State panel looking for short-term, long-term Medicaid savings

Posted Aug. 28, 2012, at 7:06 p.m.
Mary Mayhew
Joe Phelan | AP
Mary Mayhew

AUGUSTA, Maine — A state panel charged with finding short-term savings and recommending long-term reforms for the state’s Medicaid program met for the first time Tuesday, just days before the LePage administration hopes to gain federal approval to make $20 million in Medicaid service cuts this fall.

The MaineCare Redesign Task Force met in Augusta to start work on finding $5.25 million in savings this fiscal year and making recommendations to lawmakers on long-term changes to the program that reduce the cost of providing health care to low-income residents.

“We need to be on dual paths, identifying where there might be possible savings, but continue to look at the longer-term focus for the program,” said Health and Human Services Commissioner Mary Mayhew.

The panel’s nine members — who include members of the state’s MaineCare Advisory Committee and others with expertise in health policy, health care finance and state finance — started setting goals Tuesday for a Medicaid program that provides patients with high-quality care at a reduced cost.

“The goal is going to be better coordination, low-cost services and, hopefully, elimination of duplication of services,” Dr. Kevin Flanigan, medical director for the state’s office of MaineCare services, told the group.

The MaineCare redesign panel was formed as part of a supplemental budget package approved by Republican lawmakers in May. That budget package also included Medicaid cuts, planned for Oct. 1, that would eliminate coverage for 19- and 20-year-olds, tighten income eligibility requirements for low-income parents and scale back Medicaid access for elderly residents who also qualify for Medicare benefits.

It’s still unclear whether Maine will be able to make some of those $20 million in cuts as they could run afoul of a provision in President Barack Obama’s federal health care law — known as “maintenance of effort” — that requires that states maintain existing Medicaid services in advance of a major Medicaid expansion in 2014.

Maine officials are awaiting a decision from the federal Centers for Medicare and Medicaid Services on whether they can make those cuts simply by amending Maine’s state Medicaid plan. The LePage administration has interpreted the Supreme Court’s June decision largely upholding the federal health care law as a sign it can make the cuts while Democrats, Health and Human Services Secretary Kathleen Sebelius and others have come to the opposite conclusion on whether the court decision affected the maintenance of effort provision.

Gov. Paul LePage has called for cuts to Maine’s Medicaid program ever since he took office last year. Maine has above-average rates of Medicaid coverage — 27.8 percent of the population in fiscal year 2009 compared to 21 percent nationally — and LePage has said the program’s growth has been unsustainable.

Maine spent about $770 million from its general fund to cover Medicaid services during the 2011-12 budget year, according to the state Department of Health and Human Services. The federal government kicked in nearly $1.5 billion to cover most of the remaining Medicaid costs that year.

According to the Department of Health and Human Services, Maine’s Medicaid program currently covers about 341,000 residents.

The MaineCare Redesign Task Force discussion Tuesday didn’t focus on pending cuts to the program. Instead, the panel devoted much of its attention to the 5 percent of highest-need MaineCare patients who consume about 50 percent of the program’s resources, the bulk of whom are elderly and disabled.

“This is a group that is fully dependent and vulnerable, so we’re not going to get them to leave [Medicaid],” Flanigan said.

But many high-need patients also receive services from other assistance programs within the Department of Health and Human Services, Flanigan said, and that’s where there might be an opportunity to save money through closer coordination of services among those different agency programs.

For example, an asthma patient receiving housing assistance might be able make fewer costly emergency room visits if he were placed in a housing environment that didn’t trigger symptoms of his chronic condition, Flanigan said.

“There is a strong belief we can do a better job of helping these people live more fulfilling lives and not spend time overutilizing [Medicaid services],” he said.

The panel has a Nov. 15 deadline to deliver its recommendations to the Legislature.

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