The Patient Protection and Affordable Care Act (PPACA) contains major changes to the two big health entitlement systems--Medicare and Medicaid. Medicare has been more prominently featured in the discussion over reform. However, Medicaid is a significant part of the PPACA's full impact on the health system. Medicaid is the jointly-funded system to provide health care for low-income and disabled persons. The reformed program encompasses changes in coverage, administration, and oversight. Here are many of the Medicaid provisions that are either now or soon to be in effect that will impact states, patients, providers and suppliers.

Eligibility and Coverage

--One of the most immediate changes is a mandate that current state standards of eligibility for Medicaid cannot change until insurance exchanges are established and operational. Standards for children's eligibility cannot change through 2019.

--The most significant change is expansion of eligibility. States will be allowed to expand coverage to non-pregnant adults under 65 through a state amendment plan, with a current matching rate of federal funds. Coverage can be phased in based on income, as long as the state phases in lower-income persons first.

--The biggest expansion of coverage will take place in 2014 when non-Medicare eligible adults under 65, whose income does not exceed 133 percent of the poverty level, will be eligible. Income eligibility will be based upon adjusted gross income, with no assets or resources tests. During that 2014 period, Federal medical assistance percentage (FMAP) funding for states will reach 100 percent. States can also expand eligibility to those whose income exceeds 133 percent if their income does not exceed the highest income eligibility level established under the state plan.

--The enrollment process for Medicaid will be simplified in 2014. States will establish an online means of applying for Medicaid and the Children's Health Insurance Program (CHIP) for the first time or to renew a plan, including the ability to use an electronic signature.

--Starting this year, coverage will be applied to freestanding birth centers. These centers are state-licensed non-hospital facilities where women give birth outside the home, often with attending midwives.

Quality Standards

--Medicaid plans will be required to have a "benchmark" of benefits of essential coverage. This benchmark will include equal coverage for mental health treatment. In addition, starting this year the Department of Health and Human Services (HHS) will identify and measure a set of health quality measures for Medicaid-eligible adults. Following those measures, HHS will establish a Medicaid Quality Measurement Program, and continue to recommend changes to the initial core set of quality measures.

--In 2011, payments to states will be prohibited for costs resulting from health care-acquired conditions. This does not affect access to care or services for the Medicaid patient.

--Starting this year, states that provide home and community-based services may expand service eligibility, as long as individual income does not exceed 300 percent of the maximum supplemental security income benefit rate. States may offer more types of home and community-based services to those with a higher needs-level under a state plan amendment. Services can be targeted to specific populations.

Administration

--Starting this year through 2012, HHS will choose five states for a global payment demonstration project, in which a participating state will change payments to a safety-net hospital from fee-for-service to a global capitation payment model. In capitation, a flat amount is paid to the provider per individual per month. The percentage of those patients who do not use a provider's care is supposed to balance those with a high utilization rate.

--The Medicaid and CHIP Payment and Access Commission, which reviews payment policies in the programs, will be expanded to include assessment of adult services, including for those dually eligible for Medicare and Medicaid.

--Prior to the PPACA, institutions for mental illness were not allowed to receive Medicaid reimbursement for emergency services. However, HHS will now establish a three-year demonstration project in up to eight states to reimburse these institutions for emergency services for beneficiaries between 21 and 65.

--HHS will establish a Centers for Medicare and Medicaid Services innovation center. The purpose is to test innovative payment and delivery models to reduce costs. Models for care will focus on populations with deficits in care, such as women's health and seniors' health. Patent-centered medical home models will be reviewed. Measures will be considered for the chronically ill, including care coordinators, a chronic disease registry, and home telehealth technology. Payment models will transition from fee-for-service to comprehensive payment or salary-based payment. A varying payment system will be considered for physicians who order advanced diagnostic images, according to criteria for appropriateness. Those criteria will be determined through consultation with physician specialty groups and stakeholders.

Oversight

--The period for a state to collect overpayment of Federal Medicaid funds is extended from 60 days to one year. States must correct federally-identified claims of overpayment of an ongoing or recurring nature with new Medicaid Management Information System (MMIS) audits or other corrective actions. States will report an expanded set of data elements under MMIS to detect fraud and abuse. There is now a mandatory state use of National Correct Coding Initiative methodology.

--HHS and the Inspector General's office will establish procedures for provider and supplier screening for those participating in Medicare, Medicaid and CHIP. New providers and suppliers will have a provisional period of enhanced oversight, including prepayment review and payment caps.

--HHS will have agreements to share and match data for detecting fraud and abuse, with the departments of Veterans Affairs, Defense, Social Security and Indian Health.

--All Medicare, Medicaid and CHIP providers must include their national provider identifier on all applications to enroll in the programs, and on all claims for payment. HHS may require some providers to provide a surety bond.

--Finally, anyone making a knowingly false statement, omission or misrepresentation of a material fact in applications, agreements, bids or contracts in federal health care programs will be subject to civil money penalties up to $50,000. HHS may suspend payments to providers or suppliers pending investigation of credible allegations of fraud.

In other reform news, the Obama Administration is kicking off new efforts to promote the advantages of the PPACA. President Obama focused first on seniors, with a tele-town hall meeting on Tuesday. The President took questions from seniors around the country, and explained the benefits for seniors in the reform law. "First and foremost, what you need to know is that the guaranteed Medicare benefits that you've earned will not change, regardless of whether you receive them through Medicare or Medicare Advantage," the president said. "What you'll see through this new law are new benefits, new cost savings, and an increased focus on quality to ensure that you get the care that you need. And we're moving quickly and carefully to implement this law so that you begin to see some of these savings immediately." Obama also detailed efforts to warn seniors about con artists using reform changes for scams (See, DM 12943), and about stronger efforts to crack down on fraud and abuse.

The president's remarks: http://www.whitehouse.gov/the-press-office/remarks-president-a-tele-town-hall-with-seniors