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Debrief: "Reinvent Medicaid" Survives House Budget

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House lawmakers will vote next week on an $8.7 billion dollar state budget. More than a third of it pays for health care and other related services....

House lawmakers will vote next week on an $8.7 billion dollar state budget. More than a third of it pays for health care and other related services. Rhode Island Public Radio’s Kristin Gourlay joined host Dave Fallon in the studio to walk through some of the highlights. Listen to the audio or read a transcript of their conversation, below.

DAVE: Kristin, welcome. So a major centerpiece of the budget is Governor Gina Raimondo’s plan to quote “Reinvent Medicaid.” Recap for us what that’s about and tell us, did she get what she wanted?

KRISTIN: This budget – which, of course, could still change, but probably not too much – is a big win for the governor. Most of her Medicaid proposals sailed through, with some minor changes. Mainly, the revenue picture was a bit healthier than anticipated, so some of the cuts she proposed weren’t as steep.

This effort to “reinvent” Medicaid is really about three things. First, savings. The governor set out to trim nearly $190 million in state and federal dollars from the program. That’s because Medicaid costs keep growing, and the governor says it’s just not sustainable. The second was to try to make health care better by promoting efforts to coordinate services – and help patients stay out of expensive institutions like nursing homes and hospitals when there’s a better option. The third is a bit more esoteric, but it’s about trying to reform the health care system overall by linking pay to quality.

DAVE: Let’s talk about the budget cuts that remain in this spending plan – what will be cut, and who will be affected?

KRISTIN: There are no changes to who’s eligible for Medicaid or what services are covered, but there are some changes to how care is provided and who’s responsible for coordinating it. There’s even more money for some beneficiaries. For example, to help elders and people with severe disabilities stay out of residential facilities, the budget increases monthly payments to people who are living in the community or in some kind of assisted living. At the same time, the budget reduces payments to nursing homes by two percent. That’s less than the original proposal, so nursing homes are happy about that. But there are other provisions to tighten eligibility for nursing home admission. Overall, I’m hearing that advocates for people on Medicaid are happy with the outcome.

DAVE: The Reinvent Medicaid group proposed more than 30 initiatives for saving money and improving care. And we should point out that nearly a quarter of all Rhode Islanders benefit from Medicaid – not to mention the hospitals and doctors and other providers. So the stakes are high. Does the budget give teeth to those initiatives?

KRISTIN: It gives broad authority to the executive office of health and human services to make them happen. Some initiatives we just don’t have the details on yet. For example, to help people stay out of nursing homes, you have to provide the services in the community – home health care, transportation, maybe meal services, housekeeping, things like that – to help them do it. To help boost access to those services, lawmakers have considered increasing pay for home and community-based service providers. But this budget simply gives the office of health and human services the authority to make “payment reforms” to do that.

Another example: the STOP program is in the budget. This proposal establishes a place for people who are drunk or high to sober up and get connected to treatment. That’s a much less expensive alternative to the current system, which is, someone’s inebriated, on the street, the ambulance takes them to the emergency room. That’s thousands of dollars, basically, for a sandwich and a bed. It’s also not the most efficient way to help people get into addiction treatment, if they’re ready for it. Emergency room staff tell me this would be a tremendous help. But we don’t yet know how much money has been allocated to get this program off the ground.

DAVE: Hospitals have a lot at stake in this budget. They’re one of the biggest recipients of Medicaid dollars. And there was a proposal to cut their payment rates by as much as five percent. How did that proposal fare?

KRISTIN: Hospitals are breathing a sigh of relief because the rate cut is just 2.5 percent. They’re not thrilled about any rate cuts, of course, because they’re facing pressure from Medicare rate cuts too. But as we mentioned Rhode Island brought in more revenue than anticipated. So some of that money was used to soften the blow on hospitals and nursing homes. Hospitals also get reimbursed for the charity care they provide for patients who can’t pay. That amount is going up a bit. And Rhode Island Hospital will be seeing a few million dollars for graduate medical education, which is training for future doctors like students and interns. They’ll also be creating an incentive payment pool, to reward hospitals for doing certain things like preventing emergency room visits.

DAVE: And that’s on top of improving finances for hospitals in general, right? Because more people have insurance these days, they paid out a lot less in what’s called “uncompensated” or charity care. They’re endowments performed better.

KRISTIN: All true.

DAVE: So Kristin, what should we be watching for as this budget makes its way into law?

KRISTIN: I think we need more specifics on how efforts to reform Medicaid will be funded and where exactly some of the savings will be found. Work to develop those specifics is still underway. But the devil is in the details.

Debrief:
Debrief: "Reinvent Medicaid" Survives House Budget