Medicaid cuts loom; state to extend insurer pacts

Print Friendly and PDF By: Andy Miller Published: Aug 9, 2012

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.

The cuts would come on top of a current shortfall in the two programs that the Department of Community Health’s budget director estimates at about $300 million.

Community Health officials presented the financial impact of the budget cuts at an agency board meeting Thursday. In two weeks, the agency at another board meeting will outline possible targets for the cuts – potentially reducing eligibility, benefits, or provider payments.

Health industry officials and consumer advocates have expressed alarm over the impact that such cuts will have on medical providers and patients.

Tom Kornegay, a spokesman for the Medical Association of Georgia, recently told Georgia Health News that  “any action that results in any reduction in pay for Medicaid physicians in Georgia would have disastrous results for the state’s neediest patients.’’

Medicaid chief Jerry Dubberly also said Thursday that the state intends to extend the contracts for the three insurers overseeing the care of many Medicaid beneficiaries and all PeachCare through June 2016,  two years beyond the current arrangement.

Currently, the three care management organizations – WellCare, Peach State and Amerigroup – together receive more than $2 billion a year from the state for that work.

The budget cuts come as a result of Governor Nathan Deal’s Office of Planning and Budget recently ordering state agencies to prepare a budget that will have a 3 percent reduction in spending for both the current fiscal year’s amended budget and the fiscal 2014 blueprint. Funding for schools is exempted from the cuts.

The OPB also said that the Medicaid program is in line for an additional 2 percent cut in fiscal 2014, for a total of 5 percent.

Community Health said the agency’s cuts would amount to $64.8 million in fiscal 2013, which ends next June, and $106.4 million in fiscal 2014.

Medicaid, jointly financed by the state and federal governments, covers roughly 1.5 million poor and disabled Georgians, while PeachCare insures about 200,000 children in families with modest incomes.

Kaiser Health News recently reported  that amid sluggish revenue growth, 13 other states are moving to cut Medicaid by reducing benefits, paying health providers less or tightening eligibility.

Community Health also reiterated the state’s reasons for not pursuing a major restructuring of the two programs,  as proposed in a consulting firm’s report.

The U.S. Supreme Court decision on the health reform law created ‘’an uncertain environment,’’ said agency Commissioner David Cook.  The ruling means Georgia and other states will have to decide whether to expand their Medicaid programs as called for under the law, also known as the Affordable Care Act.

Deal has said that the state would wait till after the November elections to decide on the Medicaid expansion, which would add more than 600,000 Georgians to the program.

But the agency outlined some steps to improve Medicaid and PeachCare under the current setup. These moves include:

  • Putting foster children under a care management organization
  • Streamlining the credentialing process for medical providers
  • Enhancing a web portal so providers can access members clinical and claims information easily
  • Encouraging the growth of patient-centered medical homes in Georgia
  • Establishing a single drug formulary for Medicaid and PeachCare
  • Developing more home- and community-based alternatives for beneficiaries
  • Improving state oversight of the care management organizations

“We’re moving pretty rapidly on this,’’ Dubberly said of the initiatives.

 

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