Medicaid seeks latitude for savings

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JACKSON – The state Division of Medicaid, under the direction of Gov. Phil Bryant, is asking the Legislature to give the health care agency more flexibility and the authority to change the way it reimburses Mississippi hospitals.
Medicaid officials recently met with both House and Senate committees to advocate for those changes. Those changes are needed, in part, new Executive Director David Dzielak said, to deal with anticipated increased costs in the program.
Bryant has said the projections are for costs to increase about $110 million to the state for the health care program. In another tight budget year, legislators have said they will have a difficult time finding money to pay for those increased costs.
Medicaid is a federal/state program that provides health care to about 642,000 primarily elderly, disabled, poor pregnant women and poor children. Dzielak has said about 55 percent of the enrollees are children and another 20 percent are disabled.
The federal government pays about 74 cents of each $1 spent on health care costs in the program. Dzielak told a Senate Public Health subcommittee Tuesday that about $40 million of the projected cost increase will occur because the federal government is reducing by less than one-half percent the reimbursement rate the state is receiving.
Despite the change, the state, because of its high level of poverty, will continue to get the highest reimbursement rate from the federal government.
Dzielak said the rest of the projected cost increase is less precise. But it is based on anticipated growth in the program and rising health care costs. He said the economy – whether it improves or deteriorates – could affect the amount of the increase.
Medicaid received $763 million in state funds last legislative session for the current fiscal year.
Bryant has said part of the increased costs could be offset by changing the reimbursement rates for hospitals. Currently, hospitals are reimbursed on a per-diem basis. Under the change, hospitals would be reimbursed based on the service they provided and the remibursement would be consistent throughout the state. Reimbursement for a surgery on a ruptured disc, for example, would be the same in Tupelo as in Hattiesburg.
The change in the reimbursement rate would be advantageous for some hospitals and negative for others, according to various sources. Legislators have said they would like to see calculations on the impact of the change on each hospital before committing to the change in law.
Sen. Hob Bryan, D-Amory, said at the Tuesday meeting he did not think the Division of Medicaid would gain total flexibility from the Legislature to run the program. Bryan said he believes legislators wanted to keep in law the specific services the agency provided.
“We are not talking about changing any service we provide whatsoever,” Dzielak said. “We want flexibility about how we pay for provider services and not changing any services we provide.”
For instance, Dzielak said, state law currently limits a Medicaid recipient to five prescriptions. In some instances, he said it might be more economical to allow more prescriptions to prevent more costly hospital visits. Or it might save money on costly emergency room visits by increasing the reimbursement rate to a clinic if it stayed open longer hours.
The five-prescription limit was originally put in law, Rep. Omeria Scott, D-Laurel, said to save money, though she said she disagreed with it at the time.
In the past, under former Gov. Haley Barbour various providers, including hospitals and pharmacists, took Medicaid to court to successfully block changes to their reimbursement rates because they said they did not have legislative approval.
bobby.harrison@journalinc.com