Building Effective State – Federal Partnerships

The state-federal partnership is at the core of Medicaid. Medicaid programs are administered by states and territories under a broad set of federal rules and regulations and are jointly financed by states and territories and the federal government. This means that a strong and balanced partnership between state, territory, and federal policymakers is crucial to ensuring that Medicaid programs are effective, accessible, and meet local needs.

At the 2022 NAMD Fall Conference, Daniel Tsai, Director of the Center for Medicaid and CHIP Services (CMCS), Judy Mohr Peterson, Medicaid Director in Hawaii, and Tom Wallace, Medicaid Director in Florida, explored the challenges and benefits associated with building strong state-federal partnerships.

The panel shared three key insights:

• Federal policymakers and Medicaid Directors have different responsibilities and face different constraints. Having served both as Massachusetts’ Medicaid Director and the CMCS Director, Dan Tsai highlighted the different vantage points of state and federal Medicaid policymakers. Federal policymakers are bound by Congress’ statutory authorization and must develop policies that work across 56 states and territories. Conversely, state policymakers have to actually implement the Medicaid program and face on-the-ground operational challenges, including balanced budget requirements. These different viewpoints can lead to tensions.
• Strong state-federal partnerships lead to better policy. Judy Mohr Peterson highlighted the Medicaid & CHIP Scorecard Workgroup as an example of successful partnership between state and federal policymakers. Over the course of several months, CMCS and state Medicaid staff met to develop the Medicaid & CHIP Scorecard. Although states initially had some nervousness around the Scorecard concept, the workgroup built a trusting partnership, which resulted in a strong Scorecard product. Similarly, Tom Wallace highlighted CMS’ ongoing willingness to discuss ideas and find compromises, even when there are fundamental policy disagreements.
• The COVID-19 public health emergency has fueled new levels of collaboration between states and CMS – but exacerbated workforce challenges. Throughout the COVID-19 pandemic and in preparation for the unwinding, CMS and states have engaged in an unprecedented level of collaboration: states and CMCS have met on a biweekly basis for over a year to address unwinding policy issues. But the pandemic has also led to new challenges – including depleted state workforces and gaps in provider workforces. These workforce challenges limit the amount of new policymaking that states will be able to undertake. Addressing these workforce challenges will take time, resources, and creativity at both the state and federal level.

State and federal Medicaid policymakers will face a new set of challenges in the coming year: the eventual start of the public health emergency unwinding, budgetary pressures from inflation and the end of enhanced federal Medicaid funding, and increasingly acute workforce challenges. Strong state-federal partnerships are essential to meeting these challenges. As in any partnership, disagreement sometimes arise between state and federal stakeholders, but this push and pull is core to the federalist structure of Medicaid and often leads to the best policy outcomes.