You asked for an overview of the Medicaid program in Connecticut and a description of recent significant changes in it. You are particularly interested in Medicaid managed care, the KidCare program, and the interdepartmental collaboration on mental health.

SUMMARY

Medicaid is a state-federal program that provides medical assistance to families on welfare, children and some adults in low-income working families, and elderly, blind, and disabled people. The Department of Social Services (DSS) administers the program in Connecticut. The eligibility criteria vary, depending on the type of care required, but in most cases applicants must pass both an income and asset test. Currently, the state requires children and healthy adults to join a Medicaid managed care organization. Elderly, blind, and disabled people are not required to be part of a managed care organization; they receive fee-for-service Medicaid coverage that bases reimbursement to providers on the amount and type of service provided and sets a specific fee for each service.

Since 1994, Medicaid has covered certain low-income children in working families. 1997 legislation expanded health care coverage to include children in higher-income working families by creating a comprehensive children's health insurance program, Healthcare for Uninsured Kids and Youth (HUSKY), which uses federal State Children's Health Insurance Program (SCHIP) money. The HUSKY program has two basic components. The state renamed its existing Medicaid managed care program as HUSKY A and included the children in lower-income working families and later some of their parents in it. It also created HUSKY B, which uses the SCHIP funds to provide subsidized health insurance (also managed care) to uninsured children up to a certain income level and unsubsidized insurance at higher income levels.

After five years of studying its system for delivering children's behavioral health services and identifying service gaps and needs and financing and administrative issues, Connecticut is starting to implement an integrated public behavioral health service system for children, adults, and their families. The children's portion of this new system is called Connecticut Community KidCare ("KidCare"). The system is a partnership among DSS and the departments of Children and Families (DCF, the lead agency for children's mental health) and Mental Health and Addiction Services (DMHAS, the lead agency for adult mental health). KidCare is available to all children enrolled in HUSKY or whom DCF serves through its voluntary services program. It features community-based services, family participation in planning, coordination among providers in complex cases, integrated funding streams, and one administrator for clinical management statewide and one for claims processing.

In addition to collaborating to create this new integrated system, DCF and DMHAS have also focused attention specifically on helping youths with behavioral health problems to make the transition from KidCare to the adult mental health services system.

For the elderly, the lion's share of Medicaid expenditures covers nursing home costs ($ 1. 1 billion in fiscal year 2000-01), but it also pays medical costs and home care not covered by Medicare for qualified elderly who live at home. The state has creatively used Medicaid waivers and state funds to expand availability of home care and consumer-directed personal care assistance to the elderly and younger disabled people. It has allowed employed disabled people with incomes above the usual Medicaid limits to buy into Medicaid and continue to receive personal care assistance that they need to become employed. The state has also used a combination of Medicaid waivers and state money to provide assisted living services in state-funded elderly congregate housing, federal senior housing, and in five planned new demonstration

projects throughout the state. It has expanded Medicaid coverage to uninsured women with breast or cervical cancer and, this year, provided Medicaid coverage for smoking cessation treatment.

Two months ago, the state applied for a Medicaid waiver to cover more seniors and disabled people with somewhat higher incomes under its Connecticut Pharmaceutical Assistance Contract to the Elderly and Disabled (ConnPACE) pharmacy assistance program, which is currently solely state-funded. At the same time, the state is implementing a plan to restrain rising prescription drug costs in the Medicaid, ConnPACE, and other drug assistance programs through a prior authorization requirement for prescriptions for brand name drugs that have generic equivalents and any drugs that cost over $ 500 for a month's supply, as well as early refills.

Other recent actions to contain Medicaid costs include (1) eliminating Medicaid's coverage of Medicare copayments to providers for people who are eligible for both Medicare and Medicaid if it results in a payment higher than Medicaid's usual payment; (2) tightening asset transfer rules for people applying for Medicaid coverage of long-term care and limiting probate courts' powers to make exceptions to these rules; and (3) applying for a Medicaid waiver to change the start date for calculating the penalty period for inappropriate asset transfers and increases the look back period for real estate transfers from three years to five.

MEDICAID-A GENERAL OVERVIEW OF CONNECTICUT'S PROGRAM

The Medicaid program provides health care coverage to a wide variety of the state's low-income residents with the federal government reimbursing the state for half of its Medicaid expenditures. For example, the state offers coverage to children up to the age of 19 living in families with incomes up to 185% of the federal poverty level. These children receive services through the state's Medicaid managed care program (see below). At the other end of the age spectrum, on a fee-for-service basis, the state offers Medicaid to the elderly who are living in the community or in institutional settings such as nursing homes. Medicaid is generally not available to younger adults who do not have disabilities, although certain parents and caretaker relatives of Medicaid-covered children can also get coverage.

The Medicaid program consists of many coverage groups, each with its own set of eligibility criteria. For children, only an income test is applied. For most other categories, applicants must also pass an asset test. For example, in the "medically needy" coverage group, which includes aged, blind, and disabled people, among others, and which has probably the most restrictive eligibility criteria, applicants may not have more than $ 1,600 in assets, if single, or $ 2,400 if married. Elderly people applying for Medicaid in a nursing home can have income up to the monthly cost of the nursing home; the amount of allowable assets varies depending on the applicant's marital status.

Medicaid services are quite comprehensive. Federal law requires states to provide certain services and makes others optional. The mandatory services include: inpatient hospitalization (except institutions for mental disease), outpatient hospitalization; physician services; lab and x-ray services; nursing homes; home health services for people eligible for nursing home care; early and periodic screening, diagnosis and treatment for children under age 21; federally qualified health clinics; rural health clinics; and pregnancy-related services, family planning, and services provided by a nurse-midwife, certified pediatric nurse practitioner, or certified family nurse practitioner. The optional services include prescription drugs, personal care services, dental, and physical therapy, among others. Connecticut's program covers most of these.

The estimated cost of the Medicaid program in FY 2001-02 is around $ 2. 55 billion, according to the Office of Fiscal Analysis (OFA).

Table 1 lists and briefly describes recent Medicaid-related enactments.

Table 1: Summary of Recent Medicaid-Related Enactments

MEDICAID MANAGED CARE (HUSKY A)

Program Structure

Medicaid managed care is a health care delivery model, similar to private managed care plans such as health maintenance organizations. The state pays a monthly per-person rate to managed care organizations (MCOs) that agree to provide all the required Medicaid services for this "capitated" payment. Overall, the costs of the managed care program were just under $ 416 million in FY 2000-01, according to OFA.

Since 1995, Connecticut has required its entire Temporary Family Assistance (TFA) welfare population, both adults and children, to enroll in the state's Medicaid managed care program (later renamed HUSKY A), under a Medicaid waiver approved that July (CGS Sec. 17b-261 and 17b-266). The state also requires children and adults in working families who qualify for HUSKY A or B coverage to enroll in managed care (PA 97-1, October 29 Special Session; CGS Sec. 17b-289 to 17b-304). The HUSKY program offers health coverage for uninsured children up to age 19 at all income levels; it subsidizes only those with family incomes up to 300% of FPL. HUSKY A (which is Medicaid managed care) now covers children in families up to 185% of FPL. Children in families with higher incomes can participate in HUSKY B, which is also managed care health insurance, but not Medicaid. Low-income working parents of children in HUSKY A can also qualify for coverage, but only if their incomes are below150% of FPL. A fee-for-service program (non-Medicaid) for children enrolled in the lower-income levels of HUSKY B, called HUSKY Plus, provides supplemental services for children with special physical or behavioral needs using SCHIP funds.

About 70% of all Medicaid clients are enrolled in HUSKY A. As of March 1, 2002, total HUSKY A enrollment is over 265,000. Of these, about 67,000 are over age 21.

Benova, Inc. (which recently changed its name to Concera) is the enrollment broker for the program for people who are not on TFA. DSS caseworkers enroll TFA recipients directly. Participants can choose among several health care organizations and must choose a physician as their primary care provider. Currently, DSS contracts with four MCOs: Blue Care Family Plan, Healthnet, Community Health Network, and Preferred One.

Coverage for Parents and Caretaker Relatives of HUSKY A Children

While adult recipients of cash welfare benefits have historically qualified for Medicaid, until recently this coverage would typically end within two years of a family's leaving the welfare rolls. As it is widely believed that more children will enroll in HUSKY if their parents can also get the coverage, the 1999 legislature took advantage of a provision in federal Medicaid law to cover adults up to the same level as children. This legislation (PA 99-279, CGS Sec. 17b-261) became effective on July 1, 2000. But in 2000, the legislature reduced the income limit to 150% of the FPL and delayed the coverage's availability until January 1, 2001 (PA 00-3, JSS). The Children's Health Council reports that as of January 2002, about 15,000 adults were receiving this expanded coverage.

HUSKY Presumptive Eligibility

Legislation in 2001 allows more entities, consistent with federal law, to grant children provisional or "presumptive" eligibility for HUSKY A (PA 01-137). Federal law allows states to make children under age 19 eligible for Medicaid during a "presumptive eligibility period," which begins when an entity, such as a hospital, determines, based on preliminary information, that the child's family income is within the program's limits. The period ends when a final eligibility decision is made or, if a child's application is never filed, on the last day of the next month after the initial presumption of eligibility was made, whichever is earlier (42 U. S. C. § 1396r-1a, as amended by PL 106-554). The child's medical care is covered during this period.

The same law also (1) makes it easier for families to renew their HUSKY enrollment by requiring DSS to rely on certain available information and (2) requires the DSS and education commissioners to share information from National School Lunch Program applications to determine participants' HUSKY eligibility (PA 01-137).

Dental and Behavioral Health Contractors and Subcontractors

Legislation in 2001 gave MCOs that enter into Medicaid managed care contracts on or after October 1, 2001 to serve children in HUSKY A or B primary responsibility for ensuring that their behavioral health and dental subcontractors adhere to their contract with DSS, including providing timely payments to providers and interest payments. It also

contains various reporting requirements and requires a performance bond or other financial guarantee from subcontractors to cover provider claims if the contract is terminated.

The law also requires contract termination agreements between MCOs and these subcontractors to address financial responsibility for provider claim payments and data reporting to DSS. It requires MCOs to submit a plan for resolving outstanding claims submitted by providers to a previous behavioral health or dental subcontractor before DSS will approve a contract between the MCO and a new subcontractor (PA 01-2, JSS).

Additional legislation in 2002 requires each subcontractor paying mental health and dental claims for a Medicaid MCO to report quarterly to DSS on how much and what proportion of its monthly MCO payment has gone (1) directly to health care providers and (2) for administrative costs and profits (PA 02-3).

Medicaid Managed Care Council

The Medicaid Managed Care Council, first established in 1994 to help develop Medicaid managed care, continuously monitors the implementation of the program and advises DSS on its further development (PA 94-5, May Special Session; CGS Sec. 17b-28). Its members include legislators, Medicaid consumers, advocates, health care providers, insurers, and state agencies.

CONNECTICUT COMMUNITY KIDCARE

Origins and Development

Creating Systems of Care. The legislature laid the foundation in 1997 for what eventually became KidCare when it enacted a "system of care" approach for children whose severe emotional disturbance required the services of multiple government agencies. This approach featured collaborations between local care providers, community agencies, and families to develop individual care plans and coordinate services (PA 97-272; CGS Sec. 17a-127).

Studying and Refining Service Delivery. In 1999, the legislature, responding to continuing concern about children's mental health services, required DSS, in consultation with DCF, DMHAS, and other state agencies, to study the services available to children enrolled in

HUSKY. It told the agencies to look at patient profiles, payers, quality of care issues, and unmet needs and recommend ways to improve and integrate services (PA 99-279).

The agencies recommended, among other items, (1) expanding eligibility and the array of community-based services; (2) family involvement in system wide policy setting as well as service planning for individual children; (3) designing, developing, and implementing a blended funding mechanism; and (4) establishing a coordinating and administrative structure to direct an expanded system of care model.

The legislature then directed DSS and DCF to develop and report back to it on an integrated service delivery system for children's mental health services and a plan to implement it. It required them to sign a memorandum of understanding that

1. specified DSS' role in managing Medicaid and HUSKY plan modifications, obtaining waivers, meeting federal reporting requirements, and processing claims;

2. specified DCF's role in defining services and developing statewide training programs; and

3. established funding administration mechanisms, standards, and monitoring systems.

It also directed the agencies to amend the state's foster care, Medicaid, and HUSKY plans, if needed, to maximize eligibility for federal funding (PA 00-2, JSS; CGS Sec. 17a-22a).

Creating the KidCare System. The agencies reported back in January 2001 with a plan to create a new "KidCare" program consisting of:

1. a network of regional lead services agencies (LSAs) to work with local service providers and community collaboratives to provide services and support for eligible children and to manage their care;

2. care coordinators to work with families to create comprehensive individual service plans; and

3. a single, statewide administrative service organization (ASO) to manage funding streams, process claims, manage contracts and data, and report on the program's operation.

The plan's goal was to reduce significantly stays in psychiatric hospitals, residential treatment facilities, and out-of-community and out-of-state placements. It called for KidCare to provide comprehensive treatment services ranging from home-based and care coordination to outpatient and therapeutic foster care, residential treatment, and hospitalization. KidCare would also cover nonmedical support services like respite care and therapeutic recreation. All children enrolled in HUSKY would receive services through a full carve-out (that is, a separate MCO would be responsible for service). But HUSKY MCOs would still be responsible for primary behavioral health care and behavioral health pharmacy services. Children who were not eligible for HUSKY could enroll through DCF's voluntary services program.

The legislature ratified this proposal in PA 01-2, June Special Session. Among many provisions, that act

1. expanded eligibility for services to all covered children with behavioral health needs (previously, only children with "serious emotional disturbance," that is who were functionally impaired, were eligible for the system of care approach);

2. broadened the types of children for whom local teams could be established to coordinate care to those with complex service needs (the trigger had been those at risk of or placed out of their home);

3. revised the local system of care approach by creating formalized community collaboratives, naming those who must participate in collaboratives; and

4. required DCF and DSS to develop measures to evaluate various features of the system's performance (e. g. , finance, administration, client satisfaction, quality) and required, if funds were available, an independent evaluation over five years.

The act also required the agencies to report back to the legislature in 2002 on various components related to KidCare implementation.

Current Status of KidCare

The report the legislature received in April 2002 goes beyond a simple KidCare implementation report. DCF and DSS joined with DMHAS to devise an integrated public behavioral health service system for adults, children, and families. KidCare is one part of this integrated system. The agencies' overall goal is to provide enhanced access to a more complete and effective system of community-based services and supports and to improve individual outcomes for clients of all ages. To achieve this goal they have formed the Connecticut Behavioral Health Partnership.

The system features a common administrative infrastructure to support the management of services for both KidCare-eligible children and adults eligible for Medicaid fee-for-service benefits and DMHAS' General Assistance behavioral health program. The departments will share (1) clinical management services, which will be provided by a single ASO; (2) claims processing, which will be provided by a single vendor; and (3) data management. Currently, mental health providers must submit claims to six different vendors operating under seven different contracts and must seek authorization for publicly funded services from seven different entities operating under eight different contracts.

Clinical management will include prior authorization, utilization review, benefit information, and member services. The ASO will be able to manage the entire system of services for an individual, authorizing services, coordinating benefits, linking with care coordinators, and facilitating transitions from hospital to residential and outpatient or home care. The agencies expect that shared administration will integrate diverse funding streams, support comprehensive care planning, and reduce administrative costs. Having a single ASO, they believe, will reduce clients' experience of system fragmentation, while integrating funding streams will make it easier for clients and providers to develop community-based care plans that rely on multiple funding sources.

The plan's specific features for KidCare follow.

Goals and Key Characteristics. In its most recent iteration, KidCare is designed to eliminate the major gaps and barriers that currently exist in the children's mental health delivery system. It is based on the belief that children should receive services in their community whenever possible and that their parents are an integral part of the planning and decision-making process.

KidCare Eligibility. Children under age 19 who are enrolled in HUSKY or receive services through DCF's voluntary services program are eligible for KidCare. DSS and DCF estimate that 184,500 children are eligible.

Services. KidCare has two service levels.

· Core services are available for all eligible children. They include those currently covered under Medicaid (outpatient, extended day, and intensive outpatient treatment and partial and inpatient hospitalization) plus new community services like emergency mobile crisis services, home-based service, and crisis stabilization beds.

· Enhanced services are available for children with complex behavioral health needs. They include comprehensive assessment, care coordination, intensive home-based services, behavior management services, residential care, and respite. Each eligible child will be assigned a care coordinator who will work with the family and service providers to form a child-specific team. This team will devise an individualized service plan that summarizes the goals for the child and the treatment and support services that will be provided to meet them.

Once KidCare is fully implemented, families will be able to access services through multiple entry points, including schools, crisis services, courts, hospitals, and clinics.

Financing. KidCare funding will come from several funding streams: Medicaid (HUSKY A); SCHIP, which funds HUSKY B; Title IV-E (federal foster care funds); and state general funds. The program's total cost is not known at this time. DCF and DSS have contracted for an actuarial study to project the costs and to confirm whether they can be funded within available appropriations. They do not anticipate needing additional state funds beyond the $ 23 million in new money the General Assembly appropriated for KidCare in the 2001 to 2003 biennial budget (other than adjustments for enrollment and cost of living changes).

DCF and DSS are also examining whether to expand the Medicaid rehabilitation option for children's behavioral health services. Currently, children and families must come to a clinic to access Medicaid reimbursable outpatient services. The rehabilitation option would provide more flexibility in service type and provider, thus allowing Medicaid coverage for comprehensive assessments, in-home services, mobile and crisis stabilization, and other nontraditional services. The services must be approved by the federal Centers for Medicare and Medicaid Services. A decision about whether to implement this option will be made after the actuarial analysis is completed.

Evaluation. DCF and DSS are developing a comprehensive quality monitoring system whose primary goal will be to provide ongoing performance data at the state, regional, and contractor level. This data will be used to (1) monitor overall access, quality, and cost-effectiveness; (2) monitor performance-based contracts with administrative and clinical service contractors; (3) design and monitor quality management projects; and (4) create a KidCare performance report card.

Timetable. By July 2002, the agencies anticipate

· full rollout of enhanced emergency mobile crisis and expanded care coordination services,

· beginning the rollout of additional community-based services (continuing through FY 2002-03), and

· completion of the actuarial analyses.

By July 1, 2003, they expect

· full carve-out of the behavioral health services from HUSKY A and B managed care contracts and

· implementation of the shared administrative infrastructure.

DCF-DMHAS COLLABORATION TO HELP YOUTHS TRANSITION TO ADULT MENTAL HEALTH SERVICES

In October 1998, DCF and DMHAS entered into a memorandum of understanding concerning the joint development, funding, and oversight of a new series of services for youths with mental health needs who, after they age out of the DCF system, will still need help. A team from both agencies, supported by the Office of Policy and Management, focused on youths DCF identified in residential or hospital treatment. DMHAS began to design developmentally appropriate community-based programs to provide clinical, vocational, and recreational services to clients living in supervised apartments. All services are provided on a voluntary basis and each client participates in an educational or vocational program in addition to clinical activities. Since its inception, over 200 young adults have moved into locally operated, DMHAS-funded programs, and DCF has referred another 100 for similar services as they age out of its system.

CONNECTICUT HOME CARE PROGRAM FOR ELDERS (CHCPE)

For nearly 20 years, the state has offered frail elderly people the option of staying at home as an alternative to nursing home care. The state's premier home care program is the CHCPE, which provides a range of home- and community-based services through a federal Medicaid waiver. People who do not meet the Medicaid eligibility criteria can be served by the program's state-funded component.

In recent years the state has attempted to open up the Medicaid-portion of the program. The most significant change would be to increase the program's income limit, which is the same as the PCA waiver program's limit. The 2000 General Assembly directed DSS to eliminate the program's gross income limit (PA 00-2, JSS; CGS Sec. 17b-342)). (To date, the federal government has not approved this increase for the CHCPE but the income limit for the state-funded portion of the program has been removed. ) In 1999, the legislature created a 10-person state-funded pilot program for people who were over-income for the Medicaid-funded portion of the program by no more than $ 100 (PA 99-279. ). This program was extended the following year. The extension continues until Medicaid covers the services (which would presumably be when the federal government allows an increase in the income limit).

This same new law added assisted living, minor home modifications, and care management to the community-based services available under the program. The assisted living services are limited to certain types of housing (see below for a more detailed explanation).

Costs for the Medicaid waiver portion of CHCPE in fiscal year 2000-01 were roughly $ 156 million, according to the Office of Fiscal Analysis.

PERSONAL CARE ASSISTANTS

1995 legislation required DSS to seek a Medicaid waiver that provides consumer-directed personal care assistance (PCA) to disabled people between the ages of 18 and 64 who need help with the activities of daily living (PA 95-192; CGS Sec. 17b-605a). After federal approval in 1996, Connecticut began implementing the program in 1997. It allows people to hire, train, and supervise their own personal care assistants. In FY 2000-01, 270 people received services through this waiver, which cost about $ 5 million. In 2000, the legislature approved a purely state-funded pilot PCA program for up to 50 people age 65 and over who have either aged out of the disabled PCA waiver or otherwise cannot find

appropriate home care (PA 00-2, JSS). In 2002, the legislature considered proposals to make PCA part of the Medicaid waiver portion of the CHCPE, but no legislation passed in the regular session.

MEDICAID BUY-IN FOR WORKING PEOPLE WITH DISABILITIES

Two years ago, the legislature passed landmark legislation (PA 00-213, CGS Sec. 17b-597) designed to provide affordable health care coverage to working people with severe disabilities. Although many qualified for Medicare by having received federal disability benefits for at least two years, they had to pay out-of-pocket for such things as prescription drugs and personal care assistants. They could attempt to get Medicaid, but even limited wages often forced them into paying high "spend-down" amounts before benefits would be available. While the old system offered little incentive to go to work, the new Medicaid for Employed Disabled (MED) program allows them to earn, save, and pay a minimal amount towards their health care costs. And as income rises, the amount the person contributes also goes up. The program currently serves 2,241 people, about 5% of whom earn more than $ 20,000 per year.

The legislation also made related adjustments to the state's PCA programs, including the PCA waiver, to ensure that people needing these services could continue to get them even if their incomes went above the waiver program's federal limits (CGS Sec. 17b-605a). The legislature directed DSS to seek federal approval to allow these individuals to have higher income (current limit for these types of waivers is 300% of the maximum Supplemental Security Income (SSI) benefit, or $ 1,635 per month). DSS received the approval and presently almost 40 people receive PCA waiver services by virtue of being in the MED program.

MEDICAID FOR ASSISTED LIVING

Assisted living is an emerging care model that provides health care and other assistance primarily to elderly people who may not need or want nursing home care, yet need some help with things like dressing, walking, eating, bathing, errands, and chores. Typically, privately-funded assisted living services are provided in managed residential communities where the elderly person has his own apartment, receives three meals a day in a common dining room, and shares some services with other tenants.

Over the past several years, Connecticut has embarked on several innovative programs to bring assisted living to moderate and low-income seniors by using a combination of Medicaid money to pay for assisted living services and state money to subsidize related housing costs.

Legislation in 1998 and 1999 required DSS, in cooperation with DECD and the Connecticut Housing Finance Authority (CHFA), to establish an assisted living demonstration project for moderate- and lower-income people living in state-subsidized affordable housing. Eligible residents must be at least age 65, at risk of being unnecessarily placed in a nursing home, and be eligible for CHCPE. The pilot is being planned for five locations (for a total of 300 units). CHCPE will pay for the services for those who qualify financially. The law permits a combination of subsidized and unsubsidized units in the same facility. It gives DECD discretion to set the rental subsidy for the pilot at any percentage of annual family income and to define income and eligibility for these subsidies (PA 98-239, PA 99-279, CGS Sec. 17b-347e). The first of the five projects is expected to be operational in 2003.

Legislation in 2000 allowed existing state-funded elderly congregate housing facilities for frail seniors to offer assisted living services and allowed CHCPE to use Medicaid and state funds to pay for these services for eligible individuals in these facilities (PA 00-2, JSS). Seventeen facilities are now offering the new services, which allow residents to "age in place" rather than moving to a nursing home.

In addition, legislation in 2000 required DECD to establish assisted living demonstration programs in two federally assisted housing developments and a 2001 law allowed it to do so in up to two more, also using a combination of Medicaid and state money (PA 00-2, JSS; PA 01-2, JSS).

EXPANDED MEDICAID COVERAGE FOR BREAST AND CERVICAL CANCER TREATMENT

Legislation in 2001 requires the DSS commissioner to provide Medicaid coverage to certain women diagnosed with breast or cervical cancer and to seek a waiver to get federal money. To be eligible, the women must have been screened under the Centers for Disease Control and Prevention's National Breast and Cervical Cancer Early Detection Program and need treatment, including treatment for related precancerous conditions (PA 01-2, JSS).

To qualify for Medicaid under this special program, a woman (1) must be under age 65, a Connecticut resident, and a U. S. citizen or qualified alien and (2) cannot have other insurance that covers the treatment or be eligible under any mandatory Medicaid eligibility group. The law requires Medicaid coverage for this specific group of women regardless of their available income and assets.

DSS must grant these women assistance retroactively for up to three months before the month in which they applied if they were otherwise eligible during that time. They remain eligible until treatment is finished or they no longer meet the eligibility criteria. DSS must also establish procedures for granting presumptive eligibility to ensure applicants' prompt access to services.

SMOKING CESSATION

The 2002 legislature passed a law requiring DSS to offer Medicaid coverage for smoking cessation treatment. PA 02-4 requires, instead of allows, DSS to amend the Medicaid state plan to include this coverage. DSS must come up with a plan, which must be implemented on July 1, 2003 if the committees of cognizance approve it and the legislature appropriates funds for it.

CONNPACE WAIVER

ConnPACE is currently a state-funded program that helps low-income seniors and people with disabilities who do not qualify for Medicaid pay for prescription drugs. Participants pay a $ 25 annual enrollment fee and a $ 12 copay per prescription.

In 2001, the legislature increased ConnPACE income limits to $ 20,000 for single seniors and $ 27,100 for married couples, beginning April 1, 2002. That legislation further required those limits to rise to $ 25,800 and $ 34,800, respectively, effective July 1, 2002, if DSS receives approval from the Center for Medicare and Medicaid Services (CMS) for a federal Medicaid waiver for federal funding by then (PA 01-2, JSS).

In April 2002, DSS submitted the waiver request to CMS. If approved, the waiver would convert ConnPACE from a solely state-funded program to a single benefit, pharmacy-only coverage group in the Medicaid program (which receives 50% federal reimbursement for expenditures).

The waiver plan, which the legislative committees approved this year, contains the following new provisions. Participants with income levels up to 233% of FPL ($ 20,000 single and $ 27,100 married) will pay the current $ 12 copay; those with higher incomes will pay $ 20 per prescription. The plan also proposes a voluntary mail order purchasing option as part of the expanded program.

The plan proposes an October 1, 2002 start date for the expanded program if federal approval is received before then. But approval could take longer than expected, which may delay the start date.

PRESCRIPTION PRIOR AUTHORIZATION PLAN

Two years ago, the legislature directed DSS to establish a prior authorization (PA) program, whereby pharmacists serving clients in all but one of its drug assistance programs, including ConnPACE and Medicaid for the elderly and disabled, must get DSS approval whenever they are asked to fill, for the first time, a brand name drug when a chemically equivalent generic is available. The law also allows DSS to require PA for (1) a prescription costing $ 500 or more per month, or (2) early refills (less than 75% of prescription has been taken) (PA 00-2, JSS).

As required by law, DSS submitted its PA plan to the Public Health, Human Services, and Appropriations committees, (the committees can stop the plan only if they jointly reject it). The plan outlines the PA process for each of the three scenarios described above. It includes DSS hiring a contractor to run a clinical call center that will be available around-the-clock, seven days a week.

Here is how the plan would work for brand name drug requests. When a prescription comes in requesting a brand name drug, staff at the call center will have to contact the prescriber, who must present his rationale for not prescribing a generic. If he does, and the call center pharmacist agrees that the generic is not appropriate, he must approve the brand name drug and electronically notify the pharmacist. If the call center cannot make its decision within two hours of receiving a PA request, the plan authorizes the pharmacist to dispense a 72 hour supply of the drug (limited to two times per client per month). (A subsequent revision of the plan changed the 72 hours to five days. ) If the call center disagrees with the prescriber, the generic will be the only option unless the client wishes to pay for the drug out-of-pocket; in these instances, the prescriber and client can appeal. Under current rules, when a prescriber writes, "brand medically necessary" on a prescription, the pharmacist must fill it.

The committees met on May 24 and all three rejected the plan, with the understanding that DSS would submit a modified plan by June 4 and the committees would meet once again to vote on it. The committees' major concerns about the plan were the provision that allowed only 72 hours' worth of the brand name drug if the preapproval cannot be obtained within two hours and whether there should be an exemption for certain drugs prescribed for mental illness, where the generic forms have been reported to cause problems.

On June 4, DSS submitted the revised plan to the committee. This plan increased the 72-hour supply of drugs to a five-day supply when the call center cannot make its decision within two hours. It also made several other changes. It required PA only once for maintenance drugs and every six months for others (the old plan had required PA every six months for all types of brand name drugs). It also exempted prescriptions for a supply of up to 15 days, prescription changes in the same therapeutic class and changes in dosage or strength. The revised plan also added a nine-member Medical Prior Authorization Advisory panel, certain appeal procedures, detailed reporting and monitoring requirements, and a report to the committees within six months of implementation. But it did not address specific exemptions for drugs for mental illness.

The committees met on June 6 to vote on the revised plan. The Appropriations and Public Health committees approved it, but in the Human Services Committee the motion to approve failed. This means the plan is approved.

REMOVAL OF CO-PAYMENTS FOR PEOPLE ELIGIBLE FOR BOTH MEDICARE AND MEDICAID (DUALLY-ELIGIBLE)

Since 1988, federal Medicaid law has required states to help people who are eligible for both Medicare and Medicaid (dually eligible) by paying providers a portion of the people's Medicare cost-sharing requirements (e. g. , premiums, deductibles, and co-payments). Federal guidelines gave states the option of paying the cost-sharing in an amount based either on (1) the full Medicare-approved amount for a particular service or (2) the amount the state pays for the same service for a Medicaid recipient not also eligible for Medicare. In 1991, the legislature adopted the second option but never implemented it because courts in some jurisdictions held that states could not impose these limits. But in 1997, Congress made it clear that states could indeed limit the cost-

sharing to the Medicaid amount. Given this change, the legislature included a $ 54 million reduction in the FY 1999-00 DSS budget to reflect the statute's implementation.

Implementation has led to many providers receiving no co-payments for dually-eligible people considered Qualified Medicare Beneficiaries (the only dually eligible group for which Medicaid will pay co-payments) because in nearly all cases, the Medicaid cost of the service is less than the Medicare approved amount.

Since implementing the change the legislature has tried to restore these co-payments but none of these bills has passed. In 2002, the Human Services and Appropriations committees favorably reported a bill (sHB 5555) that would have restored the co-payments for physicians. The bill died on the House calendar.

MEDICAID ASSET TRANSFER RULES AND PROBATE COURT POWER

2001 legislation tightened asset transfer rules for Medicaid eligibility for long-term care and limited the probate courts' authority to make exceptions to them. This change makes it harder for people to give away their assets or put assets in a trust so that Medicaid will cover their nursing home, home care, or other long-term care services.

Specifically, the legislation:

1. defines what is an "available asset" that must go to pay for the person's care and specifying that a trustee's refusal to distribute funds from a trust does not automatically make them unavailable;

2. limits allowable asset transfers for "other valuable consideration" just to those where that consideration (such as services rendered to keep the person out of a nursing home) has a value equal to or greater than the transferred assets;

3. limits the probate court's powers in conservatorship hearings to make exceptions to the Medicaid asset transfer rules and to exceed limits on the assets a nursing home resident's spouse can keep in cases of financial duress or when higher amounts are needed to generate income for the spouse still living at home;

4. makes DSS the sole agency to determine eligibility for assistance and services under any DSS-administered programs;

5. requires probate courts, as well as the people applying for spousal support orders in conservatorship cases, to provide certain notices and information to DSS, and gives DSS the right to appear at such hearings to present its position; and

6. prohibits the probate court from approving any spousal support applications unless the required notices have been made and the decision is consistent with state and federal law (PA 01-2, JSS).

Under federal and state Medicaid law, there is already a "look back" period of 36 months for most asset transfers, and five years for transfers to most trusts. When a nursing home resident applies for Medicaid, DSS looks back from that date and, if the person has made an inappropriate transfer, delays coverage using a formula that takes into account the asset's uncompensated value and the average cost of nursing home care. But certain limited kinds of transfers are allowed even during the look back period.

TRANSFER OF ASSETS WAIVER

Last year, the General Assembly required DSS to seek federal approval (i. e. , a Medicaid waiver) to change the way the penalty provisions are implemented when people make "improper" asset transfers within 36 months of applying for long-term care Medicaid (also in PA 01-2, JSS). The change was intended to close a perceived loophole in the law that resulted in these penalties expiring before people even applied, or became eligible, for Medicaid.

In early 2002, DSS submitted its waiver proposal to the Appropriations and Human Services committees. In addition to changing the start-date for the penalty period, the plan included a provision to increase the look-back for home transfers from 36 to 60 months, something the legislature had not directed the agency to do. DSS also proposed the establishment of thresholds, whereby any assets that were transferred with fair market value below the threshold amounts would not be subject to a penalty. Here DSS acknowledged that delaying the start-date of penalties might hurt people who made relatively small transfers.

The committees held a public hearing in March 2002. Most witnesses spoke against the waiver. Most represented elderly people or nursing homes who expressed strong concerns about its "unfairness" and the negative fiscal impact it could have on both. The Human Services Committee rejected the waiver proposal and Appropriations took no action. (The vetoed budget, SB 660, included the savings that would result from the waiver's implementation. ) DSS sent the proposal to Washington and is awaiting its approval.

HN/RC/SS: ro