Unsettling Scores: A Ranking of State Medicaid Programs, 2007 (HRG Publication #1807)
Annette B. Ramírez de Arellano, DrPH
PUBLIC CITIZEN HEALTH RESEARCH GROUP
The data on which this report is based comes primarily from the Kaiser Family Foundation online database, which is maintained and updated as part of the Foundation’s Commission on Medicaid and the Uninsured. This source has proved invaluable in our analyses, and is essential to all who are interested in whom and what Medicaid covers.
Several persons served as sounding boards and graciously shared their understanding of Medicaid with us. We would like to thank the following for their wisdom and generosity in sharing their knowledge: Mary Gabay of Gabay Consulting LLC; Andy Schneider, Principal, Medicaid Policy LLC; Bruce C. Vladeck, PhD, Interim President, University of Medicine and Dentistry of New Jersey; and Doris Lotz, MD, MPH. All conclusions and interpretations, however, are those of the Health Research Group.
The staff of Public Citizen, both within and outside the Health Research Group, handled much of the coding, weight-adjusting, and computation. Asa Tapley helped devise the scoring protocol, and Sylvia Park, MD, MPH, reviewed it. Without the statistical and technological know-how and editorial and communication skills of Peter Lurie, MD, MPH, Elizabeth Barbehenn, PhD, Shiloh Stark, Kate Resnevic, Ed Uechi, and Gleb Radutsky, the data entry and computational processes would have been infinitely more cumbersome and time-consuming. These colleagues were also essential in ensuring that the data could be easily accessed online, and provided much insight on how best to use and display the data. Barbara Holzer, Rachel Pleatman, and Robert Yule provided editorial judgment and sound copyediting. Kristy Jackson designed the cover, and Candice Hayes was instrumental in monitoring the printing process. All deserve our most sincere thanks.
Enacted over 40 years ago, Medicaid has evolved with changing demographic, technological, and health needs; political priorities; and fiscal realities. The program has been called many things: the cornerstone of the nation’s health system, a safety net for the neediest, a workhorse that goes into action when help is needed, and an inflexible and flawed system, among others.
Whatever its shortcomings, Medicaid continues to grow, reflecting and refracting many of the trends affecting health care as a whole. At present, the program
Purpose and scope of study
While there are abundant data on Medicaid, these tend to avoid making value judgments. This report therefore seeks to fill the existing gap. We feel that it is not enough to say “this is the way things are;” instead, we should assess and say “this is the way things should be.”
Almost 20 years ago, the Public Citizen Health Research Group published a report on Medicaid, Poor Medicine for Poor People, ranking state Medicaid programs. The current report seeks to update that report. But because programmatic mandates have changed and states now have considerably more latitude in how they run their programs, the indicators are different, as are the sources of data. As a result, there is greater variety among states, as well as greater differences within states.
Each state program has been evaluated in terms of four categories: eligibility, scope of services, quality of care, and reimbursement. These were in turn measured by 55 indicators, and the resulting scores were weighted according to the relative value given to each category by experts. The ranking system gives a state a score for each category as well as an overall score.
Nationally, the state Medicaid programs are severely challenged: even the best state scores only 645.9 points on a scale of 1000. And the worst state rates a score of only 317.8, i.e., less than a third of the total maximum points.
The state-by-state breakdowns reveal marked disparities between and among states. The top 10 states, ranking #1 to #10, tend to cluster in the Northeast but also include three states in the Midwest and two in the Northwest. The following states occupy the first 10 ranks, in descending order: Massachusetts, Nebraska, Vermont, Alaska, Wisconsin, Rhode Island, Minnesota, New York, Washington, and New Hampshire.
The 10 most deficient state programs have overall scores ranging from between 317.8 and 379.1 of the total 1000 points. The worst, in order from 50th to 41st, are in Mississippi, Idaho, Texas, Oklahoma, South Dakota, Indiana, South Carolina, Colorado, Alabama, and Missouri.
The overall score of top-ranked Massachusetts is more than twice that of bottom-ranked Mississippi. A breakdown of scores by category further highlights the existing disparities: the scores vary 2.5-fold for scope of services, and more than threefold for eligibility. In the remaining two categories, which have fewer indicators and are therefore more volatile, variations among states are even more dramatic: in quality of care, the difference is more than 17-fold; in reimbursement, it is more than 20-fold.
The overall ranks are followed by state-specific summaries with the breakdown of scores by category. This allows states to pinpoint their areas of weakness, and to more successfully target their interventions. It also highlights states that have achieved success in one or more areas and can therefore serve as models for other jurisdictions.
Medicaid has been called many things:
Whatever the prevailing contradictory views of the system and its operation, there is consensus that the program has an “overwhelming level of diversity and complexity.” Lofty in its goals but often miserly in its actual impact on people, Medicaid mirrors changing economic circumstances, conflicting political pressures, and fluctuating demographic and medical needs. A complicated partnership between states and the federal government has yielded more than 50 different programs, each with its own distinctive features and idiosyncrasies. Indeed, state variation in eligibility, covered care, program administration, and reimbursement for services is now the rule rather than the exception. These allowable state-by-state variations are a major weakness in Medicaid.
Twenty years ago, Public Citizen Health Research Group conducted a comprehensive state-by-state assessment of the Medicaid Program. That report ranked all states on the basis of five criteria: eligibility, services, provider availability, quality, and reimbursement, each of which was measured through an array of operational indicators. Public Citizen’s 1987 report was used by states to examine their status vis-à-vis other states and the nation as a whole. The report prompted states to confront their deficiencies and improve their programs. It also provided leverage to those states that were getting less than their fair share in federal funds or had not fared well in the monies allocated by their state legislatures. In addition, the report underscored the disparities that exist among states, thereby revealing the significant differences in access to care that Americans face simply because of where they happen to live.
The current report seeks to update, though not replicate, the previous one. An update is particularly timely and necessary because many changes have taken place over the course of two decades. Much federal legislation has either focused directly on Medicaid or enacted changes in other health and welfare services that have had important implications for Medicaid. These changes have affected each of the five criteria that we focused on in the previous report, as well as some of the indicators that were used to measure them. Furthermore, Medicaid has come of age. As the program enters its fifth decade, it is going through a programmatic “midlife crisis.” It is not surprising that the program’s advocates as well as its critics are taking stock of where the program is at present in order to point out areas where changes are needed. Although much of the concern revolves around program costs, we feel that this focus fails to address more fundamental aspects of the program, including equity in access to care and the quality of services rendered.
In 2005, U.S. Department of Health and Human Services (DHHS) Secretary Michael Leavitt declared that the program was no longer meeting its potential. He named a bipartisan commission to plan for an improved Medicaid that would “provide quality health care in a financially sustainable way.” The commission was charged with preparing two reports. The first, which was submitted September 2005, outlined recommendations for Medicaid to achieve $10 billion in savings over the next five years. The second, submitted December 29, 2006, sought to address the following issues:
Scope and purpose of the current report
This report neither substitutes nor supplements the reports prepared by the federally-mandated commission. Its principal audience includes policymakers as well as advocates and individual consumers. Nevertheless, it does not consider issues related to political appeal or cost-effectiveness as much as it addresses the scope of the program, its access to those in need, and its monitoring of the services delivered. Like its predecessor, this report tries to answer the question: “If I were a poor, sick person, in which state would I have the best chance of becoming eligible for Medicaid and getting comprehensive, quality health care?” The evaluation criteria and the indicators used to measure them therefore reflect the consumer’s perspective and aim to answer the following questions:
There are relatively few indicators for quality of care and reimbursement, but we have used those that reflect both a commitment to patient care and an interest in treating Medicaid providers equitably vis-à-vis practitioners who serve other populations.
Organization of the report
The report is organized by topic as well as by state. Following a chapter on Methods (II), Chapters III through VI focus on one of the four questions listed above, which correspond to the four categories we examined: eligibility, scope of services, quality of care, and provider reimbursement. In each case we present the state scores and rankings for the specific category, thus allowing comparisons among and between states. These are followed by a chapter on national results (VII), a summary of both the overall scores and the category-specific ranks. Chapter VIII presents state-by-state data, highlighting each state’s scores and ranks. Chapter IX summarizes our main conclusions.
Our study assesses four aspects of the Medicaid program: eligibility, scope of services, quality of care, and reimbursement. Each of these categories is measured through different indicators. The choice of indicators is understandably contingent upon the availability of data. We therefore relied on data that are routinely collected and published, broken down by state. For each of the categories studied, we took what are basically qualitative characteristics and transformed them into quantitative values. This allowed us to give each state specific points for each indicator, depending on its performance for those indicators. These scores allow us to rank all states except Tennessee, both by category and as a whole. States can then be compared to each other, as well as compared against the maximum possible number of points for each category.
Certain principles underlie the selection of indicators, their interpretation, and the points assigned to them. While the Scoring Protocol included in the Appendix describes each indicator and the unadjusted points assigned to it, there were general principles governing the assignment of points, and these cut across categories and indicators. Our scoring methodology is based on the following guidelines:
The scores on which our rankings are based began with the four categories assessed—eligibility, scope of services, quality of care, and reimbursement. Each of these categories was broken down into a number of indicators, which ranged from three to 36 per category. In some cases, the indicators were composites and were further broken down, as indicated in the Scoring Protocol in the Appendix.
The indicators were evaluated by an expert on Medicaid, who suggested adding, eliminating, or combining certain indicators. Each indicator was given a maximum number of points, ranging between one and 11. These points were considered “raw scores” which were then adjusted to reflect their relative value.
To determine the relative weight of each category and indicator, two other recognized experts in the field of Medicaid were consulted. They were asked to distribute 100 points among the four categories. The mean of the points assigned to each category was then computed, and divided by 100 to determine the relative weights. The relative weights for the four categories are as follows:
The same experts were asked to further distribute 100 points among the indicators in each of the categories, and these values were also averaged, then divided by 100. A listing of all category and indicator weights can be found in the Appendix (see full text PDF for Appendix).
The final score for each indicator for each state was therefore the fraction of the total maximum points obtained by the state for each given indicator, multiplied by both the category weight and the weight assigned to each individual indicator. Because the resulting numbers were very small, these products were then multiplied by 1000. As a result, all scores are based on a theoretical total of 1000 points overall.
The scores for each indicator within a category were then added, the sum being the score for that particular category. The sum of the scores for all four categories constitutes the overall score for each state.
Because the data were entered into a spreadsheet, the computation of the adjusted scores allowed for aggregations of indicators within a given category. The final scores were then sorted by order of magnitude, thereby allowing rankings by category and overall.
In a few cases of three categories (scope of services, quality of care, reimbursement) and overall, two or more states had the same score and therefore shared a rank. In these cases, the subsequent ranks were adjusted so that there were as many ranks as programs scored. For example, two states tied for 5th place received the same rank, 5th, but the rank following that was 7th rather than 6th.
The many indicators used and the weighting of the raw scores yielded final scores that were rounded off to one decimal point. This is not intended to overstate the degree of precision, but rather to allow us to draw distinctions among state programs. We have therefore emphasized how states rank generally with respect to each other instead of focusing on any differences that may distinguish, say, a state ranking #22 from one ranking #23 overall as well as in any one category.
The detailed Scoring Protocol (including the definition, rationale, and source of each indicator and its components) is described in the Appendix (see full text PDF for Appendix).
The Medicaid Program has been called “resilient” because it is constantly re-inventing itself to meet new circumstances. One scholar has indicated that Medicaid’s infrastructure provides “a base from which almost any health matter can be addressed.” Despite its deficiencies, the program has been responsive to new technologies (e.g., drugs and devices), emerging disease entities (e.g., HIV/AIDS), natural events (Hurricane Katrina), ideological trends (assumption of personal responsibility, lifestyle modifications), and modalities of care (managed care). To take a snapshot in time of the program is therefore to miss some of the changes and adaptations that are occurring continually. This is particularly the case at present, when many states are looking to modify their programs or significantly alter their involvement in health care delivery.
Several states (including California, Massachusetts, New Jersey, New York, and Vermont) are seeking to reduce or even eliminate the number of uninsured within their jurisdictions. Others (including West Virginia, Florida, and Kentucky) are incorporating incentives for health-seeking behaviors among their enrollees. Yet others are modifying the way care is given and the incentives for participation in the program. Because of the fact that we were dealing with a moving target, we had to establish a cut-off point beyond which no new data would be incorporated. This was January 15, 2006. Any time-limited data will therefore not capture the current fluidity in the state policy arena.
A second limitation of our study refers to the need for comparability between and among states. The efforts of those states that have attempted to “break the mold” in covering their Medicaid-eligible population may therefore not be fully represented in our scoring protocols. This limitation is also tied into a significant constraint: the availability of data. Large-scale data collection efforts require consistency in definitions. As a result, some of the variations that occur from state to state may not be fully evident in tables that adopt a uniform system of coding and description.
Because our rankings entail an analysis of secondary sources, they rely on data collected for different purposes and at varying points in time. We have relied primarily on the online data on Medicaid made available through the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. In some cases, these data have been supplemented with other sources, as indicated in the Scoring Protocol. Moreover, when the data for a particular state were not available on the Kaiser database, we consulted directly with the state, thus filling in gaps to complete the national picture.
The data on provider reimbursement are limited by the fact that they reflect only those Medicaid payments that are made under fee-for-service systems. While all states other than Tennessee have a fee-for-service component, this is limited in states that have adopted capitated systems under managed care. At present, more than 60 percent of all Medicaid enrollees in the United States are enrolled in managed care. When the data are broken down by state, the proportion varies between zero and 100 percent. Our indicators on provider reimbursement thus have greater validity and reliability for those states that rely more on fee-for-service and have a lower proportion of users enrolled in managed care. Because the indicators do not apply to Tennessee, we have not computed a score for this state under the reimbursement category. This omission precludes the state being ranked with the other states in this category, and therefore in the overall category as well. As a result, the overall ranks and those in reimbursement range between one and 50 rather than between one and 51.
Consumers who want to know if they are eligible for Medicaid have to work their way through a complicated list of demographic categories to see if they qualify under any of these. Indeed, federal law describes more than 50 eligibility pathways. Many demographic variables—e.g., age, sex, marital status, family composition, income, disability, and disease—help define current eligibility criteria.
must be covered by all states, and there are others who may be covered as well. To add another layer of confusion, not everyone is covered under the same circumstances, nor for the same services.
While Medicaid is more frequently known as a “program for the poor,” and the program has always targeted low-income individuals, not all the poor are eligible and not all the eligible are poor. To be covered, the poor must meet financial requirements (regarding income, assets, and expenses) as well as categorical requirements (regarding age, family circumstances, employment status, blindness, disability, and other factors). These requirements exclude many people from Medicaid. Indeed, it is estimated that approximately 60 percent of poor Americans are not covered by Medicaid.
The Medicaid program varies greatly from state to state. Eligibility rules vary from one state to another, although there are guidelines that govern local options. While federal regulations require all states to cover certain groups and limit the additional groups that states may cover, each state can elect to include other groups falling somewhere between the federal “floor” and “ceiling.” As a result of these differences among states, the same person may be eligible in one state but ineligible in another. Moreover, many states have taken advantage of Medicaid “waivers” which exempt them from eligibility and coverage requirements as long as they are budget-neutral and do not cost the federal government more than prior coverage.
When first enacted, Medicaid was linked to beneficiaries of the federally-assisted income maintenance program Aid to Families with Dependent Children (AFDC). After 1972, the program also included those covered by Supplemental Security Income (SSI), a program which provides cash assistance to help aged, blind, and disabled people who have little or no income. Since then, changes in Medicaid and SSI have created additional groups of beneficiaries whose financial eligibility is based solely on income and resources rather than on cash assistance. The inclusion of these “poverty-related” groups expanded Medicaid to include pregnant women and children by separating Medicaid eligibility from receipt of AFDC. At present, these groups represent a growing proportion of Medicaid beneficiaries, accounting for over one-quarter of the total.
As a result of these and other changes, all states must provide Medicaid coverage to the following eligibility groups:
AFDC-eligible individuals as of July 16, 1996: States must provide Medicaid to individuals who qualified for AFDC as of that date.
Poverty-related groups: States must cover all pregnant women and children below age 6 with incomes up to 133 percent of the federal poverty level (FPL).
All children born after September 30, 1983with incomes up to 100 percent FPL. This requirement covers poor children under the age of 19.
Current and some former recipients of SSI: Despite this requirement, states may use more restrictive eligibility standards for Medicaid than those used for SSI if states were using those standards prior to the enactment of SSI in 1972.
Foster care and adoption assistance: States must cover all recipients of foster care and adoption assistance under Title IV-E of the Social Security Act.
Certain Medicare beneficiaries: All Medicare beneficiaries with incomes below the poverty level are eligible for Medicaid assistance to pay for Medicare premiums, deductibles and cost-sharing. In addition, individuals at the lowest income levels are entitled to full Medicaid benefits, which provide “Medigap” services (i.e., services not covered by Medicare). The latter individuals are most often referred to as “dual eligibles.”
The determination of Medicaid eligibility is two-tiered: First, individuals must fall within one of the previously listed “categorical” groups. Once the individual is found to meet the categorical restrictions, financial tests are applied. States have some latitude concerning the latter, which further adds to the administrative complexity of the program and to the inter-state variation. While states have limited flexibility to modify income standards, they have greater discretion concerning how “countable income” is defined. By excluding certain types of income from their definitions of “countable income,” states can liberalize their eligibility criteria without violating income standards. The following are among the “income disregards” that can be excluded from countable income: a certain portion of earned income during the first few months of employment, a given dollar amount as a child care allowance, and a set amount for married couples.
States can provide Medicaid coverage to other groups. These optional groups fall within the mandated defined categories, but the financial eligibility standards are more liberally defined. Optional eligibility groups include:
Poverty-related groups: States may choose to cover pregnant women and infants with family incomes up to 185 percent of the FPL.
Medically needy: States may choose to cover individuals who do not meet the financial standards for program benefits but fit into one of the mandated groups and have income and resources within special “medically needy” limits established by the state. Individuals whose resources are above the “medically needy” standards may qualify by “spending down”—i.e., incurring medical bills that reduce their income and/or resources to the necessary level.
Recipients of state supplementary payments: States may opt to include individuals who do not receive SSI but qualify for other state cash payments.
Long-term care: States may cover residents in medical institutions or those receiving certain long-term care services in community settings if their incomes are less than 300 percent of the SSI payment level.
Working disabled: States have the option of covering those who are disabled (as defined in Social Security Administration guidelines) but who do not qualify for Medicaid under any statutory provision due to their income. States opting to cover this group may also cover those who lose their Medicaid eligibility as a result of losing SSI due to medical improvement.
Persons with specific diseases: Persons with specific medical diagnoses may be covered by Medicaid under certain conditions. All states and the District of Columbia have chosen to cover women who need treatment for breast or cervical cancer if they are under 65, uninsured, and otherwise not eligible for Medicaid. Benefits are limited to the period during which treatment is provided.
A total of 13 states and the District of Columbia cover persons with tuberculosis (TB) who are uninsured, but coverage is limited to services related to the treatment of TB.
Some parents of disabled children: The Deficit Reduction Act of 2005 provides states the option of allowing parents of disabled children to “buy in” to the Medicaid program if they have a family income below 300 percent of the federal poverty level. This option is subject to a premium.
Other groups: States may extend eligibility beyond these groups. The use of specific waivers allows states to diverge from certain provisions of the Medicaid Act. Waivers granted under Section 1915(b) of the Social Security Act are called “freedom of choice” waivers because they permit a state to limit the providers of Medicaid services and require beneficiaries to obtain services through a managed care organization. Section 1115(a) of the Social Security Act provides even greater leeway to the states. That legislation allows states to carry out experimental, pilot, or demonstration projects that, in the judgment of the Secretary of DHHS, are likely to assist in promoting the objectives of the Act, including those of the Medicaid statute. These waivers permit a state to alter the scope of services and to expand eligibility to persons who would not otherwise be eligible for the Medicaid program. Using section 1115 waivers, states can adopt less restrictive methodologies for calculating income and resources. This discretion allows states to institute broader coverage, and hence has the potential to address the needs of otherwise uninsured populations. But the waivers also allow states to reduce benefits, increase cost sharing, and cap enrollment for some beneficiaries. Projects authorized under Section 1115 are usually approved for a five-year period and may be extended under certain circumstances. Demonstration projects must be budget neutral over their life. Several states have used the authority conferred under Section 1115 to launch “health care reform demonstrations” that include restructuring the delivery of services.
Medicaid coverage is very much in a state of flux as a result of these waivers. In fiscal year 2007, 12 states reported planning to implement new Section 1115 waivers. These vary by size and scope, and hence by expected impact. Moreover, they are designed to meet different objectives, the three top goals being increasing private or employer-based coverage, encouraging personal responsibility, and expanding eligibility. The state-specific information that is part of this report will describe some of the initiatives that are now in effect or under consideration.
In addition, states are addressing a Medicaid law that went into effect on July 1, 2006, restricting benefits to those who can provide proof of citizenship. This measure, which was part of the Deficit Reduction Act of 2005, requires that beneficiaries and applicants to Medicaid present a birth certificate, passport, or another form of identification in order to apply. This documentation replaces the previous requirement that applicants to Medicaid attest in writing that they are citizens, under penalty of perjury.
The legislation has both ideological and fiscal roots. Originally designed to prevent undocumented immigrants from gaining to access to care, the measure was also touted as a cost-saving device, estimated to save the federal government some $220 million over five years and $735 million over 10 years. The Congressional Budget Office calculates that Medicaid enrollment will decrease by 35,000 because of loss of coverage, and some states are already feeling the effects of the new requirements.
Given the multiple pathways into Medicaid, states exhibit much variety in how they score in the eligibility category. Of the four categories examined, eligibility is the one weighted most heavily, accounting for 350 of the total 1000 points. States that rank high in this category are therefore more likely to score high overall.
Rhode Island, the highest-ranking state in eligibility, earned a total score of 296.8, while Indiana, with a score of 90.6, had the lowest eligibility value. There is therefore a more than threefold difference between the two ends of the eligibility spectrum.
In addition to Rhode Island, the other states ranking among the “Top 10” in terms of eligibility include, in descending order of rank:
Vermont, 283.7 points
Given the high relative weight of this category, it is not surprising that seven of these 10 states are also among the “Top 10” overall.
The 10 states with the lowest ranks in eligibility are:
Indiana, 90.6 points
As with their higher-ranked counterparts, most of these states (Indiana, Alabama, Mississippi, South Dakota, Texas, and Idaho) are also among the 10 programs with the worst scores overall.
Eligibility indicators regarding children [extending services to children above the federal poverty level, and coverage under the State Children’s Health Insurance Program (SCHIP)] accounted for 24.8 percent of the 350 possible points under eligibility. Eligibility for women’s services (care provided to pregnant women and services provided to those with breast/cervical cancer) accounted for an additional 16.8 percent of the total points. Coverage of these children and women’s groups thus accounted for 41.5 percent of all points in the eligibility category. Looked at another way, these two categories of indicators accounted for 14.5 percent of all points for all categories. It is therefore useful to see how those states with the highest and lowest rankings in eligibility treated these two important groups.
For the two children’s and the two women’s eligibility subcategories described above, the five states with the lowest eligibility ranks had the following scores out of a possible 145.3 points:
South Dakota, 24.6 points
Conversely, the five states with the highest eligibility rankings had the following scores for these children’s and women’s subcategories:
Rhode Island, 115.7 points
As the above breakdown shows, there is no overlap between the top and bottom five states in their scores for these populations. The state with the fewest points, South Dakota (with 24.6 points), has only 21.3 percent as many points as Rhode Island, the state with the most points for eligibility for children’s/women’s services.
Ultimately, eligibility is the most important category. If a person is deemed ineligible for Medicaid, it matters little what services are available, how good they are, or how equitably the providers are paid. Yet widely divergent eligibility requirements continue to plague the Medicaid program. For example, a pregnant woman in family of three needs to have an annual income of less than $22,128 in order to qualify for Medicaid in Wyoming, while her Minnesota counterpart can be covered with an income of up to $45,650. Similarly, an infant’s family’s income would have to be less than $22,128 in Virginia for the baby to be covered, but less than $49,800 in Missouri. These are disparities that reflect local political decisions but have a ripple effect throughout the Medicaid program, undermining the very concepts of “one nation,” equal opportunity, and equal protection.
Scope of services is the category exhibiting the most variety, complexity, and nuances. Over time, states have modified the optional services they provide under Medicaid in response to need, federal financial incentives, and political imperatives.
Subcategories of service
Because this category has the largest number of indicators, we have grouped them into seven major, mutually-exclusive subcategories:
Most of these are in turn broken down into a number of discrete services, which were scored using different point values and weights before being reaggregated into the seven categories.
Services by type or target group
This broad category includes the following 16 subcategories: targeted case management; free-standing ambulatory surgery; diagnostic, screening, and preventive services; home and community-based services; home health services; hospice care; in-patient psychiatric services for those under 21; in-patient institutions for mental diseases and other institutions for mental diseases for those 65 and over; intermediate care facility services for persons with mental retardation; nursing facility services other than for mental diseases; Program of All-Inclusive Care for the Elderly (PACE); personal care services; sickle cell services; private duty nursing services; rehabilitation services for those with mental illness and substance abuse; and tobacco-dependence treatments.
These services relate to pregnancy and reproductive health and are reimbursed at a higher matching federal rate. States therefore have an added incentive to cover them, and most do. Nevertheless, some are more generous than others in their coverage, and this is reflected in their scores.
Services delivered by specific providers
These include non-physician providers who provide a wide range of primary and specialized services to Medicaid beneficiaries. These providers agree to “accept assignment,” which means that they accept the state’s payment as payment in full for the services rendered and cannot bill the patient for an additional amount. Because some of the services under this rubric are quite broad, states may choose to impose restrictions by type of patient or service, or limit the duration or frequency of the service provided. In many cases, these services are provided as part of an institutional stay.
Services in this category include the following: chiropractor services, dental services, nurse anesthetist services, nurse practitioner services, optometrist services, podiatrist services, and psychologist services.
These services include the following: occupational therapy; physical therapy; and speech, hearing, and language services. They are subject to much variation, and are often limited by type of beneficiary, trigger condition, rehabilitation potential, frequency and duration of service, and other variables.
Devices and equipment
This category comprises dentures; eyeglasses; hearing aids; medical equipment and supplies; and prosthetic and orthotic devices.
While drugs are a covered service, they are subject to restrictions that vary by state. Our indicators take this into account, reflecting the variations in scope that emerge even within covered services.
Here, we are including this service only for states that include it under their State Medicaid Plan. Some states include this as an administrative expense, and are not represented here.
In general, we are ranking states only in terms of the non-mandated services they provide. Most of the services listed above are optional. In the case of mandated services, we have taken into account only those characteristics that affect scope and that exceed or refine the mandated minimum levels. Over time, optional services have increased their share of Medicaid expenditures. In 1998, for example, Medicaid spending on optional services accounted for 65 percent of the total spent by the federal and state governments.
Rankings are based on the following criteria:
Coverage: States offering an optional service receive credit in their scores, regardless of how limited the scope or how restricted the eligible population. The total number of points, however, may reflect the scope of service, as indicated below.
Population covered: Some states cover only the categorically needy, while others extend services to the medically needy as well. The latter receive more points than the former in our scoring scheme.
Comprehensiveness: In general, the wider the scope of services, the higher the score. Limitations in terms of amount, frequency or duration will be taken into account in applying this criterion.
Lack of a financial barrier: Services that do not depend on cost-sharing on the part of the consumer are rewarded in our rankings. When co-pays are required, a distinction may be made between a nominal fee that is unlikely to deter access to services, and a more significant amount that may constitute a barrier to prompt care.
The rationale for the indicator and the way in which each indicator was scored is described in detail in the Scoring Protocol included in the Appendix. Our scoring in this category leans toward the conservative, and we assign points to any state reporting that it covers a given service. In practice, however, the service may be seriously curtailed by the fact that: it is not available everywhere within the state; there may not be sufficient practitioners to provide the service promptly and effectively; or Medicaid providers offering the service may have capped their clientele and may not be taking new Medicaid patients.
Table 2 and Figure 5 (see full text PDF for all tables and figures) present all states and their ranks with respect to scope of services. The range in scores runs from top-ranked New York (with 168.3 points or 84.2 percent of the total score) to Mississippi (with 66.8 points or 33.4 percent): a more than 2.5-fold difference. The average score is 117.7, or 58.9 percent of the total points.
The “Top 10” Medicaid programs in terms of scope of services are as follows:
New York, 168.3 points
Because this was by far the category with the most indicators, the states’ overall scores tend to be evenly distributed throughout the spectrum, with only one tie among states (between North Dakota and Illinois, who share the 5th rank). Although the two top-ranked states in scope of services—New York and Minnesota—rank among the top 10 overall, only one other state (Washington) also falls within both the overall and the category-specific top 10 ranks.
The following 10 states place at the bottom in scope of services, ranking from 51st to 42nd:
Mississippi, 66.8 points
Although this category is not weighted as heavily as eligibility in our adjusted scores, it nevertheless reflects overall program performance, and half of the states ranking in the bottom 10 in scope of services also rank at the bottom in the overall score. These states are Mississippi, Oklahoma, Alabama, South Carolina, and Idaho.
When services are broken down by type of care, it becomes evident that different states have different priorities in deciding the package of services they offer their Medicaid populations.
With respect to services by type or target group, the following states rank in the top five, in descending order:
New York, 73.9 points
The bottom rankings in services by type or target group are occupied by:
Georgia, 30.0 points
In terms of women’s services, the following five states occupy the top ranks:
California, 14.6 points
The bottom rankings in women’s services are occupied by:
Idaho, 2.8 points
In provider-specific services, the following states earn the top ranks:
West Virginia, 31.2 points
The bottom rankings in provider-specific services are occupied by:
Alabama, 10.2 points
In devices and equipment, the top rankings are occupied by:
New York, 32.2 points
The bottom rankings of devices and equipment are occupied by:
Delaware, 9.7 points
Of all the categories, scope of services presents the most options for the states. Services cover the lifespan (from prenatal care to hospice), involve a broad range of facilities and providers, and can expand or contract as a function of need and budgetary possibilities. Even when two states offer the same package of services, they can do so under very different conditions. States can impose cost-sharing, or limit the frequency, duration, or amount of service provided to a given beneficiary. For this reason, this is the category with the most indicators and the most finely-calibrated scores.
Given the large number of beneficiaries and the expenses involved in the program, Medicaid is under pressure to prove that it can deliver quality care. Up to now, however, the focus on quality has been primarily on avoiding fraud. Some states appeal to consumers to be careful about divulging their Medicaid card number, and urge their beneficiaries to avoid seeking medical care they do not need. For their part, Medicaid providers are told to watch for “upcoding” of procedures (billing for a more complex and costly procedure than what was actually delivered); to monitor attempts to “unbundle” a single medical event into its component parts in order to increase the fees; to be cautious of cost reports that do not reflect hours worked; and to be suspicious of anyone getting excess prescriptions that they may be reselling.
While these measures may be necessary to protect the fiscal integrity of the program, they are not directly related to the quality of care. In fact, because Medicaid comprises more than 50 different programs, there are no overall indicators of quality that all states maintain. Our comparisons are therefore based on measures that serve as markers of quality.
Markers of quality
The data on quality vary a great deal and are a lot more complete for some services, such as nursing home care. Because this type of care was notoriously and dangerously neglected for many years, it has been subjected to greater oversight and more complete data collection. Since 1987, the Centers for Medicare and Medicaid Services (CMS) has defined the protocol that all states must use to survey their nursing care facilities and report their findings.
In cases such as nursing home care or services for children, where a significant proportion of a given service or target population is covered by Medicaid, we have used the quality indicators available for each state for all patient populations as a proxy for quality of care for the service covered by Medicaid. While these data have the limitation of not being specific enough, they provide a close approximation of the quality available to Medicaid recipients.
In the case of nursing home care, the rationale for using statewide data, even when not Medicaid-specific, includes the following:
In the case of services for children, the rationale is that Medicaid covers a significant portion of their medical care: the program covers more than one in four children in this country. Moreover, what is adopted as the standard of care under Medicaid is often reflective of what providers do for the pediatric population as a whole, regardless of payer. Additionally, this is one of the few populations for which data on results are available.
The indicators used under the quality of care category cover structure, process, and outcomes. Indicators of structure include those ingredients or elements that facilitate or promote quality of care. Process measures include whether proper procedures were used in delivering care. Outcome measures include both improvements in health status and the avoidance of adverse results.
In part because states have not been held accountable for the quality of their Medicaid programs, they earn the lowest scores in this category. The median score for this category is a meager 28.2 percent of 200 points.
Because states have so many deficiencies in this area, even those ranking at the top have low scores, boosted only by the fact that many others do even worse in this category.
The following states score in the “Top 10” in this category:
Massachusetts, 143.0 points
The 10 states with the lowest scores all earn less than 12 percent of the maximum points in this category. They are as follows, ranking between #51 and #42:
Idaho, -4.4 points
Unlike the previous two categories, quality of care shows a very broad spread in scores, with a more than 17-fold difference between the states with the highest and lowest positive scores (Massachusetts, with 143.0 points; Nevada, with 8.4 points).
To a large extent, much of the difference can be accounted for by differences in the quality of their nursing home facilities. Because some of the indicators used rely on evidence-based benchmarks for adequacy in nursing home care, states that fall short of the acceptable minimum standards earn negative points. As a result, quality of care is the only category in which two states (Oklahoma and Idaho) have negative scores.
The distribution of scores has two “tails” representing statistical outliers on either side of the spectrum: one state that scores considerably higher than the rest, and the two that are at the very bottom, with negative scores. When these three states are omitted, the differences in scores are significantly reduced, although they still vary by a very large factor of 13.0.
Despite its top rank, Massachusetts earns only 71.5 percent of the total points in this category. It is followed at a distance by Rhode Island, with only 54.5 percent of the total points.
These findings suggest that “quality control” needs to be drastically redefined within the Medicaid program. At present, the term is used to refer to the CMS’ statutory responsibility to monitor state and local Medicaid eligibility determinations. However, the sifting and sorting of people to see if they are indeed eligible for services is more of an accounting procedure than a quality assessment process. Accountability therefore needs to supplement the current emphasis on accounting. Only then will the public be served and the government be assured that it is getting value for the monies invested in the program.
Medicaid is financed by the states and the federal government. Federal funding for the program comes from general revenues. As an entitlement program, Medicaid’s federal spending levels are pegged to the number of people participating in the program and the services provided; spending is therefore open-ended and subject to fluctuations that are difficult to budget. As costs have risen over time, the program has become an important arena in which issues related to resource allocation have played out.
Even when states may be reluctant to commit an increasing share of their revenues to the program, the political and economic reality is that they need to leverage their share of the costs to maximize what they get from the federal government. The stakes for all participants are high. At present, Medicaid:
It is therefore not surprising that the financing of Medicaid is a topic that is often debated, defused, reframed, or circumvented, depending on who is affected and who is doing the debating.
The federal government contributes between 50 percent and 76 percent of the payments for services provided under each state Medicaid program. This contribution, known as the Federal Matching Assistance Percentage (FMAP), varies from state to state and from year to year because it is based on the average per capita income in each state. States with lower per capita incomes receive a higher federal matching rate. The federal matching rate for administrative costs is uniform for all states and is generally 50 percent.
Although the sliding FMAP was intended to have a redistributive effect and therefore sought to reduce disparities between states, it does this only partially because of the constraints imposed by the statutory minimum FMAP. The funding formula is also problematic for additional reasons. First, the cost of coverage is substantial for both federal and state governments, and is difficult to predict. In addition, Medicaid’s matching payments do not automatically adjust to changing economic conditions. The program’s scope may therefore be forced to contract during an economic downturn, thus having a negative effect on both the beneficiaries and those who are newly uninsured.
Furthermore, states have used “Medicaid maximization” or “revenue enhancement” strategies to increase federal spending in the program; in some cases, these payments may constitute up to one-sixth of a state’s Medicaid expenditures. Because the monies obtained through such strategies enter the states’ coffers without earmarking, they are often used for purposes unrelated to the population and services for which Medicaid was created. As a result, these strategies have been the target of measures to insure greater accountability. These measures have included legislation, regulation, greater federal oversight, and moral suasion. Changes in intergovernmental transfer rules would reduce federal payments to states by almost $24 billion over 10 years. States are therefore poised to adjust to a significant shortfall in federal revenues, and many are restructuring their services in anticipation of lost funds.
Few indicators relate directly to reimbursement. We have therefore relied on those that cover three aspects of Medicaid finances: payments per enrollee, by demographic group; physician fees; and Medicaid fees compared to Medicare fees. Because the data on fees are restricted to payments made under fee-for-service and do not reflect payments made to managed care organizations, they capture a decreasing proportion of Medicaid enrollees, particularly in some states where a vast majority of program beneficiaries are in managed care. Nevertheless, fee-for-service reimbursement rates also have an impact on what managed care organization rates pay physicians, as many states peg their capitation rates to what they pay under fee-for-service. Because TennCare, Tennessee’s Medicaid program, does not use fee-for-service, that program has not been included in our calculations under reimbursement.
Of the four categories examined, reimbursement is the one with the fewest indicators. It is therefore subject to much fluctuation between and among states. At the same time, it is the “lumpiest” category, with several states sharing the same rank in some cases.
States have wide discretionary authority concerning the methods and amounts of fees. Medicaid fees have lagged in comparison with other physician fees, including those paid under Medicare, and many states face physicians who are reluctant to see Medicaid patients or who place limits on the number or proportion of Medicaid patients in their practices, thus closing off options for new entrants. Physician reimbursement is therefore a proxy for access to care, as research has shown that acceptance of new Medicaid patients is higher in states that have higher Medicaid fees relative to Medicare than in states with lower Medicaid fees.
Unlike the fairly even distribution of scores that characterizes some of the other categories assessed in this report, reimbursement has states with very high and very low scores. At the high end is Alaska, which pays Medicaid providers much more than the national average in order to attract and retain them. As a result, Alaska earns the maximum number of points allotted to this category, 250 points, the only case in which a state does so.
The other states within the top 10 ranks are the following:
Delaware, 200.4 points
At the other end of the scoring scale, the states occupying the bottom 10 ranks in reimbursement are the following:
New Jersey, 12.2 points
Because New Jersey ranks so low, the scores between the highest- and the lowest-ranking states vary 20.5-fold. But even when the two states representing the extreme values are omitted, the difference in scores between the second-highest state (Delaware) and the next-to-last state is still approximately 4.5-fold.
These are differences that make a difference. States have understandably attempted to keep their Medicaid costs low by paying providers lower fees, and this has had an impact on access to care. Low payment rates deter physician participation in the program, or lead providers to cap their Medicaid clientele. This is especially the case among physicians in solo practice or working in small groups. As a result, an increasing proportion of Medicaid patients are relying on physicians who practice in larger groups, hospitals, or community health centers.
As summarized in Table 5 (see full text PDF for all tables and figures), the state Medicaid programs show much variation between and within the categories assessed.
Almost all state Medicaid programs are doing poorly in meeting all of their basic objectives.
The 10 highest-scoring states earn between 645.9 and 548.9 points of the maximum 1000.
The 10 most deficient state programs have overall scores ranging from 317.8 to 379.1 of the total 1000 points.
Even the top-ranking programs fall short in some categories and have ample room for improvement.
Emphasizing the spotty performance of some of the top-ranking states is the fact that two states in the “Top 10” overall, New York and Rhode Island, were in the bottom 10 in one of the four categories; both states had poor reimbursement policies. This poor showing confirms that even the states with the most resources, best intentions, and higher overall scores are failing in one or more of the categories we examined: eligibility, scope of services, quality, and reimbursement.
Quality of care is the category in which states earn the lowest scores.
There are marked inter-state differences, with some categories showing greater disparities than others.
There is significant intra-state variation in scores, with only a handful of states ranking consistently (i.e., within 15 ranks) across categories.
The 10 best states and the 10 worst states tend to cluster geographically.
States whose Medicaid programs rank the lowest also tend to fare poorly in overall health rankings.
States’ ranks tend to correlate with median household income.
Although the federal matching formula is designed to mitigate existing inequalities, it does this only to an extent. All states receive at least a 50 percent match, and those with lower per capita incomes receive a larger percentage. In fiscal year 2007, the Federal Matching Assistance Percentage (FMAP) for Medicaid ranged from 50.0 percent (in 12 states) to 75.9 percent (for Mississippi). While the 12 states that are at the 50 percent FMAP get a federal dollar for every state dollar they spend on the program, those that have a higher FMAP get more. Mississippi, for example, receives approximately $3.00 from the federal government for every state dollar it devotes to Medicaid. If Mississippi chooses to reduce its Medicaid expenditures, it also forgoes its corresponding share of the federal match. Reducing its Medicaid spending by $1 will therefore “cost” Mississippithe $3 in matching funds and result in a total reduction of $4 in its Medicaid budget. The political and financial stakes in the program are therefore higher for the poorer states. But these states also have competing needs, and health spending may be sacrificed to other pressing priorities.
Specific populations fare much better in some states than others.
Similarly, patients who need devices and equipment are better off in New York or Rhode Island, while those requiring rehabilitation services (e.g., a stroke victim or someone recovering from an accident) are likely to be more successful in getting comprehensive care in New York or Tennessee.
In summary, this evaluation of Medicaid demonstrates a bleak picture for millions of people in many states.
The first barrier, eligibility, is difficult to get past for millions of uninsured people. The wide variation in eligibility scores, more than threefold between the best and worst states, reflects this, as does the fact that 23 states had eligibility scores less than 50 percent of the total possible (350 points), thus keeping people out who would be eligible were they to live in certain other states.
But even for those eligible for Medicaid, the scope of services is extremely uneven. In addition to the 2.5-fold difference between the best and worst states, 10 states had scope of services scores of less than 50 percent of the possible 200 points.
Similarly, even if people are eligible for Medicaid in their state and the program provides those services needed by particular patients, the miserly reimbursement policies in many states make it less likely that they will be able to find a physician who can provide these services. There was a 20.5-fold difference between the best and the worst scores on reimbursement; in this important category, 31 states had scores that were less than 50 percent of the total possible 250 points.
Despite limitations on measuring more indicators of quality because such data are not uniformly collected, this category demonstrated very poor results for almost all states. With a maximum score of 200 points in this category, only six states had scores of more than 50 percent of this point total and 18 states had scores of less than 25 percent of 200 points.
Overall, and in many ways, Medicaid is failing to deliver care to millions of people desperately in need of good quality health services.
VII. State Reports
State reports are available in the full text PDF only.
We have titled our report Unsettling Scores because it is indeed disturbing that, after more than four decades, the Medicaid program has clearly failed to achieve its objectives and to therefore fully meet the needs of those it serves or is supposed to serve.
Our findings make it clear that there are large numbers of people who need to be, but are not, eligible; need to have access to a wider scope of services; need to benefit from better quality health care; or need to have access to more providers than are available because state reimbursement policies make their participation difficult if not impossible. Yet these critically needed additions are “voluntary” on the part of states rather than mandated nationally. The fact that many states have chosen to go beyond the federal legal requirements suggests that they are responding to constituent needs and public pressures, and that the “floor” of mandated Medicaid coverage is clearly inadequate. Because the federal requirements are so lacking, if someone happens to live in the “wrong” state—one that does not provide optimally in all four of these categories—they will be denied needed care.
No state could be described as having an excellent Medicaid program, as the highest-ranking state earned only 64.6 percent of the total points. In addition, the median or midpoint in the range of scores was 47.1 percent of the total. And 30 states, including some of the largest in the country, were among the 10 lowest-ranking states in one or more of the four categories we examined.
The partnership between the federal government and the states has been fraught with tension as a result of the federal desire for national standards and the states’ clamor for greater discretion. In recent years, the states have prevailed, often to the detriment of patients. Federal guidelines, established to insure some basic level of uniformity and equity across states, have been largely eroded. At present, the system of waivers has given states dangerously great latitude in deciding whom they cover, what package of services they offer, and how and how much they pay providers.
Yet neither of the two partners is satisfied with the results. The federal government feels that the program is too costly, and states still chafe under what they feel is a federal straitjacket that limits their choices. The issue of Medicaid funding is a constant source of tension between the states and the federal government. States may want greater decision-making latitude, but they are reluctant to accept the possibility of greater state financial risk that goes with greater autonomy. The states have an interest in maximizing the number of federal dollars they can draw down; for its part, the federal government tries to shift a greater proportion of costs to the states. And the uneasy partnership between the two levels of government is likely to become increasingly tense as both attempt to address the rising number of uninsured and a growing aging population requiring more costly long-term care.
Much of the current debate has focused on the program’s sustainability. But more important is the question of whether the program, as it currently operates, is worth sustaining. Each of the categories we have examined pose problems that require attention at the national level and cannot be solved on a state-by-state basis.
Medicaid has been called a vestige of the “poor laws” because it attempts to cover the “deserving poor,” systematically excluding those that do not meet specific criteria. Eligibility is uneven and complicated. Even when some populations are eligible, inadequate outreach and complicated enrollment procedures leave many out: an estimated 20 to 35 percent of those who are eligible are not enrolled in state Medicaid programs. Eligibility policies therefore represent only the more obvious and visible aspect of gaining access to care. Even the states with the best eligibility policies do not fully measure up in our rankings. And there are five states that earn scores of less than 30 percent of the total, thereby excluding many by design.
Scope of services is similarly varied, the spectrum of scores in this category varying 2.5-fold between the most expansive and the most restricted program. Bare-bones Medicaid programs leave too many services out. While some states exclude some services altogether, others use subtler means to whittle away at services so that many are unable to get them. State Medicaid programs may only provide certain services to given segments of the population; or require some type of cost-sharing; or provide care only under specific conditions; or restrict the care to only some procedures; or limit the duration, frequency, or amount of service covered. The result is that, in many states, beneficiaries have to make their way through a thicket of restrictions to identify the services to which they are entitled. And, sadly, their efforts may very well end with exclusion.
Quality of care is an area in which even the best are found wanting, and in which scores vary more than 17-fold from the highest to the lowest positive-ranking state. Of the four categories examined in this report, it is the one with the most glaring deficiencies. The lack of oversight on the part of the state and federal governments is reflected in the paucity of consistent and reliable indicators. As a result, it is difficult to verify whether the states and the federal government are spending wisely and allocating their resources where they do the most good. And Reimbursement, which is one of many arenas in which the continuing debate plays out, reinforces the role of Medicaid as a stepchild, unable to pay its providers at parity with its more affluent sibling, Medicare.
Yet Medicaid is the largest single health program in the United Statesand its replacement has to do more than correct its more salient deficiencies. At the same time, as Michael Sparer has pointed out, the program must recognize that there are some decisions that have to be made on a national level. These include a mandate of universal health insurance, a basic benefits package, and a financial framework for how the monies are to be raised, and how costs are to be contained.
At present, many states are taking measures to recast their Medicaid programs. Some are attempting to make a dent in the number of uninsured by loosening eligibility requirements and allowing a greater proportion of the population or their employers to buy into the program by paying a sliding-fee premium. Others are changing the way care is organized, requiring all beneficiaries to have a “medical home” through which services are orchestrated. Many states are focusing on cost-containment through different approaches. One is experimenting with a “fixed contribution” that caps the amount available for each covered person. Several are focusing on the four percent of “high users” that account for approximately 50 percent of all Medicaid expenses. This in turn requires adopting disease-management strategies, diverting those in nursing homes to less expensive modalities, and promoting behaviors to insure greater compliance with preventive practices and treatment regimes. Yet these approaches can only exacerbate the differences in state programs and thwart any attempt to create a universal program in which coverage is equitable, comprehensive, and portable across state lines.
Given the current concern with health disparities, it is surprising that so little attention has been paid to the fact that, for many Medicaid beneficiaries, the care they get is largely a function of where they live. Geography is therefore one of the determinants of who gets what, when, where, how, and at what cost. The differences in state Medicaid program scores represent inequities in health care rather than desirable diversity. Programs need to be made more standard, more uniform, and more accountable if the many state programs that are now failing are to realistically aspire to the achievements of a select few.
Aid to Families with Dependent Children (AFDC) – Program operating between 1935 and 1996. Enacted in 1935 as part of the original Social Security Act and rescinded as part of welfare reform, the program sought to support needy children deprived of at least one parent’s presence and full support.
Beneficiary –Person eligible for and enrolled in the Medicaid program in the state in which he or she resides. Also referred to as enrollee.
Budget neutral –Having no impact on a budget. States may be granted authorization to deviate from certain Medicaid mandates if the proposed changes are budget neutral and therefore do not affect the bottom line.
Capitation– Modality of payment whereby a state Medicaid program pays a plan or provider based on the number of Medicaid beneficiaries under its care. Payment is usually a fixed amount per person per month.
Categorically needy – Persons eligible for Medicaid because they fall under specific categories or groups, i.e., children, the aged, individuals with disabilities. These qualify for the basic mandatory package of Medicaid benefits.
Co-pay, co-payment – A fixed dollar amount that a Medicaid beneficiary may have to pay when receiving services. This varies by state, service, and eligibility category.
Cost-sharing – Group of measures requiring Medicaid beneficiaries to bear part of the cost of a service. These can be co-payments (a fixed monetary amount), deductibles (a fixed amount the patient must pay before coverage begins), or co-insurance (a percentage of the total cost of a service). While cost-sharing is often advocated as a way of controlling costs by making beneficiaries “prudent purchasers,” it may also act as a barrier or deterrent to needed care.
Eligibility– Determination of who is covered by Medicaid. Although some populations are covered throughout the nation, others vary from state to state.
Federal Matching Assistance Percentage (FMAP) –Share of the costs of Medicaid borne by the federal government. This varies from one state to another, and currently ranges between 50 percent and 76 percent. States with lower per capita incomes have a higher percentage of their Medicaid costs covered by the federal government. The FMAP may be higher for some services than for others. For example, family planning services are matched at a higher rate than other services as an incentive for states to provide these services.
Federal Poverty Level (FPL) – Income level below which an individual or family is considered poor in the United States. The federal poverty threshold is determined annually by the U.S. Census Bureau and is based on increases in general inflation. The U.S. Department of Health and Human Services has adapted the census poverty thresholds as guidelines for use in Medicaid. At present (2007), these guidelines establish the poverty level for the 48 contiguous states and the District of Columbia at $10,210 for a single person and $17,170 for a family of three. The guidelines are somewhat higher for Alaska and Hawaii because of their higher cost-of-living. State Medicaid programs establish their eligibility thresholds as a fraction or multiple of the federal poverty guidelines.
Indicator –Measurement of an aspect of the Medicaid program. These have been grouped by category (eligibility, scope of services, quality of care, and reimbursement). Some indicators are composites of several measures, as described in the Scoring Protocol in the Appendix.
Managed care –Modality of service delivery under which an organization or health plan provides a specific set of services to an enrolled population for a fixed, prepaid annual fee. Currently, most Medicaid beneficiaries are in managed care plans.
Mandated services– Services all states are required to provide to their Medicaid beneficiaries.
Medically needy –Optional Medicaid eligibility group comprising individuals who qualify for coverage because of high medical expenses. These individuals must meet Medicaid’s categorical requirements but have incomes that are too high to qualify under “categorically needy” coverage. In some cases, services provided to the medically needy are not as comprehensive as those provided to other Medicaid beneficiaries.
Program of All-Inclusive Care for the Elderly (PACE)– Optional benefit that some states provide to Medicaid beneficiaries 55 years or older who require the level of care usually provided by a skilled nursing facility. This program, originally begun in California, allows beneficiaries to live at home, attend a day treatment center, and get other supplementary services.
Quality of Care– Degree to which Medicaid programs are performing in accordance with accepted standards of care. This category has a limited number of indicators, and includes markers that suggest better monitoring of services or better health outcomes.
Reimbursement– For purposes of this report, this category includes per capita spending by state Medicaid programs for specific groups, and physician payments.
State Children’s Health Insurance Program (SCHIP)– Federal-state matching program which provides health coverage for uninsured low-income children. In a few cases, the program may also cover their parents. States have the option of administering SCHIP through their Medicaid program or through a separate program. The average federal matching rate for SCHIP is higher than that for Medicaid, but SCHIP allocations to states are in the form of a block grant, capped at a specific amount, rather than open-ended.
Section 1115 waiver– Legislative measure through which states can receive authorization from the Secretary of Health and Human Services to waive compliance with many of the requirements of the Medicaid statute. This waiver, named for the section of the Social Security Act under which it was enacted, allows states to experiment with different approaches to delivering care under the Medicaid program. These waivers have become increasingly popular, and many states have used them to expand or restrict eligibility, coverage of services, and payment. Waivers are granted for a five year period.
Scope of Services –As used in this report, this refers to coverage of care provided by the different state Medicaid programs. Although there are mandated services that all states must provide, the focus in this report is on optional services or those that exceed the required minimum. Because different populations are eligible for different services, both the what and the who are taken into account in determining the points assigned to most indicators in our Scoring Protocol.
Social Security Act –Legislation enacted in 1934 to provide economic and other support to specific groups. Medicaid was enacted as Title XIX of the Social Security Act in 1965.
Spend Down – The process of using up all income and assets on medical care costs to become eligible for Medicaid.
Supplemental Security Income (SSI) –Federal program for the poor, aged, and disabled that provides its beneficiaries a monthly amount. In most states, those who are eligible for SSI are also deemed eligible for Medicaid.
Waiver – Provision that allows Medicaid programs to depart from eligibility or benefit rules for temporary periods. While Section 1115 waivers are the best-known, other waivers may be approved to address specific events, such as the disruption of services and population displacement that occurred following Hurricane Katrina.
Jeffrey S Crowley and Molly O’Malley, Profiles of Medicaid’s High Cost Populations, Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation. December 2006:1.
Crowley and O’Malley, Profiles: 4.
Alan Weil, “There’s Something About Medicaid”. Health Affairs. 22 (1) (Jan-Feb 2003): 15.
Medicaid Commission. Final Report and Recommendations presented to Secretary Michael O. Leavitt, December 29, 2006: 5.
Alliance for Health Reform. Covering Health Issues 2006. Chapter 6: Medicaid: 79.
Quote from HHS Secretary Mike Leavitt. U.S. Department of Health and Human Services. News release: HHS Secretary Leavitt Establishes Commission to Work on Strengthening and Sustaining Medicaid. May 20, 2005. See http://www.hhs.gov/news/press/2005pres/20050520.html.
Jean Hearne. Medicaid Eligibility for Adults and Children, Congressional Research Service, The Library of Congress, CRS Report for Congress. August 3, 2005: CRS-27.
Jean Hearne. Medicaid Issues for the 109th Congress. Congressional Research Service, The Library of Congress. CRS Report for Congress. Updated April 10, 2006: CRS-1.
U.S. Department of Health and Human Services, News Release: HHS Secretary Leavitt Establishes Commission to Work on Strengthening and Sustaining Medicaid. May 20, 2005. See http://www.hhs.gov/news/press/2005pres/20050520.html.
TennCare does not pay its providers by fee-for-service, so Tennessee does not have reimbursement indicators that are comparable to the rest of the nation. The state thus lacks a reimbursement score and an overall score.
The exception to this is sickle cell services, which no state has made explicitly available under its Medicaid coverage. Sickle cell services were added as an optional Medicaid service through legislation enacted as part of the JOBS Act of 2004. Although no state has availed itself of these services, we have included them in our scoring scheme because they represent a novel attempt in using Medicaid to address race-based health disparities.
Kaiser Family Foundation, Kaiser Commission on Medicaid and the Uninsured. Health Coverage for Low-Income Americans: An Evidence-Based Approach to Public Policy. November 2006: 19.
For example, this is the case for hours of nursing care per nursing home resident.
Alan Weil, “There’s Something About Medicaid”: 24.
For example, a source may indicate that a given state provides a specific service to the “medically needy,” but states may have different definitions of who constitute the “medically needy” and may offer different service packages to different segments of the population. Additionally, expansion populations that are covered through approved waivers are not captured in the data.
Hearne, Medicaid Eligibility for Adults and Children: CRS-26.
Hearne, Medicaid Eligibility for Adults and Children: CRS-i.
Health Care Financing Administration, U.S. Department of Health and Human Services. A Profile of Medicaid: 2000 Chartbook: 7.
U.S. DHHS, A Profile of Medicaid: 2000: 24.
Hearne, Medicaid Eligibility for Adults and Children: CRS-2.
Hearne, Medicaid Eligibility for Adults and Children: CRS-8, 9.
Hearne, Medicaid Eligibility for Adults and Children: CRS-25.
U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Using Medicaid to Support Working Age Adults with Serious Mental Illness in the Community: A Handbook. January 2005: 103.
U.S. Department of Health and Human Services, Using Medicaid to Support Working Age Adults: 106.
U.S. Department of Health and Human Services, Using Medicaid to Support Working Age Adults: 108.
Vernon Smith, et al. Low Medicaid Spending Growth Amid Rebounding State Revenues: Results from a 50-State Medicaid Budget Survey, State Fiscal Years 2006 and 2007, Kaiser Commission in Medicaid and the Uninsured, Kaiser Family Foundation, October 2006: 48.
The only states that do not allow the self-declaration option are Montana, New Hampshire, New York, and Georgia. “New Requirements for Citizen Documentation in Medicaid.” Medicaid Facts, Kaiser Commission on Medicaid and the Uninsured. Kaiser Family Foundation, June 2006.
Andy Schneider, et al. The Medicaid Resource Book. Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, July 2002: 55.
One example of this is the brochure put out by Florida’s Agency for Health Care Administration, Medicaid Program Integrity: “Why You Should Be Worried About Medicaid Fraud.”
Charlene Harrington, Helen Carillo, and Courtney LaCava. Nursing Facilities, Staffing, Residents, and Facility Deficiencies, 1999 Through 2005. Department of Social and Behavioral Sciences, University of California, San Francisco. September 2006.
Paying for Nursing Home Care: Asset Transfer and Qualifying for Medicaid. Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, January 2006.
Paying for Nursing Home Care: Asset Transfer and Qualifying for Medicaid. Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, January 2006.
Kaiser Family Foundation. Kaiser Commission on Medicaid and the Uninsured. Health Coverage for Low-Income Children. September 2004.
This framework, now widely adopted, was established by Avedis Donabedian.
Smith, et al. Low Medicaid Spending Growth: 10.
Kaiser Family Foundation. Kaiser Commission on Medicaid and the Uninsured. The Role of Medicaid in State Economies: A Look at the Research. April 2004.
Kaiser Family Foundation. The Role of Medicaid in State Economies.
Kaiser Family Foundation, Kaiser Commission on Medicaid and the Uninsured. Diane Rowland. Medicaid: The Basics. KaiserEDU.org. June 2005.
Smith, et al. Low Medicaid Spending Growth: 11.
Kaiser Family Foundation. The Role of Medicaid in State Economies: 2-3.
There are some exceptions to this: For example, family planning services receive a larger federal match.
Victoria Wachino, Andy Schneider, and David Rousseau. Financing the Medicaid Program: The Many Roles of Federal and State Matching Funds. Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation. January 2004. www.kff.org/kmcu.
In New Hampshire, for example, “enhanced revenues” account for 17.7 percent of all Medicaid expenditures. Cindy Mann. Financing Under Federal Medicaid Section 1115 Waivers: Federal Policy and Implications for New Hampshire. Prepared for the Endowment for Health, September 9, 2004. Health Policy Institute, Georgetown University: 6-7.
Mann, Financing Under Federal Medicaid Section 1115 Waivers: 7.
Stephen Zuckerman, et al. Changes in Medicaid Physician Fees: Implications for Physician Participation. Health Affairs. 23 (June 2004): W4-374.
Zuckerman, Changes in Medicaid: W4-374.
Zuckerman, Changes in Medicaid: W4-381.
Peter J. Cunningham and Jessica H. May. Medicaid Patients Increasingly Concentrated Among Physicians. Tracking Report No. 16, Center for the Study of Health System Change, August 2006.
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