Lawmakers, Governor Working On Medicaid Gap
The Charleston Gazette, April 20, 2005
Paradoxically, state spending for Medicaid in the 2005-06 general revenue budget will grow by $92.5 million to $337.6 million, but that will leave a $115 million shortfall in the state-managed health program for the poor, disabled and elderly. Even with the increase in state funding to Medicaid — actually closer to a $70 million hike because the current budget included a $20 million supplemental appropriation — the Manchin administration and legislators are looking at ways to close the budget gap.
Even though the Legislature gave final approval to the $3.19 billion general revenue budget for 2005-06 on Saturday, work continues to close a roughly $30 million state funding gap for Medicaid. “The point is, we’re not finished with this budget yet,” Senate Health and Human Resources Chairman Roman Prezioso, D-Marion, said Tuesday. “We’re not finished because we’ve got a Medicaid problem.”
Gov. Joe Manchin and Health and Human Resources Secretary Martha Walker met with U.S. Health and Human Services Secretary Mike Leavitt last week to discuss possible changes to the state’s Medicaid plan.
One possibility: charging co-payments for emergency room visits. “Co-pays have always been on the table,” Health and Human Services spokesman John Law said Tuesday. “Co-pays are something everybody’s looking at to see how to get more money into the system, and to keep people out of the ER when they don’t really have an emergency.”
Prezioso said co-payments are one option being considered, primarily to discourage Medicaid recipients from making costly visits to the emergency room for routine medical care. He said the department is evaluating all Medicaid services to see where savings can be found. “Are there instances where there are duplication of services? Are there programs we can collapse and terminate?” he asked.
Besides health-care cost inflation, two key factors caused the shortfall in the 2005-06 Medicaid budget:
· The federal match rate, which is calculated based on each state’s per-capita income for the previous year, will drop from 74.65 percent to 72.99 percent. That will reduce the federal match by nearly $35 million.
· The phase-out of the state provider tax that was used to draw down more federal matching funds. That reduction amounts to $32.5 million in lost revenue in the coming budget year.
“In the next day or two, we’ll decide what cuts are going to come, and when they’re going to start,” Law said Tuesday.
Law said the cuts should be less than the $156 million initially discussed at the start of the legislative session. “They’re still going to make some cuts, but they probably won’t be as much as we thought they would be at the start,” he said.
Health care lobbyist Thom Stevens said any cuts will ultimately mean a reduction in services provided to Medicaid patients, or a cost shift to patients with private health insurance, or both. “There needs to be a comprehensive planning process involving the Legislature, and the administration, key health officials, and health-care providers to come to a consensus on what’s funded,” he said.
Steven Summer, with the West Virginia Hospital Association, said the ideal situation would be to fully fund the $30 million gap through revenue surplus or tobacco taxes, and work on Medicaid reductions for the 2006-07 state budget.
Hospitals and health-care providers are having to prepare budgets for the 2005-06 budget year with a lot of unknowns in Medicaid funding.
“These are people who have payrolls to make and facilities to upkeep,” he said.
Any changes the administration makes now to Medicaid would probably not be approved by the federal authorities until the middle of the 2005-06 budget year, he noted.
“Let’s put the money in that’s needed, then let’s work on particulars for 2007,” he said.
Prezioso said he believes that, ultimately, there will be additional funding for Medicaid this year.
“In the end, if the feds are going to give us $3 for every one dollar we put up, it’s a no-brainer,” he said.