As a major aspect of state budget, the state’s health services always take up a significant amount of airtime during state budget deliberations. This biennium was certainly no exception for the Joint Finance Committee (JFC), as they made changes to the governor’s proposed changes to state’s long-term care and medical assistance program.
Governor Walker proposed a significant change for participants in the Wisconsin SeniorCare program, one of Wisconsin’s most well-known benefits. SeniorCare helps the elderly purchase prescription drugs at a lower cost and the federal government offers a similar program, Medicare Part D. The governor recommended, as a condition of eligibility to the SeniorCare program, that seniors must first enroll in Medicare Part D. If they qualified for Medicare Part D, they would participate in the federal program in lieu of SeniorCare. Estimated savings for the initial plan is about $100 million when all monies – GPR, federal (FED) and program revenue (PR) – are combined. Because of the popularity of this program, JFC committed to the additional spending and deleted the governor’s recommendation.
JFC agreed with Governor Walker’s recommendation to recommit the state’s participation in disproportionate share hospital payments (DSH). These hospitals serve a significant amount of medical assistance and low-income patients and these payments help offset uncompensated care. JFC voted to appropriate $70 million (GPR and FED) over the biennium for DSH payments.
Governor Walker proposed moving to a prospective payment system (PPS) for federally qualified health centers (FQHCs). FQHCs are community health centers that provide care to underserved populations and their supporters immediately opposed the changes, which meant significant cuts to their budgets. JFC decided to delay full implementation and phase the new payment system in over the next four years.
Long Term Care
One of Governor Walker’s most controversial budget proposals was the expansion of FamilyCare statewide and the elimination of the IRIS program. Governor Walker faced quick opposition to his proposal even though the budget did suggest there would be a self-directed care option in FamilyCare similar to the current program, IRIS.
JFC voted to expand FamilyCare statewide upon approval by the Center for Medicare and Medicaid Services (CMS), but required additional items to be included in the waiver to CMS. Items include a request to increase geographic regions currently served by managed care entities, a requirement there be no less than five regions, a request that multiple health agencies serve each region and the availability of a consumer-directed option under the long-term care program.
During the last night of budget deliberations, JFC approved additional items that will have an impact on the health insurance industry in Wisconsin. The additional changes include:
- Require any pharmacy benefit manager (PBM), in a contract with a pharmacy, to do a variety of provisions including update maximum allowable cost (MAC) pricing information at least every seven days and reimburse pharmacists for drugs and devices with the updated lists. In addition, the motion outlines new requirements for a PBM and pharmacy contract to include a process to appeal, investigate and resolve disputes related to MAC pricing. The provisions will take effect in July of 2016.
- Require the Insurance Commissioner to promulgate rules that provide for a fast, fair, cost effective and binding independent process for resolving disputes related to insurer conduct with respect to statutory requirements for chiropractic coverage, access and reimbursement.
- Specify that a risk retention group that has not been issued an authorization to do business in the state as a nondomestic insurer (“foreign risk retention group”) is authorized to sell health care liability policies if the risk retention group is approved by the Insurance Commissioner and it has and maintains a risk-based capital ratio of at least 300%, as determined under the risk-based capital instructions adopted by the National Association of Insurance Commissioners. This proposal is based on 2013 AB 808 as amended.
- Modify current law provisions that allow two or more school districts or two or more local units of government (cities, towns, and villages) that together have at least 100 employees to provide health insurance on a self-insured basis to allow school districts to combine with local units of government for the purpose of reaching the 100 employee threshold for self-insurance.