RI's global waiver changes administration of Medicaid

The global waiver that was granted to Rhode Island in 2009 allows the state to operate its Medicaid program in a way that is different than otherwise required under statute and still receive federal matching funds, according to Elena Nicolella, the state's Medicaid director.

The Global Consumer Choice Compact waiver will expire on Dec. 31, 2013, unless the state decides to request a renewal, she reports. "Under the waiver — and I want to emphasize that it is not a block grant — the state seeks to demonstrate changes to the Medicaid program in the long-term care and primary and acute care arenas," says Ms. Nicolella.

Utilization of long-term care community-based services is being increased in lieu of institutional services such as nursing homes, says Ms. Nicolella, and the number of Medicaid eligible beneficiaries who participate in coordinated care is being increased.

"In the two years that the Rhode Island Medicaid program has been operating under the waiver, major changes in the way we administer the program have been undertaken," says Ms. Nicolella. Here are some examples:

• A new process was implemented for determining a person's clinical eligibility for long-term care services.

Under the waiver, the state no longer applies institutional level of care criteria to long-term care eligibility, explains Ms. Nicolella, adding that the state now uses functional criteria to limit who can access nursing home services.

"The level of care criteria also includes the development of a preventive level of care," says Ms. Nicolella. "This allows the state to provide a minimal amount of home care to people not yet clinically eligible for the full scope of long-term care services."

• Mandatory enrollment into Medicaid managed care was implemented for Medicaid-only adults with disabilities.

Currently, 12,000 people are enrolled in Rhody Health Partners Program, administered by Medicaid managed care organizations, says Ms. Nicolella, and 2,000 people are enrolled in Connect Care Choice, the primary care case management program.

• Aggressive outreach and assistance to individuals interested in transitioning from a nursing home to a community has resulted in more than 100 people successfully transitioning to the community.

"This effort, as well as a concerted effort to divert people who are at risk for institutionalization, has resulted in a modest but promising downward trend on the utilization rate of nursing homes," reports Ms. Nicolella.

Controversial aspect

"One of the more controversial aspects of the global waiver is that the state operates under a budget cap," says Ms. Nicolella. This cap represents the maximum expenditure amount for which the federal government will provide financial participation, she explains, and the five-year cap for the demonstration is $12.075 billion.

If the overall cost of the Medicaid program for the five-year demonstration period exceeds that amount, the state will need to fund the excess spending with state-only dollars, says Ms. Nicolella.

"While the cap puts the state at risk for caseload and utilization, this risk factor has been essentially neutralized by the experience to date," she says. "Through the end of the second full year of the waiver, our experience is more than $1.3 billion below the budget neutrality cap for that period." This figure, which does not represent a savings to the state, is projected to grow through the remainder of state fiscal year 2011 and into state fiscal year 2012, adds Ms. Nicolella.

The advantage of the cap is that it provides the state a certain degree of flexibility in deciding how to finance the larger publicly funded health care system, says Ms. Nicolella. "The Costs Not Otherwise Matchable authority is very closely tied to the cap limit," she says. "The notion is that without the waiver, the state would spend a certain amount."

The program changes pursued under the waiver are intended to decrease the growth rate of Medicaid costs, notes Ms. Nicolella. "If the state can curb that growth rate, there is authority to claim federal match on non-Medicaid eligible populations," she says. "In Rhode Island, we have used that additional funding authority to match expenditures for services that were funded with state-only dollars."

Those populations include individuals enrolled in the state's General Public Assistance Program and adults with behavioral health needs who are not eligible for Medicaid, says Ms. Nicolella.

ACA goals complemented

Ms. Nicolella says that the major fiscal challenge she sees is the amount of available state funding in the current budget. While enrollment of the aged, blind, and disabled population has remained relatively constant at 50,000, the number of eligible families and children has increased by 3,834 over the past 12 months, she reports.

However, Ms. Nicolella says that fiscal opportunities exist in many of the initiatives offered through the federal government, including the Health Home Model, the Community First Choice Option, the Money Follows the Person Grant, and the Re-Balancing Initiative.

"The state's economic challenges have resulted in the need to increase cost sharing and decrease provider reimbursement rates," says Ms. Nicolella.

The global waiver complements the goals of the Affordable Care Act, according to Ms. Nicolella, and has enabled the state to be better prepared for its implementation. "Through the Costs Not Otherwise Matchable initiative, we have access today to many of the childless adults who will be Medicaid eligible on January 2014," she says.

The efforts in the long-term care system enabled the state to request and receive a $24 million Money Follows the Person grant to accelerate its re-balancing efforts, says Ms. Nicolella. "Our work with the Medicaid managed care organizations and Connect Care Choice practices has prepared us to begin to adopt new payment methodologies and care models, such as the patient-centered medical home and the health home," she adds.

Contact Ms. Nicolella at (401) 462-3575 or enicolella@dhs.ri.gov.