Medicare Compliance & Reimbursement

Industry leaders steering away from institutional programs.

The federal government is spending $20 million on grants for states to develop community living programs for individuals with disabilities and chronic illnesses.

As part of the Bush Administration's "New Freedom Initiative," which promotes community living rather than institutionalization for people with disabilities, the Department of Health and Human Services (HHS) has awarded the hefty grants to combat the looming financial disaster from Medicaid long-term care.

"These grants will help states take full advantage of the opportunities to reform their Medicaid long-term care systems offered by the recently passed Deficit Reduction Act of 2006 and remove barriers to equality for the 54 million Americans living with disabilities," HHS secretary Mike Leavitt said in a recent announcement. "They will help persons with disabilities exercise meaningful choices about how and where to live their lives."

Eight states will receive the grants for 2006: California, Virginia, Michigan, North Carolina, New York, New Jersey, Rhode Island and Kansas, HHS reports.

The Centers for Medicare & Medicaid Services (CMS) will require states receiving grant money to address certain goals "necessary to transform Medicaid program incentives away from institutional care with options for care at home and in the community," the agency says.

"This program is vital in helping Medicaid move from its institutional bias to a program that truly meets the needs of people who depend upon it," CMS administrator Mark McClellan commented in a statement.

More information on the New Freedom Initiative is available at www.cms.hhs.gov/newfreedom/.