State Medicaid Programs Struggling With Administrative Duties, MACPAC Told

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By Ralph Lindeman  

Jan. 23 --Even before a major expansion of Medicaid is fully implemented, the growth of Medicaid in recent years has already overwhelmed the administrative capacity of most state Medicaid programs to operate effectively, witnesses told a federal advisory panel Jan. 23.

“Medicaid isn't just Medicaid anymore; it's really part of a much more integrated health-care delivery and financing model” that includes managed care in many states, Charles Milligan, Maryland's Medicaid director, told the Medicaid and CHIP Payment and Access Commission (MACPAC).

During a full-day public session covering several topics, MACPAC examined how well states are dealing with increased responsibilities administering Medicaid, a program that in many states accounts for as much as 30 percent of the state budget, according to Darin J. Gordon, director of Tennessee's Medicaid program, known as TennCare.

Although Medicaid enrollments, regulatory requirements and financial audits have increased significantly over the past few years, administrative budgets for most state Medicaid programs have remained the same or been cut, according to Eileen Griffin, senior research associate with the Muskie School of Public Service at the University of Southern Maine.

Nearly 60 percent of state and local governments surveyed in a recent study reported they had a smaller workforce in 2013 than they had in 2008, when the economic downturn began, Griffin said.

No Minimum Administrative Standards

She noted that there are no federal guidelines governing minimum administrative standards for state Medicaid programs. States are solely responsible for setting administrative budgets for their Medicaid program, which also lacks any organized constituency advocating for increased investment in administrative capacity, Griffin said.

As one example of increased state responsibilities, Milligan cited enhanced federal match rates offered to states by the Centers for Medicare & Medicaid Services, in an effort to encourage them to participate in a variety of initiatives.

Each of the match rates, officially known as federal medical assistance percentages (FMAPs), comes with its own set of state reporting requirements, Milligan noted. He said Maryland's Medicaid program participates in seven different CMS initiatives that offer enhanced FMAPs, including the Affordable Care Act's Medicaid expansion, primary care physician pay increase and Medicaid eligibility and enrollment system upgrade.

Gordon, who also serves as president of the National Association of Medicaid Directors, noted the paradox of state Medicaid programs--with limited staff and frequent turnover--handling budgets equal to the revenue of a Fortune 500 corporation.

The average tenure for most state Medicaid directors is about 13 months, and the average tenure for their executive team is about 14 months, Gordon said. “The sad thing is there are multiple programs [within Medicaid] that require two to three years' worth of attention and effort,” he said, “and the turnover puts you back several notches in trying to move the program forward.”

Lack of Expertise Another Problem

A lack of funding to pay for expertise among staff is another problem, Gordon said. He mentioned one state's Medicaid director who told him that other than the top three people in the state's Medicaid program, no other member of the program's administrative staff had a college education.

Unlike Fortune 500 chief executive officers, who can easily get advice from outside experts and their peers in other corporations, state Medicaid directors have a “very narrow peer group” to consult about problems, Gordon said.

“And also there is very little time if any for you to look outside your four walls--and the problems coming across your desk--to find out what's going on in the private sector to think about innovative solutions to the problems you encounter,” he added.

Milligan said that one way to help states get more budgetary support for administration of their Medicaid programs would be to set up an accreditation program, under which states could receive increased funding for meeting certain administrative standards. Using such a model, he said, could “help professionalize” state Medicaid operations.

MACPAC, a 17-member advisory group, was established by Congress in 2009 to provide advice on such issues as access, eligibility, enrollment and retention in Medicaid and the Children's Health Insurance Program.

MACPAC is intended to perform much the same functions for Congress with respect to the Medicaid/CHIP programs as the Medicare Payment Advisory Commission (MedPAC) provides with respect to Medicare, according to MACPAC's authorizing statute (42 U.S.C. §1396-1).


To contact the reporter on this story: Ralph Lindeman in Washington

To contact the editor responsible for this story: JoAnn Goslin at

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