McClellan Addresses Future of Medicaid in Health Policy Speech

CMS Administrator Mark McClellan on Wednesday addressed the future of Medicaid while speaking at the 2005 National Health Policy Conference, sponsored by AcademyHealth and the journal Health Affairs. He said the program is "not just about flexibility, it's about flexibility that works," also saying that the current waiver system is too cumbersome for states to make innovations in their program offerings. According to CQ Healthbeat, his comments appeared to indicate that "Medicaid reimbursement ... would be tied in some way to meeting standards for saving money, improving treatment or expanding coverage."

CQ Healthbeat reports that "[s]igns point" to the replacement of waivers with performance measures "as the procedural hurdle state Medicaid programs would have to clear to adopt programs to save money or widen coverage." McClellan also spoke in favor of making home- and community-based care "an integral part of Medicaid" and promoted disease management and prevention programs. He also advocated allowing parents to use Medicaid funds to pay for children's coverage if they can't afford family coverage through an employer. The Bush administration is expected to propose changes to Medicaid on Feb. 7 (CQ Healthbeat, 2/2).

Kansas Gov. Kathleen Sebelius (D), in a reaction to HHS Secretary Mike Leavitt's speech on Tuesday addressing Medicaid, said that if the Bush administration proposes spending caps on optional services, governors "would likely be even less enthusiastic" than when they previously opposed a similar plan in 2003, CongressDaily reports (Rovner, CongressDaily, 2/3).

Leavitt on Tuesday said that the federal government could save $60 billion in Medicaid spending over the next 10 years by closing "loopholes" that allow middle-class seniors to receive benefits, prohibiting what he called "accounting gimmicks" used by states to receive more federal matching funds and eliminating excessive spending on items such as prescription drugs. In his first speech as HHS secretary, Leavitt said that the Bush administration will not limit federal spending on mandatory beneficiaries. However, he did not directly address the possibility of spending caps on optional patients and services, which account for about two-thirds of Medicaid costs (California Healthline, 2/2).

Sebelius, who also spoke at the conference on Wednesday, said that the federal government has failed to meet its responsibilities in health funding. She said that the highest-cost Medicaid beneficiaries are seniors in poor health who also receive Medicare benefits, but their costs for prescription drugs and long-term care "have been dumped, unceremoniously, on the states with little debate or discussion." If federal contributions to the program are capped, "the number of uninsured Americans would be catastrophic," she said, adding that any proposed cap is likely to be unacceptable. "That would leave grandparents fighting with their grandchildren for coverage," she said (CongressDaily, 2/3).