States Deal with Medicaid Challenges with Cuts and New Payment Methods

As NAHAM News has reported before, many States are facing Medicaid budget cuts and shortfalls as costs increase. This has spurred different reactions across the nation, as some states look to privatize programs, others have switched their payment methods away from a ‘fee-for-service’ model, and yet others continue to audit existing programs to try to eliminate unnecessary waste.

Kaiser Health News recently summarized how a number of states are handling the issue.

“Facing budget pressures, state officials in Georgia, Minnesota, Kansas and West Virginia are among those making cuts and switching to new payment methods as well as to managed care to cut the cost of the state-federal health care program for the poor and disabled.” The approaches these states are taking mirror much of the debate we can anticipate in the coming months running up to the election. More on this later…

Find the summary (State Officials Seek Medicaid Savings In Cuts, Payment Methods, Managed Care) here: http://www.kaiserhealthnews.org/Daily-Reports/2012/August/10/states-medicaid.aspx.

In Georgia, Georgia Health News reports that state officials say proposed budget cuts to Georgia Medicaid and PeachCare would total $170 million in state funds through the next fiscal year. And with the matching federal funds generated by that state spending, the reductions would have a more than $500 million impact on the two health insurance programs.

In Minnesota, Minnesota Public Radio reports that the state is first in the nation to receive federal approval for a new way of paying for health care in its Medicaid program. Minnesota will pay some hospitals and clinics based on how well their patients do medically and their ability to cut costs. This challenges the current “fee-for-service” approach that some say does nothing to rein in costs.

In Kansas, Kansas Health Institute News reports that the Kansas Medicaid program is scheduled to convert to a privatized system called KanCare. In January, three for-profit, managed-care organizations will take over the federal/state program that pays for health care for low-income children, seniors and people with disabilities.

In West Virginia, the Associated Press has reported that the state is planning an audit of eight state health care agencies and Medicaid with the goal of improving programs with existing or fewer resources.