Medicaid Programs 'Severely Challenged,' Report Says

State Medicaid programs, which provide health care to some of the nation's poor, vary wildly in their eligibility criteria, the scope and quality of their care, and the amount they reimburse physicians providing it, according to an independent assessment published last week.

Overall, the programs are "severely challenged," with the best scoring the equivalent of a low D and the worst way below an F.

"This evaluation demonstrates a bleak picture for millions of people in many states," wrote the authors of the 143-page evaluation, produced by Public Citizen's Health Research Group.

The top five programs, in order of rank, were in Massachusetts, Nebraska, Vermont, Alaska and Wisconsin. The bottom five, with lowest-ranked last, were in South Dakota, Oklahoma, Texas, Idaho and Mississippi. Maryland ranked 15, the District 27, and Virginia 37.

Medicaid is paid for by both state and federal tax revenue. The federal government specifies the minimum services that must be offered, which states can broaden but not narrow.

For example, states must cover children on welfare and poor pregnant women. All states and the District also choose to cover uninsured poor women needing care for breast or cervical cancer, even though this is not a requirement. Thirteen states and the District also cover uninsured people with tuberculosis. (There are many other eligible groups, as well.) States may also apply for waivers to try experimental strategies for delivering services.

The program covers 55 million Americans and accounts for about 20 percent of U.S. health-care spending. It is the largest source of federal grants to states.

The anecdotal differences between states can be dramatic.

For example, a pregnant woman in a family of three must have a household income of less than $22,128 to qualify for Medicaid in Wyoming. In Minnesota, she could qualify with an income of $45,650, according to the report.

"We know that the differences between programs reflect both differences in priorities and resources, but nobody knows the extent of them. The programs haven't been subjected to a uniform scoring scheme," said Annette B. Ramirez de Arellano, a health-policy expert who headed the project.

The authors used published data to measure Medicaid performance in 55 areas. In calculating a final score out of a possible 1,000 points, they weighted issues of eligibility and reimbursement more heavily than breadth of services and quality of care.

The highest- and lowest-ranked states differed in their scores by a factor of two -- 646 for Massachusetts vs. 318 for Mississippi. There was even more variation in the components that went into the total scores.

For example, the top-ranked state for the breadth of its eligibility criteria (Rhode Island) scored 3.3 times higher than the lowest-ranked state (Indiana) in that category. In the reimbursement component of the score, there was a 20-fold difference between Alaska, which had the most generous reimbursement, and New Jersey, which had the least.

"Most of the states are failing in one or more areas, and some of them are failing in most areas," Ramirez de Arellano said.

Public Citizen's Health Research Group did a similar analysis and ranking 20 years ago. Four states in the top 10 now were in the top 10 then. Five states in the bottom 10 now were in the bottom 10 then.

The authors admitted they were operating off incomplete information on many subjects, which made their task difficult.

For example, the quality assessment was largely based on nursing home performance and the success of childhood immunizations, although Medicaid pays for the entire range of medical care. The reimbursement comparisons were based only on Medicaid programs using a fee-for-service payment scheme. However, 60 percent of Medicaid patients are in managed-care schemes in which physicians or clinics get a flat fee to provide all medical services to a client.

The report got mixed reactions.

Dennis Smith, an official at the federal Centers for Medicare and Medicaid Services, said he thinks it "misses the fundamental nature of Medicaid and the 40-year history that states have authority to administer the program within a federal framework."

Alan Weil, executive director of the National Academy for State Health Policy, called the report "mildly helpful" but added that for unavoidable reasons, "it is a little too much of a rearview-mirror picture."

He said the report fails to capture Medicaid's cutting edge -- experimental coverage programs, managed-care reimbursement schemes and home-based care -- because there are no data collected in all states that can serve as grounds for comparing those components.

Ron Pollack, who heads the advocacy group Families USA, said the harsh judgment by Public Citizen to some degree masks the good Medicaid does.

"The overwhelming majority of people who are on Medicaid today would join the ranks of the uninsured if that program didn't exist. It truly has become the lifeline," Pollack said. "In the absence of Medicaid, a very troublesome situation would be truly catastrophic."