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Medicaid Cuts: A First Look At Where They'll Come From

Members of Gov. Gina Raimondo's Reinvent Medicaid task force huddled for hours Wednesday to go over nearly three dozen initiatives designed to save...

Members of Gov. Gina Raimondo's Reinvent Medicaid task force huddled for hours Wednesday to go over nearly three dozen initiatives designed to save Medicaid money. Their goal: find $90 million dollars in savings for Medicaid, the state's medical assistance program for the poor.

Here's a run down of where the effort is headed, straight from the fourth floor board room at CCRI in Warwick, where the meeting was held.

As anticipated, the biggest savings are projected to come from institutional health care providers.

- The group is sticking with the Governor's recommended five percent cut in Medicaid payment rates to hospitals (would save about $16 million in state funds), three percent rate cut for nursing homes (would save about $9 million in state funds), and raising the hospital licensing fee (would save about $11 million in state dollars).

But there's a new twist: some group members are proposing that the money saved by cutting rates for hospitals and nursing homes be put into an incentive fund to repay these institutions next year if they meet certain quality goals. Some group members questioned the extent to which this plan would actually result in savings for the state; co-chair of the group and Care New England CEO Dennis Keefe said hospitals would have to reduce unnecessary stays to earn the incentive payments and that alone would bring in some savings for the state.

The rest of the initiatives under consideration find a million dollars in savings here, a million there - thousands of tiny cuts, one might say. But taken together, they could add up to about $85 million in savings. It's not yet clear how some of these initiatives would actually be implemented, or how specifically they would save money. But here are some highlights:

- Medicaid would identify members it calls "high utilizers," patients with repeat trips to the emergency room or hospital stays for conditions that could be better managed - and for less money - in the community. It would send community health workers to work with these patients and find better ways to meet their needs - and keep them out of the hospital. This is projected to save $1 million in state spending. A similar initiative would scale up services for "high utilizers" at risk of being homeless, saving a projected $2 million dollars. This particular idea doesn't fund supportive housing, but "organizes" services for this population. Some group members expressed concern about how exactly this initiative would find savings and work in practice.

- The group proposes funding a sobering center -something a Senate task force, chaired by Sen. Josh Miller, proposed a couple of years ago. The idea is create a place where people who would typically end up in the emergency room can safely sober up and be connected to addiction treatment. They've even proposed a location: the upper level of Emmanuel House.

- To reduce fraud and waste in Medicaid, the group proposes verifying a patient has visited or been visited by a health care provider electronically. There's also a suggestion to do a better job of billing Medicare, which is federally funded, when appropriate. Some Medicaid recipients are also eligible for Medicare, so the idea here is to make sure the federal government picks up the tab when the state doesn't have to.

- Another proposal is to privatize publicly-run group homes for adults with developmental disabilities, for a savings of $2 million in state spending, and to close two group homes and transfer residents elsewhere, for a savings of half a million dollars.

- For Medicaid recipients with a serious, persistent mental illness, pay providers a per-capita rate to coordinate their care. This initiative would save $3 million in state spending, presumably because it would reduce unnecessary care (such as visits to an emergency room that could have been avoided if the patient's medications were better managed).

- More savings are projected to come from "streamlining" operations within the Executive Office of Health and Human Services - no details yet on what exactly would be consolidated or cut.

Again, these are just a few highlights from a long list of initiatives. They're still in flux and may be amended with feedback from task force members. They're going through nearly 36 recommendations, whittled down from a high of 200 (according to Sec'y. Elizabeth Roberts). These recommendations will have to be ready to present to the Governor by about April 30th. After she reviews them, they'll be headed, I'm told, in the form of a budget amendment, to the General Assembly for review.

Many states are in the throes of similar discussions right now. Faced with serious budget deficits, governors around the country have asked teams of professionals to find ways to cut one of the most expensive line items in their budgets. But of course Medicaid is not just a line item; it's a lifeline for many people, including nearly a quarter of all Rhode Islanders. Some patient advocates are satisfied that at least there aren't any proposals to limit eligibility for the program or limit certain kinds of health care coverage. That's not always been the case.

Medicaid Cuts: A First Look At Where They'll Come From
Medicaid Cuts: A First Look At Where They'll Come From