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Medicaid Cost Containment: Report No. 1

October 2002

Washington State Legislature

Like Washington, almost all states are experiencing a fiscal crisis, and Medicaid is considered to be one of the largest causes of the budget problem. States have several policy tools to address these budget challenges. For varying reasons, all can be politically difficult, and all represent hard choices. Most states have begun implementing cost containment strategies but few have saved enough money to entirely solve their budget problems. Through an innovative cost containment project for the State of Washington, whereby Lewin jointly was hired by the Governor's budget office and the Legislature's fiscal committees, Lewin measured the success of Washington's recent cost containment initiatives, including a series of pharmacy strategies commenced in 2002. Lewin also presented to Washington additional Medicaid cost containment options based on other states' approaches, and we modeled the potential savings to Washington of each "imported" option, utilizing data provided to us by Washington. This is the first of three reports prepared for this project. Report No. 1 inventories Washington's ongoing Medicaid cost containment activities.

Client Area: State and Local Governments
Expertise Area: Medicaid and CHIP


Medicaid Budget Options

June 2002

Robert Wood Johnson Foundation

Following successful children's outreach efforts, and now facing rising unemployment and health care costs, the demands on state Medicaid budgets are increasing at the same time that states have less funds available for their share of Medicaid. Governors and state legislatures have identified Medicaid as their leading "budget buster," and are looking for any means possible to control costs. The Bush Administration is permitting benefit cutbacks, while many Governors and members of Congress are seeking to increase federal Medicaid funding in the midst of an already strained federal budget. Are there effective methods to moderate the underlying health care costs for the Medicaid population? What policy tools are available to provide quality care to Medicaid beneficiaries at a price states and the federal government can afford? These questions are addressed in the paper, Medicare Budget Options, which was presented at the Ninth Princeton Conference, Can Health Care Spending Be Contained?, June 6-8, 2002.

Client Area: Foundations
Expertise Area: Medicaid and CHIP


Home and Community-Based Services in Seven States

April 2002

DHHS, Centers for Medicare and Medicaid Services
Lewin contact: Lisa Alecxih

As part of a CMS-funded study, case studies were conducted in Alabama, Indiana, Washington, Wisconsin, Maryland, Michigan, and Kentucky to assess the major features of the home and community-based services system for older people and younger adults with physical disabilities in each State. The case studies analyzed the financing of services; administrative systems; eligibility, assessment, and case management structures; the services provided, including consumer-directed home care and group residential care; cost-containment efforts; and quality assurance. The role that Medicaid plays in home and community-based services is a major focus of the study.

Client Area: Federal Government
Expertise Area: Center on Aging and Disability, Medicaid and CHIP


Using Data Strategically in Medicaid Managed Care

January 2002

Center for Health Care Strategies
Lewin contact: Lisa Chimento

This report, prepared by Mathematica Policy Research and The Lewin Group, is designed to help states focus their data collection and analysis and maximize the value of their investment in data. The report seeks to help states gain insight into what other states are doing, plan data collection and analysis efforts, and understand the strengths and drawbacks of specific data sources.

Expertise Area: Medicaid and CHIP


Business Case Analysis for health-e-app: A Web-Based Enrollment Application for Public Health Insurance Programs

June 2001

California HealthCare Foundation
Lewin contact: Lisa Chimento

The California HealthCare Foundation commissioned The Lewin Group to conduct a business case analysis of Health-e-App---an interactive, Web-based enrollment application designed to expedite and simplify the enrollment of children and pregnant women in California's Medi-Cal (Medicaid) and Healthy Families (SCHIP) programs. Modeled on the state's four-page joint Medi-Cal and Healthy Families mail-in paper application, Health-e-App offers unique features like real-time preliminary program eligibility determination and application tracking that allows community-based enrollment workers to inform inquiring clients of the application's status at different points. A pilot test of Health-e-App demonstrated that state-of-the-art technology can be applied to improve systems for enrolling low-income individuals in public health insurance programs and to enhance stakeholders' understanding of the entire application process.

Client Area: Foundations
Expertise Area: Medicaid and CHIP


Comparing Physician and Dentist Fees among Medicaid Programs

June 2001

California HealthCare Foundation

The study provides details on fee-for-service Medicaid payment rates for 50 common medical services, including office visits, surgeries, and tests. The report contains payment rates for all 50 states and the District of Columbia.

Client Area: Foundations
Expertise Area: Medicaid and CHIP


Analysis of Medicaid Reimbursement Rates for Acute Hospitals, Nonacute Hospitals, and Community Health Centers in Massachusetts

June 2001

Massachusetts Division of Medical Assistance

This study analyzes Medicaid payments made to acute care hospitals, non-acute hospitals, and community health centers licensed by the Massachusetts Department of Public Health. The study was commissioned through legislation that was passed in October 2000.

Client Area: State and Local Governments
Expertise Area: Medicaid and CHIP


North Carolina Medicaid Benefit Study

May 2001

North Carolina General Assembly

In most states it is common to hear that the Medicaid program offers a "Cadillac" benefit package to its beneficiaries. In many ways this observation is true: Medicaid offers benefits unavailable in private insurance. But it is also true that the catchy use of the "Cadillac" comparison masks important points about Medicaid. For one, federal Medicaid law mandates that states offer certain services that exceed the benefits available through private health insurance plans. States must provide those federally mandated benefits. For another, the poverty and disability status of many Medicaid beneficiaries necessitates including services that are not needed by a generally healthier and wealthier population in a private insurance plan. The North Carolina Medicaid Benefit Study was commissioned by the North Carolina Legislature to look in-depth at North Carolina's Medicaid benefit package. The Legislature wanted an independent expert review to know whether the process by which benefits are added to the Medicaid benefit package makes sense. It wanted to know how well these benefits are managed by the state's Medicaid agency. And the Legislature also wanted to know how North Carolina's benefit package and approach stack up against other state Medicaid programs, and to private insurers in North Carolina. We found that the Medicaid program is managed by dedicated, skilled and professional public servants in both the Executive and Legislative branches of government. No matter how skilled the managers are, however, a state Medicaid benefit package inevitably looks "messier" than a private insurance product. For example, in North Carolina, as in other states, Medicaid benefits are added (and generally not actively managed) when the provider that is paid for the benefit is another public agency, such as a school (for special education services) or an Area Mental Health Authority (for behavioral health benefits). These decisions, which expand Medicaid far beyond commercial insurance, are typically motivated by a desire to access federal Medicaid funds to legitimately subsidize otherwise state-only funded health services. Over time the cumulative effect of these decisions can blur the line regarding whether the benefit package is designed to put a package of needed services around Medicaid beneficiaries or whether it is designed to support public providers with revenue. In our review, we found features in North Carolina's Medicaid benefit process that could be improved, and that some changes could save over $130 million a year. The full report includes dozens of recommendations to improve the integrity of the program, its service to program beneficiaries, and its emphasis on cost containment.

Client Area: State and Local Governments
Expertise Area: Medicaid and CHIP


Case Study Reports on Home and Community-Based Services

December 2000

DHHS, Centers for Medicare and Medicaid Services (CMS)
Lewin contact: Lisa Alecxih

The Centers for Medicare and Medicaid Services contracted with The Lewin Group, and its subcontractors, the Urban Institute, the University of Minnesota, Mathematica Policy Research, Inc., and the MEDSTAT Group, to design and implement a study of the impact of Medicaid home and community based services programs on quality of life, quality of care, utilization and cost. The research project is studying the financing and delivery of services to older and younger people with disabilities in seven states and the Medicaid financing and delivery of services for individuals with mental retardation and developmental disabilities (MR/DD) in six states.

Client Area: Federal Government
Expertise Area: Center on Aging and Disability, Medicaid and CHIP


Idaho's Medicaid Program: The Department of Health and Welfare Has Many Opportunities for Cost Savings

November 2000

Idaho State Legislature Office of Performance Evaluations

This study assesses the management, oversight, and administration of the Idaho Medicaid program in key areas including utilization management, fiscal and budgetary control, veterans' homes, and Medicaid automated systems. The report identifies cost-savings opportunities for the state.

Client Area: State and Local Governments
Expertise Area: Medicaid and CHIP

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