Grady Health System’s proposal to cover more uninsured through a “waiver’’ has run into a major snag at the state’s Medicaid agency.

The big problem is concern about the cost.

The current waiver proposal “is cost-prohibitive to the state,’’ Jeremy Arieh, a spokesman for the Georgia Department of Community Health, told GHN on Tuesday.

The Grady plan contains several factors “that present a challenge and a significant cost to the state,’’ he added.

DCH and Grady officials met recently to discuss the waiver proposal, which would use federal matching Medicaid dollars to help set up pilot sites that would give coverage to the uninsured. Participating medical providers would then manage these patients’ care and potentially improve their health.
Such a step would fall far short of statewide Medicaid expansion, which is called for under the Affordable Care Act and has been done in several states. Gov. Nathan Deal and legislative leaders have rejected expansion in Georgia, saying it would cost too much.

Under the 1115 waiver plan, Grady in Atlanta, Memorial Health in Savannah, and a small group of rural hospitals are seen as the initial sites in the coverage program.

Grady Health System said it’s studying the state agency’s response.

“We are currently evaluating the feedback we’ve received so far and hope to keep the process moving forward,’’ said Matt Hicks, a Grady vice president.

Arieh of Community Health told GHN that Grady “has the opportunity to resubmit or change’’ the proposal. “We’re receptive to Grady submitting an alternative proposal to the department.”

The Buckeye model

Grady officials have said the waiver program would be modeled after the Cleveland MetroHealth Care Plus program in Ohio – one that a recent study found to produce unexpectedly low costs.

Care Plus gave insurance to thousands of low-income patients in 2013 and helped them improve on health measures, according to a study in the journal Health Affairs.

The study focused on Care Plus patients with high blood pressure or diabetes and on patients who had the same conditions but remained uninsured. Compared with the uninsured group, Care Plus patients with diabetes during 2013 improved more on quality-of-care standards such as receiving recommended eye exams.

High blood pressure also was better controlled among Care Plus patients than among those who remained uninsured, though the difference was not statistically significant.

The MetroHealth System, a safety net provider, and two federally qualified health centers provided care to the patients. MetroHealth accepted some financial risk, which meant that if the total costs of care were higher than allowed by the federal officials, the organization would have to absorb the extra expense.

But there was no need to pay such a penalty, because the 28.7 percent savings by Care Plus for all enrollees totaled more than $41 million, the study found.

The Ohio program lasted only about a year because it was superseded by the state’s expansion of Medicaid.

In developing its proposal, the Grady system has teamed up with five federally qualified health centers in Fulton and DeKalb counties and a philanthropic consortium that includes the Tull Foundation, the Community Foundation for Greater Atlanta, and Kaiser Permanente of Georgia.

The waiver plan would have to be approved by federal officials as well as by the Deal administration to go into effect.