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Home > Advocacy > Medicaid > White House Medicaid Propsoals


White House Medicaid Propsoals

CWLA's Questions and Concerns

On August 5, U.S. Health and Human Services Secretary Michael Leavitt sent the White House legislative proposals to Congress. These proposals specifically call for ways to reduce federal Medicaid support for children in foster care or otherwise involved in the child welfare system.

Members of Congress are considering these proposals as they put together budget reconciliation language by September 16 that reduces federal spending for entitlement programs by $35 billion over five years. Of that amount, $10 billion is expected to come from Medicaid.

The Administration proposal would reduce federal spending for Medicaid by restricting the use of Medicaid services and reinforcing that Medicaid is the payer of last resort.

The Administration proposal includes options that would:
  1. Restrict the use of both targeted case management (TCM) and rehabilitative services to cases in which the services could not be provided with any other federal, state, or local funding sources.

    Issue: Although these services provided to children in the child welfare system, and currently funded by Medicaid, may be allowable under other funding sources--such as Title IV-E Foster Care and Adoption Assistance, Title IV-B Child Welfare Services, the Title IV-B Promoting Safe and Stable Families program, Temporary Assistance for Needy Families, the Social Services Block Grant, and other mental health and juvenile justice funding sources--states are not likely to use these other funding sources because they are used to provide services for many other populations, and also to provide other types of services to children in the child welfare system.

  2. Deny Medicaid reimbursement if the same service were furnished without charge to non-Medicaid eligible individuals.

    Issue: States do not charge non-Medicaid recipients for TCM services. These services are provided to non-Medicaid recipients with state funds. If a state began charging non-Medicaid recipients for these services, would parents of children in the child welfare system also have to be charged?

  3. Require that Medicaid services be billed under a fee schedule.

    Issue: Would a bundled rate be interpreted as meeting "fee schedule"? If not, then stand-alone services with unit intervals, such as 15 minutes of lifeskills, 30 minutes of individual therapy, and 30 minutes of group counseling, would have to be billed instead of one-day of services. Enlisting an itemized billing schedule fails to meet the complex and multilayered approach to services that foster children receive.

  4. Require that both TCM and rehabilitative services be linked to specific, measurable outcomes.

    Issue: Although it is difficult to measure outcomes for TCM, since TCM links children to needed services, the services themselves are measurable. A new report from the Urban Institute found that TCM recipients were more likely than non-TCM recipients to receive physician, prescription drug, dental, rehabilitative, inpatient, clinic, inpatient psychiatric, and home health care services.

  5. Reduce the federal reimbursement for TCM to 50% instead of at the Federal Medical Assistance Percentage rate (FMAP). This proposal would become effective October 2005.

    Issue: FMAP reimbursement rates currently range from 50% up to 80%. More than half of the states operate with FMAP rates that exceed 60%. Altering this reimbursement rate now, after most states are operating under their FY 2006 budgets, would place a severe finical burden on these states.

  6. Cap federal reimbursement for Medicaid administration.

    Issue: States' administrative activities are not likely to lessen, which means states would receive less federal support for these activities.
Child Welfare League of America
August 31, 2005

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