Smith said at a July 17 health policy event in Washington that he could envision negotiations moving well beyond the scope of the number of beneficiaries his state's program would add. For instance, the state may want to renegotiate provisions of the last waiver proposed by Wisconsin and rejected by the CMS, including those related to beneficiary premiums and affordability tests. “We wanted more tools for managing the program,” he said.
Other governors' representatives told Modern Healthcare that they likewise would be open to negotiations with HHS over the specific elements of any expansion, although none said they had already requested the discussions.
HHS officials did not respond to questions about whether such state-by-state negotiations are under way or planned. Administration and congressional sources indicate the department and the CMS are scrambling to understand the complex legal consequences that the decision had on the various existing and planned elements of the Medicaid program. After the legal fallout is clarified, HHS officials will decide what approach to take.
At least some congressional supporters of the Medicaid expansion said they were not opposed to the administration undertaking state-specific negotiations in order to spur the expansion.
“I believe in federalism, so I do believe in working with the states,” Sen. Ben Cardin (D-Md.) said when interviewed about the possibility of state-specific negotiations. “Each state is different; we can deal with some of the specific problems of states. We should be amenable to try to make the system work.”
But other supporters of the law were concerned that a negotiated approach could lead to nearly endless demands from states willing to walk away from expansion.
“If I were HHS I would not want to be negotiating state by state because the state holds all of the cards,” Alan Weil, executive director of the National Academy for State Health Policy, said in an interview.
The potential for myriad state demands in any negotiation makes it more likely that HHS will issue a range of expansion options from which states could choose, he said.
HHS agreeing to individual negotiations also could cause other states that have already agreed to expand to reconsider and demand their own negotiations, other policy experts said. The cumulative effect could bog down the implementation of the reform law's Medicaid expansion, which is supposed to be effective in 2014.
While HHS officials decide how they will proceed, states have embarked on their own reviews of what information they need to proceed with an expansion and that has included a large amount of feedback from providers, insurers and patient advocates.
In Ohio, that review process has included trying to identify a source for the estimated $940 million state share of implementing Medicaid provisions of the law unrelated to the eligibility expansion, said Eric Poklar, spokesman for Republican Ohio Gov. John Kasich's Office of Health Transformation.
“In the meantime, we're getting lobbied by everybody that has an interest in this,” Poklar said in an interview. “And really, everyone has an interest in it.”