In New Jersey, Quality Group Lays Out Plan to Reform Medicaid

While the House Republicans’ plan to undo the Affordable Care Act (ACA) made its way around the nation’s capital this week, healthcare quality leaders in New Jersey offered the fruits of a yearlong process to rethink the state’s Medicaid program, which has wrestled with years of growth, funding constraints, and technology problems.

The resulting report, Medicaid 2.0: Blueprint for the Future, contains 24 separate recommendations that the New Jersey Health Care Quality Institute estimates could save $100 to $300 million from the state’s $11 billion Medicaid tab. Those savings could be important in a state where Medicaid now consumes 20% of the budget and where, despite its wealth, New Jersey has been beset by years of budget woes.

This week’s report offers an example for those who want to keep up the momentum toward quality against a backdrop of uncertainty, and apparently, declining federal resources. As the report’s crafters noted, the push for better care alongside belt-tightening in New Jersey has been the reality for some time.

“Improvement to New Jersey’s Medicaid program has been, and will always be, an ongoing exercise,” said Linda Schwimmer, JD, the president and CEO of the institute. “Each year, the state budget process demands more efficient ways to operate the program. While the Blueprint is not a solution to drastic cuts in federal funding, it identifies multi-year solutions and provides an effective roadmap that will improve the state’s Medicaid program.”

New Jersey has added more than 550,000 to the Medicaid rolls through expansion; thus, the report notes, the prospects of suddenly reversing course if the ACA is repealed would have staggering consequences. Years of credits downgrades and some of the nation’s highest unfunded retirement obligations leave the state ill-equipped to fill the gap if the federal government no longer provides 65% of Medicaid’s funding. As it stands, the big news these days is Governor Chris Christie’s pitch to put $300 million in Medicaid reserves toward other uses; Horizon Blue Cross Blue Shield has set aside these funds to meet national regulatory standards to pay claims.

The House Republican plan debated Wednesday calls for transforming Medicaid to a system of per-capital grants, something Christie has endorsed. But Medicaid 2.0 was not written with Christie in mind. New Jersey will elect a new governor this year, and the report seems aimed at the person who experts say is the nation’s most powerful chief executive. The report draws on examples from other states, notably Ohio, where Governor John Kasich used an executive order to create a powerful office to direct healthcare transformation.

The report’s 24 recommendations come in 5 broad categories: (1) creating a modern infrastructure, (2) foundational reforms, including standardizing qualify measures, (3) upgrading the Medicaid model, (4) financing reforms, and (5) creating a path to population health. Specific recommendations include:

• Creating an Office of Health Transformation, which would report to the governor, be small and nimble, but have power and influence over key agencies
• Increase data transparency
• Update state managed care contracts
• Implement a universal credentialing system
• Create Medicaid coverage for long-term residential services for those with substance abuse disorders
• Take steps to purse value-based purchasing models
• Move to the next steps with the Medicaid ACO demonstration project
• Improve end-of-life care; in New Jersey, it is among the most expensive in the nation

Quality Institute officials and Joan Randell, COO of The Nicholson Foundation, which funded the effort, said the report’s findings will be shared with key stakeholders over the next year as the election for a new governor and legislature takes shape.

“No matter who these future policymakers are, they will have common concerns about healthcare,” Randell said in a statement.

“These efforts come at an important time. There is great political uncertainty about the future of Medicaid funding,” she said.