The final recommendations of the federal Medicaid Commission could
encourage state and federal administrators to expand cost-saving initiatives
that could limit care for beneficiaries with mental illness, according to
mental health advocates.
The Medicaid Commission, established in May 2005 by Mike Leavitt, secretary
of Health and Human Services (HHS), submitted final recommendations to Leavitt
for long-term changes to Medicaid in December 2006 that aimed to "ensure
the long-term sustainability of the program." Although the
recommendations did not specifically address mental illness, many of them
could have a substantial impact on beneficiaries with mental health problems,
according to mental health advocates. Chief among their concerns is that the
recommendations would give states more flexibility to reduce eligibility and
services in their Medicaid programs.
"Instituting rewards for healthy behaviors sounds positive, but it
also has been interpreted to mean withdrawing benefits from people who don't
comply with a state's idea of healthy behaviors," said Mary Giliberti,
director of public policy and advocacy at the National Alliance on Mental
Illness, in an interview with Psychiatric News. "We certainly
don't favor that when it involves cuts to mental health benefits and
prescription drug benefits."
The concerns of mental health advocates stemmed from changes implemented
under the 2005 Deficit Reduction Act (DRA), which gave state Medicaid programs
greater latitude to amend their programs to increase cost-sharing and premiums
or to reduce benefits. States that amended their programs under the DRA, such
as West Virginia, Kentucky, and Florida, have drawn criticism from mental
health advocates for changes that placed a heavier compliance burden on
beneficiaries with mental illness than they are often able to meet
(Psychiatric News, June 2, 2006).
Additional major changes to federal Medicaid requirements may require
congressional action, but less substantive changes may be implemented by HHS
officials or state administrators.
A major component of the DRA allows states to implement service, premium,
and cost-sharing changes simply by amending their state Medicaid plans. Prior
to the DRA, states seeking such sweeping alterations to their programs
required a public review process and approval of a waiver by the HHS
Twelve states require that their legislatures approve the publicly reviewed
waivers in order to change Medicaid programs, but only two require legislative
endorsement of administratively approved state plan amendments, such as those
enacted by West Virginia and Kentucky, according to data compiled by Mental
Health America (MHA), formerly the National Mental Health Association.
The commission called for beneficiaries to accept more responsibility for
their health and health care. Specifically, the commission emphasized
its support of federal Medicaid policies that promote "partnerships
between states and beneficiaries that emphasize beneficiary rights and
responsibilities and reward beneficiaries who make prudent purchasing,
resource-utilization, and lifestyle decisions."
The emphasis on beneficiary responsibilities—also a component of the
DRA—raised concerns among mental health advocates, who question whether
beneficiaries with mental illness can realistically "manage" their
own health care. The impact of self-management policies on beneficiaries with
mental illness—including 38 percent of the 7.5 million people who
qualify for Medicaid and Medicare because of "serious mental
impairments"—has not yet become clear, according to advocates.
West Virginia Medicaid officials used their authority under the DRA, for
example, to implement a Medicaid amendment in 2006 that requires beneficiaries
who need mental health care to adhere to a treatment regimen in order to
retain their benefits.
Kirsten Beronio, senior director of government affairs at MHA, said placing
the onus on beneficiaries with mental illness to manage their health care can
be "unrealistic" in light of the seriousness of some of the
illnesses from which they suffer. She suggested that careful federal oversight
is a better way to protect the rights of such Medicaid recipients than is
ceding more power to state Medicaid officials to reform programs.
The effort to control costs was the focus of many of the commission's
recommendations and a driving force behind the DRA and other efforts to
overhaul entitlement programs. Federal and state governments combined spent
nearly $325 billion on Medicaid in Fiscal 2006, according to the commission,
and Medicaid spending is expected to exceed $450 billion by 2011. In light of
the projected costs, more states will probably consider major changes to their
Medicaid rules to control the cost of a program that has become the largest
single category of state spending, surpassing elementary and secondary
One approach to Medicaid cost control first authorized by the DRA is to
increase the share of costs for which beneficiaries are responsible. Though
the Medicaid Commission did not specifically address this approach to
controlling costs, it did endorse the "innovative approaches"
states have used under the DRA to control their Medicaid costs and urged
federal officials to allow states even more "flexibility to
Patient advocates point out that although the federal law may have given
states more flexibility to institute controversial cost-sharing programs for
Medicaid beneficiaries, the states' own laws may further inhibit that
particular cost-reduction approach. Twenty-two states had some form of
statutory requirements related to Medicaid cost sharing, according to a review
by the National Health Law Program.
Other cost savings for states and the federal government, said the
commission, could come from "innovative care-management
strategies," such as a proposed Medicaid Advantage program for dual
eligibles. This proposed program would provide a "medical
home"—that is, a primary point of care with a physician who
provides primary care services and manages all other aspects of care—and
better coordinated care for dual-eligible beneficiaries.
Beronio said concerns over increasing costs could be more effectively
addressed through increased access to community-based care, which has been
found less expensive than the institutional care that federal funding formulas
tend to favor.
"That could lead to significant cost savings in terms of reducing the
need for emergency room care for beneficiaries who don't fit the institutional
care approach," she said.
The commission's recommendations are posted at<http://aspe.hhs.gov/medicaid/122906rpt.pdf>.▪