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Wisconsin should keep optional Medicaid services such as drug coverage and shift costly patients into managed care, the state's health services secretary told health care advocates Tuesday.

Dennis Smith, who heads the Department of Health Services, vowed to be transparent about Medicaid changes, even though Gov. Scott Walker's stalled budget repair bill would give Smith new powers to reshape the state-federal health plan for the poor with less legislative review than required now.

"We will make our recommendations public," said Smith, who is scheduling five or six "listening sessions" around the state to begin in a few weeks. "It's not going to be a surprise what we send to the Legislature."

Smith spoke in Madison at the annual conference of HealthWatch Wisconsin, a program of ABC for Health, a nonprofit law firm that helps people who struggle to find health care.

Advocates say Walker's budget proposals, including $500 million in cuts to Medicaid over the next two years, could harm the 1.2 million people in the program, which includes BadgerCare Plus, Family Care, Senior Care and other services. Walker says the cuts are needed to help plug a $1.8 billion Medicaid deficit, half of the state's $3.6 billion budget shortfall.

Smith said he wants to save money by making the most costly patients — such as those with complex disabilities and mental illnesses — enroll in managed care plans, which help decide what care is needed.

About two-thirds of Medicaid patients are now in managed care. The other third have "fee-for-service" arrangements, where the state pays patients' bills directly to providers. "No one is coordinating their care," which can mean higher expenses, Smith said.

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The state won't drop optional Medicaid services, such as prescription drugs and home care that can keep people out of nursing homes, Smith said. He didn't address $110 million in cuts to Family Care in Walker's proposed biennial budget, which health care advocates say would make about 5,000 elderly or disabled people on a waiting list ineligible for long-term care.

Smith said the budget's requirement that the 91,000 people on SeniorCare, a state drug plan, sign up for Medicare Part D, a federal drug benefit, would save the poorest seniors money while curbing costs to the state.

He echoed Walker's opposition to last year's federal health reform law, saying Wisconsin has already achieved many of its goals, such as insuring about 90 percent of its population.

"We didn't need an individual mandate (to buy insurance) to get to the high coverage that we have," he said.

While Smith and his Medicaid director, Brett Davis, told the advocates they have an "open door" policy, the head of ABC for Health challenged them for supporting insurance commissioner Ted Nickel's move last month to terminate a $637,000 federal grant to help Wisconsin consumers enroll in health coverage and file complaints.

"That door was slammed in our face," said Bobby Peterson, whose agency had a contract to receive $238,000 of the grant.

Smith said the grant isn't needed because "other resources" are available to help consumers.

Capital W: Plug in to Wisconsin politics

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