The attention-grabbing debate over whether Maine should expand eligibility for Medicaid is over for now. But that doesn’t change the fact that Maine’s existing Medicaid program still serves more than 300,000 of the state’s low-income, disabled and elderly residents. And it doesn’t change the reality that Medicaid continues to account for about a quarter of the state budget.

What also remains unchanged is that Health and Human Services Commissioner Mary Mayhew asked federal officials in March for more flexibility so Maine could manage its Medicaid program, known here as MaineCare, the way it saw fit.

Mayhew’s other request in the March letter garnered more attention at the time, and it appeared that request was part of a political move by the LePage administration: Ask the federal government to fully cover 10 years of Maine’s Medicaid expansion costs while federal law specifically provides for only three, force the feds to reject the request because it ran counter to federal law, then use the rejection as political cover to veto an expansion bill.

But the request for flexibility can’t be dismissed as easily. And federal officials didn’t.

In a reply to Mayhew’s March letter, Cindy Mann, director of the Centers for Medicare and Medicaid Services, invited Mayhew to follow up and start a discussion with Medicaid administrators over what flexibility the state needs to manage a sustainable Medicaid program.

Mayhew told the Bangor Daily News in a March interview that flexibility has largely to do with the paperwork-intensive process state officials must follow to make even slight changes to Medicaid policies.

“Frankly, even where it is permissible, it is incredibly bureaucratic and administratively burdensome,” she said. “We know that health care delivery is changing rapidly, and Medicaid’s policies need to keep pace.”

Mayhew also cited the state’s inability to make better use of services provided in clients’ homes and communities — rather than in more expensive institutions and nursing homes — especially for elderly residents and Mainers with severe cognitive and physical disabilities.

She spoke of changing the way Maine pays for Medicaid services. “The policies do not support the type of payment reform that we believe is important to move the system away from one that is based on volume to one that is based on quality outcomes,” she said.

Mayhew added that the state needs a “global waiver” to free it of the administratively burdensome requirements of making Medicaid policy changes.

A global waiver is an unrealistic request, and we fear the LePage administration interprets “global waiver” as an unrestricted license to eliminate Medicaid coverage for more Maine residents.

But the Maine Department of Health and Human Services’ other requests have merit. Many of Medicaid’s policies are outdated, and Maine does need to get a handle on Medicaid’s costs — or else Maine lawmakers will continue to face periodic Medicaid-related budget gaps.

The federal Medicaid program is built around providing services in high-cost institutional settings — nursing homes for the elderly, institutions for those with mental illness. The costs are staggering. The MaineCare program, for example, spent $236.5 million on nursing home care in 2010, according to state figures. That’s nearly $50,000 annually per nursing home resident.

Which is why the state does need more flexibility to provide some health- and personal-care services to people in need in their homes and at a lower cost. As it’s currently structured, Maine — and any other state — needs to apply to the federal government for waivers to provide those services at home, and the federal government caps the number of people who can receive services under waiver programs.

Medicaid also doesn’t offer the state reimbursement for a range of services — such as so-called homemaker services that assist elderly residents with home chores and basic hygiene — that aren’t deemed medically necessary. It’s exactly those services, however, that can help elderly residents remain in their homes longer and push off the need to enter the more expensive nursing home. These are services that can save all of us money.

And Medicaid, as it’s conventionally structured, reimburses health care providers based on volume of care, rather than quality. Doctors’ offices and hospitals are paid based on the number of procedures they perform, rather than how healthy they’re able to keep their Medicaid patients — an incentive structure that perverts Medicaid’s intentions.

It’s clear federal Medicaid officials recognize these shortcomings. That’s part of the reason Maine was one of six states earlier this year to receive a $33 million grant that will allow it to experiment with new payment models.

It’s also clear Mayhew and the Maine DHHS are focused on these types of reforms. Last year, the Medicaid Redesign Task Force managed by DHHS recommended a long-term shift toward paying providers for better patient outcomes, rather than the procedures they perform. And Maine earlier this spring received another federal grant through the federal Affordable Care Act, this one for $21 million, that will allow the state to shift more of its Medicaid spending to in-home, rather than institutional, care for the elderly and disabled.

While Maine hasn’t expanded Medicaid coverage under the health care law, Mayhew still has ample reason to take the feds up on their offer to discuss ways to restructure Maine’s Medicaid program to lower costs and boost quality.