DOVER – Facing numerous challenges as more Delawareans turn to Medicaid while revenues remain flat, the state is proposing several initiatives to meet the growing demand while containing costs.
Ultimately, this may restrict how often a Medicaid patient may visit an emergency room for non-urgent care. Also, the availability of certain therapy and outpatient care may be restricted.
Medicaid is a health insurance program administered by the states and the federal government to cover the impoverished, the aging population, children, and people with disabilities. Income is the most compelling factor in qualifying for Medicaid, according to Delaware Health and Social Services Secretary Rita Landgraf.
In less than a decade, the percentage of people eligible for Medicaid has grown 73 percent in Delaware. The caseload has grown 25.4 percent between July 2008 and January 2011. The state estimates that more than 209,000 Delawareans will be eligible for Medicaid during fiscal year 2012.
Landgraf said the state is holding the line on provider rate increases for the third straight year. She called this a “dangerous precedent, since it has the potential of impacting quality of care.”
Much of the growth in DHSS’s $975 million budget proposal for the next fiscal year is designed to replace federal stimulus funding toward Medicaid that will expire at the end of the calendar year. State expenditures for Medicaid are expected to total $680 million, comprising 16 percent of the overall state budget in FY ’12.
State Senator Harris McDowell (D-Wilmington North)
McDowell says the loss of federal stimulus help to pay for Medicaid hurts significantly.
Director of the Division of Medicaid and Medical Assistance Rosanne Mahaney told the General Assembly’s Joint Finance Committee that Delaware has reviewed benefit restrictions enacted in other states over the past two years. Based on that review, these restrictions are being considered under the Medicaid program:
-coverage would be limited to three non-urgent visits annually to an emergency room
-limiting physical, occupational or speech therapy sessions to 20 annually
-limiting outpatient hospital visits to 12 annually
“Given the current growth in Medicaid, we will likely need to consider additional service limits,” Mahaney said.
State Rep. Joseph Miro (R-Pike Creek)
Miro responds to proposal to limit doctor and hospital visits to trim Medicaid costs
Delaware currently charges nominal co-payments for pharmacy services under Medicaid. Mahaney said co-pays will be considered for other services, but the state faces federal restrictions.
The state froze rates for Medicaid providers in 2009, and Mahaney said the state does not have sufficient funds to increase the rates in fiscal year 2012. The state, in fact, may look at additional targeted rate reductions.
Easter Seals, which has a contractual arrangement to serve the state’s disabled population, has gone much longer without a rate increase.
“After nine years of flat reimbursement rates, the risk to quality and even safe services has never been greater,” said Easter Seals Delaware and Maryland Eastern Shore President and CEO William Adami. “We’ve reduced everything we can, adjusted staff ratios, shifted health care costs to employees, frozen salaries certain years, and maintained starting wages at the same level as nine years ago.”
Mahaney said the goal is to reduce Medicaid costs by $5 million in the next fiscal year, and work toward additional savings in fiscal year ’13.
Other states are experiencing similar growth to varying degrees. Some of the discussion at the recent winter meeting of the National Governors Association focused on helping the states meet the growing costs of Medicaid, according to Governor Jack Markell.
However, he believes the use of block grants proposed by Republican governors is not the answer.
“The thing about Medicaid is you want to make sure you’ve got the resources when the demand is there,” Markell said during a conference call with reporters earlier this week. “We’ve had tens of thousands of additional Delawareans who’ve qualified for Medicaid over the last couple of years. A block grant would have really left us in a difficult situation.”
Markell said a bipartisan group of governors is working with the Obama administration on the issue of growing Medicaid expenses and developing programs that keep “flexibility” in mind.
“I am absolutely seeing the right kind of signal from the federal Department of Health and Human Services,” the Governor said.
Passage of health care reform (the Affordable Health Care Act) sets the stage for extending Medicaid to adults who make up to 133-percent of the federal poverty level in January 2014. This is expected to enable 18-to-25-thousand adults to obtain access to Medicaid with 100-percent federal funds.
