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Policy Memorandum: Aspen County Grant Funding

Paper Type: Free Essay Subject: Health
Wordcount: 5114 words Published: 8th Feb 2020

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Executive Summary

 The Patient Protection and Affordable Care Act, hereinafter referred to as the ACA, was designed to extend the accessibility of healthcare insurance by creating federal subsidies through health insurance exchanges and through the expansion of state Medicaid programs. As the State of Golden has chosen to opt out of expanding its Medicaid program, major implications for the state’s healthcare industry as well as the state’s residents has ensued. Within the State of Golden, providers in Aspen County are encountering a shift in the Medicaid and uninsured payer mix. The inadequate Medicaid reimbursement rates and often a lack of payment all together for provided services has resulted in Aspen County’s largest primary care practice, Basalt Primary Care, termination of its Medicaid and uninsured patients. This medically underserved population has sought needed health services through the Aspen County Public Health Department’s federally qualified health center. The lack of providers, lack of funds, and opposition to government involvement has resulted in a path heading towards a public health crisis. The intent of this policy memorandum is to identify the key issues in Aspen County as they pertain to the health of the residents and the ability of the federally qualified health center in meeting the needs of its growing pool of patients. Once the key issues are identified, the needs and interests of key stakeholders; current laws, policies, and financial practices; and potential legal risks will be analyzed to determine the best course of action for the Aspen County Public Health Department.


 The ACA intended to address systematic health inequalities, with the expansion of Medicaid resulting in an increase in accessibility of healthcare coverage to low-income individuals. The U.S. Supreme Court ruled that states could not be mandated to participate in Medicaid expansion, and resultantly, the State of Golden opted out of the program. Of the approximate 15 million individuals who are expected to become eligible for Medicaid, it is estimated that only seven million will actually enroll in the first year. This will leave a significant portion of low-income individual’s uninsured, with the largest portion of these individuals residing in states that have chosen not to expand their Medicaid program (Lyon, Douglas, & Cooke, 2014). Despite the states choice to abstain from expanding its Medicaid program; in order to uphold the ACA requirement, it will need to establish programs to address access and enrollment in current health coverage options.

Factual Overview

Providing access and enrollment assistance is vitally important in connecting low-income, uninsured individuals with healthcare coverage. To do so, the State of Golden must determine the type of Health Insurance Exchange (HIE) it will implement. Even with the institution of a healthcare exchange, in the absence of an expansion of Medicaid, there will be individuals who will fall into a “coverage gap” whose income is above Medicaid eligibility limits but below the qualifying limit for premium tax credits. If the number of individuals that fall into the coverage gap is high, it is unlikely Aspen County will achieve a noticeable change in payer mix and a subsequent reduction in uncompensated care costs. Increased enrollment in Medicaid in the absence of expansion will further strain the state’s Medicaid budget as the state will not be receiving additional funds under the ACA expansion (Goodwin & Tobler, 2014).

Role of Key Stakeholders Involved

 To determine the best course of action, all key stakeholders must be identified along with the impact that the state’s decisions will have on these key stakeholders. Key stakeholders include: community members (existing and potential persons served), healthcare providers, healthcare organizations (includes, but is not limited to: hospitals, primary care practices, urgent care clinics, federally qualified health centers, and public health departments), health insurance organizations, employers, and state officials.  Vulnerable and underserved populations, such as children, pregnant women, racial and ethnic minorities, rural populations, individuals with mental illness or substance-related disorders, and individuals with HIV/AIDs, face barriers in the acquisition of health coverage and health care services (National HCH Council, 2012). These populations would benefit most from the availability of enrollment assistance programs.

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Independently and collectively, each stakeholder identified has a role in improving access to healthcare. State legislative officials play a significant role in the development and implementation, or lack thereof, of Medicaid expansion, establishment of a healthcare exchange, and design of enrollment assistance programs. State officials need to determine appropriate steps to enhance provider capacity and healthcare access to meet the expected increase in demands for care that will result from new patient enrollees (Artiga, Rudowitz, & Tolbert, 2016). State officials must also ensure that education is provided to all Aspen County community members on the impact of forgoing Medicaid expansion and ACA requirements that must be met regarding healthcare coverage.

Providers play an important role by providing education on available healthcare coverage options, encouraging patient enrollment, and making resources readily available on how to initiate enrollment (Artiga, Rudowitz, & Tolbert, 2016). Aspen County providers and healthcare organizations have been largely impacted by the shifting payer mix and the increase in uncompensated care provided. Physicians employed by primary care practices and hospitals are experiencing financial hardship due to reduced Medicaid reimbursement rates and absence of payment from uninsured patients. Providers of Basalt Primary Care have chosen to terminate their provider-patient relationship with Medicaid beneficiaries and uninsured patients as a result of this negative financial outcome. Ensuring terminated patients have the necessary resources to obtain alternative healthcare services will be imperative.  

Legal Risks and Malpractice Issues

 The State of Golden’s decision to forgo Medicaid expansion comes with potential legal risks and malpractice issues. Work requirements, eligibility restrictions, and the individual mandate have resulted in lawsuits in an attempt to overturn the law. An issue which may result in malpractice suits is related to longer wait times for provider appointments which results in an increase in individuals utilizing urgent care centers and emergency rooms to meet healthcare needs. Along with a large increase in individuals presenting to urgent care centers and emergency rooms comes an increase in medical errors. States that choose not to expand Medicaid have experienced a crucial consequence of an increase in uninsured individuals with a resulting spike in uncompensated care costs. These states have suffered a significant increase in the number of hospitals needing to close their doors (Frakt, 2018).

Value Conflicts

 The majority of community members in Aspen County have been clear in their desire not to expand the Medicaid program, with polling data demonstrating desire to discontinue all public health services in the county. The opposing view feels that Medicaid expansion would offer a potential for significant improvements in health and access to care. By forgoing the expansion of the state’s Medicaid program early on, the state loses the ability to capitalize on available federal funding by subsidizing coverage and increasing reimbursement revenue (Sommers, Arntson, Kenney, & Epstein, 2013). It would be beneficial for the Aspen County Public Health Department to determine the negative outcomes anticipated should the state decide to participate in the Medicaid expansion. Given the community members desire to refrain from government involvement, the use of government paid enrollment assisters may pose concern, and strong objection, from the majority of those residing in Aspen County.


Stakeholder Needs

The residents of Aspen County have clearly voiced their disapproval of government involvement in state policy decisions, as well as their opposition to the level of public health services made available by the state. The State of Golden already decided to opt out of the Medicaid expansion but now must determine if it will establish its own state-based healthcare exchange (SBE), partner with the federal government, or default to a federally-facilitated exchange (FFE). In order to effectively and efficiently implement an HIE, stakeholders’ perspectives and expectations must be considered and the state must balance all stakeholders’ objectives for the SBE.

There are multiple functions and standards that must be met in order for a state to obtain approval for its SBE. Despite challenges, an SBE allows the state significant flexibility in customizing its exchange to meet the needs of its key stakeholders (Center on Budget and Policy Priorities, 2013). An SBE is the favorable option given the concerns of stakeholders; however, those involved in its development should not be short-sighted and must acknowledge the obstacles ahead. Unified support from the governor and legislature will be instrumental for state leaders charged with implementing the SBE. Financial sustainability must be a top priority with recognition that federal grants are only available to offset implementation costs for a specified amount of time (Helms, 2017).

An additional challenge the State of Golden will be faced with in managing its SBE is the potential for low enrollment and adverse selection. This is even more significant given the state’s decision to opt out of the Medicaid expansion. Adverse selection predicts that sicker, higher cost individuals relative to healthier, lower cost individuals are more likely to enroll in marketplace coverage. Additionally, a substantial number of low-income individuals fall into the “coverage gap”, meaning they are left without an affordable coverage option as their income is above Medicaid eligibility limits but below the qualifying limit for premium subsidies (Garfield, Orgera, & Damico, 2019; Shi, Feng, Griffin, Williams, Crandall, & Truong, 2017). It is predicted that nationally more than two million uninsured adults fall into the coverage gap as a result of states failure to expand their Medicaid programs (Garfield, Orgera, & Damico, 2017).

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 One strategy to offset the likely situation of enrollees being sicker and more costly than expected is to develop an effective outreach and enrollment assistance program. The program would combine broad and targeted outreach and enrollment approaches in reaching and enrolling eligible individuals. Low health insurance literacy is a significant barrier to enrollment for many individuals. In an effort to reach as many individuals as possible, the Aspen County Public Health Department should utilize multiple avenues to reach uninsured and underinsured individuals. Engaging in outreach activities, partnering with other community organizations, and utilizing grant funds via the federal government will make needed resources available and assist individuals who may otherwise avoid the challenge of enrolling. Those involved in the effort can learn from the enrollment experiences of other states. Research shows that in states with low enrollment, individuals found the process burdensome and developed an unfavorable perception due to technology platform complications and lack of enrollment assisters to help in the process. Education, navigation, and ability to answer questions make a substantial difference in successfully enrolling individuals (Giovannelli & Curran, 2016).

 With the mass of new enrollees comes a significant increase in the demand for healthcare services. Due to this increase in demand, the healthcare industry is experiencing a growing lack of providers. One potential result to this deficit in providers is an increase in waiting times for appointments. Additionally, there is a growing shortage of providers who are willing to accept new Medicaid beneficiaries due to low reimbursement rates and administrative burden (Goodnough, 2013). The largest primary care practice in Aspen County, Basalt Primary Care, has chosen to terminate its uninsured and Medicaid patients due to the low reimbursement rates, and at times not receiving payment at all. To remedy this, the government is allowing a two year increase in Medicaid payment rates for primary care providers in hopes of increasing provider participation. While this raised Medicaid rates to the level of Medicare rates, the time-limited nature of the increase is a deterrent for many providers (Goodnough, 2013).

 Federally qualified health centers (FQHC) provide comprehensive primary care services to underserved populations based on a sliding fee scale. Under the ACA, FQHCs have received additional funding to expand their service delivery capacity to meet the growing demand of healthcare access. As Basalt Primary Care terminates its uninsured and Medicaid patients, the Aspen County Public Health Department’s ability to provide services to this rapidly growing population is more important than ever. A significant portion of FQHCs revenue is received from Medicaid; therefore, the state’s decision to forgo the Medicaid expansion has massive financial implications. The absence of Medicaid expansion results in less revenue creating barriers to the number of individuals the FQHC is able to serve, the range of services provided, and the number of healthcare workers available (Rosenbaum, Tolbert, Sharac, Shin, Gunsalus, & Zur, 2018).

Laws, Policies, & Financial Practices

 The ACA made it a legal expectation that the health insurance industry would provide a new, affordable health insurance market with minimal essential coverage options. Discriminatory pricing and coverage practices are expected to be a thing of the past through the implementation of laws banning preexisting condition exclusions, rescissions, lifetime limits, and annual coverage limitations. Healthcare plans are also required to cover preventative services, immunizations, and other preventative services for children, adolescents, and pregnant women. In an effort to increase preventative health services and alleviate the shortage of providers, the ACA intends to expand FQHCs and increase the Medicaid reimbursement rate for primary care providers (Rosenbaum, 2011).

Value Conflicts Among Stakeholders

Historically, states have regulated the private health insurance market. The implementation of the ACA gives rise to a federalist approach whereby the federal government establishes a general framework of standards and the states maintain their autonomy to implement their own programs within the confines of those standards (Harkness, 2012).  The general purpose behind the HIE is to ensure accessible and affordable health insurance coverage for those who have otherwise been faced with barriers in the insurance market. HIEs must operate in accordance with extensive requirements which include legislative, policy, operational, and IT system developments. Designing an effective SBE is challenging; however, opting for a federally designed and operated exchange poses enormous challenges in coordinating the business, administrative, and legal aspects of a state’s exchange (Burke, 2014).

Legal Risks & Malpractice Issues

 As changes in the healthcare industry continue to occur as a result of healthcare reform, the State of Golden and all its constituents will need to be more vigilant than ever of the increasing number of legal risks and potential for malpractice claims (Demko, 2014). Demko (2014) reports an increase by $120 million a year in medical malpractice claims as a direct result of the increase in the number of individuals gaining health insurance. There are several areas that pose a greater risk for malpractice claims, including but not limited to: changes in the standards of care due to ACA focus on care quality and performance measures, increase in vicarious liability claims due to reliance on non-physician providers to keep up with the growing number of patients, miscommunication and poor care coordination, and provider burnout leading to a potential increase in medical errors (Beaulieu-Volk, 2014). Additional actions that pose legal risks to healthcare organizations and healthcare providers include those that violate Federal and State fraud and abuse laws. The Aspen County Public Health Department should be proactive in communicating and educating its providers on compliance issues and strategies to avoid violating the False Claims Act, Stark Law, and the Anti-Kickback Statute (Ellison, 2014).


 The Aspen County Public Health Department should start by conducting a community health needs assessment to gain an in-depth understanding of the existing challenges in improving the quality of healthcare services and health outcomes. Barriers in healthcare accessibility and high uncompensated care costs are due, in part, to the state’s decision to opt out of expanding its Medicaid program. A community health needs assessment will assist in determining the number of currently uninsured individuals, approximate number of individuals who would fall into the coverage gap, predict uncompensated care costs, and outline a course of action to ensure all residents have access to affordable, high quality healthcare services.

The number of primary care providers who are willing to accept uninsured and Medicaid beneficiaries continues to decline. Federally Qualified Health Centers (FQHCs) play an increasingly important role in providing primary care services to these medically underserved individuals. Given an expected increase in utilization of services via Aspen County’s FQHC, it is recommended that the Aspen County Public Health Department move forward in the application process for federal grant funding to expand their service delivery capacity to meet the growing demand for healthcare coverage and access to services. Federal grant funding will also assist FQHCs in establishing programs to address access and enrollment in current health coverage options.

It is strongly suggested that the Aspen County Public Health Department consider organizing an advocacy group to educate the residents of the State of Golden about the progression of negative effects as a result of opting out of the Medicaid expansion program. The advocacy group could also assist in the initiation of a petition for a ballot referendum in support of the state expanding Medicaid. Despite the continued argument that the state can’t afford its share of the costs to fund the Medicaid program, evidence-based research shows that a large portion of a state’s new spending for Medicaid would be offset by savings in other areas, such as a decrease in uncompensated care costs (Moulds, Hayes, Collins, & Nuzum, 2018).

Despite what appears to be a strong opposition to expanding Medicaid by the state’s residents, it is highly unlikely that this opposition is based on the evidence of effects that have transpired since the implementation of the ACA. Education on the role Medicaid plays in promoting health and well-being, transparency of data collected and financial implications that exist statewide would be of great value. The argument that urgent care centers and emergency rooms will experience a large increase in utilization is valid; however, this increase in the absence of Medicaid expansion is a result of an increase in uninsured individuals seeking care services. This in turn will dramatically affect the amount of uncompensated care costs. This issue is compounded by not only an overall shortage of providers, but also a decline in the number of providers who are willing to accept new uninsured and Medicaid beneficiaries. The Aspen County Public Health Department should collaborate with state leaders in developing a strategic plan to recruit and retain primary care providers. An increase in providers is needed to continue to provide the state’s residents with high quality care and to decrease legal risk and potential for malpractice claims.

Absence of Medicaid expansion will lead to serious financial trouble for hospitals and providers due to uncompensated care costs, bad debts, and payment cuts. These unavoidable financial pressures are unsustainable and threaten access to care for all state residents. States will also face Medicare and Medicaid payment cuts that will result in significant financial losses without the Medicaid expansion funds to offset the lost revenue (Piper, 2012). As hospitals and private practices decline in their financial ability to serve uninsured and Medicaid beneficiaries, FQHCs provide alternative means for these individuals to receive primary and preventative care. In addition to the increased Medicaid reimbursement rates for primary care providers, federal grant funding is critical in increasing the number of individuals the FQHC is able to serve, especially in the absence of Medicaid expansion. It is imperative that the Aspen County Public Health Department explore all viable federal grant funding opportunities in order to continue its ability to improve the health of the state’s underserved populations.



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