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MACPAC Meets to Discuss CHIP, Medicaid Provider Payments, and Medicare Savings Programs

October 31, 2014—The Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC) Oct. 30-31 met to discuss a variety of topics, including the future of CHIP, an evaluation of the Medicaid provider payment increase, and policy issues concerning Medicare Savings Programs (MSPs).

The meeting began with a presentation on the future of CHIP. Commission staff led with a brief overview of the current status of the program. Final CHIP allotments from the federal government were distributed to states on Oct. 1, 2014 and all states are projected to exhaust their CHIP balances by October 2015 unless Congress extends the program.

Throughout its 2014-2015 meeting cycle, MACPAC will consider the following policy questions related to CHIP: how covered benefits and cost sharing will change in a post-CHIP landscape; whether consumer protections are adequate as children move between sources of coverage; and what the impact will be on state and federal budgets if federal CHIP funding is exhausted.

Commission staff also provided an overview of the August 2014 CHIP Reauthorization Act (CHIPRA) Mandated Evaluation of the Children’s Health Insurance Program. The report contains seven key findings:

  • CHIP contributed greatly to the decline in uninsured rates among low-income children;
  • Medicaid and CHIP participation rates increased even as the number of eligible children has grown;
  • Relatively few low-income children in CHIP have access to employer-sponsored insurance;
  • Medicaid and CHIP programs worked as intended to provide an insurance safety net for low-income children, especially during times of economic hardship;
  • Transitions between programs are common and can result in coverage gaps;
  • Medicaid and CHIP enrollees report better health care experiences than uninsured children and comparable experiences as children with private insurance; and
  • Most low-income families are familiar with Medicaid and CHIP.

Since MACPAC is required to review and comment on reports to Congress, the commission will have an opportunity to emphasize its prior CHIP policy recommendations and make new comments based on the evaluation’s findings.

Additionally, MACPAC staff reviewed a framework for evaluating Medicaid provider payment policy. The commission is tasked with ensuring that Medicaid payments are efficient, economic, maintain high quality standards, and safeguard against unnecessary utilization. The long term goal of the commission is to examine the effectiveness of value-based purchasing strategies, and to apply the framework to specific projects, such as the inpatient payment index and Medicaid Accountable Care Organizations (ACO) study. 

MACPAC staff also conducted semi-structured interviews with Medicaid state officials in 2012 and 2014 to evaluate the effect of the Medicaid primary care payment increase on provider participation and primary care service utilization. Through the interviews, staff concluded that “at best,” there was a modest increase in provider participation.

However, most states reported that the payment provision had no effect on primary care utilization. The Centers for Medicare and Medicaid Services (CMS) has not yet asked states to evaluate the payment increase, and most stated that they had no plans to do so. Six of the states surveyed planned to pay providers Medicare rates for primary care services through 2015; others will continue to pay at higher rates (although not at Medicare rates). The payment increase was included in the president’s fiscal year (FY) 2015 budget, although Congress has not yet taken action on the proposal.     

The second day of the meeting included a presentation and discussion of policy issues related to (MSPs), which are mechanisms by which Medicaid pays for Medicare premiums and cost sharing for certain low-income Medicare beneficiaries. The presentation included a review of findings from a new study examining whether Medicaid payment policies have an impact on utilization of selected Medicare services used by dually eligible beneficiaries in fee for service (FFS), and a discussion of issues related to MSP eligibility and enrollment.

The study found that Medicaid payments varied across states and higher Medicaid payment of Medicare cost sharing is associated with an increased likelihood of having an outpatient office visit, using preventive services, and having an outpatient psychotherapy visit. Additionally, a higher Medicaid payment was associated with a decreased likelihood of using safety net provider services (i.e., federally qualified health centers, rural health centers, and hospital outpatient departments). These findings led MACPAC staff to question whether providers should be paid the full amount of Medicare cost sharing for dually eligible beneficiaries to achieve better utilization.

The presentation on MSPs also highlighted that enrollment is historically low, which is likely due to a lack of beneficiary awareness and a cumbersome enrollment process. As next steps, the commission plans to explore other areas that affect dual eligible access to care and to develop policy options for the December meeting. 

MACPAC Chair Diane Rowland also indicated plans to set up a meeting with MedPAC Chair Glenn Hackbarth to develop strategies to simplify MSP programs and the eligibility and enrollment process. Additionally, she stated that a useful next step with regard to the cost-sharing study would be to analyze whether states should build in full or partial payment for cost-sharing and ways to simplify how beneficiaries can get assistance with Medicare cost-sharing and premiums and how this relates to the Low Income Subsidy.

The next MACPAC meeting will be on Dec. 11-12.


Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806

Scott Wetzel, M.P.P.
Lead, Quality Reporting
Telephone: 202-828-0495

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085


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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806