CMS TO FUND STATE PLANS FOR TRANSFORMING MEDICAID TO INCREASE QUALITY AND LOWER COSTS
States will receive $150 million over 2007 and 2008 to fund research and design of ways to transform their Medicaid systems, to the increase quality and efficiency of care, Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services announced today.
“These transformation grants express the core goal of the DRA to give states the kind of flexibility they need to deliver high quality care in an efficient and more economical way,” said Dr. McClellan. “With these grants states can streamline and modernize their systems, stabilize the growth of the program, and protect it into the future.”
Funds for the Medicaid “transformation grants” were authorized by the Deficit Reduction Act of 2005 (DRA) and are aimed at state adoption of innovative systems to get more value out of the money they spend providing healthcare to their citizens who are low-income elderly, children and people with disabilities.
“Working together with the states, we’ve identified many ways in which Medicaid coverage can be provided more effectively, keeping costs down while providing needed coverage for more people,” added Dr. McClellan. “We want to build on the steps to make Medicaid a truly sustainable program, one that can help lead the way to a more affordable, high-quality health care system for all Americans.”
In fact, Medicaid spending projections are down $224 billion from earlier estimates of costs from 2006-2015—a reduction of 8 percent. The slowdown has resulted from many steps including innovative waivers, greater collaboration between states and the federal government and shifting rug costs for the dually-eligible to the new Medicare drug benefit. Greater use of community-based long-term care services and increased flexibility afforded by the Deficit Reduction Act of 2005 will lead to further efficiencies and slower growth for the future of this vital program.
CMS is encouraging states to look at particular areas of program operations for improved efficiency, including methods for:
- Reducing patient error rates (electronic health records, clinical decision support tools or e-prescribing programs).
- Improving rates of collection from estates of amounts owed under Medicaid.
- Reducing waste, fraud, and abuse under Medicaid, such as reducing improper payment rates.
- Reducing Medicaid expenditures for covered outpatient drugs, particularly in the categories of greatest drug utilization, by increasing the utilization of generic drugs through education programs and other incentives
- Improving coordination of care through care management programs and other steps to prevent complications and duplicative or unnecessary services
- Implementation of performance-based payment programs to provide rewards and support for high-quality care
- Implementation of programs to promote personal control over services, with greater emphasis on prevention steps
- Improving access to primary and specialty physician care for the uninsured using integrated university-based hospital and clinic systems.
- Implementation of a medication risk management program as part of a drug use review program
While the DRA set aside $75 million for each of 2007 and 2008, the grant fund solicitation will be for both years at one time. All states will be eligible for a grant and grant amounts will be variable dependent upon the number of states that apply.
No state matching funds are required for these special grants. States must submit applications by September 15, 2006. More information on the grants and how state Medicaid agencies can apply for them is on the CMS Web site at: http://www.medicaid.gov/index.html.