New Medicaid rules from CMS empower states

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If you’ve been following news from the Centers for Medicare & Medicaid Services this week, you may have noticed a theme: It increasingly is granting states more control over their Medicaid programs.

The latest and most significant regulation to trickle out of the government agency allows states what it has termed “unprecedented flexibility” in designing their Medicaid programs.

Because of the rule—which implements provisions of the Deficit Reduction Act of 2005—states can offer beneficiaries “benchmark plans,” or model plans that are similar to those offered to other populations. Benchmark coverage may include a particular Blue Cross/Blue Shield plan, coverage offered by the largest health maintenance organizations (HMOs) in the state, benefits that the secretary of the Department of Health and Human Services approves, or state employee coverage.

To the relief of the long-term care community, nursing home residents are exempt from this rule. And language in the final rule clarifies that residents have the option of choosing a plan—but they must be informed about it, and they are required to have the option to opt out if they choose a plan.

Another new CMS regulation allows states to charge Medicaid beneficiaries premiums and higher copayments for physicians’ services, hospital care and prescription drugs. States can deny coverage in some cases to beneficiaries who do not pay their premiums. They also can charge a copayment of up to $3.40 to beneficiaries at or below the poverty level for a physician visit or other services. (Dual eligibles, who make up a large part of the nursing home population, do not pay copays.)

Besides granting states more authority over Medicaid, these rules have another trait in common: They could end up hurting the most vulnerable. The drug rule, while it might help states raise money, could prevent people from receiving necessary drugs. Meanwhile, the regulation permitting benchmark plans gives states more leeway to change the scope of available benefits.

“As states are strapped for money they can cut benefits,” notes Janice Zalen, senior director of special programs for the American Health Care Association.

One regulation forthcoming from CMS, according to Zalen, would allow states the flexibility to expand home- and community-based services.

Let’s keep a close eye on these new rules and how states use them. While they may not specifically target the long-term care population, there may be significant indirect consequences.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.