Medicaid Reform: Key Considerations for Children's Health Care

Eileen K. Fry-Bowers, PhD, JD, RN, CPNP; Karen G. Duderstadt, PhD, RN, CPNP, FAAN


J Pediatr Health Care. 2017;31(4):517-519. 

In This Article

Potential Impact of Medicaid Reform on Children

Block grants or per capita caps would likely affect states' ability to provide outreach and enrollment support, respond to changing pediatric health care needs or increase pediatric provider payments (Shapiro, 2017). Specifically, under per capita caps, reimbursement for each child enrolled in Medicaid will presumably be based on the health care costs for an average child enrollee, which would not address the increased costs for caring for children with special health care needs (CSHCN). As a result, there may be inadequate funding for the care of these children, whose costs are significantly higher than those of other children on Medicaid (Shapiro, 2017).

Moreover, school districts, which rely on Medicaid reimbursement for school-based health centers and other medically necessary educational support services, could experience a 30% reduction in Medicaid reimbursement (Pudaleski, 2017). School-based health centers provide services to CSHCN under the Individuals with Disabilities Education Act and play an important role in meeting the health care needs of children living in low-income families. Such a shortfall would negatively affect specialized instructional supports that CSHCN require to be educated with their peers and interrupt the physical, mental, and developmental health services currently provided to low-income students (Pudaleski, 2017).

Medicaid financing reform would also affect the child health care delivery system. Although children's hospitals constitute less than 5% of U.S. hospitals, they account for about 35% of all hospital days for children on Medicaid and 53% of all hospital days for children with complex medical conditions (Children's Hospital Association, 2017). Currently, Medicaid reimburses children's hospitals at about 80% of the cost of care provided, including disproportionate share hospital payments. Block grants or per capita caps have the potential to decrease current payment rates, which could undermine the fiscal stability of this necessary specialty care delivery system (American Academy of Pediatrics, 2017).