The Plain Dealer
March 11, 2012

By Sarah Jane Tribble

CLEVELAND, Ohio — The MetroHealth System hopes to use $72 million in subsidies from Cuyahoga County taxpayers over the next two years to reduce the region’s uninsured by record numbers.

The safety-net health system, with help from state regulators, recently submitted a proposal to the U.S. Centers for Medicare & Medicaid that would allow MetroHealth to create a special Medicaid program for low-income people who aren’t currently eligible for the federal health insurance program for the poor.

If approved, MetroHealth would oversee “probably the single largest reduction of the uninsured in Cuyahoga County since … forever,” John Corlett, vice president of government relations and community affairs at the health system told board members in February.

While a handful of states have taken advantage of the special federal waiver program, it’s unusual for a county hospital to take the lead. If approved, MetroHealth would leverage its Cuyahoga County subsidy to gain additional money from the federal government until the waiver program expires in 2014.

Under the proposal, MetroHealth would guarantee that its $36 million annual county subsidy — which is paid in part by the human services levy that was renewed by voters this week — would be used to enroll and provide care for the new Medicaid patients. For every $100 million MetroHealth spends on patients in the program, the federal government would reimburse the health system $64 million. MetroHealth would pay the other $36 million.

An estimated 26,000 low-income adults who don’t currently qualify for the federal insurance program because their income is too high could enroll under the new program, Corlett said.

MetroHealth leaders want to start offering the program to patients as early as July — a time frame they admit is aggressive.

During the next 18 weeks, they must design a program that will manage eligibility, enrollment and delivery of care. And they need federal approval.

Nationwide, a handful of states have asked the federal government for what is called a special waiver that allows them to extend Medicaid coverage to people who don’t currently qualify because their income is too high but who can’t afford health insurance.

Joan Alker, the co-executive director of the Center for Children and Families at Georgetown University Health Policy Institute, said it makes a lot of sense for safety-net hospitals like MetroHealth to work with state regulators, who typically oversee Medicaid, and get more federal funding to support the uninsured.

If the plan is approved, MetroHealth’s financial burden could be reduced in two ways: First, millions in Medicaid dollars would help pay for care that the health system now provides at a discount or for free.

Second, the care of those patients would be managed, so the program has the potential to reduce high-cost emergency and last-resort care that uninsured patients often seek because they can’t afford preventative medical services.

Ohio regulators are helping design the new program, which calls for MetroHealth to manage and provide care for the new enrollees, said Patrick Beatty, the assistant deputy director and chief policy officer for Ohio Medicaid.

MetroHealth Chief Executive Mark Moran, who over the past four years has overseen several rounds of layoffs and budget cuts, told board members that the program provides “an enormous opportunity to improve services to the community and to improve the fiscal health of MetroHealth.”

Getting ahead of federal reform

If approved, the program will be short-lived.

The health system can offer the program only through 2013 because in 2014 the eligible population of Medicaid enrollees will be covered under federal reforms.

The Affordable Care Act mandates that states increase their Medicaid enrollment and offer the insurance to all low-income adults as long as their incomes don’t exceed 133 percent of the federal poverty level. Those levels were $14,404 for individuals and $29,326 for a family of four, according to the poverty guidelines in place when the act was passed.

Corlett, who previously ran Ohio’s Medicaid program before joining MetroHealth, said there are probably 50,000 to 60,000 people in Cuyahoga County who will be eligible for coverage in 2014.

But while MetroHealth’s program won’t attempt to cover all of those people who will be eligible in the future, it will give the public hospital a head start in financing and expanding its services and preparing for a potential influx of patients because of federal mandates.

In addition, lessons learned during MetroHealth’s early start could also help the state prepare for a wider expansion because of the federal Affordable Care Act, Beatty said.

Initial enrollees would be prior patients

To get its program running quickly, MetroHealth plans to initially enroll patients who have been to the hospital in the past year or two but haven’t had insurance.

The coverage would require patients to use MetroHealth’s facilities and doctors with a few exceptions. Patients also would be enrolled in MetroHealth’s Partners in Care program, which assigns a team of caregivers to help individuals struggling with chronic illnesses, such as hypertension and diabetes.

MetroHealth’s proposal to federal regulators details a program that would pay for all medical services, such as outpatient and inpatient visits as well as a wide range of benefits such as prescriptions, home care, medical equipment and dental services.

But it is unclear whether all of the services will be offered in the final product and it is unknown who exactly will be enrolled.

In California, which MetroHealth is using as a model for its plan, many counties have had unexpected enrollees, said Paul Hensler, the administrator in charge of Kern County’s public hospital. Kern Medical Center is in Bakersfield, Calif., about two hours north of Los Angeles.

“One of our surprises under the coverage initiative is we expected a lot of single males predominantly and single women,” Hensler said. “It turned out that there were some moms and children.”

Assessing risk for health system

Even as the new program is expected to funnel millions into MetroHealth, there are some risks for the health system.

MetroHealth plans to hire a third party to oversee member services, medical management, claims processing and other portions of the program, Corlett told board members recently.

In addition, the health system will need to spend an estimated $836,550 a year on additional staff members, such as care coordinators to manage the new patients. The extra care providers will be useful once the federal reform measures take effect, he said.

Finally, “enrollment and utilization could exceed our expectations,” Corlett told board members, adding, “None of us want to be in a situation where we have to pull back.”

In January, the MetroHealth board approved spending up to $175,000 for national consulting firm Optumus to help develop the program and forecast costs. Optumus, which Corlett said has experience with California’s Medicaid waiver program, won the bid against four other companies.

The consulting firm immediately began work, in part, because of the tight time frame.

When asked if it was feasible for MetroHealth to start offering coverage by July, Ohio’s Beatty replied, “You know, I don’t know, but we’re going to give it our best shot.”