Medicaid Expansion

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Now that state lawmakers have approved expanding Medicaid to add more than 300,000 people, it is up to the Arizona Health Care Cost Containment System to implement the new plan. Tom Betlach, the director of AHCCCS, will discuss what’s next for the state’s health care plan for the poor.

Ted Simons: Now that state lawmakers have approved expanding Arizona's Medicaid program, it's up to the Arizona health care cost containment system to implement the new plan. Joining me now is AHCCCS director Tom Betlach. And Tom, thank you so much for -- holy mackerel. There is so much going on with this. It finally is a done deal. What does Medicaid expansion really do?

Tom Betlach: Well, it had a number of different things. So let's start with the most significant provision, which is it's going to provide healthcare coverage for about 300,000 Arizonans, low-income Arizonans. So the major piece of that is restoring coverage for a population that we had to impose a freeze on two years ago as a result of the great recession and the budget cuts. The first big piece is the restoration of that prop 204, that was an initiative passed back in to provide coverage for individuals up to 100% of the federal poverty limit.

Ted Simons: I want to get to the money right now. The federal match for Arizona dollars, $1.6 billion, something along those lines in the first year from the feds. Explain that. When does that start?

Tom Betlach: January 1st.

Ted Simons: And how is it distributed?

Tom Betlach: It's distributed in that if somebody's eligible, then that person receives either 100% federal coverage so the federal government will provide the state the funding for 100% of the costs of that individual if they're from 100% of the poverty limit, that's up to $15,000 for an individual. Or the additional federal match is for the childless adults and our match goes from a traditional two to one match to almost a nine to one match.

Ted Simons: And is that the first year only or in succeeding years, as well?

Tom Betlach: In succeeding years, as well. So the group and the expansion group that gets 100% federal participation, that's going to phase down. After three years it starts phasing down towards 90% by 2020. And then the other group stays at about 90%. So that's a significant shift in terms of the federal government paying for a portion of the state's AHCCCS program.

Ted Simons: And the federal money, before it gets to the person, where does it go beforehand.

Tom Betlach: It depends on plans that we contract with. We pay those health plans a set amount per month to provide the care to members and so they'll have a membership and they'll take care of the membership and have providers and hospitals and doctors that they contract with. So it works through that system, through managed care.

Ted Simons: As far as the assessment on hospitals, when does that happen?

Tom Betlach: That will start January 1st, that helps pay for a portion of the state's costs. So the state does have some costs. We will be working with our hospital partners to sort of figure out what that final framework looks like and what the assessment looks like and we'll have it in place for January 1st.

Ted Simons: A general example here, ted's hospital, I've had trouble with the emergency room visits and uncompensated care. How much do I get, how is that decided?

Tom Betlach: What happens typically is somebody will show up now, they'll require services, if they're uninsured, the hospital has to provide coverage according to federal law for that individual, starting on January 1st, that individual will be able to enroll in the AHCCCS program. They'll select a plan, a United Plan or some of the other plans that we have in our system. And then the plan will pay the hospital for the services rendered. We would hope that people aren't going to the urgency department at that point. Hopefully, they're going to see their primary care physician. That's how the funding flow works.

Ted Simons: And for a point of clarification, the assessment, that money is used to draw as leverage, if you will, for the federal money.

Tom Betlach: It is.

Ted Simons: Explain that again, please.

Tom Betlach: So what happens is we will make an assessment on hospitals. Hospitals are the single largest beneficiary of the coverage from a monetary perspective. So roughly about 50% of the funds that we send goes to the hospitals. It's an assessment. They'll pay that money to access. We will then use that money as part of the state's portion of the costs to participate in the Medicaid program.

Ted Simons: What do we have as far as oversight of this money and this program?

Tom Betlach: Well, there is clearly legislative interest in this program. There will be reports that we provide to the legislature in terms of how it's going. There's obviously a lot of interest from the hospital community. So we're going to have a transparent process with them in terms of sharing all the information, a lot of stakeholder meetings but clearly, moving forward because of the legislative interest in this, I would anticipate that, you know, there will be informational hearings and things like that in the future in terms of just looking at how this plays out.

Ted Simons: And much of this does start January 1st.

Tom Betlach: Much of it does.

Ted Simons: Okay. And again, for point of clarification, if I'm at 100% of the poverty level right now, what changes?

Tom Betlach: Well, what changes right now is if you do not have any dependent children, you're not eligible for the AHCCCS program because of the freeze. So starting January 1st, you will now be eligible for the AHCCCS system again. So that's the significant change that occurs.

Ted Simons: 133% of poverty level right now, what changes?

Tom Betlach: Right now, you're not eligible for the AHCCCS system. Starting January 1st, you are eligible for the AHCCCS system.

Ted Simons: As far as services, medical, dental, do they change, are they the same?

Tom Betlach: It's the benefit package remains what it is now, it does not include dental services but all the major medical services, prescription drugs, inpatient, out patient, physical therapy, services like that, they're all included within the passenger, behavioral health services, all part of the AHCCCS package.

Ted Simons: Assessment like million?

Tom Betlach: We're going to start the first year, state fiscal year starting on January 1st. That's midway through the fiscal year. We're going to see a significant increase in the AHCCCS population. So we're not fully sure how quickly that population will present. So we are estimating about $75 million for the first six months of it from January to July 1st. We're then going to reevaluate the governor's budget that was presented to the legislature, it was predicated on an estimate of $250 million in fiscal year 2015. One of the things we're going to tell the hospitals and the other stakeholders is because of the flexibility that was provided for in the legislation, we're going to go ahead and set up a rate for six months. We'll re-establish it, look and see what population costs are after that and we'll reassess.

Ted Simons: Will there be much of an informational campaign for those saying, by the way, here's what you need to know?

Tom Betlach: There will be information available at the majority of the applications are done at the department of economic security, our sister agency. There will be information available there. We're moving to a new eligibility system in which roughly 40% of our applications come online now. I think it's going to be a higher number in the future and I think there will be a lot of challenges in terms of communicating to individuals not only the changes in the AHCCCS program but, of course, all the other changes in healthcare under the affordable care act and the federally facilitated marketplace and that's a whole other show but it's a lot of complexity in terms of the changes in the healthcare system leading up to January 1st.

Ted Simons: It really is. There's so much information out there that needs to be sent out and sometimes I think people are just holding up their hands and say I can't take it. Last question you talked about what's going to happen here at the 1st of the year. When will the states, by they hospital providers, the state itself, patients, tangible changes? When do you think the landscape really will change?

Tom Betlach: Well, I think what people don't necessarily appreciate is what an important policy this decision was, that hospitals, uncompensated care had doubled and that many hospitals were on the verge of really going through some challenging fiscal conditions and so that was somewhat seamless to the public person but this really helps stabilize that system. From what the public will see, it's that eligibility to the access program starting January 1st. That's the big change that's going to occur.

Ted Simons: All right, Tom Betlach, good to have you here. Thanks for joining us.

Tom Betlach: Appreciate it.

Tom Betlach:Arizona Health Care Cost Containment System, Director;

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