Congressional Republicans are proposing new ideas for changing Medicaid, suggesting models based on the 1996 federal welfare reform law, and proposing a bill that would base federal allocations on population size and patient categories.
In a paper called "Making Medicaid Work," Republicans Fred Upton, a Michigan Representative, and Orrin Hatch, a Utah Senator, argue that the program could be improved by "imposing fiscal discipline" and letting states design benefit packages, eligibility, provider coordination and pricing transparency.
"If history has taught us anything, it's that the best solutions often come from the states," Hatch said in a media release.
Hatch and Upton's paper calls for legal changes that would encourage states to reform their delivery systems through price transparency, value-based purchasing and "modernizing" the Medicaid waiver process, which they argue "often prohibits states from being bold in testing new models of coverage and care."
They also suggest moving federal financing away from the matching-fund framework (in most states, the federal government in paying well over half of the costs). "Medicaid's open-ended funding structure sets up the wrong set of incentives," they write in the paper.
Hatch and Upton suggest "block grants that cap the amount of spending the federal government sends to states and proposals that limit the amount of federal dollars spent for each Medicaid beneficiary," such as per capita caps.
How far those proposals could go in a Congress that's struggled to pass a budget isn't clear, and the Centers for Medicare & Medicaid Services is already allowing experimental state Medicaid and insurance exchange policies -- like the Arkansas "private option" -- and will be allowing more under the Affordable Care Act's state innovation waivers.
But Republicans in statehouses across the country continue to criticize Medicaid as a broken system that almost paradoxically discourages physicians from participating, with low reimbursement rates in many states, and also keeps growing in costs due to increases in unemployment and the ranks of the working poor. In many states, Medicaid comprises one of if not the largest state budget item.
Republican Congressman from Louisiana, Bill Cassidy, MD, is now trying for the second year in a row to promote a bill changing federal Medicaid financing.
Cassidy's Medicaid Accountability and Care Act would distribute federal payments to states based on the number of enrollees in four categories -- the elderly, blind and disabled, children and adults -- and would add quality of care bonuses to the top performing states.
Cassidy's bill would reduce the standard match for each state to 25 percent and bar states from using intergovernmental transfers or certified public expenditures to fund their matching share. The bill would also offer states the option to combine Medicare and Medicaid payments for full-benefit dual eligibles (something CMS is to a large extent already doing) and would let states keep all of the savings from Medicaid fraud and abuse recovery.
"The Medicaid program continues to add to our national debt while providing substandard care to those in need," said Cassidy, whose district includes Baton Rouge, where he co-founded a healthcare clinic for poor and uninsured patients in 1998. "The last time Medicaid was updated, the Beatles were the most popular band in America and we were still half a decade away from walking on the moon," he said in a media release.
The Medicaid program could be considered at a crossroads, with 21 states expanding eligibility under the Affordable Care Act and some, like Oregon, pursuing policy changes that blend managed and accountable care. Meanwhile, many Republican Governors still see large flaws with the program and want no part in expanding it.