict crucial health care funding.”

The ACP statement went on to note that “The Medicaid program is meant to provide a safety net for those most in need. For states that apply for the new demonstration project there would be a cap on the federal funding provided to cover adults under age 65 who are primarily eligible for Medicaid through Medicaid expansion, giving those states only a fixed amount of money no matter the need in the state. Just as troubling, they would also no longer need to ensure that their program is providing those beneficiaries with the same benefits and coverage. Fewer patients will be covered, and those who remain covered will have less access to health care services. We are concerned that enacting a cap on Medicaid funding leaves states unprepared to respond quickly to potential public health crises,” the statement read. “In the event of an economic downturn, states would be unable to quickly accommodate people who might be unexpectedly and suddenly dealing with a loss of insurance and employment. States will have more ability to impose premiums and cost-sharing on adult Medicaid beneficiaries under these changes. We know that imposing cost-sharing dissuades low-income beneficiaries from seeking needed care. We are also concerned that this may encourage states, in a cost-saving effort, to cut prescription drug benefits. They also will be permitted to cut non-emergency transportation benefits that could be vital to those seeking necessary care in rural or remote locations.”

A more cautious note was sounded by the Washington, D.C.-based America’s Health Insurance Plans (AHIP), in a statement on that association’s website. Attributed to president and CEO Matt Eyles, it said, “One in five Americans depend on the Medicaid program for their health care coverage. It is the largest health care program in the country, serving over 70 million individuals – including children, older adults, people with disabilities, and 2 million veterans. More than two-thirds of those enrolled are served by a private plan through Medicaid Managed Care, and research has shown these plans deliver a high quality of care just like people receive through employer-sponsored or individual coverage.

Eyles went on to say that “Different populations have different, evolving health care needs, and states should be supported to serve those needs. We support offering state policymakers flexibility to design their Medicaid programs to best meet the needs of their citizens. At the same time, funding mechanisms for Medicaid should not undermine Americans’ access to the care they need and deserve. We are reviewing the details of the guidance to assess the program’s consistency with our principles for coverage and access to care for people with Medicaid,” he added. “Moving forward, we will continue to work closely with federal and state policymakers to ensure Medicaid remains effective, affordable and efficient for the tens of millions who rely on it and the hardworking taxpayers who pay for it.”

And the Washington, D.C.-based Association for Community Affiliated Plans, or ACAP, released a statement published to its website and attributed to president Margaret A. Murray, that stated that “ACAP has long advocated for Medicaid modernization, so long as it adheres to certain key principles—that it covers all Medicaid enrollees equitably and provide state budget writers with certainty. Some Medicaid innovations are faithful to these principles. The Healthy Adult Opportunity initiative is not. Despite the initiative’s structural shortcomings, we must acknowledge that CMS has done more here than merely rebrand block-grant proposals of years past; some components of this program represent genuine steps forward for Medicaid, including an option to offer continuous eligibility for enrollees for up to 12 months,” the ACAP statement said.

Further, it continued ,“We applaud the requirement that states taking up this waiver opportunity measure the quality of care delivered through the adult core quality measure set – given the fact that Medicaid represents one sixth of all health care spending, it’s imperative that policymakers and others understand that enrollees are getting the accessible, high-quality care they deserve. But nothing about either policy mandates that it be tied to this program’s structural flaw—its spending caps. Since any state that exceeds its capped Federal allotment will have to cover the excess costs from state taxpayer revenues, HAO will inject more uncertainty into state budgets. This uncertainty would leave people vulnerable to significant cuts in the event of a natural disaster, high-cost medical innovations, or an unanticipated event such as the recent outbreak of coronavirus. What’s more,” the statement asserted, “this initiative allows states to walk away from actuarial soundness provisions, which assure that states pay health plans enough so they can cover all mandated services. We’ve seen what happens when actuarial soundness is given short shrift, and it’s a story that doesn’t end well for anyone—health plans, enrollees, or states. ACAP remains open to innovative approaches to modernize Medicaid and welcomes some of the steps CMS takes with the Healthy Opportunity Program. But incentives to strengthen the safety net need not be paired with mechanisms to cut holes in it.”