Utah seeks federal waiver for Medicaid reform

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SALT LAKE CITY -- In an effort to stem the growth of Medicaid, Utah officials have submitted a waiver request to the federal government that will allow them to increase copays for recipients and change the way providers are reimbursed.

The goal of the waiver request filed this week is to shift Medicaid to more of a preventative care system, although critics worry that the increased costs for low-income people on Medicaid will actually discourage regular doctor visits.

A longer-term goal is an overhaul of the Medicaid system, said Sen. Dan Liljenquist, R-Bountiful, who sponsored the legislative bill this year that required the waiver. If successful, he said the changes could lead to hundreds of millions of dollars in savings for the government medical program.

We want the recipients to participate a little bit more, financially, with their health care.

–Dan Liljenquist

If approved, the waiver would allow the state to pay providers lump monthly sums for patients instead of the current fee-for-service model. Liljenquist said that would give doctors and hospitals flexibility while also discouraging expensive, and often unnecessary, tests or procedures.

Providers would be required to educate Medicaid patients about choosing a primary care physician and going to a hospital within the network, Liljenquist said.

Patients will also be asked to do more. Medicaid copays will increase to $25 for emergency room visits that are not an emergency and $15 for emergencies, while there will be a $40 annual deductible per family.

Currently, copays are not charged for emergencies and are $6 for non-emergency visits to the emergency room. There is not a deductible charged right now.

The increased copays would apply primarily to emergency room visits, which Liljenquist said would ideally encourage patients to visit a doctor in a clinic.

"We want the recipients to participate a little bit more, financially, with their health care," he said.

The problem with the proposal, however, is that many Medicaid recipients are often on fixed budgets and would not be able to afford the copays, said Judi Hillman, the executive director of the Utah Health Policy Project.

You can't have the same expectations for people on Medicaid to pay those kinds of copays. There is often no discretionary income ... it becomes self-defeating.

–Judi Hillman

"You can't have the same expectations for people on Medicaid to pay those kinds of copays," Hillman said. "There is often no discretionary income ... it becomes self-defeating."

Another concern is that the rules for providers receiving the lump sums are not clear and the accountability measures the state will use are not defined, Hillman said.

Hillman does support the overall goal of reforming Medicaid, but said the waiver is a "rough start that is perhaps counterproductive."

State health officials also support the effort, which Utah Department of Health assistant director Gail Rapp said would hopefully "preserve the long-term viability" of Medicaid.

Rapp said the changes would be "barely noticeable" for most recipients, since the federal government limits out-of- pocket expenses for Medicaid recipients to 5 percent of their annual income.

Gov. Gary Herbert, who has discussed the waiver with federal officials, said it is critical that new solutions be found to handle the growing Medicaid costs. In Utah's budget, one out of every five dollars spent goes to Medicaid.

"As Medicaid costs consume an increasing portion of our budget, making it difficult to fund other critical needs like education and transportation, states need the flexibility to address the realities of healthcare on the frontlines," Herbert said.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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