KHI News Service

Brownback agenda to include Medicaid reform

Governor-elect says “re-design” initiative will have two-fold objective of lowering costs and improving services

By Jim McLean | January 03, 2011

Re-designing the state Medicaid program will be one of Governor-elect Sam Brownback’s priorities after he takes office next week.

In an interview with the KHI News Service, Brownback said he wants to improve the efficiency of the program while delivering better coordinated and effective services to the more than 280,000 Kansans who depend on it.

“I am sincere about that,” Brownback said. “I want their experience to be better at the same time that we drive costs down. And I believe this is fully doable, getting away from this 1960s, fee-for-service model and into newer models.”

Medicaid is the state’s second largest general fund expenditure, trailing only K-12 education. Its cost has nearly doubled from $1.25 billion to $2.5 billion since 2000.

“This (Medicaid) is one of the major cost drivers for every state in the country,” Brownback said. “And in a down economy, it grows even more than it normally would.”

A group of stakeholders including the Kansas Medical Society and the Kansas Hospital Association has met twice with transition officials to discuss how to re-design the massive program, Brownback said.

“And they were all in complete agreement that we’ve got to do this,” he said.

Currently, Kansas limits Medicaid eligibility to children, pregnant women, the elderly, people with disabilities and very-low income parents.

That is expected to change in 2014 when the federal health reform law is scheduled to significantly expand eligibility to include all Kansans earning less than 133 percent of the federal poverty level, or just under $30,000 a year for a family of four.

Approximately 131,000 Kansans are expected to join Medicaid as a result, according to an analysis prepared for the Kansas Health Policy Authority (PDF). The federal government is expected to pay the cost of serving all newly eligible beneficiaries through 2017, gradually reducing its share to 90 percent by 2020.

Audio clips

Gov.-elect Sam Brownback talks with Jim McLean

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Managing, monitoring and encouraging

Brownback said his vision of a re-designed Medicaid program generally involves devising ways to better manage the care provided to recipients, particularly those suffering from chronic health conditions that can lead to more serious diseases that are more debilitating and expensive to treat. The new system should also do a better job of encouraging those enrolled in the program to take responsibility for their health, he said. That means creating incentives for people to stop smoking, exercise and maintain a healthy weight.

“We may need to involve more of the private-sector, faith-based community to have mentors for people on Medicaid that are really in difficult circumstances,” Brownback said.

Mentors would be assigned to help ensure that Medicaid recipients follow care plans and get key preventive services. Requiring people to get annual physicals and to access services through a medical home are other options being discussed, Brownback said. So, too, is the possibility of giving Medicaid-eligible Kansans money to establish health savings accounts, which they would be responsible for managing.

“Those are cost control mechanisms that I believe also increase the quality for individuals,” Brownback said.

Brownback said he expected community health clinics, which provide care to low-income and uninsured Kansans, to play a key role in the reforms he has in mind, perhaps serving as medical homes for Medicaid beneficiaries.

Echoes of Colyer proposal

Some of the ideas that Brownback is considering are similar to elements of a controversial Medicaid reform proposal once championed by Lt. Governor-elect Jeff Colyer.

As a member of the Kansas House in 2008, Colyer, who is expected to be among Brownback’s top health policy advisors, proposed legislation that among other things would have required Medicaid recipients who were obese, smoked or abused drugs to enroll in wellness programs. Those who failed to show progress could have seen their benefits reduced after two years or discontinued after three.

“What this does is it rewards personal responsibility,” Colyer, a plastic surgeon, said at the time.

Colyer’s proposal was modeled upon but went further than Medicaid reforms implemented in West Virginia. There, Medicaid beneficiaries who promise to follow a wellness plan requiring “healthy behaviors” are eligible for enhanced benefits. Those who don’t are enrolled in a plan that has more restrictions than traditional Medicaid, such as limits on prescriptions and mental health services.

But a federal rule issued last spring in association with the new health reform law, which requires states to provide children in Medicaid with certain benefits, forced the state to dramatically scale back its program known as Mountain Health Choices. In November 2010, only a few thousand adults were enrolled in the enhanced benefit plan.

U.S. Sen. Joe Manchin, West Virginia’s former Democratic governor, has vowed to push for flexibility at the federal level to allow states to enact reforms like those struck down by the federal rule.

“If you are a healthy person who is financially challenged – and you need help from the state – then you’re going to have some responsibilities to meet,” Manchin told a Wheeling, W. Va. newspaper.

While states may not punish Medicaid beneficiaries by reducing their benefits, the federal law authorizes U.S. Department of Health and Human Services Secretary Kathleen Sebelius to award $100 million in grants to help states implement “evidence-based” programs that help Medicaid recipients stop using tobacco products, lose weight and reduce their blood pressure and cholesterol.