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Providers scram­ble to cope with an­tic­i­pated cuts in re­im­burse­ment and in se­vices ti re­cip­i­ents

States fac­ing his­tor­i­cally high Med­i­caid en­roll­ments may run into a fed­eral bul­wark op­posed to cut­ting peo­ple from the rolls.

The Obama ad­min­is­tra­tion is con­cerned that state lead­ers fac­ing dire fis­cal prob­lems may shrink and weaken their Med­i­caid pro­grams just as fed­eral of­fi­cials are count­ing on them to pro­vide cov­er­age for mil­lions of adults and chil­dren newly el­i­gi­ble un­der the Pa­tient Pro­tec­tion and Affordable Care Act in 2014.

In­stead, fed­eral health­care of­fi­cials are try­ing to chan­nel states’ Med­i­caid re­duc­tions to­ward other types of spend­ing re­duc­tions.

Only one state, Ari­zona, which has reached about 1.3 mil­lion ben­e­fi­cia­ries, so far has moved to cut en­roll­ment. Na­tion­ally, Med­i­caid en­roll­ment has risen to a record 60 mil­lion peo­ple, ac­cord­ing to es­ti­mates by the Kaiser Fam­ily Foun­da­tion, be­cause of cov­er­age ex­pan­sions funded by a surge in fed­eral fund­ing in the Amer­i­can Re­cov­ery and Rein­vest­ment Act. And fed­eral of­fi­cials ap­pear in­clined to keep it that way, de­spite calls by Repub­li­can and Demo­cratic gov­er­nors for the avail­abil­ity of an op­tion to cut ben­e­fi­cia­ries.

The pri­mary tool fed­eral of­fi­cials have to keep states from cut­ting Med­i­caid el­i­gi­bil­ity and en­roll­ment is the “main­te­nance of ef­fort” re­quire­ment in­cluded in the 2009 Amer­i­can Re­cov­ery and Rein­vest­ment Act and ex­tended through the ACA. Those mea­sures pro­vided the states with in­creased Med­i­caid fund­ing in ex­change for their agree­ing to not re­duce the el­i­gi­bil­ity be­low their Fe­bru­ary 2009 lev­els.

The con­tin­ued de­te­ri­o­ra­tion of state fi­nances led gov­er­nors to write HHS Sec­re­tary Kath­leen Se­be­lius on Jan. 24 to ask that the fed­eral gov­ern­ment waive cuts in fund­ing to states that re­duce their Med­i­caid rolls in or­der to close their es­ti­mated $175 bil­lion in bud­get gaps through 2013. Her Feb. 3 re­sponse— re­peated of­ten since—was to sug­gest that states in­stead im­ple­ment cuts to op­tional ser­vices that could save up to $100 bil­lion an­nu­ally.

“Cuts are not a strat­egy to win the fu­ture,” Se­be­lius told the Se­nate Fi­nance Com­mit­tee af­ter its Repub­li­can mem­bers re­peat­edly urged her to grant Med­i­caid en­roll­ment waivers dur­ing a Feb. 15 hear­ing.

Se­be­lius’ ef­fort to keep states from cut­ting their en­roll­ments in­cludes her as­ser­tion that she lacks the au­thor­ity to waive the main­te­nance-of-ef­fort re­quire­ment for any state. Repub­li­cans have dis­puted that as­ser­tion.

The waiver is­sue was dropped for Ari­zona af­ter Se­be­lius wrote Repub­li­can Gov. Jan Brewer on Feb. 15 that the state was free to cut 250,000 en­rollees when its cur­rent Med­i­caid agree­ment with the fed­eral gov­ern­ment ex­pires Sept. 30. But Ari­zona’s Med­i­caid strug­gles will likely con­tinue af­ter a state se­nate com­mit­tee ap­proved a plan Feb. 23 to scrap the en­tire pro­gram in fa­vor of a smaller state-funded al­ter­na­tive.

CMS Ad­min­is­tra­tor Dr. Don­ald Ber­wick told Mod­ern Health­care that his agency is “very aware” of the bud­get stress states are un­der and how that stress is af­fect­ing their Med­i­caid pro­grams. He said the CMS is of­fer­ing state Med­i­caid pro­grams ev­ery form of as­sis­tance pos­si­ble while mak­ing sure Med­i­caid re­cip­i­ents are pro­tected.

“This (Med­i­caid) is as in­tense as any­thing I’m work­ing on,” Ber­wick said.

In a Feb. 25 letter, the CMS sug­gested at least one new area of po­ten­tial sav­ings for state Med­i­caid direc­tors: in­creases in pre­mi­ums for Chil­dren’s Health In­surance Pro­gram ben­e­fi­cia­ries. The source of rev­enue would now be al­lowed with­out vi­o­lat­ing the main­te­nance-of-ef­fort re­quire­ments.

A task force as­sem­bled by New York Gov. Andrew Cuomo seekd to cut more than $1 bil­lion from the state's Med­i­caid bud­get.

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