Stateline Story

States Balk at Stiffer Medicaid Rules

DOCTOR PAYMENTS: Under severe budget pressure, states have been cutting the rates they pay doctors and hospitals for treating Medicaid patients. Last week, the federal government proposed new rules that would restrict payment cuts in the future and could require some states to raise their rates, The New York Times reported . Medicaid officials in several states have already complained that the proposed rules-which would reverse the federal government's long-standing hands-off approach to Medicaid fees-are burdensome and too complex. The draft regulations would require states to prove that lowering payments to doctors and hospitals is not limiting patient access to medical care by driving providers out of the Medicaid program.

DEFUNDING EXCHANGES: The Republican-dominated U.S. House voted yesterday to eliminate open-ended federal health law funding designed to pay the full cost of state efforts to build health insurance exchanges. Although the Senate is not expected to approve the bill and the Obama administration opposes it, Republican supporters say the defunding measure would save the federal government more than $14 billion by 2021. The vote comes despite strong Republican support for health insurance exchanges, which would promote competition by providing consumers comparable services from private health insurance companies.

FLORIDA MEDICAID:  Florida will have to wait before implementing a plan to save $1.2 billion by transferring all 2.9 million of its Medicaid patients to a managed-care program. In a letter from the Center for Medicaid and Medicare Services last week, the federal government said it would work with the state to approve a waiver by June 30 if lawmakers provide more details on the plan-a proposed expansion of a controversial 2006 pilot program. Florida's current Medicaid program costs nearly $21 billion, or one-third of state expenditures, and state officials expect it to rise to $28 billion in three years. Republican Governor Rick Scott has taken heat for his plan to convert the Medicaid program to a privately run plan, with patient advocates charging that the pilot program initiated by former Republican Governor Jeb Bush failed to reduce costs and severely limits patients' access to doctors.

MEDICAL MARIJUANA: Washington Governor Chris Gregoire vetoed a bill that would have licensed medical-marijuana dispensaries. Meanwhile, Montana Governor Brian Schweitzer allowed a law to take effect that will end dispensaries by limiting them to serving only three patients, all at no charge. Federal authorities recently raided dispensaries in both states, despite state laws making it legal to use pot for medical purposes. Gregoire said she rejected the bill because it would expose state workers to federal prosecution. Although Schweitzer allowed the dispensary bill to become law, he said he was concerned that its extreme limits would result in dealers selling medical pot on the streets. Fifteen states and the District of Columbia have laws legalizing medical use of marijuana, but federal law maintains criminal sanctions for any use of the drug.