A conversation with Donald Berwick on implementing national health reform

Michael Birnbaum interviews Donald Berwick shortly after his departure from the Centers for Medicare and Medicaid Services about the national health care landscape. Berwick discusses the strategic vision, policy levers, operational challenges, and political significance of federal health care reform. He rejects the notion that the Affordable Care Act represents a government takeover of health care financing or service delivery but says the law's Medicaid expansion and its creation of health benefit exchanges present a "watershed moment for American federalism." Berwick argues that the solution to Medicare's cost-containment challenge lies in quality improvement. He is optimistic that accountable care organizations can deliver savings and suggests that shifting risk downstream to providers throws the health insurance model into question. Finally, looking to the future, Berwick sees a race against time to make American health care more affordable.     

State Children's Health Insurance Program; eligibility for prenatal care and other health services for unborn children. Final rule

In order to provide prenatal care and other health services, this final rule revises the definition of "child" under the State Children's Health Insurance Program (SCHIP) to clarify that an unborn child may be considered a "targeted low-income child" by the State and therefore eligible for SCHIP if other applicable State eligibility requirements are met. Under this definition, the State may elect to extend eligibility to unborn children for health benefits coverage, including prenatal care and delivery, consistent with SCHIP requirements.     

The evolution of an innovation: variations in medicaid managed care program extensiveness

This article utilizes a theoretical framework of policy innovation, diffusion, and reinvention to investigate the evolving nature of Medicaid managed care programs over time. By estimating two separate models, one for primary care case management (PCCM) and a second for risk-based program enrollment, this study seeks to disentangle two different paths of learning (internal and external), investigate the potential effects of vertical diffusion of policy, and examine the impact of internal state characteristics on the extent of Medicaid managed care. With respect to diffusion and learning, the data reveal that earlier adopters implement more extensive programs. The data fail to reveal much internal learning, although there is evidence of some. External impacts are clear: managed care enrollments in neighboring states and changes in the federal waiver process affect states' decisions. Other policy choices are important: states with more generous Medicaid eligibility rules implement more extensive managed care programs. Complementing other studies of Medicaid, we find that politics and economics make a difference for the extent of managed care programs; unlike other Medicaid studies, we find no effect of race and ethnicity.     

Adoption of retrospective Medicare maximization billing practices by state Medicaid home care programs

Home care services funded by Medicare and Medicaid grew rapidly throughout most of the 1990s. During this period some state Medicaid programs transferred costs for home care claims to the Medicare program to reduce their liability and increase beneficiary access to Medicare coverage. This article reports the findings of the first national study of these Medicare maximization billing practices for home care services. Primary data were collected to determine which states conduct retrospective Medicare billing practices and the amounts recovered from Medicare. Our analysis indicates that seven states recovered as much as dollar 265 million from Medicare in state and federal dollars during the 1990s. Ratios of recovered expenditures-to-costs incurred for retrospective billing practices conducted in Connecticut, New York, and Massachusetts are between 5:1 and 7:1. While retrospective billing practices may aid states in reducing Medicaid outlays and potentially help dual Medicare beneficiaries gain coverage for their home care claims, they increase Medicare expenditures for home care at a time of concern for the long-term financial viability of Medicare and illustrate the need for reforming our national long-term care financing policy.     

Modernizing Medicaid eligibility criteria for children with significant disabilities: moving from a disabling to an enabling paradigm

Children with significant disabilities may qualify for Medicaid benefits, regardless of household income, if their state elects to offer the Tax Equity Fiscal Responsibility Act (TEFRA) option. However, a significant number of children with serious medical problems presently are being denied eligibility for, or terminated from, this Medicaid program. This Article describes the ways in which the existing health insurance system inadequately meets the needs of children with significant disabilities, recounts the history and development of the TEFRA Medicaid coverage option, and analyzes the eligibility criteria used by the various states. It proceeds to consider how disability should be legally defined in the health care context and proposes reforms to modernize the eligibility standards so that these benefits can be more effectively, efficiently, and fairly allocated. To accomplish this goal, the federal statute and regulation that define disability, as well as corresponding state laws, must be reformed so that the law can keep pace with advances in modern medical science, and people with disabilities are not, in effect, penalized for receiving currently accepted preventative care that maintains health but will never cure the underlying disease.     

Control of fraud and abuse in Medicare and Medicaid.

This Comment explores issues concerning the control of fraud and abuse in health programs financed with public funds, specifically the Medicare and Medicaid programs. It summarizes the nature, scope, and possible causes of what some regard as a fraud and abuse "crisis," and points out the difficulties and obstacles facing those who attempt to develop legislative and executive action aimed at controlling fraud and abuse. Recent federal initiatives in fraud and abuse control are examined, and a brief summary of key provisions of H.R. 3 (the Medicare-Medicaid Anti-fraud and Abuse Amendments, which may prove to be a landmark piece of legislation in this area) is provided. The author emphasizes that more effective control of fraud and abuse is necessary if further expansion of government financing of health programs, including national health insurance, is to occur in the near future. At the same time, caution must be taken not to neglect the appropriate use of other mechanisms necessary for reducing the costs of medical care and improving its quality. In addition, it is likely that efforts to stem fraud and abuse will raise important medicolegal and public policy issues that will require careful interdisciplinary consideration.     

Medicaid program; cost limit for providers operated by units of government and provisions to ensure the integrity of federal-state financial partnership. Final rule with comment period

This regulation clarifies that entities involved in the financing of the non-Federal share of Medicaid payments must be a unit of government; clarifies the documentation required to support a Medicaid certified public expenditure; limits Medicaid reimbursement for health care providers that are operated by units of government to an amount that does not exceed the health care provider's cost of providing services to Medicaid individuals; requires all health care providers to receive and retain the full amount of total computable payments for services furnished under the approved Medicaid State plan; and makes conforming changes to provisions governing the State Child Health Insurance Program (SCHIP) to make the same requirements applicable, with the exception of the cost limit on reimbursement. The Medicaid cost limit provision of this regulation does not apply to: Stand-alone SCHIP program payments made to governmentally-operated health care providers; Indian Health Service (IHS) facilities and tribal 638 facilities that are paid at the all-inclusive IHS rate; Medicaid Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), and Prepaid Ambulatory Health Plans (PAHPs); Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs). Moreover, disproportionate share hospital (DSH) payments and payments authorized under Section 701(d) and Section 705 of the Benefits Improvement Protection Act of 2000 are not subject to the newly established Medicaid cost limit for governmentally-operated health care providers. Except as noted above, all Medicaid payments and SCHIP payments made under the authority of the State plan and under waiver and demonstration authorities, as well as associated State Medicaid and SCHIP financing arrangements, are subject to all provisions of this regulation. Finally, this regulation solicits comments from the public on issues related to the definition of the Unit of Government.     

Nursing home utilization patterns: implications for policy

Nursing homes represent the fastest growing component of health care expenditures, over half of which come from public funds. This paper reviews research on nursing home utilization with regard to several policy issues concerning the subsidization of long-term care by Medicaid. As a background, the paper defines and contrasts three concepts; need, demand, and utilization. It then indicates how Medicaid policies regarding reimbursement of homes and eligibility for support can result in a chronic shortage of beds and describes the estimated effects on utilization of eight variables: Medicaid generosity, age structure, family resources, racial composition, residence, financial capability of the elderly, price of nursing home care and alternative sources of care. The paper concludes that there is a need for: subsidization of a more comprehensive set of long-term care services, a review of reimbursement policies, and improved methods of allocating existing nursing home beds among persons desiring care.     

Health care and the homeless: a political parable for our time

The growth in the number of homeless persons is perhaps the most visible indicator of social disintegration in the 1980s, although health and health care are not the central issues of homelessness. This paper, which draws on the author's experience as chairman of the Committee on Health Care for Homeless People of the Institute of Medicine (IOM), describes what is known about the characteristics of homeless persons and the causes of homelessness, and about the health status of homeless persons, which is often not very good (but not significantly worse, it would appear, than that of other low-income persons). The contemporary history of health services targeted to homeless persons begins with the joint initiative of the Robert Wood Johnson Foundation and the Pew Charitable Trusts in 1985, which became the model for federal support through the Stewart B. McKinney Act of 1987. The McKinney Act, like the IOM report, demonstrates how, in contemporary American politics, there can be widespread political consensus not only about a problem but about solutions, while the resulting policy actions are largely symbolic.     

Medicaid and access to child health care in Chicago.

In this article we examine how increasing the reimbursement of physicians and expanding Medicaid eligibility affect access to care for children in Cook County, Illinois, which overlies Chicago. Using Medicaid claims and other data at the zip-code level, we compare the places where Medicaid children live with the places where all the physicians who treat children and those who accept Medicaid patients have their practices. Our findings suggest that the recent changes in legislation are unlikely to benefit extremely poor children, who are more likely to live in depressed inner-city areas, where there are few physicians. "Near-poor" children whose homes are dispersed throughout the county, who are now eligible for Medicaid as a result of the recent changes, are likely to see improvements in their access to care. Further changes in policy, aimed at enhancing the capacity of institutions providing care, could improve access for the children of the inner city.     

Children's Medicaid enrollment: the impacts of mandates, welfare reform, and policy delinking

From 1984 to 1990. Congress enacted a series of mandates that expanded Medicaid eligibility for low-income children by gradually delinking Medicaid eligibility from welfare eligibility. The 1996 national welfare reform law nominally completed the delinking process when the statutory phase-in of children's Medicaid coverage was preserved even as the states were given increased flexibility for administering welfare programs. This article provides estimates of the impact of these fedcral policy changes on children's Medicaid enrollment rates and analyzes the degree of success in uncoupling children's Medicaid enrollment from welfare. Data from the Current Population Survey for 1979 to 1998 are used to provide standardized enrollment probabilities for the United States and individual states. The results show important enrollment increases associated with the period of the mandated expansions, followed by enrollment declines associated with welfare reform. The largest increases in enrollment during this period were in states with historically restrictive welfare eligibility, but rates also rose in states that previously had relatively expansive welfare eligibility. The net effect was a reduction in the extent of state-to-state variation in enrollment. The Medicaid expansion peaked in 1995, prior to the advent of national welfare reform. Since then, children's Medicaid enrollment has fallen, with the largest declines falling on families with the very lowest incomes. Consistent with the desire to delink children's Medicaid coverage from welfare, the association between Medicaid and AFDC/TANF enrollment weakened during the expansionary period, but there still was a relatively strong relationship between policy outcomes for these two programs. Despite the policy changes, Medicaid coverage of children is still influenced by state-level welfare policy.     

From shared cost to block funding and beyond: the politics of health insurance in Canada

This paper takes as its starting point recent major changes in arrangements between the federal and provincial government in Canada concerning the sharing of costs for health insurance programs. The switch from a shared cost (conditional grant) to a modified block funding system was motivated by federal desires to limit and make predictable their expenditures, by provincial desires to increase the flexibility of their allocation of funds and by a mutual desire to limit any growth of health care costs as a proportion of GNP. Concerns related directly to improving medical care delivery were insignificant The changes will effectively centralize responsibility for program financing and program delivery, thus providing a powerful incentive for provincial governments to apply very strong measures to control costs. For reasons largely external to the relationship between public sector insurers and the suppliers of medical services, these attempts are unlikely to be successful in the short run. The probable impact of this difficulty on government and members of the health care delivery system is assessed.     

HMOs for Medicaid: the road to financial independence is often poorly paved.

During the 1980s both the federal government and the private sector articulated policies to encourage the development and participation of health maintenance organizations (HMOs) in the Medicaid program. However, the policies, intended to save costs, limited the ability of new HMOs to achieve financial independence. New plans that emphasize Medicaid participation have few, if any, options on benefit design or in setting capitation rates. Relative to fee-for-service Medicaid programs, their costs to provide services may be quite high, as they have neither the buying power not the ability to impose discounts. As a consequence, plans must focus their financial planning efforts on targeting and attaining a stable enrollment base and on controlling the amount of services provided, tasks that are difficult for all HMOs. Achieving a stable enrollment base is particularly hard because Medicaid eligibles have few incentives to enroll and once enrolled often lose their Medicaid eligibility. Traditional HMOs control the amount of services provided through physician selection, financial incentives on physicians, and monitoring and utilization review. Lack of information and the difficulty inherent in attracting sufficient provider participation limit the first two strategies, so new plans often adopt organization structures that rely heavily on monitoring activities. Unfortunately, management information systems for HMOs are often the weakest link. We discuss the tasks and present data on financial planning, on putting financial plans into operation, and on monitoring progress toward financial independence for a set of ten demonstration projects sponsored by the Robert Wood Johnson Foundation.     

Toward a national personal assistance program: the independent living model of long-term care for persons with disabilities.

Long-term care for people with disabilities in this country traditionally has been provided through family members and friends. Federal and state policy has focused primarily on financing professional health care services provided through nursing homes and home health agencies. An alternative to these models of long-term care is the "independent living model," which is based on the provision of services by nonprofessional personal assistants in the disabled person's home. We describe the model and consider why it is not the dominant approach to long-term care in the United States. We go on to assess options for developing a national personal assistance services program based on the independent living framework, discussing how covered services should be defined, how the program should be financed, whether the program should use means testing, how eligibility and level of benefits should be determined, and what role government should play in implementing the program. Several legislative approaches to developing a national program are explored.     

ALL CHILDREN ARE NOT CREATED EQUAL: PRWORA'S UNCONSTITUTIONAL RESTRICTION ON IMMIGRANT CHILDREN'S ACCESS TO FEDERAL HEALTH CARE PROGRAMS

The lack of health insurance for children is a serious problem in the United States, especially for those children in families that earn too little to get private health insurance and too much to qualify for Medicare. Even within this subclass of children, immigrant children are particularly vulnerable to the problems faced by lack of health care. Nevertheless, with the passage of the Personal Responsibility and Work Reconciliation Act (PRWORA) by Congress, equality interests of low‐income immigrant children are undermined when immigrant children are denied federal benefits for the first 5 years of residency in the United States. The first part of this Note examines the importance of child health care and the long‐term problems with uninsured children, especially with uninsured immigrant children and pregnant women. The next part introduces Medicaid as well as State Children's Health Insurance Program, a supplemental federal program designed to increase health care coverage to all children, while contrasting these programs in light of the restrictive anti‐immigrant PRWORA provisions. The third part explains the passage of PRWORA, its anti‐immigrant provisions, and how these provisions prevent needy immigrant children from receiving federally funded health care. Then, the fourth part uses both the Equal Protection Clause of the Fourteenth Amendment and the Due Process Clause of the Fifth Amendment to argue the unconstitutionality of the anti‐immigrant provisions. Finally, the last part lays out the recommendation to amend the Social Security Act so that the PRWORA barriers can be removed and recent immigrant children can receive federally funded health care.     

A policy transformed by politics: the case of the 1973 Australian Community Health Program

During an era of health policy reform in Australia, community health advocates believed that community health centers (CHCs) could form a solid foundation for a new system of health care delivery. Instead, a proposal for national health insurance (Medibank) emerged as the predominant structural reform. Community health proposals were not abandoned, however, and a policy designed to give federal grant assistance for the establishment of CHCs was implemented in 1973. The historical account of how the 1973 Australian Community Health Program (CHP) was developed in the early 1970s is relevant to dilemmas faced by contemporary policy makers. Specifically, how did the CHP "survive" even though government leaders had moved away from traditional direct service models, choosing to focus more attention on indirect insurance reimbursement?     

Medicaid Program; Medicaid eligibility quality control, progressive reductions in federal financial participation for FYs 1982-84, payment for physician billing for clinical laboratory services, and utilization control of skilled nursing facility services: removal of obsolete requirements--HCFA. Final rule

This final rule removes several obsolete sections of the Medicaid regulations that specify rules and procedures for disallowing Federal financial participation for erroneous medical assistance payments due to eligibility and beneficiary liability errors as detected through the Medicaid eligibility quality control program for assessment periods from 1980 through June 1990. The Medicaid regulations that contain the rules and procedures for the progressive reductions in Federal financial participation in medical assistance expenditures made to the States for fiscal years 1982 through 1984 are removed to reflect the repeal of the statutory bases for the reductions. The Medicaid regulations that provide for physician billing for clinical laboratory services that a physician bills or pays for but did not personally perform or supervise are removed to reflect the statutory repeal of this provision. In addition, the rule removes obsolete regulations that prescribe requirements concerning utilization control of Medicaid services furnished in skilled nursing facilities. This rule is part of the Department's initiate to reinvent health care regulations and eliminate obsolete requirements.     

Enrolling children in public insurance: SCHIP, Medicaid, and state implementation

The Balanced Budget Act of 1997 established federal grants to the states to create the State Children's Health Insurance Program (SCHIP). This presented the states with a number of implementation choices concerning administrative models for the new programs, as well as choices about eligibility standards, enrollment simplification, crowd-out, and cost sharing requirements. At the same time, the states were also implementing welfare reform. We describe the most important of these implementation choices, and using data from the Current Population Survey, we estimate the impacts of state policy on enrollment in this multiprogram environment. The results indicate that SCHIP programs that are administered as Medicaid expansions are more successful than either separate SCHIP plans or combination programs in enrolling children. States that remove asset tests and implement presumptive eligibility and self-declaration of income have higher enrollment levels. Continuous eligibility and adoption of mail-in applications have no effect on overall enrollment. Waiting periods and premiums reduce enrollment. Stringent welfare reform reduces children's enrollment, despite federal policy that was intended to protect children from the consequences of welfare reform. The negative impacts of a number of these policy reforms substantially reduce enrollment, potentially offsetting the more favorable impacts of other policy choices. We estimate that if all states adopted the policy options that facilitate program use, enrollment for children with family incomes less than 200 percent of the poverty line could be raised from the current rate of 42 percent to 58 percent.     

State services for children: an exploration of who benefits, who governs

In recent years, equity, choice, and efficiency issues in the provision of education have received much attention and analysis. Yet, in the area of other state services for children (health, protective services, day care, etc.), there has been scant concern for equity, efficiency, or choice, despite the fact that out-of-school influences can be crucial in determining in-school performance. This paper reports on work in progress that reaches the following initial conclusions: 1. In the field of children's social services, data compilation is approximately 20 years behind the state of the art for education. Basic data on services provided is not collected for submission to state or federal authorities in any standard format on a recurring basis. 2. From the limited data available, the access of children to quantity and quality in social service programs varies enormously within states. The variations are much larger than those discovered in the public financing of education even before the recent school finance reform movement (1968-1978). 3. Federal allocations to states for social service programs comprise a substantial proportion of state Title XX budgets. For several reasons, the degree of accountability for these funds is less than that for federal education grants. 4. In all three states Title XX state allocations to localities are purported to be based on need. Closer examination of the formulas, and interviews with policy makers, revealed that Title XX allocations are determined primarily by political criteria.