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Utah developing plan to tame Medicaid

Deseret News

A menacing monster threatens Utah's long-term economic stability. Its name is Medicaid, and Sen. Dan Liljenquist is leading a multi-organizational quest to tame the beast.

Liljenquist detailed for the Deseret News the framework of reforms he hopes to implement during the upcoming legislative session. Working in tandem with federal agency Centers for Medicare & Medicaid Services (CMS) and the Utah Department of Health, the freshman senator from Davis County aims to curb Medicaid costs with managed-care entities called Accountable Care Organizations.

"We're pressing forward trying to find a sustainable place to be with Medicaid," Liljenquist said. "We're trying to get a handle on what needs to be done. Right now Medicaid is 18 percent of our general fund, and within 10 years we expect it to be around 36 percent (even) without the federal health care reform.

"Similar to the pension reforms we had to do, it's one area that we can't afford to ignore. Reality ultimately is not negotiable; you have to go in and address those problems before they kill you."

Even though the federal government pays for most of Medicaid, each state administers the system independently. It is an entitlement program, meaning that all eligible applicants must be accepted and there is no cap on the number of participants. In Utah, Medicaid provides medical care primarily to children and individuals who are disabled or elderly; childless adults without a disability are ineligible.

Medicaid is countercyclical relative to the economy, meaning that more people use the program during an economic downturn. Although Medicaid expenditures have risen over the past several years, increased costs have been offset by federal funds from the American Recovery and Reinvestment Act. Beginning in fiscal 2012, however, ARRA funds will no longer be available to help subsidize Medicaid. That, coupled with the fact that federal health care reform will significantly increase the number of people eligible for Medicaid benefits in 2014, is pressuring state legislatures across the country to somehow ameliorate the impending increased burden of administering Medicaid.

Utah Medicaid spokeswoman Kolbi Young confirmed the cooperation and involvement of CMS, the federal administrative entity seeking to roll out in 2012 Utah reforms that can then serve as a pilot program for similar changes in other states.

"CMS is currently in the process of developing the requirements, so we don't have any direction from them (yet)," Young said. "But from what we know, the National Committee for Quality Assurance has drafted standards for the ACOs, and we will continue working closely to assist in any way that we can. The ultimate outcome would be increased quality care and reduced costs for the state."

Ideally, ACOs empower primary care physicians with enough resources to effectively manage patient care with the goal of minimizing hospitalizations.

"We will be moving this more toward a managed-care environment where we can help this population coordinate their care and get a better bang for our buck so to speak," Liljenquist said. "One of the challenges is that this population tends to doctor shop, going to different places, and oftentimes getting their care at the most expensive place that they can — the emergency room.

"We're trying to move this population to an environment where they are seeing a primary care physician who helps coordinate their care and they're not running off to the emergency room with every emergency, like most families do, like most people do."

Judi Hilman, executive director of the Utah Health Policy Project, believes that efficient implementation of ACOs is a solid foundation for what needs to be a multi-pronged approach to Medicaid reform.

"I think Sen. Liljenquist is going in the right direction by wanting to move on those opportunities for ACOs in Medicaid," she said. "But the other thing we really need to think about in Medicaid is payment and delivery system reform. … Aligning incentives in the way we pay providers — we should pay providers more if they manage care around a whole episode of care — that's the idea of ACOs. But there are other payment reforms and payment strategies that we can use that will go after wasteful spending in Medicaid. Now is the time to really look at those and use the ones that make sense for us."

Health care advocate Sheila Walsh-McDonald of the Salt Lake Community Action Program thinks changes to Medicaid ought to catalyze implementation of what she deems to be overdue and necessary reforms to health care in general.

"Cost-containment in health care costs and payment reform, it's much bigger than just Medicaid," Walsh-McDonald said. "We need to do it as a nation. It's a huge paradigm shift; we need to do things differently.

"The state is on the right track looking at payment reform not only for Medicaid, but they're looking at payment reform globally — for those with insurance and without insurance. We need to contain costs."