HHS to share some Medicaid savings with states

The Department of Health and Human Services (HHS) announced new efforts Friday to help states cut Medicaid spending.

The initiatives are targeted at better coordinating care for people who are eligible for both Medicare and Medicaid. They represent some of the sickest — and most expensive — patients in the country.

HHS said it will begin sharing with states any savings from more efficient care of dual-eligibles. The department will test two models for shared savings.

"States that want to take on Medicaid costs now have an incredible toolbox,” HHS Secretary Kathleen Sebelius said on a conference call with reporters.

Washington Gov. Christine Gregoire (D) praised the announcement, saying Sebelius has moved with "lightning speed" to address governors' concerns over Medicaid spending.

HHS also launched an initiative to reduce hospital admissions among patients in nursing homes. Medicare could save as much as $2.6 billion per year by eliminating unnecessary hospital visits by dual-eligibles in nursing homes, HHS said.