Discussions on Medicaid Funding and Sustainability on the Increase among States

Medicaid has long been regarded as Medicare’s (ugly) stepchild, primarily because of the essentially fifty different ways the program is sustained nationwide and the myriad federal ins-and-outs of a long complicated relationship with managed care and federal financing. Not surprisingly, many states are taking the opportunity exploit the concerns of very real budgetary deficits to propose streamlining plans to cut many of its services many lawmakers — both Republican and Democrat — say are wasteful.

Here in Minnesota, a brain trust made up of both thought leaders in the public and private spheres, is outlining ways in which this can be done — of course, heightening the interest of the state’s newly elected Dem governor, Mark Dayton, a champion of far-reaching public healthcare safety nets. Accompanying the proposals for cuts in certain delivery mechanisms is a greater reliance on Medicaid managed care programs. Perhaps the most controversial of the proposals, coverage for the disabled (a traditionally expensive, wasteful, and fraudulent Medicaid sector) would be shifted to managed care programs from FFS — exacerbating cuts in provider reimbursement from the latter and potentially expanding profits for the former. I expect a well-thought out and interesting debate on the corporate side versus Governor Dayton’s message of expanding access to healthcare for all of Minnesota’s Medicaid-eligible patients.

Nationwide, however, many governors are dealing with the same problems. Perhaps the only guarantee uniting all of them in these cost-cutting endeavors is the ponderous nature of possibilities in arriving at Medicaid savings. From increasing beneficiary copays; to further reductions in FFS payments to providers; to raising taxes on acute hospitals and providers systems to offset federal decreases to beef up states’ coffers — there are a dizzying array of options no policymaker likes reviewing but is forced to confront in this age of reform.

29. January 2011 by Michael Douglas, MD, MBA
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