CPWD Update

Medicaid Stimulus?

US States Playing Games.

3/5/2009

By: Steve Gold

Two provisions of the recently enacted Congressional Stimulus program continue to raise elderly and disability advocates' questions and concerns: how do we deal with states that want take the increased match of federal Medicaid funds, while at the same time avoiding what Congress required and intended the states to do.

Let's begin with the purpose of the entire Stimulus program. Congress intended to stimulate/increase/maintain Medicaid spending to "minimize and avoid reductions in essential services and counterproductive... tax increases." The stimulus was not to use the increased federal funds so Medicaid's funds could then be redirected in non-Medicaid programs.

Here are some questions asked.

First, can a state reduce the level of its Medicaid services and still receive the increased Federal Medical Assistance Percentage (FMAP)?

No. Congress set July 1, 2008 as the floor. Section 5001(f)(1)(A). Congress expressly stated that a "State is not eligible for an increase in its FMAP... if procedures under its State plan are more restrictive than the ... procedures under such plan (or waiver) as in effect on July 1, 2008."

Any Medicaid "procedure" in its services, programs, and limitations in services or programs, number of people participating in the programs, etc., could not be "more restrictive" than existed on July 1, 2008. For a state to be eligible for the increased FMAP, July 1, 2008 is the floor. Congress even recognized that some states may have restricted their Medicaid procedures sometime between July 1, 2008 and the date of the Stimulus enactment, and Congress permit those states to receive the increased FMAP if those state "reinstate" the "procedures ... under such [State} plan as in effect on July 1, 2008."

Here are some specific examples: states might want to save Medicaid funds by reducing the number of people in Medicaid waivers to fewer than it had on 7/1/08, reducing the cost estimates for services in waivers, or changing the cost neutrality from the aggregate to an individual basis. Those examples are the result of "more restrictive" procedures than existed on July 1, 2008 and would disqualify a state from receiving the enhanced FMAP.

Similarly, a state could not impose more restrictive procedures to determine if a person meets the eligibility standards for Medicaid or for a specific Medicaid program.

Second, can a state save its Medicaid funds, use them for non-Medicaid purposes and still receive increased FMAP?

No. Stimulus' increased FMAP is statutorily required to be used for the reimbursement of only "Medical assistance" services and programs - not roads, bridges, infrastructure. That's been the statutory definition and requirement of FMAP under Medicaid, and the Stimulus program did not change either the FMAP's definition or requirements.

The increased Stimulus FMAP was not meant to be used so a state could "save" its other Medicaid funds, because it will receive the increased FMAP. That could directly undercut the purpose of avoiding reductions in Medicaid expenditures and the mandatory requirement that FMAP be used only for Medicaid services.

In Section 5001(f)(3), Congress explicitly wrote that a "State is not eligible for an increase in its FMAP ... if any amounts [of Medicaid funds] attributable (directly or indirectly) to such [FMAP] increase are deposited or credited into any reserve or rainy day fund of the State."

If a state were to take the FMAP, reduce/decrease/save - even indirectly - its funds in a Medicaid program, and then apply/credit that amount in any "reserve," this reduction/decrease/savings would violate the Stimulus program.

We've heard rumors of states already "playing games." Heck, if the banks can play footloose and fancy free, why not the states? What will be the federal oversight and enforcement? Will CMS ensure full enforcement? What should and will advocates do in those states playing games with elderly and disabled low-income persons?

-- Steve Gold, The Disability Odyssey continues

To contact Steve Gold directly, write to stevegoldada@cs.com or call 215-627-7100.

Medicaid Stimulus?
US States Playing Games.
3/5/2009 By: Steve Gold
	Two provisions of the recently enacted Congressional Stimulus program continue to raise elderly and disability advocates' questions and concerns: how do we deal with states that want take the increased match of federal Medicaid funds, while at the same time avoiding what Congress required and intended the states to do. Let's begin with the purpose of the entire Stimulus program. Congress intended to stimulate/increase/maintain Medicaid spending to "minimize and avoid reductions in essential services and counterproductive... tax increases." The stimulus was not to use the increased federal funds so Medicaid's funds could then be redirected in non-Medicaid programs. Here are some questions asked. First, can a state reduce the level of its Medicaid services and still receive the increased Federal Medical Assistance Percentage (FMAP)? No. Congress set July 1, 2008 as the floor. Section 5001(f)(1)(A). Congress expressly stated that a "State is not eligible for an increase in its FMAP... if procedures under its State plan are more restrictive than the ... procedures under such plan (or waiver) as in effect on July 1, 2008." Any Medicaid "procedure" in its services, programs, and limitations in services or programs, number of people participating in the programs, etc., could not be "more restrictive" than existed on July 1, 2008. For a state to be eligible for the increased FMAP, July 1, 2008 is the floor. Congress even recognized that some states may have restricted their Medicaid procedures sometime between July 1, 2008 and the date of the Stimulus enactment, and Congress permit those states to receive the increased FMAP if those state "reinstate" the "procedures ... under such [State} plan as in effect on July 1, 2008." Here are some specific examples: states might want to save Medicaid funds by reducing the number of people in Medicaid waivers to fewer than it had on 7/1/08, reducing the cost estimates for services in waivers, or changing the cost neutrality from the aggregate to an individual basis. Those examples are the result of "more restrictive" procedures than existed on July 1, 2008 and would disqualify a state from receiving the enhanced FMAP. Similarly, a state could not impose more restrictive procedures to determine if a person meets the eligibility standards for Medicaid or for a specific Medicaid program. Second, can a state save its Medicaid funds, use them for non-Medicaid purposes and still receive increased FMAP? No. Stimulus' increased FMAP is statutorily required to be used for the reimbursement of only "Medical assistance" services and programs - not roads, bridges, infrastructure. That's been the statutory definition and requirement of FMAP under Medicaid, and the Stimulus program did not change either the FMAP's definition or requirements. The increased Stimulus FMAP was not meant to be used so a state could "save" its other Medicaid funds, because it will receive the increased FMAP. That could directly undercut the purpose of avoiding reductions in Medicaid expenditures and the mandatory requirement that FMAP be used only for Medicaid services. In Section 5001(f)(3), Congress explicitly wrote that a "State is not eligible for an increase in its FMAP ... if any amounts [of Medicaid funds] attributable (directly or indirectly) to such [FMAP] increase are deposited or credited into any reserve or rainy day fund of the State." If a state were to take the FMAP, reduce/decrease/save - even indirectly - its funds in a Medicaid program, and then apply/credit that amount in any "reserve," this reduction/decrease/savings would violate the Stimulus program. We've heard rumors of states already "playing games." Heck, if the banks can play footloose and fancy free, why not the states? What will be the federal oversight and enforcement? Will CMS ensure full enforcement? What should and will advocates do in those states playing games with elderly and disabled low-income persons? -- Steve Gold, The Disability Odyssey continues