McAuliffe has begun planning for Medicaid growth, despite lack of legislative approval

Gov. Terry McAuliffe is quietly planning the nuts and bolts of enrolling an additional 400,000 Virginians in Medicaid even as the House of Delegates seems as firmly opposed as ever to expanding the health-care program for the poor.

The administration is considering how it would handle the flood of applications that are expected to pour in if expansion comes to pass. Privately run call centers could be an option.

The planning comes on top of research McAuliffe’s office has conducted into whether he has the power to expand Medicaid by executive order if he cannot get the GOP-dominated House to budge. And it comes to light as McAuliffe is claiming broad authority to keep most, if not all, of the state government running if the standoff prevents passage of a budget before July 1, the start of the fiscal year.

McAuliffe (D), who ran for office as a bipartisan dealmaker, continues to say publicly that he wants to find a legislative solution to the Medicaid standoff. But with the start of the new fiscal year less than a month away, the governor appears to be mulling over the extraordinary use of executive power, both to keep the lights on in state government and to muscle Medicaid expansion past the legislature.

Either move would be a brazen challenge to the General Assembly, which under the state constitution has sole authority to appropriate money, including $2 billion a year in federal pass-through funds that would bankroll the Medicaid expansion.

Administration officials said the planning work stems from caution, not a presumption that there will be an expansion. They said they are simply making responsible preparations to avoid what one lobbyist called “HealthCare.Gov, Part II,” a reference to the implementation failures of the federal Affordable Care Act. The law, known informally as Obamacare, allows states to offer Medicaid to people making up to 138 percent of the federal poverty line — about $15,000 a year for an individual.

“We are optimistic that the General Assembly is going to approve Medicaid expansion. I can’t tell you when, but we also have to consider what it would take to do that and do it well,” said Christina Nuckols, a spokeswoman for Health and Human Resources Secretary William A. Hazel Jr. “It’s not like there’s some magic switch and, ‘Medicaid expansion, here it is.’ ”

When asked about references to expansion in two documents obtained by The Washington Post, state officials acknowledged that planning is underway. The documents are highly technical descriptions of computer system upgrades, and both make reference to changes required for Medicaid expansion.

Nuckols declined to specify what the administration is doing to plan for expansion, but she stressed that it was all planning, not implementation.

“We are not implementing it, but we do have to think now about what it would take,” she said.

House Speaker William J. Howell (R-Stafford) said he thought that the state is getting ahead of itself with the planning.

The House has flatly opposed expansion, questioning Washington’s ability to make good on its promise to pick up most of the $2 billion-a-year tab, while McAuliffe and a slim majority of the evenly divided Senate say it will help needy Virginians, strengthen hospitals and boost the economy. The disagreement has stalled passage of the state budget because the Senate version includes expansion and the House plan does not.

“I certainly think it’s premature,” Howell said of the planning.

But he also said he understood the desire to do some preparation “because of how poorly these previous rollouts have gone.”

One of the most daunting challenges of Medicaid expansion involves processing applications for up to 400,000 new enrollees, a huge spike to a program that currently serves about 1 million. Offices across the state struggled with a backlog of 42,000 applications this year when news of expansion in neighboring states and the District led to a spike in Virginia among those already qualified but not enrolled.

At a meeting in April, Hazel told social service officials from across the state that he was looking into using privately run call centers to enroll applicants, said Carl Ayers, president of the Virginia League of Social Service Executives, who was at the meeting. The state might use existing call centers, which are operated by Xerox under a contract with the Health Department for other social service needs, Ayers said.

“The secretary’s office is looking at how they could modify their call centers with Xerox to handle the initial surge,” said Ayers, who is also director of the Floyd County Department of Social Services.

Enrollment might not be outsourced entirely, because state law requires that localities determine eligibility for Medicaid, Ayers said. So employees at the call centers might process applications up to a certain point, then forward them to local social service officials for final review, Ayers said.

That’s exactly the sort of procedural and legal nitty-gritty that the state seems to be trying to sort out ahead of any mandate to start enrollments.

“The state can only handle so much,” Ayers said. “It’s not as simple as saying, ‘Everyone has to go through a call center.’ We [would] review it and then press the button and say, ‘Yep, we agree.’ ”

Asked specifically about the call centers, Nuckols said they have been beefed up with additional staff and training but for purposes unrelated to Medicaid expansion.

“Contractors have been told to not spend money on expansion because that initiative has not been approved,” she said.

McAuliffe’s office has also been trying to prepare for the possibility that the state will not have a budget in place by July 1, which would be a first in Virginia.

The governor has been exploring what legal authority he has to keep the government open. Last week, Attorney General Mark R. Herring (D) hired a prominent Virginia legal scholar to guide him — and by extension, Herring’s top client, the governor — through that uncharted territory.

When the state came close to a shutdown in 2006, then-Gov. Timothy M. Kaine (D) prepared an executive order that would have directed the comptroller and treasurer to pay all the bills pursuant to his own spending plan, veterans of that budget fight recall. But a deal was struck at the last minute, and that order never came into play.

McAuliffe has kept his own plans close to the vest, but in public comments, he has suggested that he has the power to keep most, and perhaps all, state functions running. Republicans and some constitutional scholars question that he could do much beyond sustaining core public safety functions, such as keeping prisoners locked up and state troopers on the road.

Even key allies in the Medicaid fight say they are in the dark about how McAuliffe might pull that off.

“He said, ‘I think we can keep it open,’ ” Sen. Charles J. Colgan (D- Prince William). But Colgan said McAuliffe did not share any details.

“He was more confident than he was specific,” Colgan said. “But he thought certainly he could do it.”

Laura Vozzella covers Virginia politics for The Washington Post.
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