February 14,2008

Baucus Applauds Effort To Protect Medicaid Beneficiaries

Finance Chairman has protested rules that restrict desperately needed case management services

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) today applauded Senate efforts to stop proposed restrictions on the Targeted Case Management (TCM) services available to Medicaid beneficiaries. By voice vote this evening, the Senate approved a measure proposed by Senators Barbara Mikulski (D-Md.), Norm Coleman (R-Minn.), and Amy Klobuchar (D-Minn.) that would place a moratorium through April 1, 2009 on a rule that would prevent at-risk beneficiaries, such as children in foster care, from accessing necessary medical, social, educational, and other case management services by limiting the number of, and preventing access to, the most qualified health care providers. The amendment was added to the Senate’s version of the Indian Health Care Improvement Act, currently under consideration.

“The rules that CMS has proposed would keep many Medicaid beneficiaries – including members of our tribal communities - from getting the kind of specialized care they need. Along with the Majority Leader, I wrote the Secretary of Health and Human Services last week to express my strong concern about efforts to weaken targeted case management. This rule should not go into effect as proposed,” Baucus said.

Following is the text of Baucus’s letter to Secretary Michael O. Leavitt, sent last week along with
Senator Harry Reid (D-Nev.)

February 4, 2008

The Honorable Michael O. Leavitt
Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201

Dear Secretary Leavitt:

We are writing to express our concern regarding the interim final rule on the Medicaid state
Targeted Case Management (TCM) option (CMS-2237-IFC) published by the Centers for
Medicare and Medicaid Services (CMS) on December 4, 2007. Specifically, we believe that the
policy issued by CMS to implement the statutory reforms to TCM included in Section 6052 of the
Deficit Reduction Act of 2005 (DRA) extends far beyond the scope of Congress’ intent and will
result in needless harm to beneficiaries with disabilities or chronic health conditions.

TCM services are a critical component of the Medicaid benefit offered to carefully-selected
members of the most vulnerable populations in our communities. This new rule will likely
adversely impact the provision of these services. As such, we respectfully request that you
rescind or delay the interim final rule and replace it with a policy that more accurately reflects the
congressional intent of Section 6052.

Section 6052 was enacted to clarify what services qualify as appropriate TCM eligible for
Medicaid payment. Section 1915(g) of the Social Security Act allows states to provide certain
case management services to select individuals as a benefit under the Medicaid program. These
services, which are aimed at assisting eligible individuals to “gain access to needed medical
social, educational and other services,” are targeted at specific types of Medicaid-eligible
individuals, such as children in foster care programs. While states are required to provide case
planning to all children in foster care programs, there was some ambiguity as to which of these
services were appropriately classified as TCM services under the Medicaid program. In order to
address this confusion, Congress enacted a precise definition of TCM in the DRA.

As Senator Charles E. Grassley explained in his April 5, 2006, letter to you describing the intent
of Section 6052, it is clear that certain TCM services provided to beneficiaries should be
considered allowable Medicaid expenses. The DRA specifically articulates these Medicaidre imbursable activities as (1) assessment of service needs; (2) development of a specific care plan; and (3) referral to help an individual obtain needed services and monitoring. We believe that the language included in the interim final rule restricts services that may be appropriately classified within these three categories of services and, therefore, contravenes the intent of Section 6052.

We are concerned that the interim final rule imposes a number of restrictions on TCM services
that were not intended in the language of the DRA and limits states’ flexibility to provide and pay
for case management services in the way that would work best for beneficiaries. For instance,
the rule prohibits bundled or capitated methodologies related to the state TCM option and
requires that TCM services be documented in 15 minute increments. Because recipients of TCM
tend to have substantial and complex needs, many states opt for bundled rates to coordinate
services in a manner that is more efficient and clinically effective. This rule would significantly
impact states’ ability to continue to utilize these preferred payment arrangements. CMS provided
little justification for this requirement, and it is unclear what correlation such a restriction has to
the language of Section 6052. Rather, this appears to be an administrative preference that will
likely adversely impact TCM services and deny the benefits of such services to Medicaid

Another example is the rule’s requirement that case management services be furnished by a single Medicaid case management provider. Given that many of the people eligible for TCM under Medicaid typically display a wide range of health, social service and rehabilitation needs, it may not be possible for one single provider to address all of a beneficiary’s issues. Furthermore, such an arrangement may not allow the beneficiary to get assistance from the provider most qualified to address a particular need and, in many cases, would cause an upheaval of the case management models states currently utilize. The language enacted in Section 6052 did not intend such a requirement, and it is questionable what net benefit a single provider restriction would offer to the Medicaid program or its beneficiaries.

Congress has long recognized the important role case management services provide for select
Medicaid beneficiaries, a fact acknowledged by the decision to clarify, rather than eliminate,
TCM services in the DRA. We believe there are numerous provisions in the interim final rule
that do not reflect the spirit of the DRA provisions and, more importantly, could adversely impact
the availability of high-quality case management services under the Medicaid program. We
strongly encourage you to rescind or delay CMS-2237-IFC and consider a policy that accurately
implements the reforms Congress articulated in the DRA.

Thank you for your attention to this important issue, and we look forward to working with you to
implement a more appropriate TCM policy.


Harry Reid
Majority Leader

Max Baucus
Chairman, Committee on Finance

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