Health Care

R.I. unveils details of Medicaid ‘compact’

“THIS AGREEMENT will put us on a sustainable path for growth in Medicaid while also maintaining services for those most in need,” Gov. Donald L. Carcieri has said of the five-year deal with the U.S. Centers for Medicare & Medicaid Services.
Posted 12/23/08

PROVIDENCE – The state expects to save $358 million over the next five years under the Global Compact Waiver approved last week by the U.S. Centers for Medicare & Medicaid Services (CMS), according to Gov. Donald L. Carcieri.

That money “can be used to expand access to home- and community-based services and offset cost of state-funded programs for individuals who need or are at risk for institutionally-based long-term care,” the governor’s office said in a statement yesterday.

The state’s Global Compact Waiver – the first agreement of its kind – has spurred nationwide debate since the filing of the state’s initial proposal this August. (READ MORE) It applies to all services and benefits provided to children and families through RIte Care, RIte Share and the fee-for-service Katie Beckett program; to elders and adults with disabilities either in the community or through Rhody Health Partners, ConnectCare Choice and long-term care institutions, the governor said in a fact sheet released yesterday afternoon.

The deal “establishes a state-federal compact that provides the state with greater flexibility while assuring federal funding certainty,” the governor’s office added. That will allow state officials “to redesign the state’s Medicaid program “to provide cost-effective services that better meet the changing needs of the individuals it serves.”

In exchange for that flexibility, however, Rhode Island agreed to a fixed Medicaid budget of $12.1 billion over the next five years, with annual budgets that will gradually increase from $2.064 billion in 2009 to $2.792 billion in 2013. Health care organizations and advocates for the poor argue that in a weak economy, that limit could weaken the local safety net and endanger the state budget.

Under current guidelines, the federal government pays 52 percent of Rhode Island’s Medicaid costs, while the state pays the remainder. The “state only receives federal matching dollars for actual Medicaid expenditures,” the governor’s office emphasized. The new compact does allow the state to “revisit” its budget ceiling “in the event of unforeseen dramatic increases in enrollment or costs due to natural disasters or further economic calamity,” or in case of major changes in national health care policy, the office added.

“Medicaid spending has increased drastically, and the current funding structure is forcing states to cut other critical programs, like education, highways and public safety or raise taxes significantly,” Carcieri said in a statement. “This agreement will put us on a sustainable path for growth in Medicaid while also maintaining services for those most in need.”

During its five-year “demonstration period” – Jan. 1, 2009, to Dec. 31, 2013 – the compact will allow the state to impose higher patient fees than would otherwise be allowed; limit patients’ freedom of choice by implementing a managed-care system for all Medicaid populations, similar to that already used by the state’s RIte Care program for children and families; shift the emphasis of the state’s long-term care system from nursing homes to home-based and community-based programs; establish “Healthy Choice” accounts to reward wellness and prevention efforts; and establish a more competitive system of payment for health care services that aims to link reimbursement levels with quality of care. The agreement also brings together all previous waivers issued to the state Medicaid program by the CMS.

“This demonstration will allow Rhode Island increased flexibility to adjust its Medicaid program to better serve the health care needs of the state’s beneficiaries,” U.S. Health and Human Services Secretary Mike Leavitt said last Friday in announcing the compact’s approval.

The full 123-page document is available online from the R.I. Department of Human Services (DHS). “This is an innovative approach that gives the people who are receiving care more control of their health decisions while improving the efficiency of Medicaid,” DHS Director Gary D. Alexander said.

Anyone with questions or comments about the waiver is invited to e-mail the DHS director at

Additional information – including the terms of the Rhode Island Global Compact Consumer Choice Waiver, as approved by the U.S. Centers for Medicare & Medicaid Services – is available from the R.I. Department of Human Services at News and information from the R.I. Governor’s Office are available at

The U.S. Centers for Medicare & Medicaid Services, a division of the U.S. Department of Health & Human Services, is the federal agency charged with overseeing the national insurance programs for low-income and disabled. For more information, go to

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