Desperate Governors, State Legislatures Seek Ways To Cut Medicaid Costs

News outlets across the country are reporting that states are planning to trim Medicaid rolls and benefits. Some are especially focusing on nursing home costs.

The Hill: Medicaid Fight Shapes Up As States Seek Solutions To Budget Woes
The Obama administration is gearing up for an influx of state requests to modify the federal-state Medicaid partnership when the nation's governors descend on the capital for their winter meeting next weekend. High on state leaders' list of priorities is changing the healthcare reform law's Medicaid expansion, which 26 states challenged in federal court. The issue received renewed attention last week when Health and Human Services Secretary Kathleen Sebelius told Arizona it could drop thousands of Medicaid beneficiaries without running afoul of federal law — something 33 Republican governors have asked to be able to do. ... The looming possibility of such massive cuts is causing consternation among healthcare advocates. Cutting the Medicaid rolls now makes no sense, said Ron Pollack of the healthcare advocacy group Families USA, even if he acknowledges that the secretary's hands were tied (Pecquet, 2/21).

Related, earlier KHN coverage: States Seeking To Cut Medicaid Rolls Get Some Help – From The Feds (Werber Serafini, 2/16).

WLUK (Wisconsin): Budget Bill Would Affect Medicaid 
While union issues have been in the forefront of the budget bill debate, tens of thousands of people could lose medical assistance under the proposal. 1.2 million people rely on Medicaid in the state. Governor Scott Walker's budget bill could mean at least 50,000 people would be dropped from the program. Others would likely be affected with losses in benefits and increased fees (Krumholz, 2/21). 

Cleveland Plain Dealer: Gov. John Kasich Tries To Tame The Medicaid Beast 
About $1 in every $3 the state spends goes toward Medicaid, the health care system for the poor, disabled and elderly. It is the single most expensive -- and frustrating -- item in the state's budget for lawmakers. ... And it is about to get worse. Federal stimulus money available the past two years is about to dry up at the end of June, which means taxpayers dollars will have to pay more to keep the system solvent. ... Now it's Gov. John Kasich's turn to take a crack at taming the Medicaid beast, and he's aiming at those who get the most money from the program -- hospitals, managed care providers and especially nursing homes. The administration is challenging those groups to come up with cost-saving ideas or sit on the sidelines and be targeted for deep cuts. ... The easiest solution would be to kick people out of Medicaid (Fields, 2/21).

Minneapolis Star Tribune: Nursing Homes Facing Huge Cuts Under Dayton's Plan
For years, Minnesota's $2.3 billion nursing home industry received a sympathetic ear at the Legislature and avoided Draconian budget cuts, even in the leanest times. After all, there is a nursing home in almost every legislator's district -- roughly 400 facilities statewide -- and few lawmakers wanted to hurt a major employer or risk substandard care for the state's frail elderly. That hands-off tradition could change this year. The heavily regulated industry would take its deepest payment cuts in history under the budget that Gov. Mark Dayton unveiled last week (Wolfe, 2/20).

Kaiser Health News / USA Today: States Pushing Managed Long-Term Care For Elderly And Disabled Medicaid Patients
Desperate to rein in rising Medicaid costs, Tennessee last year became the sixth state to require its frailest and costliest patients — the elderly and disabled who need long-term care — to enroll in managed care plans.  At least 10 other states, including Florida, Maryland, New Jersey and Rhode Island, are considering introducing or expanding the use of managed long-term care. The trend is sparking opposition from the nursing home industry and raising some concerns from AARP and other patient advocates. Traditionally, states pay Medicaid providers, such as doctors and nursing homes, directly for individual services. But many officials say that system makes it hard for them to predict and control Medicaid spending. Under managed care, states pay health insurers a fixed monthly fee for each Medicaid patient. The lump sum is used for all the patient’s costs, including physician and nursing home care (Galewitz, 2/20).

The Associated Press/Seattle Post Intelligencer: Lawmakers Look To Trim 'Safety Net,' Plug Deficit
Disability Lifeline, which replaced General Assistance-Unemployable (GA-U) last year, provides medical and cash assistance for what the program's supporters call "our state's most vulnerable." Paid for entirely by the state, it gives medical and mental health benefits to adults who don't qualify for federal Medicaid money and hands out cash grants to qualifying clients. It's one of the big-cost state government programs that lawmakers are looking to change as they stare down a $5 billion deficit in the next two-year budget. ... The state would save $327 million biennially by nixing the program. Disability Lifeline - along with other support services, like the Basic Health Plan - was targeted by the governor for total elimination, but Democrats have pushed instead to retain it in a less costly form. ... The House and Senate reached a compromise this past week that cuts the cash grant by 42 percent (Rosbach, 2/21).

The Texas Tribune: UT/Texas Tribune Poll: Mixed Signals on Budget Cuts
By a margin of more than 2 to 1, Texas voters believe that lawmakers should solve the state's massive shortfall by cutting the budget, according to the latest University of Texas/Texas Tribune poll, but their enthusiasm dissipates when asked if they support specific cuts. ... Given a list of things that could be cut to balance the budget and asked to check each that they'd consider, the voters were protective of state programs, and overwhelmingly so. They oppose cuts to ... the Children's Health Insurance Program, 87 percent; ... cuts to Medicaid providers like doctors and hospitals, 86 percent; state funding for nursing home care, 90 percent (Ramsey, 2/21).

The New York Post: Sick! NY Blows $1.4B On Medicaid Waste
The state is paying a staggering $1.4 billion in Medicaid payments per year on unnecessary hospital admissions, The Post has learned. The costly admissions are for patients who could have been treated by family doctors for minor illnesses such as the common cold or asthma, health-care industry insiders say. Equally troubling is that hospitals have become an expensive revolving door for drug addicts and patients with chronic mental illnesses who are readmitted numerous times because they lack less costly community care. Other patients are readmitted because of postsurgical infections or lack of outpatient follow-up treatment. In New York City, 26 percent of Medicaid hospital admissions are considered unnecessary or preventable, according to an analysis by the state Health Department (Campanile, 2/21)



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