Virginia Department of Medical Assistance Services Creating Opportunities for Medicaid Participants to Achieve Self-Sufficiency (COMPASS) Demonstration Overview and Status Update BPRO Spring Conference 05/30/2019 Virginia Department of Medical Assistance Services (DMAS) 600 E Broad St., Richmond, VA 23219

COMPASS I. Medicaid Expansion Update II. Background on Legislative Requirements III. Overview of COMPASS III. Current Status/Next Steps IV. Accessing COMPASS Materials V. Questions

Medicaid Expansion Virginia’s Medicaid expansion began on January 1, 2019 Virginia expanded Medicaid coverage to adults with incomes ≤ 138% FPL Virginia has enrolled over 280,000 newly eligible adults as of May 21, 2019

Medicaid Expansion Enrollment Dashboard www.dmas.virginia.gov Interactive data available in real time Data is as of May 3, 2019

Medicaid Expansion Members: Medical Conditions and Service Utilization More than 175,000 Medicaid expansion members have visited a provider* So far, more than 175,000 Medicaid expansion members have received a Medicaid services (64% of expansion members). With only about 2 months worth of submitted claims, we expected that number to continue to rise as claims continue to come. **NOTE: We expect these claims are fairly complete for January and February, but not past that time period** Members are using services in all regions of the state and in all adult age groups. Members seeing providers are being identified as having chronic conditions. Nearly 35,000 have been identified as having hypertension, 16,000 as having diabetes. Nearly as many (15,000) have been identified as having a substance use disorder, and cancer has been identified in 2,500 expansion members. ** NOTE: These are not necessarily NEW diagnoses** More than 81,000 Medicaid expansion members have received a prescription* *Due to claims lag, numbers largely reflect services provided in January and February and the 230,000 adults enrolled at that time (85% of current expansion enrollment).

Background – Legislative Requirements The 2018 Appropriations Act directed DMAS to implement new coverage for adults and transform coverage through an § 1115 Demonstration Waiver: State Plan Amendments, contracts, or other policy changes Implement new coverage for adults with incomes up to 138% FPL and implement early reforms for newly eligible individuals § 1115 Demonstration Waiver The state budget creates a framework for expanding adult coverage as well as making additional changes to our Medicaid program. It’s important to understand the timing of these changes. New coverage began 1/1/2019 for adults with incomes up to 138 percent of the federal poverty In the future, there will be other initiatives for certain individuals that are required by State law. The details for those changes are in development and will require federal approval through a Section 1115 Demonstration Waiver, which gives a state flexibility to test innovations within the Medicaid program. DMAS solicited public comments on these future initiatives and held Public Hearings across Virginia prior to submitting the Section 1115 Waiver application, as required by the federal government. The 1115 Waiver application and information on the Public Hearings are posted on the DMAS website. Directed DMAS to submit a waiver asking for federal approval to add new features to the Virginia Medicaid program “designed to empower individuals to improve their health and well-being and gain employer-sponsored coverage or other commercial health insurance coverage.”

2018 Appropriations Act On June 7, 2018, Governor Northam signed a law called the 2018 Virginia Acts of Assembly Chapter 2 (2018 Appropriations Act) which approved Medicaid expansion and changes to the Medicaid program. What the State Law Says Virginia will implement the Training, Education, Employment Opportunity Program (TEEOP) to promote work and community engagement through a federal demonstration waiver. The Commonwealth will phase in a requirement that makes participation in TEEOP a condition of eligibility for all Medicaid enrollees between the ages of 19 and 64 with incomes up to 138 percent of the FPL who are not exempt. Required participation escalates from 20 to 80 hours per month, with a penalty if the individual fails to comply with requirements. Source: 2018 Virginia Acts of Assembly Chapter 2

2018 Appropriations Act (Continued) On June 7, 2018, Governor Northam signed a law called the 2018 Virginia Acts of Assembly Chapter 2 (2018 Appropriations Act) which approved Medicaid expansion and changes to the Medicaid program. What the State Law Says The Commonwealth will create a Health and Wellness Program, for individuals with incomes 100-138% of the federal poverty level, that includes premiums, co-payments, and health and wellness accounts for rewarding individuals who regularly pay their premiums and participate in healthy behaviors. Failure to pay premiums will result in loss of coverage Separately, the Commonwealth will design supportive employment and housing benefit services targeted to high-risk enrollees Health and wellness accounts will be comprised of participant contributions and state funds to be used to fund the health insurance premiums Copayments will be designed to promote healthy behaviors and to encourage personal responsibility and accountability related to the utilization of health care services such as the appropriate use of emergency room services. Enrollees who comply with provisions of the demonstration program, including healthy behavior provisions, may receive a decrease in their monthly premiums, not to exceed 50 percent. Per Virginia Statute, requirements include provisions for institution of a grace period for premium payment, followed by a waiting period before re-enrollment if the premium is not paid by the participant and provisions to recover premium payments owed to the Commonwealth through debt set-off collections. Source: 2018 Virginia Acts of Assembly Chapter 2

Background on Section 1115 Federal Authority Under Section 1115 of the federal Social Security Act, the Secretary of Health and Human Services has authority to approve a state’s requests to waive certain provisions of federal Medicaid law. An 1115 Waiver must be: An experimental, pilot or demonstration project; Likely to assist in promoting the objectives of the Medicaid program; Budget neutral to the federal government; and Limited in duration to the extent and period necessary to carry out the demonstration. States must provide a public process for notice and comment on proposed demonstration applications and extensions. Source: Social Security Act (SSA) § 1115.

COMPASS Waiver Timeline November 20, 2018 September 20, 2018 – October 20, 2018 December 7, 2018 – January 6, 2019 January 6, 2019 – Present and Ongoing DMAS released the COMPASS waiver for public notice. Over 1,800 public comments were received. DMAS submitted the COMPASS waiver to the federal government. The federal government released the COMPASS waiver for the federal public comment period. DMAS is currently negotiating the COMPASS waiver features with the federal government.

COMPASS Overview Section 1115 Demonstration Waiver Components Work/Community Engagement (TEEOP) Requirement to participate in training, education, employment and other community engagement opportunities for up to 80 hours per month in order to maintain Medicaid coverage. Applies to all “able-bodied adults” in the Medicaid program who do not meet an exemption (e.g., parents of dependent children, medically-frail, disabled). Health & Wellness Program Requirement for premiums and co-payments, health & wellness accounts and healthy behavior incentives. Applies to Medicaid enrollees with incomes between 100-138% FPL, who do not meet an exemption. Exemptions are the same as in the TEEOP program. Reminder of the components of the waiver – three programs – complex! Housing & Employment Supports for High-Risk Enrollees A supportive housing and employment benefit for high-risk Medicaid enrollees, including those with severe mental illness, substance use disorder, or other complex, chronic conditions. Source: 2018 Virginia Acts of Assembly Chapter 2

Work and Community Engagement: Exemptions Some people in Medicaid will be exempt from – meaning they don’t have to meet – work and community engagement requirements. Individuals who experience a hospitalization or serious illness or who live with an immediate family member who experiences a hospitalization or serious illness Birth or death of a household member Family emergency Change in family living circumstances (e.g., separation, divorce) Individuals living in geographic areas with high unemployment rates Pregnant and 6-months postpartum women Children who are age 19 and younger Students in post-secondary education Medically frail individuals Individuals meeting SNAP and/or TANF requirements Individuals age 65 and older Individuals who have blindness or a disability Victims of domestic violence Standard Exemption Examples: Hardship/Good Cause Exemption Examples: The length of the hardship/good cause exemption will be dependent on the individual’s circumstance.

Work and Community Engagement: Participation Requirements People who aren’t exempt must participate in one or more qualifying work or community engagement activities for 20 to 80 hours per month to continue to stay in Medicaid. Activities Employment Job skills training or job search activities/readiness Participation in a workforce program Education Training and apprenticeships Community or public services Caregiving services Other activities If an enrollee who does not have an exemption fails to comply with their work and community engagement requirements for any three months within a 12-month period, their Medicaid coverage will be suspended Enrollees whose coverage is suspended will have their coverage re-instated if they: Comply with work and community engagement requirements for one month Qualify for another Medicaid eligibility category in which they are not subject to work and community engagement requirements Qualify for a standard or hardship/good cause exemption Turn age 65 People who do not meet the work/community engagement requirement for any three months within a 12-month period will have their Medicaid coverage suspended until : 1) the end of the year or 2) demonstrating compliance with the work and community engagement requirements for one month, or 3) qualifying for another Medicaid eligibility category not subject to work and community engagement requirements, or 4) qualifying for an exemption.

Vision and Goals for TEEOP Design Planning and CMS Negotiations Develop highly automated approach to administering work requirements that: Puts the consumer at the center of a streamlined and accessible process; Minimizes administrative burden on State and local county agency staff; Maximizes coverage retention; and Ensures access to available workforce programs and support services. Goals Implement automated processes to identify consumers subject to, exempt from, and compliant with TEEOP, using administrative data and attested information collected at application. Implement “no-wrong-door” approach (online, by telephone, by mail, and in person) for exemption identification and compliance reporting. Create robust messaging and education around TEEOP to ensure individuals understand the requirements, reporting modalities, and support services available. Refer individuals to workforce services appropriate to their level of need. Ensure program integrity by implementing auditing process to verify eligibility and compliance for subset of enrollees subject to work requirements.

Premiums, Co-Payments, Health and Wellness Accounts Virginia will implement premiums co-payments and Health and Wellness Accounts to empower people to take greater responsibility for their health and well-being. Premiums Healthy Behavior Incentives Co-Payments for Non-Emergent Use of the Emergency Department Health and Wellness Accounts & Health Rewards Medicaid enrollees with incomes from 100-138% of the federal poverty levels (FPL) will be required to pay premiums on a monthly basis. ($5 for 100-125% FPL’ $10 for 126-138% FPL) The same categories of individuals that qualify for a TEEOP standard or good cause exemption will be exempt from paying premiums. Virginia will make Medicaid coverage effective on the first day of the month after an enrollee pays his or her premiums. Third parties like employers or churches may pay a premium on an enrollee’s behalf. If an enrollee fails to pay his or her premiums for three months, their Medicaid coverage will be suspended. Coverage will be reactivated when an enrollee makes a premium payment, meets an exemption, or reports a change in circumstances that reduces family income to less than 100% of the FPL. Individuals subject to premiums and who complete at least one healthy behavior during the coverage year will have premiums reduced by 50% in the following coverage year. Examples of Healthy Behaviors include: Annual wellness exams Mammograms Pap smears/cervical cancer screenings Colon cancer screenings Flu shots Nutrition counseling Tobacco cessation counseling or medications SUD treatment Enrollees will also be required to pay a $5 co-payment for each non-emergent or avoidable emergency department (ED) visit to help discourage using the ED for routine or urgent care

Premiums and Health and Wellness Accounts Medicaid enrollees with incomes from 100-138% of the FPL will be required to pay monthly premiums for Medicaid. Premium amounts are: Individuals who pay their monthly premiums for a minimum of nine consecutive or non-consecutive months and complete one or more healthy behaviors (e.g., annual exam, flu shot) in the 12-month coverage year will receive a gift card reward. Individuals who complete at least one healthy behavior during the 12-month coverage year will have their premiums reduced by 50 percent the following year. Income Monthly Premium 100-125% FPL $5 per month 126-138% FPL $10 per month People who do not pay their premiums for three months will have their Medicaid coverage suspended until making one premium payment, meeting an exemption or reporting a change in circumstances that reduces family income to less than 100% of FPL

Current Status/Next Steps - CMS Negotiations Negotiations of 1115 Special Terms and Conditions (STCs) Current Phase DMAS is currently in active negotiations with CMS on the 1115 waiver standard terms and conditions (STCs), which serve as the agreement between the federal government and the state on the policy for the waiver programs Negotiations of Implementation and Evaluation Protocols Next Phase After the waiver approval letter is sent, DMAS and CMS will negotiate the implementation and evaluation protocols, which outline how the waiver programs will be operationalized, monitored and evaluated Seeking Additional Federal Authorities for Key Components Additional Authorities This will include submission of multiple state plan amendments (SPAs) to secure authority for certain waiver components and advanced planning documents (APDs) to secure federal match for IT systems changes DMAS has been working closely with sister agencies to plan for operationalization of the waiver programs.

Lessons Learned from Other States Currently, nine states have received federal approval to implement work/community engagement requirements (AR, AZ, IN, KY, MI, NH, OH, UT, WI). Four states (AR, KY, NH, IN) are in the implementation phase of the work/community engagement requirement. Two states have had work/community engagement requirement implementation blocked (KY) or paused (AR) by the March court ruling. One state (NH) has pending litigation. Lessons Learned for Implementation Caution against making systems changes prior to waiver approval by CMS. Negotiations with CMS can significantly impact business processes and systems requirements. Encourage significant outreach/training prior to implementation to mitigate loss of coverage due to lack of knowledge and understanding of the requirements and penalties. Where possible, phase in or pilot requirements and penalties so both the state and enrollee can learn and adapt prior to full implementation. Implementation paused in AR; implementation blocked in KY Legal challenges to work requirements mean that currently no state has an operational work requirement with a penalty. Judge blocked Arkansas and Kentucky. Two new waivers have been approved since VA’s submission – Arizona and Ohio. Both states’ approval letters included an implementation date 1-2 years out, which we believe is in recognition of the ramp up time needed to implement a program of this magnitude. Our sense is that these market changes are impacting our negotiations with CMS, namely in the level of detail they are requiring from us and the ramp up time in the approval letters for Arizona and Ohio. Key note, if asked – all other states had implemented MedEx prior to submission of their waiver amendment. AKA, no other state has done this at the same time, as Virginia has.

Discussion of Implementation Timeline: Indiana Indiana HIP 1115 Waiver: Gateway to Work Program Overview Indiana is taking a phased approach to its work/community engagement requirement implementation. Indiana had previously implemented Medicaid expansion and its premiums/POWER accounts in 2015. Feb. 2018 CMS approval of waiver June 2017 Submit waiver to CMS Jan. 2019 Go-live (phased approach: 0-hour requirement) July 2019 Phased-in hours requirements begin Jan. 2020 Reporting and penalties for non-compliance begin Indiana is an excellent example of a state that had every motivation to implement as quickly as possible, as the federal administrator, Seema Verma, came from Indiana and was the architect for their program. Indiana is phasing its work requirement in multiple ways: First, hours requirements - Zero hours required for first 6 months Then, slowly increasing to 20 hours per week in July 2020 Second, penalties don't begin until a year after the requirements kick in (July 2020) KY and AR are also phasing in: KY WILL BE phasing in by county (implementation blocked) AR CURRENTLY phasing in by population category Work requirement and penalty are being phased in for enrollees ages 30 to 49 from June through September, 2018, and for those ages 19 to 29 in 2019 Over 4300 enrollees have lost coverage in first three months due to failing to report compliance, which some have chalked up to AR's rapid implementation

Virginia Proposed Implementation Timeline Virginia COMPASS Implementation: Unlike Indiana and other states, Virginia will be implementing three large-scale waiver components simultaneously. Virginia will be working on the operational design and planning for implementation of the waiver during negotiations with CMS. 2019 ANTICIPATED CMS approval of waiver Nov. 2018 Submit waiver to CMS Demonstration Year 1 Build systems and go-live with requirements Demonstration Year 2 Early in Demonstration Year 2, go-live with penalties for non-compliance Date of Federal Approval = Time 0 Possible Hypothetical: If we get federal approval on June 1, 2019, then Demonstration Year 1 would begin that day and end on June 1, 2020. We will use that first year to build the systems and ramp up workforce capacity Program requirements will be phased in During Demonstration Year 1 as they’re ready (e.g. premiums). Then, early in Demonstration Year 2 (which would begin June 1, 2020 in this hypothetical), we would go live with the penalties for non-compliance. Once the new members are enrolled in our system, we’ll know more about the new members and how best to build that workforce capacity to serve them and get them the right jobs that will offer health insurance. Dem question – how many will lose coverage? According to JLARC, up to an estimated 20,000 people… However, we’re working as hard as we can to make sure that no one loses coverage.

Accessing Virginia COMPASS Materials Information on Virginia COMPASS can be found on the DMAS web page: www.dmas.virginia.gov/#/1115waiver The detailed COMPASS Presentation (provided during Public Comment) The Public Notice and Comments The Virginia COMPASS Application submitted to CMS

Questions?