February 05,2008

Reid, Baucus Fight To Keep Vital Services For Vulnerable Medicaid Beneficiaries

Majority Leader, Finance Chairman write HHS to protest rules that restrict desperately needed case management services

Washington, DC – Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance
Committee Chairman Max Baucus (D-Mont.) today urged the Department of Health and
Human Services (HHS) to revise a rule that would restrict the Targeted Case
Management (TCM) services available to Medicaid beneficiaries. In a letter to HHS
Secretary Mike Leavitt, the Senators expressed concern that the rule would prevent atrisk
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 senators said that this
rule would impose restrictions well beyond the intent of Congress in the Deficit
Reduction Act of 2005 (DRA).

“I am concerned that this initiative will restrict much needed services and create
unnecessary harm to Nevada’s most vulnerable,”
said Reid. “The last thing we
should do is cut important services for children who need them. I will continue
working to ensure that the state can continue to provide Nevadans with the services
they need.”

“Targeted Case Management services are essential because they ensure that
vulnerable folks with serious health challenges get the care they need,”
Baucus said.
“We can’t jeopardize services that get patients access to the care and specialists who
can help them the most. I’ll continue working to preserve these vital services, and
fighting to keep the most vulnerable members of our communities healthy and

Baucus hand-delivered the letter to Secretary Leavitt in a previously scheduled meeting
yesterday evening. The text of the Senators’ letter follows here.


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 carefullyselected
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 Medicaid-reimbursable 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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