Medicaid coverage for HIV-positive individuals demonstration

Health Care Financing Review, Spring, 1993

The following summary is of a report from the Secretary of Health and Human Services released to Congress on January 13, 1993.

Legislative Mandate

Section 4747 Public Law 101-508, of the Omnibus Budget Reconciliation Act (OBRA) of 1990, mandated the implementation of a demonstration to assess the impact of Medicaid-covered services provided to human immunodeficiency virus (HIV)-positive individuals in the early stages of infection, and prior to Medicaid eligibility. The statutory requirements included the following: * There will be two demonstration

projects in different States, each involving

the participation of a hospital and at

least one other non-profit organization

with a demonstrated record of case

management of patients who have

tested positive for the presence of HIV. * Medicaid coverage is to be provided to

individuals whose income and resources

do not exceed the maximum

allowable amount for eligibility for any

individual in any category of disability

under the State plan under section 1902

of the Social Security Act and who have

tested positive for the presence of HIV

(without regard to the presence of any

symptoms of acquired immunodeficiency

syndrome (AIDS) or opportunist

diseases related to AIDS). * Each project is limited to an enrollment

of not more than 200 individuals. * Projects must have access to a control

group of such individuals who are not

receiving State or Federal payments for

medical services (or other payments

from private insurance coverage) before

developing symptoms of AIDS. * Projects are to be conducted over a 3-year

period and are limited to $5 million

in Federal expenditures for services in

fiscal year (FY) 1991, $12 million in FY

1992, and $13 million in FY 1993. * Projects must establish a system of

monthly payment to each participating

entity within 12 months of the start of

services under the demonstration

based on the average per capita cost of

services. * A Report to Congress outlining the results

of the evaluation is to be made

available no later than 6 months after

termination of the demonstration

projects.

Overview

A draft solicitation was prepared and submitted for review within the Health Care Financing Administration (HCFA) and Public Health Service components in April 1991. The solicitation was subsequently modified to reflect a number of recommendations. In August 1991, staff from HCFA met with the staffs of Senators Daniel Patrick Moynihan (Democrat-New York) and Alfonse D'Amato (Republican-New York) to discuss specific issues that were raised i n a letter f rom the senators to Gail R. Wilensky, Ph.D., the former HCFA Administrator. HCFA staff explained how the senators' concerns would be addressed in the solicitation, and the senators' staff indicated complete satisfaction with HCFA's approach. The AIDS Action Council, a national organization based in Washington, DC, also communicated their specific concerns regarding the conditions set forth in the solicitation. HCFA addressed these issues as well.

The solicitation closely followed the guidelines as specified in the legislation. The legislation specified that the projects would be awarded no later than 3 months after the date of enactment of OBRA 1990. However, because a solicitation to the States was required, this date was impossible to meet. The solicitation for applications was mailed to each State Medicaid agency on November 15, 1991. In addition, more than 60 copies of the solicitation were distributed to interested organizations. The solicitation was not published in the Federal Register because all potential applicants were contacted directly. The closing date for receipt of applications was February 10, 1992, allowing for approximately 90 days to develop the application. Unfortunately, no State responded to the solicitation.

The legislation authorized funding for FYs 1991-93. However, awards were to be made in May 1992, and the delivery of services would not have commenced until November 1992 (FY 1993), after a 6-month development phase. It therefore would have been necessary to authorize additional funds for FYs 1994 and 1995 to provide for a 3-year demonstration. The solicitation included a caveat that if funding were not authorized for FYs 1994 and 1995, the demonstration would be terminated.

A number of reasons for the States' lack of response have been established: * A significant factor was the fiscal problems

that many States currently face.

The demonstration would have required

State matching funds for the additional

services offered under the demonstration. * States with more liberal programs had

difficulty defining a control group, as

was mandated in the legislation. In

these States, many potential control

group participants would likely have

some form of insurance already available

to them. Moreover, some States

could not reconcile the ethical dilemma

presented by denying available treatment

to control group participants until

they became eligible for Medicaid coverage. * Several States did not apply because

they believed that, with only two

awards to be made, the States with the