Tuesday, February 22, 2011

More Medicaid Mandates Ahead…?

Ahead of the National Governors Association conference in town this weekend, the Washington Post just published an article highlighting the ways in which the Obama Administration is looking to “help” states manage their Medicaid programs.  The article includes several examples of how HHS staff are meeting with state officials to provide planning assistance – before closing with on a potentially ominous note:

In another effort to smooth things over with states, [HHS Secretary] Sebelius also will soon provide guidance to states on Medicaid reimbursement rates for doctors and hospitals.  Several states are considering reducing Medicaid payments to providers, but there’s concern that slicing rates too deeply could cause some doctors to close their doors to Medicaid patients.  The HHS guidance is intended to help states decide which cuts go too far.

In other words, it’s possible – perhaps even likely – that on top of the mandates on states not to constrain eligibility standards, HHS will now pile on another federal mandate when it comes to reimbursement levels.  To be sure, Medicaid’s poor reimbursement levels create access problems for low-income beneficiaries in many states.  But one of the reasons why states are looking to reduce reimbursement rates in the first place is because the mandate to maintain eligibility levels prevents them from taking other actions to trim their budget deficits.  So it would appear that the Administration’s solution to a failed government mandate (i.e., the Medicaid maintenance of effort requirements) is yet another government mandate on states, this one requiring certain reimbursement levels for states’ Medicaid programs.

On a related note, last Friday the Congressional Budget Office (CBO) released a score estimating the Medicaid unfunded mandates as costing states $60 billion from 2012-2021, up from only $20 billion during the years 2010-2019.  That means state unfunded mandates will total $40 billion in 2020 and 2021 – showing the HUGE jump in state obligations once the federal matching payments for the Medicaid expansion costs are reduced in 2020.  At a time when states face myriad obstacles in maintaining their current Medicaid programs, it’s worth asking why Democrats passed a law that will only increase their burdens further – and what Washington will do when states can no longer support these crushing pressures being placed on their budgets.