Necessity Breeds Innovation in Louisiana's Novel Medicaid Expansion

How does a state with almost no money launch Medicaid expansion? Louisiana health officials used data they already had, and in doing so have created a model that could be used elsewhere.

On this June morning, New Orleans’ Daughters of Charity Health Center on Carrollton Avenue is bright and busy. One of 9 centers the Catholic order operates across 25 miles, the Carrollton site bursts with patients, mostly women and children. In the waiting area for the optometry and dental clinics, there’s not a chair to be had.

The Daughters have cared for New Orleans’ poor since before the Civil War,1 and today 90% of the clinics’ patients earn less than 200% of the federal poverty level (FPL), with 70% below the 100% mark.2 According to Vice President and Chief Operating Officer Frank Folino, 24% of the clinics’ patients are “self-pay,” so a sizable number of them might want to see the young woman tucked in a quiet corner. She’s there to register patients for Medicaid expansion in Louisiana, which takes effect July 1, 2016.

Behind the young woman, separated by a partition, is a longtime employee from the state’s Medicaid office. Armed with digital application tools and a direct line to the state capital, he has been dispatched from the Department of Health and Hospitals (DHH) to handle Medicaid renewals and to speed eligibility for anyone who signs up at the Carrollton clinic.

In time, there will be 100 people like him sprinkled across 80 sites, on a mission to quickly bring coverage to 375,000 adults.3 Louisiana may be late to Medicaid expansion—the state is the 31st to do so under the Affordable Care Act (ACA)—but the state’s unique enrollment plan will be like flipping a switch, covering thousands with limited effort from the waiters, hotel maids, fishermen, musicians, and self-employed contractors who drive the tourism economy. That’s as it should be, according to Governor John Bel Edwards, who notes that 70% of those who are eligible under Medicaid expansion have full-time jobs.4

The American Journal of Managed Care (AJMC) visited New Orleans earlier this month to see how one urban clinic is integrating Medicaid enrollment into the workflow, and to speak with stakeholders whose long wait for expansion is ending. They include a health policy leader, a family practice physician, and officials with LCMC Health, the not-for-profit hospital system that operates University Medical Center (UMC), the $1.2 billion long-term replacement for the former Charity Hospital, which shuttered after Hurricane Katrina.5

While there is much hope that Medicaid expansion has finally come to one of the country’s poorest states, no one is blind to the challenges that remain. Those who have never had insurance must learn to use it. There are questions whether there will be enough primary care doctors for this new wave of patients. The governor himself has said that Medicaid payments to doctors must increase to ensure access over the long haul. And, according to Susan Todd, executive director of 504HealthNet, a health policy umbrella for 60 primary and behavioral health care sites in the New Orleans region,6 everyone must remember there will still be uninsured after expansion.

Expansion on a Shoestring Budget

“This is right versus wrong, not right versus left,” Edwards said on the first day of enrollment, June 1, 2016, during a visit to UMC. “At the end of the day … we’re going to improve health outcomes. We want a better quality of life for our people. We want them to be happier, healthier, more productive people.”7

When he campaigned last fall, Edwards promised Medicaid expansion knowing full well that a budget deficit awaited his arrival. He got expansion rolling with an executive order on January 12, 2016, his second day on the job.8 Weeks later, his administration announced the shortfall was worse than expected: this year’s $24.5 billion budget had a gap of $943 million, with a deficit of $2 billion looming for the fiscal year that starts July 1, 2016.9

Keeping the promise would take creativity, because the legislature would not pay for administrative help, even though expansion is projected to save $184 million.4

“We didn’t get one additional dime from the state,” said Secretary of Health Rebekah Gee, MD, MPH, MS, in an interview with AJMC. That meant no money for new staff to figure out who was eligible, to say nothing of funds for education or advertising.

So, Louisiana tapped eligibility data it already had, using rolls from existing Medicaid waivers and the Supplemental Nutrition Assistance Program (SNAP), a first among the states. Gee’s move to “outstation” Medicaid staffers—like the one at Daughters of Charity—counts as a piece of Louisiana’s 25% share of the administrative costs of enrollment (the federal government is paying 75%).3 With these steps, Edwards and Gee are writing the playbook for low-cost, low-bureaucracy Medicaid enrollment that is well-suited to expansion’s holdout states—places where poverty and chronic disease exceed the norm, along with resistance to government spending.

It’s all working. A week before coverage took effect, new or expanded benefits were scheduled to reach more than 225,900 people at 100% to 138% of FPL;10 these are families of 4 earning $33,564 or single adults earning $16,404, according to DHH.3 Thus, Louisiana has enrolled 60% of its eligible population in less than a month; more than 186,800 of them were automatically signed up when enrollment opened June 1, 2016.

Use of SNAP Data a Novel Idea

A week into enrollment, Gee had the number of new Medicaid enrollees at her fingertips—197,026 at that point. Most of them were transferred based on eligibility for 2 existing programs:

· 61,000 enrollees who had limited primary care and behavioral health benefits through the Greater New Orleans Community Health Connection (GNOCHC), a program funded in the aftermath of Hurricane Katrina that ends this month. These patients live in New Orleans and 3 parishes (counties) that make up the immediate suburbs.

· Enrollees across the state with income levels just above traditional Medicaid who were receiving various family planning, contraception, and screening services under a separate Medicaid waiver.

Louisiana is breaking ground by using the SNAP eligibility rolls to quickly qualify people. When AJMC spoke with Gee, she explained that SNAP clients had just received a notice letting them know of their likely Medicaid eligibility, along with 3 income-related questions (clients can answer by phone, fax, email, or regular mail). At the 1-week mark, 1116 people had been enrolled this way, but it was early—just 2 days’ prior, the state Medicaid office had fielded 10,000 phone calls as the letters hit. Over the long haul, the state expects to sign up 105,000 people using SNAP, and going forward, lower-income Louisianans can apply for both programs at once.3

Rachel Verville, system vice president for Revenue Cycle at LCMC Health—which operates 4 hospitals in the New Orleans area besides UMC—has seen Medicaid expansion in former posts in Massachusetts and New Hampshire and is impressed with Louisiana’s innovation. “It’s very refreshing to use data that is already available,” she said, adding that the automatic enrollment from GNOCHC (pronounced no-key) will allow a smooth transition for these patients.

Gee had to fill gaps to cover Louisiana’s share of administrative costs. With a background in academia, she tapped the Robert Wood Johnson Foundation, the Kaiser Family Foundation, and other sources. To promote expansion, Gee and Edwards toured the state, answering constituent questions and drawing free media coverage.

“People want to know, ‘Is this real Medicaid?’ We’ve had some tears shedded,” Gee said. “We’ve had a lot of happy faces at these enrollment events.”

What hasn’t happened, based on interviews and media reports, are the computer glitches and down time that plagued the ACA’s early days.

For Some, Coverage for the First Time

Grasping the magnitude of Louisiana’s expansion requires understanding just how hard it was to get traditional Medicaid. Previously, the income limit for parents and caretaker relatives (if a child age 19 or younger was at home) was 24% of the FPL for a family of 4—just $5820 a year or $485 a month. Adults without children could not get coverage at all, unless they qualified for disability.3

Verville said there is excitement at the chance to change Louisiana’s healthcare story. “There are people who are going to have coverage, maybe for the first time in their lives,” she said. Gee also portrays Medicaid expansion as a piece of a larger picture, of raising not only the population’s healthcare profile but its economic one as well.

“It’s quite rewarding to participate in helping a population gain access to healthcare,” Verville said. For providers, “It opens a whole world of opportunity.”

After the ACA passed, Louisiana readied itself for Medicaid expansion (plans for UMC were well under way). But when the Supreme Court of the United States made expansion optional, former Governor Bobby Jindal refused to accept additional Medicaid funds, to the dismay of healthcare leaders. Instead, he ended the charity hospital system, pairing off most of the former state hospitals with private ones, and offering state contracts to manage them.11,12 When the state capital, Baton Rouge, lost its charity hospital, another city emergency department was flooded with so many uninsured patients that it closed.13

It’s little wonder, then, that CDC data show Louisiana ranks poorly in rates of diabetes (10.4%),14 and obesity (34.9%).15 CDC data from 2012, before the ACA took full effect, show Louisiana ranked second in cancer incidence (483.4 cases per 100,000 residents, behind Kentucky) and third in deaths from cancer (190.5 per 100,000 residents, behind Kentucky and Mississippi).16 Kentucky’s experience shows what is possible: after expansion, Kentucky cut its uninsured rate from 20.4% in late 2013 to 7.5% as of December 2015.17 According to Gallup, Louisiana retains one of the highest uninsured rates at 16.3%.18

The stability for newly insured patients—not having to patch together services or drug coverage—will extend somewhat to hospitals and other providers. Ayame Dinkler, assistant vice president for Government Affairs and Strategy Development at LCMC Health, said that while public-private partnerships like UMC will still require support through state funding from the Governor and the legislature, Medicaid expansion will save the state a tremendous amount of money.

“We can’t train the next generation of physicians without state funding,” Dinkler said.

New Orleans’ Transition to Primary Care

Twenty years ago, after the Daughters of Charity sold its last hospital, the order created a holistic system of primary and behavioral health care across the New Orleans region, according to President and CEO Michael G. Griffin. Last year, the centers treated 40,000 patients and handled 107,000 primary and behavioral health visits. Concepts like the patient-centered medical home are not new here. “Our job is to keep you healthy,” Griffin said.

In the aftermath of Katrina, however, it became clear that the working poor, who lacked insurance, needed a different way to access primary and especially behavioral health care. Charity Hospital was gone. But as Todd explained, there was now an opportunity: a more complete network of community-based care could replace the bus rides and long waits in the emergency department. In 2007, Congress awarded a $100 million grant to help provide basic services to those with incomes above the Medicaid range. From those beginnings, GNOCHC emerged.19

The GNOCHC parishes will have a head start on Medicaid expansion, Todd says. All the centers in 504HealthNet have electronic health records (EHR), so there is baseline information for many Medicaid expansion patients. Expansion will mean improved benefits, access to dental care, and prescription drugs beyond the $4 formulary at Wal-Mart, she said. (For example, patients with diabetes will get coverage for insulin.)

It also means staff will spend less time piecing together payment, for patients and for themselves. “There’s more stability,” Todd said. “They can go forward and not worry that we’re not going to have financing for this group of adults that we’ve been caring for.”

There’s agreement that patients who have coverage are more likely to keep appointments and less likely to wait until a health problem is acute to see care. Though GNOCHC patients may have less of learning curve, Verville said that LCMC Health is preparing to work with managed care plans to teach the newly insured how to use their coverage—including the need to replace the emergency department with primary care. Since taking control of Interim LSU Hospital in 2013, (which provided care until UMC opened last year), LCMC Health has produced a huge drop in the no-show rate in the clinic (from 62% to 22%), and an upward trend in patient satisfaction scores, which are now above 75%.20

For both LCMC Health and Daughters of Charity, improved stability likely means a change in the “payer mix,” with a higher share of insured patients. Since 2013, LCMC Health has shifted the share of Medicaid patients from 42% to 34% in 2015, and the share of self-pay/indigent patients from 39% to 37%. The share of patients with commercial coverage has increased from 8% to 13% over the same period, and Medicare patients have increased from 11% to 16%.20

Medicaid expansion will be a game changer for Daughters of Charity, says Folino, offering more resources to pour back into the mission. The current payer mix includes 55% of patients with Medicaid and 13% with commercial coverage, according to data provided in an email. Folino said the average self-pay fee is $45 for an office visit, compared with a Medicaid reimbursement of $135; he projects that 10% of the current uninsured patient base will enroll; this means Daughters of Charity will not only get increased revenue for these office visits, but these patients will also gain coverage for dental care and the center’s pharmacy.

Support for institutions is only part of the equation—support for primary care physicians is important, too, according to Pamela M. Wiseman, MD, associate professor of Clinical Family Medicine at LSU Health Sciences Center. While she is “cautiously optimistic” about expansion, she has long been concerned about the number of primary care physicians (PCPs) in the pipeline, and wonders if there’s enough capacity to treat the newly insured.

Wiseman points to data from the Robert Graham Center that projects Louisiana will need an additional 392 PCPs to meet demand through 2030.21 To make primary care attractive, Louisiana must fund more training positions and help young doctors with student debt, Wiseman said.

There’s also the issue of getting more physicians to accept Medicaid. It’s not clear yet now many physicians in each of Louisiana Medicaid’s 5 managed care plans will accept patients from this new group; according to the DHH website, that information will come directly from the plans.22

Expansion will bring an opportunity to work on longer range goals, like being able to bill for both primary and behavioral healthcare if they happen the same day, Todd said. Most of all, those involved say they look forward to moving the needle on core measures and health outcomes.

Amid her concerns, Wiseman remembers the patients she treated at her old clinic who lacked insurance and could not follow her to LSU Health. “Now, they can come see me.”

(see References next page)

References

1. Daughters of Charity New Orleans website. Foundation, Our Story. http://dcsno.org/foundation/inside.php?page=history. Accessed June 25, 2016.

2. HRSA website. 2014 Health Center Profile, Marillac Community Health Centers. http://bphc.hrsa.gov/uds/datacenter.aspx?q=d&bid=06E00523&state=LA&year=2014. Provided via email June 13, 2016.

3. Data from Louisiana Department of Health and Hospitals, email of June 8, 2016.

4. Kaiser Health News. Will Louisiana’s Medicaid expansion provide a model for other states? http://www.georgiahealthnews.com/2016/06/louisianas-medicaid-expansion-provide-model-states/. Published June 20, 2016. Accessed June 25, 2016.

5. LCMC Health website. https://www.lcmchealth.org/. Accessed June 26, 2016.

6. 504HealthNet Resource Guide. http://504healthnet.org/wp-content/uploads/2015/09/504HealthNet-Resource-Guide-2015-2016-for-web.pdf. Accessed June 26, 2016.

7. Adelson J. ‘Right versus wrong, not right versus left': Governor John Bel Edwards stumps for Medicaid sign-up in New Orleans. The Advocate. http://theadvocate.com/news/neworleans/neworleansnews/15974336-130/right-versus-wrong-not-right-versus-left-governor-john-bel-edwards-stumps-for-medicaid-sign-up-in-ne. Published June 1, 2016. Accessed June 26, 2016.

8. State of Louisiana, Executive Order No. JBE 16-01. http://gov.louisiana.gov/assets/docs/Issues/JBE1601.pdf. Executed January 12, 2016. Accessed June 26, 2016.

9. O’Donoghue J. Louisiana’s budget is a hot mess. The Times-Picayune. http://www.nola.com/politics/index.ssf/2016/02/louisiana_is_in_a_budget_mess.html. Published February 12, 2016. Accessed June 25, 2016.

10. Crisp E. Louisiana officials praise Medicaid expansion; 225,900 have signed up as of Friday. The Advocate. http://theadvocate.com/news/acadiana/16210249-123/louisiana-officials-praise-medicaid-expansion-225900-have-signed-up-as-of-friday. Published and accessed June 26, 2016.

11. Gregory D, Neustrom A. A new safety net: the risk and reward of Louisiana’s charity hospital privatizations. Public Affairs Research Council of Louisiana. http://parlouisiana.org/wp-content/uploads/2016/03/A-New-Safety-Net-The-risk-and-reward-of-Louisiana-s-Charity-hospital-privatizations.pdf. Published December 2013. Accessed June 26, 2016.

12. Caffrey MK. Louisiana’s Jindal feeling the heat as hospital privatization hits bumps. American Journal of Managed Care website. http://www.ajmc.com/focus-of-the-week/0914/louisianas-jindal-feeling-heat-as-hospital-privatization-hits-bumps. Published September 3, 2014. Accessed June 25, 2016.

13. Hodges Q. Baton Rouge General Mid-City ER is now closed. The Times-Picayune. http://www.nola.com/news/baton-rouge/index.ssf/2015/03/mid_city_er_closes.html. Published March 31, 2015. Accessed September 26, 2016.

14. CDC website. Diagnosed diabetes, 2014. http://gis.cdc.gov/grasp/diabetes/DiabetesAtlas.html. Accessed June 26, 2016.

15. CDC website. Nutrition, physical activity and obesity: data trends and maps. https://nccd.cdc.gov/NPAO_DTM/LocationSummary.aspx?state=Louisiana. Accessed June 26, 2016.

16. CDC website. Cancer rates by state. http://www.cdc.gov/cancer/dcpc/data/state.htm. Accessed June 26, 2016.

17. Patrick M. Kentucky Health News. http://kyhealthnews.blogspot.com/2016/05/ongoing-study-of-health-reform-in-ky.html. Published May 11, 2016. Accessed June 26, 2016.

18. Alpert B. Louisiana’s uninsured rate drops, but still among the nation’s highest. The Times-Picayune. Phttp://www.nola.com/politics/index.ssf/2015/08/louisianas_uninsured_rate_drop. Published August 15, 2016. Accessed June 26, 2016.

19. Rainey R. How Hurricane Katrina created the road map for Medicaid expansion. http://www.nola.com/politics/index.ssf/2016/06/where_gnochc_fits_into_louisia.html. The Times-Picayune. June 10, 2016. Accessed June 26, 2016.

20. UMC Medical Center: Volume Comparisons and Key Metrics, Quality Performance (presentation). Provided via email from LCMC Health June 17, 2016.

21. Petterson SM, Cai A, Moore M, Bazemore A. State-level projections of primary care workforce, 2010-2030. September 2013, Robert Graham Center, Washington, DC.

22. Louisiana Department of Health and Hospitals website. Medicaid Expansion implementation questions and answers. http://dhh.louisiana.gov/assets/docs/BayouHealth/ExpansionFAQ.pdf. Published June 1, 2016. Accessed June 26, 2016.

It's not that Louisiana has no history of caring for the poor. The Daughters of Charity operated hospitals in New Orleans for more than a century, and Governor Huey P. Long expanded this system and created the Louisiana State University Medical School. As the system evolved, in 1997 LSU took full control of the charity hospitals.11 While care for the poor at the state’s charity hospitals was free, preventive and primary care networks were sparse. The divide perpetuated generations of separation between the poor, who went to the emergency room for most of their care, and the insured, who could see the doctor, the dentist, and specialists.