Price, Verma tell governors to prepare to run Medicaid programs, push waivers

States must administer their own Medicaid programs in an effort to meet the needs of vulnerable populations in the most cost-effective manner, said new Centers for Medicare and Medicaid Services Administrator Seema Verma and Health and Human Services Secretary Tom Price in their first joint letter to the nation's governors.

State accountability includes keeping program waivers budget neutral, they said in the letter sent Tuesday. State demonstration projects remain an important part of the program and will be reviewed case by case.

CMS will work with states in their initiatives to design their own programs in speeding up the waiver and demonstration approval and extension process.

[Also: Seema Verma confirmed as Centers for Medicare and Medicaid Services administrator]

"The best way to improve the long-term health of low-income Americans is to empower them with skills and employment," they wrote.

CMS will continue to use 1115 demonstration waiver authority to approve innovations in training and employment, they said.

"States may also consider creating greater alignment between Medicaid's design and benefit structure with common features of commercial health insurance to help working age, non-pregnant, non-disabled adults prepare for private coverage," they said.

This could include alternative benefit design and cost-sharing models for consumer-directed health care through health savings account-like features or facilitating enrollment in affordable employer-sponsored health insurance options with premium or contribution requirements.

[Also: Hospital groups come out against Republican healthcare bill, blast Medicaid plans]

Initiatives should break down barriers to families being on the same plan, they said. There should be expanded options to design emergency room copayments to encourage the use of non-emergency care.

Eligibility procedures should not include incentives for continuous enrollment, they said.

States will be given more time to comply with the Home and Community Based Services rule from 2014.

The agency heads said the federal government will work with states to combat the opioid epidemic., and managed care capitation payments are now allowed for individuals with stays of 15 days or less a month in mental institutions.

Verma, who was sworn in as CMS administrator on Tuesday, implemented a similar Medicaid waiver program in Indiana.

"The expansion of Medicaid in the Affordable Care Act to non-disabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program," they said. "Moreover, by providing a much higher reimbursement rate for the expansion population, the ACA provided states with an incentive to deprioritize the most vulnerable populations."

The rate also increased state and federal spending, they said.

Twitter: @SusanJMorse