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New Paragon Medicare Paper, Testifying in Texas, Improper Medicaid Enrollment + More

Paragon Newsletter
Brian Blase
PresidentatParagon Health Institute

Brian Blase, Ph.D., is the President of Paragon Health Institute. Brian was Special Assistant to the President for Economic Policy at the White House’s National Economic Council (NEC) from 2017-2019, where he coordinated the development and execution of numerous health policies and advised the President, NEC director, and senior officials. After leaving the White House, Brian founded Blase Policy Strategies and serves as its CEO.

Today’s newsletter starts with a new study from Joe AlbaneseBeyond Box-Checking: The Case for Dismantling Medicare’s Quality Bureaucracy. (Major congrats to Joe who just became a new dad on Saturday!) I then highlight my testimony in Texas yesterday on the problems with Medicaid expansion as well as alternatives that Texas should consider, Paragon’s new Pic on the staggering increase in Medicaid improper payments, a survey finding that 26 million Medicaid enrollees were unaware they were enrolled in the program, and CMS’s misguided nursing home staffing rule.

Dismantling Medicare’s Quality Bureaucracy

Improving health care quality is an important policy goal. Over the past few decades, there have been numerous initiatives to collect data, measure provider performance, and encourage health care improvements. Joe’s paper explains that Medicare’s quality improvement bureaucracy, both inside and outside of government, has failed to achieve their goals. Government agencies mismanage quality measurement and elevate their own priorities over those most relevant to patients, including whether a health care service was appropriate in the first place. Meanwhile, wasteful and harmful care continue to be pervasive in the health care system.

Policymakers have recently focused on the flaws of MACRA and the Merit-Based Incentive Payment System for clinicians, but other quality programs face similar problems. Joe’s recent Medicare Advantage paper recommended eliminating MA quality bonuses for that same reason.

Joe recommends that Congress eliminate Medicare’s pay-for-performance programs. Instead, the focus should be on empowering patients and others, such as payers, to compare providers more easily so that they can hold them accountable for quality. The federal government can help facilitate reporting and publication of useful data, but we should not rely on federal bureaucrats to define quality of care for us. Over the long run, the best ways to encourage high quality care are enacting permanent payment reforms in traditional Medicare, empowering patients to control health care financing, and encouraging the continued growth of an improved Medicare Advantage program.

Opposing Obamacare’s Medicaid Expansion

Yesterday, I testified before the Texas State Senate on the problems with the Affordable Care Act’s Medicaid expansion and options for states to expand choices and improve the functioning of the state’s health care sector. I heavily relied on Paragon’s research paper, Resisting the Wave of Medicaid Expansion: Why Florida is Right, and Paragon’s state health reform book, Don’t Wait for Washington: How States Can Reform Health Care Today.

We estimate that if Texas were to expand Medicaid, Medicaid enrollment would increase by more than 3 million recipients. Two-thirds of new enrollees would replace private coverage with Medicaid, with the vast majority replacing a subsidized exchange plan and most of the rest replacing an employer plan. If Texas expanded, Medicaid enrollment would increase from about one-in-eight Texans to nearly one-in-four Texans and the ratio of workers per Medicaid recipient would decline from 3.4 workers per recipient to 2.0. Texas would likely be on the hook for about $2 billion a year if it expands Medicaid, with much more than that added to the nation’s gargantuan federal debt.

Both the Florida report and my Texas testimony highlight lessons from states that expanded Medicaid, including much higher enrollment and spending than expected; a surge of improper payments (highlighted below); increased barriers to existing Medicaid enrollees obtaining doctor’s appointments; a surge of emergency room use for non-emergent care; and stagnant overall health outcomes.

Obamacare’s Medicaid Expansion Caused Improper Payments to Soar

Medicaid expansion resulted in a massive increase in federal Medicaid improper payments, which soared from an estimated $14.4 billion in 2013 to $98.7 billion in 2021 as shown in this week’s Paragon Pic. The primary reason for the increase: millions of people were enrolled in Medicaid without proper eligibility reviews.

The ACA's Medicaid Expansion Caused Improper Payment to Soar

Stunning Number of Medicaid Enrollees Unaware of Enrollment in Program

A new Health Affairs article estimates that in March 2022, 30 percent of Medicaid enrollees—or more than 26 million people—reported that they were not enrolled in Medicaid. This is an appalling problem that suggests so many recipients receive no benefit from the program and the government’s enormous expenditures.

According to the estimates, nearly half of this problem was the result of requirements that prevented states from doing eligibility reviews during the COVID public health emergency. This suggests that many people thought they were disenrolled from Medicaid because they gained another plan, most likely a plan from their employer, and were just kept on Medicaid because states couldn’t remove people who had secured other

Nursing Bad Policy

Jackson Hammond’s recent Paragon Prognosis tackled the controversial and costly new rule from the Biden administration mandating minimum staffing levels for nursing homes. The piece is worth a read. My focus on such rules is potetnial unintended and negative consequences.

Nursing homes are protesting that there are not enough workers to fill these roles even if we accept the premise that the government knows the best ratios of certain staff to nursing home residents. What is certain is that nursing homes will need to cut costs in other areas to increase pay enough to meet the new requirements, and those costs will include reducing the number of social activities, the quality of food options, and non-health care staff, and could potentially decrease access to nursing homes entirely as some decide that the resulting minimal or even negative margins are not sustainable and close down.

As laid out in the Paragon reports by long-term care expert Stephen Moses, Long-Term Care: The Problem and Long-Term Care: The Solution, well-intentioned but harmful government policy is to blame for low-quality nursing homes. The government has made it too easy for people to qualify for Medicaid for long-term care and Medicaid’s meager payment rates combined with too little private financing have led to overworked, burnt-out providers and poor overall facilities. Improving policy begins with recognizing that we need less government regulation and fewer Medicaid enrollees, not more.

All the best,

Brian Blase
Paragon Health Institute

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