From The Associated Press (11.08.11)
Key policymakers agreed Tuesday that a projected $139 million shortfall in the state Medicaid program will be reduced with cost-cutting and possibly cash reserves, but not by broad provider rate cuts and elimination of services.Rep. Nelson Dollar, R-Wake, co-chairman of the Legislature’s health oversight committee, told Health and Human Services Secretary Lanier Cansler that he didn’t believe it productive to reduce rates further and scale back optional Medicaid services beyond those already identified in this year’s budget. The advice seemed for now to ease conflict between Democratic Gov. Beverly Perdue and Republicans legislative leaders over a large portion of the $19.7 billion budget the governor vetoed in June. GOP lawmakers and a handful of conservative Democrats overrode the veto despite her warnings that the Medicaid cuts were too deep. The budget demanded $359 million in cuts to the agency that oversees Medicaid, the government health program that covers poor children, older adults and the disabled. Cansler’s agency has said the reductions couldn’t be reached due to slow enrollment of high-expense patients in Community Care of North Carolina, a managed care program for Medicaid. Other cost savings aren’t being realized quickly and the state must repay previous accounting errors and improper billings.
The budget gave Cansler the power to initiate additional reimbursement rate cuts to medical providers who take Medicaid patients or limit or end services the federal government doesn’t require the state to offer. The reimbursement rate would have been required to drop 18 percent starting April 1. And eliminating services could have affected hundreds of thousands of people. “We’re trying to do everything we can to whittle that (shortfall) number down,” Cansler told lawmakers. “I really need guidance from you about whether we go down that road.” Dollar backed away from the budget instruction, saying it was uncertain whether federal Medicaid regulators would sign off on additional provider cuts because it could discourage doctors from seeing Medicaid patients. He said eliminating optional services also would likely send patients to more costly services – emergency rooms, for example. Instead, he said, Cansler and lawmakers should work together to find other ways to cut spending through next summer.
As a last resort, Dollar said, cash reserves also could be used – nearly $300 million sits in the state’s rainy-day reserve account and tax collections generated a $150 million surplus for the first three months of the fiscal year. That money, however, may be needed for Hurricane Irene relief or expanding the state’s prekindergarten program. “We have a one-time financial issue. We need to solve it with one-time money,” Dollar told reporters later. Dollar suggested additional cuts could be found based on the recommendations of an advisory committee comprised of doctors, nurses, social workers reviewing Medicaid services. The Medical Care Advisory Committee recommended at least 10 changes, five of which would save $10 million alone, according to a committee presentation
