Kaiser Daily Health Policy Report

Monday, November 20, 2006

Medicaid:
Federal Medicaid Commission Recommends More Flexibility for States; Some Democrats Oppose Proposal

A federal Medicaid commission appointed last year by HHS Secretary Mike Leavitt on Friday issued a report to Congress that recommended placement of the sickest beneficiaries in managed care plans and additional flexibility for states to administer benefits under the program, CQ HealthBeat reports (Reichard, CQ HealthBeat, 11/17). The commission was established as a result of negotiations over the fiscal year 2006 federal budget to make recommendations on short- and long-term reforms to Medicaid. Last September, the commission in a report to Congress made recommendations on how to reduce Medicaid spending growth by $10 billion over five years. The latest report includes recommendations on long-term reforms to Medicaid (Kaiser Daily Health Policy Report, 6/16). The report recommended that Congress:

• Allow states to place dual-eligibles -- beneficiaries eligible for both Medicaid and Medicare -- in Medicaid Advantage plans modeled after Medicare Advantage plans;
  
  
• Revise federal law and regulations to "encourage states to place all categories of Medicaid beneficiaries in a coordinated system of care premised on a medical home for each beneficiary";
  
  
• Provide tax incentives to individuals to encourage the purchase of long-term care insurance and to employers to offer such coverage to employees;
  
  
• Expand the use of health savings accounts for long-term care expenditures;
  
  
• Encourage the use of home-based care, which costs less than nursing home care, for Medicaid beneficiaries;
  
  
• Require electronic health records for all Medicaid beneficiaries by 2012, as well as EHR compatibility among different health care providers; and
  
  
• Provide funds for care management and pay-for-performance systems in Medicaid to help improve outcomes for beneficiaries (CQ HealthBeat, 11/17).

Reaction

• Former Tennessee Gov. Don Sundquist (R), chair of the commission, said the panel sought to focus on increased flexibility for states to administer benefits under Medicaid. Sundquist said, "If something works, they shouldn't have to go, 'Mother may I' to the government." He added, "I just hope that Congress will work like we worked.
  
  
• The people will demand it, I think." Former Maine Gov. Angus King (I), vice chair of the commission, said that the commission also sought to focus on improved coordination of care for Medicaid beneficiaries. According to the AP/Houston Chronicle, Democratic lawmakers "have contended that the panel ... has lacked independence," and some analysts "are predicting the group's recommendations will be 'dead on arrival.'"
  
  
• Incoming House Energy and Commerce Committee Chair John Dingell (D-Mich.) said, "While some in Congress thought this effort would bear fruit, I see no proof of that in this report. It is the job of Congress to review the Medicaid program and legislate necessary changes, not a hand-picked commission stacked against working families."
  
  
• Incoming Senate Finance Committee Chair Max Baucus (D-Mont.) said, "Many of its recommendations will undermine federal oversight of the program and reduce the likelihood that the most vulnerable Americans will get the comprehensive health care they need" (Freking, AP/Houston Chronicle, 11/17).
  
  
• Rachel Klein, deputy director for health policy at Families USA, said, "It is a commission report that is and should be dead on arrival" in Congress.
  
  
• AARP raised concerns about recommendations for increased flexibility for states to administer benefits under Medicaid. According to AARP, "Some proposals that others have labeled as flexibility are harmful because they inevitably lead to cost shifting and unnecessary denial of care" (CQ HealthBeat, 11/17).
  
  
• William Vaughan, senior policy analyst at Consumers Union, said that increased flexibility for states to administer benefits under Medicaid might lead to more restrictions on eligibility and reduced benefits for beneficiaries (AP/Houston Chronicle, 11/17).

Robert A. Nickerson
Senior Legislative Representative
Office of the Mayor
NYC Washington DC Office
1301 Pennsylvania Avenue, NW, Suite 350
Washington, DC 20004
Tel: 202-624-5912
Fax: 212-312-0708