KHI News Service

What other states are doing about Medicaid

By Mike Shields | March 07, 2011

Governors across the U.S. are grappling with the problem of Medicaid costs. But the aims of Gov. Sam Brownback's administration are among the most ambitious in the nation relative to the size of the state's Medicaid budget.

For example, Gov. Chris Christie of New Jersey, also a Republican, has a plan that he boasts will save that state $41 million. It would rely on expanding managed care to cover the state's "aged, blind, and disabled recipients." Christie described his plan in a speech last month to the New Jersey legislature. New Jersey, which has 8.7 million residents versus Kansas' 2.8 million, spends about $9.6 billion — nearly four times what Kansas does — on Medicaid.

Who's Who: Dr. Jeff Colyer

All options on the table

Medicaid makeover in the works

A Kansas team, led by Lt. Gov. Jeff Colyer, a physician, wants to find ways to cut Kansas Medicaid costs between $200 million and $400 million by fiscal year 2013, which begins July 1, 2012.

Colyer told KHI News Service that the Medicaid makeover subcabinet he leads has been studying what other states are doing but cited none as a specific example of what might be in store for Kansas. He said it is too soon to talk about details of a plan that is still being developed.

But he acknowledged the administration has interest in expanding managed care within Medicaid.


Rob Siedlecki, secretary of the Kansas Department of Social and Rehabilitation Services, recently told KHI News Service that Florida is considering expanding a managed care pilot program statewide with potential savings of $2 billion to $3 billion a year. Florida's Medicaid budget this year is expected to reach $20 billion.

According to Health News Florida, a KHI News partner, the Florida pilot program cited by Siedlecki was controversial and the debate continues, "over whether the savings stem from efficiency or denial of services."

The Florida Senate last month approved the expansion plan, which would move millions of the state's Medicaid beneficiaries into HMOs.

The Florida House today unveiled a plan that would also take managed care statewide but phased in over five years.


Looking across the nation, there is one other governor whose cost-cutting targets and timeline for remaking Medicaid most closely resemble Brownback's; even their rhetoric on the issue sometimes hits the same notes.

Oddly, that is Gov. John Kitzhaber of Oregon, a Democrat who began his third term in January. Kitzhaber, a physician and health policy expert, was governor from 1995 to 2003. During his hiatus from the governor's office he started the Archimedes Movement, a grassroots effort aimed at creating a "sustainable" health care system.

A year later, the 2007 Oregon legislature rejected the movement's Oregon Better Health Act, which called for the state receiving "exceptions" from Medicaid and Medicare to create a state "trust fund" that would guarantee every Oregon resident had access to a basic set of "defined" medical services as opposed to the largely open-ended list of services now available to Medicaid recipients.

Kitzhaber has continued to push for more flexible federal rules so that Oregon can reshape its Medicaid program.

Brownback and Colyer have each said repeatedly that Kansas needs full flexibility from the federal government in order to redesign the Medicaid system so that it meets Kansas' needs. And they want it sooner, not later.

“The feds have to come to the table,” Colyer said recently at a meeting that included two regional U.S. Health and Human Services officials looking on. "We hope the federal government will give us an opportunity to apply Kansas solutions. We would like to work with the federal government on outcomes that make sense for the state of Kansas. I’m not ready to come out with a litany of ‘here are the 63 things we need to do.’”

"Overall, the feds normally create a very long process for any new ideas," Colyer later told KHI News Service. "Waiting 18 months for a 'yes' or 'no' is too long a wait."

Oregon in 2009 merged its major health agencies under a single roof, the Oregon Health Authority. The entity is very similar to the Kansas Health Policy Authority, which the Kansas Legislature created in 2005.


Oregon Health Action Plan

Download .PDF

One of Brownback's first acts upon taking office in January was to announce the merger of the Kansas Health Policy Authority with the Kansas Department of Health and Environment, thereby combining the state's lead Medicaid agency with the one that deals with local public health offices.

The Oregon Health Authority's governing board in December 2010 released the Oregon Action Plan, detailing how that state will set about remaking its health system.

Kitzhaber then presented a budget plan, with heavy emphasis on more coordinated care, that he said would produce "second-year" savings of $290 million. Oregon has about 455,000 Medicaid beneficiaries. Kansas has about 285,000.

Elements of his budget plan include:

• Local coordination of all benefits, including physical health, mental health and addiction services, oral health and long-term care services.

• Coordination of social supports that promote health and keep people out of high cost medical care.

• Include people who are eligible for both Medicaid and Medicare and blend the funding to "create more efficient use of resources, care management and aligned incentives."

• Set or cap the health budget so that it is "sustainable, affordable and sufficient for best-practices." Establish incentives for prevention and lower costs.

• Build on best practices in local communities "in which health entities partner with each other and consumers and are accountable for improved health."

Legislation drawing on the health authority's and Kitzhaber's idea is expected to be presented later this month.

None of the things proposed by Kitzhaber are at odds with things Colyer and Brownback have talked about.

Colyer wouldn't say which states his makeover team is looking at for possible examples. But he acknowledged other states are being watched.

"We're looking at a bunch of pilot programs and looking at what other states have done," he said. "We also have to have the freedom from the federal government to implement solutions that make sense for Kansas, that actually give us the ability to create Kansas solutions, not limit the opportunities. There's a diversity of needs here. There are frontier aspects of Kansas. Rural and urban Kansas have different needs. There's isn't a one-size-fits-all solution.

"We've been in office about 30 days and we're putting together a unified budget across these five (Medicaid) agencies and that's a tremendous step in unifying. I don't have solutions I'm ready to talk about yet. There are still a lot of ideas on the table and more to come. I've got to let my process work internally."

Other states


New York Medicaid Redesign Recommendations

The New York Medicaid Redesign Team has prepared 79 proposed changes for Gov. Andrew Cuomo, a Democrat. Together they would provide $2.3 billion in savings and include a 2 percent across-the-board cut in provider reimbursements and an overall spending cap. The legislature there began studying the recommendations last week.

Gov. Jan Brewer of Arizona, a Republican, traded letters with HHS Secretary Kathleen Sebelius seeking approval for dropping some 250,000 childless adults from her state's Medicaid program.

She and other Republican governors have been urging the federal government to convert its Medicaid aid to states to block grants, or lump-sum payments. That approach would effectively end Medicaid as an entitlement program and give states much more leeway in spending the money but also leave them responsible for costs beyond the allotments.

In Pennsylvania, GOP Gov. Tom Corbett has dropped more than 40,000 adults from Medicaid. In Washington State, Democratic Gov. Christine Gregoire has removed 17,500 adults from the program.

Gov. Jerry Brown, a California Democrat, last month proposed mandatory co-pays for Medicaid beneficiaries. Those who failed to make them could be turned away by doctors.

The California Medical Association has called the move, "a back-door rate cut," for doctors because it is unlikely they would actually turn patients away.

Brown's proposal has been endorsed by committees in both chambers of the California Assembly.

And a California Senate budget committee has approved a separate 10 percent reimbursement cut for providers.

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