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HHS Offers Cash to States For Medicaid HHS Offers Cash to States For Medicaid

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HHS Offers Cash to States For Medicaid


U.S. Secretary of Health and Human Services Kathleen Sebelius in 2010.(Alex Wong/Getty Images)

Federal health officials offered a lifeline Thursday to cash-strapped states struggling to fund their share of Medicaid and children’s health programs.

In a handful of proposed and final rules, the Department of Health and Human Services pledged $15 million from the year-old reform law to 15 states that are developing new ways to coordinate and improve care of “dual-eligibles.” These are often hard-to-treat people with low incomes who qualify for both Medicare and Medicaid.


HHS also said it would help defray 90 percent of costs that states incur as they upgrade their computer systems ahead of a major jump in Medicaid and children’s health enrollment in 2014. On the back end, the government will fund 75 percent of costs to keep those computers up and running.

“Medicaid programs provide health coverage for millions of low-income Americans who otherwise would lack access to health care,” HHS Secretary Kathleen Sebelius said in a written statement. “With these new resources and flexibilities, states will have new options to make their Medicaid programs work better for the people they serve, while helping lower their costs.”

Governors have asked HHS for more leeway under Medicaid, which is the No. 1 cost for most states. While Sebelius has been sympathetic, she nevertheless has rebuffed continued calls to change so-called maintenance of effort provisions, which prevent states from changing their current enrollment standards. As a result, the administration has worked to find other ways to save money in the program.


Experts agree that one way is to find better ways to treat dual-eligibles, who are often sicker and poorer than traditional patients and thus harder to treat in routine ways. Though there are only 9 million who qualify for both federally backed programs, they account for nearly 40 percent of total Medicaid spending.

“Beneficiaries who are in both Medicare and Medicaid can face different benefit plans, different rules for how to get those benefits and potential conflicts in care plans among providers who do not coordinate with each other,” said Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, in a written statement.

“This can be disastrous for those beneficiaries who are most vulnerable and in need of help.”

HHS also released a proposed rule to give states new flexibility in treating the disabled in their own homes and communities, and approved a waiver that allows New Jersey to expand coverage to about 700,000 more people under its Work First program.


This article appears in the April 14, 2011 edition of National Journal Daily PM Update.

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