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Medicaid News
Medicaid Spending Increased by 10.7% in First Half
of 2007
May signal end of a two-year period when costs seemed
to be coming under control
Oct. 9, 2007 - Medicaid spending increased by 10.7%
in the first six months of 2007 -- the largest increase since 2001 --
and likely will reach $330 billion this year, according to a
USA Today analysis of data
from the
Bureau of
Economic Analysis. USA Today attributed the increased
Medicaid spending in part to:
● Efforts by states to extend health insurance to
more residents through Medicaid and SCHIP;
● Increased enrollment in Medicaid after a
temporary decrease in 2006 that resulted from implementation of new
proof-of-citizenship rules; and
● Increased Medicaid reimbursements for health
care providers.
Robert Campbell, vice chair of the accounting and
consulting company
Deloitte & Touche,
said that, as a result of the increased Medicaid spending, states "are
going to have to make some tough decisions on who receives care, what
care they get and what the limitations are."
In addition, he said that Medicaid spending likely
will continue to increase as states seek to extend health insurance to
more residents and health care costs continue to increase.
According to USA Today, the "Medicaid spending
burst may signal the end of a two-year period when costs seemed to be
coming under control." Medicaid spending increased by 5.1% in 2005 and
decreased by 1.7% in 2006.
Medicaid spending "fell last year because a variety
of cost controls -- such as moving patients from nursing homes to
lower-cost home health care -- produced unexpectedly large savings" and
because "Medicaid shifted some costs into the new Medicare prescription
drug benefit," USA Today reports (Cauchon, USA Today, 10/8).
State Grants
In related news,
HHS
last week announced that 16 states and Puerto Rico have received almost
$52 million in Medicaid "transformation" grants to study and develop
revisions to their programs,
CQ HealthBeat
reports. Congress approved $150 million for the grants, which HHS will
distribute in 2007 and 2008, as part of the 2005 Deficit Reduction Act,
which President Bush signed into law in 2006. In January, 26 states
received $98 million in grants, HHS said.
HHS Secretary Michael Leavitt said, "These
transformation grants express the core goal of this administration to
give states the kind of flexibility they need to deliver high quality
care in an efficient and more economical way" (CQ HealthBeat, 10/5).
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