With Medicaid enrollment exploding at the same time that states are facing unprecedented budget pressures, there is widespread recognition that expanded access to care is unsustainable without changes in how states deliver and pay for care. Reforming Medicaid payment policies offers a significant lever for states to contain costs and improve quality.
This brief outlines opportunities to redesign Medicaid payment policies for buying value — i.e., cost-effective, high-quality care. Authored by Deborah Bachrach, senior program consultant to CHCS and former New York State Medicaid Director, the brief addresses the challenges in undertaking Medicaid payment reform and details how federal and state roles might shift to facilitate quality-driven payment policies. It draws from an April 2010 CHCS small group consultation on Medicaid payment innovations that included state Medicaid leaders, federal officials, national payment reform experts, and congressional staff representatives.
Under federal health reform, Medicaid will cover the health care needs of more than one quarter of Americans by 2014. Through innovative value-based payment strategies, states can maximize this tremendous purchasing leverage to deliver the highest-quality, most cost-effective care possible.