Medicare Compliance & Reimbursement

The Bush administration continues to believe that people dually eligible for Medicare and Medicaid should continue receiving prescription-drug coverage through Medicaid, if a Medicare drug benefit is enacted, Centers for Medicare & Medicaid Services Administrator Tom Scully said at a House hearing Oct. 8.

The administration believes that each new dollar set aside for a Medicare drug benefit should "cover a new senior" who doesn't get assistance with drug purchases today, said Scully at the hearing on funding troubles in the Medicaid program.

But Scully's statement begs the question: The pharmaceutical industry, all 50 governors, most members of Congress, and most advocates for the elderly and low-income want Medicare to provide primary prescription-drug coverage for the dual eligibles. Moreover, the extra cost of doing this could be reduced or eliminated by adjusting the "clawback," a mechanism already contained in the House Medicare bill that reclaims for the federal treasury some of the state Medicaid savings from Medicare coverage of the duals.

So why would the administration continue to insist on Medicaid coverage for the duals, at the risk of alienating all of the aforementioned groups?

One possible explanation, said Robert Greenstein, president of the left-leaning Center on Budget and Policy Priorities, in an Oct. 8 teleconference: To get state support for the administration's Medicaid overhaul plan that would offer state flexibility while capping federal funds, "the existing Medicaid program has to look so unattractive to governors that they will accept a block grant" in its stead. Ensuring that the full cost of expensive dual-eligible beneficiaries remains a Medicaid burden may be a means to that end, Greenstein opined.