Senate Moves to Postpone Reduction in Medicaid Case Management Services

Recently we reported that new interim rules issued by the Bush administration's Centers for Medicare and Medicaid Services (CMS) would reduce case management services provided to Medicaid beneficiaries, including individuals with physical or mental disabilities and children in foster care. (See "Proposed Medicaid Rules Would Limit Help for Those With Special Needs.")

Now, the U.S. Senate has passed a bill (the Indian Health Care Improvement Act, S. 1200) that includes a provision that would delay application of the limits on case management services until at least April 1, 2009. The spotlight now shifts to the House, where companion legislation remains in committee, but Rep. Frank Pallone (D-N.J.) said he likely would not make major changes to the Senate measure and expects the bill "will move fairly quickly" through the House.

Medicaid provides case management services to assist beneficiaries in moving from an institution to a community setting. Before the individual leaves the institution, the case manager assists in making housing and other arrangements to smooth the transition. Case managers help beneficiaries and their families gain access to medical, social, educational, and other community services.

Under current policy, Medicaid reimbursement is available for case management provided for up to the last 180 days of a stay in an institution. But the new rules reduce the duration of federal matching funds for pre-transition case management services from 180 days to 60 days (or 14 days, if the individual's institutionalization was less than 180 days). The shorter periods may not allow a case manager sufficient time to arrange for the transition from institution to community, beneficiary advocates say.

Moreover, the rules would prohibit payment until an individual is actually living in the community. As a result, some providers would not be able to deliver transition services. The new rules also limit the funding of case management services for children with special needs who need both Medicaid and special education.

The interim rule is scheduled to go into effect on March 3, 2008. It is unclear whether Congress will submit a bill to the White House by then that includes the moratorium on the rules' implementation.

In the meantime, a growing number of states, including Maine, Maryland, New Jersey, New York and Oklahoma, are joining a lawsuit filed against the U.S. Department of Health and Human Services alleging that the interim rule violates the 2005 Deficit Reduction Act, the Social Security Act and the federal rulemaking process.

For a copy of the states' complaint, click here.