16th Annual Survey of Medicaid DirectorsConducted by HMA for Kaiser Family Foundation

By Jeff SmithOctober 28, 2017

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SURVEY AREAS COVERED

Medicaid Enrollment &

Spending Growth Expansion Growth Changes in Payments Changes in Benefits Areas of State Focus LTSS MCO Expansion Quality Initiatives Delivery System Initiatives Looking Ahead

Available at: www.kff.org or www.healthmanagement.com

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Proj.

4.7%

6.8%

8.7%10.4%

12.7%

8.5%7.7%

6.4%

1.3%

3.8%

5.8%7.6%

6.6%

9.7%

-4.0%

3.2%

6.8%

10.5%

5.9%

4.5%

-1.9%

0.4%

3.2%

7.5%

9.3%

5.6%

4.3%3.2%

0.2%-0.5%

3.1%

7.8%7.2%

4.8% 2.3%

1.5%

5.3%

13.2%

3.9% 3.3%

Total Medicaid Spending Medicaid EnrollmentAnnual Percentage Changes, FY 1998 – FY 2017

NOTE: For FY 1998-2013, enrollment percentage changes are from June to June of each year. FY 2014-2016 reflects growth in average monthly enrollment. Spending growth percentages refer to state fiscal year. FY 2017 data are projections based on enacted budgets. SOURCE: Kaiser Family Foundation, Medicaid Enrollment & Spending Growth: FY 2016 & FY 2017; October 2016, available at: http://kff.org/health-reform/press-release/50-state-survey-finds-slower-growth-in-total-medicaid-spending-nationally-in-fy-2016-and-projected-for-fy-2017-as-earlier-increases-from-the-affordable-care-acts-coverage-expansions-taper-off/

RECESSIONS AND THE IMPLEMENTATION OF THE ACA RESULTED IN PEAKS IN TOTAL MEDICAID SPENDING AND

ENROLLMENT

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2015 2016 2017 Proj 2015 2016 2017 Proj

19.3%

4.8%

2.6%

10.3%

7.1%

4.2%3.9%

1.1% 1.2%2.2%

3.8% 3.5%

Expansion States Non-Expansion StatesMedian Rates of Growth

NOTE: Percentages reflect the median percent change for each group of states for each year. FY 2017 growth reflects projections in enacted budgets. In FY 2016, Alaska and Montana moved and in FY 2017, Louisiana moved to the expansion state group. SOURCE: Kaiser Family Foundation, Medicaid Enrollment & Spending Growth: FY 2016 & FY 2017; October 2016, available at: http://kff.org/health-reform/press-release/50-state-survey-finds-slower-growth-in-total-medicaid-spending-nationally-in-fy-2016-and-projected-for-fy-2017-as-earlier-increases-from-the-affordable-care-acts-coverage-expansions-taper-off/

MEDICAID ENROLLMENT & TOTAL SPENDING GROWTH: SLOWING IN FY 2016 AND FY 2017, FOR BOTH EXPANSION &

NON-EXPANSION STATES

Medicaid Enrollment Total Medicaid Spending

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Proj

8.4%9.9%

12.9%

5.5% 4.9%

10.1%

3.0% 4.0%5.7%

-10.9%

-4.9%

16.1%

20.1%

10.0%

2.6% 3.8% 2.9% 4.4%

8.7%10.4%

12.7%

8.5% 7.7%

6.4%

1.3%3.8%

5.8%7.6% 6.6%

9.7%

-4.0%

3.2%

6.8%

10.5%

5.9% 4.5%

State Medicaid Spending Growth Total Medicaid Spending Growth

NOTE: FY 2017 projections based on enacted budgets. State spending for FY 2000-2015 includes all non-federal spending. State Medicaid spending for FYs 2016 - 2017 refers to state spending, largely general fund. SOURCE: Kaiser Family Foundation, Medicaid Enrollment & Spending Growth: FY 2016 & FY 2017; October 2016. www.kff.org

GROWTH IN TOTAL AND STATE SHARE OF MEDICAID SPENDING IS GENERALLY PARALLEL, EXCEPT WHEN STATUTORY CHANGES

IMPACT FMAP

ARRA Enhanced FMAP (2009 – 2011)

Enhanced FMAP / Federal Fiscal Relief (2003-2005)

100% ACA Enhanced Match (2014 – 2016)

Expiration of ARRA FMAP

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FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Adopted FY 2017

2216

105

85 6

26

3

2 1

Other Eligibility Expansions ACA Medicaid Expansion

SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016. http://kff.org/medicaid/report/implementing-coverage-and-payment-initiatives-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2016-and-2017/

SINCE 2014, 32 STATES ADOPTED THE ACA MEDICAID EXPANSIONS, PLUS A FEW STATES MADE TARGETED ELIGIBILITY

CHANGES

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NOTES: Restrictions include rate cuts for any provider or freezes for nursing facilities or hospitals. FY 2017 rates were not set for MCOs in Florida or Minnesota at the time of the survey. Illinois did not provide a response for FY 2017 rates as a budget for FY 2017 had not been enacted at the time of the survey. SOURCE: KCMU Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

STATES WERE MOST LIKELY TO INCREASE PAYMENT RATES FOR MCOS AND NURSING FACILITIES, AND TO FREEZE HOSPITAL

RATES

20

3226

18 17 15 1315

3225

14 11 8 9

FY 2016 Adopted FY 2017

31

19

4 62 1 1

36

19

6 4 6 4 45 1Cuts

Freezes

States with Rate Increases

States with Rate Restrictions

3 4

5

NOTES: States reported benefit restrictions, eliminations, enhancements, and additions in FY 2016 and FY 2017. Excluded from these changes are the implementation of alternative benefit plans for the Medicaid expansion group. Home and community-based services (HCBS) and pharmacy benefit changes are also excluded. SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

BENEFIT ENHANCEMENTS IN FY 2016 & FY 2017 MOST COMMON FOR BEHAVIORAL HEALTH, SUBSTANCE USE, TELE-

HEALTH, & DENTAL SERVICES

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 (adopted)

1619

15 15 1319

2421

2421 20

Number of States Reporting Benefit Enhancements/ Additions

63

10

20 18 18

84

1 3 4

Number of States Reporting Benefit Restrictions/ Eliminations

6

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AREAS OF STATE FOCUS

States are focused on pharmacy cost-containment, and also strategies to address the opioid epidemic.

✚ 31 states in FY 2016 and 23 in FY 2017 reported implementing or plans to implement pharmacy cost containment efforts.

Targeted to specialty and high cost Rx

✚ Most states with MCOs carve drugs into capitation payments.

✚ Nearly all states reported specific opioid-focused pharmacy management policies.

Quantity limits, Use of prior authorization

Required use of Prescription Drug Monitoring Programs

Expanded access to naloxone

SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016. http://kff.org/medicaid/report/implementing-coverage-and-payment-initiatives-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2016-and-2017/

HCBS Waiver or SPA Expansions

Building Balancing Incentives into

MLTSS

PACE Expansions Close/Downsize Institution

Total States with HCBS Expansions

42

1923

14

4641

18 18

9

47Implemented in FY 2016 Adopted for FY 2017

NOTES: "HCBS Waiver or SPA Expansion" includes increases to the number of Section 1915(c) waiver slots, serving more people under existing waiver caps, or the addition of Section 1915(i) or Section 1915(k) state plan options to serve more individuals. SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

ALMOST EVERY STATE IS EXPANDING COMMUNITY-BASED LONG TERM SERVICES AND SUPPORTS

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All Beneficiary Groups

39 states

Children39 states

ACA Expansion Adults

27 states

All Other Adults39 states

Elderly and Disabled39 states

2 2

493

3

828

34

25

32

13

5

9

Excluded <25% 25-49% 50-74% 75+%

11 11

NOTES: Limited to 39 states with MCOs in place on July 1, 2016. Of the 32 states that had implemented the ACA Medicaid expansion as of July 1, 2016, 27 had MCOs in operation. SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

IN 2016, AT LEAST 75% OF ALL MEDICAID BENEFICIARIES ARE IN AN MCO IN 28 STATES (UP FROM 21 STATES IN 2015)

1

1

9

117

117

1712

9 107

17

New/Expanded in FY 2016 New/Expanded in FY 2017

NOTES: States with MCOs indicated if selected quality initiatives were in place in FY 2015, new or expanded in FY 2016 or FY 2017. SOURCE: KCMU Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

17 OF THE 39 MCO STATES EXPANDED OR IMPLEMENTED NEW QUALITY INITIATIVES IN MCOS IN FY 2016; 17 ALSO IN FY 2017

In Place in FY 2015:

10

11

6 53 4

21

13

7

11

75

25

New/Expanded in FY 2016 New/Expanded in FY 2017

NOTES: Expansions include rollouts of existing initiatives to new areas or groups, and other increases in enrollment or providers. SOURCE: KCMU Survey of Medicaid Officials in 50 states and DC conducted by HMA, October 2016. www.kff.org

42 STATES NOW HAVE DELIVERY SYSTEM INITIATIVES; NEW INITIATIVES IN 21 STATES IN FY 2016 AND 25 STATES IN FY 2017

In Place in FY 2015:

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Strategies

Integration Physical and Behavioral Health

Opioid Harm Reduction

Value Based Purchasing

Focus on Social Needs

Managed Long-Term Care

ACO, Episode of Care, Health Homes, DSRIP

Populations

Seriously Mentally Ill

Criminal Justice Involved

Elderly and Disabled

Duals

Goals

Cost Containment

Increase Access

Improved Outcomes

Improved Population Health

SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

LOOKING AHEAD, MEDICAID PRIORITIES FOCUSED ON IMPROVING CARE AND OUTCOMES FOR HIGH NEED

POPULATIONS

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CONTACT ME

JEFF SMITHManaging Principal

20860 N Tatum BlvdSuite 300Phoenix, AZ 85050

602.363.7232jeffsmith@healthmanagement.comwww.healthmanagement.com