Too early to project Medicaid savings, panel told



By Bobby Harrison

Daily Journal Jackson Bureau

JACKSON – A Senate panel was told Monday it is too early to determine whether a new method of reimbursing many health care providers for treating Medicaid recipients will cut costs for the state.

But Medicaid Executive Director David Dzielak told a Medicaid subcommittee the goal for the change in the reimbursement methodology is not necessarily to save money, but to have more predictability in costs.

Funding Medicaid, a federal-state health care program for the poor and disabled, has been a constant sore spot for the Legislature and the governor. Costs often spiral upward at a much higher rate than projected.

During the 2012 session, at the urging of Dzielak and Gov. Phil Bryant, legislation was passed so that hospitals and many outpatient health care providers would be reimbursed based on the complexity of the procedure instead of a standard reimbursement rate for each procedure.

Medicaid began the change in payment methodology in October and final changes will be made this October.

Sen. Hob Bryan, D-Amory, who chairs the Senate Public Health Medicaid subcommittee, asked if the change “had bent the cost curve.”

Dzielak responded, “It is a little too soon to say…But it appears to be trending that way.”

Bryan said policy makers face difficult choices because many believe it is important to have hospitals in small communities and Medicaid reimbursements are important to keeping those hospitals open.

In the coming months, the Legislature might consider proposals to allowed managed care companies to cover Medicaid recipients receiving treatment in hospitals. In recent years, the Legislature gave the Division of Medicaid permission to enroll in managed care programs up to 45 percent of its beneficiaries.

Managed care normally provides health care services to recipients for a set fee. The Legislature prevented Medicaid from including inpatient hospital care as part of the managed care.

Dzielak has said that including hospitals as part of the managed care program could provide larger savings for Medicaid.

Currently, there are about 645,000 Mississippians in the Medicaid program. The Medicaid budget for the current year is more than $5.5 billion with about $840.1 million of that state funds and the rest federal.

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