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The administration has signaled a three-pronged strategy for overhauling health care in America. First, repeal the Affordable Care Act (ACA) and replace it with new legislation. Second, implement aggressive regulatory actions by the U.S. Department of Health and Human Services (HHS). Third, advance specific pieces of new legislation that have bipartisan support.

While the initial replacement legislation, the American Health Care Act (AHCA), was pulled from a vote in the House, leaders are now shifting to HHS and regulatory actions in an effort to advance their policy interests.

Federal budget certainty and control at the state level are the two major principles of the leadership’s health care policy. What are the likely regulatory actions available to advance these interests?

  • Return to the core mission. Emphasis in design and funding away from the individual market and Medicaid expansion populations created in the ACA back toward the aged, disabled, and children/families populations historically served in Medicaid.
  • State-driven solutions. Leadership of the design, development, and implementation of innovations moves to the states, with HHS acting as an enabler of state innovation.
  • Improved federal relationships. Simplifying and expediting the federal role in program oversight and administration – removing barriers to state innovation and action.
  • Market-based solutions. Enabling commercial health insurance and delivery services innovations funding and designs.
  • Reasonableness in Home and Community-Based Services (HCBS) transformation. Providing states time and flexibility in the implementation of the HCBS rule.

Bending the cost curve – whether through federal legislation or regulatory responsiveness to state-led initiatives – remains the goal. The root of this cost problem is found among a population core to the Medicaid mission – where 20% of the aged and disabled populations consume 80% of funding.

Transforming delivery of services from institutional to home and community-based settings for this population is central to the administration’s regulatory agenda. Now more than ever, the opportunity to act falls to the states.

Here are three things states can do immediately:

  1. Simplify. Streamline the eligibility process by providing a centralized, single point of entry for all populations needing Long-Term Supports & Services (LTSS). Duplicating infrastructure across multiple community-based organizations or different governmental entities leads to wasted resources, makes standardized service delivery difficult, and creates consumer confusion. Simplifying the intake process through a single, statewide toll-free line can expedite the process while enabling convenient access for consumers.
  2. Assess. Standardize initial and ongoing needs assessments. Conflict-free assessments performed by a neutral third party ensure individuals receive the right level of services while preventing expenditure of unnecessary resources. It is critical that the third party is independent of Managed Care Organizations or state workers who have a vested interest in the services an individual receives. Using a single entity to perform assessments for multiple populations can eliminate redundant staffing, facilities, assessment instruments, and other infrastructure while allowing more efficient face-to-face assessment scheduling and easier navigation for individuals with co-morbidities.
  3. Streamline. Remove redundancies and barriers. Administrative streamlining can take many forms. States can maximize their federal funding by taking an objective look at how they do business, including a) finding opportunities to streamline administrative processes, b) performing standardized, conflict-free assessments of individual needs, and c) eliminating organizational redundancies. Additionally, introducing effective automation at the “right” time and for the “right” purpose can enable data to follow the person, thus providing greater flexibility in staff utilization, eliminating redundant data capture, and enabling enhanced analytical capabilities.   

Whatever form policy will take, the need to continuously improve and reform health care delivery remains. While initial efforts to pass replacement legislation may have failed, the unsustainable complexity and cost of long-term services and supports is a bi-partisan issue that will now likely be solved through state innovation supported by flexible federal regulation.