Kaiser Daily Health Policy Report Rounds Up Developments in State Medicaid Programs

Several papers reported news about local Medicaid programs in the last weeks of December. Developments included those summarized below.

• Alabama: CMS has extended until Feb. 28 a deadline for the state and federal government to reach a compromise on closing the Medicaid loophole in Alabama. The federal government had set a deadline of Dec. 24 to close the loophole, which the state has used since the mid-1990s to draw down extra federal Medicaid funds. CMS has indicated it will continue extending the deadline as long as Alabama keeps working to "find a middle ground" with the federal government (AP/Columbus Ledger-Enquirer, 12/21).
• Arkansas: State legislators have offered a plan to "tap" tobacco settlement money to "help make up" $12.8 million in cuts to Medicaid proposed by the Department of Human Services as part of a statewide effort to trim spending by $142 million. In response to a request for suggestions from Gov. Mike Huckabee (R), lawmakers proposed using money from a voter-approved $100 million trust fund that was established to spend the state's $1.6 billion tobacco settlement (Jefferson, AP/Memphis Commercial Appeal, 12/28).
• Florida: HHS Secretary Tommy Thompson on Dec. 21 approved the state's plan to participate in the federal Program of All-Inclusive Care of the Elderly, or PACE, an optional Medicaid benefit. Under the program, which operates as a comprehensive managed care plan for frail seniors, participating providers must offer all services under both Medicare and Medicaid without limitation on amount, duration or scope. To qualify for PACE coverage, a person must be age 55 or older and be deemed eligible for nursing home care by a state agency. Enrollment is voluntary, but seniors who elect such coverage will receive all services from Medicare and Medicaid through the PACE program. Thompson said, "The goal of this program is to keep the elderly in their communities and near their loved ones" (HHS release, 12/21).
• Tennessee: State officials have started the eligibility reverification process for TennCare enrollees unable to obtain private insurance, which makes them eligible for the state's Medicaid managed care program. Last week, letters were sent to 10,000 enrollees, who have 60 days to make an appointment with the state Department of Health to verify eligibility. Those failing to schedule an appointment will be dropped from the program, but will have 30 days to appeal (Lewis, Nashville Tennessean, 12/27).
• Texas: State lawmakers are preparing for "unanticipated jumps" in health care spending due to higher-than-expected Medicaid enrollment. About 50,000 more people than projected were enrolled in Medicaid as of November, due in part to the "soften[ing]" economy, which has also decreased sales tax revenue. Because Texas' budget cycle lasts for two years, more than 20 months remain in the current fiscal year, which is "plenty of time" for a potential economic recovery to fill any "budget holes," the Austin American-Statesman reports. However, if Medicaid costs increase past the amount that is currently budgeted, lawmakers would need to shift funds from other parts of the budget (Susswein, Austin American-Statesman, 12/28).
• Virginia: Gov. James Gilmore (R) has used $259 million in extra federal funds received through the Medicaid loophole to balance his proposed budget, including money to cover a projected Medicaid shortfall and other health programs. Under the loophole, states pay local- or county-owned provider facilities more than the actual cost of services, draw down inflated matching funds from the federal government and then require providers to return the extra state funds. Although many Virginia localities refused to participate in the funding plan, two long term care facilities agreed to the proposal. Gilmore's budget appropriates $97.4 million for growth and inflation in the Medicaid program and $10.7 million to increase enrollment in a Medicaid waiver program that provides community-based services for those with mental retardation. The budget also includes more than $610 million to cover a projected budget shortfall in Medicaid. Although officials in Gov.-elect Mark Warner's (D) administration have criticized the funding plan, they indicated they would use the money on health and human services needs (Martz, Richmond Times-Dispatch, 12/24).