A recent audit gave the state Department of Community Health a “clean report’’ but also found that the agency overspent its Medicaid budget by $32 million in fiscal 2012.
The audit findings were discussed at an agency board meeting Thursday. Board Chairman Norm Boyd said that though the amount of money appears large, it represents just one day of Medicaid spending in Georgia.
The budgetary control problem was the one “significant’’ finding in an audit assessment that otherwise showed improvement in the agency, said Boyd, who was elected chairman at the meeting Thursday.
DCH Commissioner David Cook said the overspending won’t happen again. He said the agency currently has ‘‘zero money’’ for Medicaid reserves, and that the Medicaid program is already underfunded by $1.2 million under the current House budget.
The financial news reflects the precarious fiscal status of the Medicaid program, which along with PeachCare covers 1.7 million poor and disabled Georgians, most of whom are children.
Cook told reporters that the agency has been forced to “budget to narrow margins with no reserves,’’ and that any spike in spending becomes a great concern. Even the state employees and teachers health plan is operating without reserves, he said.
During the current fiscal year, Medicaid ran up a shortfall of more than $200 million, and that amount doesn’t include the potential hole of nearly $500 million that the provider fee fills.
Cook said most of the overspending in fiscal 2012 (July 2011 through June 2012) came in services to the aged, blind and disabled Medicaid beneficiaries. The agency canceled contracts to lower the amount of overspending.
The audit, Cook told reporters, turned up no financial mismanagement but found that the agency did not “use all the tools available to it’’ to solve the problem.
A law to facilitate the renewal of the hospital provider fee — by switching authority over the fee from the General Assembly to DCH itself — was signed by Gov. Nathan Deal on Wednesday.
The budget constraints, Cook said, are part of the reason why some tough Medicaid cuts have been proposed, including a 0.74 percent reimbursement reduction for medical providers other than hospitals, primary care physicians, rural health clinics, federally qualified health centers, and hospices.
“We have got to implement some of these cost-saving measures,’’ Cook said. “We won’t overspend the budget like we did last year.’’
He told the board that he expects rules related to the hospital provider fee to be available to board members at their next meeting.
DCH has had informal meetings with federal health officials about the provider fee. Cook noted that the Centers for Medicare and Medicaid Services, a federal agency, must approve the financing mechanism.