Congressional task force ready to tackle Medicaid reform

Rep. Heather Wilson sees comprehensive changes in the program's future.

By Joel B. Finkelstein — Posted July 19, 2004

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Washington -- With major Medicare reform under their belts, some lawmakers are encouraging colleagues to turn their attention to Medicaid, now the larger of the two programs.

Federal lawmakers also are feeling pressure from the states as Medicaid grows as a proportion of their already tight budgets. Ideas are on the table, but Congress has yet to begin formally discussing them, a long and arduous process in itself. AMNews recently spoke with Rep. Heather Wilson (R, N.M.), chair of the Republican House Task Force on Medicaid Reform, about the program's prospects.

Question: What are the goals of the task force?

Answer: The task force was formed with several objectives. One was to identify and explore the challenges facing Medicaid. There was a recognition that we in Congress and the Energy and Commerce Committee really had not spent a lot of time on Medicaid. We were, as far as health care is concerned, almost completely absorbed with Medicare. So the second objective was to raise the level of understanding of members about what Medicaid involves and how it's set up.

And the third was to begin to prepare the groundwork for significant changes, focused on how do we make this program work better for the people who depend upon it. That means the states, doctors and hospitals, community groups and advocacy groups, who are very concerned about this program. We needed to open the lines of communication.

Q: How have you moved toward those goals?

A: We started out with small roundtables, asking people with special expertise to come and just talk about the issues they saw, again to identify some areas for further discussion. Long-term care was one, children's hospitals another, public hospitals, prevention, information technology. We then started doing larger roundtables with major stakeholders, one with different doctors' groups, one with public hospitals.

From that, we recommended several hearings for the health subcommittee to have and have worked with [Chair Michael Bilirakis (R, Fla.)] to start to more formally explore these things. I suspect what initially may come out of this, either this fall or early next year, is a set of principles that guide Medicaid reform.

Q: When considering Medicaid patients' ability to get the care they need when they need it, what do you see as problems with the program and how would you like to see them remedied?

A: The first one is the financing scheme for Medicaid, which is much more complicated than for Medicare. It's a joint state-federal operation that results in these Rube Goldberg schemes for states to shuffle money around and draw down more federal dollars. That is an inherent problem we are going to have to address. The financing mechanisms ... they're tied together with bailing wire and duct tape. They're fundamentally flawed.

The second major problem is that it does not focus on improving people's health, the quality of their lives. It is an old-fashion insurance-claims payment system. We have asked Medicaid directors: How do you measure the health status of the people who depend on Medicaid and what are you finding? They look at you like you're from Mars because that's not part of their work. They administer a federal program. Their job isn't to improve anybody's health. The program was not set up to improve anyone's health.

I visited a rehab hospital in Albuquerque, and I had a doctor come up to me just completely frustrated and angry. He had a patient there that day, a diabetic who had both legs amputated. That morning he had taught the patient how to use a glucometer to measure his blood sugar. This is a Medicaid patient, where we will pay $22,000 to a hospital to cut a guy's legs off, and the system is not set up to have him counseled about how to control his diabetes. There's a lack of focus on improving the health of the people who depend on the system.

There is also a lack of flexibility. It's come to the point where it seems like the only thing that works with Medicaid is when you get a waiver. You need a waiver from the federal program to run a disease management operation. That makes no sense. We need to reform this program.

Q: In some states, Medicaid reimbursement rates have been frozen for years. How concerned are you that access to physicians is being limited by these low payments?

A: It's definitely a problem, and we saw that problem in New Mexico, although in New Mexico we have now tied the Medicaid payment rate to the Medicare payment rate, which a lot of the states haven't done. There is a significant underpayment with Medicaid, and it does create a problem, particularly in more affluent areas where you have a small percentage of folks who are on Medicaid, because doctors can say: "We don't take Medicaid." So [patients] end up in the emergency room when things just get too bad and they're often sicker. That's not a very cost-effective way to provide care.

Q: Surveys have shown that many Medicaid-eligible people don't sign up. Does the federal government need to encourage enrollment and should eligibility be expanded to other poor populations?

A: Outreach efforts are authorized both under Medicaid and the State Children's Health Insurance Program. But it is true that there are a large number of people who are eligible who are not enrolled. I'm particularly concerned about its effect on children for whom preventive health care, early diagnosis and intervention are particularly important.

Q: States have the hardest time funding Medicaid during tough economic times when people need it the most. Should the federal government pay a greater share of Medicaid costs during these periods?

A: That's another problem with the financing mechanism. There are a lot of outside-the-box ideas out there in respect to the funding mechanisms, and we need to look at those. Unlike Medicare, where you have primarily seniors, you have within Medicaid infants, children, adult disabled, low-income seniors. So you have a lot more diversity. In fact, in New Mexico there are something like 47 different pathways to eligibility for Medicaid.

One of the challenges may be addressed by saying, "All right, we've got [people eligible for both Medicare and Medicaid], maybe that doesn't really make any sense and maybe they should be in one integrated program for both health care and long-term care." We may consider teasing apart some of these eligibility categories.

Q: Which of the reforms you have discussed are needed right away and which will require sustained efforts?

A: We're going to try to move toward a comprehensive Medicaid reform bill. I don't underestimate the difficulty of doing that. ... There are little things we can do, an incremental bill we can introduce to fix things here and there. But the big problems with Medicaid are just that -- big problems -- and so we have to come up with comprehensive solutions and at least get them on the table.

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