MEDICAID FIGHT CLUB
STATES BACKED INTO CORNER BY MEDICAID BUDGETS AND FUNERAL MANDATES
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.