Medicaid directors propose savings for supercommittee

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He said his organization hasn’t raised the idea directly to the 12 members of the supercommittee but has generated healthy interest from congressional staff. Medicaid directors are pushing the shared-savings proposal as an alternative to policies that could shift more costs to the states.

State officials, including many Democrats, are especially troubled by President Obama’s proposal for cutting federal Medicaid spending. He has proposed combining various federal funding percentages into a single “blended” rate of federal support. The change would save the federal government an estimated $100 billion, but states say it would simply pass the costs to them.

“That doesn’t solve any problem any problem other than just washing the federal government’s hands of responsibility,” Salo said.

Shared savings for dual-eligibles could hit a roadblock, though, from the Congressional Budget Office (CBO). States can take some steps now to better coordinate the two programs, and the savings will mostly go to the federal government. 

So in from CBO's perspective, sharing the savings with states might look like a change that would cost the federal government money. But Salo said both states and the federal government would benefit because shared savings would produce such a powerful incentive for cash-strapped Medicaid programs to improve.