State Medicaid Directors Want In on Reform Conversations

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By Victoria Pelham

State Medicaid directors are cautious as they face down a year of “unprecedented” change and want policy makers to consult with them before they change the $550 billion program, the executive director of the National Association of Medicaid Directors said Dec. 30.

Affordable Care Act repeal and replacement could affect the millions covered under Medicaid expansion, and leaders have floated changes to the program’s financing such as block grants. In addition, the coming year will see continued delivery system reform and potential cuts to hospitals that serve a disproportionate share of uninsured patients.

“The challenge for the new administration and challenge for Congress will be now that they’ve caught the car, they have to learn how to drive that car—and have to do that in a very short turnaround time to make sure they don’t drive the car into a ditch,” the NAMD's Matt Salo told Bloomberg BNA.

To avoid that, the organization is working to inject its voice more into these conversations, and it plans to work with President-elect Donald Trump’s transition team, the new administration and congressional staff on both sides of both houses. At the top of the NAMD’s legislative priorities is a bid to require granting state Medicaid staff earlier review of federal rules and guidelines, especially important in an administration that likely will shake up regulations issued in the past few years.

Like a ‘Trusted Auto Mechanic.’

He compared state Medicaid directors to the “trusted auto mechanic” who doesn’t own the car or make decisions about its sale, “but if you’re going to open the hood and tinker around with the engine, you better have your trusted mechanic by your side or you may realize the car doesn’t work after you’re done tinkering with it.”

Medicaid directors understand and can share the nuances of how the care is actually delivered, especially how closely tied the programs are and how minute policy shifts can affect one another. Though the industry group will not take sides on partisan issues, they could help with specific guidance.

“The (Affordable Care Act) completely changed the way Medicaid does eligibility so if you had 50 states spending three years and billions of dollars completely overhauling eligibility, we’re just pointing out that’s now baked into the fabric of the health-care system,” Salo said.

Salo noted the patient population the program serves, and he stressed that it needs to be taken into account when considering things like Medicaid work requirements, which could become more accepted under the next administration. It may appear to be a “welfare” demographic that warrants welfare-style rules, he said, but the majority of the actual funds go to the elderly, often those dual eligibility with Medicare, and the disabled.

“As you craft reforms, pay close attention to fact that this is a very complex, very heterogeneous, very delicate population really driving the bulk of the spending,” he said.

Delivery System Reforms

With or without full Obamacare repeal and political decisions shaping Medicaid, 2017 will be an overhaul year for the coverage.

Delivery reforms aimed at strengthening health care for very sick and fragile populations and making it more holistic, as well as structural shifts to payment systems to place a priority on keeping beneficiaries healthy and focus on value, are under way. The other, more prominent health-care discussions won’t “fundamentally impact the fact that these changes are afoot,” Salo said.

“There is an acceptance of the fact the underlying system—I basically call it an unmanaged, uncoordinated fee-for-service system—is not working,” he said. “There needs to be reform.”

And state Medicaid programs are leading the health-care system through this shift, which Salo said is easy to talk about but difficult to implement. They’re in the trenches trying to overturn incentives to using more health-care services not less, he said.

That means moves toward managed care, which may be looked at closely in 2017 regulations, especially for those who have been left out in the past such as the disabled, and more public-private partnerships. With so much uncertainty, he said, this continued delivery system reform is the known quantity.

To contact the reporter on this story: Victoria Pelham in Washington at

To contact the editor responsible for this story: Brian Broderick at

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