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Medicaid Commission Gives Warm Reception to Idaho Governor's Overhaul Plan

JANUARY 26, 2006 -- A Medicaid overhaul plan developed by Gov. Dirk Kempthorne, R-Idaho, received a warm reception Thursday from the federal commission charged with telling Congress how to remake the program for an era of aging baby boomers.

The plan is a "terribly important document," said commission member John Nelson, past president of the American Medical Association.

The plan, released in November, mixes proposals for cutting-edge programs with a strong call for state control over the design of benefits.

Advocates for the poor oppose such control. But the plan has won praise from provider groups, the largest business association in Idaho, and "several" advocacy organizations in the state, the governor told the members of the commission, who were appointed by the Bush administration.

The plan builds on changes in Idaho that Kempthorne said involved "no cuts in eligibility, no cuts in services, and more than $150 million in savings and better care for patients."

Among the provisions that might warm the hearts of left-leaners is a program to pay for "respite care" for people who provide long-term care to the frail and elderly in their homes.

Kempthorne's plan also aims to establish pilot programs for adding new Medicaid-funded health care services in the schools, and to reward doctors and hospitals who follow recommended treatment practices with higher payments.

At the same time, the plan includes features that are likely to appeal strongly to conservatives. Kempthorne calls for co-payments for missed appointments and emergency room visits for routine care.

"Co-pays for no-shows sounds like the best idea I've heard for a long time, especially for this population," said one commission member.

But the governor said the problem with pilots is that states must get approval from the federal Medicaid program to do them. Kempthorne said that was ironic because the federal government requires special approval if changes aren't statewide even though, he said, it is best to try new approaches on a small scale.

A Focus on Outcomes and Prevention
Kempthorne made a strong pitch for rethinking Medicaid from the ground up. The goal should be to define the desired health outcomes for the population and cover services accordingly, with an emphasis on preventive care, he said.

"Let us look at the outcomes and design the benefits," said a Kempthorne aide. The aide said it didn't make sense to have the same benefits for a 7-year-old as for a 70-year-old.

Also, entry in the program would entail a comprehensive physical exam "to ensure every participant has access to the benefits they need," Kempthorne said. "I have already included funding in my budget recommendation to increase provider payments for these services to ensure that every child will have a comprehensive check-up at the time that they enroll in the program."

The assessment, which Kempthorne also plans for adults, would establish a baseline to determine "if we're having success, or if we need to change our strategy."

The pilot programs would also bring more preventive care into schools. Kempthorne said that Medicaid should pay for the up-front services needed to prevent chronic conditions such as conduct disorder from getting to the point where a student needs special services.

Simplifying Categories
The plan calls for collapsing 50 different eligibility categories in Medicaid to three categories—low-income children, the elderly, and individuals with disabilities or special health needs.

"We will direct services toward quality of care instead of using the 'one-size-fits-all' approach of offering the same services to everyone, regardless of need," Kempthorne said.

Success in Idaho
The Idaho governor pointed with particular pride to changes in his state to bring down growth in the costs of long-term care. Idaho has increased the number of residents receiving long-term care outside of nursing homes—in "home and community-based" care—from just over 4,000 in 2003 to nearly 7,000 in 2007.

"At a cost of $838 per month when caring for someone in their own home and community—compared with a cost of $3,800 when in a nursing home—that's significant cost savings to the state," Kempthorne said.

Idaho fully deducts from state income taxes the premiums paid for long-term care insurance policies, Kempthorne said. He urged that such incentives to buy those policies be added at the federal level.

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