Next week, Gov. Greitens is expected to release his proposed budget for state fiscal year 2018. Lawmakers began their budget-crafting earlier this month. We can expect a year of fiscal belt-tightening at the state level.
The challenge is significant. This year’s revenue has been less than anticipated, and cuts already have been announced to keep the SFY 2017 budget in balance. Moreover, with new eligibility added by lawmakers in 2016 among other changes, Medicaid spending will consume around $340 million more in the FY 2018 budget — even with near-historical low levels of health spending.
This is all occurring in an environment of great uncertainty on the federal level. And, what happens in Washington, D.C., matters greatly.
For more than a quarter-century, hospitals have partnered with the state to address Medicaid’s cost to the state budget. The Federal Reimbursement Allowance partnership has been a tremendous success for the state, allowing policymakers to shift limited general revenue resources to other priorities. However, with significant — if presently ill-defined — changes expected in the state and federal relationship on Medicaid, the shape of our partnership may evolve.
On Monday, there was an article in Governing magazine that discussed states’ readiness for Medicaid block grants. Frankly, they aren’t. Although, Missouri lawmakers recently held a hearing on a “global waiver” for Medicaid, the budget implications for one possible permutation of that waiver ― a block grant ― are far greater than anyone can know presently.
Earlier this month, Gov. Greitens announced the appointment of a state “chief operations officer,” who will oversee an end-to-end review of Missouri’s bureaucracy. The objective is smart belt-tightening. However, given the uncertainty on the federal side of the state’s budget ledger, I’d recommend an even more conservative approach — a belt and suspenders approach.
The FRA has provided suspenders for the state’s Medicaid program since the Ashcroft administration. The question, therefore, is whether new focus and additional innovative partnerships can bring value from the current program and also forestall pulling the budget belt in a notch.
Last week, we released a new HIDI HealthStats on emergency department use among Medicaid “superutilizers.” The farthest outlier was a single patient who had 384 ED visits to 17 different hospitals and more than $1 million in charges during fiscal year 2016. That’s astounding. It’s also an opportunity.
Belt tightening won’t reduce inefficient or unnecessary ED utilization. An approach that expands on our partnership with the state to allow — and potentially reward — innovation that helps control cost and resources would be a far better direction. And, beyond the FRA, we’ve seen this approach through health care homes and behavioral health stabilization investments, among others.
We don’t know how quickly the federal shifts will occur. And, beginning an investigation into a global waiver or block grant approach makes sense. Acting quickly, however, could be a mistake.
There’s tremendous pressure being put on Congress and the administration to ensure that states like Missouri are not harmed in a block grant scenario. Our voice is included in that chorus. The absence of Medicaid expansion and Missouri’s reliance on the FRA could result in great harm if speed was valued over deliberation. A POLITICO story from Monday illuminates how members of the GOP — in the states and Congress — understand the complexity, and need for deliberation, during the potential sea-change in the state-federal Medicaid partnership.
There’s too much at stake to get the policy wrong. As I’ve been saying, the signals aren’t clear yet. Crafting a budget on these signals could take us in the wrong direction. However, there’s a lot we can be doing to belt-and-suspender the program now — to create a more manageable program if block grants or other models become the new normal.
In fashion, wearing a belt and suspenders is a no-no. In policy, it’s a conservative, fashion-forward choice.
Send me an email with your thoughts.
In This Issue
Herb B. Kuhn
MHA President and CEO
Marketplace Open Enrollment Ends Next Tuesday
Kindred Hospital Kansas City Names New CEO
Marketplace Open Enrollment Ends Next Tuesday
Staff Contact: Andrew Wheeler
Through Jan. 14, more than 8.8 million Americans have signed up for 2017 health care coverage through HealthCare.gov. This is a slight increase from last year’s plan selections of 8.7 million. In Missouri, 244,593 have made plan selections for 2017. Although last year’s report included two additional days, enrollment through week 11 in 2016 was higher, amounting to 266,036 enrollees. The Centers for Medicare & Medicaid Services states that the next enrollment snapshot will be released Friday, Feb. 3, which will cover enrollments through the final open enrollment deadline of Tuesday, Jan. 31.
Back To Top
January 26, 2017
MHA Distributes Projected Payment Implications Of Medicare’s VBP, HAC And Readmissions
Coalition Releases Prior Authorization Principles
January 25, 2017
State Legislators Advance Medical Liability Reform Legislation
CMS Provides MOON Instructions
CMS Provides Summary Of OP-33 Sampling Methodology
CMS Extends eCQM Reporting Deadline
January 24, 2017
HHS Releases 2016 Report On Health Care Fraud And Abuse Control Program
CBO Releases 2017-2027 Budget Outlook
MU Health Care Names Interim CEO
January 23, 2017
Trump Signs Executive Order To Ease Burden Of The ACA
CDC Issues Communicable Disease Final Rule
HIDI HealthStats — Medicaid Utilization
CMS Announces QualityNet Secure Portal Delay
CMS Announces Availability Of CART Inpatient 4.19.1
Judge Blocks Aetna/Humana Merger
RUPRI Highlights Differences Between Urban And Rural Medicaid Enrollment
CDC Report Focuses On Reducing Mortality In Rural America