While the nation's governors seek to wrest greater control of Medicaid spending decisions from the federal government, at least one governor has proposed giving counties a hand in determining how those dollars should be spent.
New York Gov. George Pataki has proposed making block grants to counties for mental health, alcoholism and substance-abuse treatment, home care and home relief. The proposals are contained in the Republican governor's budget for the fiscal year beginning April 1, 1996.
A spokeswoman for the American Public Welfare Association in Washington said New York is believed to be the first state to propose funding Medicaid programs through block grants to counties. That's not surprising, given the high portion of Medicaid costs paid by counties in New York state, she said.
In New York, the federal government kicks in about 50% of the state's Medicaid costs, and state and local governments split the difference. Counties will spend an estimated $3.6 billion in fiscal 1996, or about 14.5% of the $24.8 billion in total annual Medicaid expenditures.
For fiscal 1997, the state anticipates receiving a 60% federal match, but that deal remains in limbo. Under the budget blueprint, which trims total Medicaid spending to $23.7 billion, counties' share would drop to $3.3 billion, or 13.9% of the total.
Pataki's budget touts block grants as a way to relieve "burdensome regulations" and give county governments greater flexibility. For example, a $1.1 billion annual block grant to counties would replace the state's "fragmented" system of funding community mental health services, consisting of 70 separate funding streams.
But healthcare providers see it as an administrative nightmare. It would create "chaos for families as well as providers," said Jeannie Cross, a spokeswoman for the Healthcare Association of New York State.
Each of the state's 57 counties and New York City would be given varying levels of authority to manage money in the four different service areas proposed by the governor, Cross said.
For instance, the home-care block grant preserves current eligibility standards but gives counties the right to decide which services are "necessary and appropriate." By contrast, the alcoholism and substance abuse block grant lets counties determine who may be eligible for services as well as the type and duration of services provided.
St. Mary's Hospital, a 143-bed acute-care facility in Amsterdam, N.Y., which provided mental health services in 22 counties last year, "would have to know 22 sets of rules for mental health alone," Cross said. That doesn't even include the new rules to be determined in each county for the other three Medicaid services in Pataki's proposal.
Furthermore, in testimony before state lawmakers last month, HANYS President Daniel E. Sisto charged that Medicaid is being used to balance the state budget. Before sending block grants to counties for home care, for example, the state would cut funding for those services by $350 million. According to Sisto, 28 counties operate the sole home health agencies in their counties. So they would bear the brunt of the state spending cuts.
The New York State Association of Counties failed to return repeated phone calls seeking comment on the proposal. But as Sisto pointed out, some county officials have expressed concerns about such funding reductions and the speed with which the governor intends to move forward with his plan. Under the budget, several of the block grants would take effect Aug. 1.
Few other states have moved as aggressively on this issue as New York.
Last October, Florida Rep. Ben Graber, a Democrat who chairs the state health committee, released a one-page "conceptual document" to generate discussion on a proposal for Medicaid block grants to Florida's 67 counties.
"We had a lot of concerns," said Carol Bracy, governmental liaison for the Florida Association of Counties. To determine whether the idea makes sense, the association would need more details, she said. In fiscal 1994, counties' share of Florida's $4.7 billion Medicaid program came to 2.4%
The National Association of Counties, which has focused on federal-level activities, opposes federal Medicaid block grants to states because of the potential for states to shift some of the financial burden to counties, said Tom Joseph, deputy legislative director of the Washington-based association. There also is a concern that if a federal guarantee of Medicaid eligibility is lost, the number of medically indigent would rise.