FY '15 Budget Aims To Rein In Medicaid Spending, Add Integrated Health Services

Feb 25, 2014

I'm combing through a Rhode Island Senate Fiscal Office summary of Governor Lincoln Chafee's FY 2015 budget proposal - a handy document that summarizes the item in question and analyzes its potential impacts. In health care, there's lots to digest.

But here are a few items that have caught my eye so far. And keep in mind, these are all still up for debate.

- Hospitals: They could take a financial hit if these budget proposals become a reality. The plan is hold state payments to hospitals for what's called "uncompensated care," meaning the care they provide people who can't afford it, at current levels, about $128 million. The RI Hospital Association said RI hospitals spent more than $192 million on uncompensated care last year, so that's a significant difference. The budget bill would also freeze Medicaid payment rates to hospitals and nursing homes. The big idea here is to rein in Medicaid spending.

- Special needs kids and adults: To save about $16 million dollars, the governor's proposed budget targets "high utilizers of health care...with an array of focused interventions, such as pediatric patient-centered medical homes, an expanded behavioral health care continuum, and reduced use of psychotropic medications in order reduce costs associated inpatient hospitalization and readmissions." The analysis finds that a small percentage of the low income children and kids with special needs, as well as adults with disabilities, in the state's Medicaid program, RIte Care, account for most of the spending. So the plan would be to provide extra services to this small population that would help keep them out of the hospital if an inpatient stay can be avoided and to keep them at home, in the community longer rather than in a nursing home.

My sources tell me, and this analysis points out, that the state has been trying to help people who might otherwise go into nursing homes, for instance, stay in their homes, in the community longer. But those efforts haven't been so successful to date. That's despite the state's asking for a waiver from the federal government to manage the Medicaid money as it saw fit, and adding services to help integrate the care and support people with disabilities or special health needs might need at home. Should be interesting to see what happens if this budget is adopted.

Family planning: The budget bill also proposes expanding family planning services for women and men, and increasing low income Rhode Islanders' eligibility for help paying for these services to 250% of the Federal Poverty Level - up from 200%. According to the Senate Finance Committee's analysis, that would make Rhode Island one of just 16 states providing family planning assistance to men and women.

New Medicaid services: Thanks to the Medicaid Global Waiver, on which the state received approval from the Centers for Medicare and Medicaid Services, Rhode Island will once again have more flexibility in how it spends Medicaid dollars. The budget bill would give the Office of Health and Human Services the authority to implement the waiver, and here are a few examples of programs OHHS would like to institute (quoting from the Senate Fiscal Office analysis):

"- Extended family planning that includes counseling and treatment for sexually transmitted infections. The current benefit includes only testing.
- Medicaid matching payments for substance abuse treatment services in facilities with greater than 16 beds. Federal matching payments are currently prohibited for services in these facilities...
- Incentives that reward healthy behaviors such as weight loss, smoking cessation and stress management.
- Peer mentors and navigators for those transitioning from nursing homes to the community.
- Evidence-based complementary therapies for the management of chronic pain such as chiropractic, acupuncture and massage therapy,
- Emergency department diversion program to treat inebriated individuals at a sobering center rather than hospital emergency departments.
- In-home behavioral health treatment programs for children in or at risk of entering DCYF custody.
- Expanded case-management services for those eligible for both Medicare and Medicaid."

Anything else you're watching in the budget negotiations and hearings? Let me know!