RD243 - Report on Enhanced Benefit Accounts


Executive Summary:
The 2008 General Assembly directed DMAS to develop a plan to implement a system of monetary incentives (Enhanced Benefit Accounts or EBAs) for Medicaid recipients to make healthy decisions and to engage in self management of their healthcare. This directive indicated that the EBA program would include the deposit of incentive funds in EBAs to be accessed by participants to purchase healthcare services or items that are not covered under the Virginia Medicaid program. The directive is found in Appendix I.

To comply with the General Assembly's directive, the Department of Medical Assistance Services (DMAS) has developed a plan for a pilot project which would include a system of patient incentives (EBAs) to promote general wellness and to encourage Medicaid fee-for-service participants in the Disease Management (DM) program to engage in healthy behaviors. Under this proposal, DM participants with specific chronic conditions could be rewarded for complying with their plan of care and following through with appropriate testing and preventive care. The program could start on a small scale with a limited number of chronic conditions with rewards which would reinforce healthy behaviors known to be clinically effective at improving the health status of individuals. For example, a patient with coronary artery disease could be provided with a $100 reward for receiving his scheduled cholesterol screening. A debit card with this amount could then be used by the participant to purchase vitamins or other approved items at a pharmacy.

Virginia's current DM program targets high-risk Medicaid fee-for-service patients with specific chronic diseases and provides them with patient education materials, telephonic case management services, and opportunities to self-manage their care. DMAS believes that this population would be the best group to test the concept of patient incentives for several reasons. DM program participants have costly chronic diseases which severely reduce their quality of life. Any intervention which promotes general wellness and encourages these individuals to engage in healthy behaviors could potentially have a large positive impact on their quality of life and reduce the cost of their care. In addition, the contractor that manages the DM program already has the administrative resources to efficiently mange EBAs for this population. Working within this structure would keep operational costs to a minimum.

Until the full details of the proposal are known, CMS will not provide definitive guidance on whether this proposal can be implemented through a Medicaid State Plan amendment or whether it would require the submission of a waiver. However, based on preliminary information, CMS staff indicated that the program may require a waiver, which takes several months before federal approval is obtained.

In the event that the General Assembly decides to pursue EBAs, this report attempts to provide a framework for developing an EBA program for the Medicaid fee-for-service population enrolled in the current Disease Management program. First, the report provides a brief background on EBAs in general, what other state Medicaid EBA programs have done to date, and a summary of Virginia's DM program. Next, the EBA proposal itself is described. Finally, the report outlines the steps which might be needed to implement EBAs in FY 2010, including state and federal regulatory requirements.