News & Notes

Growth in Medicaid Spending in 2006 Lowest in a Decade

State revenues have increased faster than Medicaid spending for the first time since 1998, according to a new 50-state survey by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured. In fiscal year (FY) 2006 state revenues grew at a rate of 3.7 percent, compared with a 2.8 percent growth rate in Medicaid spending. The Medicaid growth rate was the lowest in a decade. From 2001 to 2004 state revenues plummeted and Medicaid spending and enrollment growth peaked. The biggest gap occurred in FY 2002, when Medicaid spending grew by 12.4 percent and state revenues fell by 7.8 percent.

In addition to higher tax revenues for states, the improved economy in FY 2006 meant that fewer people became eligible for the Medicaid program, a significant factor in the spending slowdown. The 1.6 percent enrollment growth rate for FY 2006 is the lowest since 1999 and about half the 3 percent rate predicted by Medicaid officials for 2006. Another factor contributing to reduced spending was the transition of more than six million low-income seniors and individuals with disabilities from Medicaid drug coverage to newly created Medicare Part D plans.

The survey found that although states continue to focus on cost control, rebounding revenues allowed for more program investments than in previous years. Throughout the economic downturn, freezing or reducing provider payment rates was a favored cost-containment strategy. Many states continued to freeze rates in 2006, but more states implemented rate increases—or plan to implement them in FY 2007. Also, the number of states moving to restore benefits has increased over previous years. In FY 2006 several states implemented policies that significantly restricted Medicaid enrollment. However, in FY 2007 only five states have plans to restrict eligibility, whereas 26 states have plans to restore cuts from previous years, expand to new populations, or make positive changes to Medicaid application and enrollment procedures.

In addition to the Medicare Modernization Act, which created the Part D plans, a second piece of major legislation with implications for Medicaid was the Deficit Reduction Act (DRA), signed by the President in February 2006. The DRA mandates documentation of citizenship for enrollment in Medicaid and makes it easier for states to offer alternative Medicaid benefit packages and to impose cost sharing. More than half of the Medicaid directors surveyed expected documentation to negatively affect enrollment. All but three states (three of the four states that already had documentation requirements in place) indicated that the new requirements would increase state administrative costs.

Few states have plans to use the new flexibility allowed under the DRA to change benefits or impose cost sharing in FY 2007, but some are considering these options. Three states—Kentucky, West Virginia, and Idaho—have approved plans to change benefits. Kentucky and Rhode Island also plan to make copayments enforceable next year, using another DRA option that allows providers and pharmacists to deny services if beneficiaries cannot afford copayments.

In FY 2006 more states were focused on changes that are likely to result in longer-term benefits rather than immediate cost savings. States continued to develop and expand their disease management initiatives, with a focus on high-cost cases (4 percent of Medicaid beneficiaries account for about half of all Medicaid spending). Also, by FY 2007 more than two-thirds of all states will have quality-of-care initiatives in place, most classified as "pay for performance." Seventeen states adopted policies in FY 2006 to improve program integrity through the use of new technologies, data mining, additional staff, and better procedures to improve coordination across agencies—and 21 states will introduce such policies in FY 2007.

The report notes that although the direction of Medicaid in many states may be determined by the outcome of state gubernatorial elections, ongoing fiscal pressures, as well as the changing balance in the federal-state partnership for Medicaid, will continue to be major factors affecting the program in the future. Despite dramatic slowing of both Medicaid spending and enrollment growth, pressure to control Medicaid spending remains strong. States may be facing additional strains as formula-driven changes continue to push down federal Medicaid match rates and as the Center for Medicare and Medicaid Services continues to scrutinize state financing practices regarding expenditures that qualify for federal matching. However, the report concludes that even with these challenges, a rebounding economy has made it possible to move beyond measures to produce immediate cost savings and to focus more on improving the quality and integrity of the program.

The 90-page report, Low Medicaid Spending Growth Amid Rebounding State Revenues, is available on the Kaiser Commission Web site at www.kff.org/medicaid.

Global Study Reveals Extent of Violence Against Children

"No violence against children is justifiable; all violence against children is preventable. Yet the in-depth study… confirms that such violence exists in every country of the world, cutting across culture, class, education, income, and ethnic origin. In every region, in contradiction to human rights obligations and children's developmental needs, violence against children is socially approved, and is frequently legal and State-authorized."

So begins the report of a three-year study prepared by investigators from the United Nations (UN) and the World Health Organization (WHO) that documents a "grave and urgent problem." WHO estimates that in 2002 some 53,000 children died as a result of homicide. In that year 150 million girls and 73 million boys experienced forced sexual intercourse or other forms of sexual violence. In 2000 nearly six million children were in forced or bonded labor—1.8 million in prostitution and pornography. Between 100 million and 140 million girls and women in the world have undergone some form of genital mutilation—three million each year in sub-Saharan Africa, Egypt, and the Sudan. Most violent acts experienced by children are perpetrated by people who are part of their lives.

The report examines five settings where violence toward children occurs—the home, schools, care and justice systems, work settings, and the community—and offers recommendations for preventing it. Study investigators defined children as those younger than 18 years. The definition of violence is from the U.N. Convention on the Rights of the Child: "all forms of physical or mental violence, injury and abuse, neglect or negligent treatment, maltreatment or exploitation, including sexual abuse." The definition also includes the intentional use of physical force or power, threatened or actual, that either results in or has a high likelihood of resulting in harm to the child's health, survival, development, or dignity.

In 2005 investigators convened nine regional consultations worldwide. Each brought together an average of 350 participants, including government officials and representatives of nongovernmental organizations and other sectors, such as the media and faith-based organizations. Children participated in each regional consultation, as well as in preliminary meetings at which they provided inputs and recommendations. Data came from field visits to 17 countries and detailed questionnaires submitted by 131 countries.

Some findings indicate that progress has been achieved. A total of 192 countries—every U.N. member nation except Somalia and the United States—have ratified the Convention on the Rights of the Child, and there has been broad ratification of two optional protocols to the convention barring the sale of children, child prostitution and pornography, and the involvement of children in armed conflict. In many countries legislation based on the convention and protocols has provided new tools for the elimination of the worst forms of child labor, trafficking in children, and genital mutilation. Several countries have created structures, such as juvenile and family courts, to address child protection concerns. Programs have been established in many countries to provide assistance and services to street children, support parents, and advocate for children from marginalized groups.

Twelve overarching policy and legislative recommendations address areas such as national strategies and systems, data collection, and accountability. Specific steps are detailed for eliminating violence against children in the five settings where it occurs. The report calls for the appointment of a special U.N. representative on violence against children who will act as a high-profile global advocate to promote prevention of all forms of violence against children and to encourage international and regional cooperation.

The 34-page report is available at www.unviolencestudy.org. A child-friendly version of the report and videos of statements from five adolescents who are advocating for children's rights in their home countries are also available on the Web site.

News Briefs

Resources on Medicaid policy changes: The Kaiser Foundation's Commission on Medicaid and the Uninsured has collected resources related to the policy changes in the Medicaid program mandated by the Deficit Reduction Act of 2005 (DRA). A PowerPoint tutorial by Robin Rudowitz, M.P.A., principal policy analyst for the foundation, addresses implications of the DRA and section 1115 waivers. Among the 15 resource documents is an issue brief that describes the impact on enrollment, access to care, and providers in several states that have introduced or increased existing out-of-pocket costs for beneficiaries over the past few years. Five additional reports describe long-term care issues that the DRA was designed to address. Long-term care accounts for 36 percent of Medicaid spending. Two fact sheets list key program changes in two of the first states to use new options provided by the DRA—Kentucky and West Virginia. Another report addresses issues and opportunities in the new Medicaid Integrity Program, which was introduced by the DRA to increase the government's capacity to prevent, detect, and address fraud and abuse. The resources are available on the Kaiser Foundation's Web site at www.kff.org.

SAMHSA guide for primary care providers on co-occurring disorders: The Substance Abuse and Mental Health Services Administration (SAMHSA) has released a guide to help primary care physicians identify patients presenting with medical problems who may have co-occurring mental health and substance disorders. The six-page guide, which has 32 reference citations and a resource list of publications and Web sites, summarizes "red flag" symptoms and warning signs and provides brief screening questions for alcohol and drug disorders and for depression. A framework for classifying patients into four groups on the basis of severity is designed to guide decisions about referral and treatment. Identifying and Helping Patients With Co-occurring Substance Use and Mental Disorders: A Guide for Primary Care Providers is available on the SAMHSA Web site at www.kap.samhsa.gov.