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Federal government gives state go-ahead for more Medicaid changes

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Friday, April 6, 2012
By Stephanie Snyder
Cronkite News

WASHINGTON – The federal government Friday approved a handful of changes to Arizona’s Medicaid program that state officials said could help extend health coverage to more than 20,000 low-income children.

The changes, the latest in a series of waivers requested by Gov. Jan Brewer’s administration, will also support hospitals that provide health care coverage for Native Americans and will let some large hospitals use local government dollars to leverage additional federal funds.

The changes approved Friday by the Centers for Medicare and Medicaid Services (CMS) were more than a year in the making.

“With these changes, Arizona and CMS are helping vulnerable populations receive the care they need,” said CMS Director Cindy Mann in a statement Friday.

The so-called Safety Net Care Pool program that was given the green light Friday by CMS was approved by state lawmakers in spring 2011. The program is designed to help hospitals cope with the growing level of uncompensated care they provide to Medicaid patients.

Brewer spokesman Matt Benson said the program will funnel $332 million a year in local government funds to Phoenix Children’s Hospital, Maricopa Medical Center and University Medical Center, until Jan. 1, 2014. Brewer’s office said no state funds are involved in the plan.

“All of these things are two years because that’s when the Affordable Care Act – ‘Obamacare’ – is slated to begin,” Benson said. “For now, that is the law of the land.”

Bob Meyer, president and CEO of Phoenix Children’s Hospital, said the three hospitals set to receive funds are “by far the three heaviest providers of Medicaid services in Arizona” and have been significantly affected by the Medicaid reimbursement reductions in recent years.

“It allows us – through a different mechanism – to receive additional payments,” Meyer said. “It certainly doesn’t solve the problem, but it helps immensely.”

With the financial relief envisioned from the Safety Net Care Pool, the three participating hospitals are expected to be able to fund expanded coverage for low-income kids under the state’s version of the Children’s Health Insurance Program. That program, KidsCare, has not accepted new patients for the past four years, during which time the number of Arizona children with health insurance fell from 65,000 to 18,000, Meyer said.

KidsCare II is expected to make coverage available again for 21,700 children when it takes effect on May 1, officials said, offering the same benefits and premium requirements as KidsCare. But while the original program covered families earning up to twice the federal poverty level, KidsCare II will only cover those with a family income between 100 percent and 175 percent of the poverty level.

“It’s a way for us to continue to provide care to kids,” Meyer said.

Approval for that portion of the waiver request was reached after one year of negotiation between the hospitals, Brewer’s office and CMS, Meyer said.

“We’ve worked so hard,” he said. “Great collaboration can have a very good outcome.”

Benson said Friday’s approved changes also include an agreement with the federal government to help with the costs of Indian Health Services in the state that have been affected by previous cutbacks.

“One of the impacts of that (Medicaid cuts) was upon hospitals and health institutions on the reservations, because there are a large number of adults that received Medicaid in those areas,” Benson said. “Hospitals were having to bear that burden.”