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The Nuts and Bolts of Making Medicaid Policy Changes: An Overview and a Look at the Deficit Reduction Act

The Deficit Reduction Act of 2005 (DRA), signed into law on February 8, 2006, contains a large number of changes in Medicaid policy that are expected to affect almost all elements of the Medicaid program—eligibility, benefits and cost-sharing, provider payments and program integrity. In most instances the policy changes are optional for state Medicaid programs, but in some the changes are mandatory. At the federal level, the interpretation and implementation of these legislative policy changes is primarily the responsibility of the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS). State Medicaid agencies and state legislatures look to CMS for guidance as to what policy changes they must make and what policy changes they are allowed to make.

This policy brief outlines the roles of Congress, CMS and the states in implementing Medicaid policy changes and highlights some of the changes included in the DRA. The brief also examines how the forms and timing of guidance can affect the transparency of the public policy process as well as lead time for state implementation of new policies.

Issue Brief (.pdf)