States seeking to maintain control over Medicaid fees

A bipartisan association of state legislators also wants speedier federal approval of health insurance exchanges and the freedom to reduce eligibility.

By Doug Trapp — Posted Sept. 5, 2011

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State lawmakers are seeking to maintain their ability to reduce Medicaid fees for physicians and others and would like more protection from additional Medicaid spending burdens, according to health care policy positions adopted recently by the National Conference of State Legislatures.

State legislators also would like more clarity from federal health officials on which health insurance exchange models are likely to receive federal approval. Members of NCSL, a bipartisan national association for state lawmakers, adopted these and other health policy priorities for the next year at their annual meeting in San Antonio from Aug. 8-11.

"Put the rubber to the road and give us the tools to help us move forward," said Alabama Rep. Greg Wren, co-chair of the NCSL Task Force on Federal Health Reform Implementation.

Each policy requires approval by at least three-quarters of NCSL members, but each will expire in one year when the members reconvene. The association is rewriting its long-term advocacy policies, said Joy Wilson, NCSL's health policy director.

The policy seeking to preserve states' ability to cut Medicaid pay was a reaction to a Centers for Medicare & Medicaid Services proposed rule released on April 29. The CMS proposal would establish a three-part Medicaid access-to-care measurement to help states adopt Medicaid changes without reducing the availability of care.

Physician organizations welcomed the standards as a possible buffer against further state Medicaid fee cuts, but state lawmakers said the proposal could impede their ability to adjust their Medicaid programs to match existing revenues.

State Medicaid directors called the proposal too burdensome. "Medicaid is strangling state budgets," Wren said. In Alabama, Medicaid was the only general fund program to receive an increase this year. The state was forced to cut general funding for all other agencies, he said.

For similar reasons, NCSL adopted a policy calling on Congress to allow states to adjust Medicaid coverage for mandatory populations, such as the disabled and elderly.

The health system reform law prohibits states from reducing eligibility for Medicaid and the Children's Health Insurance Program before key provisions of the law are fully implemented on Jan. 1, 2014.

State lawmakers are concerned that a 12-member congressional debt panel will include Medicaid or health reform cuts as part of the minimum $1.2 trillion in federal spending reductions the panel is charged with identifying by Nov. 23.

State legislators want to choose the methods of achieving any cuts the panel may identify, particularly in Medicaid.

"You give legislators the ability to say, 'How do we handle this?' " said Nebraska Sen. Jeremy Nordquist, immediate past chair of the NCSL Standing Committee on Health. "It's really about giving states the flexibility to make the decisions for themselves."

A proposed rule released on July 11 by the Dept. of Health and Human Services would give states significant control over the design and operation of state health insurance exchanges, which are marketplaces in which consumers could compare health coverage options under health reform. But legislators are seeking faster and more specific federal guidance, according to another NCSL policy.

HHS officials have improved outreach with state leaders, especially in the past 90 days, Wren said. "But we've got to keep the level going up." Legislatures do not meet year-round and will have difficulty adopting insurance exchanges and getting HHS certification by the health reform law's January 2013 deadline, Wren said. HHS, however, has indicated that states could receive certification in stages beginning that month.

Democratic and Republican NCSL members have engaged in heated debates about health reform. Bipartisanship most often breaks out when state lawmakers talk about state-federal policies, said New Jersey Assemblyman Herb Conaway Jr., MD, co-chair of the NCSL Task Force on Federal Health Reform Implementation. "The one place where there's common ground is that there should be flexibility on [health reform] implementation," said Dr. Conaway, a Democrat.

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States want reform flexibility

State lawmakers in mid-August adopted a series of short-term health reform policies opposing federal cost-shifting to states and asking for additional state flexibility to implement health system reform. The wish list includes:

  • Giving states a third option for the health system reform law's health insurance exchanges, under which states would handle insurance plan approval and enrollment while federal agencies verify individuals' income and enforce the individual insurance mandate.
  • Changing the Medicaid funding formula to provide states additional federal dollars during a recession, natural disaster or public health emergency.
  • Stopping Dept. of Health and Human Services regulations that would restrict states' ability to reduce Medicaid fees and Medicaid eligibility for certain populations.
  • Preventing possible federal limits on provider taxes, which most states have enacted to draw additional federal Medicaid matching funds.

Source: 2011-2012 Policies for the Jurisdiction of the Health Committee, National Conference of State Legislatures, August (link)

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