Washington state seeks Medicaid exemptions

The governor and Legislature want improvements based on quality and efficiency but will need federal approval to do so.

By Doug Trapp — Posted June 17, 2011

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Washington state leaders are asking federal health officials for greater flexibility to improve the state Medicaid program's quality and efficiency before the 2014 federal Medicaid expansion.

The Washington Legislature unanimously adopted a bill in early May that authorizes the state's Medicaid agency to submit a request by Oct. 1 seeking a number of exemptions to existing Medicaid cost-sharing and benefit standards. Washington Gov. Chris Gregoire signed the legislation, adopted along with a number of other health measures, on May 31.

Gregoire said the Medicaid request will lead to health reform by Washingtonians for Washingtonians. "The goal of this effort is to reduce costs for taxpayers and improve care for Medicaid users, which requires the federal government to provide the state flexibility, waivers, resources and technical assistance."

With few exceptions, the health system reform law requires states to maintain the Medicaid eligibility and enrollment standards they had in place in March 2010. Washington is asking for permission to, among other changes:

  • Pay for Medicaid services through bundled, global and risk-bearing formulas, including services provided by federally qualified health centers and rural health clinics.
  • Streamline Medicaid eligibility determinations and receive authority to enroll Medicaid-eligible people in employer-sponsored health coverage when available.
  • Establish cost-sharing and premiums that do not restrict access to evidence-based primary care.

"When some people talk about wanting flexibility in Medicaid, what they're really asking for is the ability to eliminate Medicaid coverage for working families," said Gregoire spokesman Scott Whiteaker. "Governor Gregoire doesn't want to do that. She wants flexibility to innovate, cut costs and improve care but not limit access for working families."

Tom Curry, CEO and executive director of the Washington State Medical Assn., agreed that the state is approaching the Medicaid reform from the correct perspective. Gregoire's call for Medicaid flexibility is not code for big Medicaid cuts in part because the state has not called for reduced fees, which Curry said cover about 60% of physician costs. "We'd rather have the state government engage at the local level" on Medicaid reform, he said.

If Washington achieves its goal of adjusting Medicaid payment to reward quality and efficiency, the state will have to find a way to adjust for patient behavior, Curry said. For example, some patients with heart problems continue to smoke after hospitalizations.

"Who's responsible for that? We've got to sort that out," he said.

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