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The 21st annual KFF
survey of Medicaid directors in states and the District of Columbia
highlights policies in place and changes implemented or planned for the
current fiscal year (which for most states runs from July to June). It
also reviews state experiences with policies adopted in response to the
COVID-19 pandemic. A
companion survey report provides a look at state Medicaid
directors’ spending and enrollment projections and expectations
beginning the current fiscal year, including preparations for the
eventual unwinding of the COVID-19 public health emergency (PHE) and
the return to a new normal of operations.
The pandemic has
profoundly affected Medicaid program spending, enrollment, and policy,
challenging state Medicaid agencies, providers, and enrollees in a myriad
of ways, the survey shows.
States report a variety of activities offered by Medicaid managed care
plans aimed at promoting the take-up of COVID-19 vaccinations, for
instance. These include member and provider incentives, member outreach
and education, provider engagement, assistance with vaccination
scheduling and transportation coordination, and partnerships with state
and local organizations.
In state fiscal years
(FY) 2021 and FY 2022 more states were implementing or planning
provider rate increases compared to restrictions, and the majority of
reporting states indicated that provider payment changes were related
to COVID-19. The most common of these were rate increases for nursing
facilities and providers of home and community-based services. While
most states rely on capitated arrangements with managed care
organizations to deliver Medicaid services to most Medicaid enrollees,
fee for service rates remain important benchmarks for managed care
payments in many states, often serving as the state-mandated payment
floor.
Over half of
responding states report that the pandemic prompted them to expand
programs to address social determinants of health, especially related
to housing. Also, three-quarters of responding states reported
initiatives in place or planned to address racial and ethnic
disparities in health, with many focusing on disparities in specific
health outcomes including maternal and infant health, behavioral
health, and COVID-19 outcomes and vaccination rates.
Policy-related survey findings appear across five sections
of the report: delivery systems, benefits and telehealth, social
determinants of health, provider rates and taxes, and pharmacy. Among
the other key findings:
- Twenty-two
states reported new or enhanced benefits in FY 2021, and 29 states
are adding or enhancing benefits in FY 2022. Many states are
focused on expanding behavioral health services, care for pregnant
and postpartum women, dental benefits, and housing-related
supports. A large majority of states also cited the value of
telehealth in maintaining or expanding access to care during the
pandemic, particularly for behavioral health. Post-pandemic
telehealth coverage and reimbursement policies are being evaluated
in most states, with states weighing expanded access against
quality concerns, especially for audio-only telehealth.
- Most
states that contract with managed care organizations (36 of 41
states) reported that 75 percent or more of their Medicaid
beneficiaries were enrolled in MCOs as of July 1, 2021. Children
and adults (particularly Medicaid expansion adults) are much more
likely to be enrolled in Medicaid managed care than elderly
individuals with disabilities.
- Two-thirds
of states that include Medicaid pharmacy benefits in managed care
contracts reported prohibiting spread pricing in managed care
organization subcontracts with their pharmacy benefit managers.
This reflects a significant increase in state Medicaid agency
oversight of these arrangements, in which a pharmacy benefit
manager charges a Medicaid managed care organization more than it
pays a pharmacy for a prescription drug and then pockets the
difference.
In the companion
report, KFF researchers analyze Medicaid enrollment and spending trends
for state fiscal years 2021 and 2022.
The survey found that states expected Medicaid enrollment growth to
slow to 4.5 percent in FY 2022 (down from 10.3% in FY 2021); total
federal and state Medicaid spending to grow by 7.3 percent (down from
11.4% in FY 2021); and state Medicaid spending to grow by 14 percent
(up from 4% in FY 2021).
The recent federal
extension of the PHE to mid-January 2022 will likely reshape states’
projections and delay anticipated changes in enrollment and spending
trends further into or beyond FY 2022. How long the PHE remains in
place is pivotal, because enhanced federal Medicaid money is tied to
it, as are the “maintenance of eligibility” requirements which have
ensured continuous coverage for Medicaid enrollees. However, much
uncertainty remains about the duration of the public health emergency
and the progression of the pandemic.
When the short-term federal financial support related to the pandemic
eventually ends, states are likely to face pressures to contain growth
in state spending tied to enrollment, even as they work to overcome
challenges with systems and staffing to ensure that eligible
individuals remain covered by Medicaid or transition to other sources
of coverage.
KFF researchers conducted the survey over the summer with analysts from
Health Management Associates. The full survey reports are:
For more data and
analyses about Medicaid, visit
kff.org.
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