Governors Enlist Advocates In Medicaid Reform Plans

With no relief in sight for strained Medicaid budgets, both state officials and health care advocates are taking a fresh look at their disagreements about how to control costs and maintain access.

The Tennessee state legislature passed changes to the Medicaid program, TennCare, in May at the urging of Gov. Phillip Bredesen (D) that would curtail the number of doctor visits and prescription drugs and increase copayments and premiums. A new definition of “medical necessity” that could restrict care to the “least costly alternative” was the most controversial of the proposed changes. The changes require federal approval (Psychiatric News, August 20).

TennCare was established 10 years ago as an effort to use managed care strategies to spread the benefits of Medicaid to residents who did not meet the statutory federal requirements for mandatory service. Today the program covers approximately 1.3 million people and faces a potential deficit of $650 million next year.

Of those enrollees, approximately 430,000 residents could be dropped from the rolls because they are not part of the so-called mandatory population. The mandatory population must be served for a state to receive federal Medicaid funds.

Bredesen has repeatedly threatened to drop the 430,000 enrollees from the TennCare rolls if his changes are not enacted.

Former Gov. Ned McWherter (D), who initiated TennCare, offered an assessment of its problems in the November 14 Tennessean.

McWherter said, “Truthfully, we implemented the program too fast and too quick.... Suits were filed that gave the courts some oversight and required certain things in the program. It got more and more that you couldn't manage it without going back to the courts or going to the legislature. Also, the pharmaceutical part of TennCare is totally out of control. I think enrollment is out of control.”

The current governor's principal adversary in his efforts to change the program has been the Tennessee Justice Center, which won lawsuits against TennCare that resulted in consent decrees concerning provision of treatment.

At press time, TennCare's fate was uncertain. Bredesen and Gordon Bonnyman, director of the Tennessee Justice Center, were negotiating a two-year moratorium on the consent decrees with the help of McWherter.

Kentucky `Redesigns' Medicaid

Kentucky Gov. Ernie Fletcher (R) is involving mental health care advocates in the state's redesign of Medicaid.

Theresa Walton, executive director of the Kentucky Psychiatric Medical Association (KPMA), told Psychiatric News that the governor has said he wants the program to be a model for the nation.

Fletcher, a physician, emphasized the importance of disease management and described seven goals to advocates. Among them are to reduce inappropriate drugs in ambulatory populations, launch a targeted physician education program about practice patterns, reduce the use of inappropriate drugs in long-term-care populations, institute pharmacy benefit administration, and develop a care-management program.

Much of the concern of KPMA members has focused on possible restrictions to medications. State officials have said that they “will not limit access to medications for people with mental illness.”

The state has hired First Health, a national managed care company, to administer the pharmaceutical benefits. Officials said that First Health will only administer, not manage, those benefits and will collect data that can be used to identify physicians who are prescribing inappropriately.

Prior authorization for prescriptions will be required in some situations, when the new program is instituted. For example, physicians must obtain prior authorization for patients on three or more atypicals, but other patients can be “grandfathered” into the program.

Walton, who has attended a series of meetings with state officials, said that the KPMA will continue to monitor developments closely.

Iowa Increases Cigarette Tax

In Iowa a 10-member committee appointed by the state's governor and legislature to consider a Medicaid shortfall recommended an increase of at least $1 a pack in the cigarette tax.

The state would raise an estimated $201 million through the new tax, all of which would support the Medicaid program.

University of Iowa President David Skorton, who chaired the committee, said that the state should not make major cuts to the Medicaid program. The panel refused to recommend cuts in services to beneficiaries and to reimbursement rates and also recommended against changing eligibility standards to decrease enrollment.

According to the November 20 Des Moines Register, Medicaid is expected to show a shortfall of $65 million this fiscal year.

The recommended tax increase would triple the tax on cigarettes. The tax has been stable since 1991 at $.36 a pack.

Debit Cards, Vouchers Proposed

State officials in South Carolina have proposed that Medicaid beneficiaries receive debit cards intended to make them “more frugal consumers of routine medical services,” according to an Associated Press story at<www.thestate.com> on November 20.

Beneficiaries would use the cards to purchase prescription drugs and pay for routine physician visits. After they meet a specified dollar limit on the card, they would lose eligibility for “less-serious” ailments that Medicaid now covers.

Chronic care and mental health benefits would not be affected.

According to the November 15 AMNews, Louisiana physicians are reviving a plan proposed by their state medical society in the 1990s to give Medicaid beneficiaries vouchers to be used to purchase coverage through managed care companies in lieu of receiving benefits through the state-run program. Low-income residents who are not eligible for Medicaid could purchase coverage through the program. ▪