NN&I - January 2012

Renal policy STATE OF THE STATES By Wendy Funk Schrag LMSW ACSW A review of Medicaid rate reductions in 2011 Thirteen states levied Medicaid payment reductions for dialysis providers last year as they struggled to balance budgets Nationally the dialysis industry estimates that approximately 5 10 of Medicaid beneficiaries who receive dialysis treatments rely on Medicaid as their primary insurance and will not be eligible for the Medicarefunded ESRD benefit An additional 35 45 of Medicaid beneficiaries with kidney failure are dual eligibles that is they have Medicare as their primary insurance and Medicaid as their secondary payer This high percentage of Medicaid beneficiaries combined with the frequency of dialysis treatment leaves dialysis providers at higher risk than other medical providers when there are Medicaid reimbursement reductions As a result of that payer mix many dialysis facilities may face negative operating margins Industry analyses have found that dialysis units operating in a negative margin are generally those with a higher population of individuals relying on Medicaid for their health insurance Table 1 shows the Medicaid reductions implemented in 2011 In each state dialysis providers patients and patient organizations advocated for keeping funds in place by meeting with Medicaid officials communicating with state legislators and in some states by sending letters to the Centers for Medicare Medicaid Services in their oversight capacity with regard to state Medicaid programs Table 1 State Proposed reductions in 2011 and outcome CMS has approved a 5 Medicaid primary rate reduction that was passed by the state legislature it was effective Oct 1 2011 Reductions in non emergency medical transportation were proposed but funding was left intact However a transportation co pay will begin for people who live in Maricopa and Pima counties The state legislature passed a 10 primary Medicaid rate cut beneficiary co pays and limits in drugs and outpatient visits effective June 1 2011 dialysis patients are exempt from the co pays and the seven visit limit for outpatient visits CMS approved the 10 Medicaid reduction and has not communicated their decision yet regarding the co pays and the limits in outpatient visits A group of health providers has filed a lawsuit California Medicaid has announced that it will not make any reductions in payment until after the court hearing Nutritional supplement benefits were reduced only beneficiaries with specific health diagnoses will qualify Ms Schrag is director of advocacy and state government affairs for Fresenius Medical Care North America and is based in Newton Kan She is also a member of NN Is Editorial Advisory Board Arizona California State Proposed reductions in 2011 and outcome Massachusetts Massachusetts is proposing an all inclusive rate of 19074 per dialysis treatment which includes payment for costs of all MassHealth covered routine drugs lab tests home dialysis supplies and all other dialysisrelated services It includes an add on of 20 per session for home dialysis training A comment period is underway A final rule will be forthcoming Minnesota The states proposed budget called for elimination of Medicaid secondary payments for dual eligibles since Medicare payment would exceed Medicaid rates however Medicaid secondary payments were preserved The state reduced Medicaid primary payments by 3 effective Sept 1 2011 North Carolina The state budget included a 2 across theboard reduction to the Medicaid primary rate for all providers beginning Oct 1 2011 Nevada The Governors proposed budget included a 15 Medicaid primary rate reduction for most health care providers including dialysis Dialysis providers succeeded in being included on an initial list exempting them from the proposed reduction However the Governors revenue plan did not get accepted by the state legislature so all providers that were exempt ended up getting the 15 reduction effective July 1 2011 www NephrologyNews com January 2012 Nephrology News Issues 11