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Medicaid Program Premiums and Cost Sharing

Proposed Rule

Score: 17 / 60

RULE SUMMARY

This proposed rule would implement and interpret the provisions of sections 6041, 6042, and 6043 of the Deficit Reduction Act of 2005 (DRA), and section 405(a)(1) of the Tax Relief and Health Care Act of 2006 (TRHCA). These sections amend the Social Security Act (the Act) by adding a new section 1916A to provide State Medicaid agencies with increased flexibility to impose premium and cost sharing requirements on certain Medicaid recipients.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

CriterionScore

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
A link to the proposed rule containing the RIA is five clicks from the home page. Click on "regulations" (intuitive). The rest is unintuitive: click on "other regulations," expand the "detail" list, click on "CMS regulations," and then click on "quarterly provider updates—regulations" and select the update list from the period covering the date of the regulation. It can also be found on regulations.gov using the RIN and keyword search.
4/5
2. How verifiable are the data used in the analysis?
The analysis mentions databases and studies that data came from, but it provides no links.
2/5
3. How verifiable are the models and assumptions used in the analysis?
Assumptions for calculating savings due to declines in utilization are explicit, but it is not clear how they are justified.
1/5
4. Was the analysis comprehensible to an informed layperson?
The analysis is very comprehensible and easy to understand, probably because it is so limited in scope. It requires specialized knowledge to understand how HHS got the results reported in the RIA.
3/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
1/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The explicit goal is Medicaid "modernization," which appears to mean achieving cost savings in Medicaid. Impact on citizens is implicit. The analysis does not discuss outcomes for citizens that result from the spending.
1/5
Does the analysis identify how these outcomes are to be measured?
Yes, cost savings measured in dollars.
2/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
Some savings occur because people make co-payments; others occur because usage decreases.
2/5
Does the analysis present credible empirical support for the theory?
No real documentation or justification is given for these assumptions.
0/5
Does the analysis adequately assess uncertainty about the outcomes?
Surely there are uncertainties here, but no discussion.
0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
0/5
Does the analysis identify a market failure or other systemic problem?
Simply states that these changes are undertaken because legislation directed HHS to do so.
0/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
The analysis does not address this topic.
0/5
Does the analysis present credible empirical support for the theory?
The analysis does not address this topic.
0/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
The analysis does not address this topic.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
0/5
Does the analysis enumerate other alternatives to address the problem?
The analysis does not address this topic.
0/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
The analysis does not address this topic.
0/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
The analysis does not address this topic.
0/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
There is apparently some kind of cost baseline used in the calculations, but it is not explained. Analysis acknowledges that states have discretion to impose these charges. Assumption that no state would change its behavior as a result of the change in the charges could perhaps be justified but seems arbitrary.
1/5
8. How well does the analysis assess costs and benefits?
2/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
The cost of only one option is considered, and the analysis was not well documented. The cost discussion seems cursory, and it is impossible to tell whether cost estimates account for all expected costs because of the lack of discussion.
2/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
New expenditures by Medicaid recipients seem reasonable but are not well documented. Whether this represents all new expenditures by non-federal parties that occur as a result of the regulation is not addressed.
2/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Higher charges are identified. No discussion of interaction with any other prices.
3/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
Calculations assumed reductions in usage as a result of the charges, but these are not well documented.
2/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
The analysis does not address this topic.
0/5
Does the analysis identify the alternative that maximizes net benefits?
The analysis does not address this topic.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
The analysis does not address this topic.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
Medicaid enrolls are identified as a set of parties who bear costs.
2/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Analysis calculates how much of the savings will accrue to states and how much will accrue to federal government.
3/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
The analysis explicitly says that HHS made all of the changes because they were directed to do so in legislation. Thus, the analysis played little or no role.
1/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
There is no discussion of net benefits. Assertion that all changes were required by legislation might be interpreted as an assertion that the agency had no responsibility for discussing net benefits.
1/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
No goals or measures are established to track the regulation's results. Since the analysis calculated no benefits except for cost savings, there is nothing in the analysis that could be used as a basis for establishing goals for anything other than cost savings.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
Cost data seem readily available, but nothing that could track outcomes.
1/5
 
Total17 / 60

Additional details

Agency
Department of Health and Human Services
Regulatory Identification Number
0938-AO47
Agency Name
Department of Health and Human Services
Rule Publication Date
02/22/2008