State Medicaid pilot project aims at savings

State officials say they’ve crafted a plan that could improve health care for Washington’s poorest people.

At a public forum Wednesday in Spokane, officials unveiled a five-year pilot program they said will curb the cost of treatment under Medicaid insurance, streamline primary care services, and reduce patient demand in emergency rooms, psychiatric hospitals and nursing facilities.

With a waiver from the federal government, they hope to make sweeping reforms in Washington’s Medicaid program, which insures more than 1.7 million people – a quarter of the state’s population.

“We have a very, very ambitious agenda for our Medicaid program, and this is our attempt to get some federal help in achieving that,” Nathan Johnson, chief policy officer of the state Health Care Authority, said during a presentation Wednesday at the Spokane Regional Health District building. About 50 people attended the meeting.

Officials from the Health Care Authority and the state Department of Social and Health Services are touring the state to gather feedback on the proposal. The 30-day window for public comment will close Aug. 23.

The plan is an attempt to keep up with Medicaid enrollment that has skyrocketed under the Affordable Care Act. Since June 2013, more than 548,000 Washington adults have enrolled in the federal program, an increase of nearly 44 percent.

Last year, Washington spent more than $10.4 billion on Medicaid, with about half contributed from the federal government, according to the nonprofit Kaiser Family Foundation. Nearly 73 percent of that was spent on acute care, meaning sudden or short-term treatments such as emergency room visits.

According to the plan, Washington didn’t spend $5.8 billion in federal money it had been allocated since 2003, but wasn’t allowed to keep those savings without a Medicaid waiver. With the pilot program in place, health officials project the state would save another $14.9 billion through 2020. They said per-person treatment costs under Medicaid would be 2 percent lower than the national average.

The state is asking for $3 billion as well as performance incentives to implement the five-year program, which would become permanent if the federal government approves of the changes.

Bill Moss, who works in aging and long-term care for DSHS, said new Medicaid enrollees are bringing a different set of needs. Since the Affordable Care Act took effect in 2010, the percentage of adult recipients has jumped from 40 to 55 percent, he said.

Moss said 22 percent of new adult enrollees have a mental health diagnosis, and 14 percent have a substance abuse disorder.

And, while the new adult group makes fewer hospital visits than those enrolled prior to the Affordable Care Act, its inpatient stays are 50 percent longer, he said.

Jane Beyer, who works in behavioral health services for DSHS, said the waiver would give Washington some flexibility in how it administers Medicaid programs. The plan follows state legislation from 2013 that calls for integrating mental and behavioral health services with primary care. That would help address problems such as drug abuse, which often demands intensive counseling and medical treatment, officials said.

The plan also would create two new Medicaid packages to insure those who currently make slightly too much money to qualify for Medicaid. It aims to solve a long-standing problem: Some people who hover near the poverty line sell assets or work fewer hours to become eligible for coverage.

“Really, it forces people to impoverish themselves to qualify for services,” said MaryAnne Lindeblad, the Health Care Authority’s Medicaid director. The new packages would offer “a somewhat more liberal standard to qualify financially,” she said. Those people could get basic insurance, but not the full spectrum of Medicaid-covered services.

The plan also calls for Medicaid to cover support and counseling services for people with chronic health problems to free up state money for subsidized housing. The goal is to treat people before their conditions worsen and they end up in an emergency room or psychiatric hospital.

In Washington, Medicaid is called Apple Health. Research for the pilot program was funded by a $65 million federal grant. The public can view and comment on the plan at hca.wa.gov/hw.