Kentucky HEALTH: Transforming Medicaid for a Healthier Commonwealth

1. Commonwealth of Kentucky NAPIPM Conference August 2017

2. Kentucky HEALTH – NAPIPM Conference Agenda

3. The need for Kentucky HEALTH

4. Under ACA, Kentucky chose to participate in the expansion of health coverage to low-income families through the Medicaid program Currently, 32 States have chosen to expand Medicaid. Because of the increased access, approximately 1 out of 3 of Kentuckians now receive Medicaid benefits With financial challenges and shifts in the political landscape, several states are exploring 1115 Waivers, which offer flexibility in the design and administration of the Medicaid program Kentucky Medicaid Landscape The Affordable Care Act (ACA)

5. Challenges Facing Kentucky Nationally, Kentucky is ranked close to last for key indicators The state’s unemployment rate, poverty rate, workforce participation rate and wages are all significantly below the national average • Over the past decade, the opioid epidemic has wreaked havoc in families, communities and the economy • Overdose deaths have climbed to more than 1,000 per year • Kentucky’s drug-addicted rate at birth is twice the national average • Drug abuse negatively impacts daily life and work functions, and is lowers employability (attendance, teamwork, and productivity). • Each of these factors affects unemployment • Kentucky ranks very low nationally in several key population health metrics • 1st in the nation for cancer deaths, 2nd highest in the nation for smoking • Nearly 1 out of 3 of Kentuckians are obese (12th highest rate in the nation) • There are 6.8 infant deaths per 1,000 live births (17th highest rate in the nation) • 8 of 13 counties in the nation with largest declines in life expectancy since the 1980s are in Kentucky

6. How Did We Get Here? Where is Kentucky compared to other states? America’s Health Rankings - 2016 45th

7. But WHAT is a Section 1115 Waiver? Transforming Kentucky Medicaid Kentucky’s 1115 demonstration waiver aims to empower individuals to improve their health and well-being through engagement in their care and expanding opportunities for self-sufficiency. • Section 1115 of the Social Security Act gives the Secretary of Health and Human Service the ability to approve projects that promote the objectives of Medicaid and Children’s Health Insurance Program (CHIP) programs • By using an 1115 Waiver, certain provisions of the Medicaid law may be waived to give states additional flexibility to design and improve their program • Six states have already gained approval to implement changes to their Medicaid plans as a result of having their 1115 Waivers approved by the Center for Medicare and Medicaid Services (CMS)

8. Kentucky HEALTH Program Kentucky’s Section 1115 Waiver is referred to as Kentucky HEALTH: Helping to Engage & Achieve Long Term Health Kentucky HEALTH will encourage healthy lifestyles by incentivizing positive health care choices with rewards, empower people to transition to self-sufficiency, and will implement a more sustainable fiscal approach for Kentucky’s Medicaid services. 1 Encourages members to improve their health by incentivizing preventive care 2 Embraces private market policies to prepare members to participate in the commercial market Triple-Aim Approach 3 • Addresses the growing drug abuse epidemic

9. What Determines Health? Access to healthcare alone will NOT dramatically improve the health of Kentuckians.

10. Kentucky HEALTH Benefits • Kentucky HEALTH BenefitsThe program has many benefits for its members and the Commonwealth, including: • Giving members more control over their healthcare • Promoting self-sufficiency and encouraging individuals to be engaged in their communities • Creating opportunities for members to get involved in their healthcare and promoting healthy living • Implementing a more financially sustainable approach for Kentucky’s Medicaid services BENEFITS Kentucky HEALTH

11. Kentucky HEALTH Overview

12. Key Components of Kentucky HEALTH Deductible Account The deductible account empowers individuals to make cost-conscious healthcare decisions. My Rewards Account By rewarding health and positive community related activities, My Rewards Account provides incentives for members to improve their health, engage in their communities, and improve their job skills. Cost Sharing Cost sharing introduces members to critical commercial market features, including making timely monthly premiums, tracking deductibles, and managing a healthcare account as a way of investing in their own health. Community Engagement Kentucky HEALTH Research shows an important link between some sort of community engagement (like volunteer work, public service, and employment) and an individual’s overall health and well-being. This program includes a unique community engagement and employment initiative for Kentucky HEALTH members designed to build and strengthen Kentucky’s workforce. Premium Assistance Premium Assistance establishes a path for the state to pay member’s premium if employer sponsored insurance is available. Education and Training The Health and Financial Literacy classes allow Kentuckians to gain skills for long-term independence and success.

13. Benefit Overview • Kentucky HEALTH Medicaid State Plan/CHIP • Current benefits available to individuals outside of the Adult Group • Kentucky HEALTH Alternative Benefit Plan • Kentucky State Employee Benefit Model • Same benefits and limitations as this plan • The following benefits are moved to My Rewards Account: • Vision • Dental • Fitness activities & memberships

14. Kentucky HEALTH Covered Populations Medicaid PopulationsNotIncludedin Kentucky HEALTH Traditional Medicaid(Aged,Blind&Disabled)and Former Foster Youth up to age 26 Medicaid PopulationsIncludedin Kentucky HEALTH Non-Disabled Adults & Children (Individuals covered before expansion, pregnant women, children, & adult expansion population) Model Waiver II – 1915(c) No Change • Medicaid Expansion Adults • Premiums or Copays • State Employee Benefits • Vision and Dental available through My Rewards Account • Community Engagement required, unless primary caretaker of dependent Homeand Community BasedWaiver-1915(c) No Change • TraditionalMedicaid Adults EligiblePriorto Expansion • Premiums or Copays • No Change in Benefits (continue to get vision and dental through MCO) • Community Engagement required, unless primary caretaker of dependent Michelle P Waiver – 1915(c) No Change Supports for Community Living – 1915(c) No Change Acquired Brain Injury – 1915(c) No Change Acquired Brain Injury, Long Term Care – 1915(c) No Change • Pregnant Women & Children (Traditional Medicaid and KCHIP) • No Premiums • No Change in Benefits • Community Engagement initiative not required • Medically Frail Adults • Optional Premiums (for access to My Rewards) • No Change in Benefits • Community Engagement initiative not required Nursing Facility and ICF/MR Residents No Change Qualified Medicare Beneficiaries No Change

15. Primary Innovations in Kentucky HEALTH Objective 1:Modernization of Medicaid by implementing the first of its kind Community Engagement component Objective 3:Nudging Medicaid recipients towards positive and desired outcomes through various methods and technologies Objective 2:Encouraging healthy lifestyles by incentivizing positive health care choiceswith actual rewards

16. My Rewards Account The My Rewards Account provides incentives for members to improve their health while becoming active members of the community by rewarding health, job training and community engagement. My Rewards Account Breakdown • My Rewards Account allows members to earn dollars to spend on additional benefits • The account is available to members with an active status (not in a penalty period) Policy • Expansion adults can use My Rewards Account for vision and dental services • Members also may be able to use the account for some over-the-counter (OTC) drugs and fitness activities What’s Changing? Kentucky HEALTH • Expansion Adults • Parents/Caretaker relatives • Medically Frail members • Pregnant women Who is Impacted? • Children • Non-Kentucky HEALTH Medicaid members Not Impacted

17. My Rewards Account: Proposed Qualifying Activities

18. Community Engagement Initiative Research shows a link between community engagement like volunteer work, public service, or employment and an individual’s overall health and well-being. The Community Engagement program is a unique initiative designed to build and strengthen Kentucky’s health and workforce Community Engagement Breakdown • Able-bodied working age adults who are not otherwise exempt are required to complete community engagement activities Policy • Non-exempt members will need to complete qualifying activities to maintain eligibility, such as employment, volunteering, caretaking, job training, or education Kentucky HEALTH What’s Changing? • All able-bodied working age adult Kentucky HEALTH members • Expansion Adults • Parent/Caretakers relatives Who is Impacted? • Full-Time Students • Full-Time Employed • Those meeting SNAP/TANF work requirements • Children • Pregnant Women • Medically Frail • Chronically • Homeless • Primary Caregiver • of a Dependent Not Impacted

19. Community Engagement Proposed Qualifying Activities

20. ‘Nudging’ and How to Use It Nudging is a way to alter people’s behavior in a predictable way without significantly changing their economic incentives

21. How to engage ‘Nudging’ effectively for KY HEALTH

22. Who is involved in Kentucky HEALTH?

23. Who is involved in Kentucky HEALTH? Kentucky HEALTH CMS, Cabinet for Health & Family Services, Education & Workforce Cabinet decidethe Kentucky HEALTH policies Dept. for Medicaid Services, Dept. for Public Health, Dept. for Community Based Services supportthese policies Multiple technology Partners (Deloitte, DXC, etc.) help in implementingthese policies Kentucky Medicaid recipients would benefitfrom these new policies, improving their overall health. Caseworkers, Assisters, Agents helpcitizens understand these policies and use them effectively. Managed Care Organizations provide access to health care services based on the newly implemented policies

24. Stakeholders working for Kentucky HEALTH’s success Contracted Support Vendors Government Conduent Kentucky Governor's Office Agents Deloitte Cabinet for Health and Family Services DXC Technology Assisters Regional Entities (Local governments, trusted community resources, etc.) WageWorks HMA Medicaid Market Solutions Members Education & Workforce Cabinet Medicaid Recipients in the State Department for Community Based Services External Partners Employers Department for Medicaid Services MCOs Providers (Dental/Vision & General) Department for Public Health Aetna, Anthem, Humana, Passport, Wellcare – Managed Care Organizations Organizations (Advocacy Groups) Legislators Workforce Innovation Boards Media

25. Technology Partner Systems in Kentucky HEALTH Partner Systems Kentucky HEALTH includes core partner systems to achieve program goals Integrated Eligibility System (IE)Core Eligibility & Enrollment system to capture, store and determine member benefits Medicaid Management Information System (MMIS)Member and Provider Management module with components such as Medicaid Claims Processing and provider access to coverage information via HealthNET Managed Care Organization (MCO)Medical services provider that offers managed care health plans and additional medical related services at reduced or no cost to the members My Rewards VendorProvides access to enhanced benefits through a Health and Savings and Reimbursement Account Community Engagement (CE)Tracks Community Engagement hour requirements for qualifying members and provides opportunities to engage in relevant activities Actuarial Services Verifies if an Employer Sponsored Insurance (ESI) is cost effective and comprehensive based on which members would be encouraged to enroll in their ESI

26. How are we implementing Kentucky HEALTH?

27. SDLC Timeline Kentucky HEALTH PMO/Governance Communication Stakeholder Engagement Go-Live! Evaluation Staff and Caseworker Training Delivery Deployment Waiver Submitted Waiver Approved Partner Integration SIT/UAT Development Public Hearings Design Requirements Planning Communication and Change Management Activities tracked in ChangeScout

28. What do we achieve post implementation?

29. Expected Outcomes • Kentucky HEALTH is a model for other states to implement similar solutions • Assist states in addressing multigenerational poverty, poor health, drug abuse, etc. • Kentucky HEALTH policies help citizens in maintaining healthy lifestyles • Improvements in mental and physical health, reductions in drug overdoses and deaths, and improved health care utilization for preventive services • Increase economic growth and outcomes for the state, and improve financial stability for citizens • Strengthen resource networks in local communities

30. Questions?