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Federal Health Care Leaders Write Governors About New Direction for Medicaid

    Client Alerts
  • March 17, 2017

While much of the attention related to health care this week is focused on our nation’s capital, all 50 state governors have received a letter from recently confirmed U.S. Health & Human Services Secretary Tom Price and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma.  The letter begins by noting the challenges facing Medicaid.  The authors describe Medicaid expansion as “a clear departure from the core, historical mission of the program” and as creating “an incentive to deprioritize the most vulnerable populations.”  The letter then commits to working with expansion states (31 plus the District of Columbia) and non-expansion states (19) on a “solution that best uses taxpayer dollars to serve the truly vulnerable.”

The letter promises more freedom to states in designing their Medicaid programs.  It promises a “more transparent, efficient, and less burdensome” State Plan Amendment approval process.  It also indicates a plan to fully review Medicaid managed care regulations.  The health care leaders invite states to use existing Section 1115 demonstration authority to encourage employment and community engagement of low-income adult beneficiaries.  The letter lists a host of state-led reforms to better align Medicaid with private insurance policies, including health savings account-like features.

 On the final page of the letter, CMS indicates that it will provide additional time for states to comply with the January 16, 2014, Home and Community-Based Services (HCBS) rule.  It also notes opportunities for states to innovate in order to address the opioid epidemic. 

Although the letter provides few specific details on the direction of the Centers for Medicare & Medicaid Services, it certainly indicates a different approach to the federal-state Medicaid program.  We will continue to keep you posted on this revamping project.