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Baton Rouge Morning Advocate - Cassidy Bill Would Rebalance States' Medicaid Matching Eligibility

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Location: Washington, DC

By Jordan Plum

Rep. Bill Cassidy, R-Baton Rouge, said Tuesday he is filing legislation that would create more financial and efficiency accountability for Medicaid funding.

Cassidy's proposed legislation also would reduce Louisiana's -- and other states' -- share of the Medicaid health-care funding for the nation's poor. He plans to file the legislation on Wednesday, he said.

Called the Medical Accountability and Care Act, Cassidy said he wants to start the conversation now to build momentum for the bill that he hopes will move legislatively next year. The intent is to change the way the nation finances Medicaid and insert more incentives for creating quality health programs while weeding out fraud, he said.

If you could start with a blank slate, Cassidy said, "There's no way you would design the current Medicaid program" that he contends is too "cumbersome and bureaucratic."

He wants to change Medicaid financing so states will not be able to just use the federal government as a "blank check" for matching funds, Cassidy said.

Instead, Cassidy said, the bill proposes distributing funds on a per-capita basis to states based on the number of Medicaid enrollees in four categories: the elderly, blind or disabled, children and adults.

Louisianahas a lot more disabled patients while a state like Vermont has a lot more elderly ones, Cassidy said. "They're very distinct populations with very different cost structures," he said.

Calling it a "moral argument" against some states getting much better Medicaid funding than others, Cassidy's bill would, over a 10-year phase-in period, adjust federal per capita payments so states could only receive within 10 percent of the national average.

The overall percentage of the federal share, known as the Federal Medicaid Assistance Percentage would increase for 49 states because all states would pay the same as the state with the lowest percentage share.

Mississippiis currently paying the lowest percentage state share in matching fund at 24 percent, so every state would pay a 24 percent share if that holds up.

The catch is that states like Louisiana would no longer be allowed to use provider taxes, intergovernmental transfers and so-called one-time dollars to cover their state shares.

"We give a standard state match for everybody," Cassidy said. "Every state is having a budget crisis because they're trying to come up with that match."

Louisiana, for instance, would need to work on its Medicaid funding structures, but the state also would get relief via the FMAP with a lower state share, Cassidy said.

Louisiana Department of Health and Hospitals Secretary Bruce Greenstein said state government would gladly give away the use of intergovernmental fund transfers in exchange for the legislation promoting more "true innovation" on the state level and not a "one-size-fits-all" federal approach.

"We are super pleased," Greenstein said of the legislation. He cited current "innovations" in Louisiana such as Bayou Health, which is the state's new private sector-based health-care delivery system for the poor.

With an assist last year from Sen. Mary Landrieu, D-La., Louisiana will receive an additional $560 million for Medicaid in 2013 because of a provision in the Obama health-care law that compensates states hit by a natural disaster.

The decision is part of a long-running battle over the federal government's matching share of Medicaid dollars to Louisiana.

Landrieu and state officials have successfully argued that the state's per capita income levels over a three-year period -- a chief determiner of the award -- were artificially high, due to dollars paid out for rebuilding as part of Hurricane Katrina recovery.

In 2013, Louisiana's FMAP share was to go down to 61.24 percent of each dollar paid. Louisiana taxpayers cover the rest. With the new funds, Louisiana will receive 72.8 percent, meaning state government will have to pay less.

Because of state budget cuts, Louisiana is chopping reimbursements to providers of health care to the state's poorest patients.

The Medicaid health insurance program for the poor is $7.3 billion of the Louisiana Department of Health and Hospital's legislatively passed budget.

Cassidy's plan also would set up federally funded bonuses to top-performing states. The idea is that quality health care will keep people out of hospital beds and save money for all involved.

States will have the flexibility to create innovative health-care programs, he said.

Incentives will be added to weed out Medicaid fraud because the MAC Act would allow states to keep the funds they recoup in fraud cases, Cassidy said.


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