News Release

HHS Approves Historic Medicaid Reform Plans in Kentucky, May 3, 2006

Medicaid enrollees in Kentucky will be first in the nation to have benefits customized to meet their needs based on age and health status -- changes allowed by the Deficit Reduction Act of 2005, HHS Secretary Mike Leavitt announced today. Prior to enactment of the DRA, states generally could not target benefits to groups of enrollees.

The DRA, signed into law February 8, granted states sweeping new options for designing their Medicaid programs -- the first major revision to the program in the past decade.

“Kentucky is leading the nation in crafting Medicaid benefit packages to the needs of its residents,” Secretary Leavitt said. “These changes make sense for enrollees and the very future of the Medicaid program.”

Under the plan approved today, Kentucky will offer differing benefit packages aimed at meeting the health care needs of different groups -- children, the elderly and people with disabilities who need institutional care, and the general Medicaid population.

Medicaid enrollees will be offered to the most appropriate benefit plan based on their needs. The Family Choices program will serve healthy children, while Comprehensive Choices and Optimum Choices will serve individuals with more complex health care needs. Global Choices, similar to the state’s previous Medicaid program, will serve other vulnerable populations.

“This bold innovation in Kentucky will be very valuable as we continue a national dialogue about how to make Medicaid more responsive to the specific needs of the people who count on it,” said Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services, the agency which oversees the Medicaid program. “Kentucky is the first state to completely redesign their program to give people access to affordable care that better reflects their own health needs and preferences, such as living in the home and community. These changes will make Medicaid more sustainable without restricting eligibility or access to services that low-income and disabled individuals need.”

With today’s approval, some Medicaid enrollees will also gain enhanced disease management benefits to help them live healthy and productive lives, despite having health conditions such as diabetes or Chronic Obstructive Pulmonary Disease (COPD). Special incentives, called “Get Healthy” Benefits, will be offered to further encourage healthy behaviors for these groups. These “Get Healthy” Benefits may include additional services such as, dental, vision, nutritional counseling and smoking cessation programs.

The plan approved today also reduces enrollee cost sharing from the current Medicaid program for the Comprehensive Choices and Optimum Choices benefit plans as follows:

• Medicaid enrollees will be required to pay a $10 co-pay per hospital inpatient admission.
• Co-payments will not be required for physician services, vision services, dental services, chiropractic services and hearing and audiometric services.

Disease management programs will be developed and phased in by geographic area to assist enrollees with specific chronic illnesses. Also, “Get Healthy” benefits will provide incentives to Medicaid enrollees practicing healthy behaviors. After one year of successful participation in a disease management program, enrollees may receive additional services.

Kentucky will also help Medicaid enrollees purchase health care coverage through their employers. If an enrollee chooses employer coverage instead of regular Medicaid, the state will help them pay the cost, but the individual will be subject to the benefit package, cost sharing and co-payment provisions of that particular employer program.

The new benefit design will be implemented this month in all areas of the state except for the Louisville area, where an existing Medicaid health care reform demonstration, Passport, will continue to operate.

###

Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last revised: January 20, 2009