Congress is discussing changes to Medicare and CHIP

Last week, the Centers for Medicaid and CHIP Services (CMCS) provided information to states on the April 1 expiration of the Transitional Medical Assistance (TMA) and the Qualifying Individuals (QI) programs. TMA allows families to keep Medicaid coverage for 6 to 12 months after their earnings rise, depending on income. The QI program provides funding to state Medicaid agencies to assist certain low-income Medicare beneficiaries in covering the cost of their Medicare Part B premiums. Both programs would be permanently extended under H.R. 2, the Medicare Access and CHIP Re authorization Act. This legislation also would prevent steep rate reductions in Medicare payments to physicians by including a long-term replacement plan for the current Medicare Sustainable Growth Rate (SGR) formula, and would extend federal funding for the Children’s Health Insurance Program (CHIP), currently set to expire on September 30, 2015, for two years. The House passed the bill with strong bipartisan support (392-37) on March 26 and the Senate is expected to take up the measure this week. It is unclear how quickly the Senate will be able to pass the bill, as some conservative members of the Senate may try to amend the legislation to fully offset the cost of the package, while some Democrats in the Senate may push to change the bill’s CHIP funding extension length from two years to four years. The most recent temporary “doc fix” to patch the SGR expired on March 31, and the Centers for Medicare and Medicaid Services (CMS) is only able to delay payments on claims until April 15. However, if Congress needs more time to finish work on the bill, CMS could still reprocess those claims with the new payment rates once the bill is enacted, though this could pose administrative challenges for the agency.

The Centers for Medicare and Medicaid Services (CMS) released a proposed rule to  apply certain provisions of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to requirements for Medicaid managed care organizations, Medicaid alternative benefit plans, and CHIP. The goal is to align as much as possible with the approach taken in the final MHPAEA regulation to create consistency between the commercial and Medicaid markets. Under the proposed rule, states that have contracts with managed care organizations will be required to meet the parity requirements regarding financial and treatment limitations consistent with the regulation applicable to private insurers. States will have the flexibility to include the cost of providing additional services or removing treatment limitations in their capitation rate methodology. The Affordable Care Act has greatly expanded mental health and substance-abuse coverage by requiring most individual and small employer plans, as well as plans sold through exchanges, to provide coverage. The full scope of the proposed rule applies to CHIP, regardless of whether care is provided through fee-for-service or managed care. States that have expanded Medicaid under the Affordable Care Act already are required to meet parity requirements. The proposed rule is open for public comment until June 9.

Sarah Curry

Sarah Curry is Director of Fiscal Policy Studies at the John Locke Foundation.

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