Maximizing Payment of Health-Related VR Services by Private Insurers and Medicaid

1. Maximizing the Payment of Health-Related VR Services by Private Insurers and Medicaid: The VR Program and the Affordable Care Act WEBINAR for VR Directors May 14, 2013

2. SEMINAR SPONSORED BY AND REPORT PREPARED FOR: The Rehabilitation Research and Training Center On Vocational Rehabilitation (VR RRTC) Institute for Community Inclusion University of Massachusetts, Boston

3. SEMINAR SLIDES AND REPORT PREPARED BY: Robert “Bobby” Silverstein POWERS PYLES SUTTER & VERVILLE, PC Bobby.Silverstein@ppsv.com

4. INTRODUCTION • FACT: In 2011, $264 millionwas spent by State VR agencies for diagnosis and treatment of physical and mental impairments. [RSA-2, Financial Report] • ISSUE: Whether the Affordable Care Act (ACA) can be used to reduce the expenditure of VR funds for health-related VR services. • PURPOSE OF WEBINAR: Review a recent paper: Funding Health-Related VR Services—The Potential Impact of the Affordable Care Act on the Use of Private Health Insurance and Medicaid to Pay for Health-Related VR Services.

5. INTRODUCTION The presentation: • Describes the VR POLICY FRAMEWORK pertaining to health-related VR services • Describes the ACA POLICY FRAMEWORK potentially applicable to health-related VR services • Highlights RECOMMENDATIONS for maximizing the payment of health-related VR services by private insurers and Medicaid under the ACA

6. OVERARCHING CONCLUSION The ACA provides a significant opportunity for State VR agencies to reduce the amount of VR funds used to pay for health-related VR services, thereby increasing the number of individuals with disabilities served by the program and/or enhancing the quality of services provided to current individuals served by the program.

7. VR POLICY FRAMEWORK Topics include: • Comparable Services and Benefits • Physical and Mental Restoration • Participation by Clients in the Cost of Services Based on Financial Need

8. VR POLICY FRAMEWORK Comparable Services and Benefits • Definition • Determination of availability and exempt services • Provision of services • Interagency coordination • Responsibilities under other laws

9. VR POLICY FRAMEWORK Comparable Services and Benefits—DEFINITION [34 CFR 361.5(10)] • Services and benefits that are – • Provided or paid for, in whole or in part, by other Federal, State, or local public agencies, by health insurance, or by employee benefits; • Available to the individual at the time needed to ensure the progress of the individual toward achieving the employment outcome in the individual's individualized plan for employment; and • Commensurate to the services that the individual would otherwise receive from the designated State vocational rehabilitation agency.

10. VR POLICY FRAMEWORK Comparable Services and Benefits - DETERMINATION OF AVAILABILITY AND EXEMPT SERVICES • Prior to providing most VR services, the VR agency must determine the availability of comparable services and benefits • A determinationthat interrupts or delays certain outcomes not required • Services exempt from comparable services or benefits determinations

11. VR POLICY FRAMEWORK Comparable Services and Benefits—PROVISION OF SERVICES [34 CFR 361.53(c)] • If comparable services and benefits exist and are available, they must be used by VR agencies to meet, in whole or in part, the costs of VR services. • If comparable services and benefits exist but are not available, the VR agency must provide VR services until comparable services become available.

12. VR POLICY FRAMEWORK Comparable Services and Benefits—INTERAGENCY COORDINATION [34 CFR 361.53(d); see also 34 CFR 363.50] • The Governor, in consultation with the VR agency and other agencies (e.g., Medicaid agency), must ensure that an interagency agreement or other mechanism takes effect. • The interagency agreement must delineate: • Financial responsibility • Procedures for reimbursing the State VR agency • Dispute resolution procedures • Procedures for identifying coordination and timely delivery responsibilities

13. VR POLICY FRAMEWORK Comparable Services and Benefits—RESPONSIBILITIES UNDER OTHER LAWS [34 CFR 361.53(e)] • Obligations of public agencies under ADA and Section 504 or interagency agreements • VR agency’s responsibilities if other public agencies fail to meet their obligations • Procedures for claiming reimbursement

14. VR POLICY FRAMEWORK Physical and Mental Restoration Services [34 CFR 361.48] • Physical and mental restoration services (see definition) must be made available by the VR agency, but onlyto the extent that financial support is not readily available from:  • A source other than the State VR agency (such as through health insurance) or   • A comparable service or benefit (see definition).

15. VR POLICY FRAMEWORK Participation by Clients in the Cost of Services Based on Financial Need • State VR agency may (but is not required to ) consider financial need • If the State VR agency chooses to consider financial need it must maintain written policies that meet specified conditions.

16. VR POLICY FRAMEWORK Participation by Clients in the Cost of Services Based on Financial Need Afinancial needs test may NOT be used: • For furnishing personal assistance servicesor • As a condition to furnishing VR services to SSI and SSDI recipients.

17. EXAMPLES OF STATE POLICIES • California • Florida • North Carolina • Massachusetts

18. ACA POLICY FRAMEWORK • Overview • Individual Mandate • Employer Mandate • Health Care Exchanges, Including Essential Health Benefits • Changes to Private Health Insurance • Expansion of Public Programs

19. ACA POLICY FRAMEWORK Overview In March 2010, Congress passed and the President signed into law the “Affordable Care Act” (ACA).

20. ACA POLICY FRAMEWORK Overview On June 28, 2012, the United States Supreme Court with the exception of the Medicaid expansion provision upheld all of the provisions of the ACA, including: • Individual mandate, • Employer mandate, • Health care exchanges, • Essential health benefits package, and • Insurance market reforms.

21. ACA POLICY FRAMEWORK Overview With respect to Medicaid: • The Supreme Court held that if a State chooses not to expand Medicaid eligibility to cover all non-Medicare individuals under age 65 with income up to 133% of the Federal Poverty level, the State may not, as a consequence, lose Federal funding for its existing Medicaid program. • In other words, the Medicaid expansion is voluntary, not mandatory.

22. ACA POLICY FRAMEWORK Individual Mandate • Most individuals will be required to have health insurance beginning in 2014 or pay a financial penalty. • Individuals who do not have access to affordable employer coverage will be able to purchase coverage through a Health Insurance Exchange. • For those individuals who cannot afford health insurance, premium and cost-sharing credits will be available.

23. ACA POLICY FRAMEWORK Employer Mandate Employers required to provide insurance or pay penalties for employees who receive tax credits for health insurance through the Exchange with exceptions for small employers.

24. ACA POLICY FRAMEWORK Health Care Exchanges— Establishment • States are authorized to create State-based Exchanges where individuals and small businesses can purchase insurance. [17 states and DC] • HHS will establish and operate a Federally-facilitated Exchange in any State that elects not to do so. [26 states] • In a hybrid model known as State Partnership Exchanges the state may perform plan management and consumer assistance functions and HHS performs the rest of the functions. [7 States] • Handout identifies states in each category

25. ACA POLICY FRAMEWORK Health Care Exchanges— Establishment • The Exchanges will provide consumers with information to enable them to choose among plans. • Premiums and cost-sharing subsidies will be available to make coverage more affordable.

26. ACA POLICY FRAMEWORK Health Care Exchanges— Essential Health Benefits • Effective 2014, qualified health plans in Exchanges will be required to offer essential health benefits that meet a minimum set of standards promulgated by the Secretary of Health and Human Services (HHS). • All Medicaid “benchmark plans” [see below under “Expansion of Public Programs (Medicaid)] must cover these services by 2014.

27. ACA POLICY FRAMEWORK Health Care Exchanges— Defining the Essential Health Benefits Package • States must start with a typical employer plan (base-benchmark plan) andthen • Supplement the base plan to comply with the ACA by providing an essential health benefits (EHB)-benchmark plan. • HANDOUT includes links to EHB benchmark plan for each state.

28. ACA POLICY FRAMEWORK Health Care Exchanges— Essential Health Benefits The EHB-benchmark plan must include all ten general categories and the items and services covered within the categories: • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Prescription drugs • Laboratory services

29. ACA POLICY FRAMEWORK Health Care Exchanges— Essential Health Benefits The EHB-benchmark plan must include all ten general categories and the items and services covered within the categories : • Mental health and substance use disorder services, including behavioral health treatment • Rehabilitative and habilitative services and devices • Preventive and wellness services , including chronic disease management • Pediatric services, including oral and vision care

30. ACA POLICY FRAMEWORK Health Care Exchanges— Defining the Essential Health Benefits Package In addition, EHB-benchmark plan must be defined so that: • No discrimination • Needs of diverse segments accounted for • Not denied due to present or predicted disability • Appropriate balance among categories

31. ACA POLICY FRAMEWORK Health Care Exchanges— • Levels of Coverage • Limits on deductibles

32. ACA POLICY FRAMEWORK Changes to Private Health Insurance— • Coverage • Preexisting conditions exclusions • Premium ratings • Annual and lifetime limits • Rescissions • Coverage of dependents • Waiting periods • Preventative services and immunizations and cost sharing • Existing plans

33. ACA POLICY FRAMEWORK Expansion of Public Programs — Extension of Medicaid Eligibility (As Enacted) • The ACA, as enacted, was designed to extend and simplify Medicaid eligibility. • Starting in calendar year 2014, the ACA, as enacted, would have replaced the complex categorical groupings and limitations to provide Medicaid eligibility to cover all non-Medicare individuals under age 65 with income up to 133% of the Federal poverty level ($14,404 for an individual and $29,327 for a family of four in 2009)

34. ACA POLICY FRAMEWORK Expansion of Public Programs — Extension of Medicaid Eligibility (Supreme Court) • Supreme Court upholds all of the provisions of the ACA, with the exception of the Medicaid expansion provision. • Supreme Court holds that if a State chooses not to participate Medicaid expansion, the State may not lose Federal funding for its existing Medicaid program. • In sum, the Medicaid expansion envisioned by the ACA is now voluntary, not mandatory.

35. ACA POLICY FRAMEWORK Expansion of Public Programs — Extension of Medicaid Eligibility (Key Policy Changes) Under the ACA, for those states electingto participate in the Medicaid expansion (up to 133% of the FPL), the following key policy changes apply:   • The Federal government will provide between 100% and 90% of funding for the newly eligible between 2014 and 2020 and beyond.

36. ACA POLICY FRAMEWORK Expansion of Public Programs — Extension of Medicaid Eligibility (Key Policy Changes) • There is no deadline by which a State must let the Federal government know of its intention regarding Medicaid expansion. • As of date of webinar, governors in 26 states and the District of Columbia support Medicaid Expansion • A State which expands eligibility to less than 133% of the FPL will not be eligible to receive the enhanced match.

37. ACA POLICY FRAMEWORK Expansion of Public Programs — Extension of Medicaid Eligibility (Benchmark Plans) • It is important to note that the Medicaid eligibility expansion group will not be entitled to the full array of State Medicaid benefits. • Rather, those individuals will be entitled to “benchmark coverage” or “benchmark equivalent coverage.” • All Medicaid “benchmark plans” must cover essential health benefits by 2014.

38. ACA POLICY FRAMEWORK Expansion of Public Programs — Home and Community-Based Services State Plan Amendment • The ACA includes changes to the HCBS State Plan that enable States to: • Target HCBS to particular groups of people, • Make HCBS accessible to more individuals, and • Ensure the quality of HCBS.

39. ACA POLICY FRAMEWORK Expansion of Public Programs — Community First Choice Option • Attendant services and supports must be provided; and • Additional services and supports must be made available

40. RECOMMENDATIONS INTRODUCTION— The ACA provides VR agencies with the opportunity to influence State policymakers to reduce use of VR funds to pay for health-related VR services

41. RECOMMENDATIONS INTRODUCTION— • Opportunity to Influence regarding: • State Health Care Exchanges and the scope of the benchmark package of essential health benefits; • Medicaid expansion and Medicaid benchmark plans; and • New options under the Medicaid program, including the Community First Choice option. • Opportunity will be ongoing as state participation in programs evolve.

42. RECOMMENDATIONS INTRODUCTION— Major Recommendations • Modernizing the Federal and State VR Policy Framework • Determining the Scope of Essential Benefits Package Under the ACA • Determining the Medicaid Benchmark Plans in Medicaid Expansion States • Ensuring Funding of Personal Attendants under Medicaid Buy-in and Community First Choice Options

43. RECOMMENDATIONS #1: Modernizing the Federal and State VR Policy Framework • The potential of the ACA to reduce payment by VR agencies for health-related VR services is substantial. • Examples of health-related VR services include: • Physical and mental restoration services (e.g., surgery, therapies and mental health and substance abuse disorder services); • Rehabilitation technology, assistive technology devices and assistive technology services; and • Personal assistance services.

44. RECOMMENDATIONS #1: Modernizing the Federal and State VR Policy Framework Current legal and policy bases for facilitating payment for health-related VR services by private health insurance and Medicaid include: • Comparable services and benefits • Limitations on use of VR funds to pay for physical and mental restoration services • Obligation to develop and maintain written policies and procedures regarding financial responsibility of individuals.

45. RECOMMENDATIONS #1: Modernizing the Federal and State VR Policy Framework • Recommendation: • RSA should clarify impact of ACA on payment for health-related VR services. • Greater leverage for State VR agencies.

46. RECOMMENDATIONS #1: Modernizing the Federal and State VR Policy Framework The policy guidance should clarify: • Use of private insurance and Medicaid prior to use of VR funds • Specific policies and procedures in interagency agreements • Relationship between VR and EHB-benchmark plan

47. RECOMMENDATIONS #2: Determining the Scope of Essential Benefits Package Under the ACA State VR agencies ongoing opportunity to influence decisions by State policymakers regarding coverage of health-related VR services under the EHB-benchmark plan

48. RECOMMENDATIONS #2: Determining the Scope of Essential Benefits Package Under the ACA • Specifically, VR agencies should be involved in decisions relating to determining the scope of the EHB-benchmark plan by: 1) Supplementingthe base-benchmark plan to include all ten benefit categories (and the items and services covered within each category)

49. RECOMMENDATIONS Specifically, VR agencies should be involved in decisions relating to determining the scope of the EHB benchmark plan by: 2)Supplementing the base-benchmark plan by ensuring compliance with the non-discrimination provisions of the ACA and ensuring that any plan enhancements provide for an appropriate balance between the various benefit categories.

50. RECOMMENDATIONS #2: Determining the Scope of Essential Benefits Package Under the ACA • Specifically, VR agencies should be involved in decisions relating to: 3) Defining key terms, including • Rehabilitative services, • Habilitative services, • Rehabilitative and habilitative devices,