Delaware legislative panel eyes Medicaid spending

DOVER, Del. (AP) — Budget writers from Delaware’s legislature met Thursday to consider how to curb spending on the state’s Medicaid program, which is costing state taxpayers about $700 million a year.

State Medicaid director Stephen Groff briefed members of the Joint Finance Committee on how the subsidized health care program for the poor and disabled operates and outlined some of the biggest cost drivers, including a 40 percent increase in enrollment over the past five years.

Enrollment is expected to increase even more under a Medicaid expansion approved by Democratic Gov. Jack Markell in conjunction with the Affordable Care Act, the federal health reform law. The expansion will extend coverage to those with incomes up to 138 percent of the federal poverty level starting Jan. 1, up from the current threshold of 100 percent of the poverty level.

But Groff said the expansion will not strain the state’s budget because federal taxpayers are picking up 100 percent of the tab for the expanded Medicaid population through 2016, after which the federal contribution will gradually fall to 90 percent in 2020 and beyond.

Also, the federal match for the state’s existing Medicaid population will increase from 55 percent to 77 percent, Groff noted, more than offsetting the state’s 10 percent cost share for the newly eligible Medicaid population.

“In effect, the state is going to save money by expanding Medicaid,” he said.

That’s not to say the program, which covers more than one out of five Delaware residents, doesn’t face challenges.

“When the recession hit, we started to see a dramatic increase volume, way beyond what we had seen in the past,” Groff said.

Groff and state budget director Ann Visalli also said people who are eligible for both Medicaid and Medicare, which provides medical coverage to people 65 and older, are putting a strain on the system. While Medicare, which is 100 percent federally funded, is the primary insurer for those seniors, many of them also use Medicaid to help pay for expensive long-term care costs.

“We see more people in that category,” Visalli noted. “… It’s a small portion of the people with a large portion of the cost.”

Groff suggested that one way to save on Medicaid spending is moving from a fee-for-service billing model and tying payments to patient outcomes, allowing health care providers who offer higher quality care at lower costs to share in the savings.

Committee members also discussed ways to reduce fraud and abuse in Medicaid, such as doctors billing for services that aren’t provided, enrollees trying to skirt income limits, and people posing as Medicaid clients, using someone else’s enrollment card to get medical care.

Rep. Debra Heffernan, a New Castle County Democrat, suggested that requiring Medicaid clients to show photo identification before receiving medical care could be one way to ensure that ineligible people aren’t taking advantage of the system.

“That does seem to be a no-brainer to me,” said committee co-chair Melanie George Smith, D-Bear.

Panel members also questioned what officials can do to ensure that Medicaid applicants are truthful when reporting income and financial assets. Medicaid officials said cases are subject to quality control reviews, but that financial institutions have been reluctant to share data on Medicaid recipients with government officials to confirm eligibility.

“To my knowledge, no state has been successful in implementing that because the financial institutions do not want to participate,” Groff said.

Smith, the panel co-chair, wondered what could be done about Medicaid recipients who smoke, prompting Sen. Karen Peterson, D-Stanton, to suggest that officials might also want to look at obese people.

“Obesity is much more of a cost driver than smoking,” said Peterson, a smoker.

On a related note, Rep. Joe Miro, R-Newark, said many Medicaid recipients also receive food stamps but do not buy the nutritional food they should.

“They’re not buying the best protein-type of food,” Miro said. “… It is sodas, some of the other things that are not conducive to the best outcome.”

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