As of January 1, 1971, 52 jurisdictions were operating a title XIX Medical Assistance Program. Alaska and Arizona are not expected to initiate a program under title XIX during FY 1972. Federal requirements that affect program costs Since July 1, 1970, all medical assistance plans under title XIX must provide as a minimum, eight basic medical services (inpatient hospital care, outpatient hospital care, skilled nursing home care, physician care, home health service, screening and treatment of people under 21, transportation, and laboratory and X-ray care) to all individuals who are eligible to receive maintenance payments. The following 24 States limit their programs to the foregoing group: Under Federal law, as enacted in 1965, all State plans under title XIX are to be expanded, both in terms of persons who are eligible and quantity and quality of services provided, so that by 1977 comprehensive medical services will be available to all the medically needy 1/ Looking toward this goal, 28 State plans now cover both the people who are eligible for assistance payments and the people who are medically needy only. These States are: 1/ Those individuals who would be eligible for maintenance assistance except that their income is sufficient to provide for the basic needs of food, shelter and clothing but is insufficient to pay for medical needs. Accomplishments 1970 - 1971 Beginning in 1970 and continuing in 1971, the reorganization of the Medical Services Administration has expanded the Federal role in reshaping the medical program to provide more health services to eligible recipients with increased emphasis on economy and improvements in the delivery of services. More searching project reviews, new regulations on hospitals, more critical utilization of nursing homes, stronger utilization review procedures, and new management information systems are being devised and implemented to improve the States' ability to control their costs and provide a more economical method of delivering health care. New methods of financing and of delivering services to Medicaid patients have been implemented. Several organizations that would qualify as Health Maintenance Organizations deliver comprehensive services to Medicaid patients. Prepaid financing is also becoming available as Medicaid negotiates contracts with provider groups and insurance companies who guarantee to pay for services needed by Medicaid patients in return for fixed per capita fees. The following administrative initiatives are being taken in FY-1971 which are expected to result in savings of $70,000,000 in Federal funds. savings have been applied to reduce the FY-1971 Supplemental budget request. These a. It is estimated that a potential savings of $40,000,000 will result from a more critical review of medical services utilization by Medicaid eligibles by reducing hospitalization where outpatient care or nursing home care will substitute, and by cutting down on the lengths of hospital and nursing home stays. b. Savings of $30,000,000 is estimated by requiring prior authorization Program Plans for 1972 The request for 1972 is based upon the States' estimates, which are modified The States for Federal administrative initiatives reducing the total costs. estimates show increases in the number of people eligible for medical assistance, greater utilization of available services by those eligibles, and added costs for services provided. The administrative initiatives are expected to result in a savings of $110,000,000 in Federal funds in FY 1972. This savings is deducted in arriving at the FY 72 budget requirement. Additional savings which would result from legislative changes to be proposed are not reflected in these estimates. Relation to Long Range Objectives The plans for 1972 reflect the concentration on improved utilization review, strengthened management information systems capability, program incentives to encourage the use of more efficient methods of delivering health services to the Contracts with private poor, and more reasonable expenditures for long term care. industry are currently being developed to provide methods and ways of converting Contract existing medical service activities to Health Maintenance Organizations. plans are also under way to study the background and causes of long-term care in nursing homes. It is expected that these contracts will provide necessary In addition, it is material and information to reduce or curtail future costs. planned that all the States will accept and install the Model Management Information Payment System to improve claims processing and surveillance of vendor medical payments. Comparison of Vendor Payments by the Category of Recipients receiving medical assistance in FY 70, 71, and 72 1970 1971 Category of Recipients Vendor Recipients Vendor 01 Recipients 18 2,100,560,000 35 3,100,000 16 2,388,294,000 33 1972 Vendor 85,000 01 56,385,000 01 Fiscal Total Vendor Payments for Medical Care, By Program, Fiscal Years 1951 to Date 1961 588,867,000 1962 812,365,000 1963 1,000,822,000 1964 477,441,000 303,810,000 8,261,000 54,503,000 68,861,000 42,007,000 111,425,000 91,312,000 194,787,000 99,815,000 100,878,000 287,342,000 102,922,000 122,780,000 381,671,000 103,685,000 1,367,125,000 1,249,087,000 436,416,000 12,248,000 128,329,000 151,116,000 520,978,000 118,038,000 133,146,000 139,210,000 535,068,000 3,171,000 42,852,000 37,715,000 1968 3,580,825,000 3,510,753,000 118,469,000 2,822,000 35,328,000 25,438,000 4,126,082,000 4,046,386,000 4,935,671,000 4,634,408,000 124,328,000 2,008,000 18,212,000 27,358,000 5,675,000 503,000 5,978,000 74,610,000 372,352,000 4,515,974,000 301,263,000 6,023,298,000 5,631,528,000 7,168,821,000 6,712,463,000 5,631,528,000 6,712,463,000 391,770,000 456,358,000 |