Medicaid expansion said to move this week (updated)

UPDATE: Following the publication of this story, sources say Sen. Katz objected to the timeline set by Democratic leadership. Medicaid expansion will come out of the Health and Human Services Committee Wednesday and be scheduled for House and Senate votes Tuesday.

AUGUSTA – Multiple State House sources have confirmed that a bill to expand Medicaid may move forward this week as an amendment to an Augusta Republican’s bill.

By tying House Speaker Mark Eves (D-North Berwick)’s Medicaid expansion bill to Assistance Senate Minority Leader Roger Katz (R-Augusta)’s L.D. 1487, backers of the expansion proposal can float a “compromise” expansion bill as a trial balloon. If the bill fails to surmount Gov. Paul LePage’s inevitable veto, pro-expansion lawmakers will still be able to advance expansion legislation as a standalone measure later in the session. 

Sources said the first House and Senate votes on the expansion bill could come as early as Thursday.

The maneuver will effectively allow Majority Democrats two chances to push through a controversial proposal to expand Medicaid pursuant to the federal Affordable Care Act, also known as Obamacare. The tactic mirrors that used last year with LePage’s hospital repayment bill. Last year, when the governor introduced a bill to repay $500 million in Medicaid debt by renegotiating the state’s wholesale liquor contract, Democrats tried to tack on Medicaid expansion.

That proposal ultimately failed when the Legislature sustained LePage’s veto. Later in the session, Democrats and some Republicans failed to muster sufficient votes to enact a so-called “clean” expansion bill.

L.D. 1487, An Act to Implement Managed Care in the MaineCare Program, has seven co-sponsors, including Sens. Emily Cain (D-Orono), Margaret Craven (D-Androscoggin), Dawn Hill (D-York), and Dick Woodbury (I-Cumberland), and Reps. Kathy Chase (R-Wells), Lance Harvell (R-Farmington) and Dennis Keschl (R-Belgrade).

Katz’s managed care bill would have the state contract with an outside firm to provide services aimed at reducing the cost to taxpayers of Medicaid users. According to the current version of the bill, the Department of Health and Human Services (DHHS) would put out a bid for a five-year managed care service contract. The contract would have to be funded through a supplemental budget.

The cost of Katz’s bill is subject to debate.

Although there is not currently a fiscal note for the bill, the legislation does require funding through a supplemental budget. Katz and other supporters of his managed care bill believe it could generate up to $30 million in savings in the first year. Critics see that figure as optimistic.

“The managed care bill is just another fancy name for Medicaid expansion,” said Rep. Deb Sanderson (R-Chelsea), the top Republican on the Legislature’s HHS Committee.

“You’re still expanding the MaineCare rolls. The only difference is you pay outside firms to come in and do what the department is already doing.”

In his testimony on behalf of the bill last year, Katz said managed care would make sense with or without expansion. He also admitted that managed care can save money two ways, what he referred to as “good way” and a “bad way.”

“The bad way is to simply make it difficult for enrollees to get care by denying access, making it difficult for providers to get paid, or by reducing provider reimbursement rates,” said Katz. “The good way to save money is by doing a more effective job of preventative care and actually managing the care of the patient through our complicated health care system,” he said.

Katz said ensuring managed care providers save money the good way and not the bad way would be the job of DHHS staff writing the request for proposals (RFP) and the contract. The managed care proposal contrasts with DHHS Commissioner Mary Mayhew’s Accountable Care Organizations (ACOs), which have been implemented over the last three years.

Mayhew told me attaching Katz’s bill to the Medicaid expansion bill was politically calculated decision. “This is an effort to win votes and paper over the financial challenges of the program,” she said.

The bottom line, said Mayhew, is that research does not show managed care organizations are effective at addressing the core challenge, which is utilization. She said such organizations typically reduce reimbursement rates or services in search of savings.

“It’s easy to slash reimbursement rates or cut services,” she said. “It’s much harder to commit to the real structural change that needs to occur locally.”

“[The Managed care bill] would duplicate a lot of what is already going on in Maine,” she said. “Hospitals have been hiring local nurse care managers and we’ve been supporting them through changes in reimbursement rates,” she said, adding that the administration is focused on reducing inappropriate use of Medicaid, such as avoidable hospital admissions and over-usage of the emergency room.

Mayhew said supporters of Katz’s bill need to show proof that managed care organizations would actually save money.

“There’s no silver bullet here and to suggest that these managed care companies  can produce one is not realistic,” she said.

Steve Robinson
Editor, Maine Wire