The future of the Centers for Medicare and Medicaid Services | Apr 28, 2017

The Centers for Medicare and Medicaid Services is a federal agency that is part of the Department of Health and Human Services. Its role within the government is to oversee the Medicare program and work with states to administer Medicaid in addition to various other programs.

The CMS aims to ensure Americans have access to comprehensive health care at an affordable cost. As such, the organization also manages the Health Insurance Marketplace under the Affordable Care Act as well as the Children’s Health Insurance Program. As with any new administration, a new leader of the CMS was chosen by President Trump and underwent a hearing facilitated by the U.S. Senate before being sworn into the new post. Let’s take a closer look at what the future may hold for the CMS under a new commander in chief.

Seema Verma: A history

Then President-elect Trump identified Seema Verma as his pick for administrator of the CMS on Nov. 29, 2016. The CEO and founder of SVC Inc., a health policy consulting firm, Verma is a graduate of the Johns Hopkins School of Public Health and has a large amount of experience with Medicaid. In fact, Verma is considered to have the most in-depth background with the program than any other leader of the agency in its history, according to Modern Healthcare.

Operating out of Indianapolis, Verma is most well-known for her work expanding Medicaid programs under the ACA in states including Indiana, Ohio and Kentucky using the Section 1115 waiver process. This option enables states to customize their own plan for eligibility and delivery of Medicaid, but the actions must be approved by the CMS. While Ohio’s proposal was denied, Indiana’s was successful and Kentucky’s is still pending approval, Advisory Board reported.

Mike Pence and the Healthy Indiana Plan

In her work to create a Medicaid expansion program for Indiana, Verma worked hand-in-hand with two of the state’s leaders. She and former governor Mitch Daniels created Healthy Plan Indiana, which became law in early 2008. Under the legislation, people who don’t have access to employer-provided health care can buy a plan with a subsidy from the state. To carry out this plan, Indiana increased taxes on cigarettes and reallocated federal Medicaid funds through the 1115 waiver. Healthy Indiana offered citizens insurance with a $1,100 deductible and access to a health savings account, which they had to contribute to on a monthly basis.

Verma continued to work with Daniels after the ACA was passed in 2010 to ensure their Medicaid expansion program met federal requirements. When the governor was succeeded by Mike Pence in 2013, SVC’s leader maintained her relationship with the Indiana governor. Together, the pair developed Healthy Indiana 2.0, which not only maintained the use of the 1115 waiver, but also implemented a stipulation that beneficiaries who don’t pay their premiums within a grace period would be locked out of the benefits for six months, the Kaiser Family Foundation reported. Passed by the CMS, the program is currently up for extension.

The chase for Senate approval

Verma’s confirmation hearing took place on Feb. 16, 2017 and although her experience with Medicaid was well-received, her unwillingness to explain potential reforms she supported was frustrating for Democratic members of the Senate, according to The Hill.

Although she refused to comment on her support of an Obamacare repeal, the SVC founder did address certain questions. Some of her more specific talking points included the following, according to Modern Healthcare:

  • Reassessment of an Obama-era rule that asks states to create quality ratings systems for health plans to better understand effects on health outcomes.
  • Turning Medicaid into a per capita capped program or block grant as GOP lawmakers have proposed previously, while still ensuring states were responsible for improving access and results.
  • Lack of support for converting Medicare into a voucher program, which HHS Secretary Tom Price proposed.
  • Helping small-town and rural healthcare providers avoid great financial risk under the transition to value-based care instead of fee-for-service.

Although Democrats were concerned with Verma’s inexperience with Medicare and drug-pricing problems, one of their biggest interests was the businesswoman’s potential conflict of interest that stems from overseeing and regulating states that have previously paid for her consulting expertise.

Despite their hesitations, members of the U.S. Senate voted to confirm Verma on March 13 in a 55 to 43 vote, Healthcare Finance News reported. She was sworn in by Vice President Mike Pence a day later.

Campaign promises: A push for funding changes

During the election cycle, Donald Trump echoed a widely held Republican approach when it came to Medicaid. Backed by GOP lawmakers like Speaker of the House Paul Ryan, altering funding regulations is at the top of the president’s list as it pertains to healthcare and the repeal of the Affordable Care Act.

Currently, Medicaid is jointly funded by the federal government and individual states with the former doling out money for about 57 percent of the program’s costs, according to Time magazine. The amounts that the government pays can fluctuate and may rise depending on factors such as drug prices or infectious outbreaks.

The Republican proposal is to change federal funding to a system known as block grants, where states would receive a predetermined amount of money that states would then have the power to distribute. While the goal is to reduce Medicaid’s budget while giving these jurisdictions more flexibility, according to the GOP, Democratic opponents have cited the inability for the option to keep up with healthcare costs that continue to rise. Furthermore, the action would likely result in the end of guaranteed coverage under the program as well as eligibility restrictions and increased expenses for citizens, HHS Secretary Tom Price admitted in his own Senate confirmation hearing, according to CNN.

The American Health Care Act and Medicare

Passed by both the House Energy and Commerce Committee and the House Ways and Means Committee on March 9, 2017, the American Health Care Act was the Republican rebuttal to the Obama administration’s Affordable Care Act, which GOP lawmakers had promised to repeal and replace during Obama’s presidency.

While the legislation offered a great number of changes to healthcare, it included serious modifications to the programs operated by the CMS and new administrator Seema Verma. The proposal included President Trump’s aforementioned plan to change Medicaid funding, but also addressed those states which have expanded their program under the ACA.

Under Obamacare, states had the ability to extend plan eligibility to people making a household income below 138 percent of the federal poverty level. The federal government covered at least 90 percent of the expenses collected by members of this expansion group. Currently, 31 states are taking advantage of this Medicaid option, according to Politifact.

The AHCA aims to reduce the federal match by eliminating the option for states that didn’t expand by March 1, 2017. For those who had already taken the action, the high-rate match would end in January 2020 – except for members in the expansion group prior to December 2019 who have never had a change in eligibility for more than a month.

By 2020, the ACHA would also alter federal payments to states to a per-person allocation with restrictions, give these jurisdictions the choice to switch to a block grant, if they chose to do so, and allow states to introduce a work requirement for people who wish to access the benefit and aren’t elderly, disabled or pregnant.

The future of the CMS

On March 24, 2017, the AHCA was withdrawn after Republicans were unable to garner enough votes for the legislation to pass the House of Representatives. This decision came following the release of Congressional Budget Office facts surrounding the Obamacare alternative.

According to the non-partisan agency, 14 million people would lose healthcare coverage by 2018 if the AHCA was passed – and more were expected to drop in the years following. The analysis also found that reducing access to birth control would lead to an increase in Medicaid expenses.

“We’re going to be living with Obamacare for the foreseeable future,” Speaker Paul Ryan stated in a press conference after the act was withdrawn, according to The New York Times.

As of April 4, 2017, however, Republican lawmakers are back at work attempting to modify the AHCA and repeal the ACA, the Washington Post reported. Only time will tell what the future will hold for healthcare in the U.S.

Due to Seema Verma’s confirmation in mid-March, few large-scale changes have been proposed by the CMS at this point. Yet, as Republicans press forward with their aim to repeal and replace Obamacare, there is likely to be more news coming from not only the CMS, but the HHS as well.

Changes to the country’s Medicaid and Medicare offerings are important for public health officials to understand and disseminate. Since federal materials relating to these alterations may be challenging for people of various walks of life to comprehend – especially in terms of how the modifications will impact healthcare coverage – it is the responsibility of public health leaders to break down this data in an effective manner.

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