​Attempts to cut Medicaid now would be akin to cutting the Federal Emergency Management Agency during a disastrous storm, said Tim Westmoreland, a Georgetown University law professor and former director of Medicaid for the Centers for Medicare & Medicaid Services (CMS), speaking at a Hill briefing on Nov. 10.

“Cutting Medicaid in the middle of a recession is anti-stimulus,” Westmoreland said, adding that the program for people who are poor and those with disabilities acts as a stimulus for state and local economies. “It’s exactly the wrong plan at exactly the wrong time,” he said.

With less than two weeks to the congressional super committee’s deadline for submitting a proposal to find $1.5 trillion in deficit reductions to the president, the panel of Medicaid experts was unable to come up with firm suggestions.

In fact, there was general consensus that there were no low-hanging fruits among the actions the super committee is likely to consider in its efforts to squeeze savings from Medicaid.

“If anything,” Westmoreland said, “now is the time to increase FMAP [the federal matching rate for state Medicaid programs].”

In a report released last month, the Government Accountability Office (GAO) shared Westmoreland’s sentiment. “Congress could consider enacting an increased FMAP formula that targets variable state Medicaid needs and provides automatic, timely, and temporary assistance in response to national economic downturns,” the report said.

GAO offered a prototype formula for a temporary FMAP boost that is triggered after a threshold number of states show a sustained decline in their employment-to-population ratio—which compares the number of employed persons in a state to the working age population aged 16 and older.

Like many states seeking to save precious Medicaid dollars, Kansas recently introduced managed care to new populations, said panelist Andy Allison, Kansas Medicaid chief. In addition, the state has integrated dual-eligible beneficiaries through a shared-savings model.

“Spending reductions are the new normal in state Medicaid programs,” Allison said. He predicts that states will expand managed care dramatically and that states need more tools to address cost growth.
But DeAnn Friedholm, campaign director for the Consumers Union and a former Medicaid director for Texas, cautioned states’ enthusiasm for taking up managed care in an effort to cut Medicaid spending. She implemented managed care in Texas in the early 1990s with little success, she said. “It’s not a panacea,” she said.