Medicaid on spin cycle

When the federal government’s temporary Medicaid spending increase under the American Recovery and Reinvestment Act expired last summer, industry observers drew the lines between state Medicaid shortfalls and LTC services. Their estimation: states would begin to doggedly seek more inexpensive solutions through home- and community-based services (HCBS). And we’ve already seen that happen.

Aiding states in that course of action, the Centers for Medicare & Medicaid Services is finalizing a rule that would describe Medicaid coverage of a new optional state plan benefit to both furnish HCBS and draw federal matching funds—basically, more care options for seniors and disabled Americans with more incentive for states to keep these people out of SNFs.

And don’t forget that last month, New Hampshire was the first state to receive new Medicaid grant dollars provided through healthcare reform for the express purpose of keeping beneficiaries out of nursing homes.

This is not creating a feeling of stability for LTC providers. Readers in Kansas are intimately aware of this, as the state is overhauling its Medicaid program, with a complete reorganization of its top health and aging departments to be completed this summer.   

Yes, Kansas is certainly not alone. As PHI noted on its blog yesterday, Alabama legislators passed an FY2013 budget this week that cuts its Medicaid program by 30 percent, and you can pretty much expect program reforms with funding slashed that deeply.

As is the case normally in this space, current events coalesced today with an announcement from industry advocates—this time, the American Health Care Association (AHCA)—asking for reprieve.

AHCA pointed out that state tax collections are up $62 billion, and that every state experienced an increase in tax revenues during 2011. In the announcement, AHCA President Mark Parkinson asked states to sustain Medicaid as a budget priority.

“With the end of assistance from the Recovery Act, an increasing population relying on Medicaid, and states continuing to backfill years of deficits, we understand that challenges still remain. However, as revenues return, states should consider rolling back many of these Medicaid cuts and restoring the level of care our nation’s seniors and individuals with disabilities deserve,” Parkinson said.

But with states already committed to cutting costs and reorganizing their Medicaid programs, will a return of revenues be enough to change course? If the above-mentioned events are any indication of the future, providers who rely on Medicaid are just now seeing what the future holds—and it’s not inspiring good faith.

Topics: Medicare/Medicaid