You asked for a history of the state’s elimination of certain optional Medicaid services, starting with 1991. You also asked how long the Department of Social Services (DSS) paid for these services before they were altogether eliminated by PA 02-7, May 9 Special Session.

SUMMARY

Medicaid optional services, which are those that federal law gives states the option of providing to Medicaid recipients, have been cut twice and restored once since 1991. Both times the cuts were part of larger cuts in the state budget. The 1991 cuts were more limited in scope and duration: they affected only three types of practitioners and were restored the following year. More recently, the legislature directed DSS to find savings in the Medicaid budget, which DSS implemented through policy changes on January 1, 2003. These include eliminating payments to podiatrists and chiropractors, among other independent practitioners.

Connecticut has provided optional services to Medicaid recipients for at least 18 years, but possibly longer. DSS found policy dating back to 1986 indicating its predecessor agencies paid for these services.

HISTORY OF MEDICAID OPTIONAL SERVICE CUTS

PA 91-8, June Special Session (JSS) and PA 92-231

PA 91-8, JSS, contained numerous cost cutting measures, including a major restructuring of nursing home rates, and reductions, freezes, and limits in Medicaid reimbursements for a variety of services. It directed the DSS commissioner to eliminate Medicaid payments to chiropractors, podiatrists, and natureopaths as of October 1, 1991. (DSS would continue to pay physicians who provided these services. For example, it would pay an orthopedist who performed podiatry care on a Medicaid recipient. )

A year later, the legislature restored these payments, effective July 1, 1992 (PA 92-231). According to the fiscal note for the bill, DSS suspended payments for these services in February 1992. It also said the state could avoid future costs by restoring the services. (See attached OLR report 2002-R-0740 for a detailed explanation of the 1991 and 1992 actions).

PA 02-7, May 9 Special Session

As part of a bill implementing numerous cuts in DSS’ FY 03 budget, PA 02-7, May 9 SS, directed DSS, by September 30, 2002, to submit an amendment to the state Medicaid plan to implement provisions concerning optional services to reflect a reduction in its budget. The law was written broadly and did not specify how the reduction was to occur.

In December 2002, DSS issued policy that enumerated specific services that would be eliminated. These cuts applied to both Medicaid and the State-Administered General Assistance programs (SAGA). Effective January 1, 2003, Medicaid would no longer pay for services to clients ages 21 and older from the following independently enrolled providers:

1. podiatrists,

2. chiropractors,

3. naturopaths,

4. independent therapists (i. e. , physical therapists, licensed audiologists, and speech pathologists), and

5. psychologists.

(DSS also cut vision care services for SAGA recipients. )

We have attached a copy of an earlier OLR report (2003-R-0039) that addresses the 2002 cuts.

RC: ts