Federal Government Issues Guidance to States on Medicaid Cost Containment Options

On February 3, 2011, the federal Department of Health and Human Services (HHS) responded to states seeking guidance on ways to control Medicaid spending. A letter from HHS Secretary Kathleen Sebelius reminded state governors that states have substantial flexibility to design Medicaid benefits, service delivery systems, and payment strategies—all without a Medicaid waiver. The recommendations forwarded by Secretary Sebelius fell into six categories, the first two of which are already existing areas of flexibility: Increase beneficiary cost sharing Modify Medicaid benefits plans, with examination of mandatory versus optional benefits and use of the 'benchmark plan' concept Adopt specialized care . . .