Despite Gov. Jan Brewer’s insistence to U.S. Health and Human Services Secretary Kathleen Sebelius that Arizona had followed every single one of her suggestions for cutting Medicaid costs, AHCCCS still provides several optional services that could be eliminated without running afoul of federal law.
In response to a letter Sebelius sent to governors on Feb. 3, Brewer wrote to the secretary that Arizona is a national leader in Medicaid innovation and “has pursued every efficiency measure you’ve suggested.”
One of the cost-cutting measures Sebelius proposed was for states to eliminate or scale down optional services, and her letter included a list of services that states could cut. Among the optional services that Arizona still provides are prosthetics; screenings such as mammograms; physical therapy; and clinic services. AHCCCS Director Tom Betlach said those services have limits, such as a 15-visit-per-year cap on physical therapy and a cost limit on prosthetics.
The state also still provides two major benefits that are listed as optional by the Department of Health and Human Services: prescription drugs and home- and community-based care, which is designed to keep chronically ill patients out of nursing homes and other institutions.
Betlach said eliminating those services would actually cost AHCCCS more. Home- and community-based care, for example, costs about one-third as much as putting a patient in a nursing home, he said. Scrapping prescription drugs, which all 50 states still provide, would lead to more hospital stays.
“Our actuaries tell us it would add costs almost immediately, because you’re pulling a drug benefit away from somebody that’s using that to get out of the hospital,” Betlach said.
In her list of suggestions, Sebelius indicated that not all optional services should truly be considered optional. Her letter suggests that states can “change optional benefits or limit their amount, duration or scope.”
Brewer spokesman Matthew Benson said Sebelius made a number of broad proposals for cutting Medicaid, and that Arizona had made cuts in every one of those areas, though the state didn’t cut every benefit that it could cut.
“What we said is that we have implemented or pursued every one of those general suggestions. Within each of those suggestions there are a number of very specific proposals,” Benson said. “We’re not suggesting that every single one of those has been accomplished. What we’re saying is that we have pursued or implemented the efficiencies in the broad categories that Secretary Sebelius suggested.”