mum umsomr mama on WA]. arm-nous mmucon. n. c. 20375 (202) 382-2116 YOK A. ll. RELEASE Septeoher 30. 1968 NEWS EMS NATIONAL oomxssmm ounces Ill 016510 The Advlaory autumn on Intergavernneatal Relatlona. ant-nun; M m San Francuco September 20, recon-ended "adherence to the goala ol um Congrvuluml cstahllshed FederaloState Hedicald prugramo-cuupn-o lit-halve m'dlcal care (or "subatuntlallgnll" ol the poor and near poor by l975~hut pruposed IeVeral laportant change- la the my the progra- nuw u operated. The Cont-awn also urged the Federal Government cu take account of the heavy rum burdens posed on State and local govern-ants by the program and to consider hroadenlng mdlceld'a flmmclal been through lurcnud lmmlveacut of the prlvate acvtur through an employeroe-ployec cuntrlhutory health lnsurancc uystcn ur uther appruprlatc loans. Parrl. Bryant. Gunman ul the leeory (Jo-lesion and (umr Governor ul Florida and. "the report identitiea clu- any point 01 undo rchaled durln the that two and a half years 01 Htdlcald'e nporatlon. and often maya 0! eaaln; than, conuent ulth euvctlsm and cccmollcal Iodical care." a When *3 c .J 50-? why-mus m arkJ W . The 26- r Co-iaewu Le a bi artisan body eatahllahcd by Federal law lu l959 to ulntaln continuing review 0! the rulutluns mum; Fl'dtrdl. State and local govern-antes. It: holdup consul. ol gutvvt'nuta. mayors. county olllclaln. State legislature. am! representa- twon of both lbusva a! Gangrene. the Federal Emcutlu- branch. and the general puhllc. luster: Roster u! Marlon mama-re attachch (more) The Advisory Go-lasion proposed that the Federal Oman-cot nako liodicald noncy available to States for coverage of scan groups of needy not: excluded; that States be ivcn unto exibility in adapting the Medicaid program to their individual needs and resources; and that Statnmrwith allowing vdicaid applicants to use a ainplo declaration at nancial status in csublishin tiwir financial eligibility. The dominion opposed any attonpt by the Indoral Government to who such a declaration Procrdurv mandatory. Mower. Tho Omission's study of liodicaid located mainly on basic pollen-u .uivcting rvdorul. Stutv and local sharing of rt-aponaibility iur iinancin; around. It accqlla Micah! as an interment-natal program [or providing medical can. in the noody and udicnlly needy-on Joint program in which iinnncing cones basically from public land. and eligibility for services is based on a "means test." in so confining the stody's scope, Clair-an Bryant said that the (mission inpliu no pinion on tin.- ncrits and dent-vita o! najor altcmtivo uyutmx. of financing nodical care ior the noody and sonically noudy. Anon; tho significant findings and conclusions of the report are tho following 0- Policy-Mrs at all xovorn-cntal lchla new largely unpreparod (or the manitudo oi the fiscal inpact of Medicaid. The progan has tripled federally aliltfd nadical Vendor pay-cats iron (pore) . -3- $1.4 billion in 1965 to an eetimeted $4.2 billion in fiscal year 1968-69. -- A; a consequence of thin impact. Congress in 1967 imposed limits on Federal sharing in the cost of medical care for the medically needy. These cutbetke forced ebout a dozen States to restrict the number of eligible: covered or make other program adjustments. -~ For the Staten. the first two end a half yeare of hediceid produced a wide verietion in the scope of the program and its fiscal impact. Thirty-eight States had initiated the progran; 12 and tau District of Columbia had not. Thirteen of the 33 States had progrems for the needy, but not for the medically needy. Seventeen provided some degree of at least 11 of the la medical services specified by law for hath the needy and medically needy. For 27 Nedicaid States with programs in effect for ell of 1967, the change in total medical vendor pey- nente between 1965 and 1967 varied from an increase of 371 per- cent in Delaware to a decline of 15 percent in west Virginia. with an average increase of 56 percent. - In a few States new or higher State level taxes were linked in part to Medicaid programs; in others, higher taxes were fore- stelled by postponing initiation of a Xcdicaid program or by restricting the program's scope. (more) - a - -- A key contributor to the rising curve of Hedicaid expenditures was the increase in medical costs. Medical prices increased 6.6 percent in 1966 and 6.4 percent in 1967, compared to rises of 3.3 and 3.1 percent in the overall consumer price index. -- Among the nonfiscai problems in the Medicaid program most concerning the States are difficulties in coordinating the administration of Medicare and Medicaid, the inflexibility o! the law and guidelines, and difficulties in imposing adequate controls over charges for services. The Commission found that the legislative history of Medicaid and tongressional attitudes toward further cost escalation of the program raise doubts about the strength of the Federal Government's commitment to the law's requirement that the States provide comprehensive care to "subntuntially all the needy and medically needy by July 1975. The Commission, howevor, endorse the 1975 goal. At the same time, a two-year postponement of Metieaid's 1970 target date [or all States to initiate a program was rm outm- th-d . The Commission also called (or shifts in the sharing of fiscal tcspnniblllty among Federal. State and local governments. It urged: -- greater State discretion in determining lien and recOVery provisions; and - tighter Federal standards (or evaluating State limitations on the amount of cash assets they allow Medicaid recipients to retain. (more ) - 5 - The Commission rejected'proposals to put Hedicaid on a i.-~ n-Vnd appropriation basis and Ch mandate nationwide eligibility standard .u: recipients. in connection with the latter, however, greater intvrhitv uniformity in eligibility requirement; was supported an n lonh-r. goal. Reflecting concern over the need to control xedicaid costs, the Commission recommended that the Secretary of HEW rescind regulations requiring hospital inpatient services to be reimbursed under Mr. -.u on the same basis as under Medicare, thus avoiding imposition oi an uneconomital "cost-plus" feature on Medicaid. It also urged the States to move vigorously to experiment with methods of increasing LlC o:.lricncy and economy of health services under Hedicaid. Suggested technieuvn include reimbursing hospitals contingent on their efficient upcraiiun, expandinb prior Juihorilltin for elective surgical procedures, basing payment [or physician~ services on other than "usual and customar," chhtgca, an. Una of copaynuni or "deductible" provision. in order to give States greater flexibility in developing a program a: nwdical services for their needy and medically needy within limitations of State resources, the Commission propoSed that, suoicet to approval of the Secretary of NEH, States be allowed to vary schlscS among different groups served. Finally, the Commission urged States to move vignr.quy to experiment with simplified procedures for establishing Lodau-Li Quail i-a- tiuns for medical assistance under Medicaid, designed to remove the administrative complexity and the stigma attached to the prehcn. austem oz establishing applicants' financial status. The Commission lu{.-ci (more ) -6- recounendod that State Indical autatanca ottlctala be 31m: awe. .uwct safeguards. to Padatal into-a tax retuma for purposea o! verifying applicant a atatananta. (NOTE: A digest of the recommendations adopted at the Septuaer 20 mating la attached.) (end)