Governors oppose Medicaid cuts in debt-ceiling efforts

One approach being discussed would lower federal payments to states for Medicaid and the CHIP program — which as analysis says would lead to even more budget burdens for already cash-strapped states.

The Hill: Governors Oppose Obama Medicaid Plan
The National Governors Association on Saturday pressed President Obama and congressional leaders not to pursue Medicaid cuts the White House has proposed, and to instead repeal a provision of health care reform. Several proposals to cut Medicaid have been floated as negotiators look for spending cuts to accompany an increase in the debt ceiling. But the governors said their "highest concern" is with Obama's proposal. It would blend various rates of federal funding into a single percentage (Baker, 7/9).

Modern Healthcare: Governors Plead Against Medicaid Cuts In Debt Ceiling Talks
With the president and congressional leaders poised for Sunday talks on a debt-ceiling deal, the nation's governors sent them a letter anticipating their Medicaid funding was about to get hit as a means to cut federal spending. "It has been reported that the target for 10-year total Medicaid reduction is in the neighborhood of $100 billion, or roughly $10 billion a year," wrote Washington Gov. Christine Gregoire, who is chair of the National Governors Association, and Nebraska Gov. Dave Heineman, the association's vice chair. "Make no mistake: these reductions are significant and cannot be absorbed into state budgets or simply passed on to providers of health services for our Medicaid populations" (Blesch, 7/9).

Kaiser Health News' Capsules: Governors Wary Of 'Blending' Federal Contribution To Medicaid, CHIP
If a deal to reduce the deficit results in lower federal payments to states for Medicaid and the Children's Health Insurance Program, then the National Governors Association will say no thanks. As part of the ongoing negotiations between the White House and Capitol Hill, one proposal would combine the federal government's Medicaid and CHIP payments into a single blended rate for each state. A Center on Budget and Policy Priorities analysis says that change would mean less federal funding for already cash-strapped states, likely forcing state governments to reduce services and cut payments to health care providers (Carey, 7/8).

In other related Medicaid news, Health and Human Services Secretary Kathleen Sebelius offered more ways to help states control costs by dealing with the so-called "dual-eligible" population — an expensive group of beneficiaries who qualify for both Medicaid and Medicare.

National Journal: Feds Introduce State Medicaid Saving Plans
The federal government, in an effort to help states reduce Medicaid costs, announced two new ways for states to pay for people enrolled in both Medicare and Medicaid. Health and Human Services Secretary Kathleen Sebelius said on Friday the agency's aim is to help states cut costs without eliminating benefits or kicking people off the rolls. But Sebelius could not avoid talking about this weekend's upcoming negotiations between the White House and congressional leaders on a deal to reduce the deficit and raise the debt ceiling. Any plan is widely expected to cut funds from Medicaid in some way (McCarthy, 7/8).

Modern Healthcare: HHS Aims To Aid States With Dual-Eligibles' Care
HHS on Friday announced three different initiatives the agency says are intended to help states improve care and lower costs to care for the 9 million Americans who are eligible for both Medicare and Medicaid, also known as dual-eligibles. In the first initiative, the CMS' Center for Medicare and Medicaid Innovation will test two demonstration models to align the financing between Medicare and Medicaid. One model calls for a state, the CMS and a health plan to participate in a three-way contract in which the managed-care plan receives a blended payment to provide coordinated care. The other demonstration would have a state and the CMS enter into an agreement in which the state would be eligible to benefit from savings that result from managed fee-for-service initiatives that are designed to both improve quality and lower costs. States that meet certain conditions will have the option of pursuing one or both of those models, according to the CMS (Zigmond, 9/8).

Meanwhile, in news from the states, Medicaid costs continue to take their toll on state budgets.

The Wall Street Journal: Medicaid Contract Bleeds New York
New York state's botched effort to modernize its Medicaid billing system is becoming an increasingly costly mistake. Over the past decade, the state has paid a Virginia-based IT company nearly $1 billion to set up and operate a Medicaid billing and processing system hobbled by delays, cost overruns and programming flaws (Gershman, 7/9).

Atlanta Journal Constitution: State In A Bind On Medicaid Funding
Facing the addition of hundreds of thousands of new enrollees to Georgia's Medicaid system, the state is re-examining the program — searching for more cost-effective ways to provide care. Medicaid is already facing a $180 million shortfall this fiscal year; meanwhile, officials say the 600,000-plus people expected to join its rolls under the federal health care overhaul starting in 2014 could cost the state an additional $2.1 billion by the end of this decade. Medicaid and PeachCare for Kids currently provide health care to roughly 1.7 million low-income Georgians (Williams, 7/11).