Yesterday, HHS Secretary Kathleen Sebelius sent a letter to governors outlining the flexibility and support available to states that are examining how to make Medicaid programs more efficient while meeting pressing health care challenges in the face of difficult budget circumstances.
“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 also outlines the substantial flexibility that states have to design benefits, service delivery systems, and payment strategies, without a waiver. In addition, 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 Benefits. States can generally change optional benefits or limit their amount, duration or scope through an amendment to their state plan. In addition, states may add or increase cost sharing for services within limits.
- Managing Care for High-Cost Enrollees More Effectively. Just 5 percent of Medicaid beneficiaries account for more than half of all of Medicaid’s costs. These individuals often have fragmented care that contributes to higher costs. A new option to provide “health homes” to people with chronic illnesses, and initiatives to reduce unnecessary hospital readmissions, are just some of the strategies that can help improve care and lower costs.
- Purchasing Drugs More Efficiently. States have broad flexibility to set their pharmacy pricing. HHS will create a first-ever national database of actual acquisition costs that states can use to determine state-specific rates. HHS will also share proven approaches that states have used to drive down costs.
- Assuring Program Integrity. States will be able to use federal audit contractors to save funds and consolidate auditing efforts and will benefit from new, cutting-edge analytics, like predictive modeling, being developed to prevent fraud in the Medicare program. HHS’ Medicaid Integrity Institute is preparing a series of webinars for states to share best practices for assuring program integrity.
The full letter can be found at this link, http://www.hhs.gov/news/press/2011pres/01/20110203c.html.
