Disease management in fee-for-service Medicaid programs.

Between 2000 and 2003, Medicaid spending (federal and state) increased by about one-third—from $205.7 billion to $275.5 billion—largely as a result of enrollment growth fueled by the economic downturn, job loss, the erosion of employer-sponsored health insurance coverage, and rising health care costs (Holahan and Ghosh, January 2005).1 This explosive growth caused fiscal problems for state governments faced with depressed revenues. Despite some positive indicators of economic recovery, 24 states expect to face potential budget shortfalls in FY 2007 (McNichol and Lav, 2006). Medicaid issues continue to be a key concern in several states for 2007, where at least 17 states will on Medicaid reforms and a reduction of the Federal Medical Assistance Percentage (FMAP) (National Conference of State Legislatures, 2006).