FIELD REPORT from Familes USA

A wealth of ideas are in this report, click the link in the main title to review the report in it's entirety, requires Adobe Reader. i have cut and pasted a few excerpts here...rw

July 2005

The Good, the Bad, and the Ugly: Analysis of the National Governors Association’s Medicaid Reform Proposal

On June 15, the National Governors Association (NGA) released “Medicaid Reform : A Preliminary Report,” a proposal that describes the NGA’s vision for the future of Medicaid, as well as some aspects of the broader health care system. The proposal is the culmination of several months of discussions among a small group of governors that includes both Democrats and Republicans. At NGA’s July 15 meeting, governors voted to adopt this proposal as official NGA policy.

NGA’s adoption of this proposal comes at an inauspicious time. This is because
the congressional budget resolution requires that as much as $10 billion1 be cut
from the Medicaid program by mid-September as part of the so-called “budget
reconciliation” legislation. In making these cuts, Congress has placed the cart
before the horse, requiring that budget cuts be made before policy changes can
be fully examined. The NGA proposal should not be adopted in the context of
Congress’s effort to obtain short-term budget savings. Instead, the changes
proposed by NGA should be postponed until they can be carefully analyzed and
until their impact on Medicaid beneficiaries are fully understood.

In this preliminary analysis, we highlight key concerns about the NGA proposal
and describe some of the promising ideas as well. The analysis also assesses
NGA’s ideas for expanding federal assistance to the uninsured.
Contents:

1. Proposals that Hurt People Who Rely on Medicaid
2. Medicaid Reform that Makes Sense
3. Expanding Federal Help to the Uninsured

Proposals That Hurt People Who Rely on Medicaid

Erecting Barriers to Health Care for the Poor

The NGA proposes giving states broad discretion to dramatically increase cost-sharing—the amount that people pay out of their own pockets in premiums, copayments, and deductibles to receive services through Medicaid. This proposal would remove the current reasonable limits on how much states can charge people who must rely on Medicaid—including low-income children, pregnant women, and people with disabilities, as well asseniors on low fixed incomes...

Arguments for higher out-of-pocket costs suggest that the low-income people served by Medicaid (most live on budgets that are below the federal poverty level—some are well below that level) will thus be less likely to make unneeded visits to the doctor or to seek out unnecessary treatment. There is absolutely no evidence to support the assertion that low-income people are over-utilizing the health care system.

However, there is ample evidence that increased cost-sharing discourages people from seeking necessary care:
Increasing the copayments charged to the poor has been shown to reduce their access to critical needed services, leading them to seek more costly care later. Further, a significant body of research has shown that charging premiums to low-income people deters them from enrolling in coverage and thereby increases the ranks of the uninsured.

Picking and Choosing Who Gets What Health Care

The NGA proposes eliminating federal assurances that people who rely on Medicaid have access to critical health care services. In place of the current federal requirements that spell out the minimum set of benefits that must be provided to Medicaid enrollees, the NGA proposes that states be given very broad discretion to determine the services provided and to “tailor” services to meet the needs of broad categories of people.

Under current law, individuals in Medicaid only get the health care services that are medically necessary for them. Thus, it is unclear how much savings could be generated from “tailoring” the Medicaid benefit package for individuals or groups—unless the “tailoring” consists of eliminating coverage of health care services...To contain costs, we should pursue the use of disease management, home- and community-based care, and other methods that promise to deliver
quality health care services more efficiently, ather than arbitrarily strip away vital services from those who need them.

Medicaid Reform that Makes Sense

Prescription Drug Cost Savings

The NGA proposes reducing Medicaid costs by cutting spending on prescription drugs. Prescription drugs have consistently been among the fastest growing Medicaid costs in the past several years, and there is widespread agreement that Medicaid is paying too much for drugs. This is one area where savings can be found without reducing services essential to those with Medicaid and where improvements are long overdue.

Specifically, the NGA has identified the following positive reforms that will save significant federal and state Medicaid dollars:

• increase the minimum rebates that states collect on brand-name and generic drugs;
• require that authorized generics be included in “best price” calculations for purposes of determining rebates;
• force discounts on the front end of drug purchasing;
• enact sanctions for companies and individuals that fail to accurately report the average sales price;
• allow states to join purchasing pools; and allow managed care organizations to obtain rebates directly for the Medicaid populations they serve.

In addition to these proposals, policy changes that encourage states to restructure pharmacists’ reimbursements could also result in very significant savings. In particular, moving away from payments based on Average Wholesale Price (AWP) to another pricing calculation, such as one based on average sales price (ASP—the weighted average of all non-federal sales prices to all purchasers, excluding sales exempt from the best price calculations,net of rebates, discounts, and other price concessions), would save money for both states and the federal government without hurting the people who must rely on Medicaid.

With this change, pharmacy dispensing fees should be set at a flat rate that adequately covers reasonable costs and that does not create incentives for pharmacists to dispense higher-priced drugs. The administration of the current drug rebate program also needs to be strengthened.

read more in the report by clicking the main title in this post or @ http://tinyurl.com/cu5e5