Health Reform WK-EDGE Study finds flaws in evaluation designs for experimental Medicaid projects
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Wednesday, December 26, 2018

Study finds flaws in evaluation designs for experimental Medicaid projects

By Brian Craig, J.D.

A recent study by the Commonwealth Fund shows that evaluation designs for experimental Medicaid projects either are lacking or contain flaws that limit their policy utility. The study examining the quality of evaluation designs for demonstrations that test Medicaid eligibility and coverage restrictions found that states seeking to impose Medicaid work requirements are supposed to formally evaluate the impact on beneficiaries—but many states are not doing so.

Medicaid 1115 demonstrations. Section 1115 of the Social Security Act gives HHS authority to approve experimental, pilot, or demonstration projects that are found by the Secretary to be likely to assist in promoting the objectives of the Medicaid program. Section 1115 is an experimental statute that permits demonstrations designed to promote program objectives and ensures that their results are properly evaluated. Because the authority that 1115 confers is experimental, the HHS secretary is obligated to carry periodic evaluations of approved experiments, so policymakers can determine whether they are indeed promoting Medicaid’s purpose. In Stewart v. Azar, 2018 WL 3203384 (D.D.C. June 29, 2018), a federal court, invalidating the HHS approval of Kentucky’s Medicaid work demonstration, concluded that Section 1115 of the Social Security Act authorizes experiments only if they are "likely to assist" in promoting Medicaid’s objective of insuring eligible people.

Currently, eight states are approved to operate the Medicaid expansion on an 1115 demonstration basis: Arizona, Arkansas, Iowa, Indiana, Kentucky, Missouri, Montana, and New Hampshire. Of four states that, as of November 2018, had received approvals to conduct work experiments—Arkansas, Indiana, Kentucky, and New Hampshire —Arkansas is the only state that has submitted evaluation plans for approval.

Findings. The study found that in Arkansas, the nation’s first-ever Medicaid work requirement demonstration is proceeding even though no federally approved evaluation is under way to assess the impact on beneficiaries. No federally approved evaluation designs for Medicaid work and community-engagement demonstrations are yet available, and CMS has not issued evaluation guidance to states. Evaluations thus lag well behind demonstration implementation, meaning important impact information is being lost. Eligibility restrictions attached to some approved Medicaid expansion demonstrations remain unevaluated. Moreover, evaluations are not sustained long enough to measure critical effects; systematic evaluation of communitywide impact is lacking; and comparisons to states with no Medicaid restrictions are missing. Without robust evaluation, the core purpose of Section 1115 is lost.

While some state designs appear to pose "pre and post" questions, there do not appear to be evaluation features aimed at ensuring pre-and-post-impact analysis in all demonstration states, or between demonstration states and states expanding Medicaid under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and states doing so under Medicaid’s normal operating standards.

The study also found that the duration of evaluations appears to be uncertain. For example, with Office of Management and Budget approval, the Trump administration has terminated a previously scheduled participant impact survey for the Healthy Indiana Demonstration that would have examined the longer-term effects of premiums and enrollment lock-out periods. This raises the potential that major downstream consequences will go unobserved.

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