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News and Notes   |    
Psychiatric Services 2004; doi: 10.1176/appi.ps.55.4.464
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Steven S. Sharfstein, M.D., of Baltimore was chosen president-elect of the American Psychiatric Association in balloting by APA members and will assume the APA presidency in May 2005.

The current president-elect, Michelle B. Riba, M.D., of Ann Arbor, Michigan, will become APA president in May at the conclusion of the 2004 APA annual meeting in New York City. She will succeed Marcia K. Goin, M.D., Ph.D., of Los Angeles.

Dr. Sharfstein, an APA vice-president since 2002, received 67 percent of the vote in a race against Jagannathan Srinivasaraghavan, M.D., of Anna, Illinois. Dr. Sharfstein is president of the nonprofit Sheppard Pratt Health System in Baltimore and clinical professor and vice-chair of the department of psychiatry at the University of Maryland School of Medicine. He served as APA secretary from 1991 to 1995 and is a former APA deputy medical director.

In late 2002 the APA board of trustees voted to downsize the board by eliminating one of APA's two vice-president positions and combining the secretary and treasurer positions. APA voting members approved these changes in the 2003 election. Pedro Ruiz, M.D., of Houston, who was elected in 2003 for a two-year term as vice-president in the 2003 election, is now APA's sole vice-president.

In a three-way race for the office of treasurer, Carolyn B. Robinowitz, M.D., of Bethesda, Maryland, defeated Albert Gaw, M.D., of San Francisco and Patrice Harris, M.D., of Decatur, Georgia. Dr. Robinowitz, who won with 59 percent of the vote, is a private practitioner, a member of the board of directors of American Psychiatric Publishing, Inc., and an APA delegate to the House of Delegates of the American Medical Association. She will become secretary-treasurer in 2005, at the end of the term of the current secretary, Nada L. Stotland, M.D., M.P.H.

In APA races with more than two candidates, voters are asked to rank the candidates in order of preference. If no candidate wins a majority of votes on the first round, the candidate with the lowest number of votes is eliminated, and the second-choice votes on the ballots cast for him or her are distributed to the remaining candidates. In the race for treasurer, Dr. Robinowitz won on the first round of counting.

In this year's other three-way race, Renée Binder, M.D., of San Francisco was elected trustee-at-large with 58 percent of the vote in the second round of counting. Her opponents were Jeffrey L. Geller, M.D., M.P.H., of Worcester, Massachusetts, and Michael J. Vergare, M.D., of Philadelphia. Dr. Binder is professor in the department of psychiatry and director of the psychiatry and law program at the University of California, San Francisco.

APA members-in-training chose Daniel T. Mamah, M.D., a resident at Washington University Medical School in St. Louis, to be the next member-in-training trustee-elect. Dr. Mamah won with 66 percent of the vote to defeat John M. Kuzma, M.D., of the University of Iowa in Iowa City.

Two of APA's seven area-trustee posts were up for election this year. Roger Peele, M.D., of Gaithersburg, Maryland, was reelected as area 3 trustee in an uncontested race. In area 6 Thomas K. Ciesla, M.D., of Santa Monica, California, defeated Barry F. Chaitin, M.D., of Newport Beach, California, with 57 percent of the vote.

A total of 30,261 APA members were eligible to vote in the 2004 election. Of that number, 31 percent, or 9,408, voted. Approximately 8 percent of those who voted did so online.

The evenly balanced federal-state partnership that was envisaged when Medicaid was created in 1965—in which state expenditures for health care are matched dollar-for-dollar with federal funds—has devolved into a "financial arms race" that threatens the program's stability, according to a new report from the Kaiser Commission on Medicaid and the Uninsured. Since the mid-1980s, states have aggressively pursued "Medicaid maximization strategies" to trigger a federal match without actually incurring a state cost. The federal government has tried to keep pace by closing loopholes in Medicaid regulations. The Bush Administration's latest proposal—to move from federal-state matching to a set allotment of federal funds—is a radical and risky change in the structure of the Medicaid program that will not be necessary, according to the Kaiser Commission, if the government follows the commission's recommendations for strengthening financial management of Medicaid.

The Medicaid program served an estimated 50 million people in 2003 and accounted for $275 billion in federal expenditures in 2002. If the proposed change to a set allotment of federal funds is made, the benefits of matching will be lost, according to the Kaiser report. The matching system has helped cushion states from unpredictable changes in program costs, such as those that result from economic downturns, and has ensured that both the federal government and the states have a stake in program management and outcomes.

The critical role that Medicaid plays in funding states' mental health systems was recently emphasized in the President's New Freedom Commission's report. Medicaid is the largest payer for mental health services in the country; 20 to 25 percent of services for nonelderly adult users of mental health care are funded only by Medicaid. It is a critical component of the safety net for persons with severe and persistent mental illness. Some policy analysts fear that changing to a set allotment may lead to unproductive competition among agencies for funds and to reductions in state funding of mental health care.

The Kaiser Commission report urges the Medicaid program to make an organizational commitment to improving financial management and to addressing inadequacies in fiscal oversight. Although Medicaid is by far the largest source of federal grant funds to the states, dwarfing transportation, education, public assistance, and corrections, it lacks a chief financial officer (CFO) to oversee day-to-day financial operations and to act as an institutional force for accountability and fiscal discipline. The importance of the CFO function was recognized more than a decade ago with passage of the Chief Financial Officer's Act of 1990, which required designated federal departments to have a CFO and to establish deputy CFO positions. The Departments of Education, Transportation, Justice, Housing and Urban Development, and Homeland Security are required to have CFOs, the report points out, and although the combined 2003 expenditures of these five agencies were less than federal Medicaid spending in that year, no single individual is responsible for financial management of the Medicaid program.

In addition to naming a CFO for Medicaid, the Kaiser Commission recommends the creation of a financial oversight board to ensure that financial controls are developed and implemented. The importance of audit committees has been emphasized in recent years by the accounting failures of a number of large companies, the report notes. The Centers for Medicare and Medicaid Services (CMS), which oversees Medicaid, could model the oversight board on similar boards that it has put in place to manage Medicare contractors. The report also recommends that CMS enhance accountability by appointing departmental and non-Medicaid agency staff as board members and by making the board's proceedings public.

As Medicaid expenditures have grown over the past decade, the resources devoted to financial management of the program have declined, which reflects the low priority placed on providing proactive oversight in areas of federal concern, according to the report. In 1992, a total of 95 regional analysts were dedicated to financial management of Medicaid; in 2002, the number was 65. Between 1994 and 2001, CMS regional offices were not required to perform any focused financial reviews. The report recommends the creation of a guaranteed and mandated funding stream—"the Medicaid integrity fund"—that CMS can model on a similar integrity program that it administers for Medicare and that has recovered billions of dollars for the Medicare trust fund.

The Kaiser report also calls on Medicaid to develop and implement a comprehensive financial management plan, modeled on the plan created for the Medicare program in 1999, that identifies problems and describes steps to address weaknesses in the program's internal controls, oversight, and financial systems.

In addition to these changes to ensure organizational commitment to financial integrity, the 30-page report makes recommendations for program improvements in four areas: standards and requirements, risk management, information and monitoring, and enforcement. In each area, the report describes current conditions that have led to calls for reform along with specific steps for responding to problems. For example, in the area of standards and requirements, the report calls for an "anti-churning" rule to prevent a state from using accounting transactions to make it appear that the state has paid enhanced funds to a provider, such as a municipally owned hospital (to trigger a federal match), when in actuality most or all of the money is transferred back to the state. To discourage this practice the report suggests that CMS require that the facilities receiving enhanced funds retain those funds to support the provision of services to Medicaid beneficiaries.

In the area of enforcement, the report acknowledges that the ability of the federal government to institute effective enforcement strategies against states is limited. Whistleblower provisions in federal legislation, which have been instrumental in fighting fraud in federal defense and health programs, do not apply to states, the report notes. Intermediate sanctions, such as civil money penalties, are not available. States cannot be excluded from the Medicaid program. The report recommends holding key "actors" in the states—governors, state Medicaid directors, and CMS administrators—personally accountable by requiring them to certify financial data and decisions. The certification of accounts by chief executive officers was one of the first reforms implemented in the wake of the Enron and WorldCom accounting scandals, the report notes.

Medicaid's Federal-State Partnership: Alternatives for Improving Financial Integrity is available on the Web site of the Kaiser Commission on Medicaid and the Uninsured at www.kff.org/medicaid. An accompanying 40-page paper—Financing the Medicaid Program: The Many Roles of Federal and State Matching Funds—provides an in-depth description of Medicaid's existing financial structure, along with a glossary of frequently used terms.

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