HD59 - Medicaid Reform in Virginia: Report of the Medicaid Revitalization Committee


Executive Summary:
House Bill 758, passed by the 2006 General Assembly and signed by Governor Kaine on April 5, 2006, set into motion a self-examination of Virginia's primary healthcare delivery mechanism for the State's most vulnerable citizens - the Medicaid program. The legislation creates a group consisting of patient advocates, healthcare providers, health insurers, program administrators, and other stakeholders - the Medicaid Revitalization Committee - to examine alternative and innovative approaches to healthcare delivery under Medicaid, with a focus on client-centered planning, individual budgeting, and self-directed quality assurance and improvement.

House Bill 758 directed this Medicaid Revitalization Committee to consider several potential reforms to the Medicaid program, including the creation of an incentive structure utilizing enhanced benefit accounts, to promote increased personal responsibility in the healthcare decisions of Medicaid recipients. The legislation further envisioned increased enrollment from "un-managed" delivery models to care-coordination programs such as managed care and disease management. Additionally, House Bill 758 directed the MRC to consider revising the Medicaid program to allow additional mechanisms for purchase of employer-sponsored health insurance through health benefits accounts funded at the actuarially defined risk-based premium cost that would otherwise be borne by the Medicaid program as a direct insurer. Finally, the legislation focused on the expanded use of electronic access mechanisms for both providers, through electronic funds transfer and claims submittal, and recipients, through direct debit-like access to the enhanced benefit accounts.

The Department of Medical Assistance Services convened the Medicaid Revitalization Committee on July 14, 2006. The Committee met five times over the course of the summer to discuss and debate potential Medicaid reform ideas intended to fulfill the mandate of House Bill 758. The Department employed a professional facilitator to lead the discussion, as the Department did not want to inappropriately guide or limit the reform discussions. Meeting materials, recommended readings, and public comments were all made available to anyone interested in following the Committee's deliberations through the Department's internet site.

At the outset Committee members wish to express our appreciation to the Legislature for directing this important study of the Commonwealth's critically important Medicaid programs, as well as our compliments to DNIAS staff for the serious, thoughtful and open-minded way in which they undertook the charge. Our facilitator, Barbara Hulburt was also instrumental in keeping the group moving forward together.

We learned much about other state Medicaid reform efforts, but also how each state's approach is driven by their history, the relative size and scope of their program and the unique characteristics of their health care system. Some experiences and policies are potentially applicable to Virginia (e.g., beneficiary incentives for disease management) and other elements are not - either because Virginia is already applying the concept (e.g., managed care) or the relatively lean nature of our program makes it impractical (e.g., higher cost-sharing levels are more applicable in states with higher eligibility levels).

[The entire executive summary can be viewed in the full report.]