Sebelius Sends Letter to Governors Outlining Flexibility, Support Available for Medicaid

Kathleen Sebelius, secretary of the Department of Health and Human Services, sent a letter today to governors outlining the support available to states that are examining how to make Medicaid programs more efficient while dealing with slimmer budgets.

“In light of difficult budget circumstances, we are stepping up our efforts to help you identify cost drivers in the Medicaid program and provide you with new tools and resources to achieve both short-term savings and longer-term sustainability while providing high-quality care to the citizens of your states,” Sebelius wrote in the letter. “We are committed to responsiveness and flexibility, and will expedite review of state ideas.”

The letter describes new initiatives that HHS will pursue with states and offers state-specific technical support.

Some of the key areas of potential cost savings include:

· Changing optional benefits or limiting their amount, duration, or scope through an amendment to state plans. In addition, states may add or increase cost sharing for services within limits.

· A new option to provide “health homes” to people with chronic illnesses, and initiatives to reduce unnecessary hospital readmissions, along with other strategies to improve care and lower costs.

· A national database of actual pharmacy acquisition costs that states can use to determine state-specific rates.

· The state use of federal audit contractors to save funds and consolidate auditing efforts.

Click here for the full letter.