BOISE -- A package of Medicaid program cuts adding up to more than $39 million was introduced in the Idaho House Health and Welfare Committee Wednesday.
Idaho Falls Rep. Janice McGeachin, who chairs the committee, said the cuts are prompted by declining state revenues and federal mandates that continue to drive up Medicaid costs. "When you're handed two lemons, make lemonade," she said.
The cuts include everything from rate freezes to voluntary provider assessments to new co-pay requirements. Audiology benefits for adult Medicaid recipients is the only program being eliminated, but there will be major reductions in other services.
Unlike the past two years, when lawmakers came up with a patchwork of temporary changes to plug the budget hole, these $39 million in cuts will be permanent.
When federal matching funds are added in, the result will be about $130 million in ongoing spending reductions.
"We're making changes in areas we believe we can make changes," said Rep. Ken Roberts, a member of House Republican leadership and of the Health and Welfare Committee. "We tried to maintain a safety net."
Along with the list of short-term changes, the bill proposes a long-term shift away from the fee-for-service delivery model to a managed care system. The focus, at least initially, will be on high-risk pregnancies and other high-cost cases, as well as behavioral health services.
A fee-for-service approach rewards providers based on volume of work, whereas a managed care approach should focus on getting the best outcomes for the lowest cost.
Lewiston Rep. John Rusche, who also sits on the committee, said he had a number of concerns with the proposal.
"Some of it's OK, but I think there's a significant amount of fiction in it (in terms of the estimated savings), and some of it is harmful," he said.
For example, instituting a co-pay for adult Medicaid clients could result in delayed care and higher costs. Even though it's typically only a few dollars, Rusche said, a co-pay can discourage people from seeking preventative care and lead to higher-cost treatments when their condition deteriorates.
Because the co-pay is so modest, he said, Medicaid providers often eat the fee, rather than decline service.
"But (McGeachin's plan) also includes a 10 percent discount," Rusche said. "When we stack discount upon discount, we're going to have access problems. I think it will discourage some providers from participating, because it's not worth the money."
Roberts said the most controversial aspect of the plan is a proposal to eliminate mandatory rate increases.
"The providers are going to come unglued about that," he said. "But why would we have automatic increases in state statute? If the rate increase is warranted, let them bring it to the Legislature for approval, just like other fees."
Besides reducing benefits in various programs, the package includes $7.5 million in voluntary assessments from hospitals, nursing homes and intermediate care facilities. By preventing even deeper cuts, the assessments help these facilities retain the 70 percent federal matching rate.
The plan also adds eight positions to the Medicaid Integrity unit. These folks are similar to the tax auditors in the State Tax Commission, Roberts said. By monitoring provider claims, they reduce fraudulent or mistaken payments.
The Health and Welfare Committee is tentatively scheduled to conduct a hearing on the bill March 10. That's just four days before the joint budget committee is schedule to set the fiscal 2012 Medicaid budget.
Spence may be contacted at bspencelmtribune.com or (208) 848-2274.
Medicaid cut details: A partial list of proposed Medicaid cuts and the savings they generate include: $4.7 million B Freeze provider reimbursement rates and eliminate mandatory rate increases included in state statute. $1.5 million B Cap non-primary care Medicaid reimbursement rates at 90 percent of the current Medicare rate. $1.8 million B Exclude adults who don't qualify for waivers from accessing developmental therapy. $1.7 million B Reduce adult dental benefits, except for pregnant women. Tooth extractions and dental emergency services would still be provided. $2.6 million B Implement a retirement age for developmentally disabled adults. Rather than try to teach them various life skills like cooking or shopping, this proposal would simply provide the service to older individuals after a certain point. $2.27 million B Reduce psycho-social rehabilitation services to four hours per week for adults 21 and older. $2.0 million B Use a tiered approach to adult client budgets, similar to what's being done in the children's service redesign. This would give individuals a set budget and allow them to choose which services they want to receive. $800,000 B Limit podiatry and vision coverage for adults based on chronic care criteria.
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