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More Information Bazelon Center comments (PDF) (1/11/08) Bazelon Center Summary of the rules (HTML or easy-to-print PDF) House Oversight Committee Report in State-by-State Impact (3/3/08) CMS' targeted case management rules (Text or PDF)

Information Alert

Medicaid Case Management Rules Cut Access to Critical Services

Moratorium Proposed on Rules Stifling Service Delivery

March 6, 2008--On December 4, 2007, the Centers for Medicare and Medicaid Services (CMS) published interim final regulations to govern case management services under Medicaid (Federal Register, December 4, 2007, Vol. 72, No. 232, 68077-68093; 42 CFR Parts 431, 440 and 441). Under Medicaid, case management services are services that will assist individuals in gaining access to needed medical, social, educational or other services.

Responding to advocates' outcries, lawmakers in both House and Senate introduced bills to place a moratorium on this and other CMS rules until April 1, 2009. (See the February 8 Mental Health Policy Reporter.) The Senate passed its version as an amendment to the Indian Health Bill (S. 1200), while the House version (H.R. 5173) remains in the Energy and Commerce Commitee. In a February 29 letter, a group of infuential Senators urged the Secretary of Health and Human Services to put a hold on the case management regulation, which was scheduled to take effect on March 3, 2008.

The Bazelon Center and many other advocates filed comments prior to the February 4, 2008 deadline, explaining serious problems with the rules. On March 3, Rep. Henry Waxman, chair of the House Committee on Oversight and Government, released a report on the likely state-by-state impact of this and other new Medicaid regulations issued by CMS.

New Rules Implement Deficit Reduction Act

These regulations were promulgated to implement part of the Deficit Reduction Act of 2005 (DRA, Public Law, 109-171—see the March 2006 Mental Health Policy Reporter) and are CMS’ final interpretation of Section 6052, Reforms of Case Management and Targeted Case Management. The DRA made substantial changes to many vital federal programs, including Medicaid, Medicare and TANF; with an overall focus on saving the federal government money.

Section 6052 of the DRA outlined specific provisions on what may be included in case management. It also clarified that Medicaid will not pay for certain services that have traditionally been furnished by child welfare system case managers. Additionally, it appeared to restate Medicaid’s prohibition on payment for services for which another party is liable (third-party liability) to pay for the service. However, it also stated this third-party payment exclusion applied to potential reimbursement under a “medical, social, educational or other program.” There was no further definition of what this exclusion encompasses. The March 2006 Reporter offers an analysis of the DRA and section 6052).

The Congressional Budget Office estimated that the case management changes in the DRA would save $760 million over five years. The estimate of savings resulting from this interim final regulation is far higher — $1.28 billion over five years.

See a summary of the regulations and their impact (HTML or PDF).

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