ANNAPOLIS – If no cuts are made in the current state Medicaid system, it will not be financially sustainable in the future, Department of Health and Mental Hygiene Nelson J. Sabatini told lawmakers Tuesday.
State Medicaid costs – now approaching $5 billion – are projected to rise to as much as $600 billion over the next decade, said Sabatini to members of the Senate Budget and Taxation health subcommittee.
“We need to make some fundamental changes,” Sabatini said.
Legislative analysts suggested several measures, including:
– Co-payments for Medicaid patients who go to the emergency room for routine, non-emergency care.
– A federal waiver to change penalties for people who try to protect income by transferring assets before entering a long-term care situation, such as a nursing home.
– Reduction in fees paid to pharmacists who dispense Medicaid prescriptions. The average cost to managed care organizations is $2.28 per prescription; Medicaid pays between $3.69 and $4.69.
– A single preferred drug list for state employees and Medicaid prescription care that would combine purchasing power.
– Reduction in how many days an adult on Medicaid can stay in the hospital.
– Increased turnover in the Medical Care Programs Administration by elimination of several now vacant positions.
The department accepted the first four and rejected the last two.
“I believe taxpayers in the state . . . believe that poor people have a right to health care, and they expect to buy that health care in the most economical way possible,” said Sabatini, suggesting the state should employ more business-like decisions.
The committee asked Sabatini to recoup $9 million from Amerigroup and JAI, two managed care entities that didn’t meet state regulations on how much of Medicaid premiums must go toward care.
Sabatini disagreed, arguing that could result in punishing insurers with superior management who avoid excess expenditures.
In total, analysts suggested $29.4 million in possible reductions. The department agreed to $10 million.
In addition to Tuesday’s proposals, the department plans $77.2 million in cost-cutting measures in fiscal year 2005, including reducing nursing home rates and continuing to impose limits on hospital days for the medically needy. The department also hopes to reduce Medicaid enrollment through an increase in eligibility enforcement.
– 30 – CNS-2-10-04