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State Policy and VBID

State Policy and VBID. Value-Based Insurance Design Symposium Alan Weil Executive Director National Academy for State Health Policy November 16, 2011. Presentation Outline. Quality and cost are critical issues for states

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State Policy and VBID

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  1. State Policy and VBID Value-Based Insurance Design Symposium Alan Weil Executive Director National Academy for State Health Policy November 16, 2011

  2. Presentation Outline • Quality and cost are critical issues for states • Payment cuts are the dominant response; provider-oriented payment reforms come next • States face particular issues when approaching VBID • The policy environment creates unique issues for states when it comes to VBID

  3. Medicaid’s Share of State Spending Source: NASBO, 2010

  4. Medicaid Spending and State Tax Revenue Billions of Dollars Sources: Revenue data from Census Bureau; Medicaid spending data from the CMS Office of the Actuary

  5. State Medicaid Cuts • Since the start of the recession, all states have implemented: • provider rate cuts or freezes • benefit cuts and restrictions • provider taxes and assessments • utilization controls • fraud and abused reduction strategies • numerous administrative cuts Source: “Waiting for Economic Recovery, Poised for Health Care Reform: A Mid-Year Update for FY 2011 – Looking Forward to FY 2012”, Kaiser Commission on Medicaid and the Uninsured, January 2011.

  6. State Medicaid Cuts • Kaiser annual survey of Medicaid programs showed that 20 states reduced Medicaid benefits in FY 2010 • Largest number of states in a decade • 14 states planned to reduce benefits in FY 2011 Source: “Waiting for Economic Recovery, Poised for Health Care Reform: A Mid-Year Update for FY 2011 – Looking Forward to FY 2012”, Kaiser Commission on Medicaid and the Uninsured, January 2011.

  7. State Strategies for Payment Reform • Non-payment for Preventable Events • Medical Home Incentive Payments • Quality Incentive Payments • Bundled Payment • Accountable Care Organizations

  8. Medicaid Population Source: Kaiser Family Foundation

  9. State Policy Speed Bumps on Road to VBID • Restricted cost-sharing in Medicaid • High levels of cost sharing anticipated in qualified health plans in the exchange • No (direct) state sensitivity to prices of plans in the exchange • Uncertain interaction across essential benefits, state flexibility, and VBID • Vulnerable population requires extreme caution • But no policy barriers to application to state employees and retirees

  10. States as Locus of VBID Opportunity?

  11. States as Locus of VBID Opportunity • Can we think of VBID not on its own but as a mechanism to align patient and provider incentives? • If so, with much of the payment reform discussion occurring at the state level, can we integrate VBID principles on the patient side into the discussion of payment reforms on the provider side?

  12. Alan Weil Executive Director aweil@nashp.org www.nashp.org www.statereforum.org

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