Indiana Medicaid chief: Feds leave states in dark

July 15, 2010

Indiana's Medicaid chief told lawmakers Thursday that the federal government has largely left states in the dark on implementing the federal health care overhaul because it hasn't yet provided needed guidelines.

Medicaid Director Pat Casanova told the Health Finance Commission that key parts of the overhaul take effect in 2014 — about 3-1/2 years away — but states will need several years to pass their own rules and implement the overhaul.

"While it sounds like it's a long ways off, it's around the corner," Casanova said. She noted some state rulemaking on the 2004 federal Deficit Reduction Act is only occurring now.

Her comments underscored the challenges facing Indiana and other states as they grapple with putting the health care changes into place in a relatively short span of time while they also contend with the economic downtown and strained state budgets. Parts of the health care overhaul involve changes to Medicaid, a federal health care program that states administer.

Complicating matters is the size of Indiana's relatively small Medicaid staff of fewer than 90 people, which also is facing deadlines for implementing federal medical privacy rules and health information technology upgrades, Casanova said.

"This is like a tsunami coming at us," she said.

Casanova said her office has not sought some federal grants to pay for implementing the health care overhaul because it lacks necessary staff or matching funds.

But a spokesman for the Family and Social Services Administration, Marcus Barlow, said Casanova misspoke and that the state so far has passed up applying for only one grant while the Division of Aging and the Department of Insurance have applied for four others, seeking a total of $2.6 million. The grants haven't been awarded yet.

However, Casanova's comments that that state was passing up federal funds dismayed Rep. Ed DeLaney, D-Indianapolis, an alternate member of the State Budget Committee.

"I'm just stunned," DeLaney said afterward. "I don't like it that we're not apply for grants because we don't have staff."

DeLaney also criticized the administration of Republican Gov. Mitch Daniels for lagging behind other states in putting the health care overhaul into place and for leaving lawmakers "out of that process." He noted other governors have taken steps to implement provisions of the overhaul while Indiana waits.

Daniels has criticized the health care overhaul and Indiana is among a group of states suing to overturn it. A private actuary on contract to the administration has estimated the overhaul will cost state government at least $2.9 billion over the next decade. Much of the money will go toward Medicaid coverage for hundreds of thousands of newly eligible Indiana residents.

Daniels policy aide Lawren Mills said the only major decision by the administration so far was to not expand its high-risk insurance pool for people with pre-existing medical conditions, instead allowing the federal government to establish such coverage in the state.

Mills told lawmakers the administration was working on putting together a package of proposed legislation for implementing the overhaul.

Senate Health Committee Chairwoman Pat Miller, R-Indianapolis, expressed frustration over federal Medicaid officials offering little guidance on implementing the overhaul. President Barack Obama last week bypassed the Senate and appointed Dr. Donald Berwick to run Medicare and Medicaid.

"It's very complicated for us right now," Miller said.


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