Rhode Island's Medicaid reform advances

Washington -- The Centers for Medicare & Medicaid Services on Dec. 19, 2008, approved a waiver that would modernize Rhode Island's Medicaid program while capping federal and state spending on it.

The proposal would give the state unprecedented control over its Medicaid program -- including benefits and eligibility. It would also limit combined state and federal Medicaid spending in Rhode Island to $12.1 billion from 2009 to 2013. Another provision of the plan would transition many long-term-care patients from institutional facilities to home- and community-based care, and it would create a more consumer-driven program by allowing health savings accounts and making other policy changes.

The waiver will go into effect unless the Rhode Island General Assembly amends or rejects the proposal before Jan. 19, according to General Assembly spokeswoman Meredyth R. Waterman. Lawmakers began committee hearings on the matter Jan. 9.

The Rhode Island Medical Society is part of a group of about 20 health care organizations that opposes the Medicaid waiver because of concerns it would result in waiting lists, or reduced services, among other issues. The waiver's spending cap "frightens us all," said Steven DeToy, director of government affairs for the medical society. Doctors have also decried a lack of physician involvement in crafting the waiver.

The reform plan's $12.1 billion funding limit is $358 million less than the state estimates it would need to sustain Medicaid as it exists today; $67 million of that savings was taken into account in the fiscal 2009 budget, which began July 1, 2008.

However, the waiver would not prohibit the state from receiving higher federal Medicaid contributions if Congress adopted a measure boosting the funding, according to Rhode Island Gov. Donald L. Carcieri's office. Leading Democrats in Congress have called for a temporary increase in federal Medicaid spending to help states weather the recession. Medicaid enrollment and spending typically increase during economic downturns.

Carcieri said the waiver will guarantee the future of the program in his state. Medicaid spending is on a path to consume 30% of Rhode Island's budget by 2011, up from 25% today. "This agreement will put us on a sustainable path for growth in Medicaid while also maintaining services for those most in need," he said.