Manatt on Medicaid: Montana Governor Signs Act to Expand Medicaid
Authors: Deborah Bachrach, Partner | Patricia Boozang, Senior Managing Director | Dori Glanz, Manager
On April 29, 2015, Montana Governor Steve Bullock signed Senate Bill 405, referred to as the Montana Health and Economic Livelihood Partnership Act (HELP Act), which expands Medicaid to cover an estimated 70,000 new adults. The legislation authorizes the state Department of Public Health and Human Services (DPHHS) to seek a waiver from CMS to implement the expansion through a Third Party Administrator (TPA), and specifies that the expansion must be implemented in such a way as to ensure enhanced federal matching funds under the Affordable Care Act. DPHHS may exempt certain individuals (such as those with exceptional healthcare needs) from the TPA administered program and the other HELP Act provisions described below, instead enrolling them in traditional Medicaid. The expansion would be effective after the state receives all necessary approvals by the federal government.
Key features of the HELP Act include:
- Third Party Administrator. Montana will contract with a TPA to administer the delivery of and payment for healthcare services to new adults. The TPA will be responsible for establishing networks of healthcare providers, facilitating provider reimbursement on behalf of the state, collecting enrollee premiums, and additional administrative functions such as care coordination.
- Cost Sharing and Premiums. The HELP Act requires new adults to pay the maximum copayment amounts allowed under federal law, and excludes copayments on preventive services, generic drugs, immunizations, and other medically necessary healthcare screenings. The HELP Act also requires enrollees to pay premiums of 2% of monthly income. In accordance with federal law, copayments and premiums combined may not exceed 5% of family income on a quarterly or annual basis. The state Department of Revenue may assess overdue premium payments against an enrollee’s annual income tax. Enrollees above 100% of the federal poverty level who fail to pay premiums within 90 days of notification of the overdue payment may be disenrolled from coverage. An enrollee may reenroll in coverage only after DPHHS has assessed the unpaid premium through the enrollee’s income taxes. It is unclear how often DPHHS will assess unpaid premiums. Individuals who meet specific criteria, such as following healthy behavior plans developed by a provider or the TPA, are exempt from disenrollment for failure to pay premiums.
- Taxpayer Integrity Fee. The legislation amends the state tax code to impose a fee of $100 per month for HELP Act enrollees with substantial assets (defined as assets exceeding a primary residence, one vehicle and $50,000 in cash or cash equivalent) and who are taxpayers. The fee increases by $4 per month for each $1,000 in assets over the value of the assets described above.
- Workforce Development. The HELP Act authorizes and funds a new voluntary workforce development program for expansion enrollees, aimed at matching individuals with jobs and workforce development opportunities to increase earning capacity, economic stability and self-sufficiency.
Finally, the HELP Act authorizes DPHHS to pursue Medicaid delivery reform efforts such as primary care case management, patient-centered medical homes, accountable care organizations, and health homes for individuals with behavioral health or other chronic conditions. The HELP Act also authorizes medical malpractice reforms.
Montana’s expansion legislation follows on previous state proposals pursuing expansion waivers for alternative coverage models that include premiums and cost sharing. Montana is the first State to use a TPA arrangement to implement a Medicaid expansion. The approach is modeled after the State’s existing TPA arrangement under the Healthy Montana Kids program. Montana also notably is the first state to appropriate funds (more than $1.7 million) to implement a workforce development program in conjunction with expansion.