Nation's health leader advises how to deal with Medicaid funding crunch

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Providers could be facing calls for cuts in benefits and demands for more effective drug purchasing in the wake of a letter from Health and Human Services Secretary Kathleen Sebelius to the nation's governors. Sebelius sent the missive as a reminder on ways states could more efficiently utilize their Medicaid programs.

Medicaid is the biggest payer of long-term care services in the United States. Any curtailment of funding for it could hit providers especially hard. Special federal matching-funding rates currently are set to expire in June.

Sebelius counseled governors to consider changing “optional” benefits in her letter Thursday. “Many services, such as prescription drugs, dental services, and speech therapy, are optional” and can generally be limited within reason, Sebelius noted.  She also touted “health homes” for individuals with chronic illnesses and pointed the finger at nursing homes as a dominant recipient of Medicaid funding. In addition, she called for better policing of payments.

Sebelius said there is a federal spotlight on helping states provide better, cheaper care for so-called “dual eligibles,” seniors and people with disabilities who are eligible for both Medicaid and Medicare, many of whom wind up in nursing homes. “This population offers great potential for improving care and lowering costs,” she wrote.