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Dennis G. Smith
A clause buried in the budget repair bill would give Secretary of Health Dennis Smith and the Walker administration unprecedented power to revamp the state's Medicaid programs.

Lost in all the sound and fury over labor issues in Gov. Scott Walker's budget repair bill is a clause that would give the administration sweeping new powers to revamp and even gut Medicaid programs.

Walker has put the legislation on a fast track and hopes to get it approved by the Republican-controlled legislature during this week's special session.

Over the weekend, public health advocates started raising the alarm, and this afternoon the non-partisan agency in charge of analyzing the controversial bill sent a memo to Democratic Rep. Peter Barca that would seem to confirm complaints that the Medicaid provision, buried deep in the budget-repair bill, would give the Walker administration unprecedented power to revamp the state's BadgerCare programs without following the legislative processes, public vetting, and even state laws normally required.

The memo from the Legislative Fiscal Bureau, a response to Barca's request for a list of non-budget items that Walker has folded into the budget-repair bill, some with far-reaching policy repercussions, focuses on the Medicaid clause as an item "that should be noted" because "while the provision may result in significant savings in the future...it would remove the entire Legislature from determining substantial elements of the medical assistance program."

The provision "could potentially give broad authority to the Department of Health Services, with approval of the Joint Committee on Finance, to signficantly modify the medical assistance program and supersede most statutory provisions regarding the program," LFB director Bob Lang writes in the memo.

Yet this significant aspect of Walker's controversial budget repair bill has been mostly overlooked in the outrage and protests over Walker's efforts to roll back public employee benefits and collective bargaining rights.

Advocates say the Medicaid measure would hand Governor Walker and his administration broad powers to rewrite the state's public health programs, including BadgerCare and even SeniorCare, with virtually no public input.

Under the bill, proposed changes to the programs would need to be reviewed only by the Legislature's Republican-controlled budget committee, a significant shortcut compared to the normal legislative process and public vetting required.

Walker's Department of Health Services could unilaterally change state laws dealing with the programs, which affect more than a million state residents from infants to the elderly and include a spectrum of BadgerCare plans, FamilyCare, and SeniorCare.

Last weekend several public health advocates were reeling at the magnitude and the speed of the proposed changes and at what they signify for the state's BadgerCare system, which only a year ago was touted nationally as a model for how to increase health coverage for the poor and middle class.

"Most of us who have been waiting to hear what Walker had to say about how we ought to cut spending for BadgerCare expected that at some point we'd hear his recommendations, have a chance to respond to them, and then the Legislature after two or three months of deliberation in the budget process would sort all that out," says Jon Peacock, research director for the Wisconsin Council on Children and Families. "But instead of that normal legislative and public process, they're going to in a few days turn that all over to the department with no possiblity of public input. That's just shocking."

Also shocking, Peacock says, is the bill's indefinite extension of the emergency rules pertaining to Medicaid. "I can't ever recall seeing a bill that does that," he says.

According to an analysis by the state Legislative Reference Bureau, the bill would require the state Department of Health Services to study changes to Medicaid programs with an eye toward "increasing the cost effectiveness and efficiency of care."

If DHS determines, as a result of the study, "that revision of existing statutes or rules would be necessary to advance any of the purposes for which the study was conducted," according to the Legislative Bureau analysis, "DHS may promulgate rules to implement certain changes, including making certain requirements, modifying benefits, revising provider reimbursement models, developing standards and methodologies for eligibility, and reducing income levels for purposes of determining eligibility."

So what exactly does this mean?

"It would enable the department to cut huge portions of Medicaid away," explains Peacock. "It would allow the department to drop coverage for childless adults, it would allow them to substantially reduce coverage for kids and parents in terms of which populations are eligible and what services they might be eligible for."

Most significantly, Walker and his new health secretary, Dennis Smith, could do so without needing to go through the normal legislative processs. "It means the department of its own accord can make huge changes," Peacock says.

Agrees David Riemer, director of the Community Advocates' Public Policy Institute: "It sets up a situation where the DHS could promulgate rules that violate state Medicaid statutes that are still on the books."

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Walker has made no secret of his impatience to check the program's skyrocketting costs, and Smith, as a fellow for the conservative think tank The Heritage Foundation, has advocated that states should walk away from Medicaid completely.

For this fiscal year ending June 30, the state faces a $153 million deficit in the Medicaid program, and for the next budget starting July 1 the hole could be as deep as $1.8 billion.

But Robert Kraig of Wisconsin Citizen Action, an advocacy group, claims Walker is using the budget crisis to strongarm legislators and the public. "This whole notion that we're in an emergency so he must make massive changes quickly that affect people's lives is a very disturbing trend," he says. "We've seen it over and over now. Some reporters want to frame it as him getting things done and being effective, but the cost is that we get no serious public discussion. The legislative process is supposed to allow time for public input and discussion and understanding before such major decisions are made. This is fundamentally undemocratic."

So undemocratic that it could be legally challenged? Riemer raises that possibility, noting in an e-mail that the measure would "invite litigation."

"It undermines the constitutional balance of power between the executive and legislative branches by abrogating the law-writing function of the Legislature," Riemer notes.

Riemer argues the Medicaid provisions would establish dangerous legal precedent, asking "If this law allowing agency rules to trump statuatory language that's still on the books is valid" what would stop other agencies from doing the same?

And what would stop a future Democratic administration from overhauling Medicaid in a way that would absolutely undermine what Walker is doing now? "What's good for the Republican goose is good for the Democratic gander," Riemer argues. "It's precisely to avoid such unchecked use of administrative power to serve the political or ideological preferences of whoever happens to be in power that we have these troubling things called laws."

Kraig accuses Walker of deliberately burying these Medicaid provisions in a bill with other controversial measures Walker knew would overshadow them. "This is just another example of him trying to do something that is crucially important in a way that it will get lost in all the other stuff and probably just slide through without much attention, giving the governor a whole lot of power to change Medicaid," he says.

A call to the Governor's office seeking comment was not immediately returned.