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State's Medicaid expansion report revised, delayed

CHARLESTON, W.Va. - The study commissioned by Gov. Earl Ray Tomblin on expansion of Medicaid is costing more than $860,000 and will cover a wide array of issues raised by the federal health care overhaul.

The company preparing the report originally promised it in January. It has completed some aspects of the contract but not the assessment of expanding Medicaid, the federal-state health care program for the poor.

The state agency monitoring the study says the original contract didn't include a completion date, and the goals and timeline for the project have changed since the contract was awarded.

But it won't say how they've changed, calling the new work plan an "internal planning document" that cannot be released to the public.

"The work plan has adjusted during the project as necessary to reflect new project goals and timelines for planning purposes," said Jeremiah Samples, director of health policy for the state Offices of the Insurance Commissioner, in statements emailed by a representative.

"The work plan is an internal planning document that includes some information that may be sensitive to private issuers. It is not a document that can be released."

A ruling by the U.S. Supreme Court last June allows states to decide whether to expand their Medicaid programs as called for in the federal Patient Protection and Affordable Care act, commonly known as Obamacare.

If a state does expand, anyone with income of up to 138 percent of the federal poverty level - about $32,500 for a family of four - would qualify. In West Virginia, the current Medicaid eligibility limit is 35 percent of the federal poverty level, or about $8,240 for a family of four.

About 420,000 West Virginians already get their health coverage through Medicaid, and an estimated 150,000 more will be eligible if the state opts to expand coverage.

Medicaid already consumes much of the state budget, and its growing costs have caused the governor to order cuts in other areas.

The cost of expanding would be covered by the federal government for the first three years. Then states would begin pitching in and are expected to pay 10 percent of the cost by 2020.

As of Monday, 20 states and the District of Columbia had decided to expand, according to health care public policy company Avalere Health LLC.

Another four are expected to extend coverage, 10 states likely will opt out and 15 have declared they won't participate.

Only West Virginia has not indicated which way it is leaning, according to the report.

Tomblin administration officials repeatedly have said the governor is waiting for the findings of the study before deciding.

Maryland-based CCRC Actuaries is conducting the study, but the parameters of its work go far beyond the Medicaid expansion.

The original goal was to examine "all aspects of planning and feasibility of a West Virginia Health Benefit Exchange," according to the request for proposal issued by the state insurance commissioner.  

A health care exchange, which is to be a publicly operated market for people and business to seek competitive prices for private insurance, is another part of the nationwide shift in health care included in the federal overhaul.

In February Tomblin announced the state would implement its health care exchange in partnership with the federal government. States also can opt to operate their own exchanges or let the federal government do it for them entirely.  

The original contract also required the study to "describe how they will project the number of individuals to be insured in public health care programs and any resulting issues, such as Medicaid, as a result of (Affordable Care Act)-mandated eligibility expansions."

The original study was to include background research on the uninsured and underinsured in the state; West Virginia's health insurance market; and insurance affordability. It also required different design options for the state's exchange, estimates of implementation cost and additional services as needed.

The insurance commission asked for bids in early 2012, and the responses were to be opened March 21. Of the three bids submitted, CCRC had the highest technical score by four points and the lowest bid price, Samples said.

It proposed spending $497,500 on background research, exchange design options and the impact of using the exchange. It included 1,500 hours of "ad hoc" services at a rate of $243 an hour to add $364,000 to the project, for a total project price of $861,500.

The Wisconsin offices of Oliver Wyman Actuarial Consulting submitted a total bid of $1.2 million. A final bid price for New York-based KPMG - which devoted the entire cover of its bid proposal to a picture of the gold-domed Capitol of New Jersey - was not listed on the website of the West Virginia purchasing division.

The entire cost of the contract is being covered by federal Planning Exchange and Level 1 Establishment grants, Samples said. The total value of the grants is $10.7 million, according to the Henry J. Kaiser Family Foundation.

CCRC was awarded the contract last August and started work Sept. 12, Samples said.

It has been paid four of the five scheduled installments for its work, with each worth $99,500, Samples said.

Ad hoc services could continue after the report is completed, and the contract can be renewed twice if both parties agree. Samples said state officials don't expect to incur costs beyond the original contract amount.

CCRC expected to complete the report by Jan. 31. Samples said the reluctance of private health insurance companies to share information significantly delayed the work. After this delay the work plan was revised, he said.  

The exchange and expansion decisions rely on similar information but are different aspect of the federal overhaul, said Perry Bryant, executive director of West Virginians for Affordable Health Care.

Bryant's organization supports extending eligibility for Medicaid coverage but said its members are excited to see all aspects of the report.

He is glad Tomblin commissioned the report because national studies have reported conflicting results for the state.

The Medicaid portion is taking longer than expected, he said. Tomblin faces no federal deadline for making the decision, but people could start to apply Oct. 1 if he opts for the expansion.

"The sooner we make that decision and release that report, then the better," Bryant said.  

"It's already a very compressed timeframe and will take Herculean effort to get everything up and running in time," he continued.

Samples said he expects the entire project to be completed by May.

Tomblin spokeswoman Amy Shuler Goodwin said the governor would likely review the results for several weeks before making any decision.

Contact writer Dave Boucher at 304-348-4843 or david.boucher@dailymail.com. Follow him at www.twitter.com/Dave_Boucher1.


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