Feds tells state its Healthy Indiana Plan expansion not complete

That is because the state did not consult with the Pokagon Band of Potawatomi Indians, a Native American tribe that lives in northern Indiana and southwestern Michigan, before submitting for federal approval its application to expand the Healthy Indiana Plan, according to letters sent to the state from the U.S. Department of Health and Human Services in mid-July.

The state must consult the tribe and address other issues before the federal government can begin the official review process of Gov. Mike Pence's proposal, according to a letter from Angela Garner, acting director of Centers for Medicare and Medicaid Services' division of state demonstrations and waivers.

Pence announced his proposal to expand the plan in May, calling it an alternative to the Medicaid expansion found in President Barack Obama's Affordable Care Act.

The tribal consultation is holding up both the state's application to expand the revision of the existing Healthy Indiana Plan, dubbed HIP 2.0, and the backup proposal to keep the program as currently designed in the event federal health officials do not agree to the expansion.

State officials met with the tribe Tuesday, and Indiana Family and Social Services Administration spokesman Jim Gavin said it is his understanding the meeting went well.

A Pence spokeswoman, Christy Denault, said the administration does not anticipate the issues to affect discussions with federal health officials. Denault said the Pence administration looks forward "to having an opportunity to launch the innovative HIP 2.0 to provide more Hoosiers with consumer-driven health care."

The state also remains hopeful the federal government will approve the expansion in time for the program to begin in early 2015, Gavin said.

State and federal health officials are continuing discussions while the issues are resolved, Gavin said. Pence met last week with U.S. Department of Health and Human Services Secretary Sylvia Mathews Burwell in Washington, D.C., to discuss his expansion proposal, but said after the meeting differences remain.

Matt Clay, medical director for the Pokagon Band, told the state in a letter the tribe is supportive of the state's goals to expand health care.

However, the tribe brought up a number of issues with the state's application, including that the proposal would "unnecessarily complicate" the administration of the Medicaid program for the tribe and the state, according to a letter from Clay.

Clay recommends the state not require tribe members to participate in the Healthy Indiana Plan to be eligible for Medicaid reimbursement.

"This simpler approach is based on other waivers recently approved without delay by (federal health officials,) and involves simply carving out the Indian population from having to enroll in the managed care system proposed in both waivers," according to Clay's letter.

Pence's administration is seeking the federal government's approval to access Medicaid dollars made available through the Affordable Care Act to expand health care coverage to "able-bodied" Hoosiers ages 19-64 who earn no more than $16,105 a year. Pence chose not to expand traditional Medicaid through the Affordable Care Act. Instead, he's asking the federal government to approve a plan crafted by his administration that in some cases would require participants to pay contributions for coverage.

The federal government also told the state the feedback from the tribe is necessary before a 30-day federal public comment period can begin, which is separate from the public comment period already completed by the state. The state is requesting clarification on why consulting with the tribe was not required in three previous applications the state submitted to continue the Healthy Indiana Plan, including last year's application to expand the program through the end of this year, Gavin said.

Separately on its application to maintain the program as currently designed, the federal government told the state it had not received a 2013 annual report due on May 1. The state is working to submit that report.

"Under new leadership, FSSA is now working expeditiously to correct this oversight and get (the federal government) the materials they need," Gavin said.

A request for comment to the Centers for Medicare and Medicaid Services was not returned as of Tuesday evening.

In May, Pence unveiled his proposal to cover 350,000 more Hoosiers by expanding the state's program, which began in 2008, and currently requires participants to make contributions to a health savings account. The expansion would tier coverage, charging participants above the federal poverty line monthly. Participants below the poverty line can choose to pay a monthly contribution for greater coverage but default to a plan with lesser coverage and co-pays if monthly payments aren't made.

Pence said after meeting with Burwell last week the state is "determined to continue to work in good faith" in its efforts to expand the Healthy Indiana Plan. His administration has touted the proposal saying it requires participants to show personal responsibility.

"We are hopeful that the federal government will give us the freedom and flexibility to empower Hoosiers to take charge of their health and wellness in a fiscally responsible manner," Pence said following his meeting with Burwell.